Presentation week

The DWO presentation and its run-up was a hopeless one. We hadn’t got the report ready by the time we had our presentation, we over shot the time by whopping 20 mins (twice the stipulated time- at least, everyone overshot by similar margin).

The presentation itself wasn’t bad. We had used rhetoric language (what else do you use in a HR course?) in some of the slides, and the professor asked, ‘these are all well, tell me the mechanics?’ Everyone tried explaining, and he wasn’t happy. I tried this- ‘Sir, we’ll design systems which will elicit the desired response from our employees’, which in effect means saying nothing. But the professor seemed to be quite satisfied with the reply. Whoosh goes the logic.

There were minor quibbles after the presentation and I stayed away from it.

Economics presentation was much better. We had put in our presentation this bullet- the change of the base year is one of the reasons why our fiscal deficit shows a smaller figure than it actually is’. Prof asks how. Ramanan said something which the professor dismissed summarily. After the presentation, I asked him how it really happens. Professor says ‘It’s really hazy. Why don’t you mail me the source so that I can figure it out?’ Ah, the self-righteous souls.

Marketing presentation, well Sounak thought Shakti was in our group (he generally is) and prepared his slides. But alas we realized it only the last moment. I was given the task of saying the part impromptu. I managed it anyway.

Its Operations management course again. Well, the senile old man at least gave a Quantitative, application oriented paper last time. This time it was qualitative (lacks quality though).

We knew it was qualitative this time; we tried to mug Deming’s 14 points, 5S principles, 7 tools of TQM, few models etc. etc... I generally make all course notes in the same book. On some days, I hadn’t written the subject name on top of the notes, and yesterday, I had a tough time figuring out if the notes belong to OM or DWO (HR subject).

Questions? Features of TQM, TPM, well, the professor must be bored himself when he sat down to set the paper. So are we.

What is it to be a HR man?

I did a mediocre BE and had no strategy in my mind on how to pursue my goals, because there weren’t any. My mom said ‘Go do MBA’ and that resulted in a paradigm shift in my life.

I applied SWOT analysis on myself and scored high on 20 of the 23 variables I considered.  Then I prepared a managerial effectiveness model and was better in global awareness and communication model, but scored poorly in self management competency. I then proceeded to get a 360 degree appraisal involving all stakeholders, to get both a subjective and objective analysis of myself.

I realized that the external environment was very complex that collaboration and not competition that is necessary. Therefore I was tempted to form a cross-functional team in my CAT exam hall to pool the skill sets and form a synergistic and organic relationship for handling complexity, like the CAT paper. But in a complex environment, ethics is more important than ever. So I did a cost-benefit analysis for competition vs. collaboration by a new model that I developed in the exam hall, and found that….

Sounak: Wake up, why are you sleeping over the DWO (Designing Work organization) book?      

Everyone heading for second floor!

A couple of stex (student exchange) girls have come from Paris, and do they look gorgeous! What happens when they have trouble configuring the internet? Hey, no problems- I can lend a hand. When I went there, they, my classmates, were lined up in their rooms falling over each other to help the girls. I have a question.

Why doesn’t everyone except me have any suave? IIM ka naam roshan karenge!

FIIs are cold money!

Alright, once upon a time, there was a stock market marred by scams, insider trading and low depth. The government arrested bad guys, infused transparency and it coincided with a growth story. Lo and behold! Investors swarm like bees, the market never seems to cool off and aren’t we happy!

We would have, but for the government that is more tense and skeptical than ever, thinks that a lot of money is chasing a few papers, and even thinks about putting a cap on FII investment. And what’s the purported reason? FIIs are hot! err…. hot money.

Nothing is farther from the truth. True, every investor wants a good avenue for investment and will book profits when opportunity arises. But they aren’t hot money. One, they have invested mostly in blue chips and fundamentally sound mid caps, which don’t give return in the short term. Second, most of the newer FIIs are pension funds and Japanese investors, who have a longer perspective than even our own mutual funds. Third, they control so much stake (30-40% of the free float) that if they happen to pull out at once, the biggest losers will be they themselves.

Contrast this with our retail investors. Even when the sensex was rising, the market breadth remained largely negative. Why? Our retail investors try to ride the tide called penny caps which rise in a boom and end up losing a fortune. The government expends a lot of energy trying to track money and insider trading and even putting a cap on FII flows, to protect the investors from the fallout. But should the government try to protect the investors from the stupidity they themselves are responsible?

The only panacea for the market from overheating is to divest the PSUs to infuse quality paper in the market, and give the foreign investors to participate more in the debt market. Give them a chance to stay when the Feds hike rates.

Discouraging FII from participating in the growth story called India, while exhorting them for 150 billion dollars investment is one step forward, two backwards.    

Incredible Rajnikant!

You got to read this

I love him for what he is.

http://people.indiatimes.com/quickiearticleshow/1328104.cms

Don't let Economics override Technology

Middle path may be good for spiritual sake (heard of Raja-rishi model?), but when it comes to regulatory policies, it is not just frivolous but dangerous too. One such policy now is the government decision to have a combo of entry fee-revenue share model for 3G spectrum allocation. The rationale seems to be having an entry fee small enough for encouraging competition but high enough to avoid small inefficient players throwing their hats.

The underlying premise for entry fee is this- spectrum is scarce resource, so the government should give a strong dis-incentive for inefficient usage. So far so good, but something seems amiss- economics seems to have overridden technology.

Technology is fast making spectrum a scarce to an increasingly abundant resource. You may think that radio signals kind of bump into each other, so the electromagnetic spectrum has limits. Actually, it’s not the transmission that poses problems (though signals get weakened with distance), but the receivers aren’t sophisticated enough to differentiate one signal from other.  This problem is getting fixed.

Wide band spectrum and spread spectrum (used in CDMA) is just one way of circumventing it- instead of confining the signal to a narrow band, spread the signal over broadband so that it mimics a guassian random signal, and have sophisticated error correcting receivers to decode them.

One of the emerging technologies is mesh networks. In this, the signal is passed through a network of receivers which receives the signal and passes them to adjacent receiver, giving the counter-intuitive result that the channel capacity increases with the number of receivers.

One more technology involves having cognitive ‘smart ‘radios having super-computing chips to receive the signals, which dramatically increases the signal capacity, as it decodes spectrally-close signals.

These and more are evolving, which will make the existing technologies obsolete. An entry fee may bring small fortune for the government, but decreases the Indian companies’ ability to adopt newer technologies when they arise. Revenue share model, where companies pay as they use would have been more appropriate.

Long live the middle path!    

Nothing ails Indian industry like conflict of interest

So there are reforms, competition and end of monopoly of PSUs in the Indian industry. Or is it?

A double standard, euphemistically called the conflict of interest still permeates in different forms. Take the case of telecom industry. TRAI, the regulator has been kept out of important decision like the interconnectivity issues in mobile phones with the minister vesting the powers with DoT, the biggest telecom provider. TRAI has been fighting this in Supreme Court for quite sometime now. While there was quite some heartburn in industry quarters over TRAI’s arbitrary handling of WLL issue, an arbitrary regulator is, dare I say it?- better than an arbitrary politician.

In oil, the government tried to inject Director General of Hydrocarbons, the head of upstream regulator into the board of ONGC, the state major. It was only after ONGC supreme Subir Raha threatened to resign did the government dropped the decision.

In banking, the regulator RBI holds a majority stake in SBI, the biggest Indian bank. Is this why foreign banks are prohibited to open more than their allotted number of branches? I don’t know, but it’s a food for thought.

There are innumerable instances like these, but the bottomline is- till there is a conflict of interest in the legislating body (government) also controlling the industry (via PSUs), it will permeate through the system. After all, the government owning a majority stake in PSUs puts the ministries in a fix- while the official position is reforms; they are responsible for the profits of state owned enterprises as well.

While the government has every right to protect the interests as a promoter, the correct approach is appointing more independent directors to manage the companies efficiently- not stifling the growth of industry by arbitrary decisions.

Multi-level marketing or Multi-pain marketing?

There was a talk by the Amway MD on direct selling. Only one word could describe it- fabulous. It’s amazing how the industry interaction committee manages to bring in such speakers time after time. Hats off to you, folks!

The same couldn’t be said about the company. True, the direct-selling company has thrived for the past 46 years- no mean achievement. I believe it has done so because it has played on one unchanged aspect of humans- if there ever was one- greed.

I didn’t have an opportunity to see the Amway presentations that used to happen regularly in Chennai, but from whatever I heard; these people make such tall claims about compensation that you could drive only Merc and nothing else.

Is it that bad for a company to advertise itself to attract IBO- independent business agents? Not at all, and that’s not the aspect that I want to highlight anyway.

What else, then? Have you heard these hardcore investors talk? They somehow come to stock market the third minute of any conversation which will make you crawl for cover. Amway agents are worse. They start their propaganda first up, and won’t let you till they get an answer. They are the most hated people on earth; insurance agents come a distant second.

And how true are their claims? If you are aggressive, you may taste some success, but even if you do, what’s the point of making money on someone’s expense? And no profession unnerves such a lot of people to make a few bucks.

Amway products? My dad tried only one product- Amway car wash (a small bottle costs Rs.400). Dad was happy with the quality. But then Amway takes premium products to an extreme. My dad’s friend bought brand new Amway underwear with some special qualities which costs Rs.250. Without dwelling too much into the qualities, let me just add that his friend thought it was too costly to wear.

The concept is good- train some entrepreneurs who will be not just salespeople, but business partners who will get compensation based on not just their sales, but how many entrepreneurs they bring in. Unfortunately, it’s a perfect recipe for greed, generating multi-pain marketers.

What do you do in your free time?

Incredible, isn’t it? A fortnight ago, I would’ve never thought that I would get some free time. Thanks to mela for index, I’ve two days off. I’m not part of any team there, so there isn’t any task to do. I thought I’ll doze a couple of days off.

