Wednesday, December 03, 2008
I am accusing you and your ilk (with a few notable exceptions) of the worst possible behavior for disregarding professional ethics and for fear mongering and sensationalizing.
1. Shame on you, for putting the lives of our brave soldiers in danger by telecasting live pictures of the the counter operation.
2. Shame on you, for conveniently putting away all sane voices of our leaders and sensationalizing silly remarks by a handful of silly politicians. As putrid as our politicians are, you are equally bad if not worse.
3. Showing live, amongst other things conversations with the terrorists and helping them in spreading their propaganda.
The people hiding in the chambers got attacked after you pointed out people were stuck there. For harassing an injured police officer, who had suffered four bullet wounds by asking him to repeat his experience again and again.
All you care about is your TRPs. You feed the nations curiosity and fears but demand a CMs resignation when a certain XYZ happens to visit the site to pay his homage, or he said 'out of curiosity'. Can a citizen only satisfy his curiosity only by watching the idiot box free of all what you throw at us. I blame you for doubting the people's intelligence.
so all of you, please straighten up. We, the people, will deal with you once we have are done with our beloved politicians.
My impression (no awards for this)
1. People are very angry all over
2. Reactions from India: A lot of accusations against politicians, intelligence officials, Pakistan (some against certain sections, some against Pak government and some against entire Pakistan)
3. Counter reactions from Pakistan: Anger at some of the above accusations, messages of reconciliation when Pak diplomats talk to Indian media, Conspiracy theories - some quite sickening,
People are making a lot of suggestions. A lot of them just angry reactions, some more sane but always at the wrong forum. Who is taking action. In my heart, I am convinced that there are forces within Pakistan that want to destabilize India, possibly within other their government. I hears claims that India has concrete evidence. But just those, I have not seen the evidence for myself. Maybe I never will but I want to as it will put an end to the part of me that does not believe it.
But everybody, at least on the Internet forums is convinced. Have they seen the evidence? I doubt it. How could they be so sure if they have not and recommend an all out war with our neighboring country with people who are very much like our own.
Well, may not all like our own we would say. But don't we have the naxals, the deobandis, I have talked to people from Kashmir who are sick of both India and Pakistan. They want this war to end and peace to prevail.
I am sure everybody should want it. But I am also sure that everybody does not. Where is all of this taking us? Is the ISI chief going to visit India. He was going to, one day. Now, I am not so sure.
When I hear the Pak president on TV, I want to believe that he is genuine, for sake of all of us in India. But is he? I am not so sure?
Despite all this, I know the masterminds of this evil plot are out there somewhere. But where, I do not know?
The only thing I am sure about is that for humanity's sake, we need to keep a level head, avoid knee jerk reactions? Can I do that? I am not sure?
Tuesday, December 02, 2008
However, had not expected such differences from the organization which claims to "Do No Evil". They do seem to have succeeded to put context in online news search. Sometimes, even hiding the true picture under all the context.
Thursday, November 27, 2008
Tuesday, November 25, 2008
This, from an article which appeared in rediff about IT companies increasing their working hours from 8 to 10.
"The IT industry in India still follows the best practices it had introduced earlier. But this does not mean employees will work less. If they are being asked to stick to duty hours, this will increase the productivity," explained Infosys Technologies HR head TV Mohandas Pai.
"Besides," he added, "they are also being paid well to work hard. These are difficult times and if they don't work hard then there will not be any industry left in coming days."
Reminded me of the project manager I had earlier in life. He used to give the following argument to team members to work longer hours and to show up at work on Saturdays. “You are young, and now is the time to make a career. If you do not work longer hours now, when will you make a career for yourself”
Sure enough, there were many who worked longer hours. However, this did not necessarily lead to a productivity increase. In fact, my hunch is that, all these arguments had an inverse correlation with productivity.
Sorry, Mr Pai, but Infosys has been making 30% EBITDA margins. IT industry would not fold if your IT margins come down to 25%. Of course your investors would raise hell for you. But that does not mean you can get away with anything to please them.
Now striving for better performance is prudent. However, why is is that we wake up only under pressure. Anyways, I have great respect for Infosys and their top team but this is not what I expected from a seasoned industry leader. He sounds like a heckled HR person who has not clue what to do.
Saturday, November 22, 2008
NT: As a trader, my job is to understand biases and trade on them. There are all kinds of biases. The most common is the small sample bias. Let's say you have 1:1,000 odds you will come home every day with a dollar and once in a while you lose $1,000. Many traders show very steady incomes but they could be fooling themselves because they don't have a long enough period to chart their performance. Their Sharpe ratio will not be indicative.
