Helpless ..

26^th – 28^th Nov , Sitting at home, watching the live videos of destruction and misery of people who fell victim to the planned attacks , that strong feeling of disgust and utter helplessness which few of us had ever felt .

This is not a fact to ignore that some people actually came, killed for fun and we were just the mock spectators. It differs from the cowardly planned bomb attacks, this time they took the whole city for ransom for 60 hours, looked liked as if the freedom of 60 years evaporated in 60 hours.

After everything got over, the anger of the people came out; they showed their solidarity for the cause and wanted a swift action from the government machinery. They pledged to put all their energies together to fight against the evil.

The question remains -Are we civilians really helping out our authorities in putting an end to the terrorism. What can we people do other than candle light marches and shouting for justice? How can we make our effort count? Is it really possible? I think this case is much tougher and complex than any of the case studies we have discussed in class. Do anyone have any concrete answers to the problem. 

I believe that even the government is helpless to a certain extent. Diplomacy is not working out for us the way it works for other countries as most of the countries are looking safeguard their interests rather than seek justice for India. Starting a war in this crisis will not only weaken the country financially but it will also affect the foreign relations and image of our country. So what can the government do? 

Credit Rating Agencies ..

The origin of credit ratings agencies can be traced back to 1840 when agencies started rating merchant’s ability to repay their financial obligations. It was the gift of 1837 financial crisis which saw increased credit defaults and it led to the birth of credit rating agencies which can predict the interest and debt repaying abilities of the lenders. The functioning of these credit ratings have remained questionable ever since and this topic revisits itself after every financial crisis, sub-prime crisis is no exception.

The whole purpose of structural finance and financial engineering for sub prime loans was to improve the credit ratings of various financial instruments by credit enhancement and converting them into marketable securities. The underlying risk of the financial innovation and the difference between Prime AAA+ securities and sub-prime AAA+ was never contested before the whole system failed. 

The biggest issue with these agencies is their financial model where they actually get there revenues from the company they rate and not from the users of credit ratings, it causes two problems,

1. The credit rating company cannot be conservative in its approach as there is high competition in the ratings business and the company may lose out on lucrative deals if it starts giving conservative ratings. 

2. Most of the companies which undergoes rating process wants better credit ratings to reduce the cost of financing and no company wants to increase their cost of capital even after paying rating agencies.

If we actually compare the number of above investment grade to below investment grade ratings issued by different agencies, we will find that most of the ratings given are above investment grade. There is a need to change this financial model to make the whole structure more fundamentally strong.

The second crucial issue with rating agencies is their operating model, which relies totally on the auditor and the companies for all financial and non financial statements. It increases the risk of distorted ratings in case the auditor and the company are running a joint partnership firm which happened in case of Enron. 

I feel that the world has seen enough recessions and depressions, there is an urgent need of a single world regulator who can improve the functioning of various financial markets and limit the grey areas of finance. 

Tata’s love for Ferrari ..

Just one week back the whole auto industry breathed a sigh of relief when the federal government approved more than $17 billion dollars as bailout package for likes of Ford, Chrysler and General Motors. Due to expectation of unfavorable economic conditions people are actually delaying their plans to buy new car. The reduced sale of new cars is leading to increases inventories and losses for all major Auto and auto ancillaries companies in the world. 

Everyone knows that last one year has not been the best of the year for Tata Motors (TTM). The average four wheeler sales growth rates have also reduced from preceding year and has turned negative which has caused TTM to cut down the production and give paid holidays to its employees . TTM is suffering hugely due to losses suffered in Singur which is in excess of $100 million, the untimely buyout of JLR had caused huge cash outflows and they are paying huge interests to cover the deal. The rights issue launched to pay a part of the deal was also not fully subscribed and was financed by Tata Sons. The Tata-owned Jaguar and Land Rover continues to lobby the UK government for a £1bn tax-payer bailout when they are actually bailing out likes of Ferrari. 

When the companies are conserving cash which can save themselves from future trouble, it’s very tough to understand the Tata’s logic to sponsor Ferrari for Formula One car racing championship. The question now is about surviving next two years rather than expansion for new phase of growth.

There might be a long term vision or strategy behind such move but I as a person am unable to comprehend the logic of such spending when you need to set your house in order first.

Market Timing ..

All technical and short term investors usually try to achieve something called market timing. Most of the traders believes that they can buy at low levels and sell at higher level in short duration of time. Although the term might look very simple but it is one of the toughest task according to industry experts. 

Technical analysis is the study of demand supply which is analyzed by reading different chart pattern which can daily, 3 day, 7 day or 30 days moving averages. The logic behind this exercise is said to be decoding the fundamental nature of human behavior that react to market scenario in either Fear or Greed. Most of the time people behave like a herd and as per the technical analyst the chart pattern actually help them in predicting the future direction of the market.

I am never able to appreciate the art of charting. Infact I seriously doubt the technique of reading charts for predicting future market scenario is something which can be proved or done on a regular basis. 

If we check the history of stock markets, the research suggests that the past information cannot be used to predict the future trends in market as that information is already discounted in the share price. This theory is called Weak form of ‘Efficient Market Hypothesis ‘ and has been proved by several quantitative research experiments.

Few weeks back I was reading a book on market timing by a prominent author who was trying to explain in a very unconvincing manner that the market timing does exist and people can actually do it. It is actually this belief which is making the markets liquid, nearly 60% of the volumes on BSE and NSE is from day traders who want to make the most in a day. They have literally zero holding time in comparison to the Warren Buffet philosophy of holding the stocks forever.

All said and done but I am yet to meet a person who says that he makes money 3 times a week by day trading specially in such volatile markets.

Govind ki Chai ..