Ah, easier said than done. Why not write a short paper? There’s no point trying my hand at fin or mark one. I chose a strategy paper- its easier to fool around- I did. Strategies for the Indian pharma firms in the post-product patent regime. There’s no dearth of information- there’s FICCI, CII and Mckinsey reports. It took longer than I thought, 10 hours in all. It’s tough to do it single. I ended up with a headache and finger-burn.

The theme is simple. Indian firms can’t copy drugs anymore- euphemistically called applied research! They have to invest like hell in R&D in basic research- some of them already doing that. Cost arbitrage is a short term measure- there are opportunities. Pfizer and Merck are outsourcing manufacturing, part research and clinical trials to India. In future, when countries like China start developing their human capital, these opportunities will cease to exist.

The constraints for the Indian firms are the financial muscle of the big majors. Therefore the strategies like generics exports and others are but a means to achieve the end- put a new drug on the market, which no Indian firm has done till date. It is important not to lose sight of this long term goal.

I’ll be lucky to go to the next round- only five entries get through. But then, philosophically speaking, the effort can be as satisfying as the end.

Just another hit, or is it?

A manager of a distinguished petroleum company, the Indian oil corporation, blacklists a petrol pump for selling adulterated oil. The pump starts selling petrol on the sly, after a few days. When he tries to stop it, he gets five bullets on his chest. What if he happens to be my alumnus of 2003 batch? I’ve never heard of him, and, aren’t we used to murders?

The 27 year old Manjunathan happened to be one of the few bright spots of our country who dared fight our rotten system. A system controlled by corrupt officials-politicians-mafia nexus, a system which lacks transparency and accountability, a system which takes eons to punish offenders, a system people are so used to, that it fails to tickle them anymore than when Satyendra Dubey, an IIT engineer was killed by mafia when he whistle-blew the corruption in the national highway project an year ago. A system where there is no place for men of integrity, much less courage.

So what’s the purpose of more petitions or even a peace march which we are planning? Customary? Just to show that we are alive and kicking? I guess not.

There is only one alternative to this rotten system. We students, who will refuse to get brow-beaten by such acts, refuse to escape this by the time-immemorial-bushland offers, and strengthen our resolve to fight them. It’s no time for dejection, but action. Rest in peace, whoever you are.

What day comes after Saturday?

The mid term ends. After every paper I had said to myself ‘I’ll make up in the end term’. After all, I said a similar thing after my quizzes too, ‘I’ll make up in mid terms!’ Life goes on.

I don’t remember when I last had a Sunday. Last week it was placements, last to that was an extra classes, plus the mid terms eve, the only way I know its Sunday is when I get the appropriate newspaper supplement.

The mid term papers weren’t so bad; if it is; it’s bad for everyone, so relatively I’m not that bad off. (Whoa! The last line will qualify for PhD in verbosity! Blame my marketing and organizational design papers for that)

From this year CAT exam is going to get tougher. And number of seats in IIMs is being raised to 1400- which means still less than 1% of the 150000 entrants make it here. Hmmm... Sometimes life moves too fast to look back at your own achievements.

It’s been a while since I read anything worthwhile. Slow down your pace, life! Let me catch up.

Summer internship process

It’s finally over. What you see is a few IIMs getting placed in slot 0 with hefty packages. What you don’t is a majority who has to slog for 3 days flat out not knowing when it will get over, if it does. And a bunch of seniors who ran around satisfying weird needs of the obstinate HRs. Or for that matter, tons and tons of RG docs (resource generating documents) about the company. The last 3 days have taken a toll on everyone.

I screwed up a few interviews- one interviewer asked me what my group discussion topic was. I’d done close to 10 GDs that day, and had no clue what the topic was, and said as much. Another interviewer asked me, are you tired? It was 12 in the night, and I hadn’t slept for 18 hours, what do you think? I managed an artificial smile and asked him, aren’t you? You bet he was. He started telling me about how hard it was to shortlist 80 from 250 applications and do two rounds of interviews. Stop whining and get on. I managed to nod sympathetically.  How many process have you gone through till now?  I said around 8. He asked the name of the companies- I could recall around 4 or 5, but he pressed for all names, so I just took out the checklist I had from my coat pocket and read out. An embarrassed interviewer didn’t ask me, why our company!!!

Though around 70-80 companies came, only a small fraction shortlisted me, and I went through all the rounds of even smaller fraction. For three days I woke up at around 6 and went to bed as late as 1 in the night, only to wake up at 6 again. Damn it, I had no time to wash my socks. I thought, if worse came to worst, I would just take off my shoes in the GD and put everyone in a trance, and it would have been the elusive chemical weapon that Bush couldn’t find in Iraq!

Sounak was no better. The poor guy had calls right from day 0, and still managed to drag on the whole thing to day 4, and was even more tired and sick of the whole thing. He was sleeping before he was dragged to a couple of interview rooms, and I couldn’t imagine what he did there.

A few guys just broke down on the third day, after getting kicked out by one company after other. Some people tried to show that they didn’t care and went on watching Tom and Jerry shows, others porn, oblivious to the crowd there. I believe it’s another form, denial.

I managed to hang on to a company called DCM Shriram, an unglamorous fertilizer company for a rural marketing project. I’m glad it’s over; it may even be more interesting than I imagine, what the hell.

Get your dream company!

Some of us have been shortlisted, some waiting to be one. Here are some suggested answers to some clichéd questions…

Q. Why our company?

     Some of us are desperately waiting for a shortlist, and this one assumes the contrary. Don’t take slight at that. We can say something like ‘your company is 3 blocks away from my home in chennai’ or ‘you shortlisted me’, but that wouldn’t sound too smart, will it? Try something like, ‘I went through the vision and mission statements of a million companies, and tried to match with mine. You proved lucky!’

Q. Where do you like to be seen five years from now?

     Ah, if only I knew where I would be few days from now! You can say something like, ‘Be your boss’, but it wouldn’t get you anywhere. Try ‘I want to be the receptacle of ideas, paradigm of probity, and engine of growth, the piston of change, steering the people along’. It will make you sound smart, and if the company makes cars, who knows?

Q. What are your strengths and weaknesses?

     ‘I am a hopeless workaholic’ is one that’s been tried for years. But I tried this in my XLRI interview ‘I dream that I am the PM of this country and change its fortune’ for both my strength and weakness. Strength, as you dream big, weakness- you are disconnected with reality. Find something like this which will leave the interviewer confused.

Who cast shadow on the festival of lights?

Three days since three blasts in the heart of Delhi, the images fail to vanish. Imagine two families fighting over the charred remains of what they think is their kid. This festival of lights is surely darker than the rest.

Things move on. Let’s salute the resilience of this great nation. (I may be wrong. It’s more resilience than thick skin). Happy Diwali.

This is not fair!

We had an Operations Management surprise quiz today. Remember that old spiritual Sahay? That prof’s quiz. People wrote ‘OM’ (a spiritual symbol) at the top of the answer sheet (some wrote it on all sheets!). I first thought it was the abbreviation of Operations Management!

This is a deliberate attempt to create a perception bias in the mind of the professor. This is a grossly unfair means to get a few more marks.

WHY DIDN’T I GET THIS IDEA? THIS IS NOT FAIR!!!!

Don’t mistake thick-skin with resilience

Another day, another blast. What if that happens to be three timed blasts, in the busiest areas of New Delhi, paharganj and Sarojini nagar, (thankfully one averted in chandni chowk). The government as usual condemns the incident, there are meetings and press conferences, office and institute chat, and it will all be forgotten in a few days. After all, aren’t we resilient?


The terrorists may be nabbed, put to trial, may not be convicted thanks to brilliant lawyers like Ram Jethmalani who are bent on satiating their ego by appearing in such high profile cases. Even if they are convicted, there are always the ubiquitous human rights groups who will plead for less punishment, and there is our President who is so considerate to pardon hardened terrorists.

The feeling of helplessness and apathy has penetrated our collective conscience that we have even ceased to react to such acts. I have doubts if we are resilient. It’s just that the random terror happens all the time that we have become indifferent to it. The Delhi-ites who saw their fellow residents torn into pieces would probably say, thank god it wasn’t me.

The human rights activists require special mention. After all, they were the ones who condemned the encounter killing of veerappan, the sandalwood smuggler who killed more than 100 constables in duty, destroyed sandalwood ecosystem, and killed hundreds of elephants for their tusks, all with the backing of political class of course; the activists who don’t see the human rights violations of terrorists and smugglers.

What should be done? Army is not supposed to go after terrorists. It’s the jurisdiction of police. Khalistan terror in Punjab in the 1980s was even worse than Kashmir one. All it took was one bold chief minister Beant singh, (who had the backing of then Prime Minister Rajiv Gandhi), and one super cop KPS Gill who didn’t care about human rights of terrorists, to root out terrorism from the face of Punjab.

We don’t need condemnation, Mr. PM; unleash state-sponsored terrorism against terrorists.          

World 2150 - part II

First we will see how the India and China become the twin powerhouses.

Reason 1: Countries found lesser need to manage currency.
The manufacturing boom in china and service one in India started with the low end work in the early 90’s. To sustain the low cost advantage for their software and manufacturing exports (weaker the currency, cheaper the exports), the Governments in these two countries managed their respective currencies.

But as these industries grew bigger, they moved away from cost competition. China’s spending in their universities were starting to bear fruit, as the R&D boomed in the early 2010s, while Indian software firms moved away from back office operations to complex data mining and analytics. As this started to happen one curious phenomenon occurred- Bangalore got bangalored!

The software companies started outsourcing their low end back office operations to first tier-2 cities, then to smaller towns like Meruts and Gobichettipalayams, which had low cost advantage. This was the result of the massive investment in human capital in small towns a decade back. This resulted in growth permeating in every corner of the country.

Companies now competed on quality, not cost as they did earlier. Exports needn’t be cheaper, the forex reserves which previously had bloated on account of weak yuan/rupee, suddenly evaporated, and US was found wanting. Why?

The biggest blunder of Dubya wasn’t stem cell research or even Iraq war, but TAX CUTs!

A series of mistakes snowballs into a catastrophe. Bush tax cuts encouraged the US customers to buy like hell. This is how the US business cycle which would otherwise in the recession phase went into the biggest growth phase ever. But it was built on weak foundation, credit.