In option trading there is a similar bias. Short premium option traders, typically those who sell out-of-the-money options, are more likely to make money on a daily basis and then blow up. Likewise the yield hogs, those traders who would take any risk for a few basis points. You can fool yourself with your Sharpe ratios, and you can fool all of the financial engineers, but you can't fool an old Chicago trader who went bankrupt twice.
Another bias is what I call the size bias. If you have 20,000 traders in the market, sure enough you'll have someone who's been up every day for the past few years and will show you a beautiful P&L. If you put enough monkeys on typewriters, one of the monkeys will write the Iliad in ancient Greek. But would you bet any money that he's going to write the Odyssey next? You know that because of the sheer size of the sample, you're likely to find a lucky monkey once in a while. But the same applies to traders.
A third bias is the survival bias. Everybody will tell you that stock investing is a great idea because it's been back-tested by some serious guru and if you had bought one share of some stock during the Revolution you would now own the GNP of some banana republic. But you forget that your back-testing is only on stocks that are alive today and does not cover stocks in imperial Russia that a rational investor would have bought at the beginning of the century. Many continental stocks were recycled into wallpaper. When you look at markets you are only looking at the remnants, the parts that have survived. Or take real estate. People always say it goes up. But that works only if you always bought in places that became fancy.
Taken from Talebs interview to DS
This appeared in 1997. Wallstreet as well as regulators could have done well to pay heed to his rants.
Tuesday, November 18, 2008
Sunday, November 16, 2008
Wednesday, November 12, 2008
Obama, Outsourcing and How steps to prevent job losses may go wrong for US workers and be positive for outsourcing vendors?
Tuesday, November 11, 2008
Anyways, was just wondering if the worlds greatest investor Warren Buffett is another one of Taleb's 'black swans'. Probably he is, cause no other investor following his investment style has accumulated as much wealth and none more are likely to do so... oops perhaps he/she would be another black swan
Sunday, September 28, 2008
Tuesday, September 16, 2008
In economics and ethical theory, the term moral hazard may be used for any situation where a person or organization does not bear the full adverse consequences of its actions.
Rescue operations carried out by governments, central banks, or consortiums of financial institutions can encourage risky lending, if lenders know that in case of serious problems they will not have to take losses. Similarly, if governments know that inability to pay creditors will lead to yet more loans (to prop up finances), then they are less likely to have sound financial policies.
By refusing to bailout Lehman, Fed signalled that it would longer allow moral hazard ( although it had been looking the other way and may have caused moral hazard itself when for example it brokered the Bear Sterns deal, or remember TBTF? anyone).
Wednesday, September 03, 2008
Tata Motors as stopped work in Singur in West Bengal, but its spokesperson said that there is still a small window open for Tata to return if normalcy returns. The $350 Mn that Tata Motors has put into the project is now a sunk cost. There are two scenarios for Tata to return.
- Farmers give in (of their own volition/ forced or coaxed by government/ community pressure from lure of future jobs etc)
- Or Tata strikes a deal with the farmers and gives additional payout to these farmers
The second scenario is appealing if the total payout would be lower than the amount Tata would have to invest in a new factory elsewhere + time costs. However this would not generally be good for other companies (and even for Tata) as this could potentially become a trend.
Even if the government acquired the land from the farmers at the prevailing market price, it is always a fraction of the land value after is handed over to the industry. The question is, at what price should the government acquire land. Is forced acquisition justified. What happens if one farmer does not want to give up his land and his land is smack in the middle of the land in question. What is your answer if the farmer in question is you and you little hut, that you call home, is smack in the center of it. What if farming is the only thing you have done your entire life. These are tough questions to answer if you are not the farmer.
And without fail, there are also rumors/reports of people close to the government owning a substantial stretch of land close to the land under question. What of these?
However, if you were a true believer in free markets, you would ask Tata to acquire land on their own at market rates and go fetch elsewhere even if one farmer refuses. The pseudo capitalists would let the government do their dirty in this case and use the free market argument to get government to slacken regulations elsewhere. What would you call such people? Ethical?
Tuesday, August 12, 2008
The question is, Has the drop in growth has bottomed out?'.
Options Trading Strategy: Write 'On the Money' calls cover above 4650-4670. Buy Put options (out of money)
August 13, 2008
Sunday, August 03, 2008
Options Strategy: Buy Put options, Write Call Options at 4450
August 4, 2008
Saturday, August 02, 2008
However it is now time to face reality. You just have to look at the large private sector players today to realize that the dream has gone sour especially in this department. Far from being customer friendly the large telcos, banks, and power discoms behavior rivals the worst departments in the public sector and in many cases service levels and regard for customer is even lower. This is true especially of the top players in each category.
