Rangarajan

The year of change

2011-01-23T18:10:00.001+05:30

I got a message from Linkedin last week that "250 of my contacts changed jobs within the last one year". That's a whopping 25% of my contacts.

I am well aware that the year of 2010 is definitely not representative. The two years preceding 2010 were literally wash-out years, especially for finance professional who form bulk of my contacts at Linkedin. Many people were waiting by the sidelines, patiently biding their times, and waiting for the tide to turn favourable.

Even if we take these factors into consideration and discount the above figure by say 30%, the attrition rate still is at around 18%, which is definitely not something which is normal. I don't need to explain here that "Attrition" is a very costly affair for the employers. With increasing employment choices for the people and the fight amongst the employers for the right talent, the problem is only getting worser for the employers.

Isn't it time to redesign our strategies towards talent management?

The joy of giving..

2011-01-17T22:53:00.002+05:30

Of late, I have been taking along a few old clothes in my car. The intention is to give it to someone who is in dire need of it. I come across these people at signals, roadside pavements and many other public places. I have so far been able to give away 2 shirts (over 3 encounters) during the past 10 days or so.

The first one was to a person who was lying on a pedestrian pavement on a busy flyover. I parked my car a few paces ahead, walked back and then handed over a shirt to this guy. This person looked at me, accepted the shirt and then swiftly went back to his world. No words were exchanged..

The second encounter happened when I was at a petrol bunk. There was this poor man, along with his wife. Tattered clothes, hungry eyes and a weak frame. A few people who were walking past, took notice of the couple. A small proportion of this crowd shed their pocket change.. I went to the couple and gave a shirt to the old man. The wife looked more pleased than the husband and folded her hands in gratitude. The husband's eyes acknowledged the act with thanks. No words were exchanged..

The last one was on a hot sunny day. This man was walking on a corner of a road. All he had was a really tattered cloth clad around his waist. His last bath must have been at least a few months ago. He was taking out rice from a dirty plastic cover he had in his hand and was eating. I dreaded to think where must he have picked it up. I ventured out and gave him a shirt, pretty confident that he must be pleased to receive it. But alas, he saw me eye to eye, shook his head and move away. No words were exchanged..

All the three experiences were unique. The first man took the shirt, because someone gave it to him. The woman in the second encounter was in as much need as her husband and did not get anything from me, yet was overjoyed because her husband got something. And finally a man, who had nothing with him, but yet walked away from accepting something which was a basic need.

One thing was common though.. The joy with which you walk away.....

Goodbye 2010

2010-12-31T18:17:00.002+05:30

Today I went for the Annual Sports Meet of my school. I studied in this school (Vivekananda Vidyalaya) till my 10th Class and passed out in 1995. Exactly 15 years back.. Time does fly..

While at some level I felt that the whole world has changed, another thought which crossed my mind was that nothing has really changed over these years. I saw some of my teachers. They were just the same, but for what time has done to their physical frames. A little grey hair, that additional ponch and a bespectacled face was all that had changed. But their calm intellect, their intelligent face, their inexhaustible patience and the glint in their eyes, when a old student like me walked up and spoke to them, was just the same.

The students were the same too. That little irreverence to the teachers, the know all attitude, the lazy stroll which they call as "March Past" and the joy in their eyes when they spend a day out with their friends, was just the same.

Probably the world actually never changes. What really changes is our own views, perceptions, attitudes and beliefs. It is this change that makes us see the world differently, each time. It is this change that makes us love what we had hated before and hate what we had loved before. Why is this truth, so difficult to realize?...

My thoughts were distracted, when someone walked near me and asked "Are you Rangarajan?"... That was my classmate in 5th standard. She had completely changed and I found it difficult to recollect her name.

She volunteerd "Jayashree"...

"Of course", I said, with a sheepish smile..

"Nothing has changed in you Ranga.. You are exactly the same, as I remember you from our fifth class".. said Jayashree..

" I am not sure, if I should take this as a compliment"..

"Of course, its a huge compliment. How many of us manage to stay the same?".. said she..

I felt good. What a good way to end the year.

Good bye 2010.

Nature's Response

2010-12-20T14:07:00.002+05:30

A beautiful sunrise in Vizag, a picture I clicked during my recent visit to the port town.

While everything about the beach and the sunrise was so beautiful, I wouldn't say the same about everything around the beach. The dirt, the plastic covers, the Pepsi cans and ice-cream wrappers were spoiling the show.

That's when I came near this rocky spot on the beach and thought to myself that perhaps Nature is showing its middle finger to all of us, for all that we do to her...

Tupperware Tales

2010-12-16T23:06:00.000+05:30

It was just past lunchtime at office and I had just finished my fill then. As I was tickling my laptop to life, from the brief slumber it might have enjoyed when I was away, I heard a voice from behind.

"Sir... Sir". I craned my neck behind to see a lady, about 40-45 yrs, standing behind the receptionist's desk. Since the receptionist had gone away for lunch, this lady was trying to attract my attention.

The lady, obviously didn't belong to our office. Her attire, poise and probably even the face, did not belong to our pseudo-sophisticated investment banking world.

I quickly took the role of the receptionist and asked what she wanted. She gave me her card and said that she is a distributor of Tupperware products and quickly reeled out her prepared script on how Tupperware is the best thing to have happened to mankind. I took her card and said if someone is interested, I will direct them to her.

I have seen many people react wildly when they get a unsolicited call or if they happen to meet someone like this lady. I will never belong to this camp. I never slam the phone down on calls from credit call agencies, from loan sprayers or from Mahindra Holidays. I never shut the door to eager salesmen who land up at your home on a hot Sunday and disturb your afternoon nap.

Who am I to shout at them? At best my right ends with refusing to accpet their offer. Have I myself not benefitted from kind souls, who had no obligation to hear me but chose to? What do I lose if I respect them as humans?

Next time when one of those hungry salesmen come to your house on a sunny day, offer them water. Their smile will take you a long way..

Misguided Positioning

2010-12-12T19:21:00.003+05:30

"Murali Medicals A/C" screamed a banner in front of my eyes. This set me into a trail of thoughts.. Ok another medical shop has come around in the neighborhood. That's ok, there seems to be a place for many more given the number of people I see queuing up in the doctor's clinics. What though puzzled me was the suffix they had added in the banner - "A/C".

I don't remember spending more than two minutes in a medical shop ever. There is a prescription, the guy behind the table is normally well aware of the positions of these medicines and he gathers them deftly. A bill is presented in the end and I walk back with my picks. The only reason I may end up spending more time is either when the shop is crowded or if the guy behind the table is incompetent. (I am assuming that the medical shop guy has mastered the art of deciphering the doctor's handwriting, which usually is a superhuman quality in itself). In both these cases, I am frustrated. Speaking for myself, in both these cases, whether there is a A/C or not, my frustration is not going to reduce.

Given this scenario, whats the use of having an advertisement which tries to build out a differentiation argument, based on a metric which is irrelevant. I understand that an A/C can keep the owner comfortable. Period. However, to try and build an argument of differentiation around it, is non-sensical.

Murali Medicals, is not alone in this madness. I see it all around. Misguided differentiation is actually omnipresent. I see hotels advertising that they are specialists in Tandoori and Chinese, I see airlines positioning themselves as low cost and full service, I see products/ services trying to achieve a position of being cheap and best. In my business school days, I have seen some of my classmates trying desperately to bring out their differentiation by including thoroughly non-sensical information in their CVs.

All these instances are sure-shot recipes of disaster. Firstly, identify and understand things that matter; Build competencies on these relevant metrics and then go ahead and confidently cement your positioning. Rise and shine.

Teachers required

2010-04-24T18:26:00.003+05:30

Can it ever get more ridiculuous? This is an actual advertisement published in a local daily seeking candidates to apply for the post of a teacher.

Since the picture is a little blurred, I am pasting the actual text of the ad below:

Required unmarried good looking - below 30 years - Brahmin girls, PG teachers for Physics, English, Tamil and for administration for a reputed school @ chennai. Good salary for the right candidate

Apply with full details with photo to scsmatric.hr.sec@gmail.com

Sir.. are you using a 3G enabled mobile?

2010-03-06T09:48:00.001+05:30

Sir.. are you using a 3G enabled mobile?

I said "No".. hiding my surprise at this sudden question and shifting uneasily in my seat.

Why do you ask?

"No sir..My 3G mobile is unable to receive 3G signals while I move around the city. The reception is good only in certain parts of the city. I am hence unable to make video calls"

"There should be some problems with your phone settings. Once you correct it, you should be able to receive 3G singals, if your phone is indeed 3G enabled".. quipped I, slowly feeling the confidence levels rising in myself.

"Sir.. I have checked all the settings, including GPRS packet settings, 3G network settings and Access Point etc.. But somehow it is not working. I even took my handset to the BSNL service centre and they are unable to resolve the issue. Let me anyways go back and read the user manual once again and see if I had missed anything"

"Do that.. by the way what phone do you have?"

"Sir.. I have a Sony Ericcson set. Costed me Rs. 19000. I did not want to buy a Nokia. everyone has a phone sir. There should be some difference between my phone and the usual stuff. Sony Ericsson is class sir. If i go out for some function, people have a seperate respect when i pull out my phone sir. I am very happy with this phone"

"Excellent.. Pls stop here my destination has arrived", Said I and handed him a Rs. 100 note.

"Sir.. petrol prices have increased drastically. Give me atleast 5 rupees extra sir.."

I handed an additional Rs. 10 to the Auto rickshaw driver and walked away with sea of thoughts rushing into my head. India shining? Telecom revolution in India? Impact of inflation on common man? Business opportunity at the bottom of pyramid? Meaning of financial planning at different stratas of the society?....... My trail of thoughts were disturbed by a sudden phone call I received.

"Yes sir, I am on my way. Will be there in your office in another 2 minutes"... I ended the call and put my Rs. 6900 Samsung Corby phone in my pocket, which I had bought the previuos day, after a lot of research..

The great lemon rush

2010-02-22T23:05:00.005+05:30

Three major "home-made" lemon drinks have hit the market in recent past. Pepsi's Nimbooz, Coke's Minute Maid Nimbu Pani and Parle Agro's LMN are sweating it out for Numero Uno. A host of reports and marketing blogs tell me that lemon drinks clock the highest growth rate in the non-cola segment. Some analyst reports peg annual Nimbu Pani sales at a whopping 45 million cases (of 5.6 litres each)!!

The battle for nimbu pani is on and the manufacturers with their creative advertising, aggressive marketing and competitive pricing are leaving no stone unturned... Its easy to see why. Nimbu is available in plenty in India, Nimbu Pani is probably one of the easiest to make, has a naturally long life and ofcourse a huge profit margin.

Whats interesting is that, we Indians have been having nimbu pani for a few centuries now. We always knew its natural health benefits and pocket friendly attitude. And yet I am not sure why this segment never took off till now. Pepsi's Troicana has a 100 different flavours (well not exactly... but you get the point right??) on its menu and even boasts of a few which are strictly for the adventures types only (white grape kiwi, pomegranate blueberry!!!). Coke has Maaza and Minute Maid Pulpy Orange to its share. Frooti, Appy, Appy Fizz decorate Parle Agro's showcase and Dabur always had Real Fruit Juice to its credit. Yet it is unfortunate that none of these guys took the poor lemon seriously. No wonder people are always scared of "bad lemons"..

But the little yellow rascal is back with a vengence and is not going to look back again. The uncrowned king of India has now finally taken a lead which is clearly ahead of what many of his kins can hope to achieve in the next decade.

Question to ponder - An opportunity as big and as profitable as this, always existed right in front of our eyes. Yet, it took a Nimbooz to shake the market from its slumber and wake up to this opportunity. Can we spot the next Lemon at least?

Ranking Magic

2010-01-25T18:38:00.000+05:30

ISB is ahead of Said, Kellogg, Yale and several others in the Financial Times' Global Business School Rankings 2010. ISB has moved up from 20th rank in 2008 to 15th in 2009 and 12th in 2010.

No mean achievement for sure and I am proud of this achievement by my alma mater. It is for sure going to swing the masses in ISB's favour in the coming years. Nevertheless, do rankings really matter? What is the sanctity of these rankings? And now the bigger question of does ISB really deserve a 12th rank? Globally? Well, I am sure many of friends are going to hate me for even pondering over this question. But the doubting Thomas that I am, made me go through the fine text in the ranking.. Some of the things which I did not understand or things that had a bulb glowing over my head were..

1. Its strange that ISB does not have an Audit Year mentioned in the ranking. FT's website defines "Audit Year" as the year in which KPMG obtained evidence applying specified audit precedures relating to selected survey data. Does having the "Audit Year" as "Nil" mean that an audit was never conducted in ISB? Incidentally only 3 out of the top 100 schools have this problem of not having an Audit Year.

2. The weighted average salary for the 2006 Alums today is US$ 141,291 which is approximately Rs. 66 lakhs. Well, it does sound huge, but what does it really include? Is it comparable with the figures quoted for other B-Schools? I remember, ISB's average salary figure for my batch (2008) and the 2-3 years prior to that were in the range of Rs. 15-19 lakhs. Assuming that the batch of 2006 had an average salary of Rs. 17 lakhs at the time of passout, their salaries must have grown at a CAGR of 40% over the last four years to reach this magical figure of Rs. 66 lakhs. Hmmmm... Did we have the worst financial crisis in this period??

3. Another interesting number.. The salary percentage increase is quoted as 166%. This is defined as the percentage increase in average alumni salary from before the MBA to today as a percentage of the pre-MBA salary. Let us back calculate. A 166% increase would mean that the average pre-MBA salary of the 2006 alumni would be about Rs. 40 lakhs (assuming that their present salary is Rs. 66 lakhs). At least 95% of ISB applicants are Indians. Doesn't a Rs. 40 lakh pre-MBA salary for an undergrad, ring a bell in your head?

I rest my case your honour.. This post is definitely not to demean ISB or its worth. I had the best of my times at ISB and have a really high regard for the school. But I do not understand this ranking business.

Sincere advice to the few who still do read my blogs.. Don't be swayed by external rankings. Do your own research and be convinced.

An idiot and a Messiah

2010-01-16T15:41:00.001+05:30

I do not usually venture into writing movie reviews, but two movies which I had watched recently have inspired or rather compelled me to write something about them.

3 Idiots was the first one. A simple story line, an average plot, no major twists and turns and a predictable climax. A recipe for a box office disaster, you would think. But the movie was a treat to watch. It touches a chord not just in your heart, but in your brain too :-) You come out of the movie hall feeling happy and cheerful. And be rest assured that the producers are laughing their way to the bank as well.

The second movie I watched was "Aayirathil Oruvan (One in a thousand)". For the uninitiated, this was one of the most awaited Tamil movies in the recent times. People who fell in love with Karthi Sivakumar, were eagerly awaiting his second flick after his successful debut in Paruthiveeran. As rediff puts it.. the movie was supposed to have it all - War, love, betrayal, ancient history, a forgotten kingdom, magical powers and a ruined city. A perfect recipe for a smash hit at the box office....

And what a disaster it turned out to be.. The movie had nothing but great visuals which were hopelessly tied together with a razor thin plot, confused actors, disgusting violence, crass and lewd dialogues and to top it all a director who probably did not know how to end this mish-mass masala at the end of 3 hours that he just ended up choosing the easy exit by saying, ".... the journey continues." Three years of efforts and Rs. 32 crores down the drain. Interesting that director's production company is aptly named "White Elephants". If you have not yet watched the movie, take my advice and give the money you intended to spend on the movie, to charity. You will feel better.

Can these big budget actors and directors of the South take a leaf from 3 Idiots and make movies which are fun to watch and not come out with something where you will need to visit your doc/ psychiatrist immediately after the movie?

The urban spirit!!

2009-12-07T21:44:00.005+05:30

A blogpost after a long time.. And what brings me to table now? A relatively mundane issue - City bus travel.

To travel in a city bus in a metro in peak hours is not for the weak hearted. It requires tremendous guts, will power and an indefatigable attitude. Most buses in the popular routes carry passengers at least 2-3 times their originally intended capacities. With a sizeable proportion of passengers travelling on foot-board, One side of the bus leans towards the ground and keeps you guessing, what makes this marvel defy gravity? A few really aged buses in MTC's fleet make it through this dairy chore of ferrying passengers, purely by god's grace. ... And yet these buses (in Chennai) transport over 45 lakh passengers per day, making over Rs. 2 crores collections per day. A truly commendable feat.

Well.. this post is not to douse you all with my woes against the MTC transport. Through my many travels in these buses, I have observed two things which create inconvenience to other passengers and/ or more accidents.

1. Voluntary foot-board travel by many aspiring youths, probably in a bid to showcase their adventurous spirit and woo eligible partners
2. Left side overtaking

My hypothesis is that both these problems can relatively easily be solved if the MTC officials make a small change in the seating arrangement. For historical reasons, the fairer sex takes the left side seats in the MTC buses. If they are instead made to take the right side seats, the following welcome changes can happen:

1. Dis-incentive to voluntarily travel on foot-board due to absence of the right audience/ platform
2. Reckless left hand overtaking for similar reasons described above would stop, as people would be incentiviced to now overtake from the right hand side..

