In today’s article on AI Post, we will cover the evolution of startup industry in India and its impact on the economy. We will start our discuss from the origins of the startup culture in India and which way it is likely headed. For simple illustrations which everyone can understand, we will be taking examples of Uber, Ola and Flipkart. Same trend is getting replicated in other startups as well. A good Sunday read, which may take approximately 8-10 minutes to finish.

It seems exit polls have evolved. This time all of them unanimously gave same verdict which later translated into more or less the same result. Thanks to the power of social media, this time people were pretty decisive and vocal on pro-modi or against modi. With elections over, friends will not be fighting over political issues anymore.

Talking about stock market, people have a lot of expectations from Modi Government. In general, investors are upbeat on the election result and expecting a start of bull run from here onwards. In this article, we analyse and put forward our views on what lies ahead for stock market and certain industries under Modi 2.0. We will also discuss on BJP’s election manifesto to get a sneak preview of future policy direction.

Today’s article on AI Post is focusing on a niche segment of stocks within stock market. These are stocks listed on special platform of stock exchanges called as BSE-SME & NSE Emerge. The purpose of such platform is to enable entrepreneurs and small companies to raise capital from stock market and fund their next leg of growth. You will be surprised to know that this segment of stocks have given stunning results to investors. Over last three years, BSE SME IPO index itself has given an annualized return of 31% as compared to BSE Sensex’s 16%. Almost double.

Index NameAnnualized Return
BSE Sensex16%
As of 14 April 2019

Going down to individual stock level within SME space, we have many multibaggers even in a bad year like 2018. Within 2018, stocks like Mittal Lifestyle gave 478%, Mac hotels gave 283% & Gautam Gems returned 247% just to name a few.

Please note that these stocks are NOT recommendations but just an example to showcase that SME stocks can be very rewarding. For return generated by our service, please look at performance section in Emerging CAPS page. Moreover, many of these examples are no long active on SME exchanges. This article was written in April 2019

If we extend our horizon up to 5 years time-frame, we have more than 25 multibagger stocks emerging from this segment. Now consider this – Till 2017, there were hardly 100 odd stocks listed on BSE SME platform. This implies a very high strike-rate of finding a multibagger from this segment. Theorically, 1 out of 4. Since 2014, Suyog Telematics gave 1700%, Kushal Tradelink gave 1740% & SRG Housing Finance 1553% returns to quote a few. All of them have now graduated to the main platform of BSE & NSE. With this migration, liquidity has improved and certain restrictions on their trade has gone away. Please note these stocks are our preferred picks nor we ever recommended these stocks in the past. This is just an illustration to showcase the power of SME stocks. This analysis was done in April 2019 and things may change in future. We will cover all of this at a later stage in the article.

Coming back to the article’s heading, so there is a serious amount of money to be made from SME platform that is for sure. Surprisingly, we have not heard much about them in media reports. Possible reason is because there are very limited set of investors interested in SME stocks. Media mostly reports to the interests of general investors and not to the taste of specific set of investors. This can also be a reason that there is hardly any stock advisory service catering to this segment. Market supplies services which is in high demand. This concept is also very new to Indian investors while it is quite popular abroad. This means early movers will get the advantage.

At AI, we have observed this gap and that is why we are publishing about them so our ace readers are aware of this relatively new concept in equities. SME stocks are open to everyone and there is no reason why it should remain confined to a limited set of investors. May be lack of awareness & expertise is restricting wide participation in SMEs. There is no denying that it is highly rewarding but also a very risky segment to operate. Sensing this, we are launching a new stock advisory service, called as Emerging CAPS to fill this gap and enable small cap enthusiasts to benefit from these new opportunities. Ok, enough introduction. Let’s go into the details of SME stocks and how to deal with them.


It been tough for equity investors. Market has tanked. Impact is more aggravated at individual stock levels. This is in sharp contrast to 2016 or 2017, where money was easily made over free sms tips or television news channels. Unfortunately, this is the true face of stock market which will keep on popping up at regular intervals. You need a strategy to tackle it otherwise all your gains made during bull years will vanish in thin air. If you don’t have enough time or expertise, it is a wise decision to buy a professional subscription.

Once you decide to approach a professional help, the issue arises in choosing the right stock advisor. If you search on google, you will find tons of websites claiming to be the number one. This further adds confusion. In this article, we discuss a checklist which should be considered before buying subscription of a stock advisory service.

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Today in AI post, we want to share our honest & candid discussion with a senior investment banker based in Mumbai. I know him since school days and is one of my good friends. He started his career in sales, later got promoted to wealth manager. A career spanning more than two decades in which he worked in both Indian and MNC financial institutions. So, he has seen working style of different institutions across various levels.

