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