Anybody listening?

Indianblogger

2009-06-05T19:46:00.002+05:30

I have become a guest blogger at www.indianblogger.com and I hope to publish various articles on finance and stock markets.

Here is my first article on "What is a QIP and why is it hot today?" - http://indianblogger.com/2009/06/05/what-is-a-qip-why-is-it-hot-now/

Risk

2009-04-12T09:04:00.001+05:30

To laugh is to risk appearing the fool,
To weep is to risk appearing sentimental,
To reach out for another is to risk involvement,
To expose feelings is to risk appearing your true self,
To place your ideas, your dreams before
a crowd is to risk their loss,
To love is to risk not being loved in return,
To live is to risk dying,
To hope is to risk despair,
To try is to risk failure,
But risk must be taken because the
Greatest hazard in life is to risk nothing.
Those who risk nothing do nothing,
Have nothing and are nothing.
They may avoid suffering and sorrow but
They cannot learn, feel, change, grow
Love or live.
Only a person who risks is free.

Author unknown

Markets for Maharajas

2009-04-11T17:56:00.001+05:30

I have started another blog - http://marketsformaharajas.blogspot.com

I endeavour to write on various topics in finance and economics in this blog. I have started with some really basic stuff and aim to gradually cover more ground. Check this out when you find some time.

I will of course continue this blog too.

What’s an attractive business?

2009-02-25T00:36:00.002+05:30

Who amongst these three is a more inspiring leader? - Abraham Lincoln (AL), Mahatma Gandhi (MG) or Alexander (A)

It’s difficult to say… Let’s briefly see what these leaders are remembered for..

AL: Humility, perseverance and practical leadership. Knew the importance of infrastructure to an economy. Fought against racial discrimination. Leadership during civil war. None of the things he did was rocket science. He did small things.. yet he did them consistently and achieved a number of small victories.....

MG: Truth, simplicity, non violence.. Fight against the British and the Indian independence... Father of an entire nation. A leader who did simple things.. Yet had the mettle to inspire millions to follow him.

A: One of the most successful military commanders of all times. Conquered the entire world. He did not do small things. He did great things that continues to inspire us even centuries after his time..

Ok.. What have these leaders got to do with my original question on what is an attractive business? Here you go...

If we agree that shareholder returns is a reasonable measure on evaluating business attractiveness, there are three important components which constitute shareholder returns:

1. Margins

2. Asset Turnover

3. Leverage

That’s because

(Net Profit/ Sales) i.e. Margins X (Sales/ Assets) i.e. Asset Turnover X (Assets/ Equity) i.e. Leverage = (Net Profits/ Equity) i.e. Shareholders Returns

It’s great if a business scores well on all these three counts. But even if it scores extremely well on one of these counts, it can constitute an attractive business..

High Margin businesses are like Alexander. He did great things. It’s almost impossible for a common man to imitate his deeds. High margin businesses are like that.. They do big ticket deals. Small number of deals but great margins. It’s difficult to imitate them.. Eg. Fashion, Jewelry

High turnover businesses are like Abraham Lincoln. He did not do earth shattering feats. He did small things, down to earth deals.. But he did a 1000 small things, consistently over long periods of time, which put together made him a great leader. High turnover industries are like that. They do small things, yet make up these insignificant deals through volumes.. Eg. Retail stores

High leverage industries are like Mahatma Gandhi. Gandhi gained his fame not because of his own feats. He gained it because he could inspire a million others to follow him which ultimately led to the freedom of an entire nation. Would a strategy of non-violence be exactly effective, if people were not ready to follow him? High leverage industries are like that. They use so little of their own money, get others to lend them money and manage to make a neat profit using the entire pool of cash.. Eg. Financial institutions

DuPont Analysis is a great way to look at businesses. Understanding these levers of business can help us identify and profit from opportunities.

An year since placements

2009-02-07T14:58:00.003+05:30

Its almost a year since my placements concluded at ISB. I was browsing my hard disk and going through the list of companies to which I had applied while at ISB.

Here are the statistics:

Number of companies applied through placements - 37
Number of shortlists - 11
Number of offers through campus - 5
Number of off-campus offers - 3

Here is some interesting stuff on what had happened to these 37 companies over the past one year:

18 of these 37 are listed
The average drop in the share prices of these 18 firms (since the time i had applied) is 62%. The range is 19 to 81%
Of these 18 firms,
5 firms have been bailed out
1 has been taken over
1 restructured
1 expected to default on its loan in the next 3 months

Its interesting that i finally took up an offer from IFC,

To which i had never applied
Never knew that such a job existed even 2 days before placements

And yet IFC is probably one of the best spots to be in, in today's environment (as compared to the 37 companies i had applied)

Moral of story:
Most often we do not recognize if its a blessing or a curse when something hits us. You can well imagine the anxiety i went through when my strike rate at ISB (Shortlists/ Applied) was not that good. There was a point of time during placements, where I had rejected almost every offer I had got and the future looked totally uncertain. Yet in the hindsight, when you are able to connect the dots, it all ends well. Take life as it comes. Have faith - In yourself, in your destiny and in god.

What are we?

2008-12-18T16:49:00.004+05:30

What did we do against the Mumbai terrorists attacks:

1. We participated in online polls and declared that India badly needs to take more stringent action against terrorism
2. We participated in Email campaigns and added our names to the lengthy list of citizens seeking action from the government
3. We participated in peace marches
4. We supported tons of websites on the themes of India rocks, Proud to be Indian etc..
5. We lit candles to honour the victims of terrorism
6. We bought T-shirts with whacky slogans supporting the fight against terrorism
7. We watched and may be a few of us participated too in panel discussions
8. We observed a minute of silence in the honour of the terrorist victims
9. Sachin dedicated his century. Amitabh cancelled his dinner with Clinton. Sanjay Dutt lowered his fee. RGV visited the terror ravaged Taj. Bollywood registered 30 movie titles. Saif and Kareena condemned the most heinous terror act and government’s failure to protect the citizens. Aamir Khan wore a black dress on Eid to denounce the terror act.

We have recovered now. We have come back to organizing our lives around two of our most important goals - Watching our bank balances increase and liabilities decrease.

That brings me back to the main question. Are we fundamentally hypocratic or plain helpless?

Not Today

2008-12-11T09:39:00.002+05:30

December 10, 2008

8.35 AM: I started from my home and sped towards Chanakyapuri (my office). The moment my car hit the main road I realized that I would have been much better-off had I started even 5 minutes earlier. But that never happens... I hastily laid that thought to rest and drowned myself in loud music to transport myself to a different world. My mood changed and I started appreciating Delhi - Its misty romantic look, clean and broad roads, greenery... Delhi is great. A couple of PYTs (Pretty Young Things) walk past.... My mood elevates even further..

8.50 AM: After some skillful driving, I manage to reach office on time. Those gleaming Volvo cars parked in the office, stole my vision. They always do. I console my mind saying that someday I will own them.

8.55 AM: Reached my desk. Was happy to see my desk as clean as it always used to be. I don't like a cluttered desk. It reflects a cluttered mind. Not sure if a clean desk reflects a clean mind... But I would like to think so.

Started my laptop. It slowly comes to life and after a few minutes of what seemed an herculean effort, it asked me for my password. Without a second thought I punch in those keys... And here comes the first jolt of the day

"Your account has been disabled. Pls contact the administrator"

Wild thoughts run in my head...

What was the last assignment I did? Did I really screw it up that they did not even bother to inform me before firing?

But how can they do it? The notice period serves both ways right?

I thought IFC is a relatively safer island amidst all this mayhem and I never expected this could happen here... And to me..

9.10 AM: Office is still almost empty and there is no one at office who could help... my emotional mind makes its temporary exit and in comes the rational mind..

I make a mental calling plan..If the news is confirmed..

Call your wife first.. assure her that you haven't married a dumbo and that i would be back on track in a short time

Parents next... my mind was racing ahead and thinking of simpler ways to explain the subprime story and the woes of mortgage backed securities.. One good news though, tell them you would be back in Chennai soon..

Make calls to previous bosses with whom i am still in good books..

Calculate the burn rate (cash used up per month) and the bank balance to see maximum period of self sustenance without external assistance

Meanwhile start thinking of those entrepreneurial plans you always had..

Be calm.. if it has happened, it has happened..

9.20 AM: "You were supposed to change your password on Friday and you did not change it. That's why your account has been disabled. Do it now" yelled the IT administrator..

Heaved a sigh of relief.. Not today..

Happy to work now

Scratch your own itch

2008-11-07T17:38:00.002+05:30

Now that I caught your attention, let me share a very intersting article I read in Newleaders.com

Getting things right is very hard to do, but is even further complicated when you are trying to solve a problem for someone else. You have to be the customer and the creator at the same moment in order to create something that will truly solve a problem once and for all. When you try to solve problems that aren’t your own, your product ends up either being too complicated or simple, which isn’t the solution.

In a world where most medical records still exist on paper and we use paper voting ballots for the presidential elections, we don’t need another RSS blog syndication widget or another new way to embed music on your MySpace page. Instead, try investing your time into developing products that can help people save time, money, or increase awareness.

Start small, solve your own problems, and don’t quit your day job until you are absolutely certain that it will be a success.

FAIL

2008-10-18T10:06:00.000+05:30

Came across an article which crisply summarized what can be expected in an emerging economy during a market turmoil such as the present one.

4 things essentially - FAIL

F: Fear and uncertainty
A: Asset prices (falling)
I: Interest rates (rising)
L: Liquidity crisis

The whole world seems to be crashing... but it is during times like these that great corporations and fortunes are made. If you want to take cues from Warren Buffet, he has been buying American stocks from his personal account in which he previously owned nothing but US government bonds. He says "Be fearful when others are greedy and be greedy when others are fearful"

What's in a place?

2008-10-17T12:11:00.002+05:30

I stopped by the ISB campus last evening. Took a leisurely stroll around the campus. Went to the classrooms, library, sarovar, my old room at SV1,the rec centre... Everything I could squeeze in the little time I had.Memories rushed into my head like the first passage of light into a dark room which had never been opened before... Ha ha ha.. Ok it was not that dramatic, but it was great to relive my memories...precious moments of joy,long periods of pain, embarrassments, disappointments, moments of truth...

Its strange how things can change in a matter of six months. The campus is still as pretty as it ever was... But those familiar faces which greet you with 'what's up?' Wherever they saw you...Were missing. (Its a different matter that most people who greeted you thus, did not actually wait for a response). What's a place in itself? Its the people who truly make it what it is...

Got sometime to interact with some of the current batch too. Entrepreneurs, media reporters, traders.. What not. The batch has some great bunch of people. But, the tension in the campus is palpable. Its not easy to be in such a situation when you have kicked a good job, taken a huge liability in the form of a loan, watch your dream companies come crashing down in front of your eyes.. Tough times ahead.

My own little piece of advice to them..

1. While you hope for good placements, prepare for the worst.

2. Nobody is as interested in your career as you yourself are. Its pointless to outsource that responsibility to CAS or the school. Remember... The school never promised you a job.

3. The first level of defence is to establish or reestablish your old contacts. They are people who have at least seen you at work and were hopefully impressed. If they are not going to help you get a good job, nobody else will

4. The second level of defence is to use the network your batch mates have. They themselves may not be willing to go back to their previous employers for whatever reasons. But these companies could be your dream employers and these your batch mates may at least lead you to the right people.

5. The third level of defence is to use the alumni and their network

6. If you note, these levels of defences are arranged in the ascending order of information asymmetry.

7. If you have not already started, do it now and explore these levels of defence and if possible get at least in-principle offers or comforts from these people. It will remove enormous pressure of your shoulders during the placements. Handle it intelligently and diplomatically.

8. No substitute to preparation. Esp in these tough times. You don't want to miss an opportunity when it actually lands. Keep the machine well oiled and be ready to race ahead when needed.

9. Keep your cool. If you have come till here in your life, you will most likely reach where you want to go. There is a bigger force at work, whether you realize it or not, whether you like it or not.

Best wishes for your preparations and placements ahead

On top of the world

2008-09-25T07:46:00.002+05:30

Thats Mount Everest. I clicked this photograph from the aircraft, on my recent visit to Nepal.

License to be unrealistic

2008-09-08T21:56:00.001+05:30

I see a waitress standing at the door of the lobby where my training program is going on. She has been standing by the door for at least 5 hours now. Her job description is simple - Open and close the doors for guests, with a smile.....
.... And i thought my job description was not power packed..

The other day i was taking the late night flight from Mumbai to Delhi. It was close to midnight when the plane was about to touchdown Delhi. I sneaked a quick view towards the air hostess cabin and saw them wearing a make-up and getting ready to say "Thank u sir.. have a good night". Here is a quick peek into their day : Get up - Board - Smile - Serve - Sleep - Back to step 1....
.... And i thought my job was travel intensive..

When my plane did land at Delhi, i took a cab back home and started chatting with the driver on the way back. Meet Mr. Unknown, he drives from 6 AM to about 12 - 12.30 AM. Each day. Has been doing it for past 8 years. Saves enough per month to pay a two day visit to his wife and children who live about 100 KMs away from Delhi. They cant live with him. Its unaffordable. Mr. Unknown hopes that over the next 10 years, he would save enough to buy his own car....
.... And i thought my career was progressing a bit slow..

But they are different. They do not have a FT 20 B-School degree...
... Are they really different? Or to put it the other way, does a B-School degree really give the license to complain, be impatient and unrealistic in my dreams?

Power packed air travel

2008-08-05T09:40:00.002+05:30

When you start matching the names and the faces of the security personnel at the airport, when you start wondering why Kancheepuram Idli is missing from today's menu of Kingfisher, when you start predicting which flight of Jet would have an in-flight entertainment system and which would not.... You know that you and travel have become as inseparable as Deccan and delays.

Every air traveler on an average spends at least 25-30 min after finishing all formalities (baggage screening, security check in etc) before his boarding call. Here is a list of services which if provided by the airport/ airline, can make air travel a lot more interesting and power packed and could make this time worth the wait..

Services at the airports:
1. Beauty salons - Can I have a quick facial/ a hair cut/ a shave/ a shampoo bath/ hair colouring before my boarding call? Can it make me more presentable before i land?

2. "Ladies and gentlemen... Air Deccan regrets to announce a further delay of 45 minutes. This delay is due to late arrival of flight from......." - On a usual day this announcement may have the ability to suck out the last ounce of energy which u had preciously saved. But what if you can spend the next hour or so usefully. Can someone give me a head massage (just the service I need right now.... Imagine an announcement which goes thus.... Air Deccan regrets... Blah blah blah.... Passengers who wish to avail a complementary head massage can do so by proceeding to gate no 1). Kingfisher can offer body massage services too, to take the Kingfisher experience to a completely new level ;-)

3. Book rentals: There is no dearth of book shops in the airports. But it is most likely that I don't actually buy the book in the airport store. The reason - I think it may be overpriced/ I am not sure how long my interest will last in the book/ I am not sure if there are better alternatives..
What if I don't need to buy the book but can just rent it for a small fraction of its original price and can return it to another branch of the same store in the airport in which I am going to land? If I really like it, may be I will buy it there...

4. In the same breath, can I hire MP3 players loaded with genres I like and return it in the landing airport? Can someone rent me a portable DVD player loaded with a movie which I always wanted to watch, but never got a chance...

5.I have a headache/ a running nose/ feeling feverish... I don't want to just pop an off-the-shelf pill, but i can't afford to be sick tomorrow. Can a doc have a quick look at me and prescribe something sensible?

6.How about secretarial services? I need to schedule a visit to my dentist, take my family out for a movie, have a dinner appointment with my friend. Can someone have all these appointments scheduled and give me the confirmations and the movie tickets, when I land?

7. Be it economy class in Air Deccan or business class in Kingfisher... All are equal when it comes to security check. Everyone has to wade through serpentine lines before ones turn comes through. Can someone else stand on my behalf and call me when just 4 or 5 people are ahead of me?

8. Here comes my next idea inspired by Harry Potter. If RFID tags are attached to each boarding pass, wherein passenger information is captured and if these are displayed as moving dots (with passenger details) on a live map in the airport area, I could spend hours staring at the screen and getting to know who is around. Mind you.. the airlines too dont need to make announcements like "This is the final call for Mr. X traveling by Kingfisher to ...." Mr. X's position can directly be spotted through the RFID tag..

Ok... Now let's move on to in-flight services

9. Networking platforms: Every flight has some interesting personalities traveling in it. However, at best I can know about my neighbor and no one else. Can there be a system wherein people can voluntarily say a few things about themselves and this in turn is available for others to see. Meeting requests can be communicated through a system and if the other person is interested in the meeting too, then the airline can facilitate the in-flight meeting, by rearranging their seating/ having a small meeting area arranged near one of the exit doors etc..

