The View from the Middle

An Overview of Financial Markets - II

2009-05-28T05:00:00.000-07:00

(Recap: In part I, the motivation for the series had been laid out. In part II, we had discussed a bit about stock markets, what are their objectives, why liquidity is important etc. The previous article had been concluded with the point that to understand stock markets (which is the secondary market) better, it is important to understand the primary market. In this part we look at the primary markets.

Acknowledgments are also due here to Shyam Sundar (Peter to IITM guys :)) as some of the ideas came in our conversation.)

III

Primary Markets

As a definition, we can use the wikipedia definition that primary markets is that part of the capital markets that deals with the issuance of new securities. Hence, the term primary. It is like this is where there instruments originate, then they are traded on the secondary markets.

But what are these instruments? The common term for them is securities. Again, the term is self-explanatory. A security has a commercial value and you can use it in a commercial transaction as a security of some kind.

But why do these securities originate? Who originates them? Why do they come into existence?

For that consider the following scenario. You have a business idea, say, something related to setting up a website for something. You do some estimation and find that 40 lakhs is needed to get the project off the ground. You may have savings of 10 lakhs and can maybe borrow 10 lakhs from family and friends. So what has to be done for the 20 lakhs?

You can approach a bank. But a bank may not like the risk they are seeing. Like most dotcom financial projections, your projections promise the moon and sky, if you reach a certain critical traffic. And honestly, that is a big "if". Even if a bank were to fund it, it would require something as collateral and you may not have that.

Another alternative would be to approach an investor who has the stomach to take the kind of risk you are looking at. But before that, you need to write a business plan. Too much hype is made of business plans mainly due to the proliferation of business plan competitions. A B-plan (I hate that term!) is simply a checklist of items to make sure you have thought things through. Therefore, any business owner needs to think about:

What is it exactly he/she is selling
How to get the information across to the public that they exist - there is an art in this. The look and feel of the communication exercise matters as much to the public's perception as is the actual look and feel. Ok, not as much, because even the best marketer can't sell a bad product, but between two almost equal products, marketing can make a huge difference.
How much money would be needed to finance the funding – how long would funding be required, when can the venture be expected to break even
Operational issues – what sort of office do you want, where should your office be, how many people to hire, where to get them etc.

It is just an organized way of thinking about a business. At the starting time, only a few things would be clear, the rest of the picture emerges as you go along. But atleast, when you have a plan, you know what you know and what you don’t know!

Therefore, before going and meeting the investor you draw up financial projections. According to your projections, subject to certain assumptions, you don’t make money for the first two years but after that you really start raking it in. After the initial two years, you expect to make upwards of 2 crores a year say.

The investor looks at the plan and he likes it. He likes your business model and the idea but he is not sure if you have the maturity to execute it. Imagine the following conversation:

Investor (I): I like the business model. In fact, I think you are being conservative. This business can really grow exponentially once we take the hit for the first two years.

Entrepreneur (E): (Smiling) That’s encouraging…

I: But, I have my doubts on how you would implement it. I think you need to come back to me with some more details on the team. Fine, how much money are you looking at?

E: I have 20 lakhs, I estimate I need 30 more to get the process started.

I: Hmm… I really like your business. Subject to a better team, I am interested in taking equity stake. I could give you 30 lakhs for majority stake in your company.

E: How much?

I: I would own around 60% since I am giving that much money. But don’t worry I will be a dormant partner. Think about this. The other option is that I give you money in return for an interest payment. The interest payment can really screw you, this way I swim and sink with you.

E:(To himself) I am not comfortable with that at all. What if he is not dormant? What if he gets edgy after one year?

(To the investor) What happens if I borrow for an interest payment?

I: Hmmm… In that case, I am ready to invest 30 for 5 years at an annual rate of 20%.

E:(To himself) Wait… that means I need to pay you 6 lakhs a year as interest! And in the final year I have to return the principal and interest at 36! That is nonsense! This guy is sitting on his ass, doing nothing and I have to pay 6 a year in interest!

(To the investor) This is too high. In the first two years, I am anyway making a loss, this just adds to it.

