Category Archives: Blog

Petrol Prices– Why the prices of Fuel are Rising in India?

The retail petrol prices touched triple digits for the first time in a few areas across the country after the prices were hiked earlier this month. You too might have already noticed your monthly expenditure on fuel is increased.

petrol prices

In this article, we take a look at why the prices of fuel are rising in India. Here, we’ll try to give the reasons why the petrol/diesel prices have increased. Keep Reading to find out.

Why have petrol and diesel prices increased?

When the Union Petroleum and Natural Gas and Steel Minister Dharmendra Pradhan was asked this question he blamed it on the oil-producing countries. When it comes to crude oil India imports over 80% of its crude oil requirement. So any changes in the global prices will directly impact the fuel prices in India.

Pradhan stated that ”There are two main reasons for the fuel price rise. The international market has reduced fuel production and manufacturing countries are producing less fuel to gain more profit. This is making the consumer countries suffer,”. The minister also added that the government has also requested OPEC and OPEC+ countries to increase output.

The oil prices have been on a rise ever since Saudi Arabia along with the rest of the Oil Producing and Exporting Countries (OPEC), its allies the OPEC+ countries and Russia agreed to cut their production by 1 million barrels per day. This caused the oil prices to rise to $63 per barrel – the highest in a year.

But is this the only reason for the high prices in India? Oil prices in countries around the world have been reduced back to pre covid levels but quite the opposite has taken place in India. Prices in the US, China, and Brazil are 7.5%, 5.5%, and 20.6% lower than they were a year ago. A closer look at the price break up reveals some different answers.

Related:- Union Budget 2021 Overview – A Budget for Everyone?

Taxes on Petrol and Diesel

Both the central and the state governments have hiked the central excise duty and sales taxes to increase their revenues. In Delhi, the combined state and central taxes are 180% and 141% of the base price of petrol and diesel respectively. Over two-thirds of what we pay as fuel is tax to the government.

The main reasons for the increased taxes were the nationwide lockdown hurting the revenues of the government. In order to make up for this, fuel prices were taxed heavily. Last year the petrol prices were touched nil but this benefit was not passed on to the consumers in order to make up for the losses the government faced in other areas.

The last time any relief was provided was in 2018 when the excise duty was cut by Rs. 1.50 per litre. The crude oil priced however increased to $40 per barrel between June and October, and now have gone past $60.

When the lockdown was imposed the excise duty was increased by Rs 13 per litre on petrol and Rs 16 per litre on diesel. Between April 1 and December 10, petrol prices were revised upward 67 times. Despite the huge increase in prices the Centre has refused to budge and still maintains the same excise duty.

Value Added Tax (VAT) too has been significantly increased to accommodate the needs of the state governments. After GST the only direct source of revenues that the state governments have is through liquor and fuel. Only a handful of state governments have taken action to control the prices.

Rajasthan reduced (VAT) from 38% to 36%, Assam withdrew the Rs.5 additional tax imposed during the COVID-19 crisis and West Bengal, cut VAT on petrol and diesel by Rs.1. Meghalaya gave the biggest relief by cutting  Rs 7.4 per litre on petrol and Rs 7.1 on diesel.

Related:- Who are the Highest Paid CEOs in India? Find out here!

In Closing

Consumers that directly spend on travel have already been affected due to the high fuel prices. But the concern due to increased fuel prices now extends to other products and services as well. Food inflation has reduced in the last few months but with the transport costs increasing they too may catch the inflationary trend.

Who are the Highest Paid CEOs in India? Find out here!

CEOs Leaders play a very important role in every organization. Sometimes they also manage to inspire millions around the world too. But how important are they their organization and how much are these organizations willing to pay them.

CEOs

In this article, we take a look at the Highest Paid CEOs in India. You’ll be surprised as they beat Mukesh Ambani (15cr.) by crores when it comes to remunerations.

The Highest Paid CEOs in India

1. C.P. Gurnani – Rs 146.19 crores

C.P. Gurnani is the CEO of Tech Mahindra an Indian multinational technology company, providing IT and BPO services. He took home compensation of  Rs. 146.19 crore (inc. benefits and bonuses) for the year 2018. This makes him the highest-paid CEO in India.

Gurnani, a Chemical Engineer has had a career spanning 32 years during which he held leading positions in HCL Hewlett Packard Limited, Perot Systems (India) Limited, and HCL Corporation Ltd.

2. Kalanithi Maran and Kavery Kalanithi- Rs 87.50 crore each

Also known as the “King of South India TV”, Kalanithi Maran is the President and CEO of Sun Group, Syriac and Red FM, Sun Cable Vision, and Sun Pictures. The group is headed by Maran and his wife Kavery, who holds the post of executive director in the company.

They both took home a compensation of ₹87.50 crore which includes ex-gratia/bonus.  This makes Maran the 2nd highest paid CEO and his Kavery the highest-paid woman executive in India.

Maran the grandson of former Tamil Nadu Chief Minister, M. Karunanidhi started the business in 1993. Their leadership has expanded the TV network to have over 32 channels that reach over 95 million households in India.

Related:- Union Budget 2021 Overview – A Budget for Everyone?

3. Pawan Munjal – Rs 80.41 crores

Pawan Munjal is the Chairman, Managing Director, and CEO of Hero Motocorp. He took home a compensation of Rs. 80.41 crores in the financial year 2019. This made him one of the highest-paid CEOs in India. Son of Brigman Lal Mangal joined Hero Honda Motors in the early 1980s as director and took over as MD in 2001. He has been key for the growth, strategic planning, and transition of the group from Hero Honda to Hero Motocorp in 2011.

Pawan Munjal also heads several Committees of CCI, he’s part of the board of IIM, Lucknow, and also a member of the  World Economic Forum.

4. N. Chandrasekaran – Rs. 65.52 crores

Natarajan Chandrasekaran is the chairman of Tata Sons. He was appointed as the CEO of Tata Consultancy Services (TCS) in 2009.  He took home a salary of Rs. 65.52 crores in the Financial Year 2019.

Before serving as the chairman Chandrasekaran was also appointed as COO of TCS, chairman of Tata Motors, and Tata Global Beverages. He also was one of Tata’s youngest and the first non-Parsi CEO to take office in 2009.

5. S N Subrahmanyan – Rs. 48.45 crores

Sekharipuram Narayanan Subrahmanyan is the CEO & Managing Director of Larsen & Toubro. He had a pay package of Rs. 48.45 crores for the year 2019.