10. Independent Service Providers - Take a look at this... If i am a financial consultant and cannot do anything useful during the 2-3 hr flight journey, i may be happy to offer my services to others, of course for a fee. Unlike networking platforms described above, these are pure commercial service offerings. I can meet a consultant, a leading doctor, an analyst, a beautician, an event manager... whoever.. right in the flight. For the both the above services, the airline can take a cut too.. for facilitating the meeting.

Anyone out there listening? Come on do something.. or still better hire me..

Life goes on

2008-07-09T15:57:00.003+05:30

Random thoughts
1. Recently read an article in Business Line/ ET which talks about what investor's strategy should be in these tough market conditions. The crux of the article is "If you have held on till now, hold on for some more time". While holding on for now may be a right choice, i find the logic provided for holding on, slightly wierd. By this logic, we should probably never quit the market and hope that our patience would prove good someday. Markets are dynamic and a static strategy such as this is dangerous. Evaluate opportunities and risks given the current market scenario and dont fear to book losses

2. If an IIT-an has a dream of doing an MBA and ultimately wanting to work in an financial institution, why study in IIT in the first place. Why not do an undergraduation in commerce/ economics and familiarize yourself with necessary evils like P&L, Balance Sheet and Cash Flows??

3. Hmmm now about my workplace - IFC is a very interesting workplace with some fundamental contradictions when compared to a usual financial institution. IFC is a financial institution with profits not being the only motive, manages to do great work without placing target pressure on its employees, does not believe in participating in a deal if it feels that it has no role to play apart from just providing money. In fact the day IFC goes out of business, is the day when it has truly achieved its goals. My exposure and experience has been great so far..

4. Reading the blogs of most of the current students at ISB. I am reminded about the movie Gladiator, where people watch the fights/ death match from the sidelines. I am glad that i have graduated to being a spectator and am no more a gladiator.

Dojos, Senseis and Reis....

2008-06-06T14:25:00.001+05:30

The new language ringing in my ears. Yes.. i have enrolled myself for Karate classes. I have always been fascinated by martial arts and but never have even spent a minute to learn them. Life is short and i cannot afford not to chase my dreams..

The first thing which really impressed me about Karate is the discipline. You will have to bow and show your respect before you enter the training place. Plus you show your respect to your teacher, your teacher's teacher and the grand master at the beginning and end of each class. Additionally you bow down and wish every senior when you meet them. By the way seniority is defined by belt and not by age.

Some of the philosophies of Karate, as told by my teacher, which bowled me over were..

Karate is not for fighting with others. It is not even for self defense. You fight with yourself. You fight with your weaknesses and with those things which prevents you from emerging greater. Its a process of self evolution, where you will reach a stage when you no longer need to fight.

Another simple point which looked beautiful when he said... "Can a vehicle keep running throughout its life, if you simply keep filling petrol? The obvious answer is a No. A vehicle to be in good condition needs proper repair and maintenance. However, most of us do not seem to understand this simple truth in our lives. We keep eating and think that we shall live healthy always. 90% of us do not even do basic exercises in our life. Karate or for that matter any form of exercise is basically good maintenance".

I hope my enthusiasm continues and doesn't die a premature and a hasty death.

Tips - Optional?

2008-05-14T16:12:00.000+05:30

I found this message in Oberoi Hotels in Mumbai - "Tips is optional. We do not levy any service charge for the same".

The day might not be far, when we may have to shell out a 10% service charge and a 12.5% VAT on the TIPS which we give to the bearers in the hotels..

Strange are our ways when we bargain with the auto walas and the vegetable vendors but do not mind letting out a nice sum as a tip in these hotels where the price of anything is already suffixed with a couple of additional zeros..

Its good to be back

2008-05-06T17:10:00.003+05:30

Back in the ring after a gap of slightly more than a year. From the first impressions of the workplace it seems to be living up to its expectations. Hope it continues..

Delhi... Yet to explore the city. But i got to see and experience extreme heat, rain, a cold night and a mini sandstorm.... all in a single day. The house hunt ended positively in an extremely short span of time - Half a day.

Reading and enjoying the blogs of many of the present batch of students at ISB... A dry smile crosses my lips when I think that I no longer need to start a mind numbing assignment or start reading an epic-long case study on a Sunday morning nor will my bank account continue to bleed a slow death.

Its good to be back.

And so it ends..

2008-04-05T22:03:00.002+05:30

Thus came the end of a great and an enlightening year. We had the graduation ceremony today and I am sure you will read all about it in the media.

I had a great time blogging. It has helped me organize my thoughts, speak to people whom i have never met (and some of whom i will never meet) and at many times, question my own reasoning.

I will continue blogging, as the journey progresses forward. But this is the last time i can wish you all luck as an ISB student..

Best of luck

Doing things differently

2008-03-26T09:13:00.003+05:30

Today is the last day of classes for me at ISB. There are no mixed feelings, i am definitely happy. As the ISB journey comes towards the end, i wanted to write a post on what would i have done differently, if i were to repeat the entire experience at ISB.

For the records, i am clearly not looking forward to such an experience of doing it all over again, but may be the future batches might find something useful in this post. The views expressed here are purely my own and hence some (or many) might not subscribe to them. But after all this is my blog..

1. Study like crazy in core terms. Do not be swayed if someone tells you grades dont matter. The point is despite all your efforts you might not be in the Dean's list or may be not even somewhere close to it. That does not matter. At least you tried your best.

2. Term 2 is one of the most important terms. It separates the men from the boys. Make sure you work double hard during this term.

3. Be sure that the consulting bug is going to bite you. The hype in the campus, the build up given in the campus by alums and the repeated visits by consulting firms will for sure affect you at some level. From all the sweet talk that happens, every student believes internally (or is led to believe) that he is a right fit for consulting. But the hard reality strikes only towards the end.

Do explore this option seriously. Talk to alums, attend these sessions, make up your mind if you really like this option as a career, look at the history of recruits done by these firms and make a realistic estimation of your chance. But do these early enough and move on. You will save yourself so much time, effort and tension.

4. With respect to placements, make three choices:
a) Same industry target - A company from the same industry which you would like to go back to.
b)Realistic career switch target and
c) A dream career switch target.
The kind of efforts you need to put in is very different for each of these choices. Develop your strategy to tackle each of them. Ignoring any of these options might harm you severely towards the end.

5. ISB is all about "relativity". Your absolute strengths and weaknesses dont matter. These matter only in the context of what is it compared to your other batch mates. This applies in everything from grades to b-school competitions to your previous work experience to extra curriculars. So, keep working on your "differentiation" strategy. Remember these differentiations have to be both meaningful and credible.

6. Everyone is innocent until proven guilty. Be extremely cautious and intelligent in whatever you do at ISB. I am purposefully leaving this vague enough, but hopefully you would understand the meaning when you are here.

7. B. School competitions - There are a ton of them which happens. Most of them do not even count on as "spikes" in your resume. The filtering criteria for these competitions which i used are: Participate only if
a) Prize money is good
b) There is something interesting in the format/ outcome and
c) If it can work as a spike in your resume.
No point in writing mind numbing essays on "Challenges for Indian leadership in the "Nano" era" along with a million others.

8. ELP (Experiential Learning Programme) - A vast majority of them is pure bullshit. Do not feel compelled or pressurized to take this up. Do it if it is in your area of interest or if it will help you in someway in your placements. In most cases, people are better off taking an additional elective instead of ELP.

9. Develop your BATNAs (Best Alternative To a Negotiated Agreement) with respect to your placements, at least two months in advance. Prepare yourself for the worst possible outcome in placements. Even before the placements commence, try and make sure you find at least two companies which are ready to take you (on a "as is" basis). This will not only help ease the pressure but also increase your bargaining power at the table during placements.

10. Keep juggling with business ideas. You will get ample exposure to various business ideas during your stay at ISB. Keep your eyes and ears open. You never know whats in store for you.

11. Networking - One of the most important words you will hear at ISB. To me networking is not just knowing names and exchanging cards. It is "exchange of value". Do not miss your opportunity to reach out to others and at the least make few trusted friends.

The expert advice

2008-03-09T01:07:00.003+05:30

Lao Tzu’s famous quote “Those who have knowledge don’t predict and those who predict don’t have knowledge” seems most appropriate in this situation. I was just browsing through the Sensex targets given by various experts before the crash began in early January. Am pasting some of these below… have a good laugh.

“We are overweight on India as it is the best bull market in Asia. Our India weightage is at 38%, which is the biggest in thematic portfolio. The long-term Sensex target remains at 40,000." – Chris Wood, CLSA, Global Strategist, October 2007

“We continue to be bullish on the Indian market and have set a BSE SENSEX Target of 23,950 to 25,000 for 2008” – Citigroup, Jan 08

“This puts the Sensex target at around 27,000 mark. The breakout could be as big as 2.618 times the largest leg, leading to a mind boggling figure of 39,000. Even if we keep aside this over-optimistic view, the target of 27,000 could be achieved and that too most probably in the first half of 2008. The daily chart shows one directional wave (A) followed by wave (B), which seems to be a diametric pattern. This pattern has seven legs and has a bow-tie shape” - Milind Karandikar, Leading Technical Analyst, in Business Standard, 7 Jan 2008

“Being an India bull there are reasons such as strong corporate earnings growth (though slower around 20%), and liquidity expected from FIIs & domestic institutions that could propel the Sensex to 24000 by the end of the year (Sensex PE at this level would be around 22.85 considering Sensex EPS of 1050)” - Amar Pandit, Moneycontrol - 2nd Jan 08

“After Sensex 20,000, the market expectations are for 30,000, but I don’t see the Sensex extending beyond 24,000 this year with the benchmark making a decade high this year” - Mukul Pal (Leading technical Analyst), in Business Standard, 7 Jan, 08

“So, in order to find the Sensex targets for ’08, we added these multiples to the highest monthly closing of the Sensex in ’07, i.e. 20286.99. So, the possible targets of the Sensex in the year ’08 at 0.382, 0.618, 1 and 1.618 Fibonacci ratios are 23094.27, 24828.61, 27635.89 and hold your breath, 32177.51, respectively” – Economic Times, 7 Jan 08

“76.4% of leading brokerage firms viewed that the markets are fairly valued while 11.8% each believes that it is overvalued and undervalued, respectively” - CNBC-TV 18 poll, 1 Jan 08

“The move past 15,400 proved beyond doubt that the long-term uptrend has resumed from the June-2006 trough of 8,800. But this move appears to be the final (fifth) part of the long-term move that commenced in May 2003. This final leg can take a few more months to complete during which the Sensex will move between 17,500 and 24,800. We place the outer target for the Sensex in 2008 at 27,145” – Business Line Research, 30 Dec, 07

“Indian stock market would continue its bull run next year with the benchmark index Sensex likely to touch the 24,000-mark by the end of 2008” - Macquire Bank, 30 Dec 07

The last term

2008-03-06T09:04:00.001+05:30

Every student dreams about Term 8 in ISB. Its my turn now.

ISB is a totally different place now a days. Some of the activities which are taking place in campus now are..

1. Night Cricket - This is real fun. The intersection cricket matches starts around 7.30 PM under floodlights and goes on well in the night. There is music, liquids and lots of cheering

2. Monopoly Championships - The good old game is back in form, with more and more converts each day

3. The Multiplayer Age of Empires Championship – People are trying to load the game in LAN and organize multiplayer championships. This is still under process. Should be good fun when its up and running

4. Most students have taken a new resolution that they would watch at least 50% of the movies available in our library. So there is a perennial crowding in the DVD section, which had never seen so many visitors in all the seven terms put together

5. Gym and the swimming pool - Many students have started hitting the gym and the swimming pool with vengeance. Some to keep fit, some trying their best to relive their memories of how they once looked and a few others just for the fun of it.. especially given the fact that its our last one month in campus

6. Other games - Many other games including Basketball, Shuttle badminton, Table Tennis, Pool, Carom have regular patrons

7. City exploration - ISB has recently increased the capacity and the frequency of the City Shuttle which takes students from ISB to the city. It could not have come at a better time. All of us are trying to do justice to this beautiful city by giving it the attention it deserves..

8. Assignments/ Pre reads - They have at last taken a back seat at ISB. Assignments are not receiving a minute extra than what they are worth it. Most of us meet the night before to complete these "impediments" which are still on our way.

Interesting times at ISB...

Efficient Markets

2008-02-29T20:59:00.000+05:30

I had a field day today. Watching the budget live is fun. And that too when you have have the stock markets sites and your internet trading accounts opened in your laptop it is absolutely thrilling...

I was watching the markets live after having read my dose of budget expectations. The market opened lower and stayed under till about 11 AM on weak global cues and may be because of the uncertainty that it faced in the form of budget.. But once the budget speech started, the market was responding almost on a minute to minute basis to the budget provisions.

The moment Mr. Chidambaram announced the increased thrust on education in the form of a 20% increased budget spend stocks like Educomp, Aptech, NIIT were up. Then came the announcements on healthcare and the 15% additional allocation.. up goes DRL, Sparc.. Emphasis on polio and HIV eradication reflected an increase in Panacea Biotech. Waivers of loans availed by small and marginal farmers.. the PSU bank stocks fall. Excise duty reduction.. auto stocks rise. And then comes the killer…the hike in the short term capital gains tax. Then there was no stopping and markets started falling badly.

All of us know about the efficient market hypothesis. But it is during events like these you get to watch it in action. Ok.. enough of the serious stuff. I am not sure how many of you caught the real fun moments in today's budget. I caught at least three instances:

1. When the finance minister was talking about the "One Time Settlement scheme" for the loans availed by the farmers, there was one MP who was opposing it heavily without even hearing what the FM was saying. At one point when the FM announced that he is increasing the loans that are going to be eligible under the scheme, this guy started opposing even more. The speaker then intervened and said to that opposing MP that "You should be happy when the loans to be waived are increased. Then why are you opposing?" Then MP then immediately sat down with a sheepish smile on his face. Thats the state of our beloved leaders..

2. During his speech the FM was at one point extolling LIC and he said "LIC is a jewel amongst the crowns.." I hope he did not mean this..

3. When the FM increased the IT exemption limit for senior citizen from 195 K to 225 K... he had a naughty look at his face and looked at the speaker and said..."I hope there would be no objection now"...

The Pre-IPO Grey markets

2008-02-27T08:09:00.002+05:30

I had started a project some months ago at ISB which aimed at understanding the Pre-IPO grey markets and their ability/ effectiveness in forecasting the listing prices. The project is complete at last and am sharing some interesting pieces of information which i found..

For the uninitiated, Grey Markets are actually over the counter markets where dealers may execute orders for preferred customers as well as provide support for a new issue, before the stock actually gets listed. So, these markets operate in the period between the announcement of an IPO and the actual listing.

As the name suggests, this is an illegal market and has been banned by SEBI. However trades in this market are still rampant and thousands of crores exchange hands. The grey market premiums are even quoted in many of the financial dailies and are easily available in many public forums on the net.

I had studied the time series data of the grey market premiums for 38 IPOs which came out in 2007. Some of the interesting stuff on these..

1. The correlation between the last quoted grey market price and the actual listing price is 0.9768 (a near perfect correlation). This suggests that, grey market’s ability to predict actual prices is great.

2. Not surprisingly, there is a definitive positive association between the percentage premium (in grey markets) and the subscription rates. Higher the premium quoted in the grey markets, greater seems to be the subscription rates or vice-versa. The correlation here was about 0.8095.

I am not going to bore you to death, giving the other findings here. However, I have concluded my paper stating - Stay away from these markets and don’t ever get into executing actual trades. Thousands of investors have burnt their fingers dealing in these markets.

Nevertheless, as intelligent investors use these grey market prices as one more additional data point in your analysis while evaluating an IPO. Grey markets seem to be great indicators of dumb IPOs..

Destination

2008-02-25T21:04:00.001+05:30

The wait is over. I am joining International Finance Corporation. It is part of the World Bank group and is the largest multilateral source of loan and equity financing for private sector projects in the developing countires.

Day 7

2008-02-23T09:29:00.001+05:30

Received too many complaints yesterday that i haven't posted the Day 7 proceedings... Sorry about that. Remember, i told you all about the "interesting appointment" that i had, I had to go out of station for the same.

Day 7 was a lackluster day. I guess, there were just about a couple of companies which participated.

The last thing i heard was that more than 95% of the batch is placed in the first 6 days.. of course these are unofficial estimates..

Day 6

2008-02-21T07:21:00.001+05:30

A day for doctors... Apollo, Global Hospitals, Max Healthcare.. Many of the IT companies participated too. Infosys, JPMC & HSBC (for IT roles), Infotech Enterprises, Mphasis, Sankhya, Satyam and a couple of others.