I: (Persuasively) Look, I think you can reduce the operating costs. The interest payment would not pinch so much and…

E: If it is 20%, then you must give me a two year interest holiday? I can pay the corresponding interest at a later date…

I: You are not getting my side of the deal. If I charge 20% and say the company goes bankrupt in 2 years, I atleast get back 12 lakhs…

E: if the company goes bankrupt, you will get a claim on whatever I get by selling the assets of my company like the servers and stuff…

I: Haha… how much will that be! If I give you a 2 year holiday, I could earn much more by just putting my money in a fixed deposit. That is why I offered equity stake as an option. Think about these things and get back to me.

E: My problem with equity stake is this. You are a nice guy, I like you. Suppose, for some reason, you sell the stake to someone and exit and that person does not work with me, what happens.

I: If you have a problem with majority stake, we can work on a combination of debt and equity. Think about it.

E: Ok, I will do that. Thanks for your time.

I: Thanks for yours!
____________________________________________________________________

This is a stylized example. An example is an isolation of reality, isolated by the author with an intention in mind. Please do not think this to be how actual negotiations get conducted. I don’t know how they happen, maybe it is like this, maybe it is not.

But the example brings out points I would like to illustrate.

The entrepreneur needs money and the investor, unhappy with returns from other sources, is looking to increase his/her returns. It is basically an opportunistic union and while it would be great to have a human touch in the process, the priorities of each party are clear. The entrepreneur does what is best for his baby, the investor does what is best for himself or his shareholders. Having said that, if either one gets over smart, both tend to lose.

There were two structures discussed here. One was an equity investment and the other was a debt investment. If the business goes according to plan and it really works out, the equity investment makes more money. How? Say, the investor took a 50% stake and the company grew to having profits of 2 crores. This 2 crores is the earnings for the shareholders in the company. Therefore, the investor gets 1 crore, the entrepreneur and his family gets the rest. However, there are two options. The shareholders can take back the money i.e the 2 crores, but in that case, the company will not have any cash reserves to begin the year. Or they could reinvest it back into the company to make more money (hopefully) the next year.

In the debt structure, the investor gets 20% in good times. But in the bad times he gets the first claim on the proceeds from the liquidation. At the time of bankruptcy, the equity holder gets whatever is remaining after the creditors have been paid off. That makes sense, if the equity holder could have the first claim in good times and bad, then even when the going gets slightly tough, he may be tempted to run the company into the ground! Therefore, the debt structure is a less risky structure; both the loss and gains are capped. The equity structure is riskier. The moral from this is that in a good deal, the reward must be commensurate with the risk taken.

In the above example, the entrepreneur was a small guy and the investor was also a relatively small guy. It need not be. A big company like Reliance can approach investors for money for a new plant they are putting up. A bigger company could approach investors for funding for a takeover. These investors could be a bank, could be a private equity fund, could be a hedge fund etc. The actual structure of the deal would depend on the risk appetite of the investor and their commitments to their shareholders.

This "structure" that we spoke about is essentially a contract. That piece of paper now has some value, hence it becomes a security. Depending on the nature of the contract, this can either be made into a mass product and sold to everyone. Or you can make specialized, newer contracts from this and sell it to specific institutions. Either way, these agreements, if they have a value, can be traded. Where would they be traded? In the secondary markets.In the next part, we would take a closer look and begin to look at how to apply these ideas to real world situations.

An Overview of Financial Markets

2009-05-16T06:48:00.000-07:00

(This is part I and II of an n part series on financial markets as I understand them. n part because even I don't know how many would be required. Not to fear, I will not leave it half baked, I have written parts III and IV and will put it up based on the response to this.)

In the recent past, there has been much focus on the functioning of capital markets. This set of blog articles is aimed at the layman who may be bewildered by the sudden assault of finance-related jargons everywhere. Turn on any TV channel and there are gurus and pundits each giving their own views sprinkled with newer and newer jargon. Now, in addition to TARP, there is TALF, TGLP yada yada and it gets too much for regular market watchers also. Funnily, two highly respected people, sometime from the same organization, hold different views on the same issue! And sometimes the confusion gets pretty serious, for instance, when President Obama recently blamed a set of “speculators” for their intransigent attitude that led to Chrysler filing for bankruptcy.