Getting good food is a big issue around NMIMS. Our canteen does not serve very good menu most of the days and most of the people have to go to likes of Cooper Hospital , Rasraaj or Dena Bank Canteen for lunch . I mostly go to dena Bank canteen where Madhav’s canteen food taste seems more palatable and the place is easily accessible as it is just opposite to our Campus in JVPD. 

When I today stopped for tea after lunch near Dena Bank, I met Govind , he has been selling tea there from past 18 years , he is a very silent middle aged person who generally don’t talk much with the customers . I just talked with him about how the business is going and what kind of issues he faces regularly in the business and I found that his replies were quite interesting.

He told me that getting a place to setup a tea stall is very tough in Mumbai as most of them are illegal and the other hawkers want to grab the space where they can do good business. He regularly has to fight with other people ‘ Bhai’s ‘ who want to get that place but since he is there for around 18 years now, the tussles have reduced. Surprisingly the tension due to internal fights for space among hawkers is much more than that of the threat from Bombay Municipal Corporation (BMC) for illegal encroachment of space.

The business risk of these kind of setups are completely different from regular legal business .It cannot be easily evaluated by doing sensitivity analysis in the excel sheets. For example as NM has closed the main entrance for students from last few months, his business has reduced by nearly 50% as students don’t want to travel too far for tea. Again if less people start preferring Dena Bank canteen food, his business will again be impacted. These are some of the risks which are completely beyond his control. Although his tea tastes best in that area but there are very few students seen around his shop nowadays.

Govind misses the previous batches of NM, as per him those students were much more closer to him. They used to sit around his shop for long hours. Even now when they come to that area for some work they don’t forget to land at his place for a tea. He has lost the taste in business now as student nowadays does not interact much with him.

Tough Job !

When we people crib about job satisfaction, salaries and work life balance, half of India is still struggling to get the very basic necessities in life. I just came across a character who I was ignoring from last one and half year of my stay in our society. It was not intentional, maybe at times we just get too engrossed in our life that we ignore the most important part of humanity. Interaction

I met Mahendra , our society Guard while taking a late night walk today. I see him daily but never interacted with him, When I saw him today, he just smiled and I started a casual talk with him only to find how tough his job is. He is a short character of slim built aged 25 but looks 35 due to malnutrition and difficult nature of his job. The guy came from a place in Jharkand 6 months back where he was working as a day laborer and was finding it difficult to earn enough to feed his family. 

His duty starts at 8:00 pm in night and goes on till 8:00 am in the morning when the next shift guard takes over the charge. A 12 hour job when he has nothing to do, but just sit or walk off the time. He is ill equipped to take on any thefts but is being appointed just to make society people sleep comfortably in their cozy apartments. If any of the society inmates finds him sleeping during the duty hours, he is scolded brutality without any respect or concession. And after all this he is paid just 3000 Rs per month. He can’t afford to eat out and prepares his own food after the finishing his grueling job. 

The worst part is that he gets no vacations, has to work seven days a week, and can only travel once to his village to meet his family for whom he has made his life a living hell. 

I don’t understand when will these people get a respectable place in our society and when will we people start think of doing something fruitful for them except targeting them to sell our products and calling them the ‘Bottom of the Pyramid ‘. I don’t have any solutions yet.

Bollywood Underworld Mystery !

Bollywood and underworld linkage is a mush debated topic in the past and time and again it has been found that a lot of greedy film industry people have connections with the underworld. The worst part is that these underworld people are the people who actually promotes and finance host of illegal activity in India like drugs and terrorism . 

Dawood Ibrahim who has been repeatedly accused for having direct involvement in the Mumbai blasts. He is one of the world’s biggest terrorist and has repeatedly harmed India by his involvement in various terrorist activities in Mumbai .He was No. 4 on the Forbes' world's Top 10 most dreaded criminals list of 2008 as per Wikipedia . 

The recent terrorist attacks in Mumbai and alleged involvement of Dawood in it really makes me wonder how we people have such short memories. How can we people tolerate movies made on Dawood just for the sake of glorifying him . Dawood is one terrorist who has been glorified by host of Indian celebrities. Ram Gopal Verma has put great efforts in attaching glamour to his image by making movies like D and Company . In all the movies made by Ram Gopal Verma I could never found him portraying the character of dawood as cruel.This is nothing but the abuse of freedom of expression, just because India is a democratic country and we have got rights to express our self does not mean that these directors can make terrorists the heros. Interestingly Mr Verma was also seen at Taj after the carnage, Only God can know if he was thinking of another plot to showcase the ‘ bravery ‘ of the terrorists which only he can see.

Mr Anu malik along with lot of Indian celebrity were also once reported and shown praising and performing for Dawood in Dubai , nothing ever happened to them .Anu Malik was actually singing for Dawood ‘ Sabka bhai , gareebo ka masseha , dawood bhai ‘. India might not be able to have access to Dawood but why don’t they teach a lesson such celebrities and set examples for the generations to come. 

We have suffered so many terrorist attacks in last six months that the people of the country are in a state of total insecurity. The time is ripe now for the government to take some swift actions and stop testing the patience levels of people of the country.

Employees are our biggest Strength ?

IT companies are the major recruiters from Indian Engineering colleges and are one of the most attractive career destination for the students in engineering colleges. Some of the major IT services companies recruits thousands of people every quarter and are well respected in all the campuses. 

If we actually see the reality of the matter these companies are simply sucking life out of their employees, these companies are hiding their inefficiencies by hugely underpaying their employees. As a matter of fact the starting salary of a fresh graduate is nearly 12000 to 15000 in most of the Services companies, after 1-3 months of training most of people gets billable and work for nearly 8.5 hours a day which has now been increased to 9.5 hours a day in many companies. The billing rate for a fresh engineer is nearly 20$/hour here in India compared to 80-100$/hour in US which is one of the most important factor which brings work to India is this cost arbitrage. For 20 working days a month, the companies are making a pretax income of nearly 3800 $/month/Employee and paying just 240-300 $/month/Employee. In this business the companies are having a contribution margin of nearly 93% which is huge comparing to the other businesses. For working 9.5 hours on job a person has to stay for nearly 11 hours a day in office. If we include the traveling time too, nearly half day is gone in doing office duties itself the employees does not have any motivation left for other recreation activities.