Looks like my views have been heard or similar views have been floating around on the preparedness of students. From today on, the Placement Committee has decided to put in place the following:

1. CV Experts - Catch these guys to customize your CVs for the role/ company you are applying

2. Company champion - Know everything about the company/ role before you step in for the interview

3. Student Village Champions - Guys with whom you can chat up if you are generally feeling low and if you require any help in targeting/ preparing for companies which are coming..

These students (who are taking on the above roles) would be around the interview area to help people who need it. Great initiatives indeed.

The formal placement season is on just for three more days. Our last term - Term 8, starts on Monday.

I have an interesting appointment tomorrow and i will make up my mind on where i would be joining, immediately after that.

Day 5

2008-02-20T09:14:00.000+05:30

The venue for the interviews has been shifted from the main building (Academic centre) to the executive housing (from today onwards). This has two objectives -

1. The number of students who are still in the process has come down
2. If interviews are still being conducted in the main building, then it attracts a lot of attention and the students who are still in the race are unnecessarily pressurized

This is a very good move.

Coming to the companies which took part today... the biggies are DRL, DSP ML, Fortis, Genpact, Honeywell, Intel, Pfizer, Sony, Suzlon... and many others.

Many students who have already secured jobs have gone to their hometowns for cooling off. On the other hand it’s very disturbing to see some of your classmates still in the fray... This section can be split into two kinds...

1. People who know where they want to go. These are people who are at least focused and are confident that in case they are not able to secure a job here, they would chase their passion outside. I am very confident that these guys will surely secure a job in the next couple of days

2. People who have become so desperate that they would try their hand at any company... be it pharma, banking, PE, real estate, IT... anything. This is disturbing.

I met up with one such student yesterday who was waiting for his turn for attending one interview. I happened to pass by and wished him best of luck. He had no clue what the company is into, why he wanted to join them, what are the roles they are offering... nothing. I as a passive stock investor knew more about the company than him. This is totally unacceptable. If this is the level of preparedness, no doubt he will again miss this job.

If you are not clear about where you want to go… that is forgivable. But if you do not even do your basic homework before going for an interview, i am not sure what will ever motivate the recruiter to give you this job.

Day 4

2008-02-19T07:50:00.003+05:30

This was primarily led by IT cos. (CA, Dassualt, HCL, IBM, NIIT, Oracle, Wipro, Virtuasa, Tech Mahindra, Zensar, Mindtree...), Real estate (CBRE, DLF, Hines, Lodha..) media and some finance cos as well.

People are negotiating hard for the specific roles and salary they are expecting. Most companies are opening up their jobs.. (allowing walk-ins). About 90% of the batch should have at least one offer by now (this is just my estimate..). However, quite a few are still shopping for better deals (you are out of placements, only when you have two offers).

Crisis of confidence has clearly set in amongst those who haven't made it still. Many of them are falling in the vicious circle... “no job still - poor confidence - bad performance during interview”.. Some of the married ones are the most affected. Their woes are multiplied by the anxiety shown by the spouses, especially when the spouses start comparing the salaries of their counterparts amongst themselves..

It is important that they take some time out for themselves, build up confidence and then attend the future interviews. Remember, all of us had jobs earlier and our career should have at least been above average, else we would have never found our places in ISB.

I am beginning to get the notorious title of the one who is rejecting the most number of offers. I have rejected 6 till now (1 Commercial bank, 3 I-Banks, 1 Real Estate and 1 consulting). The point is, its not just money . If the company is not even able to appreciate the work you have done in past and give you a commensurate grade/ role, then why join them with a negative frame of mind... and yes, money does play an important role. No one works for charity..

Here is a question i want to pose to the HR clan. There are 2 candidates competing for a role. One has quoted a price of Rs. 11 lakhs and the other Rs. 20 lakhs. Which one do you choose?

We all know the theoretical answer i.e choose the one who brings in the maximum value (NPV in other words)... but the actual action taken by most HR people does not reflect their understanding of this concept. Most HR people seem to think they save 9 lakhs for the company by choosing person 1. Little do they realize that they might have actually lost may be 9 crores in potential profits by choosing the wrong person.

This example is little simplistic. Purposely so. Dont lose the main point, by trying to find flaws in the argument. The crux is, invest time in finding the right person and the right fit. Not in haggling for a few couple of lakhs..

Day 3

2008-02-17T21:27:00.000+05:30

Another hectic day. Lots of companies today and many many interesting interactions. There were some "bulk recruiters" today like ADAG, Cognizant etc. So i think a good number of offers would have been made and accepted today.

The not so good part of the placement process is that pressure has started setting in for the people who have still not made it in the first two days. The feeling is further enhanced when you see your class mates and quad mates walking in jeans and T-Shirt indicating subtly that they are out of the placement process. Its dangerous to succumb to the peer pressure...But as expected quite a few have started succumbing to the peer pressure and have started accepting bad deals.

The other aspect is that companies have also started feeling the pressure... A lot of students are already out of the placement process and the companies are feeling the pressure of lesser number of candidates available for the interviews. Some companies have already started opening the roles available, for all the students. Meaning, even if you were originally not short listed, you could now walk in for an interview.

As for me, I had pretty good interactions with four companies. Fingers crossed.

Day 2

2008-02-17T07:52:00.002+05:30

More than 25 domestic companies and many international companies have made their offers yesterday. This includes all the consulting firms, many I-Banks, commercial banks, IT majors, Conglomerates and real estate majors.

My guess is that more than 150 people should have got an offer and about 100 or so could have actually accepted it. Will get back to you on getting some more dope on this.

I had two interviews yesterday and got an offer from both of them. However i have rejected both the offers. Both of them were banks.

My interview had of course gone well with both the guys. At the end of the interview, when the HR lady broached the salary topic and gave me a number which they had in their mind, my first reaction was "Mam, may be you are missing a couple of zeroes, could you please recheck and revert?". But then i realized that she was damn serious when she made the offer... So, you can imagine the rest of the story..

My experience with the other bank was even more interesting. At the end of the interview...

HR: "Ok Mr. Rangarajan, we are impressed with your skill sets and achievements and are pleased to offer you.... blah.. blah..."

Me: "Mam.. can i bring something to your attention?"

HR: Sure.. go ahead

Me" "I had already mentioned this during te interview, but i guess this fact got missed out. One year back, before i joined ISB, i had an offer from you. However, i could not take it up, because i had decided to join ISB. The grade you had offered me then was one level higher than what you are offering me now and the salary you are offering me now is about ___ % lesser... Could you please take these facts into account" (I had a mind to ask... Do you really think, ISB could have brought down the value in me?.. however, i restrained myself..)

HR: Is it so? I am very sorry. Give me a couple of minutes, let me check and revert..

Me: Sure.. take your time

HR (20 min later): Sorry Mr. Rangarajan, our mandate for today is to hire up to a maximum of this level only. You can take this offer if you want to..

Me: Oh.. thats wonderful. I am sure you understand my position... Thanks for the efforts..

This again reiterates my views about the HR community in general (there are of course some exceptions..). Its best that i dont voice them in this forum.

My plate is again full today and I have an intersting array of companies to meet..

Day 1

2008-02-16T13:26:00.000+05:30

All the consulting companies had 2 or more rounds of interviews yesterday and have come out with their shortlists. To get a reconfirmation on their decision, the companies are again testing the survivors today.

Most of the other shortlists are also out and the whole campus is abuzz with activity and anxiety. At least one third of the batch is expected to be placed by end of today.

Some people have more number of shortlists than they can handle and are juggling their limited time between the interviews... a few have already chosen their loyalties/ aspirations and have decided to skip a few of these interviews.

Will comeback with more updates later..

Day 0

2008-02-15T08:50:00.001+05:30

The show starts today. 7 consulting firms - McK, BCG, ATK, Oliver Wyman, Parthenon, Diamond and Accenture and a couple of other firms start their interview process today.Expectations are running high from the recruiters perspective given the latest FT 20 ranking. We will know if our months of preparation and perspiration have been worthwhile...

All of us have heard enough about the placements week and have formed our strategies to cope with its anxieties, uncertainties, disappointments and "Appointments"... (By the way this was meant to be a joke... :-)

I will take on the role of Sanjaya (of Mahabarath fame) for the next few days and will give you all an idea of whats happening out here..As for me... I have almost made up my mind on where i would be going... Lets see..

Pecking order theory of employment

2008-02-14T08:24:00.003+05:30

In Finance literature, Pecking order theory implies that Firms, while deciding on their capital structure and financing decisions prioritize their sources of financing as follows:

1. Internal funds
2. Debt
3. Equity

It is a popular belief that this pecking order is chosen because of cost of funds i.e. internal funds being the cheapest and Equity being the costliest. However, this is not true. The actual reason why firms choose this pecking order is because; this order helps in reducing information asymmetry. Equity issuance may signal that the firm's stock is overvalued (why will a firm sell more of something when it is undervalued?). Hence the market may react negatively to the firm's equity issuance move… A debt issuance is a better option than the equity issuance because, by issuing debt a firm is effectively signaling that it believes that the cost of financial distress is small and that the firm's future prospects are strong. In the same logic, using internal funds is better than debt issuance because of lesser costs of efforts involved and lesser resistance from external parties.

Now comes the gyaan part. I am of the view that, we can use this theory in our employment search. During an interview there is a whole lot of information asymmetry involved. You know that you have done (or not done) many things, but the interviewer is not able to believe you fully and it is difficult for you to send out credible signals. This being the case picking up cues from Pecking Order will imply that, your order of employment search should be

1. Own network - Least information asymmetry. Easier to send out credible signals
2. Leveraging experience - If you already have experience in a particular field, then you can at least send out credible signals about your past experience and give out references from the field, which will help you clinch a better job in the same field.
3. Career switch - This is the most difficult part, just like equity issuance. There is enormous information asymmetry and hence most difficult to pull off.

But if you do want to exercise the third option, make sure that you have some means of sending out credible signals, which are difficult to be imitated by others...

Actions speak louder...

2008-02-11T09:39:00.000+05:30

Read an interesting article in Business Line on insider trading... Some excerpts.

Time for some statistics..

1. Mr. Sunil Duggal, CEO of Dabur India sold over 12,000 shares representing about 0.72% stake in the company between Jan 2 and and Jan 7. The deal should have taken place around Rs. 120/ share. The share price declined to about Rs. 85 in the crash, days later...

2. Mr. Ajay Kumar Vij, CEO of Dabur Pharma, sold around 10,000 shares in the same period. The price at which they were sold is around Rs. 87/ share. The stock price after crash was Rs. 55/ share...

3. Mr. Senthil Kumar of I-Flex (not sure of his designation.. but must be one of the directors) sold 8000 shares in the same period around Rs. 1580. Price after the crash... about Rs. 950/ share

4. Same story with Suzlon. The promoters sold over 65,000 shares in this period at around Rs. 460... the price after te crash.. Rs. 310..

5. The promoter of Crazy Infotech sold 5000 shares on Jan 10 at Rs. 206/ share. The price after the crash was Rs. 47/ share..

The interesting point is, we could have obtained the knowledge of most of these moves, with little effort and luck, before the crash itself. And this could have saved a good deal of money to many investors... But most of us dont invest the time, the market deserves...

If you can trust something in the markets it is the notion of fear and the greed. Look out for these signs. Let them not fool you. Some of the places were you can track these moves are

1. The bulk/ block trade column which is published by most financial dailies
2. http://corpfiling.co.in/insidertrading/insidertrading.aspx

11 more days…

2008-02-05T17:05:00.000+05:30

The stage is set. Placements are just 11 days away. More than 150 companies (and counting) are participating. ISB is a different place these days..

The consulting guys are no longer seen around... most live in bunkers, studying every minute of their waking moment. Yes, it has taken its toll on some people and they are already so deep in their preparation that, they refuse to see anything normally.

Here is an example... a couple of days ago, I had the fortune (???) of accompanying one of my friends for breakfast. She was a walking example of MECE (Mutually Exclusive Collective Exhaustible) analysis of consulting. We first reached the curds counter first, she served herself a bit of curds and tasted it first, before serving herself a bigger portion. She turned around with a beaming smile to explain that its not good to have sour curds early in the morning.

Next comes the Aloo Paratha... "Bhaiya is this made of butter or oil". Once again she turned around to pause and explain. "If it is made of butter than i cant have, else i can have:... then we came to eggs counter. This time she turned towards me before the serving itself. She asked me if i could help her identify "good eggs"...

Enough is enough…I said "No" and walked past her, wishing to avoid these questions in the bread, juice and the fruits counter. I wonder what will become of these people, five years from now. The very thought of career consultants gives me a shiver.

Next comes to Fin guys. "Do you know what is a participating forward?" "When you are estimating cross border acquisitions, which beta you take?", "How do you take into account real options when you are doing a DCF valuation".... these guys are numbers walking on two legs.

There are quite a few in the batch, who are still thinking, which path to take.
"I have no clue on what fixed income sales is all about. But i have a shortlist. What do you think? Can i become a Fixed income sales guy in a week?"...
"Real estate??? All i know is that land prices are going up.. Is that good enough for working with a leading real estate player?"...
….these guys are all around. Even the supremely confident, might be privately wondering about these issues..

Finally, there are number of people who seem to experience the "DIARRHEA OF APPLICATIONS AND CONSTIPATION OF SHORTLISTS" effect... These people are sincerely hoping for speedy cure and grabbing every laxative at sight...

Just another 11 days to go...

Top of the world

2008-01-28T18:25:00.000+05:30

ISB has achieved another milestone today. According to the latest ranking released by FT on the Global MBA programs, ISB features 20th, much ahead of Kellogs, UCLA, Darden, Duke....

This achievement comes in a span of just six years. ISB is one of the youngest schools to achieve this feat and probably the first to feature in the top 20 list, in the very first year it decided to participate in the ranking.

Read more of this in

http://rankings.ft.com/global-mba-rankings

http://www.isb.edu/media/UsrSiteNewsMgmt.aspx?Topicid=352

P.S: The picture means... "ISB Rocks"

India all the way

2008-01-20T22:22:00.000+05:30

Sorry for not blogging for a long while (that is assuming that someone actually noted it).. Wanted to touch upon couple of wonderful things which had happened while i was away.

Tata Nano - One of the biggest inventions of our time i guess. Hats off to Tata Motors. I was reading some articles about this invention and noted some interesting facts:

The price tag of 1 lakh was never proposed by Ratan Tata or Tata Motors. The price tag is basically an outcome of media hype. However, Mr. Ratan Tata took it as a challenge and the rest is history.
From the time this concept came into existence till the birth of Nano, about 4 yrs have passed. The price of every component of the car has increased. But Mr. Tata still stuck to the challenge. "A promise is a promise".... the now famous quote of Mr. Tata says it all...
Another aspect i wanted to touch upon was the reaction of people. While most of us rejoiced, there were quite a few who were quite negative to this development. People were worried about pollution, traffic congestion and what not. My point is simple - If every company and the government itself could have worked as hard as Tata Motors in the past few years, our whole perspective would have been different. So, if someone has to be blamed - it is the people who have failed to act and not the one who has actually acted....

Reliance Power: The next big thing was the Reliance Power IPO. The biggest primary market issue. The highest number of applications collected. Total amount committed is more than Rs. 7 lakh crores. The interesting point is that most people (including leading financial publications) believed that the issue is over valued, but despite that the response has been tremendous.

I am personally very curious to see the listing price and the share's subsequent performance in the capital market. The other interesting shares to watch out subsequent to Reliance Power's listing would be Tata Power, NTPC and Power Grid..

The Condorcet Paradox

2007-12-29T20:22:00.000+05:30

Another cool concept i took away from my negotiations class.... The Condorcet Paradox. Imagine a situation in which people have conflicting preferences. Is it possible to influence other's choices to reach an outcome which you prefer, while at the same time appearing fair and just? The answer is a clear "Yes". Condorcet paradox could come to your rescue. Let me explain with an example.

Suppose we have three candidates, A, B and C, and that there are three voters with preferences as follows (candidates being listed in decreasing order of preference):

Voter 1: A B C
Voter 2: B C A
Voter 3: C A B

Assume you are Voter 1, so you obviously want "A" to win. The condorcet strategy to reach this outcome is as follows:

1. Choose a strategy to eliminate out least preferred candidates.
2. Specifically, for the first step, choose the candidates other than "A".
3. Ask all the members to vote between "B" and "C".
4. Between "B" and "C", both voter 1 (you) and voter 2 prefer "B".
5. So, by a vote of majority "B" will get to stay and "C" is eliminated
6. Now again choose the elimination strategy between "A" and "B".
7. Both voter 1 (you) and voter 3, prefer "A" over "B".
8. So, by a vote of majority "A" will get to stay and "B" is eliminated.

Wow... you got what you wanted and at the same time appeared fair and just by taking majority votes all the time. Cool isn't it?