Just at the end of February, everyone had given up on the stock markets. Publishers were paying advances on books that were going to address the death of Capitalism. Now, a lot of the major indices have rallied 25-30% from the lows and suddenly, the world seems sunnier. And Economists are talking of U,V, W shaped recoveries?

What the hell is all this? Why do we need a stock market? What are these financial institutions? Who is the “Market” that everyone is talking about? On what basis is stock trading done? If it is indeed blind speculation, why doesn’t the government shut it down? If it is shut down will the world end as these guys claim? Is financial innovation good at all? If you look at the daily turnover of BSE and NSE, it has been varying between 80,000 crores and 1,00,000 crores. It may come as a surprise that around 70% of that is in the Futures and Options Segment of the NSE. If indeed financial innovation is bad, how has it withstood the test of time and in fact gained in importance?

As stated earlier, this is meant for the layman. However, I am still a student and just because I use the word layman it does not imply I am an expert. I have tried to keep it as accurate as possible but please feel free to point any flaws or confusions in the presentation.

Also, at first shot, I would not advise the reader to apply whatever has been written here to the real world. Some of the ideas will be “idealized” forms. We will see later how to apply it.

The Stock Markets

When I was in school, I used to think that the stock market was an entity run by the Government of India. This misconception arose due to the fact that the stock market position was telecast daily on the news. I figured if it is coming on a daily basis it must be something important to everyone and the Government usually controlled these institutions.

Of course, I later realized that it is a private entity and the stock market number quoted was that of the Bombay Stock Exchange. There were many stock exchanges once, almost all state capitals had one, but most went out of business. Interestingly, since the BSE and NSE are for-profit organizations, they could issue shares and get listed on their own exchanges! Now when people refer to stock market they could be referring to either the Bombay Stock Exchange or the National Stock Exchange in Delhi.

(Actually, I need more clarity on how the index numbers are calculated. I have heard that NSE is based on market capitalisation. So is the Nifty a weighted average of the market caps of the 50 companies? Fundaes needed please)

The stock exchange acts as a marketplace. What do exchange owners want? They want people to trade on it and they make their money by taking a part of the transaction fees. The transaction fee is very small in percentage terms but very profitable overall. As mentioned earlier, say, the overall turnover of NSE is 60,000-70,000 crores on an average per day. 0.01% of that translates to 6 crores a day. With 250 trading days on an average, we are talking of upwards of thousand crores a year of turnover.

For the exchanges, success begets more success. If there were two exchanges, similar in terms of what you can trade, one with 1000 players and another with 100,000 players, the second exchange is likely to have more “liquidity”. What does that mean? If you go to money.rediff.com, and look up the quotes for individual stocks, you will see various bits of information given about that stock. You will find information like Day’s High/Low or Year’s High/Low. In addition you would see something called Volume. That gives an indication of how easy it is to get into that stock or get out of it.

For example, according to some analysis, you may think a particular stock is a good investment. But for the past 6 months if it has traded only say 1000 shares a day and you want to buy 500 shares, then you could have a trouble exiting the position. When there are more buyers and sellers, the probability of getting the price you want gets higher. This attracts more people into that exchange which in turn increases the probability of getting the desired price and so on.

However, if the 1000 player exchange offered more innovative services and charged a higher fee, there may even be an “oomph” factor associated with it!

Exchanges take on significant operational headaches. With technology, it is not that apparent today. My father said it used to take more than a month in the 80s and 90s to get hold of the shares you bought. Errors were common and people made arrangements to counteract those problems which in turn created other problems. :P Today delivery happens at T+2 i.e you get hold of the shares you two days after you bought. In addition there are facilities like “Buy Today Sell Today”, “Buy Today Sell Tomorrow”. While these facilities increase the liquidity, they also require clear definitions of who is legally liable for what.