The second point of distress is the quality of work which is being given to Indian software engineers , nearly 80% of the work in all top services firm is either application maintenance , Testing or doing minor changes in the old code which can be done even by a 12th class student . Infact in USA most of the work of this kind is being done by far less skilled people. Due to this skill mismatch the Engineer dont use their knowledge and the whole creativity and education gets wasted. The effects of the whole process are clearly evident as even after so many years India has not developed any great software product , the entrepreneur here lack the risk appetite to invest in research , they are simply too happy in earning through revenue contracts with assured returns by underpaying their employees. 

The third issue which is often ignored is the lack of efficiency and the abundance of middle managers in Indian IT companies. In any company it’s the engineers who are doing the real work of developing of maintaining the code but we have huge number of managers who don’t add any tangible value to the company. 

One issue which has been highlighted off late is the affect of large bench size on the efficiency of the company .Nearly 25-35% of Indian engineers are always sitting on bench due to improper demand supply estimation which impacts the earning of rest 70% of the people who are working 9.5 hours a day. This inefficiency, which is very high in India compared to western companies. It is not a healthy sign for the Indian software industry as working engineers have to compensate for it in the form of low wages. The coordination between Marketing and HR teams is under a big question mark here as they are not able to forecast the requirement of the human resource and the flow of services projects.

Nowadays the IT companies are not giving joining dates to the fresh graduates and causing lot of problems to them. Many of the new engineers have been assured of joining only in 2010. This kind of treatment when a company has once assured the person of a job and is not making good the contract is a very biased tool which makes life of a common man tough . In most of the engineering colleges students are not allowed to apply for other companies once one gets placed in a company. The student’s suffering starts after the end of the course when he has to just keep waiting for the joining letter from the HR offices.

So are the IT companies really caring for their employees ?

About Hollywood Movies and Indian Remakes ..

When I today sat to see the new Movie ‘ Dasvidania ‘ ,the very first scene reminded me of the Hollywood classic “ The Bucket List “ . My first reaction was to leave the movie as I thought there is no point watching another Hollywood remake, but as watched it for some time, I really liked the movie.

The plot of the movie has some inspiration from the Bucket list where two dying man forms there wish list and planned to enjoy their life before the D day. The star cast may not have the brilliance of Morgan Freeman or Jack Nicholson but I enjoyed the movie more than the Bucket list due to some obvious reasons. The main reason of it being something I can relate to , something which I see every day , something which is not copied and something which had lot of meaning.

It really feels good to see young Indian Directors coming up with fresh thoughts and making some meaningful cinema but the agony remains that people still want to see the old boring plots with no room for creativity and thinking. 

The movies like ‘Wednesday’ or ‘Dasvidania’ may not be doing very good on box office as majority of the people still want to see the likes of ‘Om Shanti Om’ but the things are changing for the good and it’s just the matter of time before people start appreciating the change.

About victories and defeats ..

Life is full of constant up and down , a sine curve will be a ideal definition of how God has planned our lives. Its full of pleasant surprises and disgusting shocks. 

At time one will feel that he is on top of the world , nobody can compete with him , he has got all the things to succeed and at times one feel that how disgusting the life is , and one is the bloody biggest looser in the world . This is the way I feel life is for most of us.

I think the biggest lesson I’ve learned in my life is to be “ Humble in my victories and graceful in my defeats “ , as I know I may loose at times even when I had put my best efforts and at times I may win even when I have not worked even half as good as others . The rule of averages is very clearly fits for glories in life, there are very few people who always win and there are very few people who always loose. 

Its very easy to curse your luck or blame others for your hard times in case of failure and its very easy to go overboard and announce yourself as the ultimate winner when you achieve something big , but the real gentleman are the people who stay in control and stay humble in their victories and graceful in their defeats .

The Art of Living ...

Yesterday we had the guest lecture session of Mr Khursheed Batliwala , popularly known as Bawa , He holds a masters degree from IIT Bombay and now a senior teacher at Art of Living , relaxing mind for people across the world including likes of Harvard’s and MITs . 

He Shared lot of great thoughts on stress management, anger management , Entrepreneurship etc . I am sharing most of them here as it might be useful for everyone.

1. Anger and Regret comes from the past, fear and anxiety comes from thinking about future, Anger heats up the body, anxiety makes the body cold , our thoughts constantly travel in past and future , which causes stress . Its not the job which is stressful , its our thought process . He gave the ‘ Samosa’ analogy and told us that how this heating and cooling can spoil the samosa.

2. Bawa told us that there is no point analysisng your past , its like a garbage cane , no body analyzes their garbage , so Don’t try to manage anger or stress , just eliminate them .

3. Anger is just the emotion which shows our helplessness , when we cant do anything , we should try to postpone the anger like we postpone to propose love.

4. Meditation improves your efficiency , Gandhi ji use to meditate regularly , he once said “ Today I’m so busy , I don’t have time to meditate for one hour , I’ve to do it for 2 hours . It is a process to improve your efficiency .He told us not to use books for learning meditation.

5. Don’t feel bad about loosing out , defeats , it’s the process . Winner is a person who keeps failing until he succeeds . Give yourself the permission to fail.

6. Try to do difficult and different things. Have the guts to face failures.

7. Entrepreneurship should be the aim of all the young professional, we have such great scope. Your parents might fret now, but after the end of 4-5 years they will feel very proud of you .

