I am pessimistic about the valuations of brokerages around the world, including that of Zerodha. This is because the performance of broking is directly tied to market performance. If people aren’t making money or there is no greed, activity usually drops off a cliff.

The best tech, products & low pricing won’t help.

A new report from JP Morgan on Robinhood (RH) said that app downloads are down by 78% QOQ and active users by 40% QOQ. And this is still a bull market, just that market has plateaued last few months.

For Robinhood, unlike Indian brokerages, Crypto is the wild card. If not the stock price would’ve collapsed on this data. This old post about how it’s much much tougher for Indian brokerages to make money compared to the US brokers still holds good.

I don’t understand other sectors as well. But when brokerages globally, relying on retail customers to grow are getting crazy valuations on the assumption that the recent growth rates will sustain forever, I constantly ask myself, WTH is the world smoking

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