“All this is fine. But the basic question has not been answered. On 28^th April 2009, the BSE went down by 350 points and on 29^th April it went up by 400 points. The stock markets seem like a casino or a con game. What is going on?”

The stock markets are secondary markets. To understand the existence of stock markets it is important to understand primary markets.

“Hey, this is the problem with finance types. Everyone speaks very well but no one seems to give a one line answer. Is it a con game or not?”

Hmm… If I could, I would. The financial system that has evolved is not an Act of God. It is the result of evolution, conventions and practices. And sometimes the logic goes a bit backward and forward, wish I could help it!

These Are a Few of My Favorite Things

2009-05-14T07:07:00.000-07:00

(Yes, yes,this is nowhere near the poetry of the original. But to be really honest, raindrops on roses and whiskers on kittens are not my favourite things, though, potentially I suppose there is no reason to dislike them. The actual lyrics can be found here.)

The youtube video of the original song.

Feluda’s exploits and Bertie’s adventures,

Old rock music and classic war movies,

Smell of newspapers fresh in the morning,

These are a few of my favourite things

Sandwich from Cool Joint and breakfast at Woody’s,

Spicy hot gravies and white sevai* noodles,

Open Butter- Masal-Dosa from Adiga’s,

These are a few of my favourite things

Lazing on Elliot’s beach and dinner at Pupil,

Lots of cold beer on a hot afternoon,

Side dishes served in the bars of Chennai,

These are a few of my favourite things

IPL cheerleaders and CSK victories,

Ample Mallu girls in off-white dresses,

Robin Scherbatsky in any episode,

These are a few of my favourite things

When an exam cups, When the beer is flat,

When I lose money on F&O Nifty,

I simply remember my favorite things,

And then I don’t feel so baaaaad.

(P to the S:

1. Sevai refers to a noodle like dish made in Tamil Nadu. I am not going into those restaurant type descriptions - "a scrumptuous lentil based blah blah". I have never benefited from those descriptions. Has anyone ever?

2. Cool Joint is in Jayanagar 4th Block and Woody's is in JP Nagar. Funnily, I went to Woody's only once while at IIM. But I went there almost every time I went to Bangalore before that.

3. The Adiga's I am referring to is in Bannarghatta Road, near IIM. There is supposed to be different Adiga'ses (?) run by different brothers, but I have never noticed what this one is. (!)

4. Pupil is near the Besant Nagar Beach. You will find it, IF you don't know of it.

5. There is a really cool bar near Pavithra's in Jayanagar 4th Block. It is called B-15. Slightly hard to find. There is a staircase near Pavithra's which looks slisha shady, but it leads to B-15 on the 2nd floor. Fantastic music systems but the music gets kind of loud and is not a place to go to if you want to talk.

5. Almost every bar in Chennai serves free side dishes. This is for the gloating Bangaloreans who are like "Oh, Oh, Bangalore is the pub city." Yes, you may have pseud non-TASMAC-like shops where one can go buy alcohol without feeling pained at the dirty surroundings, maybe you can get all new beers and Smirnoff with ease. But we have free and unlimited side dishes in our bars. Yes, free and unlimited. So ha and haha :P

Vacation Stupor

2009-05-14T04:56:00.000-07:00

‘Nother Dawn, ‘nother dusk,

‘Nother breakfast, ‘nother lunch’,

Before you can even know,

“How did all that time go?!”

The day begins late for the

Night ended early,

Everyone else in a hurry,

Pfft… why ever this melee

It is the vacation stupor,

The best type of stupor,

She is the mistress of time,

The vacation stupor

So much happenin’ around,

You check the news, too many views,

Really, don’t these people all over,

Ever get the beautiful vacation blues

You could travel,

You could laze by a pool,

You could surf the net,

Or curl with a book

It really doesn’t matter,

What you do,

As you long as you have

Nothing useful to do

An idle mind is a devil’s shop,

Continue this, you can’t,

But before it all comes to a stop,

Have as much as fun as you want

Bumptop!