8. Don’t compromise your dream due to losers opinion about your venture. Most of Bawa’s college seniors told him that “those 2 years of college were the best days of their life “ , why should one do a job which won’t even give them happiness . We should not let our educational qualification decide our choice of our career.

9. 1 love failure and one professional failure is a must for very one in student life so that he or she learns from it. 

Art of living runs several short term courses all over India , one can very easily benefit out of it .

Perfect Farewell to the Prince of Kolkata ..

India crushing Australia 2-0 is the perfect farewell to our cricket hero Saurav Dada. His remarkable career came to an end today and I’m sure his fan will miss his energy and exuberance on and off the cricket field.

On his day dada was the sweetest timer of the ball, he can rip the fast bowling apart to all sides of the field and will hit more sixes than fours of the spinners. He along with Sachin gave us the most exciting starts in one day matches and won countless matches on their own. England always brought best from the cricketer, be it the century debut at lords where he mesmerized every one with his class, be it the finals of the Netwest trophy where he took off his Shirt to show the world that we can also do it if provoked or be it India reaching finals of the world Cup under his leadership.

Cricket is known by Individuals ,Ganguly was the real character , emotional , vocal and ready to take all kinds of leadership roles .

It was Gavaskar who brought dignity to Indian cricket when English Press commented “ Indians can now play Fast Bowling “ ,It was Kapil who brought respect to Indian cricket when the cricket giants said “ Indians can now bowl Fast Bowling ‘ and it is Ganguly who brought the fighting spirit and aggression to Indian cricket and every one said “ Indians can answer your queries on field now in the language you ask them “ . He was the fighter, and he made it a point that the team plays aggressive cricket under his leadership. And his contribution to the Indian cricket will be remembered forever

Threat or Opportunity

The economic slowdown has engulfed the whole world in a matter of just 6-8 months. It has created a cause of concern among students passing out this year from engineering and business schools . The scenario which was looking very conducive just a year back has totally changed today. Many of my friends here, who have come leaving their high paying jobs in search of better career opportunities and now are in threat of getting reduced salaries even after 2 years of hard work and training. The recessionary scenario which has caused huge layoffs is giving sleepless nights to thousands of people.

I think this scenario is not a threat to the young professional but a great opportunity. There is a old saying that when God closes one door he opens several other doors for us. One of the best opportunity available now for young ambitious graduates is to start their own venture. Making their own dream a reality. Its like becoming the lord of our own destiny. In the internet enabled world today it is much easy to start a venture than it used to be 5-10 years before. But the Indian mindset makes us thinks of going for secured jobs rather than thinking about taking calculated risks .Lot of people think that there are lot of hassles and risks involved in this kind of initiative. You can lose the high paying job , the capital invested and even your reputation . I think these are all just lame excuses , The truth is that it does not require money , it does not need a great brain and it does not even require a great idea to be a Entrepreneur , what it needs is shear GUTS . The risk taking ability and the degree of passion defines any Entrepreneur. When someone asked Mr. Sunil Handa, Professor of IIMA that he is not getting good ideas about the business venture he wants to start, he said “Quit your job and sit for 10 days at your home and than see how the ideas starts hitting you “. Even in the bestselling book ‘Rich Dad Poor Dad ‘ Robert Kiyosaki says “A job is only a short-term solution to a long-term problem “ . The message is loud and clear, it is just the test of our nerves , patience and willpower.

As per my understanding this is the ideal time to start a venture as the opportunity cost is very low. The salaries and job profiles are already on decline, a person is not loosing much when he quits his job. Infact we can make a mental excuse of it that the job is not good enough for us to devote our time. The credit crunch might reduce the financing options for the Entrepreneur but it is better than the scenarios before . Its just a matter of decision to take on the next challenge … I mean the next opportunity.

Are we heading towards Great Depression?

Among all the talks, predictions and doomsday theories propagated by the economists, people of this era are going to be more financially literate than any of the generation in the past. The way India has come on the global scene , our markets unfortunately got coupled with the global economy and the crisp reporting of issues done by newspapers, nobody can ignore global cues anymore. 

One of the current debates is “Are we heading towards Great Depression “. If we analyze both the scenarios,there are actually lot of similarities between the great depression of 1929 and Sub Prime Crisis the world is facing today. The prominent similarities include the similar crash of asset price including housing and stock markets, defaults by Banks, global nature of crisis, movement of prominent economies away from capitalism, likely increase in taxes by USA in times of crisis etc. If you see the similarities the chances of subprime turning into depression are indeed very threatening but on the brighter side the intensity of the economic downturn is much lesser this time than in 1929. If we actually see the stages of great depression, it started with black Tuesday (Oct 29, 1929) when the markets crashed heavily .The reason being high level of public debt caused by destructive WW - 1and reduction in income which was leading to defaults of loans by people . But economy recovered again in 1930, the next phase of downturn which lasted for few years was even more severe. The prime reason for it was seen as low investor confidence. People wanted to stay away from financial markets and institutions to avoid any future financial problems. Demand for goods and service dipped because of that and it lead to massive crisis. Comparing it to the present scenario where we have high inflation in half of the world countries, robust demand for products and services, the fundamentals of the economy are not that bad. There may be slight downward pressure on the demand in US but still most of the countries have good demand and people still have lot of confidence about the strength of the system. 

Certainly the lesson learnt by the great depression are helping central banker in facing the situation. They are pumping huge money in the system to bring back the liquidity and investor confidence. It will help in reviving the state of economies.

On a lighter note, one of the popular Jokes now days on internet is ‘Q - What the difference between recession and depression? , A- Recession is when your neighbor looses a job and depression is when you lose your job! ‘

It wasn't only 3 mistakes

Chetan Bhagat, author of '5 point someone’ fame came out with his new book ' 3 mistakes ..'. The deterioration of a author to respect the popular sentiments of people is quite evident in the book. It looks like a very loose story of 3 youngster from a small town in Gujrat. All the plots are predictable and phony, which any one can guess even while reading initial few pages. Infact Bhuj tragedy followed by Cricket match commentary looked more like pieces of diary rather than a narration.

