Compounding Fundamentals

30s | Fan of compund interest 🌱Passionate about equity investing 💰 CFA level 2 cleared✍️ @bitspilaniindia 👨‍🎓 Views are not recommendations

[Compounding Fundamentals @Shankh_Ray]

Did you know compound interest can transform not just your finances, but also your intelligence, connections, health, and overall success? Let's dive into the incredible impact of compound interest in different aspects of life.

[Compounding Fundamentals @Shankh_Ray]

@Arun_vish This is such an incredibly lousy take. India is not just you and a bunch of your friends. Read some books. Think a bit before posting dumb takes.

[Compounding Fundamentals @Shankh_Ray]

@capreal26 @HarveenChadha That will NOT change the DNA of TCS which is services-based SLA thinking. But will surely change the DNA of the company being acquired (for the worse)

[Compounding Fundamentals @Shankh_Ray]

@InvestorOfJAMMU What is there in TCS's results to be excited about? Growth is tepid. Employees are being fired. 300+ of their most senior leaders out of 1800 have resigned in the last 8 months. A company without satisfied employees + the headwinds of AI is a sinking ship.

[Compounding Fundamentals @Shankh_Ray]

Someone pls tell Trump that there are still 3 hrs left

[The Hormuz Letter @HormuzLetter]

BREAKING: US-Israeli forces have struck Iran's largest aluminum producer, IRALCO, in Arak. Major fire at the facility.

Arak hosts Iran's IR-40 heavy water reactor and is one of the most sensitive cities in the country. IRALCO produces aluminum used in missile casings, drone airframes, and centrifuge components.

The strike was reported at 23:45 local Iran time, nearly 3 hours before Trump's 8 PM ET deadline.

[Compounding Fundamentals @Shankh_Ray]

@TheThevaluetrad And then Aditya will have to spend 3 cr to buy a house. So net no impacts

[Compounding Fundamentals @Shankh_Ray]

This is pure ragebait. By this logic, #varun beverages sells diabetes and India is the diabetes capital of the world. #Tata motors sells accidents and air pollution. Mining (#Coal India) destroys the environment and leads to global warming. 🙄

[Sab Maya Hai @sab_maya_hai__]

Many mutual funds, and even retail and HNI portfolios had big allocation in ITC.

Even PPFAS fund has big holding in ITC.

ITC sells cancer.

These people deserve poor returns.

Frank words.

[Compounding Fundamentals @Shankh_Ray]

@kingofknowwhere Drone deliveries have already started in some parts of India. These strikes will accelerate the adoption further

[Compounding Fundamentals @Shankh_Ray]

The government should target illicit tobacco trade, not strangle the golden goose that lays the golden eggs. #ITC

[Compounding Fundamentals @Shankh_Ray]

@JMilesPT @qatarairways @qrsupport You are right @JMilesPT. It's been 2 weeks and still no updates from @qrsupport @qatarairways. Not sure how they claim to be the best airline of 2025 🙄

[Compounding Fundamentals @Shankh_Ray]

Deeply disappointed with @qatarairways. Flew Frankfurt–Doha–Bangalore last week, only to be told in Doha that my connecting flt was overbooked (poor planning). Forced to wait 24 hrs, missed an important event. Still no response from @qatarairways Unacceptable service @qrsupport

[Compounding Fundamentals @Shankh_Ray]

@TheNavroopSingh This is incorrect. Prices are expected to be hiked by Rs 3-11 per stick.

[Compounding Fundamentals @Shankh_Ray]

@qrsupport @qatarairways @qrsupport : Have messaged you with all the details.

[Compounding Fundamentals @Shankh_Ray]

@HDFCBank_Cares @HDFC_Bank Anay - Have Dm'd

[Compounding Fundamentals @Shankh_Ray]

@HDFC_Bank : Your customer care is #pathetic, Your relatonship managers are always busy and do not care to call back. You have replaced humans with bots that are helpness. Been trying to get my family'scard delivered to their current location for a month not, but no luck.
#Hdfc

[Nithin Kamath @Nithin0dha]

If you take money out of a business as dividends, the effective tax rate is 52% (25% corporate tax + 35.5% on personal income). Through capital gains, it's just 14.95% (with cess).

Why does this matter? Here’s what you should know if you invest in IPOs.

If you're an investor (especially a VC), the math is simple: reduce corporate tax by showing minimal profits or losses. Spend (Burn) on acquiring users, build a growth narrative, and then sell shares at a higher valuation while paying much lower tax.

This spending also makes it harder for competitors to survive. To be clear, we're not discussing R&D spending here, which, incidentally, is very low in India (0.7% of GDP).

What's often overlooked is that VCs are essentially playing a tax arbitrage game. Look at most VC-backed businesses listed in the last few years, the reason they show little or no profit is partly due to this. Once you run a business this way, it's extremely difficult to switch.

Every startup that's 7-8 years old from the time of raising the first round faces constant pressure from VCs for an exit. With almost no M&A opportunities in India, IPO is often the only way out.

The government probably designed this tax arbitrage to incentivize companies to spend money and not just accumulate and distribute. But I'm unsure if the balance is correct. I think it's also creating businesses that aren't very resilient. One prolonged market downturn, and many of these unprofitable companies would struggle to survive.

Two things that make this more interesting:

Unprofitable growth gets valued at much higher multiples than steady profits. A company doing ₹100 cr revenue with 100% growth might get 10-15x, while a profitable one with 20% growth gets 3-5x. So VCs aren't just saving on tax; they're in essence creating a 3x higher exit valuation.

If you're competing against someone burning cash, you almost have to match it to defend market share, even if you don't want to, because of the quirks I mentioned above.

[Compounding Fundamentals @Shankh_Ray]

@enggirlfriend Investment bankers spend 89-100 hrs creating multiple versions of the same slide deck - each with some cosmetic change or the other. So yes - it is 80-100 hrs of grunt work, and not productive at all

[Alok Jain ⚡ @WeekendInvestng]

China delayed wielding its rare earth leverage against US sanctions until breaking its 95% helium dependency on America—vital for tech like chips and rockets—through massive investments that reduced US reliance to under 5% by late 2024.

China plays Chess well.

[Devina Mehra @devinamehra]

Saw I headline recently saying 'Gold has seen the biggest rally since 1979'

Here is the second part of that story - what happened AFTER 1979

Gold did not reach its early ‘80s US Dollar price for a 27 years; had a 60% decline in the interim - it was DOWN 62% from its 1980 price in 1999 (in dollar terms without adjusting for inflation)

Then again, the 2012 high was not reached till 2020 with a 40% loss in between.

Gold has been more volatile and has seen bigger losses than equities - in dollar terms... Unlike its 'safe haven' image

More details below

[Neil Borate @ActusDei]

Which ratios to look at while picking a mutual fund?
1) Sharp/Sortino/Treynor for risk adjusted return
2) Alpha/Information Ratio for fund manager skill
3) Expense Ratio/Turnover for portfolio efficiency
Story by Dnyanesh Mugurdekar https://t.co/l80D8Eatoy

[Prashanth @Prashanth_Krish]

Ranking of top global IPO markets by 2025 fundraising volume