He received a bachelor’s in Civil Engineering and also has an MBA from Symbiosis and was part of an Executive Management Programme from the London Business School. He joined the company in 1984 after completing his education and has worked with them for 33 years before he was appointed CEO in 2017.

6. Salil Parekh – Rs 34.27 cores

Salil Parekh is the CEO of India’s second-largest  IT company. He took home compensation of  Rs. 34.27 crore (inc. benefits and bonuses) for the fiscal year 2019-20.

Before joining Infosys Parekh also worked for E&Y and served on the board for Capgemini. He was appointed CEO of Infosys in 2015 and was responsible for overseeing a business cluster comprising Application Services and Cloud Infrastructure Services among others.

7. Rajiv Bajaj – Rs. 32.31 crores

Rajiv Bajaj has been the managing director of Bajaj Auto since 2005. He took home a remuneration of Rs. 32.31 crores in 2019. He joined his family business after completing his studies as an engineer.

Vivek Bajaj is credited with reviving the ailing business. He also was responsible for introducing the Pulsar range of motorcycles into the Indian markets.

Related:- How to Invest in Share Market? A Beginner’s Guide!

8. Sunil Mittal – Rs. 31 crores

Sunil Mittal is the founder and chairperson of Bharti Enterprises. He had a pay package of Rs. 31 crores for the financial year 2019. He was the son of MP Sat Paul Mittal. He founded his first company at the age of 18 with an investment of RS. 20,000.

Today he owns Bharti enterprise which has diversified interests in telecom, insurance, real estate, education, malls, hospitality, Agri, and food among other ventures.

9. Guenter Betschek – Rs 26.29 crores

Guenter Butschek is the CEO and Managing Director of Tata Motors worldwide till Jan 2021. He took home a package of Rs. 26.29 crores for the year 2019. This made him one of the highest-paid employees in India. The German worked with Daimler AG for 25 years and served as the COO of Airbus before being appointed as CEO for Tata motors.

10. Venu Srinivasan – Rs. 23.77 crores

Venu Srinivasan is the Chairman of TVS Group. He took home a package of Rs. 23.77 crores for the financial year 2019. He has come a long way as he started his career as a mechanic in his own garage during vacations. He completed his education as an engineer and also received an MBA from Purdue University (USA).

Closing Thoughts 

In this article, we looked into the profiles of Highest Paid CEOs in India. This list clears those huge responsibilities also come huge paychecks.  An average salaried employee would have to work for months for what they make in an hour. This makes the post all the more lucrative.

Union Budget 2021 Overview – A Budget for Everyone?

The Budget 2021 can be widely considered as one of the most difficult times in Humankind (owing to COVID 19). While presenting her third budget (by far the most challenging), Honourable Finance minister, Nirmala Sitharaman has delivered a budget, that is expected to lay the groundwork for Indian growth and development for years to come.

Budget 2021

The FM budget speech this year was economical in terms of time spent. A shade under an hour and 50 minutes as compared to 2 hr and 40 minutes last year.  In her speech, Honorable FM laid mentioned the budget which is built on the following six pillars:

  • Health and well-being
  • Physical and financial capital and infrastructure
  • Inclusive development for aspirational India,
  • Reinvigorating human capital
  • Innovation and R&D
  • Minimum government-maximum governance

The primary focus of this budget was to create jobs primarily through big infrastructure announcements. Now, let us give you a brief Union Budget 2021 Overview.

Related:- Regulations to Invest in US or Foreign stocks for Indians?

Budget 2021 Overview – Major Budgetary Announcements

Here are some of the key announcements in this budget included:

  • Since the last budget, the nominal GDP has reduced to Rs. 1.94 from 2.24 lakh crore. This is owing to the increase in expenditure to handle the situation of Pandemic, COVID-19
  • For the first time ever, the budget went paperless and it was presented on Made In India tablet. 
  • The total COVID support measures amounted to nearly 13% of the GDP and total COVID-19 support measures by the government and RBI amount to Rs 27.1 lakh crore
  • The PM Atmanirbhar Swasth Bharat Yojana is projected to outlay Rs 64,180 crores over the next six years. The aim of this scheme is to develop the overall healthcare system and develop institutions for the detection and cure of new and emerging diseases
  • The Jal Jeevan Mission Urban to be launched and it has an outlay of Rs. 2.87 lakh crores. The aim of this scheme is to provide Universal water supply, 2.86 crores household tap connections and liquid waste management 500 AMRUT cities
  • A grant of Rs. 35000 crores have been provided for COVID vaccines for the year 2021-22. And if required then the government is committed to spending more.
  • For Railways, a total amount of Rs. 1,10,055 crores have been committed. And this money will be used for overall railway infrastructure development and for 100% electrification of railway broad gauge by 2023
  • The government to allot Rs 1.03 lakh crore for National Highway Projects in Tamil Nadu. Rs 65,000 core for National Highway Projects in Kerala; Rs 25,000 crore for National Highway Projects in West Bengal. The government will also allot additional Rs 34,000 crore for National Highway Projects in Assam.
  • The FM also proposed to divest two PSU banks and one general insurance company in FY22. Further, divestments of BPCL, CONCOR, Pawan Hans, and Air India will be completed in FY22. FY22 Divestment target is at Rs 1.75 lakh crore.
  • The Government also aims at doubling the ship recycling capacity by 2024. More seven port projects worth more than Rs. 20,000 crores to be undertaken in FY 2022 via PPP
  • Social security benefits to be extended to gig and platform workers. Women to be allowed to work in all categories in night shift also
  • The ‘1 Nation 1 Ration Card’ plan is under implementation by 32 States & UTs. The Centre will launch a portal to collect data on migrant workers.
  • Senior citizens to be benefitted. The ones who are having income sources as Interest and Pension income are exempted. The age limit is for citizens above 75 years. Further, the timeline for re-opening of tax returns has been reduced to three years from six years.
  • To reduce hassle for small taxpayers a dispute resolution committee has been proposed. This will be faceless to ensure efficiency and transparency. Anyone with a taxable income up to Rs 50 Lakhs & disputed income up to Rs 10 Lakhs are eligible to approach the committee.
  • Custom duties are aimed at promoting domestic manufacturing and to promote that following steps have been taken: 1)Cutting duty on Copper scrap to 2.5 %, 2) Plan on bringing nylon at par with polyester with respect to taxation, 3)Duty on Naphtha reduced to 2.5%, 4)The plan is to rationalize custom duties on Gold and Silver
  • The power distribution companies across the country are monopolistic and a need to provide choice to the consumers. A framework will be put in place to give consumers alternatives to choose from among more than one distribution company.