The worst part was so many gross mistakes which were committed in the 144 pages short novel.

The whole plot seems illogical and phony if you think of these ponits which I thought of while reading the novel yesterday: -

1 Maths exam for medical entrance exam , that too readings from ML Khanna ( a IIT Entrance Guide) ? 

2 Resnik and Halliday for Medical Entrance? When even 12th class standard book works?

3 Chetan Bhagats way of spicing up the story, 1 sexual scene is a must ! 

4 Flamboyant use of F word by Gujratis that too from a small town!

5 The narrator of the novel was a Msc, I could not understand this line ‘What an MBA type would call a 'paradigm shift'. Its totally out of place.

6 Over doing of math freak funda, the guy is talking maths even while he is romacing and life threatening situation at the climax.

7 There in 2001 how many Indians could have afforded 15 Rs call/min mobile phones. The non earning students, kids all are having mobiles in the story in a small town of Gujrat ! Wow 

8 The dress of Ali suddenly changed from Jeans T shirt to White Kurta Paijama without any reasons in climax scene.

9 Govind sees Ishaan crying for first time twice in the story 

Cricket Field Entightenting ...

A welcome break from run of the mill life, we have the sports week coming up. The enthusiasm is on top, something I love about Mba Junta . Somehow they manage everything with full energy and commitment. So we have a match tomorrow and today we had the practice session. I really found myself out of practice but anyway I was never a great exponent of this art.

Cricket in Mumbai is different from other places , In a small ground roughly half the size of a football field there were around 10-12 independent cricket matches taking place . Half of the time in such conditions you will find yourself worried that the ball from other games might hit you on your head, especially when you are not used to this mode of Cricket. But somehow everyone was managing everything really well without any altercations or hostility.

After few overs I was directed to field at deep square leg. There was a interesting match going on there .I was more engrossed in that match rather than our practice session as the ball was rarely getting hit in my direction. I was listening to their conversations. It was real interesting conversation :-) ,the kids there in half torn clothes ,roughly in the age bracket of 10-16 , were fully engrossed in the match . It made me think with amazement how sports and cricket can take your mind out of everything and provide you healthy way of recreation. Those kids may not be sure about their next meal or their future but still enjoy the game with full concentration. 

I sometimes feel that it’s the educated and learned who waste more time in fretting about future and opportunities rather than people who just live life without any fears and high ambitions.

Value Investment revisited in Troubled Times..

The value investing was losing relevance off late due to global Equity markets reaching new heights. When market was breaking all barriers and going high every day who would have given a thought to the precautionary principles of value investing like margin of safety, splitting of investment In debt and equity etc. Benjamin Graham, Guru of celebrated investor Warren Buffet and writer of ‘The Intelligent Investor ‘ is the originator of value investing Philosophy. 

The most important principle of value investing is margin of safety .Margin of Safety is a conservative investment strategy. By margin of safety, Mr Graham meant that any stock bought should be worth considerably more than it costs. The worth of the stock can be determined by checking the book value of the share although there is no generic rule to define it, as per Mr Graham if the market value of the share is less than or in close vicinity of the book value it provides good margin of safety. If we look at the present valuations of the Indian equity market, there are so many stocks with good margin of safety. It was tough to spot such stocks when Sensex was at 22000 but at present valuations many good companies like ICICI Bank, DLF etc are all trading below book values.

Mr. Graham was a conservative investor throughout his life and strongly felt that the money invested should be splitted into both debt and equity as it provides a natural hedge against each other. If we check the present scenario the stock markets are plunging but interest rates are increasing proving good yields. 

As per Graham a shrewd investor is one who bought in a bear market when everyone else was selling and sold out in a bull market when everyone else was buying. But I don’t know how many people will actually have courage of buying in bear conditions.

I think history repeats itself over and over again and the core principles which were valid before are valid even now. The whole environment, technology etc may change and these principles may lose significance or ignored by investors for some time but they keep reappearing to upset us all and remind us the significance of basics.

Kudos !!

So it’s finally over today .The Tata’s have decided to move on and finally decided to stop all of their plans of continuing operations of NANO project from Singur .There are reports that even other companies are considering to abandon their plan of continuing their operations from the state.

Ms Benerjee told the press today that “It hardly matters to us. It is a joint gameplan of the CPI(M) and the Tatas to leave ... The allegation that our agitation was violent is bogus,"

I think with leaders like her no country needs outside funds, technology or help in the growth and development of the state. It shows the clear signs of self sufficiency which we were trying to achieve from so many years. We are proud of you Mamta Ji!

Under Pricing of IPO’s

When we were taught pricing of IPO’s in class of Management of Financial Institutions I found it very interesting. The concept was that the primary aim of the merchant banker should be to get the full subscription of the shares and leave enough gravy on the table so that even in case of strong bear sentiments in market the investors to the IPO don’t lose money. 

Our professor told us that there is phenomenon of overpricing of the IPO’s by the Indian merchant bankers. They overprice in order to get merchant banking contract from the company going for listing as there is lot of competition among the merchant bankers. The banks which can get the shares fully subscribed at the highest price are the preferred one in the industry. It clearly brings more funds for the company; hence companies want to overprice. This phenomenon causes lot of loss to the IPO investors in case the listing price of IPO is less than the IPO book building cutoff price. The overpricing of IPO’s happened throughout 2008 in Indian stock markets including the likes of Reliance Capital. Hence the IPO’s should be under priced. 

