Welcome to the first edition of \u2018Z-Connect this Week\u2019, a newsletter where we wrap up everything we publish on Z-Connect, Varsity, Rainmatter, and TradingQnA. Those explainers, podcasts, updates, and every other experiment we cook up to help you understand the annoying and needlessly mysterious world of finance.<\/p>\n
As an Indian, it\u2019s easy to see China as the \u2018bad guy\u2019 of global affairs. That\u2019s the side you always see in our media: an angry, overconfident nation set on irking others and gobbling up their territory. Over the last year, as the news was slowly flooded with negative stories about the country, I relished it. And so, I thought I\u2019d write a small, self-satisfied take on the chaos in Chinese stock markets from a few weeks ago.\u00a0Instead, I found myself on an intense diet of China scholarship: podcasts, reports, think tank publications, and more.<\/p>\n
I don\u2019t think I understand the country better now, but at least I\u2019ve been rid of the\u00a0notion\u00a0<\/em>that I do. I hope humility is a step forward. At best, I have a few vague ideas about China. In a cruel, twisted joke, the ingredients of China\u2019s recent struggles were the very things that made it grow. Two, China\u2019s most severe weakness, perhaps, is that it doesn\u2019t trust its people. These are the stories we\u2019re trying to tell in our series \u2018Big Trouble in Brittle China<\/em>\u2019.<\/p>\n In the introductory post of the series, I look at how China\u2019s addiction to investment is giving it less return every year. Check it out here<\/a>.<\/p>\n Until I started working at Zerodha, the finance industry was alien to me. It still is, to tell you the truth. Don\u2019t believe me? Let me draw you a picture: I opened my Kite account for the first time in six years yesterday. Under peer pressure. It had two shares in an old insurance company I once bought as an experiment that have been gathering cobwebs ever since. If I open my account again before 2030, I\u2019ll call it progress. And I work for a\u00a0stockbroker<\/em>.<\/p>\n So yes, I\u2019m exceptionally bad with my financial life. In fact, I have an\u00a0aversion\u00a0<\/em>to finance. I\u2019m financephobic. I refuse to believe I\u2019m the only one of my kind, though. From where I sit, it looks like smart, financially literate people teach other smart, financially literate people how to do well in life, while the rest of us sit on our heinies and hope that fate is kind.<\/p>\n I can plug this gap. I can talk to other financephobes. At their level. That\u2019s my hope with the series \u2018Financephobic\u2019, anyway.\u00a0Check out the first edition here<\/a>.<\/p>\n How would you feel if someone said, “Investing is solved?” A little shocked? Maybe even a little angry because it might force you to think about your own difficulties with investing. About 4-5 years ago, a veteran of US investment management said this on a podcast, and it has been stuck in my head ever since. It’s a provocative premise, to say the least, and when I initially heard the statement, I’ll admit to having quite a bit of cognitive dissonance. But upon thinking about it, there’s truth to the statement and nuance as well.<\/p>\n After thinking about this for well over 4 years, Bhuvan shares his thoughts on whether investing is solved.\u00a0Check out the post here<\/a>.<\/p>\n Here are two undeniable truths.<\/p>\n One, data is important if you want to understand the world. It\u2019s why we love India Data Hub\u2019s weekly newsletter,\u00a0This Week in Data<\/a><\/em>, which neatly wraps up all the major data stories of the week.<\/em><\/p>\n Two, data is boring. I bet the words \u2018major data stories\u2019 just made you gag.<\/p>\n We\u2019re trying to make things slightly better. We\u2019re taking it upon ourselves to create a simple, digestible version of This Week in Data for those of you that don\u2019t like econ-speak. Take a look at our last few editions\u00a0here<\/a>,\u00a0here<\/a>\u00a0and\u00a0here<\/a>.<\/p>\n This is a must-read if you are a systematic trader. Most systematic options trading strategies use last traded prices (LTP)\u00a0 in the backtests. It sounds reasonable, doesn’t it? Well, you\u2019d be surprised to know that backtests that look good with LTP as an input might not fare so well when deployed in live markets. If you are wondering why and what parameter you should instead use,\u00a0this post by Shyam is for you<\/a>.<\/p>\n Let things get dark for a moment. What would happen to your portfolio if something bad happened to you? Maybe you\u2019ve put a few plans in place: you have a nominee that\u2019s empowered to take control of things. But what if you\u2019re not dead, only incapacitated? You won\u2019t be able to do anything. Nor would your nominee. Your portfolio would be useless to anyone.<\/p>\n SEBI is thinking hard about the issue, though, and it has suggested some changes. Check out Vikash Jain\u2019s post on SEBI\u2019s\u00a0far-reaching proposals here<\/a>.<\/p>\n You probably know how much of your financial life depends on your \u2018credit score\u2019. But do you really\u00a0understand<\/em>\u00a0what it is? Or what can you do about it? Kulsum gives you a primer on how credit scores work and how you can bring up yours.\u00a0Check it out here<\/a>.<\/p>\n Satya recorded a wonderful podcast with the super insightful Rajeev Thakkar of PPFAS Mutual Fund. It\u2019s a must listen.<\/p>\nFinancephobic: How Zerodha Messed Up By Hiring Me<\/h3>\n
Investing is a problem that has been solved<\/h3>\n
It\u2019s the economy, stupid!<\/h3>\n
\nOn the Varsity blog<\/h2>\n
Perils of using the last traded price (LTP)<\/h3>\n
What powers does a nominee for an incapacitated person have?<\/h3>\n
What is a credit score, and why is it important for you?<\/h3>\n
Rajeev Thakkar (PPFAS) on overcoming Behavioral Biases in Investing | Know Your Fund Manager Ep-2<\/h3>\n