Related:- How to Invest in Share Market? A Beginner’s Guide!

Budget 2021 Overview: Major Reactions on the Budget

According to PM Narendra Modi, Budget Will Give Major Boost To Agriculture, Create Employment

Congress leader Anand Sharma said that the “nation needed a bold budget and more direct transfers to the weaker sections to revive demand, restart job creation.”

Union Defence Minister Rajnath Singh hailed Budget 2021 as the budget for an AtmaNirbhar Bharat that will strengthen the economy.

According to Tapati Ghose, Partner, Deloitte India, The budget speech had an undertone of the Government’s focus on ease of doing business in India. Towards the FM reiterated that tax systems to be transparent, efficient and promote investments in our country. The tax rates, surcharge, cess etc. have been left untouched. Even the much-debated Covid Cess was not brought out. This brings stability and certainty to the tax framework. Definitely a positive move.

According to Adar Poonawala, CEO, Serum Institute of India, “Great Budget 2021 announcements, Nirmala Sitharaman ji, especially on healthcare and vaccines; this is the best investment any country can make. A healthier India is a more productive India

According to Harsh Goenka, Chairman of RPG group, “Cong-anti poor,anti-farmer, unimaginative. BJP-innovative,pro-farmer, help all sections of society CII, FICCI-will kickstart economy, encourage investment

Some TV channels-wasted opportunity, will increase inflation Businessmen-pathbreaking, 10/10”

Regulations to Invest in US or Foreign stocks for Indians?

Owning foreign shares like Tesla, Apple, Amazon, etc has been made so simple that Indian investors can now do it with the click of a mouse. All one has to do now is find a good international broker to create an account by providing details such as name, email, and mobile number to start.

foreign

This is followed by providing documentation like PAN card and address proof. The brokers take care of paper-work, authorizations from banks,  getting the RBI clearances being, and opening an account. Almost seems like investing in Indian markets!

With the process now being seamless, it is easy for investors to get carried away. At times lose track of the guidelines set for investing abroad. So let us find out and understand better the guidelines that govern investing abroad. Here, we’ll look into the Regulations to Invest in the US or foreign stocks for Indians.

Regulations to Invest in US or Foreign stocks

Transferring money abroad used to be complex with a lot of approvals required. The advent of globalization simplified the process with the introduction of the Liberalised Remittance Scheme (“LRS”)  in 2004.

RBI’s Liberalised Remittance Scheme (LRS) allows Resident Individuals in India to acquire foreign securities without prior approval. They can freely remit money out of India, up to the given threshold, with the help of authorized dealers and Indian banks. The threshold is currently set at $250,000 for one financial year (April to March). At the current rate (73.59) this amounts to Rs. 1.83 crore. Individuals here have to watch out for forex changes.

Related:- Indian GDP Shrunk by 23.9% in First Quarter 2020

Current and Capital Account Transaction

It is important to understand all transactions involved in LRS other than stock market investments. This is because they too affect the remittance ability of an individual. This $250,000 is permissible for current or capital account transaction or a combination of both. The current account transaction can include gifts, donations, emigration, medical treatment, business travel, private visits to any country (except Bhutan and Nepal). The Capital account transaction include the following:-

  • Making investments abroad ( Debt instruments, shares, etc.)
  • Purchasing property abroad.
  • Buying objects of art.
  • Extending loans including loans in INR to NRI/PIO close relatives.
  • Setting up of wholly-owned subsidiaries and joint ventures outside India for bonafide business.
  • Repayment of loan acquired when you were a non-resident etc.

The LRS restricts buying and selling of foreign exchange abroad, or purchase of lottery tickets or sweepstakes, proscribed magazines, etc. An individual is also restricted from investing in a country that has been identified by the Financial Action Task Force as “non-co-operative countries and territories”.

Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme. This is even if the proceeds have been brought back into the country. The individual however can send money as many occasions as he wants. This is as long as the $250,000 cap is maintained. It is not necessary that the remittances have to be made only in US dollars, they can be made in any freely convertible currency.

In the case of investment in shares, debt instruments, and mutual funds it is not necessary that the interest or dividend earned have to be remitted back. They can be reinvested or retained or used to meet any expenses abroad. The investment and their profits too can be reinvested without being brought back to India.

Which individuals are considered as resident individuals?

Any individual that satisfies one of the following 2 conditions would qualify as a resident of India:

  1. Stayed in India 182 days or more in a year or
  2. Stayed in India for 365 days or more for the immediate 4 preceding years and 60 days or more in the relevant financial year.

Related:- 3 Easy Ways to Invest in Foreign Stocks From India!

How are taxes affected in India for income earned abroad?

According to income tax rules, the income earned anywhere in the world is taxable in India for you. However, if taxes have already been deducted at source abroad. Then the individual can make use of the Double Taxation Avoidance Agreement (DTAA) where the income was earned. According to this if the taxes have already paid in the country abroad, as long as that country has a DTAA with India the individual will not be required to pay tax on the income once again.

What are the exceptions to the LRS cap?

If the $250,000 cap is reached one may still remit more funds if it takes prior approval from the Reserve Bank. The exception also includes medical treatment where one can still remit more than USD 250,000 without approval from RBI.

This is if one can produce certain documents. In the case of education undertaken abroad too may be allowed without prior approval from the Reserve Bank. This is because students are considered NRIs from day one (of moving abroad for studies).

Closing Thoughts

Despite liberalizing the economy it is important for a country like India to practice control on foreign exchange movements in and out of the country. India already spends much more on foreign exchange than we earn. The RBI keeps an eye and adjusts the cap accordingly.

The table above shows the limits adjusted by the RBI throughout the years, A situation where unlimited remittances are allowed would ruin the exchange rates of the country. This makes LRS all the more important to be implemented.

3 Easy Ways to Invest in Foreign Stocks From India!

Apple, Google, Facebook, Amazon, Microsoft, Samsung, Tesla, Twitter… Invest These are some well-known companies in the world. We all have grown up using the products/services offered by these companies. Moreover, these companies are global leaders in their respective businesses, as well as innovators, who are likely to benefit in the future. But along with using their products, can we also own some shares of these companies?

