Trendlines | Expect the unlikely

June 19, 2024

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Hi!

Greetings from your friendly neighbourhood brokerage!

The election results were announced last week, and it was a wild time at the markets. At Zerodha, we had the craziest day we’ve seen in a long time, in fact. If there’s one thing to take away from the results, though, it’s that you should expect the unlikely. Incidentally, that’s also the big take-away from Bhuvan’s excellent re-telling of how World War I broke out.

It’s also been a busy fortnight over at Varsity. Our friends at Quicko are answering all your tax queries in a new weekly series. We’ve also had some fantastic guest posts, on everything from new stock trading strategies to how dopamine affects your trading results. Meanwhile, Vineet takes a detour to Japan — looking at its falling population.

We’ve also cooked up something new on the product front, by the way! You can now add notes to the Kite marketwatch, to remember why you’re tracking something!

Here’s what’s on our mind

The history of World War I shows us that things can go wrong suddenly, and in horrible ways. Europe was peaceful for a century, and then, in four weeks, it landed at the heart of a global war. The lessons of the war aren’t merely relevant to politicians or military planners — they are also relevant to investors, as Bhuvan explains.

A low fertility rate and declining population have made Japan home to the highest number of Akiya, a Japanese term for an abandoned house. India, too, is seeing a decline in its fertility rate and could see a declining population in a few decades. Vineet discusses the perils of population de-growth and some lessons for other countries.

Did you know that a hormone in the human body — dopamine — dictates almost every decision we make in our lives, including our investing and trading decisions? Ankush Datar, Associate Vice President, PhillipCapital India writes about how it impacts your trading results.

We all have that one friend or a relative living abroad who regularly sends money back to India — for family maintenance, investments, medical care, education, and more. In this blog, Aditya Chopra, Managing Partner, Victoriam Legalis, tells us if there are any restrictions on the usage of such money and explains how it is taxed in the hands of the recipients.

Did you know the income tax department sends notices to taxpayers who do not disclose their entire income? If you engage in intraday or F&O trades — even if occasionally — you need to file ITR Form 3 and show that income as business income. If you have more questions like this, we’re releasing a new tax blog every week until the ITR filing deadline, addressing FAQs on trading & investment income, answered by Quicko. Check out the first two editions here and here.

What if you bought momentum stocks on Friday and sold them on Monday? And then, again, bought momentum stocks on Monday to sell on Tuesday? This could possibly be a high-churn, high-return portfolio, argues Shyam Sunder of StockViz.

Recently, a Varsity reader came up with an interesting question about direct vs. regular mutual funds. We all know that one can accumulate more units in a regular fund, because of their lower NAV compared to a direct plan. The reader wanted to know if such more units could offset the higher NAV of a direct fund in the long run? What do you think?

Have you seen our simplified version of IndiaDataHub’s excellent This Week in Data newsletter? It breaks down complex macroeconomic datapoints, and tells you why you should care. Check out our latest editions here and here.

Rainmatter features

Meet Digio.

While India’s fintech growth story is only possible because of DPIs, they’re not enough in themselves. DPIs are mere protocols, on which businesses need to build pipes. This is what Digio is doing, allowing fintechs to go paperless.

Want to know more? Click here.