Exploring Farmville ..

Recently I started playing Farmville internet game on Facebook. Initially the game seemed boring but the graphics and animation attracted me and after 2 days I found the game really interesting and started playing it for nearly 1 hour per day.

Yesterday I tried to analyze my decision making regarding my crop selection in Farmville. Initially I thought why should I waste time in analyzing it and just visited my neighbor farms to see what they are growing but was unable to find any similar pattern in them. It might be because of variant individual likes and dislikes for different fruits, vegetable and flowers. Finally I decided to do some analysis on crop selection myself and found some really interesting patterns.

As I had reached level 11 only few crops are available to me for cultivation. I did the hourly profitability analysis based on real cost price (Cost price of crop + Ploughing charges)/crop and compared it with the selling price. Experience gain per crop is also an important variable in the game and hence it is again required to be used as a active decision variable.

Now if we refer to the table here we found that Bell peppers provide us gain of $ 2.25 Coins/hour in comparison of wheat which has low return per hour of just $ 0.9 Coins/hour. It will take the wheat farmer to harvest 2.5 crops to match the earning of one crop of Bell peppers in the similar time and on top of it one will even earn more XP/day.

Soyabean might just provide 1.38 Coins/hour but it provides good XP/day(3) , hence as per the need of the hour one can pick and choose any of them.

If someone can login to play the game after every 2 hours in the day he can cultivating Raspberries and can grow 12 hour crops rice in the night, by this process one can make maximize the profits and also earn maximum experience credits. If putting so much time in the game is not possible, one can choose Strawberries for slightly reduced profitability but more comfortable 4 hour cycle.

Getting ribbons also bring lot of money and XP in the game so one should carefully plan to hit them to increase the earnings and becoming a good farmer.

Similar profitability and experience analysis can also be done for the plants, animal and other interesting variables in the game.

Sachin Sachin .......

I was just going through Sachin's ODI record today and though of finding some averages. It might sound like a crazy idea and many people say that Indians are crazy about Sachin but I think we have all the reasons in the world to do so..

Today after reaching milestone of 17000 runs in ODIs, he has also made his 45th century . Going by 424 innings he had played till now it takes him less than 10 (9.42) innings to hit a century and less than 5 (4.66) matches to hit a half century. Doing it consistently for more than 20 years is a awesome achievement.It wont take you a second look why he is the Best player in the world. Generations past might feel jealous that they could not see a player of such a caliber . Thats why he is called the GOD of cricket.

Are we searching Google or is the Google Searching Us !

The kind of innovations google is coming up nowadays is simply awesome. If I analyze my internet usage, more that half of it uses google in some way or the other . Why its only the goolge which is coming up with best of the world innovations and not the other companies ?

I agree they have the best brains of the world, but still believe that new innovations might not always emerge from them. They might be good in finding solutions but finding the problems is not often done by the best brains ..

Is it actually possible to find out the biggest problems one after another , what are all others companies doing ?

Are we searching Google or is the Google Searching Us !

Delhi Auto Rickshaw Drivers

Travelling daily by auto in Delhi for last 5 months have taught me lot of intricacies about the behavioural aspect of the auto drivers in Delhi. Most of them don’t own an Auto but rent it on a daily basis, the rent for a single shift is around 250 Rs (12 Hours) and for both the shifts it is 450. So time is the essence for revenue generation for them. Few of the interesting aspects I noticed are:

1. They try to make up for the time lost by charging extra money , for example if there is a auto waiting for passengers for more than 1 hour, he will always quote higher price as he tries to make up for the lost time and this behaviours results in loss of more time. To get the best price always approach a auto which has just reached its destination.

2. Most of them want to talk to you and know what you do.

3. They understand demand and supply better than us, knows when in demand with too many people chasing them, they will increase the rate exponentially.

4. Very well versed with the current affairs, especially news related to the city.

5. Will never go by meter, in 5 months, I travelled by Meter reading just once.

Interestingly the behavioural aspect and the way of doing business of Mumbai auto drivers are completely different from the one in Delhi. Mumbai Auto drivers try to focus more on last mile drive whereas Delhi auto drivers are always looking for longer distance travellers.

The Lehman Saga …

It’s been a year when the biggest event of last year occurred, 15^th of September 08 is not someday one can forget too easily. I still remember that everyone was so concerned in the college. The placements were nearing and after the last year windfall, people were expecting great rewards for the 2 years of the Degree course. Ultimately it affected us all and so many of us are still struggling due to something for which they were not responsible.