Invest

Wait, these are not Indian companies, right? Therefore, they won’t be listed on the Indian stock exchanges. Even if you’ve a demat and trading account in India, you can trade/invest only in companies listed on Indian stock exchanges (BSE/NSE). But these companies will be listed in their respective country’s stock exchanges like US stock exchanges. Then, how to buy shares of a company that are not registered in India, but trades in the foreign stock exchanges?

Don’t worry, if you really want to buy these stocks- you’ll get it. In this post, we are going to discuss three simple ways through which you can invest in foreign stocks.

Why should you invest in foreign stocks?

Before we start this post, let us first discuss why should you invest in foreign stocks? Are they better than Indian companies? Here, you need to make up your mind why you want to invest in foreign companies. There are over 5,500 listed companies in the Indian stock market. Aren’t they enough? Why do you need to invest alternative stocks?

Further, which one is better to invest in- Indian companies or foreign companies?

Well, I’m really not in a position to answer the second question. It won’t do justice if a guy in his 20s sitting on the comfort of his couch judges these companies. These are giant multi-billionaire companies that we are talking about here. Google, Apple, Facebook, Amazon, Samsung, Cisco, Tesla, etc are too big companies to comment upon. These companies have lots of cash, highly qualified professionals, employees in their management team and they are big innovators in their industry. Anyways, there are even many big Indian companies that can give competitions to many foreign companies.

Top reasons why many Indian invests in the US

Here are my top reasons why many Indian invests in the US or other foreign stock exchanges:

1. People want to invest in their favorite companies

Apple, Google, Twitter, Facebook, Amazon, Tesla etc. are the darlings of this generation. And of course, many people want to invest in these companies.

2. Diversification with Global Investments

Investing in foreign stocks helps in diversification. Let’s assume that the Indian equity market starts falling due to some local region. However, investing in foreign stocks can mitigate the risk in your portfolio as the local reason may not have a significant effect on the international markets.

3. To seize bigger opportunities

Once you start to invest in foreign stocks, there are no boundaries anymore. You can hunt for better (profitable) opportunities in the international markets.

Besides the above-mentioned points, few investors believe that foreign companies have better resources, facilities, government cooperation, and standards. That’s why they invest in these foreign companies, compared to Indian companies. Nevertheless, while deciding to invest in foreign stocks, you should also remember that India is one of the fastest-growing economies in the world. On the other hand, most of the international markets are a little saturated. Therefore, growth-wise, India has better potential.

Related:- Indian GDP Shrunk by 23.9% in First Quarter 2020

Cons of Investing in Foreign Stocks

There are two sides to every coin. Here are a few critical points to know before you invest in foreign stocks:

1. Be ready for the high charges

While investing in international stocks, you’ll be transacting in foreign currencies. For example, if you are trading in the US stock market, you have to pay the brokerages in the US dollar. And hence, the stock brokerages may be a little higher compared to the charges in the Indian stock market. Similarly, the annual/monthly maintenance charges may also be higher compared to domestic accounts.

2. Profits are subjected to the currency exchange rate

Let’s assume that you are investing in the US stock market. When you bought the US stock, the currency exchange rate was $1= Rs 68. However, next year- when you sold the US stock, let say the Indian currency got stronger, and the currency exchange rate becomes $1 = Rs 62. In such a case, you have already lost 8.8% due to the change in the exchange rate. That’s why when you invest in foreign stocks, profits are always subjected to the currency exchange rate.

3. Up to $250,000 can be invested overseas by the Indian residents

As per the RBI notification in the Liberalised Remittance Scheme (LRS), an Indian resident individual can only invest up to $250,000 overseas per year. With the current exchange rate of ($1= Rs 68), this amount turns out to be over 1.7 Crores. Anyways, if you have a family of four, you can invest 4 x $250,000 = $ 1 Million. That’s enough money to invest, right?

Quick Note: Besides the above factors, you also need to keep in mind the foreign stock risks. As these stocks will be listed on foreign stock exchanges – the environment and the factors (like local government policies, local trends, etc) will affect the share price of those companies.

How to invest in foreign stocks?

Now that you have learned the basic concept of investing in the international stock exchanges, here are three simple ways to invest in foreign stocks—

1. An account with Indian Brokers having a tie-up with a foreign broker

Many full-service Indian brokers like ICICI Direct, HDFC Securities, Kotak Sec, Axis Securities, Reliance money, etc has a tie-up with the foreign brokers. They have made it very simple to open your overseas trading account with their partner (foreign) brokers. You can invest in foreign stocks using these full-service brokers. 

For example, if you’ve an account with ICICI direct, you can invest in global markets using their broker partner Interactive Brokers LLC.

2. Open an account with the foreign brokers

A few international brokerage firms like Interactive BrokersTD AmeritradeCharles Schwab International Account, etc permits Indian citizens to set up an account and trade in US stocks, mutual funds, etc. In fact, US-based brokerage like ‘Interactive brokers’ also has an office in India where you can visit, get your queries answered, and open your overseas trading account.

3. Investing in Foreign stocks through new startups Apps

In the past few years, many new starts have been launched in India and abroad than helps Indians to invest in foreign stocks. For example, recently launched startup Vested Finance, helps Indians to invest in US stocks. They are a US Securities and Exchange Commission (SEC) registered investment advisor. Similarly, you can also invest in foreign stocks using the Webull app, another popular startup company that is also committed to building the best investing and trading experience for India and Global stock markets.

Related:- Good Debt vs Bad Debt: What You Need to Know?

Extra: Buying Indian MF/ETFs with global equities

There are a number of mutual funds/ETFs who invest in international markets (global market, emerging market, etc). You can invest in those mutual funds/ETFs to indirectly invest in foreign equities. 

This is the easiest approach to invest in foreign stocks. An advantage of investing through mutual funds is that you won’t need to open any overseas trading account. Further, you won’t also require to invest a hefty amount. Compared to direct investing in foreign stocks (where you might be asked to maintain a minimum of $10,000 deposit), investing in mutual funds/ETFs are cheap.

For example, Motilal Oswal recently started their subscription for its Motilal Oswal S&P 500 Index Fund. It is an open-ended scheme replicating the S&P 500 Index, which consists of leading 500 companies listed in the US. A few of the popular of popular mutual funds who trade in global equities are—

Quick Note: Many other Indian stockbrokers are also planning to offer their clients a facility to invest in the US and foreign stocks. For example, Zerodha is planning to offer option to invest in US stocks with no minimum investment. However, these features are yet to be launched. Nevertheless, these stockbrokers internally working on these features is a good sign for the Indian retail investors who are enthusiastic about investing in foreign companies.

