WeekendInvesting Newsletter - 9 Feb 2024

What is the correlation between Large and small caps?


9 February 2024 · Friday

Good evening, WeekendInvestor !


Learnings from 15+ year long Suzlon story

Investing in the stock market can be a rollercoaster ride, with stocks soaring to incredible heights one moment and crashing to unimaginable lows the next. Understanding how to navigate through the ups and downs of the market is crucial for any investor. One such example is the history of Suzlon, a stock that experienced a dramatic rise and fall, teaching us valuable lessons about making informed investment decisions.

In 2008, Suzlon was a highly sought-after stock, reaching an impressive value of Rs420. However, over time, the stock went through splits and its value plummeted to below Rs40. This drastic drop resulted in a massive 90% loss of market capitalization for investors within a short period of just nine months. Such a sharp decline can be devastating to anyone’s portfolio. . . . .

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The correlation between Large and small caps

Small caps and large caps are two key categories of market cap segments in the stock market. While they both represent stocks of publicly traded companies, there are significant differences between them in terms of market capitalization, performance, and risk factors. In this article, we will delve into the relationship between small caps and large caps and explore how their performance can impact the overall equity markets.

To begin, let’s analyse a historical chart comparing the Nifty (large cap index) and the small cap index over the past 20 years. . . . .

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WeekendInvesting Daily Bytes

In today’s market, we witnessed some interesting movements and good volatility. Yesterday, the market experienced a significant decline from 22,000 to nearly 21,650. However, in the second half of the day, we saw a strong recovery. As a result, the market closed at a congestion level, ranging from 21,700 to 21,750. This range has acted as both support and resistance in recent times. Despite certain pockets of correction, there seems to be no panic in the market.

Today’s highlights include Zomato, Paytm, PFC and many more !

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