The reporters from different news channel surrounded the Lehman head Office on the death anniversary and my friend managed to get few clicks holding the CNBC mike in front of the Lehman Brother's Head Office in NY.

Weak Infrastructure , An Opportunity ..

We often feel that India is struggling and China has moved ahead of India due to our weak infrastructure . The roads , bridges , flyovers , basic amenities are simply missing here . We are wasting so much time and energy working in these conditions . Life is so good outside , every things happens on Internet, you don't have to struggle to reach your office everyday.

I agree with most of it but two days back when I had my first Delhi Metro ride , I found something interesting. I think we have a great opportunity now to make a mark provided our politicians start working on it.

The Delhi metro is just amazing , the ride is smooth , metro stations are amazing and infact I found the experience better than what I had in New York metro and here lies the opportunity.

Most of the existing infrastructure in western world is atleast two decades old and India can easily adopt the inexpensive yet better new technologies and leap frog in the new era. We are not required to do the experiments which other countries did and simply pick the best of the world technologies which fits into our country. This will not only develop the new infrastructure but it might even give us a competitive edge.

The toughest part here is the political will and issues of corruption which eats into most of the resources. If we are able to cross these hurdles we can have the best basic infrastructure in the world.

Ignoring Human Resource ..

Most of us while studying in B schools dint spent much time in studying the intricacies of human behavior and Human resource Management as a subject. Today when I work with daily issues in the company I think it is the toughest and most important element of the business .

You can have very fancy strategies, full involvement of the top management but communicating the message to all the people in the organization and motivating them to implement a particular strategy is not easy . Every man wants importance and good roles, how will you satisfy every one and yet bring them to accept a change. At times even automation which eases jobs of the people brings lot of dissatisfaction amongst the employees as they are left to do very mundane tasks which even a ordinary person can do. After every few years the best people will leave the organization and the others will be left who are not even half as good. How to cope with this issue . Providing them good incentives to stay ?

Incentive structures to motivate the people can back fire. Against the popular perception, money is the least important thing for most of us. In blue collor jobs where the salary are the lowest, people are not concerned about it , they are happy in there 2 meal a day. If you provide them high incentive to improve their productivity, they might work for only 5 days and enjoy the rest 2 days. There monitary needs gets fulfilled in working just 5 days, this leads to mass absenteeism which is not good in any setup.

The great Lehman Brothers gave amazing bonuses to their top management which induced them to take more risks. The ultimate result is known to everyone . So is this fixed salary and a incentive scheme actually works ?

I am still struggling to find a answer to it ...

Freedom Completes a Year

Its been a year when I wrote the first Post on this blog and it really feels great to write this post on the first Birthday of Freedom !

I want to thank all the people who have encouraged me to keep posting on the blog and also spent their valuable time on writting comments and reading the post . Thanks Alot !

Adulterated Life..

Nothing seems real these days, the milk we consume, the sweets we eat, the edible oil we use, the pulses we eat, most of them are getting adulterated as people are poisoning them to make some easy bucks and putting life of thousands of people at risk. This is turning out to be a bigger risk today, even bigger than the external threats which we read in newspapers every day.

Past two weeks have been rather low as I am down due to Typhoid. The reason behind the illness is again spurious water I consumed from our regular supply of Kingfisher Water. Until now it appeared to be genuine but only after both I and my friend got Typhoid, we found out that it’s spurious. The bottle and even the seal will look genuine but some people have perfected this art of selling poison to such an extent that it’s difficult to find out what is original and what is duplicate. So even after paying 3 Rs/ litre for something which should be free for me I am not sure whether it is genuine.

The biggest setback is the lost of trust. Just yesterday my father asked me to buy all the medicines again from some good medical store as he thought the one I bought earlier might be spurious. The story doesn’t end here, as per the latest reports from RBI there is a significant fraction of currency notes which are spurious. So right from food to the currency notes, the complete system is getting poisoned.

Where exactly are we heading, what will technology and growth do if we can’t even tackle such basic issues. How is the government safe guarding the interest of the people who are suffering due to the menace of adulteration? I don’t know any of these answers.

BJP: What went wrong?

Jaswant Singh might not have had the slightest idea of getting impeached from the BJP party over his praise for the founder of Pakistan. What prompted him to write such a piece of literature which is totally against the ideology of the party which he served for 30 long years is a big question?