Bottom line is that these private companies care only about their profits. The decision for them is simple and depend on the answer to this question, 'Is investing in customer service for you NPV (Net Present Value) positive or negative?'. God help you if the answer is negative. Large private companies are more like monopolies in their respective field. Take telcos for eg even though there are a number of companies now, with no number portability you are locked into telco and therefore there is no reason for them to improve their service as long as there is no mass exodus.
So what can you do as a consumer. Make it expensive for them to deny you good service. Switch, Complain, Sue. Be aware of your rights. Abuse back, blog about that poor experience that you have had. Cause a mass exodus of customers. Cause a run on the bank. Make theme pay. Make them realize customer is king. Other wise only competition can be your savior.
Tuesday, July 29, 2008
N & A, the largest players in this segment had positioned them selves as being an IT training provider to non-engineers and its trainees were therfore not considered by the Tier 1 companies as being up to the standard. However, over the years while N has moved upwards and started to address the engineering segment in a big way, IT sector has also lower requirement to be seen as only employing IIT engineers and therfore it makes perfect sense for large IT companies to source talent from training providers such as N.
Some of the other emerging sectors which did not have such training capacities and either due to lower agency costs or due to urgent need to train people, have out sourced their training to N. More innovative amongst them have been quick to adopt new models.
But there was reluctance in IT companies. Imagine if you were leading the training dept at these IT companies what would you do. However, with large companies now hiring upto 3000 per month, training has become a CXO level problem as managing training at these levels needs a professional training organization.
It is only a matter of time before they board the ship too. and therefore, I believe that the future is bright for companies like N.
Friday, July 18, 2008
Thursday, July 17, 2008
Monday, July 14, 2008
Educomp, the country's leading education company on the basis of stock market performance (market cap had recently crossed $2b) has a revenue base of 280 crores implying huge growth expectations from the company. Gaja capital had invested in the company and made handsome returns on its exit last year.
Everonn, with revenues of ~95 crores in 2008, has touched valuations of 1700+ crores before correcting over 60 percent recently. Recent investors include New Veron, DB & The India Fund (Blackstone)
Tuesday, July 08, 2008
However they completely ignore the fact that that the underlying economy is still growing at 7-8 percent in real terms and therefore the premium over other markets is justified.
Anyways, what i really wanted to point out was that they also imply, that along with the sensex, other stocks should fall as well. While their movement is correlated to an extent, one needs to take a look at the underlying valuations of these stocks independently of the sensex. The sensex PE is at 13-14, but other stocks with similar growth performance are languishing at a PE of the order of 5-6 or below. Which would make sense if the markets were expecting a dip in earnings. i.e. profits next year being lower than in the previous year and not just a slow down in growth, in the short term.
If you were to do a DCF valuation, a short term performance blip anyways has low sensitivity to the overall valuation as a large majority comes from the terminal value. So if structurally the story is intact and long term growth is not threatened, which I believe is, I would be a buyer in these markets
Saturday, July 05, 2008
Company Dividend Yield -%
ARI Consolidated 16.37
Hind.Housing Co. 15.95
Swastik Safe Dep 15.87
Ashirwad Capital 15.35
Disa India 14.80
Kanchan Intl. 14.79
Schrader Duncan 14.19
Hinduja Ventures 14.04
Assam Petrochem. 14.01
Allsec Tech 13.33
I do not know if they pay a higher tax to the govt (vat etc on this ) but it sure makes them a huge margin. I guess every one has to just put his/her foot down and stop buying items that are priced nonsensically.
Wednesday, July 02, 2008
Anyways, for those expecting the market to increase , recommend buying a strap (ie go long in two calls and one put options with same maturity and strike price) or a strip (long in two puts and one call options as before)
Monday, June 30, 2008
And therefore like these models, technical pattens represent statistical realities and like all statistical models, would give you predict correctly only a certain percentage of times. As long as this is above 50 percent it has some value. Need is to be persistent with your apporach and to select patterns where predictive success percentage is substantially greater than 50 percent.
Anyways, market held above the 4015 support today. Fundamentally the markets look prime for entry. However, the momentum may take the market down further in the near term.
Saturday, June 28, 2008
Friday, June 06, 2008
Q. What does he tell a client who desperately wants to buy into the market?
A. "Buy half of your desired position now"
Q. What does he tell a client who is losing money in his position and wants to sell?
A. "Sell half your position now"
Now just imagine what would he tell his clients if the market moved up and what would he tell them if the market moved down.
Saturday, May 31, 2008
Guess it is easier to return to these reasons when the price trend reverses than now. Till then keep looking at the following reasons for price rise and take your pick:
- Limited fossil fuel reserves
- Rising crude demand due to rapid demand increase from emerging economies
- Limited crude refining capacity leading to short to medium term fixed supply
- Cartelization from OPEC/ hoarding
- Speculation / Traders playing on uncertainty due to all of the above / Psychology