Over last weeks, we met a few times and during the course of our multiple free-flowing discussions, we discussed about various practices in Indian banking industry. Our banking industry is greedy which is a known fact. There are a lot of malpractices but the extent or breadth of it is rather discomforting. I want to share this information with our ace readers so at least you are aware of it. With my friend’s permission, below are the excerpts from our conversation which can be very insightful for innocent investors. For privacy reasons, I will refer him as Mr Banker in this article.

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5G is a much talked about upcoming technology. At Ace Equity Investor, we continue to bring you the latest industry trends via free for life newsletter service, AI Post. A few weeks back, we wrote a primer article on 5G in which we familiarized you with what and how of 5G in a simple language. Before you continue on today’s article, it is recommended to go through our earlier post by clicking here.

5G will change the way we communicate with technology and it will usher in many new business applications. Needless to say, this will have a profound impact on our day to day life. 5G is not just one network but a network of networks. In today’s article, we will explore various scenarios where 5G can benefit human beings. These scenarios are being explored at various places across the world by technology companies (like AT&T, Docomo, Qualcomm, etc). We skimmed through various research reports from Siemens, PWC, Huawei, Accenture, etc & white papers from Mobile Congress, 5GPP Europe, TechUK, Research Gate, etc to understand and summarize probable impact on sectors & stocks in Indian context. Some of the illustrations have been borrowed from them to simplify the context.

Please be patient as it is going to be a bit lengthy article but it will not bore you as the language is kept simple. Let’s find out more details about it.

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So far in 2018, AI Post published a total of 43 articles with two more articles to go. As we draw curtains to year 2018 and get ready to welcome 2019, it is time to reflect back on the success and failure of the last year. We covered wide variety of topics ranging from stock market to technology trends to investor behavior & current affairs. We hope you enjoyed reading these articles and it helped you to gain some confidence in equities.

Today on AI post, our editor is handpicking six top articles from AI post which we think were pretty good and full of common sense. Here are these six posts.

Investors are spooked by the uncertainty arising from various state elections and general elections in next five months. There is a common belief that if ruling party comes to power it will be good for the stock market. Any adverse result may put stock market into the tailspin. In today’s post, we are trying to analyse from two angles, one from what historic data tells us starting from 1980s and another from what common sense tells us. Let’s find more details about it.

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Technology has time and again created many disruptive patterns in the economy. For people who identified and saw it coming, were able to benefit from it. If we just go back a decade, things were very different from today. One such disruption was roll out of 4G which helped emergence of various new businesses like Uber, Ola, Food Panda, Flipkart & Airbnb. These new generation companies are wiping out old business models like Meru Cab, Local Taxi Agency, Grocery stores and what not. People and businesses which saw them coming either refused to believe and got out of business, the smarter one realigned themselves with new business models to sustain in new & dynamic marketplace. All powered by speed of internet which is connecting customers & suppliers at lightening speed.

Technology however, keeps moving forward and this time disruption has found a new name called 5G. It is not just a faster version of 4G, in fact faster internet speed is only one aspect of it. The aim of 5G is to galvanize whole device ecosystem in an interconnected mesh of devices called IoT (Internet of Things). This will have very profound impact on the way market place is running. It will become a network of networks. We will surely look back after a decade and might say that things have changed so much from 2018.

Since 5G is a big topic and we want to write a comprehensive post covering major aspects that investors need to know, we will be publishing it as a two part series. Today, we will discuss about the features & layout of a 5G system, pros and cons of this technology and latest updates happening in 5G around the world. As usual, we will keep the language simple to understand so that you can easily understand the concepts. One does not need to be a communication engineer to understand 5G. However, this article is written by a communication engineer turned stock market analyst 🙂

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Ever wondered why many famous companies never really generate returns for the shareholders. There are plenty of examples like GMR or Jet Airways. Both belong to India’s rising aviation industry. GMR owns IPL cricket team Delhi DareDevils, it also built Delhi airport. At a high level, it seems GMR should have been a great wealth creator but that is not the case. Same goes for Jet Airways, it has been in aviation industry since 1995 and once it was India’s best private airlines. In the same period, India’s air traffic has grown by leaps & bounds. Starting from just 16 million passengers two decades ago, it has grown 8 times by now & expected to grow another 3-4 times in next two decades. Still Jet Airways continue to struggle for survival.

Same is true for Apollo or Fortis Hospitals. They operate in India’s ever growing healthcare sector. All of us must have queued in OPD of these hospitals at some point in time, depicting healthy demand. Alas, they have also not created healthy returns for shareholders. Same is true for Airtel or Vodafone. This can be perplexing as in why these companies operating in forefront sectors have not grown at all.