The Annual Circus

2007-12-26T08:02:00.000+05:30

I read this post in a blog of an IIM student (Alok Rustagi). Found it really cool and interesting. Read on.... its about placements (I have modified some parts to suit ISB better)

An annual circus that is organized in every business school which attracts the participation of many of the ringmasters from the corporate world to hire some musketeers for performing the same jugglery at their private circuses is branded as summer placements. But a circus cannot be organized without thorough preparation and planning else the ring masters might be displeased with the current lot of monkeys on sale. So let me (a monkey) take you through the preparations which may put a wedding planner to shame.

The preparation starts well in advance for the annual ritual of selling raw uncooked pieces of meat packaged as delicacies to hungry customers. The Alum gyaan flows uninterrupted... Read about this, read about that, read about everything under the sun. Forget about academics, forget about personal life, forget about extracurrics, and some people do forget even sleep, food and other Maslow’s basic needs. We are told to mug up ready responses to clichéd questions like, Why finance/marketing/consulting? We are actually taught to lie about our ambitions, career dreams and even why are we alive. A “tell me about yourself” question becomes so difficult that it requires 100s of hours of coaching from 10s of people, 5 out of these 10 don’t know anything about their tomorrow themselves is a different thing altogether. So this process continues for a long time, we (junior monkeys) are threatened repeatedly by alums (senior monkeys) who have gone through the same process of hire-purchase last year. A perfect example of Knowledge Sharing.

So now the monkeys are ready with impressive CVs to lure the best ringmaster. They all purchase nice costumes for the big day. The first step in the actual sale is coordinated by some internal ringmasters fondly known as PlaCom members, who make sure that every monkey is looking like some imported kangaroo and every third grade ringmaster gives an impression of an expert in his field. The ringmasters come with a jazzy presentation to lure the best monkey. Isn’t it nice, monkeys luring ringmaster and ringmasters luring monkeys!! Nobody knows who the smarter monkey is though. The masters indulge in a self appraisal mode crossing all lines of modesty, telling about the quality of food in the office canteen, the gender ratio, the cleanliness of toilets etc. After this blabbering comes the next part of announcing the names of shortlisted monkeys which suit the requirements of their circus. After all they can’t ask every monkey to jump for the same height. The rejected monkeys go back to their trees, some become sad, some cry, some shout, some drink and some simply go to sleep.

Meanwhile the shortlisted monkeys are taken to a separate chamber for further screening. Monkeys who ate together, smoked together now become enemies; they fight badly for a place in the circus. After this fight some more monkeys are sent home. The remaining monkeys are now interviewed and now it’s the turn of the monkeys to put modesty and humility to shame. Every answer is exaggerated to its limit; a simple thing is blown out of proportions and presented. Glib liars rule and honest monkeys lose. The sequence of lies continues till the ringmaster finally decides on the best monkey to dance in his circus. He goes back happily and I don’t think I need to mention about the joy of the monkey involved. Finally he is proved a superior monkey and may get some attention from the opposite sex. He is proved to be more adept in lying than others, he is proved to be a decent crook, and he can surely pull off a double face more easily than others.

This process of hire-purchase continues till all monkeys get a ringmaster. During this time, monkeys jump from one selection tent to other, changing their career choices in the flight time. They vomit the good things about a circus in front of that particular ringmaster, a sure shot formula for selection. The process is hard and takes a toll on the weaker monkeys; they get disheartened and lose hope, thereby losing their confidence to jump higher. A vicious circle sets in, a less confident monkey is more likely to fall down and a fallen monkey loses more hope. But for the rescue of these monkeys come forward the internal ringmasters. They make sure that finally every monkey gets a place to jump and dance. In the end we have a bunch of happy and gay monkeys who now believe that the world is theirs.

A world of unequals

2007-12-21T09:46:00.000+05:30

From today (actually yesterday) the world will not be comprised of equals. Some are more equal than the others. McKinsey shortlists came out yesterday. There were a few happy and lots of sad faces floating in ISB. Lots of back biting as well. War lines are drawn and people take positions. A few swore yesterday that they would never hire McKinsey when they become CEOs. A few said they would shortsell the company's stock (unfortunately it is a partnership firm). Another group resolved that they will make McKinsey realize its mistake of not hiring them by excelling in their careers that would make McKinsey beg them to join their firm (at a future date). Yet another club was formed yesterday - "I hate McK" and memberships to this club sold like hot cakes. And yes, there were a few (a clear minority), who reaffirmed their belief that McK was indeed the best. Curious to know what my stand is? Here you go...

First of all let me clarify that i am on the side of majority - Not by thinking, but by my status. However, my admiration and respect for the organization hasn't come down a bit. McK had explained to us in detail (through a number of interactions) the pains they undertake to evaluate the applications. The things they look for, turn offs, evaluation criteria, the time they spend on the shortlisting process etc... I am sure they would have done a thorough job before coming out with the shortlist. If at the end, your name doesn't figure in the list, it does not mean that the shortlisting process was bad. They knew what they were looking for and they found that in some applications. Yes, they could have made a few mistakes. But that is the trade off between being 100% right and the time pressures. I am sure they are OK with losing a few degree of fairness in the interest of time.

Congratulations for the all the newly crowned kings and queens. And for others, do think hard. Do think why you really wanted consulting? Is it the money or the work? Is it the glamour or your true interest? In marriages you are better off marrying someone who likes you, rather than marrying someone whom you like. Its the same with respect to career. If you do not have forceful answers to some of the questions posted above, may be you will be better off sticking to an area of your strength/ interest. Money will follow. Money has to catch up with skills... at least in most cases.

2022

2007-12-15T17:13:00.002+05:30

I was feeling bored in a class and just to keep myself occupied started thinking about what shapes technology might take in the times to come and how it might impact our daily lives.... Read on

1. Information transmission: Attaching RFID tags to the items we use on a daily basis. Eg. toothpaste, deodorant, soaps, provisions.. whatever. Let these tags transmit the information about the remaining weight/ quantity of these items on a daily basis to the place where we shop. The shop can then deliver these goods directly to our homes based on our agreed reorder points.

2. Early morning health scan: Automatic health monitoring systems attached to toilets. These take our health readings on a daily basis and transmit them to our family doc. The doc can then suggest corrective/ preventive measures based on that.

3. Nutrition/ Diet: Sensors which read our brain cells, outside climate and health readings and fix our ideal diet for the day taking into account nutrition and health requirements, taste preferences etc.

4. Organizers: We should have digital secretaries which track

a. News/ happenings in the world
b. Changes in our wealth position - stocks, mutual funds, bank accounts
c. Schedule for the day - Appointments, reminders..
d. New products of interest in the market etc..
e. Other customized information which we would like to see early in the morning

and present a crux of all these stuff in a single A4 sheet to us which can be read while we are brushing in the morning

5. Mood lifters: Sensors which are able to read my mood and change lighting, TV channels, temperature and music accordingly

6. Time optimization - The digital secretaries (described above) should be able to talk with the digital secretaries of the people with whom i need to interact during the day and should be able to optimize my time. For eg, if need to meet Mr. X today and if Mr. X is planning to visit a local store today and i also intend to visit the same store today, may be it is optimal for both of us to meet at the store rather than visit each other in our offices and waste our times.

7. Energy needs: Carrying multiple chargers is a pain - laptop, mobile, Ipod, PDA.. what not? A simple wireless charging device, which can charge all these devices would be great

8. Pocket convergence - This simply means that a single device should be able to combine the utilities of all the items you generally keep in your pockets - Palmtop, MP3 player, PDA, Mobile. This device should also be in a position to substitute my car keys, home keys & office keys. May be if i send in a message/ signal from this device and upon authentication with a password i should automatically get entry into my car, home etc... I should also be able to use this device
for doing my shopping i.e as a substitute for carrying my debit/ credit cards, loyalty cards etc.

9. Physical Google - I should be in a position to search things in the real world using my PDA. Let me explain. If I want to buy a Allen Solly shirt of a particular colour if the price is less than Rs. 1000, then i should program this into my PDA. The sellers can use a spectrum and transmit their advertising messages through radio waves. If for example a particular seller, lets say Shoppers Stop is indeed having a sale and it meets all my purchase criteria, then my PDA should pick up this radio signal and intimate me, If i happen to pass Shoppers Stop. It should be able to send me a message like "Hi, the light Blue Allen Solly shirt (size 40) which you wanted is available in this Shopper's Stop (100 meters from here... address....) in fourth floor. It is not crowded now, and you will approximately take 8 minutes to complete the shopping".

10. End Of Day health scan - When i come back from work late at night and sink into a refreshing hot water bath, the bathroom should automatically do a complete health scan and give me a crisp report suggesting preventive and and corrective measures which i should adopt before going to bed, so that i get up refreshed the next day... It should also give me a quick summary of the health status of all my family members...

One thing is sure in the digital world. Nothing is impossible... May be i would read this post of mine 15 years from now and wonder, how primitive was I in my thinking...

Congratulations

2007-12-13T08:54:00.000+05:30

The results for the R1 applicants have been declared. I remember the day the results came in last year. I was driving my car when the SMS reached me. My first reaction was that, I was not going to take the offer. Finally i did decide to take up the offer after a lot of soul searching.

Congratulations to all the R1 admits. Enjoy your days now and get ready for a really hectic year ahead. Amidst all your celebrations, spending some time on the following will do a lot of good:

1. Try and see if you can negotiate a good sabbatical package with your existing employer. You may hate your existing job/ boss. But having a back up plan doesn't hurt.

2. Work you best for the rest of time you spend with the organization. People forget all your earlier contributions, but will remember clearly the way you exited. True colours come out at this time. Dont spoil all the hard work and the good name you have earned till now.

3. Dont burn your bridges. Make sure you end your relationship with a positive note with your colleagues/ bosses/ clients/ competitors. Its a small world.

4. Spend some quality time on what you want to get out of ISB and why? Is it a career shift? Better job in existing field? Networking? Knowledge? Platform for launching own venture? Once you are clear on these objectives, have your back plans ready too. Then start charting your strategies

5. Spend some time on revising/ getting ideas on some subjects. Revising quant skills (for the Non IIT/ Engg) and getting some ideas on subjects like finance, economics, accounting (for the IIT/ Engg) will not hurt. You will atleast get an idea of what is waiting for you.

6. Be mentally prepared for a challenging year ahead.

7. Research on various loan options facilitated by ISB. And yes.. remember that you have other options as well. The 3 Fs - Friends, Family and Fools.

8. Meet up with other admits in you area/ city. In my view it really doesn't help much. But you will feel really special and great. And thats good.

And yes dont forget to party hard, enjoy with your family and friends and live a life of a normal human being. Catch up on sleep, movies and whatever things interest you.

Enjoy well and congratulations once again.

Its a small world

2007-12-07T09:23:00.000+05:30

I have take a course titled "Negotiation Analysis" this term. This could easily be one of the best courses i have taken at ISB. In our previous class, the professor was explaining that it is very important to build trust before starting to negotiate. One of the easiest ways to build trust is to strike a common chord with the other person. We could either discuss about a common friend, problem, enemy... whatever

To prove the point that it is not difficult to find common links with any person in the world, he took us through a small experiment conducted by "University of Virginia". This university had built an elaborate database of all actors and actresses. You simply type in the names of any two actors or actresses and program searches the database and tells us how they both are linked. Its fun..

Try it out for yourself using the following link

http://oracleofbacon.org/cgi-bin/oracle/movielinks

Another moral of the story - Never burn your bridges.

Retail investors... The step sons

2007-11-30T13:15:00.000+05:30

Does this graph strike a bell? Its is not the blood pressure reading of someone... Its the price chart of Reliance Petroleum for the past one year. It is quite possible that this graph definitely might have a strong correlation with the blood pressure of its retail shareholders. Reliance Industries has sold about 18 crore shares or 4 per cent in Reliance Petroleum (RPL) recently. The sale happened when the price was near its peak. This deal has hogged considerable media light and has opened more questions than answers. Consider the following facts in this deal:

1. With the rise in prices RPL, a refinery which is still under construction and to be ready by only next fiscal, has overtaken the combined shareholder wealth of the three PSU refiners-cum-marketers - IOC, HPCL and BPCL.

2. The modus operandi of the sale is still not known. Whether RPL shares were sold in small lots or in huge block deals to small investors or private equity firms is still a matter of conjecture. These details were neither available in the block or bulk trade details of BSE and NSE, nor was it put on the stock exchange notice board.

3. Reliance Industries communicated about this deal to the stock exchanges late on Saturday night. (Of course both the exchanges are closed on weekends)

4. Earlier this month, the RPL share was on the rise on a market rumour that Chevron could pay $6 billion for 21 per cent in RPL. The US oil major promptly repudiated the news, but Reliance was slack in denying it and RPL shares climbed northwards probably on this rumour, to a 52-week high of Rs 295. Mind you the sale happened sometime after this.

5. While all these were happening on one side, there were players who were building huge short positions (betting that the stock price will fall) in the derivatives segment. There were 16 crore shares position built up in this category (which is around 250-300% the normal levels). These short positions peaked on the same day, the promoters began selling shares. Of course we only know it post mortem. Needless to say that these guys must be laughing their way to banks.

Thats "transparency". RIL's communications post this sale are even more curious.. "The sale of RPL shares was conducted by transactions through the stock exchanges and has helped to further broad-base the shareholding pattern of RPL and is a bid to maximise overall shareholder value".. said the company statement.

"Maximize shareholder value".... thats a nice and neat phrase. At who's cost?

RIL made a profit of Rs 3662 crore in the deal... and as usual retail investors like you and me (thank god i am spared in this case) would have been caught on thier wrong foot.

Gymoconomics

2007-11-26T08:23:00.000+05:30

If you enrol into a gym which offers us two payment options - Either a pay-per-visit of Rs.100 or a flat fee of Rs. 1000 per month, which one would you choose?

Most of us end up choosing the flat fee option. We calculate that with this option we would be better off, if we end up using the gym more than 10 times in a month. However, if we were to do a true audit of our own behaviour subsequently, a significant portion of us would have actually visited the gym less than 10 times in a month. Yet we all fall into this trap of not choosing the pay per option. Behavioural Economics throws some light..

We tend to overestimate our needs and fail to change our views on it. Most companies understand this behaviour of ours and rightfully exploit us. Most of us fall into the trap of "zero interest rates for the first three months" in our credit card. Even if we knew upfront that the rate increases to 20% after three months, we end up choosing this option thinking that we would stop using the credit after the offer period. But if we are like a typical customer, we will not have the self control to do it.

Another case in point. For pay-per-use TV, we end up choosing a bouquet as against an a-la-carte option. The problem is, we may never watch all the channels we have subscribed to.

Coming back to initial gym example - Some might argue that they chose the flat fee option because it will then force them to use the gym and in the process keep them fit. Yet if we reflect on our own actual behaviour, we will understand that this never translates into reality.

P.S: This article appeared in Business Line.

Business Plan - II

2007-11-25T10:25:00.000+05:30

Looks like the judges seem to share our enthusiasm. Our plan has got shortlisted for three prestigious B Plan competitions. Lets see where this takes us.

The biggest pat on our back came when we were presenting the B-plan to a panel of judges, one of whom is a Venture Capitalist. The VC commented that he is mightily interested in our area of work and has asked us get in touch with him.

Am reading some extremely interesting articles on Behavioural Economics, which explains why we do things, the way we do it. Watch this space for a few interesting pieces...

Interviews

2007-11-17T23:50:00.000+05:30

Attended two interviews over the last three days. Could not make it beyond Round 3 in both. Despite doing an in depth review of what could have gone wrong in either of this, i am honestly not able to come out with even a single answer.

In the consulting interview in round 2, i got to solve 4 cases. I solved all of them. The interviewer was visibly impressed and acknowledged it during the interview itself. But i got a reject mail later during the day. The story is no different in the Investment Banking interview. I got 5 puzzles in round 1, solved all of them (and that too very quickly). In Round 2, they tested my banking knowledge and understanding of stock markets (both my passions) and i did a pretty neat job. Proceeded to Round three, where they just spent 5 minutes with me and we had a general chit chat and nothing went wrong there as well. I did not take any controversial stance, no showing off, i did nothing to put of the interviewer, showed genuine interest in the job and the firm.... Reject mail promptly finds its way to my mail box later in the day.

I have never really faced failures in my life. I take these as good learning experiences. I am learning to handle failures. I will never be able to find a reason for these failures today, but i am sure someday i will be able to connect these dots and it will form a brilliant design.

Nothing can separate me and my self confidence.

The Business Plan

2007-11-12T11:59:00.000+05:30

I have never written a business plan in my life. I have never forced myself to write one, for i never had any idea that is strong enough to influence me to write one. But now this is a thing of the past...

For the first time, I have written a new business plan (jointly with another friend of mine at ISB). We are excited by this idea and firmly believe that this idea may have strong implications in future. I do not know if the judges would perceive the business plan with the same enthusiasm as ours, but our journey was wonderful.

From a mere idea (a random thought) we have now travelled a long way to conceptualize and give life to this idea. It had forced us to think in a structured manner and challenge assumptions and we have come out victorious.