Closing Thoughts

In this article, we discussed three easy ways to invest in foreign stocks from India, along with the forth way of mutual funds route. We also covered the advantages and disadvantages of investing in foreign stocks.

Investing in the foreign market will help you widen your investment horizon. Here, you can invest without boundaries in your favorite companies. Moreover, in the era of the internet- it’s not much difficult to invest in the international market. The most significant advantage is that it helps in diversifying your portfolio. However, the obstacles are higher expense charges and currency exchange rates.

That’s all for this article on different ways to invest in foreign stocks. Let me know what you think about investing in international stocks in the comment section below. Further, if you’ve got any questions on this topic, feel free to mention below. Have a great day and Happy investing.

Indian GDP Shrunk by 23.9% in First Quarter 2020

Hit by the Covid-19 pandemic, India, the world’s fifth-largest economy has been turned into the second-worst performer in the Covid-19 hit the quarter of the financial year 2020-21. India’s Gross Domestic Product (GDP) has shrunk by 23.9% in the first quarter of the financial year 2020-21.

quarter

Generally in forecasts, it is of rare occurrence to find the negative performances beating the downward trends. But that is exactly what has happened in the first quarter as although a negative GDP was predicted but nothing close to wiping out 1/4th of the GDP. Today, we take a look at the reasons behind the decline and the possible future.

Related:- ‘National Educational Policy’ 2020 – Highlights & Concerns

Why did the Indian GDP Shrunk by 23.9%?

Earlier, when this issue of the state of the economy came up at the 41st GST Council Meeting on Friday, Finance Minister Nirmala Sitharaman looked into the celestial factor and stated:

“This year we are facing an extraordinary situation…we are facing an act of God which might even result in the contraction of the economy.” – Nirmala Sitharaman, Finance Minister

Now, let us look into some of the hard facts. The Indian economy suffered due to the nationwide lockdown imposed. This was during the April- June quarter of which the lockdown covered a major portion. India had one of the longest and strictest Covid-19 lockdowns in the world. And unfortunately enough also suffered is suffering through the worst economic consequences. In comparison to other countries around the globe, India has been one of the worst-hit.

In order to understand how exactly the GDP was affected and how it can recover, we must first take a look at the components that form a part of the growth. These are consumption, government expenditure, investment, and the nation’s current account deficit (imports – exports).

  1. Consumption generally has the greatest impact on GDP. In the last quarter, consumption accounted for 56.4 percent of the country’s GDP. But when compared to figures from 2019 there is a drop of Rs 5,31,803 crore in private consumption or 27 percent. This has been one of the major reasons as to why the GDP has contracted. This is because people simply are not willing to consume more as most expect tougher times ahead.
  2. The Investment portion made up 32 percent of India’s GDP. This portion too fell by Rs 5,33,003 crore in comparison to last year. When coupled consumption these two components made up for 88 percent of the total GDP shrinkage
  3. The government expenditure share of the GDP stood at 11 percent. This component rose by 16% due to the relief measures provided by the government. This increase in expenditure, unfortunately, could not make up for the total decline from the consumption and investment portion.
  4. The current account deficit which historically has always been in negative recorded positive rates. But this too was not due to exports exceeding regular imports. It was simply due to the lack of imports due to a lack of demand.

The National Statistical Office (NSO) in an official statement released that “The GDP has shrunk from Rs 35.35 lakh crore in Q1 of 2019-20 to Rs 26.90 lakh crore in the first quarter of Q1 of 2020-21, showing a contraction of 23.9 percent as compared to 5.2 percent growth in Q1 2019-20,”.

Related:- Good Debt vs Bad Debt: What You Need to Know?

What does the future hold for the Indian economy?

The future of the Indian economy depends on how well is the purchasing capacity distributed among the general public. This is generally spread out by the income earned by the citizens.

But the pandemic has rendered millions jobless forcing them to cut back on their spending habits. This reduces the consumption portion. When there is a fall in consumption businesses avoid making investments as they already are aware of the lack of demand. These two portions, unfortunately, depend on individuals as they cannot be forced to spend. One factor that can be controlled is government expenditure in order to boost the GDP.

But unfortunately, enough even prior to the pandemic the government had already exceeded their resources by borrowing. The only option remains is to keep borrow from the RBI which has maintained amounts close to 18% of the GDP as a reserve. An infusion will provide some relief and may get the consumption portion moving as long as inflation is kept on check.

For the remaining quarters to come analysts have predicted that even though the GDP will improve but will still keep performing negatively. This recovery phase is expected to also likely extend into the first half of 2022. But these estimates depend on current figures and will change depending on how deeply COVID-19 outbreaks occur throughout the country.

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Good Debt vs Bad Debt: What You Need to Know?

A common misconception among most of the working population is that all debts are bad, and hence they should avoid debts at any cost. Now, it is possible that you may never take any debt/obligation throughout your lifetime. However, this is not a very smart move.

bad

Many times, taking debts to reach your goals can be a wise action and can help people succeed in the long term. As a matter of fact, all those who run a business or have a winning mindset know that – “Not all debts are bad!

Although buying luxury goods through debt on your credit card should definitely be considered as a bad debt, however, sometimes, it is okay to take a debt to start a business, buy your new house, for getting a higher education, etc when the possible returns in future are higher compared to the interests paid.

Good Debt vs Bad Debt

1) Good debts

There is a common saying in the business world– “Money makes money.” In other words, it means that you need money to make more money.

Concerning good debt vs bad debt, if you can use your debt to generate more money/value or simply increase your net worth, then it can be considered as good debt.

In general, these debts have lower interest rates than the potential returns and, therefore, treated as an investment for the future.

For example, if you’re starting a business, it is not necessary that you should have enough savings to get it off the ground. Here, if the future growth potential and expected returns from your business are high, you can take a business loan. The business loan can be considered as a good debt (on the condition that your business is fruitful).

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Here are a few other common examples of good debts:

— Education loans:

“The more you learn, the more you can earn.”

If taking a degree can increase your earning potential as an employee (or an employer), it’s okay to go for that debt. You are more likely to be better paid if you have higher knowledge and degree. Always be ready to “Invest in yourself,” and hence, taking a student/college debt can be considered good debt.