2009-05-09T21:46:00.000-07:00

I came across this link via Balaji's GTalk status message. It was a TED talk on "wearable technology". Some of the stuff is just downright cool. In one of the demos the user projects a call pad onto his palm, using something that looks like a holographic level thing and uses that to call a number. Very "Beam Me Up Scottie" only! While it is cool and all that, I am personally not one for revolutionary changes. I like my changes to occur gradually. I used to be anti-gadgets once, so admitting this is my first step :P But it is definitely something to watch out for. The video below shows the talk on Wearable Technology.

I also stumbled across this video regarding a different user interface called bumptop.

Bumptop can be downloaded here. As the speaker says in the video, the premise of bumptop is to make your computer desktop more like your real desktop, which is cluttered and clumsy. However, the cluttered and clumsy layout conveys information. For example, a bigger pile of something could mean work you are putting off to handle in one time. Or the physical location of the piles on the desk conveys information.

Overall, I really liked it. Found the user interface very intuitive as well. Basically, loved that you could stick pictures and stuff on the wall. You can make a pile of files and throw in a folder as well, just like in the real world.

Check out my "bumptop"ped desktop:

A disclaimer here: Yeah yeah, I am sure there is something in some version of Linux which is either cooler or negates the need for a desktop in the first place. For all I know, there could be some OS which is not only more efficient, it can also cook food and clean the kitchen. But as I have said earlier, one step at a time for me.

The Course of Nations

2009-04-20T04:07:00.000-07:00

I was browsing through the Times of India yesterday and my eyes fell upon the column Swaminomics. I do not follow the column normally, I used to read the centre page of ToI for Jug Suraiya once, but never anything else. However, what made me read the article was the headline: "It's Goodbye Chindia and Hello Chimerica". The article revisits the relevance of the term "Chindia" - China and India hyphenated during the years 2003-2008. Swaminathan points out that the recently concluded G-20 meeting could have been a G-2 meeting for US and China seemed to be the only countries that mattered.

I think the article is on the dot and timely. Perhaps this idea is a well known idea among geopolitical experts, but the point is China has really left us behind as an emerging star. To put it in clearer terms, pre-2008, if someone had asked me to bet on the emerging super powers in say 30 years time, I would have put my money on China, India and Russia. Post the crisis I would put all my money on China. It is not a matter of China growing at 11-12% and we growing at 9% (at the peak) What matters is the thinking in the political establishment. To quote from the article:

"India scarcely matters. It is still a country that instinctively seeks aid and foreign concessions. On the international scene it is a taker, not a giver. China, however, is now a giver. In the proposed expansion of the IMF's lending,China has offered to supply $40 billion, against $100 billion from Japan and possibly the US. India does not figure in this giver's list, it would rather be a receiver."

There are many critics of the US. There are pages and pages written about US and its hegemony. There is some justification to that. But where was the action when the US became vulnerable during this crisis. Chavez can rail all that he wants, but when this crisis hit, did Venezuala emerge as a beacon for the world? Did Chavez or Castro demonstrate the power of an alternative model? The EU also did not emerge as a clear counter. We are still left looking at the Dow Jones and S&P for cues. And the world is rallying on the news that there are signs of economic recovery in China.

The rise and fall of nations is to me, the most exciting aspect of history. If you want to go back and study history, I say, start with post-15th century history. Pre-15th century is important,yes, but the history of various nation states is more interesting and instructive.

Between 15th-16th centuries, Spain, with its "conquesting" sailors and access to riches in South America was the most powerful nation in the world. From the 17th century to World War II, Britain was the most powerful nation in the world. In between, Britain faced a challenge to its supremacy first from the French and later in the 19th and first half of 20th centuries from Germany. Post World War II, with a weakened Europe, US became the most powerful nation in the world. A great part of the credit goes to the visionary Marshall Plan, where the US came up with a huge package for European Reconstruction. In other words, when the older powers were reeling, the US emerged as the financial big brother.

What is important to understand is the following: unlike a corporation where there is a hierarchy which an employee negotiates to get to the top, there is no such hierarchy in world politics. All the global organizations are more or less influenced. The struggle to be the most powerful nation is a simple, Darwinian struggle and the nation that has the resources and is willing to commit them for the fight will win. You can say it crudely like a two-bit gangster would say, "No one hands anything to you. Ya gotta take it" (Jack Nicholson in "The Departed") Or you could say politely that China has a strategic vision in world politics. Either way, the motivation is the same.