Or have we? As always time will tell us. But right now, its time to bask in this comforting feeling..

Random thoughts

2007-10-31T23:51:00.000+05:30

1. Today was an important day. I got my first shortlist at ISB for a job posting. Was feeling pretty kicked up about that. Some of my friends did not make it. I would have felt much better if they had also made it. Joy multiplies when shared... I have heard from many alums that placements season is when the true colours of people come out...war lines are drawn...best of the chums become worst of the enemies. I will do everything in my control to make sure that this bug encounters a premature death in my hands.

2. When some students ask a really good question in class and when the Prof. is not able to give a convincing reply, the best thing he could do is to say "Thats a really brilliant question". He does not need to answer it, because once he gives this comment, the student who had originally asked the question is immensely satisfied and is no more interested in actually finding out the answer.

3. Came across an interesting statistics in our Business Valuation course.. India has some 22% of the world's total hair. When you are valuing a company which is into hair care products, be sure to keep this in mind along with other estimates like Net rate of hair growth amongst Indians (hair growth - hair fall), per capita consumption of the hair care product per inch of hair.... Thank god we stopped with valuing a company which is into hair care and did not delve further below..

4. The coming fortnight is going to be one of the busiest periods... Amidst our usual assignments, tests, pre reads and case studies we have a whole lot of other stuff... Mid term exams, announcement of shortlists for many other job postings, atleast 3 companies are coming to campus for interviews, Global Social Venture Business Plan competition, finance interview preparation, case interview preparation, diwali celebration, trip to chennai and probably a trip to Mumbai as well.... Mind u all this is to be done in the next fortnight...

5. One of my friend's hobby - To watch the status messages of other people in GTalk. I tried that too... i must admit it is damn interesting...

6. ISB has brought out a new policy for entreprenuers. If they are planning to start their own ventures immediately after graduation, to encourage and protect them from downside risks, the school has proposed to allow these people to sit for placements in the next year or the year after that. Brilliant

7. Keep your shopping lists ready and have a bottom less bank account.... Some of the best IPOs are around the corner.

The extra mile

2007-10-25T15:11:00.000+05:30

We had an official Pre Placement Talk by BCG yesterday . The talk was supposed to commence at 9.30 PM but got delayed by an hour due to late arrivals of their flight. The first part of the session went on till 12.30 AM. Since it was already pretty late, the BCG guys asked if wanted to stay on for some more time to do a live case interview. You may not believe it, but people actually said "Yes". And the BCG guys enthusiastically went on do a wonderful case till 2.30 AM. The classroom was almost packed throughout.

That is commitment. Both from the students side and the company's side. This morning i was speaking to another student and he exactly hit upon the same point. The difference between targeting a company and desiring to work in the company is Commitment.

How committed are we towards our goals? What separates wishful thinking and aims? Lots to ponder over...

Defying Gravity

2007-10-24T19:03:00.001+05:30

It is very interesting to watch the various theories people come out to justify equity valuations. We are really ingenious in coming out with creative concepts to understand crazy valuations to mentally calm ourselves and make sense of the madness..

We started with Par values and then slowly moved on to the concept of premiums, wherein we were willing to pay something higher today considering the possibility that the stock price might soon catch up. Then some analyst came and taught us the concept of P/E ratios when we graduated from the world of additions (premiums) to the world of multiples (P/Es). When it became difficult for us to justify the stock prices even according to this concept of PE, we then went one more step ahead.

We broke down PE into trailing PEs and Forward PEs and calmed ourselves saying that a forward PE after all makes more sense. However, at today's Sensex levels even the forward PE is not in a position to justify valuations. But I read an article today which seems to have an answer. The article makes a convincing argument for coming out with a new measure - Market Cap to GDP.

The crux of the article is - Market cap of a company represents a public consensus on the value of a company and GDP is the sum of value added at every stage of production of all final goods and services produced in a country by both listed and unlisted entities. Market cap and GDP of a country together form a positive relation to determine the growth potential of the economy. The article thus concludes that India's Market Cap to GDP is as of now just 0.99 as compared to other countries like Singapore (2.65), UK (1.6), US (1.35) and China (1.10). It thus represents that India is significantly undervalued even at present levels.

There is a theory in marketing which states that once consumers have purchased a certain good/ service, they then look for reasons to justify their purchase behaviour. To me these things appear to exactly satisfy this concept. I dont know what measures will these guys come up in future to still justify that we are undervalued. Let me make their life simpler by suggesting a few things...

1. Earning Potential Vs. Market Cap - India's working population and their potential PPP adjusted average wages scaled up to developed economies compared with the market capitalization

2. Population to market cap - Assuming that the per capita market cap in US is XXXX, in India it should be atleast 3.5XXXX because we beat them black and blue as far as population is concerned.

3. Employees to Market cap - A US company produces so much revenues with X amount of employees. In India, we produce the same amount with 3X employees. So our market cap should be atleast 3x times that of US.

Dont laugh at these. The gravity defying Sensex might actually make all these ratios come true pretty soon.

The fever begins

2007-10-19T08:47:00.000+05:30

The elective terms have started... ISB is very different these days. During the core terms there was a common thread running through all the students. All of us had the same profs, assignments, tests, exams, groups, sections... All that has changed in a single sweeping moment. Each of us now have different schedules, different profs, multiple sections, different tests... But its good fun. From this term on, we dont need to take subjects which we dont like. We even have freedom to choose the pedagogy (to a limited extent). So most of us dont complain these days.

On the other side the action is even getting better. The placement fever is slowly catching up. International companies have started flowing in. The scene as of now looks bright and sunny. Every ISB student nowadays carries his resume on a A4 sheet. Trespassers would be severely punished and asked to review his/ her resume. Almost four times a week we have one company or the other coming to ISB for an official pre-placement talk. At the end of every talk atleast 75% of the students mentally make a note that this is the company they want to join in. The other 25% would have already made that decision before the talk began.

This apart we also have the flagship events of various clubs lined up. The flagship events of the Real Estate and the Pharma club just got over. The events of the Marketing, Net Impact and the Finance clubs are scheduled for the near future.

Finally, almost every student is busy participating in the countless B-school competitions which come our way. We can do anything. We can write research papers, design mutual funds, make a marketing plan for an MNC for a multi continent launch, answer 100 questions in 30 minutes, advice a multi billion dollar company for an India entry strategy, study emerging trends in technology, advice leading CEOs what should be their next steps, write business plans.... anything.

Anything for just another bullet point in our resume to differentiate ourselves from 425 other most sought after b-school grads...

Farmers of ISB

2007-10-15T18:05:00.000+05:30

Our life at ISB closely resembles that of an Indian farmer...

1. If there is a bumper harvest, a typical Indian farmer doesn't rejoice. Instead he is sad (he gets a much lesser price). Same thing here. If an exam is easy, we feel sad, because its all relative grading. An easy exam means the class average is going to be sky high, hence even a small slippage costs us dearly.

2. If there is a draught a farmer doesn't cry if his relative misfortune is lesser. If the exam is really tough, there is a silent smile which crosses our lips.

3. The land bank owned by the farmers put together in India is huge, but we are plagued with productivity problems because of fragmented land holdings. Same stuff here... the relative knowledge we hold amongst ourselves is huge, but we are afraid to share it with others/ dont find the right incentives to share it with others. So, while we are collectively rich, many a times we are individually poor.

4. An Indian farmer knows that he might not be able to service the loan he takes, yet he takes it and enters the classic debt trap. Here too, we know that if we are not regular with our studies we will find it extremely difficult. But still, that never translates into action, despite such commitments and resolutions being made at the beginning of every term. Both of us never learn..

5. A typical Indian farmer's farming strategy can be summarized in one word - "HOPE". He has no control over the rain, wind, climate, soil conditions, expected market prices, expected costs in future in terms of transport, storage, interest rates etc.... Still he goes and farms every year with the hope that he will somehow make a profit. Again its the same story here... We almost have no clue/ control on the number of things that might affect our grade, yet we start each term with a noble intention. Most often we do not know whats hitting us and from which direction? Homeworks, Assignments, cases, class participation, mid term, end term, presentation, group projects... Yet we feed on HOPE..

Contrary to what you might expect at the end of such a pessimistic post, right now it is raining in my farm land. It is this rain, which really forced me to think, do i deserve this rain? But then i neither deserved the draught earlier....

I have decided to get drenched while i can.

Pehla Nasha...

2007-10-12T16:11:00.000+05:30

It was somewhere about an year back that i first saw her. She was sitting like an angel amidst countless earthly beings. It was love at first sight for me. There was something inside me which said that we were made for each other.

Overcoming my initial trepidations and with an anxious heart, i slowly proceeded towards her. She was openly flaunting her looks and men of all statures were gaping. Our first interaction was not so pleasant. I thought she acted pricey and arrogant. Anyways I had already lost my heart and decided to go against what my rational mind was screaming from inside and accepted her. My life was never the same again.

I am at times very demanding and if someone doesn't meet my expectations, i lose interest very fast. But not once had she ever let me down. There were times in which she had cooperated with me throughout the day and the night. She has donned various roles to please me. She has given me the best of the news and she had stayed with me right through when things did not seem so pleasant. She had sang for me, showed me the worlds which i never knew existed, had entertained me when i was bored of life and had revealed her secrets to me. Many a times, i had woken her up at all unearthly hours, but not once had she ever complained. I am not sure if my life at ISB would have ever been the same without her.

But she is getting older by the day... her once beautiful body has today lost its sheen and is marred by scratches, her battery life is running down.... My sweet HP Laptop

The bubble?

2007-10-01T20:52:00.000+05:30

I found this article in today's Business Line. Brokers cutting a cake and celebrating the BSE Sensex's new life time peak of 17,000.

One thing stuck me though... I am not sure if the balloon in the picture is supposed to be symbolic of the times to come..

Buffett and the Beast

2007-10-01T00:58:00.000+05:30

Some of the best quotes of the man who tamed the beast (read markets...)

1. It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.

2. Wide diversification is only required when investors do not understand what they are doing.

3. Only when the tide goes out do you discover who's been swimming naked

4. Chains of habit are too light to be felt until they are too heavy to be broken

5. If past history was all there was to the game, the richest people would be librarians

6. When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.

7. In the business world, the rearview mirror is always clearer than the windshield

8. Our future rates of gain will fall far short of those achieved in the past. Berkshire's capital base is now simply too large to allow us to earn truly outsized returns. If you believe otherwise, you should consider a career in sales but avoid one in mathematics (In his letter to the shareholders)

9. Price is what you pay. Value is what you get.

10. In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world.

The Gladiators

2007-09-29T09:04:00.000+05:30

When you enter ISB you will be put into study groups (the composition of which is decided by ISB). You and your study group (of 4 or 5 people) will stick together, like the Gladiators trying to fight off and survive whatever comes off out of the gate, in the first four terms. All your group assignments, presentations, write ups etc have to be submitted group wise. So it goes without saying that a good portion of your fortune at ISB in terms of grades is decided by your study group.

I must say that one of the best parts of my stay at ISB was my study group. Not because we four were the toppers of the batch or we scored highest in every assignment, but because we cried together and laughed together, we enjoyed and suffered and we did learn a lot from each other...

Here goes my blog in the honour of my study group - C11. A brief profile of the rockstars of this group

Kaustubh Verma: He can sing in 9 languages, can play the guitar (all learnt by himself) and he is one of the most "networked". He will be the first to invite others for a game of cricket/ tennis, he is the first to vote for a party, he is the first to take a short break in any assignment, he is active in most clubs - consulting, operations, energy, social life.....but if you really think he is a Poet (which is what he claims in his blog - http://www.kaustubhverma.blogspot.com/), you are badly mistaken. Whenever our group reaches a deadend in any assignment, we all look up to him and he will not disappoint us... This man from L & T is truly Lovable & Talented..

Sudhanshu Dutt: We call him Mr. President, for he leads the Real Estate club at ISB. He is one of the most organized persons i have ever seen. A health and fitness freak. A work machine. He never gets tired and its rumored that he can study non-stop for 100 hours. In ISB sometimes.. sorry most times, the amount of work involved is herculean. And many people just give up, but not Chugi (his nick name). Irrespective of how many assignments, how many pre reads or how many cases have to be read, our man is always prepared for everything. Dont know where he gets the time.. Its going to be easy for the real estate firms this year at ISB, they know where to look for...

Ashutosh Kumar: (http://www.ashutoshatisb.blogspot.com/) A banker. If i were to describe him in just one word, i would say "Determination". He is a truly self-made man. Hails from Bihar, studied physics but then joined a bank. Rose through the ranks, worked hard for GMAT and here he is now at ISB. If he has reached till here, i know nothing can stop him from his dreams. May be he will start his own bank someday...

Rangarajan Krishnan: Come on, you know me... i am not going to bore you..

Yesterday we finished our last group assignment for the core terms and went out together for dinner. My best wishes to these gladiators to come out in flying colours in the days to come...

Connecting the dots

2007-09-27T22:59:00.000+05:30

Unplanned chance random events sometimes can have profound implications in our lives. Many a times, if we look back at our own lives, we will find that it is these chance events that leave a indelible mark on our lives. These chance events can guide us, warn us and put us back on our life's path.

History is abound with examples... Narayana Murthy might have never started Infosys, had he not had a chance encounter with a computer scientist on a breakfast table... Apple Computers might have never thought of GUIs, fonts and fancy stuff had Steve Jobs not learnt Calligraphy (totally unplanned though) during his college days. Today our finance prof was telling that he decided to take up finance seriously, only when his marketing prof asked him a question for which he did not know the answer.

To quote Steve Jobs.. "Its not always easy to connect these dots (random events) looking forward, but these dots will certainly form a brilliant design when we look back someday"

A million dollars or knighthood

2007-09-26T18:15:00.000+05:30

A million dollars - No more cramming up crazy management theories, no more assignments, no more mind numbing case studies, no more tests, no more getting crushed between bird-brained subordinates and dinosaur-egoed bosses, no more alarm clocks, no more traffic signals, no more deadlines, no more appraisals, no more worries..... Just beaches, babes, bars and BMWs... Sounds too good to be true.

....but wait a minute. What sort of a life is this? Whats the one differentiating factor between you and an animal. Whats your motivation to live? What do you look forward to in your life? Whats the one thing you want to accomplish today? Is there one being in this world which would look upon you as a role model?.... this side of the coin looks terrible...

How about knighthood? This option seems to address all the downsides of the million dollar option. Kids look up to you as their role model. You automatically command respect wherever you go. You are consulted upon on all matters of importance and you have a meaningful life. But whats the use of knighthood if you don't have the means to enjoy your life or live comfortably? How about leading a life of a pauper knight? You command respect alright, but you don't have money to fill your own stomach. A knighthood sans money looks terribly miserable too..

Be it a million dollars or a knighthood, what matters is what would you do with it once you achieve it. Both are meaningless if not put to proper use.

What do I want? I want to be a knight with million dollars. But there is one difference though. I don't want either of these thrusted on me. I don't want to wake up one fine morning and realize that I am either a knight or a millionaire from that day on. I want to earn it. I am convinced that the journey towards achieving these would be as meaningful as the destination itself. I want to experience the immense sense of satisfaction and the feeling of a life well-lived, when I get there. I want to show others that it is not difficult to achieve...

Economic logic

2007-09-25T23:31:00.000+05:30

This term we have a paper on Government, Business and Society. The professor who taught us this course, Mr. Mudit Kapoor presented us some of the most compelling economic arguments we have ever encountered. And this course is clearly is one of my favourites at ISB.

Some of the counter intuitive economic logic I came across in this course are:

1. Government subsidies incentivizes farmer suicides.
2. Private sector benefits maximum from regulation.
3. A bribe could actually help in better economic allocation
4. Markets can be used for creating cleaner environments
5. Being righteous may be good for the individual, but in some cases the society is worse off

Some other interesting stuff which came along our way...

CEOs:

1. Stock prices on an average have historically increased, when a CEO dies
2. There is some empirical evidence which suggests that CEOs are actually being compensated for luck and nothing else.

Rules of Economics:

1. Every economist has an equivalent opposite economist
2. And both are wrong

Useful advice - Never ask an economist for a solution:

Some economists in US were asked to study the impact of making seat belts compulsory, on accidents. They came out with their findings that making seat belts compulsory would actually increase the number of accidents, as people would start driving more recklessly. So, when these economists were asked to come out with a solution to counter this problem, their suggestion was

"Put a dagger on the steering wheel"

Thats our section (in traditional attires)

2007-09-23T21:34:00.001+05:30

Life under a normal curve

2007-09-18T09:09:00.000+05:30

If there is one thing that you are going to hate in ISB it is the Normal curve. ISB follows a relative grading system and uses a "bell curve" grading system, wherein the grades are assigned according to the frequency distribution known as the Normal distribution. While it does benefits a few, its victims easily outnumber the beneficiaries.