Anyways, please note that an education loan may turn out to be bad debt if you do not get employment as per your developed skills after graduation. Therefore, always choose the degree/program carefully because if there’s no substantial earning potential after you have completed the education, it may not be a good debt.

— Business loan:

If taking a business loan can increase sales, earnings, and improve your company’s financial health in the future, it can be a good debt. Moreover, having a balance in the account can also reduce the financial stress of owners as they do not have to worry about running out of cash constantly. And therefore, they can make better decisions for their business.

With time, the owners can slowly pay down the debt when their business becomes profitable and moreover stable. Anyways, a business loan can also become a bad debt if the businessman is blindly taking money for a risky business idea.

— Mortgages:

Mortgages for buying a house or real estate debts for property ownership can be considered as good debt.

Generally, buying a house or property involves a massive upfront cost. If you do not have saved a lot of money to invest in a house/property, but the potential earnings that you can make from your real estate investment are way high, then taking a loan may be a good idea.

Here, you can buy the property, live in it for years, save money on rent, and also sell it in the future for making money. Else, you can buy the property and rent it out to make money as rental income. As you are taking a loan to build an asset that increases in value, mortgages can be considered as good debts in the long run.

The Risks of Good Debt:

Although good debts may sound like a viable option for a better future, however, they are always dependent on a lot of assumptions. There’s no guarantee that the future will turn out to be the same as planned. For example:

  • You can get a college degree from your education loan but may have no job offer.
  • Your business loan may be a waste if your business/startup fails
  • You may be paying high mortgages for your house and may be left with no savings for the future.

Even for good debts, there are a lot of risks involved as people are forecasting the future based on their assumptions. Therefore, before taking an obligation, carefully assess the risks and rewards.

For example, if you are planning to get an education loan, choose to take the loan for a degree/program that you’re confident to be fruitful. Know the expected salary after graduation so that you can plan to pay the money back.

Besides, considering the worst-case scenario may also help here as you can even plan for it. Overall, always act smartly as a good debt may not always be right for everyone.

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2) Bad debts

Bad debts are the money that is borrowed to purchase depreciating assets or liabilities. In other words, if the value of assets doesn’t go up or generates income in the future, you should not buy it by borrowing money as they are bad debts.

In general, bad debts have a higher interest rate, and people can prevent taking these debts by making smart use of money. Here are a few examples of bad debts:

— Debts to buy fancy cars:

Cars cost a lot. While having a vehicle can be a necessity as it saves money and time, however, taking debt to buy an expensive car is never a good idea. The value of a vehicle depreciates over time, i.e. becomes less than what you paid for in the future. And hence, borrowing money to buy fancy cars can be considered as bad debt.

— Debts to buy luxuries:

Taking consumer/personal loans to purchase luxuries like expensive watches, clothes, dining in fancy restaurants, services, etc. are again bad debts. Personal loans have incredibly high-interest rates and are usually caused by living beyond one’s means. The money spent on these goods/services could have been used somewhere else.

— Credit Card debts:

Credit card debt is the worst form of bad debt. The interest paid on credit card debts is significantly higher than the rates on consumer loans. Moreover, as the outstanding amount accumulates each month, it makes it easy for the people to fall behind and become prey to the credit card companies.

Mixed/Special Cases of Good Debt vs Bad Debt:

The world is not just ‘Black’ and ‘White’. There’s also ‘Grey’!

Similarly, a debt cannot always be classified as good debt or bad debt. Sometimes, it can be both. It depends on your financial situation and preference. Here are a few examples:

— Borrowing to invest:

If you are getting money at a lower interest rate and making more money by investing it, then it can be considered as good debt. In the trading world, this is called leveraging, and it can help the traders to make a lot of profits using other people’s money.

Anyways, if the interest rate on the borrowed money is way high and the profits earned from your investment is low, then this money can be considered as a bad debt.

Overall, there’s a risk involved in borrowing money to invest. Until and unless, you’re trained and experienced to do so, this approach can be dangerous.

— Credit card rewards:

Although relying too much on credit cards be harmful, however, they are also a lot of benefits of using credit cards. Most of these cards come with amazing rewards like free airline tickets, movie tickets, cashback, etc. If you can use the credit cards efficiently, it can be considered as good debt.

— Consolidation loan:

In finance, consolidation occurs when someone pays off several smaller loans with one more jumbo loan. Here, the individual gets this loan at a lower rate to pay off the higher interest rate loans. In general, it can be considered a good idea to get rid of high-interest debts. However, the problem arises when the individual is not able to pay off the bigger loan or when the debts pile up.

‘National Educational Policy’ 2020 – Highlights & Concerns

On July 29th, 2020 the Modi government announced the National Educational Policy in a move that left us stunned over the sweeping changes involved. The only dismay that most of us had was that our wish to be able to study once these reforms are imposed is not possible.

Policy

In this article, we cover the key points of the NEP and their views from different perspectives with hopes that the policy is better understood and loopholes if any are addressed.

Highlights of the New Education Policy

This is the third education policy bought forward by the Indian government in its efforts to raise Indian education standards. A much-needed decision. 34 years after the last policy was implemented it is also the first Education policy by the BJP. The policy was approved by the union cabinet but is yet to be presented in the parliament.

The new National Educational Policy also requires further regulation between the state and center. However, it is still policy and not the law to be followed. The following are some of the points in the policy.

— NEP for Schools Students

1. New pedagogical and curricular structure of school education (5+3+3+4): 

The education system currently follows the 10+2 structure. This will soon be replaced by the 5+3+3+4 curricular structure. The new structure can be better understood when it corresponds with a child’s age i.e. 3-8, 8-11, 11-14, and 14-18 years respectively. The first stage includes time spent in Anganwadi and preschools.

This new structure divides the existing structure as per the cognitive developmental stages of a child. These are early childhood, school years, and secondary stage. It also should be noted that this change in structure does not change the years that a child spends in formal education. They remain the same as before.

The new structure brings changes to the examination structure too. As per existing norms, a child gives an exam after every academic year. But once the NEP is implemented children will give examinations only in class 3,5, and 8. This is apart from boards which too will see considerable changes. 

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2. Earlier, schooling was mandatory for children aged between six and 14 years. Now education will be compulsory for children aged between the three and 18 years.