When lender lends a million, he is the boss. But if he lends a trillion, you know who the boss is. Asian countries amassed a huge forex reserves unleashed by the bush dollar tsunami, and the reserves ploughed their way through to US by way of T-bills. This was the source of consumer credit.

By 2005, there were already enough things to escalate oil prices, iraq war again, hurricanes Evan, Charlie, rita, and the biggie Katrina. These became a regular feature in the coming years, and the oil prices hit the roof. How did it bring the downfall?

Asian nations dependent on oil found the import bill too hot, their forex reserves declined. Less forex, less credit.

Even the tax increase couldn’t salvage the situation, as the economy fell into a debt trap. Company after company filed for bankruptcy or takeovers, which saw Tata motors, mount a successful takeover bid for Ford, CNOOC gobbling up Conaco Philips and a host of big ticket takeovers.

Note: Some of them are a bit exaggerated; but you can’t prove/disprove me, can you?
End of part 2

World 2150 – part I

Ladies and Gentlemen: Welcome to the Annual global conference on ‘How the businesses evolved in the last 150 years’. Let me present you a chronological order of how we have progressed.
2000:     The national boundaries were fast disappearing. To quote Nanadan Nilekani, the great Indian entrepreuneur, ‘The global field is being increasingly levelled’. How nostradamic that statement is!

Businessmen had increasingly moved away from competition to collaboration, the divide between the fat and small corporations were increasingly thinning. In fact the logic of economies of scale was increasingly being questioned. The fat corporations like Microsoft or GM weren’t revered anymore, with the exception of corporations like Toyota or Google which continued to innovate. They were instead seen as dinosaurs, whose might suddenly became its weakness. In its place were corporations like Tata motors, Acer or Hyndai or LG, those nimble footed Asian organizations who were suddenly growing bigger and started spreading their control. In fact the first signs were felt when Chinese hardware major Lennovo acquired IBM.

2020:     India and China had truly emerged by then. It had to be, considering how the once mighty US imperialism as now the historians call it, had fallen, just like the British imperialism of the 19th century! One empire succeeds other, now the Asian one. Let us see how.

For long, US dollar remained stable and was the backbone of world economy. Research and innovation sustained the US economy till 2000. But the fall can be attributed to one person- George W. Bush (Muhammad-bin-Tughlaq incarnate!).

He started one scheme after other- tax cuts which only made rich richer, flawed social security scheme that tried to wash the government’s hand off its responsibility, and the biggest mis-adventure of all time- Iraq war, and the then popular term bodybags.

But the US economy was resilient all through this, primarily because the Asians fed them with dollars by way of huge forex reserves. The interest rates remained benign, and the American consumers were borrowing like there is no tomorrow. But all through this US managed to grow at a great rate of 4-4.5% year after year. So when did this bubble burst?

We will see this in next issue.

Things I didn’t write in my summers form…

How do you interact with people whose backgrounds and value systems are different from your own?
As if their value systems were like my own.

How do you interact with people whose backgrounds and value systems are like your own?
As if their value systems were different.

How do you interact with people whose backgrounds and value systems are like your own and different from your own?
The same way.

Why do i feel an empty space?

Statutory warning: Don’t read it. It’s a sure depressant.

Most of the term I marks have come. I’ve done okay in some, not so okay in others, brilliant in none. What the hell, aren’t all IIMs get placed? Still makes me a bit sad.

Summers are round the corner. The more I hear the alumni talk, the more the PPTs I attend, the more humble I feel. (To quote Churchill, I’m a humble person who has a lot to feel humble about)

The summers forms are eating a lot of time, and I never seem to have any for the reading a thing, completing an assignment, or doing a host of things I get advice about, be it research companies or increase business awareness (it’s funny I crib when a lot of people do even more in their 24/7/365).

I’m cursed with an expressive face and a whimsical temper, so it’s clear to those close to me that I’m not my usual self (And it makes me sick every time they say that!).

I’m a laidback person, and I’m not used to this, damn it! (Whatever ‘it’ is). Give me a break. May be I’ll.

Things I didn’t write in the summers form...

Qn. Tell me an instance where you did a seemingly impossible task. What was the outcome?
Ans .Filling up your form. You have to tell the outcome
Qn. Have you ever be tried in a civil/criminal court? If yes why?
Ans. Yes. Once a poor chap asked me this question and got me a 10 year suspended jail sentence for attempt to murder
Qn. Please detail any achievement/experiences that is special to you?
Ans. Once my sister and I had a big fight over who will get the last special masala dosa. I suggested to my sister to let mom arbitrate it, and I’d successfully eaten it, while she was gone to complain, after overcoming all obstacles.

GD capsule 7

Theme: Textiles
To what extent will the end of quota regime really benefit India?
Background: The Multi fiber agreement came to an end this January 2005. Prior to that, west sourced more than half of their textile imports from Latin-American and Caribbean countries, though they didn’t offer cost advantages like Asian counterparts. (End of MFA had been one of the principal demands of Asian countries at the WTO for a long time)

According to a Goldman Sachs report, China is set to capture 50% of world textile market in 2015, while India’s share will triple to 16%. But the road is not without hiccups.

Though the decision to end MFA was taken at WTO as early as 2001, the Indian companies had woken up to reality and went for capacity expansion of their plants only when the deadline was nearing. This is in sharp contrast to the well oiled Chinese machine, which employs whole towns to produce just one product, to reap in economies of scale.

Also, it looks increasingly difficult to china in mass production, which not only has low cost of labor (prices of Chinese goods is less than the cost of producing them in India) but gives subsidized power (cost of power Indian equivalent of 2 paisa/unit!) and host of concessions to its industries. But India can compete in different turf- home textiles.

I reiterate this point once more- If China has cheap manpower, India has cheap brainpower (see outsourcing). Home textiles are one area which requires less manpower and more designs. This is why US textile industry has managed stay afloat in this segment. The government has provided the industry with cheap 3% loans for capacity expansion, so it’s possible to compete in this capital intensive segment.

Siva's dictionary

Pain: What you feel when you have to fill summers form
Scarce resource: synonym of CV point
Spin a yarn: What you do when you get incomprehensible questions
Pun: When you spin-a-yarn around man-made fiber project!
Blood Pressure: indicator of closeness to submission deadline
Ecstasy: What you get when deadline is extended at the very last minute

Just a thought….

I had a question in financial management quiz. Your grandpa is 60 years old. He is investing a sum in the bank at so and so rate compounded. What amount should you take every year such that there is no balance left after 10 years? If grandpa is 60 years old, would I be that old to solve this problem? Or, would the bank allow me to take his money?

GD capsule 6

Theme: Agriculture
News: This quarter, GDP grew at 8.1%-manufacturing-8.9%, services 11.3%, agriculture-2% making India the second fastest growing economy, next only to china. Agriculture once again proved a drag on GDP growth
Background:
Agriculture employs around 60% of the workforce but contributes only a fifth to the GDP (Indian GDP figure is around 600 billion dollars) whereas the corresponding contribution from services is more than 50%. The successive governments have largely ignored agriculture after the green revolution of 60s. More than investment, the country needs focus.

For example, we have one of the worst storage and transportation facilities in the world. We lose almost 40% of the produce in godowns. Plus lack of storage means farmers are forced to sell their produce at lower than market rates. Let commodity markets and e-choupal expand!

Also, the perverse government subsidies on wheat and rice have caused a glut in foodgrains. The policy dates back to 60s when there was a shortage, but it has outlived its usefulness. The government can continue subsidies, if it changes the crops to cash crops suitable for exports. Any one responds to incentives.

Agriculture needs a new focus because, not only a slow growth drags down GDP, but also a sufficient growth in agriculture means increased demand for other products as well. For example, FMCG and durables industry does well whenever there is a good monsoon.

How (not) to answer in an interview?

I had a mock interview (2 mentors) 12 at night today. We were told to mail our CV and a functional area along with two preferred companies so that they can do a focused interview. I wish I could be choosy about the functional area for now. I’d put marketing anyway (because most companies are marketing)

Mentor: Why is marketing important?
I: Organization exists for creating value for customer. So marketing is very important.

M: So you say finance is not important?
I: Do a volte-face. Finance is the backbone of any firm as firm exists to create value for shareholder!

I’d toned down my deep voice just to show (off) that I’m Mr.Humble.
M: Are you not meek for a marketing manager?’
I: No. The old management paradigm is that companies try to sell aggressively the products the firm produces but the new paradigm (I like that word. Makes me sound smarter than I actually am!) is whatever….

M: What’s the difference between customer and consumer?
I: Hmmm… I don’t know
M: Try
I: Okay. Consumer is the one who consumes one’s goods and services and customer is an all encompassing term that includes all the stakeholders of the company
M: Who is a stakeholder?
I: One who has a stake in the company.

The two mentors look at each other and think the time is up.

PS: I met a senior Jassi who was supposed to interview 10 people, but only three turned up. A couple of them even dared call him up and give him a silly excuse like preparing for P&G case. One fellow who had acknowledged Jassi’s mail at 8 pm called him up at 12 and said he didn’t see the mail.  It seems I’m living in a utopian world and in reality the legacy is not that rich after all.

Why the students here leave a rich legacy...

Summers are fast approaching. For us lesser mortals who don’t have either a good academic background or any work experience, filling two pages of resume is daunting, to say the least. Or for that matter, being interviewed by sharp eyed HRs.

This is where the seniors come. I’ve done my schooling and undergrad, but nowhere have I seen this level of mentor-protégé relationship. May be B-school is a different ball game, or that this happens everywhere, so why not here? Whatever it is, it’s great!

It’s not just the formal placement committee that’s taking up all the initiative, but seniors go out of the way, just to make sure that we don’t mess things at the D-day. Like my tam seniors who hold mock GD/PI sessions with ruthless feedback, or sigfi forums (must see it sometime). Some may feel that too much of such things may prove redundant, but I see the noble intention of these seniors who have nothing to get in return.