The nature of the resources has changed with time, pre WW II it was guns and tanks. Now, it is economic might. During this crisis the most powerful nations in the world were on their knees begging for money. If you had the money and were ready to twist some arms, the prospect of jumping to another league was there.

At this stage, a qualification is necessary. I am not saying that just because China aspires to be a superpower, we must too. There is no need. Especially, if China had been somewhere far away, near Australia or something, we could have said, "Good for them" and gone about our lives. And just because they are neighbours does not mean we too must strive to equal them every way. Swaminathan's point of Chindia being dead is right on. If there were delusions in that direction, they must be disabused of. My point is: while crises are tough, and unfair to many, they create cracks in the power structure which the underdog or upstart can exploit.

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2009-04-18T15:16:00.000-07:00

Inertia

Much to my own surprise I have not felt the compulsion to spew my thoughts out in the blog, given that I am lazing around at home. As the astute reader may have wagered, the reason for that is simply that I have had no "blogworthy" thoughts. I have fallen into a comfortable rut. Just like Newton is said to have got the idea of gravity by seeing an apple fall, I suspect he would have got the inspiration for the First Law looking at how slothful he became when he came home for the vacations. A body in rest, indeed continues to be in rest unless acted upon by an external agent! Three cheers to that! Will someone get the beer for me?

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A Paradigm Shift?

Of course, a large amount of my time is spent in front of the TV. And in all that time I have made some observations. One of them has to do with anchors on various news channels. Interestingly, the girls of CNBC-TV 18 - a Finance News channel - are way, way prettier than the girls on Channel V! First of all, I see only one female VJ on Channel V and even the girls on V's reality shows can't hold a candle to the CNBC TV 18 girls. There is of course, Shereen Bhan, who to put it politely, is a real looker. Mitali Mukherjee is almost perfect, except she does not have a photogenic smile. There are a couple of other cuties - more like trainees for Mitali's and Shereen's roles. I never get their name. Of course, even Mitali and Shereen come second when compared to Erin Burnett and Maria Bartiromo. A note here. All these anchors really know their stuff. Yes, there is the occasional faux pas and Erin Burnett is known for a couple of them, but they are very very good, no arguments. From a news perspective, I like the Indian team. They are balanced and do not over-reach. There are times when Erin and Maria seem to give their spin on the news, instead of giving the news first and then talking about it. But over-reaching or not, Erin and Maria are clearly the top guns.

So, here are the issues. Has the designer label wearing, fin. sophisticate babe become the flavor of the season? Will they stay? Has the punk'd out rebellious rocker chick gone out of fashion?

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And Then On the Other Hand We Have...

Sun Music. Seriously, where do they get these anchors? There used to be talk that one of the reasons for Actor Dhanush's popularity was that he looked like the Average Arumugham on the road. His was not the perfect-jaw-boned, chiseled-body image that Bollywood actors projected, hence he connected with the masses, film reviewers argued. Well... the producers of Sun Music seem to have taken that to heart and appear to have a policy of picking people who do not look smart at all. One moment. When I say smart, I do not refer to physical looks. I mean, smart - well groomed, well turned out, people who wear dresses that suit them. Add to that, all the male anchors want to do the "Boy Next Door/kalaichifying" image played by Vijay in Ghilli.

But what really irritates me is the tremendously unrefined manner in which all of them speak. This is supposed to be cool. Please! Of course, if you ask the studio executives they would say, this is what the masses want. Probably, if you go and ask the "masses" they would express a yearning to listen to good Tamil!

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Facebook Killed the Orkut Star

2009-03-18T20:04:00.000-07:00

With due apologies to The Buggles

Facebook Killed the Orkut Star

I signed up with you back in two o six
Lying awake intent on scrappin’ in on you
If I was shy it didn’t stop you coming through

Oh-a oh

They took the world and put it in my hands
Anyone could scrap anyone anywhere
and now I understand the problems you can see.