This move would allow those aged from 14-18 years to also demand the same Right to Education(RTE) that was earlier present only up till 14years. Now children above the age of 14 too can demand this.  Meaning they can get educated up to 12th grade free of charges at any government educational establishment.

3. Mother tongue as the medium of instruction

It is obvious that the mother tongue is the first language that a child understands. Hence understanding newer concepts will be much easier when if done in the mother tongue itself. In order to implement this the medium of instruction in schools will change too.

This move is also inspired after observation of the medium of instruction imposed in some European countries. In these places, when a child is introduced into the schooling system he is only taught in his mother tongue be it German, Italian, Spanish, Russian, etc. depending on the country. Due to this, children are able to grasp trivial concepts easily. This will be made compulsory until 5th grade at least or preferably until the 8th.

The NEP also includes the three-language policy. Here all students will learn three languages in their school. It is mandatory that at least two of the three languages should be native to India.

The introduction of this policy is also in line with the NEP’s aim of increasing the Gross Enrollment Ratio in higher education. It has been found that the inability to cope with languages like English as the cause for dropping out.

4. Baglessdays and informal internship

According to this, students will participate in a 10-day bagless period. During this period students from Grades 6-8 will intern with local vocational experts such as carpenters, gardeners, potters, artists, etc.

This was another move, that was hugely appreciated as necessary professionals that are looked down upon by society will finally be viewed with newer outlooks in the coming generations. This move will also enable children to pick up at least one skill during the period.

5. Coding for Children

Children will now be able to learn to code from class 6 as coding will be included as a part of their curriculum. This move will put students at par with the Chinese where simila

6. Multi-Stream Flexibility

Once the NEP is imposed, the compartmentalization of students post 10th into Arts, Science and Commerce will be blurred. Now students will be allowed to take up courses from varied streams depending on their interests.

For eg., A student interested in physics will be able to do so by also taking up subjects like economics and politics. This was one of the most lauded moves of the NEP. Furthermore, Bachelor’s programs too will be multidisciplinary in nature with no rigid separation between arts and sciences.

— NEP For College Students

7. Common Entrance Tests for Colleges

Students now will be judged by common SAT (present in the US) like tests that will decide the eligibility of students for different colleges. These tests will be held twice in a year.

8. 4-year bachelor degree  

Funnily enough, just a few years back this move was highly criticized when implemented in Delhi. This move does not simply make bachelor degrees longer but also provides students with the option to change degrees if they feel it does not suit them. A student who realizes this and will be allowed to drop.

He also is allowed to transfer the credits he earned in the previous degree into the degree he chooses. A student who decides to drop out after completing 2 years can do so and will be provided with a diploma certificate associated with that degree. Students who drop out after 3 years will receive a bachelors missing out only on research opportunities present in the final year.

9. Fee Cap

The New policy suggests a cap on the fee charged by private institutions in the higher education space. One of the major hindrances a student faces when trying to obtain quality higher education has been affordability. A fee cap imposed would go a long way in making education more equitable.

10. Opening up higher education to foreign players

According to this the top 100 education institutions in the world will now be encouraged to come to India and set up campuses. Every year 750,000 Indian students go abroad in pursuit of higher education. This move will not only go a long way in reducing brain drain but also help in making global education more accessible. A similar move was implemented in the UAE successfully. The UAE is now home to universities like Hult International Business School, University of Wollongong, British University, American University of Sharjah and Dubai. Now that UAE can implement such a move it also shows the way to countries like India. Especially because we hold a student population much greater. Increasing the interest from foreign universities.

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Differed Views over the NEP 

Every point mentioned above is an advantage in itself. But post the disclosure of the NEP there have been varied viewpoints, concerns, and criticisms surfacing. We now look at these so-called loopholes in the NEP so that they can be further addressed

1. Language

There are many viewpoints directly addressed at languages i.e. medium through which students will be taught in schools, and the options available to them. First comes the problem of even introducing mother tongues into schools. India already faces a huge shortage of teachers leading to the skyrocketing teacher: student ratio in the country.

On top of this finding, a staff that is Qualified to teach is a challenge in itself. Next comes the challenge of bringing forward material in each of the mother tongues. Say for eg. bringing forward textbooks of maths, social in each of our mother tongues is a herculean task in itself.

It is completely understandable that the government wants to hold the same status as Germany, China, etc. where foreigners have to learn the language in order to better deal with the country. At the same time when the NEP is marketed in that way, it does not address that there are 22 languages active in India instead of one national language as in other countries.

The other problems that have already been raised with respect to language associates with the three-language policy. States like Tamil Nadu have already begun calling out the center and have associated the NEP as a tactic simply to implement Hindi in the state.

The three-language formula in the new National Education Policy (NEP) 2020 is “painful and saddening”, said Tamil Nadu Chief Minister Edappadi K Palaniswami, as he vowed not to implement the new policy. Unfortunately, the imposition of Hindi has been a major issue in Tamil Nadu often leading to protest and has reduced the NEP to another gimmick by the center by the current CM.

2. The increasing disparity between sections of society

The policy shows how students in government schools will be taught in the regional languages up to 5th standard if not 8th. The private schools, however, will not take a step back in introducing English from the early stages. If a student only begins to learn English 7 years later to that of students in private schools the difference will only add to those of learning a language in an environment that is not conducive to speaking, writing, and reading English.

Even when it comes to providing material to students in regional languages or mother tongues the NEP 2020 mentions that textbooks should be available in regional languages, but also must be downloadable and printable. It fails to address that less than 30% of Indians have smartphones. And if you and the people around you do have one it just shows us the fortunate category we are in and the fortunate category of people we surround ourselves with at all times. Also, there is a need for computers in order to learn to code.

3. Four-year graduation program

The four-year graduation program, unfortunately, lets go of most of the benefits after approving dropouts in the first year in order to change streams. What is the purpose of allowing dropouts in the later stages? Why should a student even wait to complete 4 years if he receives a diploma in two? If he leaves immediately he may have added 2 years of work experience instead of classwork.

And on top of all, how will a child from a lower-income background answer these questions when he is asked to take his diploma and start contributing to the family income.

Closing Thoughts 

Although there may be a few minor loopholes the new National Educational Policy, nevertheless is revolutionary. Hopefully, these are further addressed in the parliament sessions to come. The next question that pops up is – By when will the policy be implemented? The implementation, however, will start immediately with the first change being the Ministry of Human Resource Development getting renamed as the Ministry of Education.