This is a rich legacy, which we will give to our juniors next year, and it’s something we can be proud of.

GD capsule 5

Theme: Stock market

Is this Bull Run sustainable?

Yes, because

• Strong earnings of the companies in the recent years will sustain the momentum


• The index heavyweights like ONGC, ITC and RIL still trading at modest valuations


• New FIIs from Japan have started investing only recently with a long term perspective

No, because

• Oil prices if remain high for a longer period, may slow down the global economy and affect Indian share market


• The risk of feds hiking the interest rates. Why? Interest rate hike may strengthen USD and investors may respond by pulling out money from emerging markets like India.


• The weakening rupee is not helping the sentiment either


• A lot of mid cap stocks are overvalued and the market should expect a correction


• Indian market is overvalued when compared to other markets like south Korea, Brazil and South Asian tigers

Conclusion: The only thing that’s certain about share market is that it’s uncertain. So both schools of thought are valid and good fodder for GD

My best friend’s (sister’s) wedding

Thank you, Vipin Prakash Aggrawal! I attended a preview of a North Indian wedding of vipin’s sister at Merut , a small town in western UP (remember 1857 war?). And it looks like the city has seen no development since1857 (technically called preserving the ancient roots!!).

We cancelled the train ticket and went to bus stand (to gain time), only to see that the bus had left. So we took the train ticket again and went to station only to find the train delayed by three hours. By the time the train had come, we had discussed past, present and future, classmates and profs, romances, courtships and failures and hmmm.. money. Thanks to some great planning and divine interventions, we managed to travel the maximum possible time and reached home at 11:00 AM of his sister’s wedding day.

The chief guest of Namrata Aggrawal’s wedding, our own buddy, went straight to hotel where Baraat took place stenched in sweat and scent, (no time to bath!!). I did a crow bath and followed suit. So there we were, two crumpled looking IIMs in new clothes.

Nitin Aggrawal (brother) was short of men, and yours truly had great time welcoming groom’s relatives. He didn’t know who were the ones and who weren’t, so ended up parading a few unsuspecting strangers to the hall.  

The next was some ceremony where the groom’s relative decorates the bride. But isn’t she is already decorated, I asked Vipin. Yeah, he said, decoration used to be done by them, but nowadays its token symbolism for the video. Ah, the perils of outsourcing!

Vipin was busy with meeting people, and as I was jobless, I eavesdropped a few conversations- Sumit’s (groom) friends saying something about Waitlists and RACs and whatelse, and sumit (as expected) blushing at regular intervals. Yawn, change the channel.

I learnt that there were a couple of army majors. So I went upto them, made them at ease (you guys are doing a great job in jammu evacuation!) and started implementing my only-the big-apple-gets-hit principle (Doesn’t episodes like manorama erode army credibility? What do you say about stats that show court martials have gone up in recent years? Or for that matter, hasn’t the soldier’s motivation reached its nadir in Kashmir, as shown by increasing suicides?) One fellow got a little nervous (so did I!) but other was measured and logical (manorama, an isolated incident blown up by media and politicians, court martials show transparency and decisiveness, motivation is personal and not easily measurable.) Well said, Captain Ravi.

Vipin introduced me to a gorgeous friend of his, Ruchi, and we spent the rest of the evening chatting like old buddies. Other ceremonies like reception, circling the fire (forgot the name) were text book like.

Namrata bade Al vidha to her family, Vipin cried loudly and made funny noises so I encouraged him to continue. All in all, it was wonderful time at Merut.

GD capsule 4

Theme: Corporate governance, oil prices
News: Essar and IBP, the oil marketing companies, are reducing their retail outlet timings to reduce losses
Background:
With spiraling crude prices, oil companies are losing money because they are not allowed to raise prices due to so called administered pricing mechanism. This results in companies selling petrol at huge losses. So much that they are better off not selling them. This is the reason why the aforementioned companies are cutting their outlet time to limit losses.

How it relates to CG (corporate governance):
CG in part means the companies act in the best interests of all shareholders, including minority ones. The government (majority shareholder) decision to maintain price even in the light of oil prices has seriously eroded the retail investors’ wealth. Sebi, which is so bent on preaching CG and the role of independent directors to protect small shareholders, has turned a blind eye to this large scale cheating by none other than the govt.

Why is freezing the domestic prices bad for the economy?

• The oil companies are the biggest tax payers in the country, and keeping them in red implies less money in the government corpus and less money for social schemes


• There is no motivation for the companies and the people to adopt efficient technologies. Brazil long suffered from oil shocks, adopted ethanol run engines and has reduced its dependence on oil

    

What do you say of a bank that has missed the bus (India)?

I thank placement committee for doing such wonderful work for the students. It’s a fine committee, pun intended!

As a part of summers PPTs (pre-placement talks), we had an Australian investment bank Macguarie Bank today. Like all i-banks, the talk focused a lot on compensation, profitability et. al. I’m not sure if all was that impressive. Why?

For all the size and presence all over the world (a 11 billion dollar company), the bank has no presence in India till recently. For all the explanations they offer, it shows a lack of judgement on their part. If sacrosanct IIMs haven’t heard of this name, it’s doesn’t reflect that good on the organization, does it?

They are an advisor-investor rolled into one. I raised the issue of conflict of interest there. If we put money to back up the investment advice we give, doesn’t that add credibility, they reply. Fine, but there are a few things to consider.

If it does add credibility, why doesn’t Goldman sachs or JP Morgan do that? The advice is sought not just for what you give them, but more importantly, how you got to that conclusion. That is why GS doesn’t need to back its claims with money.

Not all advice turns out correct. Investors know it. (Of course, if you keep giving them bad advice, you are unlikely to get business) But I’m not sure if investors care if you put money along with them or not. If they lose money, they wouldn’t appreciate that you are losing with them too.

But there are a few things I liked about the company. One of course, the fact that the company is making a lot of money. Two, there is no history of retrenchment. Considering the way things turn out in I-banks and consulting companies, this is impressive indeed.

All said and done, why do I care? They are going to take one or two people- bright IIT grads. Let me better make my CV good for other companies.      

GD capsule III

Theme: FDI

News 1:  US ambassador Mulford says "Failure to follow through in raising the cap (in insurance from 26 to 49%) is increasingly seen by investors as a breach of faith”, adding that "if India wishes to regain its credibility in the eyes of foreign investors this promise of 49 per cent FDI needs to be delivered sooner than later". Left reacts strongly to this comment (US dictating India policy). IRDA (insurance regulator) comes in support of insurance cap hike.

Reason: India promised hike ‘upto’ 49% in insurance in 2001. Technically, there is no breach of promise. But investors normally assume that countries follow up on these claims sooner or later. That is why so many companies like Aviva, AIG etc. set up shop here. That Left makes so much noise only shows its xenophobic character.

News 2: China attracts more FDI than India. Therefore India’s FDI policy should be more investor friendly. How do you counter it?

• China’s FDI figure is not because of foreign policy, but due to NRC (non resident Chinese) investment in china. Without taking that into account, MNC investment in china is not much higher than India.


• India doesn’t follow IMF norms when it comes to FDI. This one is a little complicated. But you can visit the link if you want to know why. http://economictimes.indiatimes.com/articleshow/1016361.cms

Conclusion:
Though good investor climate and reforms are a must, don’t expect quantum leap in FDI into India if you do it.    

Siva’s dictionary II

Vomit:  Indicator of institute party success
Amusement: what you get when you see a person vomit all over a car
Frustration: what happens when that car is yours

Earthquake is an opportunity

The recent report says 18000 estimated dead in Pakistan and POK (Pak occupied Kashmir), and around 1000 in India. Our hearts go out to them.

There could be no better opportunity for the next level of thrust to the sagging CBMs (confidence building measures) and to build goodwill with our naughty neighbor.

Indians and Pakistanis are not just tired, but sick of militancy and political games played to get one up over each other. My friend just remarked, ‘Quite a number of the dead will be militants’. Perhaps, but the majority is innocent civilians, women and children who have nothing to do with the complexities of Indo-Pak hassles and who just want better jobs, education and basic amenities.

So there is some thaw in the relations in the last few years, but the pace of the peace process is frighteningly slow. I am not sure how tier-2 (experts, chief secretaries meet and army commanders’ flag meetings) and tier-3 (Shabana asmis and Asma Jehangirs hugging in full media glare, Bollywood films shown in Lahore) diplomacy will work because, to quote a Einstien cliché ‘The problems cannot be solved at the same level at which we created them’. And Indo-Pak is the baggage of the political leadership of two countries, not people. The will and the initiative should come from higher level, media gimmicks won’t work.

If you still harbor some hatred towards Pakistan, I have a question- whom do you want to be equated with – Pakistan or China? Lets get on.

GD capsule II

Theme: Energy security, reforms
News item: India imports coal (To put it other way, Kuwait imports oil!)
Background:
Our proven coal reserves are 92 billion tons and rising. One-third of this can easily be mined. Yet, our annual production at around 400 million tons is grossly inadequate to meet the needs of even existing power stations. In past decades, India used to export coal, mainly to Bangladesh and Nepal. Today, our power plants need to import over 10 million tons to utilize capacity fully.
How it relates to ….
Energy security

Discussions on energy tend to focus on the price of international crude. I have two points to make on this.

• There is precious little that India can do to affect prices, whether they stay at their current levels or even if they rise above the US $70 mark.


• Please remember that oil accounts for just about 30 per cent of India's energy needs, less than a third of the total. So what makes up the rest? In a word: coal. Well over half of India's energy requirement is met by coal.

Reforms
Privatizing mining would pump in resources and create jobs, but apparently everyone who objects to this sees nothing wrong in buying privately-mined coal from abroad. And of course lack of domestic coal also leads to greater dependence on imported petroleum, the costlier option.
And how do we import coal? Not through an open market system where everyone tries to get the sanest price, but through the Government of India deciding that a single nodal agency will do the job for everyone. (MMTC [Mineral & Metals Trading Corporation of India] is most likely to get the job.)