The answer lies in the way these businesses are operated. In his 1992 & 2007 annual letters, Warren Buffet spoke about it and he classified three types of businesses. The great, the good & the gruesome. He advised investors to stay away from gruesome and stick to the great & good businesses only. The question is how to identify which business is great & which is not. Today in AI post, we are discussing these three types of business models which can cover almost every type of business. You can apply it to instantly assess the quality of underlying business of a stock.

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mind the gap

This concept was originally published as part of our Tiny CAPS report on 18 Nov’18. To suit AI post, certain portions have been modified for easy understanding.

Today’s AI post focuses on the behavioral aspect of investment. Emotions play a far larger role in wealth creation than any high end analytical or robotic capabilities. In equity, your EQ (Emotional Quotient) matter more than your IQ (Intelligence quotient). There is a famous saying from Warren Buffet that “Buy when there is blood on wall street and sell when there is euphoria”. I know you have read it several times all over the internet but are we able to implement it when time is right? Currently, there is blood on at least dalal street which means we should be buying Indian stocks right now but how many of us have that courage to do it?

If this question was asked last year, I am sure many would have said, “Surely, I can implement what Mr Buffet is saying during next stock correction”. Knowing the path is one thing, walking down that path is another. Do you know why this happens? Fear, of course is one short answer but we are looking in-depth here. What induces this fear? How come last year’s confident & aggressive investor has transformed into unsure & risk-averse investor. This is what we are trying to answer in today’s AI Post. We have coined this phenomenon into a term “Bear Market Brainwash”. Let’s read about it.

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Robo Human.jpegAs a regular reader of AI Post, we aim to keep you abreast with the latest developments across the financial world. Keeping up the ante, today we have Damien Kopp on AI post.  Damien is based in Singapore, working as product head with a fintech organization. He is also board member of a Non profit organization – Live with AI.  Fintech space is rapidly evolving. Over next few years, it will have a very profound impact on the way we do banking transactions. In India, we have seen emergence of digital payment solutions from Paytm to UPI to WhatsApp. In this article, we try to understand how fintech is shaping or rather re-shaping robo-advisory with the help of augmented intelligence.

Over to Damien!

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FIFO 3.png

During our conversation with clients, we were surprised to learn that most of them had no clue about FIFO (First In First Out) rule which is applicable on all demat accounts as per IT Ruling Section 25(2A). If you are looking for selling some portion of your shares (lets say 100 out of 200 shares) then FIFO rule can impact your average purchase price for remaining shares. Let’s try to understand where it applies and how it can be used to our advantage as well.


This is a question which every investor thinks at some point of time. The question is “How do rich people or so-called super investors invest their money? They must be investing into the best opportunity available in the market. So I shall do the same.”

There is nothing wrong in aspiring to create more wealth out of small sums of money but every strategy has some pros and cons which must be understood well before blindly following others. In this article, we bring some unorthodox investment strategies which many rich investors deploy in the hope of market beating returns.

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It has been a bad year in equities for everyone. Stock prices started falling since Jan’18 immediately after annual budget. There was a little respite in between but again recent round of correction has broken the backbone of most portfolios & demats. In such market conditions, stock quality goes for a toss as bears will not spare anyone, the good, the bad or the ugly.

Naturally as an investor, we are all worried and there are a lot of queries clouding our mind. Sensing that, today’s AI Post is focused on addressing frequently asked questions (FAQs) from investor community under current market conditions. Trust this helps!

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On 21st Sep, market was most volatile in last four years. Sensex jumped up and down more than 1000 points intraday. It all started after 12pm and next three & half hours were completely roller coaster ride. Many blue chip stocks were hit and more predominantly Non Banking Finance stocks (NBFC). There are talks about bubble in Indian financial sector and likely repetition of 2007 crisis in India. Lot of this noise is based on gut feeling and not well placed. In this article, we look at various events happening inside our financial industry that are weighing down on the sector.

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Real Estate Vs Equities.jpeg

Real Estate is one of the favorite investment option for Indians. It is also a popular topic in parties and functions. We have seen our previous generation buying real estate with a sense of pride & satisfaction. It is an investment culture which has been inherited in generations. With slowdown in real estate sector, the old age habit is changing and people are seen shunning away real estate .

In today’s article, we objectively compare both investment options with their pros & cons from a neutral perspective. Let’s find out more in details.

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Title of this post may surprise you but once you finish reading, you will understand my point of view. On AI post, this time we thought to write something which not only benefits us financially but also physically. As my father once said “Better to run on tracks than later run towards hospital”. I am sure most investors or traders are glued to computer screens ignoring health concerns & pushing themselves to the limit. It is not a good habit and may hamper your investment success as well. If you are one of them, then this article is dedicated to you my friend.

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