Other implementations are to be done in phases from next month. Meaning many significant changes of the over 100 action points being noticed. The complete policy, however, is meant to transform the education system by 2040. Final judgment on the extent of its success can only be made on its execution. Hopefully, it doesn’t take till 2040.

Crypto Portfolio Based on Twitter – What Could Go Wrong?

A three-year-old crypto portfolio Twitter strategy has been added by the eToro platform for its retail investors and is now available for copy trading. “The TIE – Long Only” strategy measures market sentiment by analyzing Tweets using advanced Natural Language Processing (NLP) tools. What could go wrong?

Twitter

Let’s take an indepth look at the companies behind the product plus the details of the strategy itself. Then, we can determine any possible holes in the program.

What is eToro?

The eToro platform is a social trading and copy trading company that links professional traders (who earn from copy traders) with novice retail traders looking to be immediately involved in trading but who lack the knowledge to trade successfully.

Founded in 2016 in Tel Aviv by Yoni Assia, Ronen Assia, and David Ring, eToro for many years focused on social trading in the Foreign Exchange markets (Forex). Just this year, the platform launched crypto trading on the platform, rolling out initially with 8 established cryptos including bitcoin, Ether, and DASH. However, crypto trading is still not yet available to US investors.

The company employs over 850 people headquartered in London, Limassol, and Tel Aviv-Yafo. At the launch of their crypto trading feature, eToro had 3 million people signed up globally with 200,000 active monthly users.

eToro partnered with TheTIE information services firm to add the new tweet-based portfolio strategy to the platform.

Who is The TIE?

The TIE provides sophisticated data solutions for cryptocurrency assets. It utilizes algorithmic trading models based on the ‘wisdom of the crowd’.

The company is based in New York City and Connecticut, having begun operations in 2017. Founders Joshua Frank, Joseph Gits, Ben Latz and Eric Frank place a high value on the ethics of their data gathering, focusing on transparency and accountability in the products they provide.

The value of digital assets is driven by supply and demand, and movement is determined by the wisdom of the crowd.” eToro

In October 2017, leading up to the massive crypto market price actions of Dec 2017 and January 2018, The TIE first launched the The TIE Long Only strategy. Since that time, the algorithm as brought in a 281% ROI (after fees). When annualized since inception, the strategy has had an average return of 123%.

What’s interesting is that when you compare it to an equally weighted basket of the same crypto assets, which generated 29% ROI, The TIE Long Only outperformed by far.

You can find all the stats and historical performance data on the eToro site. But as you can see from the performance chart below, the heavy gains for 2019 came in a relatively short window of time, when crypto was pumping. The same can be said for 2017 and 2018.

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Why did eToro add this crypto portfolio strategy?

There are several reasons for the addition of this strategy to eToro’s social trading platform:

  1. First, because the crypto market is still in the early stages of maturity, social sentiment is still a significant indicator of cryptocurrency price movements.
  2. Traditionally, the small retail investor has not had the same data and tools for smart investing like the institutional investors and trading firms. This disadvantage is disintegrating in the face of blockchain technology. One of the major tenets of the blockchain industry is to level the playing field for all investors. The TIE Long Only strategy is one way of providing an institutional-grade investment product to the average Joe trader.

How does The TIE Long Only work?

Using a proprietary Natural Language Processing tool, The TIE Long Only scans the Twitter Firehouse, which is a real-time stream of every tweet. They take in approximately 850 million tweets per day. These are then scanned for specific terms related to crypto.

The advanced algorithm scores each word according to predetermined sentiment-related parameters. When the tweet volume for crypto words (such as BTC, Ether, or Binance) reaches a certain threshold of positive sentiment, the coin in question makes The TIE Long Only. Investors copying the strategy are then effectively ‘longing’ the digital asset.

Currently, the five cryptocurrencies with the highest level of market sentiment according to the algorithm will be part of this portfolio. Rebalancing happens every month. To get started, the minimum buy-in is $2,000 and the only fees charged are those associated with the spreads on whatever assets are traded. The cryptocurrencies in The TIE Long Only are not compared against other digital assets. Instead, they are compared to the social sentiment of other assets.

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Possible problems with social media-based strategy

The idea of a sentiment based portfolio seems to make sense in the nascent crypto market. However, there are some issues that could crop up to make the product less viable.

Manipulation

At Rice University, the Chair of Marketing, Utpal Dholokia, spoke about this type of trading strategy to Bloomberg. The gist was that because the crypto market is such a specialized niche, social influence strongly affects buying behavior. It should not be a sole indicator, though, but used more in a wider range of signals. Dholakia’s take is that with this strategy available to retail investors, we could see a lot more traders attempting to manipulate prices using tweeting strategies.

Indeed, anyone that has been active in “Crypto Twitter” understands the power of this sub universe. Crypto projects and their marketing teams can ultimately tweet however much they want using hashtags and positive sentiment-related terminology. In fact, The TIE Long Only is really a measure of Twitter manipulation and not so much a measure of ‘the wisdom of the crowd.”

One of the biggest problems in crypto is when novice traders are influenced by social media into taking risks they are not ready to handle. A tool like this in the hands of everyone could cause a proliferation of tweets by bad actors who are passing off shitcoins as viable investments.

The wisdom of what crowd?

It’s understandable that there aren’t a lot of tools yet to actually measure crypto activity. It’s plausible to turn to tweet sentiment. Especially with Crypto Twitter being the mega platform for crypto-related information. But when we say ‘wisdom of the crowd’, what crowd are we talking about?

Crypto Twitter is awash in new traders seeking information, as well as scam artists trying to hook them in. Meanwhile, you have legimitate projects promoting their offerings and communities dedicated to certain crypto niches, such as the Bitcoin Maximalists and DeFi.

All in all, it’s a very confusing place for any new crypto traders entering. Nefarious characters lay wait, sharpening their knives in the new, unregulated market. Not exactly a hotbed of crypto wisdom, we hate to admit.

Fake Tweets

Another challenge with using Twitter data is the existence of close to 50 million Twitter bots.

These automated tweeting mechanisms often spew out irrelevant or false information regarding cryptocurrencies.

According to a Duo Labs report in 2018, just one scam ICO project had 15,000 bots tweeting about it. Additionally, Crypto Twitter (CT) is full of false bot accounts running everything from referral programs on scan coins to phishing links and automatic engagement, such as with the XRP army.