Courtesy:  ET, rediff.com

Siva’s dictionary

Showing off: what a person does when he asks a question to prof, waits for 30 secs for prof to babble, and then proceeds to give his answer

Emotional balm: What a person gets, after he gets kicked out by prof and then smses this author, ‘please write this in your blog’

Director: One who has no work. (I got this confirmed when the aforementioned person before getting kicked out, was told by prof  ‘go meet the director before coming to the next class!’)

Confidence: when told by your Group Discussion mentor, ‘good, you were visible’

Overconfidence: When told by the same mentor in the next GD, ‘bad, you try to dominate’

Siva’s dictionary series kicks off today.

GD capsule I

Theme: Corporate Governance

News Item:
Government tries to inject the DGH (director general of Hydrocarbons) into the board of ONGC. ONGC chairman Subir Raha threatens to quit citing conflict of interest. Law minister comes out in favor of Subir.

Decoding the matrix:
DGH is the proxy regulator for upstream oil companies i.e. companies in exploration and refining (there is no clear cut regulator appointed for them). The regulator who also is in the board is a clear cut case of conflict of interest because if DGH issues any directive to oil companies, Reliance may doubt its integrity.

How this relates to the theme:
Corporate governance, in part means the promoter (in this case the government) doesn’t interfere with the management in any way. Unfortunately, there is a lot of interference of ministers (favoritism and nepotism) and government itself is doing just this. Only this time, Subir Raha has dared to show some spine, a rare commodity in the anatomy of the Indian Bureaucracy. Fortunately, with law ministry and Sebi coming in his support, the government has deferred the decision.

Psycho Babble III

It’s been a month since we were down with food poisoning. Most of them who cared for their peers would have probably forgotten their faces by now (ours a big batch of 300). But the care shown by them is still fresh on my mind.

I have something to give back to you. As the summers are fast approaching, GD/PI process starts all over again. I will write on some general topics with this focus from today. Don’t expect a goldman sachs report. But I do promise something that is readable but more importantly USABLE. You can tell me how I can improve it. Or you may tell me something important that I have missed.

To genuinely care and make a difference may be high sounding, but yeah, everyone should try to do something like that. I hope you find this useful.           

Review of 'The World is Flat' by Thomas Freidman

 
Indians (I guess its universal) have a tendency. We are very interested to know what foreigners think of our country than what we do ourselves. I am no exception. So when I read that a NY Times columnist wrote a book on India, (with globalization thrown around it!) you bet I was interested to know more.  
 
So I did. Thomas Friedman is a three-time Pulitzer prize winner and one of the best American columnists(My top slot goes to Paul Krugman). And the first thing that strikes you is the amount of effort that went into his book. Authors worldwide have this tendency to use a lot of anecdotes and less of sound research into their columns/books (Yours truly sure has). Not Tom. He has traversed Bangalore in India to Dalian in china to Taiwan to what else. And the quality is manifest in the book.
 
This book is about history of globalization in the twenty first century (History? an awfully short period at that!). Tom identifies ten major happenings that leveled the playing field.
 
Some of them are damn interesting- Netscape IPO is one of them. He argues the free distribution of the first browser has flattened the information field. Organizations could no longer have a monopoly over them.
 
Blogging has a mention. He argues that people no longer have to yell at their televisions to get heard. They got a medium. Also the proliferation of online journalism means the reach of journalists is no longer the function of  the size of their daily, but purely the quality of research they put- sooner or later they get a big audience.
 
There are thousand other things I could write (some of them like outsourcing is too clichéd!), but reader, get yourself a copy today. You can have a tab on this world even if you have just woken up from a long slumber, as long as 5 years!

Recipe of a diversity curry

We had our first Designing Work Organization (that’s an awfully complex title) class. Professor Anjani Kumar is a former VP, HR dept of GM with 30 years industry experience. Bless his soul. We need more mangers and less academics as professors.

The first assignment is to cook a diversity curry i.e. a diverse team of ten members each that simulates a work place, come up with a viable project proposal and present it. As the author is a rare commodity, a south Indian in this northern city of India, he’s in a happy situation where three teams want to sign him up. At last he succumbs to the charm of Nitika-tikki-Nagpal.

What happens when there is an incentive for coming up with maximum diversity? I think we will all cook up a diversity curry in the coming days. Guys who have stayed put in Delhi, calcutta for a few months may become the ‘residents’ of those cities, guys who have done mechanical or comp science engineering may become manufacturing or IT buffs, guys who are aged 21 years,11 months may become 21 and those with 22 years 1 months, 23. Plus a host of innovations I couldn’t think of. Ah, how humans respond to incentives! (I read a book, Freakonomics recently. It talks of this theme)

I sometimes try to put a proactive face, but I am a lazy chap; too lazy to even apply for institute committees when it called for applications then. Now, I have responded to a couple of Expression of interest emails (industry interaction committee and media relations). It’s better late than never. And it’s better to get rejected than not try. I’ll bore you to death with more such clichés in the coming days.

Only the big apple gets hit

It gives me a pleasure that some of my friends take my blog seriously and pull me up for writing not-so-good-things about IIM. Thank you. But why do I write only those and neglect a thousand good things about this institute?

Americans, I would say is the most self effacing race on earth. For the thousand good things they have done to this world, they only pick up the occasional bad things and laugh at their own follies. What does this do with my question?

My point is, mature institutes, like mature nations and individuals, know their strengths and weaknesses. We don’t have to cringe about our shortcomings, but neither have we strut on our good things. If IIMs and Americans gloat on their successes, the typical response would be ‘Why not? After all they are…’

My mom is a BSNL engineer, complains about the unethical practices of reliance telecom all the time, but that doesn’t stop dad or me from buying Reliance shares. Why? For all the bad things reliance does, the bottom-line is profits.

What is the bottom-line of IIM? It is not the infrastructure, faculty or location; a lot of Indian B-schools have them, thank you. The bottom-line is the talent it attracts. Students pass out of IIMs, make a name for themselves and build goodwill for the institute, companies get attracted like bees, and so does talent, year after year. It is a virtuous cycle.

As long as this happens, not a thousand bad things I write (are they that bad?) would make any difference to this institute. That I write what I do is only natural. After all, only the big apple gets hit. And IIM is one.

Note: I will try to make my future posts less pungent, but please, let me take names. After 10 years, if I see my posts, I want to see sahay. Mr.X won’t ring a bell!

What is the similarity between operations Mgmt. and Cow?

Once upon a time lived a teacher, lets call him Mr.X, who was very good talking about cow. He used to teach children ‘Cow is a sacred animal. Cow gives milk and dung and host of others….’ An inspector who visited the school at that time was suitably impressed and recommended promotion for Mr.X.

When the same inspector visited the school next year, he found Mr.X teaching the same cow to the same children. An annoyed inspector asked Mr.X to talk on coconut tree instead. Mr.X thought for a moment, started ‘Coconut tree is a tall tree. Tethered to it is a cow. And Cow is a sacred animal….’

I thought this was a witty prank till today when I met Mr.X himself, Professor Sahay. A learned man in his sixties, Sahay loves to talk spirituality, culture and you-guessed-it-right, cow.

So he did, started the class with a Sanskrit slok and then it was cow all the way. Psycho Babble: ‘Like a cow that masticates the food it eats, one should reminisce knowledge to retain it’. Operation problem: If 6 cows graze a land in 3 days and 3 cows in 6, how many days will one cow take? He promised more cow problems tomorrow.

I have met a lot of interesting Profs, and this one tops them all.    

What can India learn from Bangladesh?

What the hell, you might ask. After all, Bangladesh is a failing democracy, run by a government which cannot guarantee safety to the opposition leaders, madrassas corrupting young minds possibly with funds from ISI and Al Qaida, a government whose allies are Muslim fundamentalists who profess hatred against India and the west, what can India possibly learn from Bangladesh?

The recent UN human development report, which ranks countries based on infant mortality rates(IMR), female literacy, freedom and a host of other factors, has ranked India 127 out of 170 countries, way below Bangladesh. How a country which is economically weaker than India has managed to do so well socially? The answer partly lies in Grameen Bank, which is the first implementation of micro-credit in the world.

Mohammed Yunus, the Harward educated economist tried in vain to get the nationalized banks to lend money to the poorest of poor, and decided to start his own bank in 1983. Today Grameen bank has branches in 46000 villages and has lent over $4.5 billion, mind you, against no collateral, but has good debt recovery rates. It has stressed on women empowerment in a predominantly patriarchal society.

The results are for everyone to see. Empowered women tend to have fewer children, educate them, and are more responsible than their male counterparts when it comes to repaying debts. Bangladesh spends much less than India on education but boasts of higher literacy rate and lower IMR.

Does it mean there aren’t any micro-credit schemes in India? There are, but nowhere near the scale of grameen bank. Lending to women SHGs(self help groups) has proliferated, but the focus is still on trickle-down approach, like the much touted Bharat Nirman scheme with a cost of, hold your breath, Rs.174000 crore. There have been such schemes in the past (every time a PM visits NE region, announces a multi-crore deal). The premise is simple. Investment generates employment and other benefits like literacy and social benefits accrue due to money multiplier effect, the basis of Keynesian economics. But it has failed miserably. Why?

The potential for corruption associated with such expensive schemes is not the reason, but the very fact that our systems are so inefficient that the money allocated for spending on such projects are returned to the exchequer. ET ran a story of how Rs.5000 crore money collected for sarva shiksha abhiyan, by imposing a 2% education cess on goods and services, remained unspent even after one year of announcement. So is the case of Bimaru states returning the money allocated by planning commission. With such a history, Chidambaram need not worry about raising money. They are rarely spent anyway.

Lending tiny amounts is not cost effective and the government should do more than exhorting public sector banks to lend without offering sufficient incentives (to my knowledge) to do so. Putting money is alright, but the government should put money where the mouth is.

Home sweet home

Ah, finally home. It’s a nice feeling, isn’t it? After three months of dog work in a secluded place.

The flight was a hop- Lucknow-Delhi;Delhi-Chennai. And I didn’t had to disembark at Delhi. I got to see the activity in the flight before the passengers board – airhostesses with their quick touchups and lipsticks, an army of men doing what I thought was cleaning- very amusing indeed.