Why should grades be normative? When scores are referenced to the performance of group member, there will always be students who have lower scores than this, even if the individual student scores are themselves quite high when evaluated against specific performance criteria or standards. Conversely, if all students perform poorly relative to a larger population, even the highest graded students may be failing to meet standards.

More fundamentally, this whole process is based on a deep misunderstanding of statistics. Many measurements can be approximated by the normal distribution, not the other way around. A class’s marks are not an imperfect observation of what should be the normal distribution. The marks are what they are. The normal distribution might or might not approximate that. If it does not, mathematically transforming the grades to match it is meaningless. Instructors should grade papers according to their intrinsic merit and give out whatever grades result even if the distribution results in a lot of A's or F's. On tests, an instructor should know, before looking at the results, what score will be required for each grade and what grade this paper deserves. How can the performance of one student go down just because the someone else has also performed well? Why should good grades be a commodity in short supply?

I have no grudges against using the normal distribution where it is appropriate (e.g., in estimating confidence intervals from random samples). To make this correct usage clear, it might be wise to revert to the original phrase used to describe the normal curve - "Normal curve of error." This would make it clear that the normal bell curve is "normal" only if we are dealing with random errors. Social life, grading, IQ, attitudes etc. however, are not a lottery, and there is no reason to expect these variables to be normally distributed.

I hope the law of averages will catch up and today's victims (Me) will benefit someday from the same stupid concept.

The Emperor’s clothes – Part II

2007-09-14T01:22:00.000+05:30

All of us would have at sometime heard the fairy tale – “The Emperor’s New Clothes”, the story of a little boy puncturing the pretensions of the emperor's court. We now have a sequel – The Subprime

Here is how the whole thing had worked –

Scene 1: Home loan borrowers with less than stellar credit were approved for a mortgage. The emperor (lenders) obviously wanted to get the monkey off his back and so invited the wise men – The investment agencies.

Scene 2: The rating agencies knew that the emperor was indeed naked. But may be they were willing to pull of an impressive story, for a fee. All of a sudden the risky consumer loans were reconstituted into something seemingly no more risky than a government Treasury bond and highest ratings were being issued. Of course like the wise men in the original fairy tale they too claimed that those who do not see these investments as safe were either stupid or not fit for their position.

Scene 3: Enter the investment banks. (I bet they knew clearly that the emperor was indeed naked). But why miss an investment opportunity, if the whole world is ready to believe that the emperor’s clothes’ are indeed magnificent, based on the claims of the wise men? Result – dress up these pigs into princess and sell them to the suitors.

Scene 4: It took a little boy to say that the emperor is indeed naked to actually wake up the world from its blissful slumber. Skeletons are being unearthed by the hour - allegations of predatory lending, misrepresentation and omissions related to the valuation of the loans and the profits from selling or servicing them, suitability of investments, breach of contract related to loan servicing, fraudulent conveyance issues, collusions with rating agencies…

It might be of interest to note that one of the wise men in our drama – Moody’s earned about $3 billion from rating structured deals from 2002 through 2006, and this area accounted for 44% of its 2006 revenues. Since the subprime fallout S&P has downgraded more than $ 12 Billion worth of these bonds and Moody’s has followed suit with downgrading more than $ 5 billion.

In one of the recent conference calls which this rating agency had with a hedge fund, the MD of the fund had a question:

I'd like to understand why you're making this move today and why you didn't do this many, many months ago."

It's a good question," responded the analyst.

"You need to have a better answer," said the MD.

EOGO

2007-09-12T00:19:00.000+05:30

This is the new mantra at ISB. Most of us in the current batch, have volunteered to be part of the Admissions Task Force Committee. As a part of this group we undertake activities such as interacting with prospective candidates, resolving queries, providing guidance, mentoring etc..

This year ISB has invited each of us to encourage atleast one brilliant student with leadership potential, to apply to ISB. After having identified this candidate, we could then refer them (along with our comments) to the admissions committee. Simply put this policy is called "Each One Get One" or EOGO...

Am still looking around for exercising my right...

Windfall weeds

2007-09-05T16:18:00.000+05:30

One of my colleagues circulated a very interesting entrepreneurial story, which illustrates the power of Internet and the new opportunities it has opened for all of us.

Here is an entrepreneur who did not have any earth shattering idea. Nor did she have money. But she has created a successful venture of her own. Here goes the story...

Linda Katz sells tumbleweeds on the Web.The lowly tumbleweed is a nuisance to most inhabitants of Western Kansas. The Russian thistle bushes are everywhere. They clog drainage ditches, pile up against fence rows, and have even been known to cause traffic accidents.

"It all started as a joke,"says Katz. She asked her son to build her a family Web page so she could communicate with friends and give it the tongue-in-cheek name Prairie Tumbleweed Farm. Never mind that she didn't even live on a farm, but in a subdivision. Nevermind that you can't cultivate tumbleweed, which spreads its seed as it tumbles in the wind. For authenticity's sake, Katz added a price list ($35 for a big weed, $25 for a midsize one, $20 for the small economy model). And she guaranteed that each tumbleweed was "Y2K compliant" and quality-tested to tumble in even the gentlest of breezes.

Remember, Katz wasn't looking for business, but it found her all the same, thanks to the power of Web search engines. Orders started to pour in from all the places where people love Hollywood Westerns: Alaska, Austria, Britain, Hong Kong, India. Japanese customers proved so eager that she has added a section to her Web site in Japanese. Movie and TV production companies in Britain, Finland, and the U.S. have ordered tumbleweed for props, too, including a $1,000 order for the children's show Barney & Friends. A scientist from New Mexico wanted tumbleweed for research purposes. Many of Katz's newfound customers use tumbleweed to decorate their homes, even in lieu of the traditional Christmas tree.

During Katz's first two months on the Web, the site logged 2,000 visitors. By mid-January, the number had grown to more than 56,000. Katz says she's making about 30 tumbleweed sales a week, which suggests revenues of about $40,000 a year.

That may not sound like much, but neither are her costs. She fills orders by grazing Kansas fence lines for tumbleweed and buys her mailing boxes in bulk lots. For labor, Katz uses her five nieces and nephews (aged 11 to 19) to help collect the stuff, and she gives them a share of the profits.

So why are u waiting? Go find something to sell on the net...

P.S: For the curious souls who wish to check if this is actually true... check out http://www.prairietumbleweedfarm.com

Term 4

2007-09-04T08:35:00.000+05:30

The last of our core terms has started yesterday. This term promises to be completely action packed.

This term is one week shorter than our usual terms. Additionally we have a host of interesting activities scheduled to take place during the term. There is a session conducted by McKinsey on Structured Problem Solving. Many international names are expected to come to campus during this term and address the student body. I just came back from a session conducted by Credit Suisse (This was scheduled at 7 AM, because that's the only time they can catch the batch as a whole.... Around 125 students attended). Citibank will also be interviewing candidates for their scholarship program this term. We have the flagship event of the Real Estate club too in this term. It brings together some top academia and professionals to deliberate on the topic "Indian Real Estate Scenario".

This apart we have a lot of club activities planned for during the term. Investment banking workshops, CV preparation sessions, case preparation sessions and a crash course on options and futures. We also need to get started on our interview preparations in case we are targeting any of the international names which might be visiting the campus late October. To top it all I am doing an ELP (Experiential Learning Program) for a private equity firm and undertaking an independent study on the IPO markets.

Today is September 4th and our end term exams commences on October 4th. Exactly a month away. And yes..... we have to study too..

Should I or should I not?

2007-08-29T09:30:00.000+05:30

One of the favorite questions of many prospective applicants to ISB is “My GMAT score is ____ (around 600), should I apply to ISB with this score?” And the most popular reply for this question is “ISB evaluates the application as an overall package and GMAT score is only one of the ingredients, hence you can apply to ISB”. Nine out of ten people you meet will give the above answer.

I beg to differ on this issue. Actually the way this question is framed is itself self-defeating. When you ask this question to someone you are mentally not prepared to take ‘no’ for an answer and the person who answers this question has no incentive to give you a honest reply (at the risk of not offending you) and hence the obvious choice is, why not take a chance and apply?

My own perspective on this issue is that you and you alone can answer this question honestly. Nobody else. While thinking about this question, please do consider the following aspects:

1. ISB is a very academically demanding course. In a short span of about 50 weeks you would be taking around 32 courses, 60 exams, 200 assignments, amidst attending on an average about 50-60 guest lectures, taking up some independent studies, experiential learning projects, planning an entrepreneurial venture, consulting assignments, b-plan and b-school competitions, professional club activities, networking, placement preparations and attending atleast about 50 parties.

2. ISB follows a relative grading system. Hence your own grade in a course depends on the person who scores best. In a typical ISB batch you will always find student experts in every field. There will always be economics majors, finance experts, quant jockeys, IT veterans, and some people for whom statistics is a hobby (I really find this one very hard to digest). My own batch represents people from over 25 sectors. In a world of relative grading remember that you are competing against these best brains for your own grades.

In the light of the above two points it should be quite evident that ISB is not for the weak hearted. To get into ISB is only a means of achieving something else in life. It is not an end in itself.

Hence to survive in this competitive environment, notwithstanding your other achievements, academic excellence is crucial. It is hence very important for you to ask the question “Is my GMAT score a real reflection of my academic performance?” It may sometime happen that your GMAT score doesn’t truly reflect your abilities. In these cases where you believe that your potential is far higher and that your low GMAT score is only an aberration, either retake the GMAT or please go ahead and apply to ISB by all means. But if you believe that your low score is fairly reflective of your academic performance (be honest), refrain from applying to ISB blindly (notwithstanding what others might say). Concentrate first on fixing this issue and then apply to ISB. Otherwise you might end up giving up more than what you can ever hope to recoup.

P.S: The views expressed here are purely personal. I am sure even amongst the current/ past ISB students, there would be a 1000 other differing views. So be it. That’s what makes life interesting.

Sinister Subsidies

2007-08-25T13:44:00.000+05:30

I attended an excellent presentation on WTO conducted by Mr. Shishir Priyadarshi, former officer of the IAS and presently a Director in WTO. He presented us some very interesting perspectives.

For all the hype about India being over protectionist in the WTO negotiations, consider the following facts:

India's agriculture subsidies averages about 4% of the value of the agriculture goods produced. The comparable percentages for US, EC and Japan ranges about 80%.

US provided agriculture subsidies worth $ 22 Bn last year. 90% of this amount went to 10% of the farmers in US (Because subsidies are given based on the land holdings. Hence, obviously these subsidies reached the richest of the US farmers. It should be noted here that rich farmers in US are a powerful lobby and they contributed about $ 11.5 million during last election towards campaign contributions).

In UK the largest recipient of the agriculture subsidies is THE QUEEN

In Switzerland, a farmer gets an average $ 1600 per year for every cow he owns. (Incidentally, this is more than the per capita income of two thirds of the nations in the world)

In Norway, farmers get subsidies for the hedges they maintain in the rural areas (Optical soothing)

The import tariffs for rice is Japan is more than 1000%.

In Rajnikanth style.... the rich get richer and the poor get poorer...

Ithaka

2007-08-24T00:09:00.000+05:30

Today, our entrepreneurship professor ended his class by citing this poem. Its a poem about a man who sets upon a long journey towards his island home - Ithaka.

In a subtler sense each of us are on our journeys to find our own homes (treasures) - wealth, fame, happiness, position, power.. The point is to realize that we get rich not by arriving at Ithaka, but by undertaking the journey to reach Ithaka..

Am reproducing a few lines of this poem below..

"Keep Ithaka always in your mind. Arriving there is what you're destined for. But don't hurry the journey at all. Better if it lasts for years, so you're old by the time you reach the island, wealthy with all you've gained on the way, not expecting Ithaka to make you rich.

Ithaka gave you the marvelous journey. Without her you wouldn't have set out. She has nothing left to give you now.

And if you find her poor, Ithaka won't have fooled you. Wise as you will have become, so full of experience, you'll have understood by then what these Ithakas mean. "

You can read the full poem at
"http://homepage.newschool.edu/~wrightd/cavafy-ithaka.html"

Chasing the horizon

2007-08-20T01:33:00.000+05:30

As a part of the Independence day celebrations we had an event titled "Bandhan" at ISB. This event basically brought together many children from various NGOs in Hyderabad to ISB. Most of these children are specially-abled. During the first part of the event we (the students) had organized various fun events for these children to make them feel special. The second part of the event was these children's turn.

One event which deeply touched me was a dance program by a group of 6 boys. They were dancing to the beats of a popular fast tune and It was exceptional. The coordination was supreme. Though it was a group dance, within that limited time frame of about five minutes, each of the boys had a specific time slot to showcase their individual talent as well, when they danced solo.

As the dance came to a close, we heard an announcement on the stage that these boys who just performed are actually visually challenged. I just could not believe this when i heard it. There were a thousand questions which arose in my mind... How could someone coach them? How could these people visualize something they have never seen and implement it with perfection? How could they achieve that coordination? What could these people have achieved had they been gifted with a sight like ours?

I do not know the answers... i may never know. But John Milton's quote clearly flashed in front of my eyes "The mind can make a heaven out of hell or a hell out of heaven".

All limitations are perceived horizons. The secret is that the mind is limitless, and that we truly have no limits except those that we have accepted as real. David Cameron puts it nicely when he says "It is all just a horizon, and no matter how much you chase the horizon, you will never fall off the end of the earth. So chase it!"

Class Participation

2007-08-14T20:59:00.000+05:30

Almost every ISB student writes about this phenomenon in his blog. Its now my turn.

As part of the ISB grading system, student participation in class discussions carries marks and affects the final grade. The weightage varies from subject to subject. This system has been kept in place to ensure that the students come adequately prepared for class and also benefit from the views and experience of peers in the class. However, what actually translates is quite different. People in their enthusiasm to score some CP points make all sorts of comments. I have thus classified people into the following nine categories.

1. Commonsensical Point: This league of extraordinary gentlemen camouflage mere commonsensical points into brilliant works of art. They tend to take even rhetorical questions very seriously and carefully enlist their response

2. CraP: This group's only aim is to make sure that their voice is heard in the class. It is not of much relevance to them to think, if it makes sense..

3. CoPied: Brilliant imitators. Borrow ideas from others, but not words. Shrewd listeners who will be quick to borrow an idea, para phrase/ re-phrase/ cut/ edit/ add but essentially maintain the chastity of the soul and give out the same point..

4. Continuous Pain: Intellectual masturbaters. Their sole aim is display their knowledge. The problem is, they dont bother if it is relevant in the current context.

5. Crossed Past: They dont have any genuine point, nor can they display their knowledge (or the lack of it), but still they have a tremendous desire to participate in the class. So they end up asking questions which the professor has just answered. They however try to mask their intentions by keeping a seriously concentrated face which reads "genuine doubt". Fall not into this trap, for less than 10% of this group is genuinely interested in hearing the answer to the question, for the rest "asking the question" is an end in itself..

6. Chronically Pointless: They dont mind taking a ridiculous stance, questioning fundamental concepts or even making up impossible hypothetical situations, as long as it promises some "airtime" in the class

7. Calling Professor: They miss their chances to grab the professor's attention to make their point. So, when their impatience reaches a peak and they become desperate to make their presence felt, they call out the professor and camouflage their comments as questions/ doubts

8. Curtain Puller: Take a peek at the next slide and base your question/ comment on them and try to pass them off as intelligent remarks

9. Class Participant: It is this small but sensible proportion of the population that actually understands the true spirit of CP and genuinely tries to contribute towards the learning and development of the entire class...

The boy who lived

2007-08-11T00:55:00.000+05:30

This is one of the greatest business phenomenon of our times. For those "muggles" who still couldn't make meaning of the title, i am talking about Harry Potter. Consider the numbers... More than 325 million copies of the first 6 books of this series is sold world over. The seventh installment, which was released last month in more than 93 countries, sold 11 million copies within the first 24 hours of its release.The books have been translated in about 65 languages and is distributed in 200 countries. The five movies released till date have grossed more than $ 4 billion.

I read a nice article which summarized the reasons for the grand success of this series. The article traces five basic reasons for its success - 1. Its not just a children's story, it crosses several boundaries and appeals to the interests of numerous categories of people. 2. JK Rowling's exceptional writing 3. It has chosen a subject which is universally alluring 4. It brings to life all our fantasies, everything we always wanted to be, but never can be.. 5. Its social relevance..

JK Rowling's present networth is estimated to be more than $ 1 billion. Not bad for someone who was unemployed and living on State benefits, when she completed her first book.

What fascinates me the most is the way it all started. Rowling says "It all began on a train ride in which the whole idea just dropped in my head. Harry, as a character, came fully formed as did the idea for the entire plot".

I call this a gift of god...