The case of Mr. Singh is not the only case where BJP has lost its image in public but unfortunately there had been countless number of cases and incidents off late which had made BJP suffer in public. Ever since the fall of the “ Indian Shining “ campaign BJP has not recovered yet and is not able to provide good competition to Congress. It’s not that they are not able to digest the defeat in the election but I believe their downfall is has more fundamental intrinsic and extrinsic reasons behind it.

Succession Planning : - Not only the corporate world but even the political parties requires proper succession planning , With the ageing of the founding members of BJP there is no clear leader which had been identified to take on the responsibility of the next leader and it had made people fight for posts inside the party . With Gandhi’s as a controlling centre of the Congress it had never been the case with Congress.

Conflict about Hindutva Ideology: - With the growing liberal face of Indian society and a major proportion of Indian population being in mid twenties, it had become rather confusing for the party to stick to their long term political ideology of Hindutva. This confusion has created a loss for BJP as even the staunch supporters of BJP are now confused about what BJP really stands for.

Rise of SP/ BSP: - Success in UP was one of the reason which made BJP prosper in the national politics. There was a time when BJP used to win 50 seats in UP. The rise of BSP and SP had made the equation very tough for BJP in UP where elections are closely integrated with the game of caste politics. Now we have four ways fight in the UP elections with Congress emerging as a strong force. This year assembly elections might be very interesting and there are strong chances of revival of Congress in UP.

Demand and Supply …

Down with typhoid I went to the doctor for a X Ray and while I was returning back home I went to a Fruit vendor to buy some fruits, When I enquired about the prizes , I found them astronomical high. I asked him “ Bhaiya you are quoting really high , what is the reason ? “ He immediately replied in the local language , “ The supply of fruits is reducing due to less rainfall and delayed monsoon , and as more people are falling ill the demand of fruits is increasing which is driving the rate up due to demand supply mismatch “ . I felt that half of the people even after MBA can’t give such an apt reply, what is he doing here selling fruits.

When I was returning back after buying 2 kg of fruits he added one more dimension which was even better , he told me “ As the rate of fruits increases people tends to buy them more ,as the people thing that the dearer the prices better the quality “ . Wow behavioral aspect of fruit selling business!

Allowing China to come closer to Srilanka , A strategic mistake

China is now the major suppliers of Arm and Ammunition to Srilanka which is fighting a War against LTTE. Is it a strategic mistake by India?

India is surrounded by host of unfriendly nations, China being the most powerful and seen as the next superpower after the decline of USA. In such a scenario allowing Srilanka to be used as a new base for China puts India in a scary position. When Rajiv Gandhi sent the Indian Peace Keeping Force to Srilanka it was not seen as a logical decision as we were putting life of our soldiers at risk but if we see the diplomacy behind it, it was a great decision. It prevented Srilanka from becoming a new base for both USA and China.

India should have done what China did for Srilanka , it would have also improved relations between the nation which are becoming sore due to problem of Tamil killings and Tea exports.

Is the pressure of coalition politics that high that we can compromise with the National Security?

Indian Railways a Social Venture?

Mamta Bannerjee presented a wonderful Railway budget this year with lots of emphasis on improving the railway infrastructure of the country which is coming under pressure due to rising population. Apart from announcement of new trains the schemes for backward areas, budget tickets for students and nonstop trains came as the pleasant surprise this year.

Inspite of all these good announcement there were few sweeping statements made during the budget session, one of them was “Indian Railways are not a profit oriented Enterprise but a Social Enterprise “.I beg to differ on this completely.

No social venture is sustainable unless it makes steady profits and shows a growth in future. I think that we are all now reaping the benefits of the profitability of the Railways in last 5 years. Only when a company makes profit, they can be reinvested and utilized for fulfilling some of the social commitments. No institutions will even lend to the institutions which are disoriented towards the profit aspect of business. A cliché statement but very appropriate for this discussion, “Wealth Maximization should be the ultimate goal for any corporation”.

Another observation about budgets is the lack of visibility on the implementation aspect of the various schemes. The government commits huge sums of money towards the development schemes but lot of funds leaks during the bureaucratic process. I believe we need a new department for reducing the inefficiencies of the various ministries by developing the implementation strategies of various schemes in close coordination with the ministries.

Budget 2009

Sensex may have crashed 600 points after the announcement of the budget, but I still found the budget very responsible although it has fair share of negative policy decisions too .

Positives

1. Government high degree of spending on rural and poor India clearly signals the accountability to the people of the country. They are fulfilling the promises made in the general elections.

2. Infrastructure spending will give boost to the manufacturing industry which is facing trouble due to recession. It will also have increased multiplier effect and will boost the overall economy.