I had to put up at hostel for one day as I’d taken the apex for 24th instead of 23rd and couldn’t pre-pone it - I couldn’t get a refund. It’s tough to spend a day at IIM doing nothing, I MEAN NOTHING! So I went to the library and flipped through one Principle centered Leadership, by Stephen covey. Have you read his 7 habits of highly effective people? It’s a must read. This one was too similar to that. Got bored in third chapter itself.

Tried to get one book, Freakonomics, suggested by one blog friend (new avatar of pen friend!) Couldn’t get that. I’ll try when I get home.

Talked to my sister who is in London via voice chat. I am a little conservative, but I must admit that the technology is fabulous.

So if you think I spent the day usefully after all, you are mistaken. For most part of the day, I was counting the minutes. Everyone had left the 23rd afternoon itself. To rub salt, there was my special room mate who kept telling me that I have the entire hostel to play the next day. I asked him to get lost but alas, he didn’t get the cue and continued rambling about how lucky I am to get such a wonderful opportunity. He got the harshest verbal thrashing of his life.

Well, I try to make the place come alive wherever I am, but I do have this nasty temper. Hey, there is a limit to even banter, isn’t it? I was a little sad to having him leave with the sourest of moods. Have a nice vacation, mate. And don’t think about me.

Why do I write serious stuff?

I am not a serious guy. I crack wits all the time, and sometimes I’m the only one who laughs. When others do laugh, sometimes I get the feeling that they laugh at me, not my jokes. And I had no way to check. Till I started blogging.

When you like my write up, you come back, don’t you? It’s in a way, in psychological terms, self monitoring. So I started mimicking calvin and hobbes (I’m too small to have a style of my own). And writing wit is a very tough job. An occasional post may come out good (like manac presenta(sham)tion); doesn’t happen all the time.

So why not write serious stuff to fill the gap? What should I write? Psycho babbling (like this) all the time will only drive you away. I have this USP, reading editorials. I think I started this much before the gyan given by TIME or IMS or whatever. So I started choosing a topic, write whatever I had read on it, and give an occasional opinion (as if I am Alan Greenspan).

How does it help? One, it helps me refine what I think about that topic. Two, it gives me a little satisfaction that I share serious stuff in simple digestible words (I hope).

What can you do? I don’t ask you to post comments all the time, but I do ask you to comment on serious stuff. May be you can tell me what I haven’t thought on that topic.

Footnote: When you read this post, you may get the feeling that I AM A SERIOUS GUY!

Term I ends today

It seems like yesterday that I was vegetating at vinay’s (my best friend) house when a mail that said ‘very urgent’ (regarding IIM admit) came and put my career in an F-1 track. The term I (first of six) is over already.

Lucknow is a place I’ve never been, met and acquainted with colorful and gregarious north Indians, started doing things (like blogging) which I am not sure I would’ve done otherwise, and found things about myself which I never knew before.

I know the purported air that surrounds us, the mixture of admiration-envy-indifference the society attaches, the expectations of companies…. Our life will never be the same, will it?

I came here with modest expectations, finishing the course without hiccups, build a few good friendships, get a reasonably good job, and on the whole, enjoy my stay here. So I don’t find the rationale of crossing the line in the exam hall and getting a better CGPA which some of my more ambitious peers share. This is not to suggest that I’m the most perfect of them all. I have done it before, and never felt good afterwards. I hope I never find any situation so desperate as to cross the line.

Talked about economics and operations right? What about the other exams?

IT Management

The prof is a little weird. Gives a 3 part question
Part 1- Write a question
Part 2- write the marking scheme
Part 3- write the answer. Great. I was so tempted to give a question, ‘what is the full form of ITM’ for 5 marks.  

Organizational Behavior

We had this question. Write the precise title of your project and write the objectives and findings. Alas, none of the other members of my group knew the exact title, though most of them did contribute to the project work. This was the case in other groups also. I heard a lot of ‘title, title’ murmurs in the hall. I found it almost funny.    

Outsourcing: Is India stealing U.S jobs?

Yeah I know. It has become such a clichéd topic that every tom, dick and harry (another cliché!) writes on it.

Just the other week Government of India has approved IA proposal to buy 43 planes from airbus at 2.2 billion USD when Blair came to Delhi. This comes on top of Air India plans for 50 jets from Boeing for $6.9 billion; private airlines like kingfisher and Spicejet plans worth one billion dollars each for Airbus and Boeing respectively; plus options for many more. This doesn’t relate to outsourcing. Or does it?

For the entire cry over India and low cost countries stealing jobs from the west, every jet Indian carriers buy creates hundreds of jobs in these countries. With airlines like Northwest and Delta airlines filing for chapter 11, others barely managing their existing fleet, the two majors had come under severe stress to stay in business; till the flood of orders from the land of Bangalore.

How true is the paranoia of outsourcing? AT Kearney estimates that for every dollar US put in India, it gets 1.12 dollars by cost savings and India gets 33 cents. The increased profitability means more money to be invested in new ventures, more returns for shareholders (70% of US households invest) and more employment generation.

During 1980s when Japanese were buying a lot of real estate in US, there was a great outcry. That fizzled out. Only now the threat is real, looking at the way the dragon is spreading its wings. The threat is both for India and US. What could be done?

It seems almost impossible to compete with china in low cost manufacturing. But India can compete in a different turf. Cheap brainpower. The auto ancillary industry, which involves designing and auto cad are demonstrating that they can more than match the dragon. Bharat forge’s recent US and European acquisitions are worthy of note.

Where does US come here? US has the technology, India with its engineering professionals represents cheap but skilled labour. It is easy to see one plus one is more than two.

The success of any economy lies in the ability of its companies in moving up the value chain. The pharma sector, which has long been thriving on reengineering and poor patent laws, has started putting a lot of money in R&D. So has software, which has moved from call centers to analysis and research. Proponents of outsourcing assume a zero sum game. India wins, US lose. The whole economics is based on scarcity.

Scarcity is not in the pie, it’s in our mind.          

Term I- End term exams start off with a whimper

Economics paper was designed to be written like an economics paper. Write the economic dimensions of so and so case. Write about how tax increases effect on the government exchequer. I could have studied operations management thoroughly (sigh).

Not that it could’ve made any difference to my performance efficiency though (operations is over, damn it siva). It was a shade better; engineers prefer maths to theory, don’t they?

Adhiraj-I-won’t-write-the-name-Banerjee does it again! I thought human beings were so narcissistic that the first thing they write on any paper (not just the answer sheet) is their name.

All blogs are blocked within IIM. Worse, all blogs are put in the same category as porn. Blocking freedom of speech? Not that it will stop the author anyway.

Psycho Babble II

Don’t get drowned in pressing things

There are always reports to be made, presentations to be done, textbooks to read. There are always a countless things to do, and they are the most inviting. Why? They demand action, they are NOW! DO THIS. It is very easy to get drowned in them, lose focus of what you really want to do, end up firefighting forever. At the end of the day, you may get satisfied with what you have done today, only to worry about what’s to be done tomorrow.

So how can we break out of this endless cycle? We can always find time to invest in ourselves. We can devote time to do two things- what we feel good, and things that will do us a lot of good.

First one- How often do we consider doing things which we really like, be it as simple as novels, sing, paint, write or whatever we are good at. What stops us from doing it. One of my friends asked me how I get time to blog amidst my busy schedule. Well, you read because it shows well on your acads, you do projects because your prof asks for it, (may be bath and brush because others ask you to!), what about giving one hour for yourself?

Second one- Consider reading papers. How much time do we devote per day, and how frequent do we do this? How about calling up our friends and relatives, investing in people?

It is easy to pass them on, procrastinate. These are things which don’t say NOW, though we all know the benefits we get from them, be it hone your skills, increase knowledge base or get benefits from ‘emotional deposits’ (to quote Stephen covey).

So why do I write blog? I need a little space for myself, but more importantly I CRAVE FOR A LITTLE PAT ON THE BACK! Heck, everyone do.

Lastly, hmmm.. Read the first line.

What is a self analysis test?

Long long ago, the rishis wandered Himalayas and did tapas to find about themselves. Fast forward 2005; we are doing the same in a computer that too in one hour!

There are a lot of heads-personality, group-dynamics, leadership etcetera. All on a 6 point scale – given a situation you disagree- strongly, moderately, slightly, one neutral and three agree.

How are the questions? There is one test- how good are you at building a team?
The questions are like this

1. I encourage team members to balance autonomy with interdependence among other team members.

Hmmm… I guess I slightly agree.

1. I encourage the team to achieve dramatic breakthrough innovations as well as small continuous improvements.

Hmmmm…

1. I diagnose and capitalize on the core competence.

I’m neutral (I don’t understand one word of this, damn it)

So how do you analyze the scores of these tests? Fast, the deadline is only two hours away. So I write, ‘…By analyzing the scores, I believe that I could make paradigm shift in the way I deal with people that will result in not just evolutionary but revolutionary changes that will help me handle the tempestuous challenges facing this world.’ Take that, sailu (prof)!

Footnote: There were a lot of printouts spewed by the printer that people didn’t know whose score-sheet was which. Clement saw two score-sheets wondering which was his, took the one which looked better. May be this is what is called personality conflict.

Management Accounting presenta(sham)tion

Well, this is easily the best presentation of all time. You have to see to believe how a Professor can make 20-25 year adults run for cover.

The whole affair was reduced to a viva-voce, and how I hate them! People come, customarily open the ppt, if you answer Professor Bansal’s one question, he says ‘Thank you’ and you are done. But if he says ‘thaenk youuu’, you know what it means.

Rahul-bubbly-avasthi strolls confidently, opens his company ppt, ‘Sir, Zuari Ltd is basically…’ ‘I know what zuari does. Do you have cash flow statement?’ Hey, we weren’t supposed to put them in ppt. How can you see those small figures in a ppt slide anyway?
Avasthi meekly replies ‘No sir. But..’. ‘Thaenk youuu’. Strike one.