Ultra Super Hyper Salesmen

2007-08-07T19:31:00.000+05:30

I have many times thought about "What constitutes an effective sales call?". And the answer is pretty obvious.. "The Sales".. If a sales call cannot be converted into sales then it is useless. Now comes the more difficult part. In a world where time is increasingly becoming more precious, and where people are willing to shell out large sums of money (Eg..fast food, home deliveries, Internet banking, air travel etc..) to maximize their Return On Time Invested (ROTI, as one of my previous bosses used to say), the effectiveness of a sales call cannot be overemphasized.

The attention span of customers is becoming increasingly shorter. Which means the time available for you to convince your client and make a sale is increasingly becoming small. It is hence very very important to deliver your best in each second that you spend with your client. People who are best at this are called Ultra-Super-Hyper Salesmen (A term i have coined :-)

I know of at least one group of people who are best at this - The beggars who stand in traffic signals. Imagine their plight. Their maximum window of opportunity is about 45-60 seconds. They have to cater to multiple clients within this time frame. No office, no air conditioning, no mobile, no handouts to help them in their sale, not even a chair to sit and many times an empty stomach too...

But they cannot afford to take no for an answer, because for them no sale means no food. They try to understand their customer's psychology and use every weapon in their armour to convert each of their interaction into a sale. Within the first few seconds they assess what sort of a customer you are, and then they come out specific techniques to cater to each of these types. And with my limited experience, i must say that their conversion ratios are at least more than 75%, if not higher. A pretty impressive feat, given the constraints...

I salute these Ultra-Super-Hyper Salesmen and hope to learn some transferable techniques...

P.S: This analysis is purely from a sales process point of view. I request readers to take it in the same spirit and not bring social issues into the picture.

Pursuit of leadership

2007-08-04T18:50:00.000+05:30

Today, one of our professors gave a very interesting definition of business leadership... It goes as follows: "All business leadership is about chasing perpetually changing perpetually vanishing arbitrage opportunities".. I liked this definition of business leadership because this brings many other things to perspective.

First of all this connotes that business leadership is a journey and not a destination. To be on the top of the ladder requires one to continually seek newer and emerging opportunities. To understand emerging trends and opportunities, while it is necessary to have a bird's eye view of the entire landscape, it is not sufficient. You should also have your feet on the ground to feel the pulse of the market. Possessing only one of these attributes may lead us to either taking a myopic view of opportunities or in just missing out the details.

Secondly, every opportunity vanishes or runs out of steam some day. We necessarily don't need to take a very long term view of opportunities to profit from them. Every opportunity needs to be evaluated as an investment and this means weighing cost vs. benefit. We should be indifferent while weighing short and long term opportunities, if the ratios of cost versus benefit are the same.

Some people may not necessarily subscribe to this view of placing short term opportunities on an equal footing with long term opportunities. Fair enough. But what is long term? Remember what Keynes said "In the long run we are all dead"...

The 'dabba' market

2007-07-30T22:42:00.000+05:30

The grey market or the “dabba” market, as it is popularly called is fascinating. As a company announces its IPO (book-building) dates, players in the grey market try to put a price on the shares of the company. They try to speculate market response, size of the issue and fix a premium on the shares.

This market is interesting for many reasons. It’s illegal – plain and simple. However, speculators and investors have been doing it for a long time. The grey market premiums themselves are quoted in almost every financial daily and broking firms, worth their salt. Many times these markets also decide the fate of listing gains.

There are many other interesting facets to this market... How do these dabba operators ensure actual delivery right under the nose of the regulator? Many time unscrupulous promoters use this market to fool gullible investors.. And sometimes this market is also used to infuse liquidity into the secondary market...

If you come across any article or news which is related to this, please let me know... i am undertaking some academic stuff on this...

The black swan strategy

2007-07-29T07:38:00.000+05:30

I recently read a few articles on this subject and found it extremely interesting..

Nassim Nicholas Taleb has built his career based on the theory of unexpected rare events. Taleb calls himself a "skeptical empiricist", and believes that people generally overestimate the value of rational explanations of past data, and underestimate the prevalence of unexplainable randomness in that data. Simply put, he says that "No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion."

His company Empirica follows a particular investment strategy - It trades options, i.e it deals not in stocks and bonds but with bets on stocks and bonds. It takes very small bets from people on an unlikely event. For example, if a stock has lets say never dropped below 10% in a particular month, it takes a bet from you for a very small amount (lets say 1 cent) that the stock will indeed drop by 10% or more in this month. You don't mind this bet, because this event has never happened in the past. However, the company buys millions of such options from various people. If as expected the event doesn't happen then the company loses. But remember, its loses are pre-determined and small. However, if indeed the event does happen, the company rakes in millions of dollars.

Empirica makes its money when there is an exceptional day in the market. Something new or different happens and the unexpected unfolds. Under such circumstances, which were probably all but impossible to predict, Empirica will be able to exercise its options and reap a healthy profit. Huge gains will make up for the numerous days of small loses.

Venture Capitalists use this at all times. They invest in tons of “white swans,” lose a little bit all the time on those investments, and be poised for the singular “black swan” whose returns swamp all of those losses.

In search of mediocrity

2007-07-27T01:47:00.000+05:30

In a world where perfection is expected and excellence is tolerated, this search for mediocrity may seem quite counter intuitive..

One of our professors made us think on the merit of this advice. Many many individuals and companies are making millions by following this strategy of chasing medocrity and not excellence. How could this be done...

The new mantra for very many PE firms now is Invest-Turnaround-Harvest. They don't look for excellent companies for investing, instead they look out for poorly managed companies and use basic management principles and common sense to turnaround these companies to average performing companies and sell them at a much higher valuation.

Take the case of some individuals. A new breed of high performing operating executives are being hired as turnaround experts. These guys are not liquidation managers, they instead repair and build back poorly managed companies. Michael Capellas, who has made serial job hopping a career, is a case in point.

As head of Compaq Computer, Capellas led a turnaround and a sale to Hewlett-Packard before leaving the company in 2002. Capellas then took over MCI while the company was in bankruptcy and eventually sold it to Verizon. He has collected large paychecks along with way and is estimated to have taken home a total of more than $57 million in change-in-control payouts from Compaq, Hewlett-Packard and MCI. He was an adviser for Silver Lake Partners, a buyout firm that specializes in technology and from there on he moved as head of Serena Software, one of Silver Lake's portfolio companies. Now, Capellas is taking over as chief of First Data Corp., the payment-processing giant acquired by the private equity firm KKR in April for $25.6 billion. This will be his fourth technology company in eight years. With an ownership stake in First Data, he could take home millions more.

Convinced? If not, let time heal you..

Pumpkins and mice

2007-07-24T13:29:00.000+05:30

With the bulls raging at Dalal Street and Sensex within a kissing distance from the giddy height of 16000, i want to reproduce one of the classic gems from Warren Buffet...

Buffet says that "The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money."

After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. These sensible investors know the cost of overstaying the festivities -- that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future -- will eventually bring on pumpkins and mice.

But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands...

India Shining

2007-07-22T20:32:00.000+05:30

I took this picture on my journey to Chennai during the term break. This was inside an Air Deccan flight...

....and I think this picture pretty much summarizes the India shining growth story...

The Wealth Maxi"MISERS", The woodcutters and the wise men

2007-07-20T21:02:00.000+05:30

When you meet people and say that u r doing a PGP programme from ISB, you typically evoke some response from them. I am in Chennai on my term break and met many of friends and past colleagues. And I have tried to frame their responses under three categories - The Wealth Maxi"MISERS", The woodcutters and the wise men

The wealth maxi"misers"
This group's first question is how much does it cost to an MBA from ISB? When i tell them that its about Rs. 14 lakhs (Food and acco extra). They are then dumbfounded and ask me the same question again just to recheck if they heard me right. They then respond back saying that, It is so costly, it does'nt make to sense to spend that much money to study.

What is costly? Is a reliance stock priced at around Rs. 1900 about 400 times more costlier than Pentamedia Graphics stock which is priced at about Rs. 5? The mathematical answer to this question is a simple YES. But that's not an answer you expect from good investment analyst. Comparing two things purely based on their absolute prices is not just useless but quite dangerous. If ISB does make sense in your career and if you take ISB as an investment and undertake an effort to calculate the NPV by a discounted cash flow method and compare it with the NPV of your career without it, am sure your investment will more than be justified.

But i know that these people cannot be convinced as they generally don't hear what they don't like to hear. So, when i meet up with these people i just smile :-)

The woodcutters:
This group's reaction is "Why did u leave the job to go and study?" Leaving a job at this stage is foolish. When i meet up with them i am reminded of the woodcutter's story. Some woodcutters never waste anytime and keep cutting trees without checking if their axe is sharp enough. Sharpening the axe tantamount to wasting time and these woodcutters hence doesn't indulge in this activity.

My reaction when i meet up with these people is "I am sharpening my axe". I don't claim that ISB is the only place where you can sharpen your axe. To me i believe that ISB will help me sharpen my axe. Every person needs to decide what will sharpen their axes..

The Wise men:
It is this small percentage of the population that typically understands the value of a quality education and the greatness of ISB. When i meet up with this group, i am at home and reason out bigger things.

And what a term it was....

2007-07-18T13:46:00.000+05:30

Our term 2 just got over. When some seniors suggested that term 2 and term 3 would be the toughest part of ISB life , i did not realize what they actually meant. But now that the term is over i fully subscribe to their view..

Of the four subjects we had in term 2, u cant prepare (in the traditional sense) for three of them. Apart from these, we had loads of stuff to do in terms of assignments, pre reads, decision submissions, case analysis, self studies and the club activities which had kicked started in this term.

I am a active member in two clubs - consulting and finance. I hold a position in the finance club as Director, Corporate Banking. These professional clubs are student initiatives and is an important aspect of ISB culture. They provide a platform to interact with alumni and professionals in the field and helps us explore career opportunities. We had three very good presentations in the consulting club during the term - by Deloitte, Mc Kinsey and BCG.
Consulting is one of the fanciest word in a B-school. Most of us(me included) are tempted by the intellectual kick, the moolah and the fast career path that a consulting job promises to offer. Hence there was an excellent turnout for all these presentations. We had also started off the internal speaker series sessions for the finance club, wherein the directors of each vertical in the club made presentations about basic stuff in their respective fields.

Overall term 2 just zoomed past.. In the hindsight i think i had learnt a lot of new things in this term. I had to deal with some of my weakest areas and now i can safely say that, while the journey was tough the results are worth it... As someone said "One can't become a butterfly by remaining a caterpillar"...

Kelly Criterion

2007-07-13T18:21:00.000+05:30

Came across this concept while preparing for my exams and found it very interesting. This is basically a rule which helps us decide how much of our wealth we ought to bet in a situation, in which we have a percentage advantage.

Simply put this formula says that the optimum fraction for the bet is "Edge over odds". That is bet a fraction your bankrole (wealth) equal to the advantage you have when compared to a fairgame. If you have a 52% chance of winning a fairgame, your edge is 2% (52%-50%) and your odds is 52%. Hence the optimal fraction that maximises the expected growth of the intial wealth is 2%/52% or 3.85%

Whats more intersting is that the way this formula was developed. This was originally developed by John Kelly (AT & T Labs) based on the work of his colleague (Claude Shannon) who had originally developed an application for dealing with noise issues arising over long distance telephone lines. Kelly then showed how Shannon's "information theory" could be applied to the problem of a gambler who has inside information about a horse race, trying to determine the optimum bet size. The gambler's inside information need not be perfect (noise-free) in order for him to exploit his edge.

This application now finds wide application in gambling, statistical logic, blackjack and in stock markets.

The broken window fallacy

2007-07-12T06:37:00.000+05:30

I came across this concept as a part of our Macroeconomics course. I found this one quite interesting as it helps us weigh economic arguments... The parable is as follows:

A little boy breaks a shopkeeper's window. Everyone sympathizes with the man whose window was broken, but pretty soon they start to suggest that the broken window makes work for the repairman, who will then buy bread, benefiting the baker, who will then buy shoes, benefiting the cobbler, etc. Finally, the onlookers conclude that the little boy was not guilty of vandalism; instead he was a public benefactor, creating economic benefits for everyone in town.

The fallacy in the argument is, had the shopkeeper not spent his money on repairing his window, he would have spent it on the new suit he was saving to buy. The broken window didn't create net new spending, it just diverted spending from somewhere else.

People see the activity that takes place but they don't see the activity that would have taken place.

Most of us claim that we are extremely busy and that we do not find time for anything. Taking this logic forward, it would do good if we pause and ask ourselves, are we "productive" or just plain "busy"?

Nonsense

2007-07-11T05:52:00.000+05:30

I recently came across an article published by BCG on this topic. Its fascinating. A few perspectives i enjoyed from the articles are:

The importance of nonsense can hardly be overstated. The more clearly we experience something as "nonsense", the more clearly we are experiencing the boundaries of our own self-imposed cognitive structures. "Nonsense" is that which does not fit into the prearranged patterns which we have superimposed on reality. There is no such thing as "nonsense" apart from a judgmental intellect which calls it that.

Those who establish the established lines of thought, however, are those who do not fear to venture boldly into nonsense, into that which any fool could have told them is clearly not so. This is the mark of the creative mind; in fact, this is the creative process. It is characterized by a steadfast confidence that there exists a point of view from which the "nonsense" is not nonsense at all - in fact, from which it is obvious.

Drinking water from a hosepipe

2007-07-09T23:26:00.000+05:30

An one year MBA programme is really like drinking water from a hosepipe. That too doing the programme from a school of the stature of ISB brings with it a lot of challenges..

We get the best of the professors and are exposed to the latest in management thinking. To get the best out of this requires lot of effort, commitment, intellectual curiosity and guts. Some people get overwhelmed by this information overload and stop learning. Some others are so much caught up in the details that they just forget the big picture and miss the woods for the trees.

In my view i think a balanced approach to this would do a lot of good. Everything that is taught need not be in our area of interest. But it is important to know that such things do exist. Even a mere knowledge that something exists will help us become better managers than not knowing at all. Moreover as future leaders of organizations we can always hire specific talent for a functional role, but we may not be in a position to get the best out of others if we are ourselves unaware of the possibilities.

My two cents for all the future MBA aspirants, think a few hundred times why you need to do an MBA? Don't do it unless you get a clear and a compelling reason. Because its this clarity that will help you cruise through this course. It is this clarity which will give you the special power to drink water from a hosepipe and enjoy it too..

Contact lens for Chickens

2007-07-09T01:09:00.000+05:30

Weird... you may think. But its true. We recently learnt about a company which makes contact lens for chicken. But of course this lens is not for bettering the vision, its actually for partially blinding a chicken. Apparently this increases the lifespan of a chicken and gives a host of other benefits.

We learnt a lot of management stuff by doing this case.. but apart from all these, i was amazed by the sheer ingenuity of human thinking. Who could have ever thought of making a contact lens for a chicken and trying to make money out of it too..

It reinforces my belief that there is no dream too large, no innovation unimaginable and no frontiers beyond our reach..

P.S: If you think i was fooling around check out www.opticaldistortion.com

The Damocles sword

2007-07-08T02:19:00.000+05:30

In Greek mythology this refers to the sharpened sword which hung directly above the head of Damocles (A courtier in the court of Dionysius), held in its place only by a single strand of horsehair. The expression "Damocles Sword" is a frequently used allusion to this tale, epitomizing the imminent and ever present peril faced by those in power.

We have a modern version of this in ISB too... Most of our assignments have unearthly deadlines such as midnight, 2 AM etc. We are expected to drop a finished copy of our assignments in a wooden box (very much like a post box) which is usually kept somewhere near the atrium (the centre of the school). This box would make its initial presence somewhere 36 - 48 hrs before the deadline and would dematerialize at the appointed hour. Any assignment which does not find its place in this box by the deadline, is not graded.

These boxes have become very much a part of our lives now-a-days and remind me of the Damocles sword. Their very appearance makes us realize the ever present peril and steals away our little joys...

On my way back to the room, I just spotted another sword... :-(

I-Min

2007-07-07T02:49:00.000+05:30

Last Sunday me and my wife watched Spideman-3 in Hyderabad Imax. It was a good movie. On my way back, i got excited about a new idea... The I-Min.

Why can't i start a new theatre chain on the concept of I-Min? This works exactly opposite to the I-max concept. I-max is all about big things.. I-Min is all about small things. There would be a very small screen in the centre, people need to use special glasses to watch the movie. These special glasses will magnify the images and bring them the theatre effect. Each seat would have headphones, so people could adjust volumes as they desire.

I can have multiple screens in the centre and can hence show different movies at the same time. Since each seat will have a personalized audio, this should not be a problem. All people watching a particular movie will be seated facing that particular scree. I dont even need a closed theatre... and hence can accomodate a much bigger audience.

Thats it... here is a theatre, which screens so many different movies at the same time. People can personalize their audio, more space, more personalization, no queues, better box office collections... Thats the world of I-Min

Dont laugh.... who knows what will happen tomorrow...When telephone was first invented and Western Union was given a chance to buy all rights for the telephone patent for just $ 100,000, its then Chairman asked "What use could this company make of an electrical toy?" :-)