Otto Money Newsletter - 19 Sep 2025

Dear Reader,

In our last newsletter, we touched upon what might provide an up move to the Indian equity markets - tariff resolution or another GDP surprise. The somewhat visible thaw in India-US trade relations led to a small hope led up move in Nifty +2.26%. NASDAQ 100 continued to outperform with gains of +3.44%. The rally in US stocks is clearly led by AI - those are the stocks gaining massive market capitalization and investments continue to flow there. Some analysts have turned cautious on the US market - notably Chris Wood of Jeffries said that he is calling a top on US market capitalization as a percentage of worldwide capitalization at 67%. While nobody can predict the future, one can look at facts. (1) The biggest NASDAQ companies are actually global companies. e.g., Meta gets more than 60% of its revenue from outside the US, Alphabet’s share is greater than 50%, Microsoft is at 49% and so on. (2) Those who work with AI believe that it is likely that AI will take up 5 to 10% of the services revenue - that’s $2.5T to $5T of topline for all AI companies together.

While there may be a short term shakeout, we remain constructive on technology as an investment thesis. The author is also reminded of a book he read many years ago - The Price of Tomorrow by Jeff Booth. The book rightly argues that the traditional economy built on labour and capital is inflationary by design and technology is the ultimate deflator. Even a look at India shows that the biggest gains have been had in stocks applying technology to everyday operations - Zomato, PB Fintech etc. Note that technology is not just software - as an example, Intuitive Surgicals holds 60% share of the robotic surgery market. If you think about the biggest jumps in productivity of human society, those have been led by Technology - which requires R&D! Our hope is that India will also create large technology companies rooted in R&D - which is the only way for our economy to escape the middle economy trap in the next 2-3 decades.

In other news, this week saw the launch of India’s first SIF - Specialized Investment Fund. The first SIF is a long-short fund from Quant AMC. In theory, these funds should do more quantitative trading including short positions and should outperform Mutual Funds in sideways and bearish markets. While we cannot recommend such funds just yet - we need some evidence and historical performance, SIFs offer a promising new addition to portfolios. Please contact our team in case you want to test the waters with SIFs. Last week, REITs were given parity with equity in terms of tax treatment and saw impressive gains. Our portfolios have benefitted from this change and we remain constructive on this asset class as a good diversification asset.

Happy Reading!

Wealth Beacon Team

If you haven’t already gotten your portfolio analyzed and streamlined, you may contact us at: contact@wealthbeacon.ai / http://www.wealthbeacon.ai

Disclaimer: Securities mentioned are illustrative and are part of our portfolios. (Meta, GOOG, MSFT, ISRG)

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