Vikas Pasrija:  Prof: ‘Do you have cash flow statement?’ ‘Yes sir .I do’. Oops! Downloaded the wrong file. ‘Thaenk youuu’. Strike two.

Amol: Sits in the last bench. Didn’t know that his group had been called. Runs to the stage. Irritated prof, ‘Are you not interested? ‘ ‘Ssss….Sorry’. ‘Alright. Show me cash flow statement’. ‘Hey. I was supposed to do group presentation’. Thaenk…

Myself: Goes to the stage. Blurts out, ‘Sir, mine is an exports company’. Prof retorts ‘Do you know the foreign exchange policy?’ Ha haa. Bach gaya.

Bandaru: Poor chap. Couldn’t find the file. Nervous Bandaru frantically searches the ppt in the cluttered desktop. (Imagine having 60 ppts with most of them having the same name ‘Accounting policies of so and so company’). Theank youuu.

Pranshu Gupta: She has the same problem as bandaru. Prof waits patiently. Not fair at all, Professor.

Gives a break. Everyone runs like hell to add cash flow statements, B/L and P&L statements.

Murphy’s law: If you perceive that there are four possible ways in which something can go wrong, and circumvent these, then a fifth way, unprepared for, will promptly develop.

Example-Puneet Bansal: Chap thinks he covered cash flow analysis, P&L, B/L.
Prof: ‘Can you show the company’s board of directors?’ What the hell.

I could remember only so much.

Learn to write a formal letter

To
The unsuspecting reader
Wherever you are

From
Yours truly
My blog

Sub: Economics project presentation

Sir
Ref: Article ‘Market survey means freakin’ out’

With reference to the above, kindly refer to the below (oops! Here goes my formal letter)

As you may/may not be aware, my group had eco presentation at 18:30 IST at Class room 107 of one and only IIM L. The duration of presentation was 30 mins and 6 people shared the time.

We started with the definition and history of man made fibers viz yawn err… yarn and the like. The discussion then went forward to demand and supply for the past 15 years. Actually we didn’t have data before 2001. So we put the demand forecasted in 1990 for the next 15 years as the historical data! The international market vis-à-vis Indian ones were analysed (vis-à-vis is a term economics prof likes. So we peppered our presentation with vis-à-vises)

The group took off like a cat on a hot tin roof (sidhu! forgive me). Four people finished their part in ten mins. Make it long, make it long were the whispers on stage. Then came our own market survey which we forgot to take. Sounak didn’t disappoint. Simple strategy, slow down the pace of words. Soooo, ouuur neeext isssssue waaas……Good going mate. ‘In graphs, he used 47,13,8,9.5% pie chart distribution (when others used 80,10,10% drab distributions) to make it look real. Cute.

Cometh the hour, cometh the man! Yours truly comes last and makes a lasting impression (I wish). Agenda: Textile quota regime and government policies. 10 full minutes left.
Why not start with history of quota regime. My heart errr.. talk will go on ……

So what happens after ppt? Question and answer session. If no one is interested in questioning, why doesn’t prof leave us? ‘ Mr.Serious Sam, Why don’t you ask a question?’ Sam wakes up. Hmmm… ‘Sorry sir, I came late to the class’. That’s a good question.

At the end of these, all we needed was a lecture on communication from Prof. If anyone talks on communication again, I’ll die.

Yours whatever
Sivananth



      

Psycho babble

So I’m here for two months. What have I done?

The going is the same as in college. Chill out the entire term, cram in the last week and those who do the most end up having the last laugh in exams. This is how the system works every where and IIM is no different.

What’s the point of doing this in IIM? I could’ve worked in Wipro, done well and get promoted in three years to a team leader, say. I could’ve made a more confident person, capable of doing something worthy in my field. Instead I’m doing some worthless courses that no one would use anywhere, churning out stupid reports that I myself wouldn’t give a second look and being extremely busy without being any effective.

So why am I here? Everyone says IIM is a cash cow. I once thought that it is so good a value addition that cash behooves the same. But I seriously doubt it now. It’s only that companies have this high esteem on us unworthy souls, give us those opportunities to excel which wouldn’t be given to ‘lesser’ mortals and most of us do excel. In psychology it’s called a self fulfilling prophesy. You become what others believe you are capable of.

All’s not bad. There is this IIM culture. It means you constantly try to learn new things that will make yourself more useful wherever you go. You take advantage of opportunities around you and go on refining your USP (the marketing jargon means unique selling proposition) and in effect try to live up to the aura that surrounds an IIM for the people outside.

I haven’t done much. I’ll try. So should everyone.    

PJ (poor joke) of the day:

How do you wish god when he goes to office?
Khuda office!    

Free power is the most expensive thing in the world

Last year The Hindu ran on an article series on farmers’ suicides in Andhra Pradesh. Surely after Rajasekar Reddy came to power on ‘free power’ plank, the farmers should’ve heaved a sigh of relief. Or have they?

Consider the classic case of Byra ‘borewell’ reddy, as he is affectionately called in Guntur, impoverished part of AP. He has the distinction of digging, hold your breath, 40 bore wells in his farm with no avail. Why has the water table gone down to alarming levels? Free power, of course. With no metering of water pumps for years, the indiscriminate pumping has turned fertile parts of AP to desert. With no security, banks are reluctant to lend these farmers and as a result, they are turning themselves moneylender vultures putting themselves in a debt trap where only way out is suicide.

Delhi consumers have boycotted their payment of electricity bills citing indiscriminate hike. Regulator DPC has been forced to rollback at the behest of Sonia Gandhi. Why hike? Free power and no metering has led to large power thefts (euphemistically called transmission and Distribution losses) which has put the two private distributers, tata and REL in severe financial stress which they tried to pass on to unsuspecting middle class.

There are countless more reasons why free power is not free. With no incentives, the farmers use the most inefficient pumps that guzzle power. Rich farmers divert the power to their homes. The subsidies put a huge drain on exchequer and translate into high inflation and fiscal deficits which is brunt by the poor which it is supposed to benefit.

So should government abolish free power totally? The intention is good, execution bad. The government could leave the power tariffs to market forces and target the poor by way of say electricity coupons like the rice or wheat coupons given to the BPL families now. A proper census to identify the poor farmers could be best left to Panchayats. The government should ensure that thefts (T&D losses is currently 40% against the world average of 12) are severely dealt with.

Populism is not plain bad. If exercised intelligently.

Operations Research Decoded: When simplex is complex…

Suppose there are a few wholesalers and retailers each having fixed stock and demand respectively. The trick for the wholesaler is to apportion stock so that it meets demand, has the minimum unit cost of freight and he has no stock left.

Sounds simple, huh? You may think we will be bothered with more such real world problems that entail a little math. No. We are just doing math all the time. Sensitivity analysis, graphs, matrices and its stupid row operations with all those zj,cj and what else. They even dare call it simplex! No person in the right mind will remember anything the day after the exam.

The mere subject name suggests it’s not for managers and only for researchers. Why trouble us with nitty-gritty when all you have to tell us is what sorts of problems have solutions in linear programming?

My Childhood part II

Age: 14

Till 14, I first went to a school which frowned on anything other than academics. I played a chess tournament at a well known academy and did well. The next day I was made to kneel down before principal’s room for missing the Independence Day celebrations at school.

Dad got a transfer option: Agartala for 2 years/Calcutta 3years. My sister and I were damn eager to get released from the prison and go to the scenic Agartala. So we did.

Agartala:

Capital of Tripura, NE region, it is 40 mins by air and 2 days by train (Train goes around Bangladesh). So even beggars travel by flight and only IA operates flights in this loss making route. My hopes of airhostess were dashed when a 40 year old lady roughly prodded the passengers to make way. Thank god for the competition in aviation now.

School is a posh convent in the beautiful hills of Agartala. Students were all 3 years older to me. Seems they do nursery till age 5 then go to kindergarden. My sub-5 feet lanky frame felt oddly out of place.

So there were odd love letters flying around and boy! Was I thrilled? I saw a cutie pie by the name of Ruchi Jain who had a twin brother whose name is guess what, Ruchir Jain. By sheer coincidence (!), I became a close buddy of Ruchir. Things were going well till Ruchi tied a rakhi. My eyes welled up, not because she made me her brother but because she gave a peck on my cheek and said ‘you are my kid brother from now on’. What a shame.

We didn’t stay there for long, but the memories are still fresh.

Are Prakash Karat and Buddhadeb Bhattacharya playing Dr.Jekyll and Mr.Hyde?

This is the article which I sent to ET last week unsuccessfully. If ET has one million readers, my blog has potentially millions (forget the adjective)


Noted economist Paul Krugman says that capitalism triumphed and communism didn’t work because ‘For much of the past century and a half, men have dreamed of something better, of an economy that drew on man's better nature. But dreams, it turns out, can't keep a system going over the long term; selfishness can’. The apparent contradictions within CPI (M) over the reforms and FDI has thrown open the issue of relevance of communism today. The embarrassment caused by Mr.Buddhadeb Bhattacharya’s pro-reform stance may have made him the evil Mr. Hyde among his comrades, but it has given an opportunity for the Left to make its policy clear towards reforms.

Since UPA assumed power, the reform initiatives of Manmohan-PC-Montek combine has been hitting roadblocks, thanks to the bellicose attitude of the Left. The recent Bhel divestment initiative, which was scuttled by Left citing violation of CMP as an excuse, does not hold water either, as CMP clearly states “Navaratna PSUs shall remain as public sector but can go to the market to raise capital”. Clearly, even a 10% divestment will leave Government with more than 51% stake. Mr.Bhattacharya on the other hand, has been going out of the way to woo foreign investors to his state. This hypocrisy does not bode well for a party that professes to be the conscience of the government.

Rigid labor laws and high exit barrier has been the single biggest deterrent to entry of FDI in the country, thanks to the political class in general and left in particular. Mr.Bhattacharya rightly points out that issues of productivity and quality are not the headaches of management alone, but must be shared by the workers. Left can play the role of facilitator so that the benefits of reforms reach everyone. For that, it must shed its old dogmas of no-foreign-investment-at-any-cost and worker protection even if it compromises efficiency. Communism in its pristine form has lost its relevance and should find a place in history text books (though that may spark a confrontation of different kind!).