Today I came across a piece of statistics which confused me about the whole theory. The American merchant bankers in order to have full subscription repeatedly followed this principle of under pricing. IPOs were underpriced by 11 percent between 1990 and 1998, but that gap soared to almost 70 percent during 1999 and 2000. In 1999 and 2000 alone corporate America left more than $60 billion on the table money that could have been invested in the development of the newly listed companies. Now thinking that the promoters of the company are the major subscribers in any equity issue, it’s not the common man who is only benefiting out of these under priced issue. Infact it can be seen as a major issue of corporate governance. 

So what should be the correct strategy of the pricing of the IPO’s? By looking at the demerits of both under pricing and overpricing I think fair pricing of the IPO with regards to the risk and relative to industry peer might be a good way of pricing. But the question remains, deciding the fair value is very subjective and there is nothing like fair value of any company.So confusing !

About Critics and Criticism….

Today Oct 02, a national holiday, each one of us is very happy atleast for the holiday we are getting in the name Gandhi Jayanti. I too very relaxed woke up at 9:30 , sipping coffee and sitting in front of my laptop , thinking of the significance of this day for us with my sleepy eyes.

Actually it’s a thought which visits me every year. I still remember good old school days when I first heard about Mr Gandhi, I was amazed by the description given in NCERT books of the father of the nation. I wondered how one person can lead such a great movement for independence, without any selfish motives, so selfless. His patience and persistence were always the quality I thought will make any one a complete man. All of this adulation was contested as I started getting information from my friends and teachers which was in stark contrast with the information I earlier absorbed. I started interacting about it with other people who I thought could bring more clarity on the topic, but there was no consensus on the controversies attached with Mr Gandhi. It was an unending debate and a disappointment for that child who was seeing a hero in Gandhi Ji.

All those ugly thoughts didn’t lasted for long time and I still think even if all these controversies associated with him are true which I believe are not, He is still a Hero, a forcing personality, a person who contributed greatly to the cause of the nation . How can we forget that we all are vulnerable to do mistakes in life? Everyone is criticized on the unintended mistakes one commits, it’s the way society works. Nowdays even people who buy cell phones from grey market, who have done nothing for the nation are very comfortable in blaming Gandhi Ji for the past events. I think if something happens for good no body praises it but if it doesn’t pays off we all start the criticism. It’s like if Sehwag swings hit mighty bat to hit a six and gets caught on the boundary line no body sympathizes with him. They will surely criticize him for the reckless batting.

In this era of terror and violence I think the principles of Mahatma can do wonders to improve the condition of the society. I may not be a pure ‘Gandhi Waadi’ but I still believe that Gandhigiri is a very effective way of fighting without tears and bloodshed.

Breaking News ..

The 24 hours run media channels don’t leave any stone unturned in making claim of first reporting. They call it breaking news. Last Saturday just 1 hour after the Mehroli bomb blast was reported, a esteemed news channel was actually boasting of being the first news channel to report the incident. They were feeling really proud to cover the tragedy first which rocked the capital first. I really wonder that how long they can actually show this kind of reporting without hurting the sentiments of their viewers.

As excellently portrayed by the movie “Mumbai Meri Jaan “ the news channel are on a constant look out for stories to fill their free airtime . If they are unable to get the spicy stories they have to show the same news repeatedly which won’t help them to maintain their TRP ratings. And for worst they nowadays shows the repeat telecast of comedy game shows to fill the gaps, What a comedy !

They constantly play on the emotion of the viewers. Even this time after the blasts I saw them asking the silly questions to the bereaved parents who have lost their child in blast “How are you Feeling now? ” Are you people crazy!

Few months back when I was watching a popular Hindi news channel they were showing a story about a lady who was thrown out of house barely 2 days after the marriage. The correspondent after reciting the story in a very tragic and dramatic fashion introduced the lady by saying “ Aayiye ab aap ko milata hu 2 din ki suhagan se “ .The lady’s face was flushed with tears listening to it. This clearly shows disrespect and inhuman behavior. It’s like adding insult to injury with clear and vested motive of adding spice to the news item. There should be no excuse for such people who abuse their profession in such a manner. And what is the editing team doing, Infact I really wonder if there is any editing team for such news channels?

As lot of my friends have observed, one fact clearly emerges out of the growing crowd of 24 hours TV news channels. The fact is that its mainly the Hindi or regional language News channels which are doing such crap reporting , The likes of Aaj Tak and India TV being on top of the list .Do the management of such news channel thinks that listeners to such channels are intellectually inferior or insane. There is no reason for such treatment for listeners of Hindi channels.

The whole setup looks so illogical. I think we people are also responsible for this in a way. The day people stop watching these channels, they will have no option but to improve their reporting. But there is a big need of having a regulator .By having a regulator we can have some control over the quality of offerings .It may actually lead to some red tape too but it might stop the abuse of “Freedom of Expression”.

State of Anarchy ..

I can't remember any time when I’ve felt more insecure staying here in my country. There is a total state of anarchy. Bomb explosions have rocked the whole country into a vulnerable zone of insecurity. Now when I was travelling from Delhi to Mumbai, I can see it on my Parents faces, they were not as confident as they used to be. I told them that I’ll manage this routine travel on my own but that day itself there was a bomb explosion in Delhi and their concern was genuine. Mummy asked me to stay away from the crowded place, I was just thinking that how can someone stay away from crowded place in Mumbai where everywhere it seems like a big chaos, hundreds and thousands of people are emerging from every nook and corner, all in a state of hurry . But I told her Yes.