3. Increasing MAT to improve the tax revenues from the company which are avoiding tax due to tax incentives given to them. If we see companies like TCS, INFY, they have established themselves well and don’t really need any tax breaks further. Ideally there should be a limit set on net profits and the time company crosses the limit, it should be taxed as a normal company.

4. Boost to agriculture sector in the form of 7% loan will improve the rural economy further, it will improve the purchasing power of almost 650 million Indians.

Negatives

1. No announcement of disinvestment in both loss and profit making companies is really shocking news. When the country is sitting on huge fiscal deficit and borrowing nearly 34% of the money used for spending, disinvestment could have been a trump card solution which is missed.

2. Imposition of Fringe Benefit Tax was a smart move by the earlier government, by abolishing it tax revenues will be reduced as companies will start paying its employees in the form of benefits and perks to reduce their tax load. This may also increase the fiscal deficit even further.

3. Reducing duties on Plasma TV, Mobile Phones and imported Car - This may be one of the decisions for the galleries, but it really doesn’t help the rising fiscal deficit of the country.

I think the major issue of this budget is clearly the lack of fiscal management by the finance ministry, increased borrowing by the government will cause following effects: -

1. Sovereign Ratings: - Increase fiscal deficit to more than 6%, it may also affect our sovereign ratings and increase the cost of borrowing by the government and the institutions.

2. Crowding out Effect: - Government is borrowing almost 34% of the expenditure from the markets. It will reduce the options for the private sector to get easy funding as it will be competing against the government to secure funds.

3. High Interest Burden: - Around 19% of the budgetary expenditure goes in just paying the interest on the loans taken by the government. High interest burden and increased borrowings is a negative sign for the growth targets of the country.

Slums.. Are we missing the larger Picture?

Slumdog Millionaire might not have done anything great for the slum dwellers but it has surely made few people very rich and famous, one is them is producer and director Mr Danny Boyle other includes actress of the movie ‘ Latika Fame‘ and last but not the least the slum cast of the movie who are finally having a good time after many ups and downs during and after the release of the movie .

What came as surprise to me is the lack of interest shown by people in attacking the real problem of poverty in slums. Actors like Salman etc are posing happily with the children from the slum who worked in the Oskar winning movie but they are simply ignoring the real issue of the condition of millions of kids who are still deprived of the basic necessities of the life.

Sending the Slumdog kids to school is really a great gesture shown by Danny Boyle but it could have really helped if they can simply build a school for slums in the locality or appeal to the general people to show some empathy to the major cause of slum development.

I think people are missing the larger picture of putting efforts in improving the conditions of slums as a whole and assuming that improving the life of few kids in slum will solve all the problems.

There is also a lack of initiative from the government machinery. We have ministries for urban development and rural development but we don’t have any focus on the slum Development or rather rehabilitation where 60% of the urban population lives. If India has to improve its condition and reputation outside , slum development has to be taken as a first priority .All the issues of poverty , malnourishment , crime and illiteracy are actually originating from the slums and as the population density in slums is very high , it will take significantly lessor effort and funds to improve the condition.

Preventing two wheeler road accidents ..

Freedom without concrete laws and regulations can lead to increased risk in every walk of life; people call it ‘Flexibility Premium’. A prime example of it may be the way Lehman Brothers saw its downfall due to freedom given to its managers to invest anywhere in any kind of security . The freedom and flexibility situation may looks very good initially to all of us but it mostly ends in self destructive mode.

A similar kind of risk can be associated with the driving of two wheelers in India, hardly any adequate regulations to safeguard the common man from falling in the trap of taking excessive risk while driving. When people are dying every day due to road accidents in thousands there is an urgent need of a new driving policy to reduce the rising number of road accident young casualties.

If we compare the US regulation regarding two wheelers, they are very strict. There is a requirement of wearing safety accessories like Helmets, elbow guard, gloves etc while driving a bike in the US and the people are charged heavy fines for violating these rules and even crossing speed levels .In India we have dismal conditions of the roads but even than few people never seems discouraged about showing their talent of crazy stunts and over speeding bike which endanger both theirs and life of others on the road.

Lot of effort is required to improve the conditions of road too in improving the condition of roads tom reduce the level of accidents .With abundance of two wheelers in the country which is one the most popular means of family transport, government may even think of having a special lanes for the two wheelers . It will even make roads easily accessible for non two wheeler drivers.

Are Bulls Back?