Review of Salaam Namaste

There is this scene where Arshad Warsi tells a drunk Saif ‘….Its 2005’. Thanks for the reminder. Till that moment, I thought this movie is shot in the year 2500 AD.

To make the long movie short, Preity is a surgeon-cum-RJ for guess what, ‘salaam namaste’ station, Melbourne. Saif is a head-chef in a restaurant. They start with a jagada (as all hindi films should), meet each other in a marriage, saif ‘thinks’ he had fallen in love at the end of marriage. He successfully persuades her to move with him to a penthouse, so that he could decide whether its love indeed. To ‘verify’ love, there must be one, right? So they make love for the next two months! She becomes pregnant. Now he refuses to take responsibility for the child (marriage), but still loves her. She is pissed off, but refuses to leave. In the end a baby video, a few self help books and expert advise from from subordinate cook changes his mind and to quote a cliché, all’s well that ends well.

If you are wondering where our ‘salaam namaste’ Indian culture fits in, join the club. I am a conservative tamil Brahmin, but the movie would have made even those pepsi/beer drinkers- who speak english in their tongue tips and frequently twist their fingers and scream yoyo!- agape. A lot of Saif’s antiques reminded Friends, so it did for those Shah rukh-college student Rahul-movies but atleast the underlying thread there was Indian.  May be this is how the directors take Indian cinema to a higher plane.

In a country where sonography test to find the sex of prenatal baby is banned, the film potrays a prenatal video positively, to promote the motherhood message. Saif’s recipe for controversy? (forgive the pun!)

Saif played his part well, except for the overuse of ‘crap’ that made me calculate the mean time between arrivals! Preity looks ravishing in the title song, but its tough not to notice her sagging cheeks in a few scenes - she almost resembled a cute bulldog.

Javed jaffry’s English grammar evokes laughter at times, yawn other.

The refreshing aspects of the film- Arshad warsi as his friend, a caricatures-rid comedian and Abhishek Bachan’s comedy in the last scene.

If you are unperturbed by logic (which we are anyway) but more importantly unperturbed by culture shocks, Salaam Namaste might just be your money’s worth.

My Childhood (part-1)

Childhood is one of the most wonderful times of a person’s life – filled with follies and ingenuities, anger, happiness and sorrow for the most trivial of things…. Lets cut the crap- come join me for this multi-part article about my childhood

Age – TYTR (too young to remember)

These people never stop/stopped telling me this

Sridevi (My elder sister) – You saw our nanny undergoing a uterus surgery and asked me anxiously, ‘will I need such surgery too?’

Ramachandra Iyer (Dad) – You managed to forget the school bag and went to school with only lunch bag. An embarrassed I came scurrying after you with your bag.

Nanny – You were difficult to be woken but I found a way (clever she). I used to scream ‘coffee’ and you used to jump from the bed and come running to me.

Class teacher – I once mixed up leave letter with provision list. An amused teacher kept cracking intolerably poor jokes throughout the year. (the jokes were poor alright. That it was poked at me made it intolerably poor)

Should World Bank give aid to Africa?

There is one school of thought, championed by economists like Jefferey D.Sachs, advisor to Kofi Annan on Millenium Development Goals and Jean Dreaze (advisor of Sonia Gandhi - championed the Rural employment Guarantee scheme, pseudo-socialist in my opinion) which says that developed nations should share their spoils with developing and third world nations so that they can be lifted out of poverty. The idea of 0.7% GDP contribution came from leaders like Tony Blair and billionaire philanthropists like Gates and Buffet in the G-8 summit last year. Jeffrey Sachs also came up with innovative ideas like transit fee for all trans-national air traffic, international vehicle licenses to fund this Aid Africa effort and write off African debts. Their economics is compelling and intentions noble, but does Africa deserve it?

True, a debt write-off may greatly reduce the burden off the shoulders of the governments, but such efforts are not new. World Bank has always assisted Africa with soft loans with pay back period of 25 years or more with interest of guess what, 0.75 percent!!! If these nations had just put the money in US T-bills which yields anywhere between 2.5-3% based on fed interest rates, they would have still paid back the money. But why haven’t they?

Most of these nations are run by autocratic governments who wouldn’t care less about people and divert the loans to fund their luxuries (remember Idi Amin?) And these nations don’t have strong democratic institutions – courts, election commission and the like. Nehru was a dreamer and glib talker but he was right once, when he said ‘Strength of Indian democracy is its institutions’. This is why India, for all its corrupt political and bureaucratic systems, has never defaulted in its international loan repayments, even during 91’ crisis. World Bank, which now thinks about writing off African debts, charges whopping 10% or more interest to loans given to India. All this to cross-subsidize African bad debts. India should never privy to this.

So what should be done? Not all African nations are run by autocratic regimes. Nigeria is poor despite good institutions and vast reserves of oil. Such nations should be eligible for debt write-offs and others contingent to their cleaning up their systems. This would prove a sufficient incentive for autocrats to mend their ways. Gadaffi, after facing international isolation for long, recently confessed to 1998 US embassy bombings in Libya and agreed to pay compensation to victims.

Carrot and Stick sometimes works better than one-size-fits-all approach.
          

Classes today

Operations Management:  Talk about pun, sushil (prof) cracked one unknowingly. The mike malfunctioned as usual and after some tinkering, worked. Prof checked it and said ‘sounds okay’. Each day brings a wealth of information to be added to you repertoire, if only you are intent on getting it. (I can’t recall the subject information though)

Economics: Business as usual. Talk of World Bank, hey, I know something about it. Read my other post on WB.

Organizational Behaviour Decoded:  A manager should not say ‘From his views, I find the chap smart, so I trust him’. He should say ‘By evaluating his normative statements, I rate his cognitive abilities high. Therefore I will build a relationship structure based on mutual trust’. The two statements mean the same, but the latter obviously comes from a smarter person. So Shailu (prof) made us a shade smarter by his 90 minute lecturing.

Thank you, peers

The food-poisoning incident is not something that should happen all the time, but it brought the best out of you when it did. You may not be Mother Theresas, but you didn’t shy away from the tasks which honestly, I myself would’ve found menial, like sponging. Thanks for the courage you shown in these sordid circumstances. Thanks for the care you showered on us when we were celebrating flu and going through the motions-pun intended!

Market Survey means freakin’ out

So there is a market survey on guess what? Man made fibers. MAN MADE FIBERS !!!! You know, polyester, viscose, flax etcetera - study the demand for them. So my friends and I prepare a questionnaire for dealers and customers – that was an ordeal in itself, got that okayed by economics prof and went to hazratganj, the posh area of lucknow and aminabad, the kirana locality. We split into two grps of three and other group went to Bombay dyeing, Raymond et.al while we got smaller shops.

Shop 1: I go to this shop which sells sarees. IIM brand means atleast we weren’t told ‘don’t bug me’ by dealer. Asks what is man made fibers. We explain patiently about different things. Dealer retorts ‘Cotton and jute clothes doesn’t come from sky. They are also man made. Excellent start.

Shop 2: Dealer is warmly receptive. Unfortunately he was more interested in IIM – average salary, companies, streams blah,blah,blah. In the end we weren’t sure who surveyed whom

Shop 3: Chap must have a lot of problems in life. Whatever questions we ask , ‘bhaiya, what is the percentage of cotton-polyester clothing you stock?’, he retorts ‘you tell me, what might be the answer’ Bhaiya, if we were to guess, we would have been saved from the trouble of surveying.

Now to customers- as expected didn’t have a lot of clue except polyester.

We surveyed one kid. When he knew we were from IIM, his face glowed. ‘Bhaiya, I am preparing for CAT. Tell me how to prepare’. Sigh. Forget market survey – Intuition works quite as well.

My friends had lucknow’s famous kabab-Boy! Smells heavenly. Too bad I don’t have too much options as a vegetarian. Had to be satisfied with kheer – another speciality. And roamed the streets – technically called ‘feeling the market pulse’.

Which company would you invest?

When legendary investor J.P.Morgan was asked to comment on the then state of dow jones index, he replied “Its changing”. But you can get a plenty of advice about share market from anyone on the street. If that person happens to be an investor himself, you can’t stop him. Alright, I’m not Warren Buffet, but I’ve the experience of wasting my dad’s money on investing for the past few months, so I’m something.

In the last few years, the share market has generated returns of 10-15% pa and has beaten other avenues like fixed deposits, postal schemes and senior citizens schemes hands down. But when it comes to retail participation, the numbers paint a grim picture. When companies like ONGC and HLL, which has consistently rewarded shareholders with good 6-7% dividends (not to forget the share premiums) have retail investors having paltry 3-3.5% stake, what can be said about others?

Okay, Harshad Mehta and Ketan Parikh may have put the fear of god in the minds of you and me, but share market crashes have taken place in other countries too. Or that India as a whole is a risk-averse country doesn’t hold much water either, if you consider the response for the IPOs floated by mutual funds. So what stops retail investors from participating from India shining story?

Well, for all the gung-ho about the share market returns, the retail investors don’t seem to be making money. If you book profits, won’t you increase your investment? It’s as simple as that. But why haven’t they made money? One they try to ride the wave when the market is booming and end up buying a lot of worthless stocks euphemistically called designated securities. You cannot make money in share market in short term. If you do, you are either a genius investor, an insider, extremely lucky or a combination of these.

A person who had invested in a HLL or infosys stock just after the black Monday crash of May 17, 2004 would have seen his investment doubled now. If you have missed it and want to invest now, all you have to do is hunt for some mid cap stocks with good growth prospects. And not worry about short term variations. Or if you are a completely risk averse investor you can go for blue chips whose valuations are down only because of market sentiment. Reliance currently is attractively valued when you see there is an imminent de-merger in a few months from now, which will invariably accompanied by either stock-split or bonus share issues.

India is shining for FIIs and so can it for you. If you choose to invest wisely.