Zeal to Read Weekly Newsletter
Weekly Newsletter | by 2 | on 2021-05-30 06:00
At Zebu we spend a lot of time reading news and articles that cover a wide range of topics, including investment analysis, psychology, technology, etc. We have been sharing our favourite reads with clients under our weekly ‘ Zeal to read ’.
“Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are ‘right’ only 30% of the time, as long as our losses are small and our profits are large.” —Dennis Gartman
News you may use
Banks have enough capital to meet severe stress: RBI
Banks sanction over Rs 15 lakh crore under Mudra Yojana
Biz resumption drops further as lockdowns continue; vaccination essential for recovery: Nomura
Business Activity Locked Down, Hits Lowest in a Year: Nomura – Index falls to 60 from 63 a week ago; improvement likely in June as states ease curbs
Dividend Index Outperforms Nifty Amid Higher Volatility – The index, comprising of high dividend-paying stocks, has given an annual return of 11.3% against 8.9% for the Nifty 50 since October 2007; valuation still below that of Nifty though
Electricity Consumption unlikely to pick up soon: Experts – Lockdown Curbs, Rains Dampen Power Demand
Exports hit $51bn in first 7 weeks of current fiscal
FDI inflows rise 9.8% to record $82bn in FY21
First Series of FY22 – Investors Lap Up 5.3T of Gold Bonds
FMCG Cos See 50% Jump in Ecomm Sales
FPIs Selling Out as Covid Clouds Earnings – Equity exits stand at $2.2 b in April and May so far; gross purchase to sales ratio drops below the long-term average
FY21 data: FDI equity inflows rise 19% to $60 bn
G20 goods trade reached record levels in Q1 2021: OECD
ICRA pegs Q4 GDP growth at 2%; projects 7.3% contraction in FY21
In a pandemic year, bank frauds down 25% by value – In terms of number, fall is 15%; share of PSBs in cases declines
Incentives for R&D: New foreign trade policy to retain key schemes despite WTO trouble
India’s consumption purse hit hard as unemployment climbs yet again
Nifty hits record high of 15,436 – Sensex 2% Short Of Peak
Pandemic Lows: Formalisation of jobs takes a big hit
RBI wants Centre to accelerate spending Says economic cost of the second wave may be limited to Q1
Retail Falls 30 % in April: Registration data – Vehicle Unit Sales Forecast Down 5-10 pp for FY22
Surging input prices, rural disruptions caused by high Covid cases twin risks to inflation: CRISIL
Views may be of use
How Complex Systems Fail
Safety is an emergent property of systems; it does not reside in a person, device or department of an organization or system. Safety cannot be purchased or manufactured; it is not a feature that is separate from the other components of the system. This means that safety cannot be manipulated like a feedstock or raw material. The state of safety in any system is always dynamic; continuous systemic change insures that hazard and its management are constantly changing.
Source: (https://fs.blog/2014/04/how-complex-systems-fail/ )
The Real Winner of the Fintech Micro-Bubble
Though the financial services industry has experienced significant innovation in recent years, much of that innovation is not as disruptive as start-up firms would have you believe. As we explained in October 2017, big banks co-opted the “Fintech Revolution.” Big banks have the financial resources, swaths of user and transaction data, necessary regulatory approvals, and customer relationships to sustain a large, technologically-driven advantage over smaller firms. JPMorgan Chase is the biggest and the best.
How I Misapplied My Trader Mindset To Investing
There are many ways you can apply the lessons of trading to life. There are adaptive ways to apply options reasoning to other domains. You can also live a totally unexciting life of collecting options but not exercising any. Knowing when to apply analogies is an art that requires choosing pertinent references classes and having awareness of what actually matters. 6We are at the mercy of initial conditions, frames, and contexts. You have blind spots coming from your training as surely as they come from the womb. The trading business smells so much like investing that I confused zero-sum with positive-sum because the wrapping looked the same.
Inflation and Investing: False Alarm or Fair Warning?
As we approach the mid-point of 2021, financial markets, for the most part, have had a good year so far. Looking at US equities, the S&P 500 is up about 11% and the NASDAQ about 5%, from start of the year levels, and the underperformance of the latter has led to a wave of stories about whether this is start of the long-awaited comeback of value stocks, after a decade of lagging growth stocks. Along the way, it has been a bumpy ride, as the market wrestles with two competing forces, with an economy growing faster than expected, acting as a positive, and worries that this growth will bring with it higher inflation and interest rates, as a negative. As inflation makes its way back into market consciousness, there are debates raging from whether the higher inflation numbers that we are seeing are transitory or permanent, and if it is the latter, how they will play out in financial markets.
Speculation and Investment
The signs of speculative excess in the stock market today are obvious. Speculative booms provide both entertainment and outsized profits while they are happening, but they do generally burst painfully. This is particularly true in equity markets, where the demand growth is ordinarily met with increased supply from savvy capitalists. Maintaining excess demand in the face of growing supply becomes ever more difficult and eventually proves impossible. In this cycle, the supply growth is particularly impressive in both its scale and the flexibility it has to migrate wherever speculation is most rampant. That does not seem like a good sign for an extended continuation of this boom. Whether the end means a fall for just the more speculative end of the market or the market as a whole is harder to predict at this point, although even if the rest of the market holds up for now it will require a difficult economic balancing act to keep it aloft indefinitely.
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