Outcome of general elections have changed the face of Indian Equity Markets. People who are staying away from the market are suddenly all excited about the easy money from stock markets.

 Is it really the revival of great Indian bull market which is ignoring all bad news and simply concentrating on the development agenda of the newly form UPA government without the fear of LEFT parties  or its just yet another short lived  trend. I personally feel that there are less chances of it being a sustainable upside trend for long, reason being: -

 

1.      1.  The earnings figure of the companies are still on the declining trend, nearly 33% of the top 1000 listed Indian companies by market capitalization have shown losses in the last Quarter. Majority of the companies are seeing a decline in the EPS growth.

 

2.       2. GDP increase of 5.8% might look very comforting but if look at the breakup of the GDP growth rates only the infrastructure sector has shown good growth with rest of the sectors still far from the last year’s level.

 

 

3.       3. Global recession seems far from over with heavy weights like General Motors filling for Bankruptcies and US markets still struggling for confidence.

 

4.       4. We are facing the challenge of large fiscal deficit and there is a high expectation for the populist budget this year which might stretch it even further. High Fiscal deficit combined with soaring current account deficit can even make a case of downgrade of India’s sovereign ratings which will increase the cost of funding for both the government and the companies of India.

 

5.       5. Low credit off take from banking sector clearly reflects the declining trend in the capital expenditures of the companies.  It can reduce the extent of growth rates and job opportunities both in manufacturing and services sector.

 

6.       6. Delayed Monsoon can negatively affect the agriculture and the rural economy making it tough for recession neutral industries like Food and FMCG.

 

7.       7. Declining exports and increasing crude prices can even the increase the current account deficit of India and with less capital account inflows due to grim external conditions the balance of payment condition of India can denigrate although we are sitting in huge Forex reserves.

 

I can clearly see a classic case of retail investor’s excitement about entering the market when it’s too hot to handle. It’s very tough to predict the direction of the markets but the macro economic factors doesn’t really reflect any signs of sustainability of this rally for long time and I think it will be in interest of the small time investors to go a bit slow on their buying frenzy in a quest to become a millionaire in a month.  

Strategic Time Out

Sometimes I really wonder how marketing guru's change the face of the game in such a amazing fashion .. Look at the new feature of the IPL - Strategic Time out . A move which adds another 10 minutes to the game , how it has changed the entire game . Now the media has extra time to put in more advertisements and earn extra revenue . It also provides  time to teams to realign the strategy in the middle of the game and makes it really interesting . So many games in IPL have been influenced by this time out.

The best part of it is the flexibility it provides to the viewer who can also use this time to do some work , sitting and watching the entire 2 hour game can be tough for few of us .

 In all a win win situation and no one is complaining . 

Filthy Rich

What will you do when you have tons of money, Mr Raju is reported to have 1000 designers suit just for himself, which can make even the likes of Amitabh Bachhan feel jealous, but the big question is - Why do people like Raju spend millions on designer suits and accessories when it will take him atleast 3 years to repeat the usage of the earlier used one. Some of the reasons might be:-

1         Exhausted with other options of burning money

2         Marginal utility of saving money gets reduced drastically

3         Safety from detection of excess Black money

4          Have to fill up the expensive and fancy Wardrobes

5         To attract attention of fairer sex

6         Improving the demand and state of economy

7         Use it as a sign of immaculate taste

Want to know the real reason, get Rich.

Corporate Governance ..

Satyam scandal has unnerved lot of market participants about the chances of corrupt practices being undergoing in lot of other companies, people who use to believe in fundamental analysis of the securities are now suspicious of the real intrinsic value of their stock holdings. Clearly discounted cash flow analysis , relative valuation or even DDM cannot account for the risk of marked up employees or fudged balanced sheets. In such a scenario what method of valuation can actually discount for the risk of abysmal corporate governance is a real issue for modern day finance practitioners and there is a need to add this qualitative measure in quantifying the intrinsic value of any stock. This risk can be called risk of asymmetric information .One of the way of quantifying such risks is increasing the discount rate for company with less transparency or lesser number of independent directors. The high discount rate will reduce the value of the stock but quantifying the value of this premium is a very difficult process.

SEBI is coming out with a new formula to add another check in the auditing process by introducing peer review. In a peer review internal auditors from some randomly selected company will check the books of some other company and vice verse.  There may be lot of operational intricacies in actually adopting this process but it can act like a good deterrent for the company to take up innovative accounting practices . What is interesting is that the industry is not supporting this new check. Let’s hope we have it implemented and it can identify most of the Satyam’s in the process.