Thinking of blame game our politicians are playing in the comfort of their Z+ security, Media cursing Intelligence agencies for the lack of surveillance and Police blaming ATS for their inability to track terrorists, what can a ‘AAM AADMI’ do? He is just a mock listener to all of it. The real question remains “Is it actually in the reach of these different agencies to stop someone from burning their own house? “

How can the police and intelligence agencies track the action of so many citizens. They may track the flows of big explosives like RDX, but they can’t stop someone from throwing Crude Bombs in open roads on innocent kids. The crude bomb which was used in the recent Mehroli blast can be easily produced by anyone. The secret recipe of Bomb is no more secret when substandard news channels are freely showing it on mass media that how easy it is to manufacture a bomb. Anyone can easily buy these common chemicals with medicinal usage and cause the blast. It will indeed be a tough job for the police and intelligence agencies to manage this situation.

There was also lot of talks about the spirit of Mumbai in the media after the train blasts, they reported that people are still travelling by local trains, using the same affected route, their spirits are intact. But my question is “Do they have a option? “. Life in Mumbai will be standstill without trains, how can a person who travels from Virar to Mumbai Central daily manage his travel without Local Trains. Nobody wants to put his life at risk. It’s not the spirit; it’s the lack of real options!

I think the time is ripe for the government to make some strict rules and set examples by differentially treating these arrested terrorists in such a fashion that it will make the other terrorists think twice before putting their dirty plans into action. It won’t be death of democracy as articulated by so called human right activists. It will be a slap in the face of terrorism and a act to safeguard humanity itself.

About Heros and Villains ..

Just few months back all the Newspaper and Media channels were flushed with news of Tata Motors launching NANO , the dream car made for middle class Indian who aspires to drive comfortably with his family in comfort of a four wheeler but can't buy the existing brands due to the high cost. The cute looking car was coming at literally half a cost of existing Maruti 800 which is the cheapest car now in market. The worlds applauded India for the frugal engineering , a new break through in applied sciences , comfort at bare minimum cost.Countess number of patents were filed for it , surely they dont needed any scantily dressed models to launch it.

Mr Tata gave a promise to the people which he is fulfilling even when the commodity inflation is touching new peaks . My friend in Tata motor told me that there in the office there are huge posters saying " A promise is a Promise " , so true only a gentleman can keep his promise and they feel so proud about it. We all are proud of it .


Today Tatas have made the final announcement that they are moving out of Singur. it will be a loss of more than $100 million , delay in schedule of launch , huge loss to the vendors who have set up the plants there to follow Just in Time (JIT) methodology to reduce cost.I think these losses may look huge but nothing in comparison to Singur which could have been part of history , could have been known to the world because of NANO and its even bigger loss to Bengal which is trying hard to shed its image of investment unfriendly destination.

Indian politics have shown lot of dirty faces but I think this will be amongst the top, when likes of Tatas are promising rehabilitation , price and jobs to land owners . why are people creating silly issues about it. Its a classic example of short sightedness where at times local issues take much more importance for some people of prominence and the whole Nation is discounted for the local cause. I dont understand why someone who is not the representative of the people , who has been defeated in the elections is taking the whole administration for a toss.This is surely not the democracy I have learned in books.


Mamta Bennerjee might have not done any good for the people of West bengal but here she surely has done a big mistake which people will remember for long time. She is truely deserves a Razzie Award . May this episode bring some sense to the politicians of India ! We dont need such people but we have the problem of plenty .


One more thing which is clear after this incident is that the TATAs are the best employers to work with , as for them its the employees which matters , they are ready to take losses to avoid agony and discomfort for there employees .Mr Ratan Tata has again shown why he is so admired in the world . I dont have words to describe him , He is my Hero !

Is it Safe to Invest in Indian Equity Markets ..

After the advent of globalization in mid nineties the Indian Stock Market has repeatedly shown its strength of being well regulated and trustworthy institute, thanks to the efforts of SEBI but still for Indian punters it is hard to digest the monotonous upswing in the capital markets from last few years . The main rationalities behind it is the periodic down trends in the market when it’s the small investors who have lost heavily, be it the black Monday after the fall of BJP in the general election , be it the havoc of rising oil prize or the inflationary pressures , is it common to only Indian mindset or is it a global trend of being a skeptical towards the stock markets ?

Last 8 months has been dreadful for the global capital markets due to sub prime woes which has engulfed almost whole of US and Europe due to securitization of Debt , the companies are still writing off billions of dollars of assets due to the subprime lending and the world commodity prices has also become a pain for central bankers , there are more than 60 countries facing double digit inflation , the oil bills is increasingly putting pressure on the inflation and growth of economies , Sensex along with the major world stock exchanges have seen major corrections , it has come down from the level of 21000 to 14000s , the real question now is that is the correction over and is it safe to invest in equities now ?

The Indian stock indices mainly Sensex and Nifty are seen as heavily overvalued by many of the analyst who keep bringing there dooms day theory now and then , they say that Indian market is at P/E ratio of 18 which is very high as other high growing economies like Korean , Brazil , Russia which is also showing tremendous growth is at a P/E of 11 , so is it worth investing in market at this time when Oil is boiling , federal interest rates has seen five negative interest changes in past 1 year just to pull the ailing US economy out of recessionary pressures and Japan is no more distributing dept at zero interest rates. Another theory much hyped by the promoters of doom is the redemption of foreign investor’s money from capital market to more secured bond market as the interest rates are hardening in India and other emerging economies, with these theory in newspapers now and then we can hardly blame the Indian mindset for panicking under slightest hint of trouble.

If we see the historic bull run , the shortest bull run lasted for 16 years in Japan and by that landmark we have barely reached the half stage , but again our impatient mind constantly remind us that our valuation are reaching a peak , the international scenario is no more stable with lot of economists say is the compounded effect of loose monetary policies right from from the dot comm. Bust and now they can no more hide it. . By analyzing our industrial growth one can find that India has shown a 7+% GDP growth in last 16 consecutive quarters , high industrial growth with full capacity utilization in most of the sectors , SEZ being seen as increasing the demands of industrial goods and for that capacities are increased to milk the profit , so is there any need to panic, When we compare Indian market to its peer we forget that India is one of the best regulated market where we are giving a big pie to FII’s , if we compare China where capital market is still suffering from xenophobia , FII’s are seen with distrust and most of the companies are state regulated we can easily find the answer to the high valuations , Indian market have 50% more listed companies compared with any Asian market which can be attributed due to loose IPO regulations which still need to develop to filter hundreds of dead companies coming to equity market for funding , the trading volumes are also a cause of concern for lot of companies and its only 400-500 companies which are actively traded out of 9000+ companies ..

So the question again comes ‘ Is it safe to invest now ? , Is it the time to do some bottom fishing ‘The answer is not easy but one thing is timely tested and trusted by all that if we are long term investor in any market we will seldom loose our money and most of the time can make a good Fortune , but timing the market is not easy., As warren Buffet says , don’t invest in equities, invest in business you trust and invest in them thinking that even if stock markets gets closed for next 10 years your company will still be there’. So what are you betting on!

About dances and dancing styles

Another Sunday morning, tomorrow another fresh start haunting us all but this Saturday was special as the Fahrenheit 08 and the party after that gave a much needed break and refreshment after another hectic week. Its a new initiative by Deepak and Gang and I must say they are doing a great job by putting their time to great use. It was again competition at its peak where every one was cheering their sections at peak of their voices , reminded me about the good old engineering days when their was great rivalry among all inter hostel events and inter branch events. The finest of it was Ruby Cup ( Night tennis ball inter hostel Cricket tournament with running commentary ) , I still remember how people use to get emotionally involved to such an extend about their hostel teams that many a time the games use to end up in minor injuries and lots of abuse being fired. lol, but it was all fun and the moment the tournament is over people use to just forget all animosities, here it is much different , people are lot more mature and image conscious and the interaction is also of not that level due to pressures of deadlines and absence of hostel.

After the rounds of competition like Antrashari , face paintings , madd Adds etc the floor was open for the dance and we all literally waiting for it ,Dancing for 45 min gives you a feel of good work out schedule. lol , When I think of dancing , what strikes me most is the way we people dance , each of us has a particular style and some steps which we keep repeating ,it looks like a medley of dances . I think most of our dances are inspired by legendry Mr Bachhan Senior ,who use to dance in simple yet elegant steps , Even he was not great at this art ,the simplicity of his steps, popularity of his songs and charm of his persona has made us idolize his dancing style , be it boy, gal its beyond it . Than I find that lot of bhangra steps which we usually love to add even in a western number, but who cares . It the masti which matters .

Off late their are two more important steps which has been added in our dancing styles ,first is the head banging particularly to rock numbers which give you a much needed gap to regain the energies and also the flow of adrenalin to feel the beats of the drums and intensity of mettle Guitars . The second new step is attributed to admirers of 50 cents and Akon of this world , the style is truely unique and fun to act .This also again clearly suggests that how flexible and ready to learn we all are , ready to add all new good things coming our way !!

Idea of a blog..

The Purpose of writing a blog was different to me few years back when i just wanted to use my creative thinking and write on divergent topics . It was pure and precious to me and I never shared my name or url with any one as I thought it will only make sense to just float it in the cyber space with anonymity . But these days when i read people's blog on various facets of life it makes me admire the peculiarities of people's life and expression , I feel that it is actually a sense of freedom , a freedom of expression . A place where people actually can share thoughts . Some of the people are gifted with the art of storytelling and some are like me , but it still gives us a place to put our random thought where there is no one to edit it , no one to judge and people just reading it as a pass time .

The technological revolution may have changed the way of doing things but the intent is just the same , initially people use to maintain diary which they use to restrict to themselves but now with evolving world people find it better to share their peice of mind and take suggestion from others .It also speaks loud about a gradual shift in the mindset of new generation which doesn't believe in keeping things to themselves , they rather put their argument without any fear and ill will.

Technology is a great enabler , It really Is !

When the life gets tiring ..

Many a times I have seen that when we push ourself too hard in work , with loads of different divergent activities , it takes a heavy toll of your body and peace of mind , their are loads of good book teaching about mantras of time management and devotion but I found it a tough ask to juggle 4-5 things at a time , may be I'm not apt at it , which might be considered a weakness as per management sciences. It always happens to me that at the end of the day I feel that I havn't done justice with any of the activity by taking too much to handle. People call it burn out , I call it adverse selection.

When I see my college friends around me also struggling with same issues , I feel its actually a big problem now days, Sometimes i try to give myself a break by not doing anything for a day, just to enjoy reading a novel or watching a good movie but as the another day starts you are actually caught with deluge of things lined up ,Perhaps Too Much To Chew , and your life becomes like a excessively chewed gum which cant give you much flavovour but u can just keep chewing it to please yourself .

Focus might be the mantra to actually excel , when you seek confidence and satisfaction from the work you are putting your tie in . It may be tough to actually apply descretion in choosing things you actually want to do or you end up doing .But still doing one thing at a time and than moving to other might help , but for me whenever i tried it i found myself doing that thing on the last day just for the sake of completing it.

Life in management school can be tiring and boring at times when you need to put efforts and time in things you wont do even for money , but its a endless persuit which makes us do all such tasks which absorbs energy out of you and leave you dull and tired , but still I feel its lot better than once you start working as the expectations increases drastically and also you have added responsibilities of doing loads of things

We used to read in school days " Khali deemag shaitan ka ghar hai " , which means that keep yourself occupied otherwise you will think only of doing destructive activity, which I think is actually not quite the way i look at it , I think when you will give yourself some open space to breathe , some peace of mind , one can actually think cretively .

May be thier are better way of doing things which can give you satisfaction in doing diversified jobs , I still have to learn it .