Oh-a oh

Can v be frands plzz?

Oh-a oh

Where are those hot Brazilians?

Facebook killed the orkut star.
Facebook killed the orkut star.

Locked albums came and broke your heart.

Oh-a-a-a oh

And now LinkedIn, WAYN are just a few like you,
We see the scrap chats and it seems so long ago.
And you don’t remember who is where anymore

Oh-a oh

You were the first one

Oh-a oh

You shoulda been the only one

Facebook killed the orkut star
Facebook killed the orkut star

In my mind and in my car, we can't rewind we've gone too far

Oh-a-aho oh,
Oh-a-aho oh

Facebook killed the orkut star
Facebook killed the orkut star

In my mind and in my car, we can't rewind we've gone too far
Apps came and broke your heart, put the blame on the way we are

You were an orkut star
You were an orkut star

Facebook killed the orkut star
(5X)

(Original Lyrics can be found here)

The Old Judge's Conundrum

2009-02-18T13:10:00.000-08:00

The Old Judge finished reading the book and let out a sigh. He had been postponing an unsavory task for far too long. He stood up to walk to the old mahogany desk, but turned away and approached the window. He started pacing the room nervously.

The room was luxuriously furnished and filled with books. The room had a signature smell. The smell was an oddly pleasing combination of the usual smell of old books and the smell of moth balls, and the smell of wood polish and the smell of dust. There were hardly any visitors to the den, but the few who had had the privilege instantly recognized this smell to be the one people associated with the Judge. Society women had long speculated on where he procured his enchanting flavor of perfume.

The Judge of course, was oblivious. He was an odd man for any age, but he was positively an anachronism for his. Early on he had taken a policy of minimum social contact as well as banning newspapers from his house. He was steadfast about neutrality and treating the case as per its merits. Instead, he read and read and was truly one of the few polymaths in a time of specialization. He had written monographs ranging from religion to chemistry. However, in the last few years he had conceded defeat to the era of specialization and mostly stuck to the social sciences.

The Old Judge mused on his life. It was true that his name was a by word for integrity but it was also equally true he could afford these eccentricities as he had been born rich. At various times, he had seriously thought about what it was to be a judge. Did being a judge require moral purity on the judge’s part? Definitely, in religious works, the judge was a man higher than men, a man who possessed superior character and wisdom. However, in today’s world, the judge was a man appointed by a process, based on a test. Character was required no doubt, but everyone knew that the judge was no Man of God. He could be a man of character and wisdom but it was enough if he was a competent and consistent interpreter of the law.

While human beings constantly engage in activities that are questionable but not blatantly illegal, a judge could not be expected to do that. For often, the definition of Judge did carry on outside the court and the personal actions of one appointed as Judge were usually interpreted as “the right thing”.

The motivation behind this chain of reasoning would have seemed strange and intellectually fascinating to an outsider but to the Judge it was based on a pressing reality. While everyone knew the Old Judge of today, no one seemed to know of the wayward Old Judge in his young days. At that stage, he had been known to patronize localities that would cause scandal in the press. The Old Judge sometimes bitterly regretted the moral high ground he had seized. Yes, he had seized it as an ambitious man. Seizing the moral high ground placed him at an advantage in his profession. Integrity was the defining quality, not brilliance, and he had played it well. Of course, this did not mean the Judge was not smart. He was, extremely.

But he hated the moral high ground. It seemed as if he analyzed every action of his extensively and previously simple joys, gave him happiness no more. He could not, for one, frequent the delightfully decadent cabarets his city was famous for.

He was about to sentence a man to death. In his role as a neutral interpreter of law, it was a mundane matter. The evidence was overwhelming; it was an “open and shut” case. But the man had been poor and was not particularly bright. He really was not a hardened man, he was genuinely remorseful. The Judge knew the feeling. A feeling of impotence arising from situations beyond his imagination drove him to over react to an insult and he ended up committing his heinous crime. The man’s story reminded the Judge of one incident which had caused him many a sleepless night.

------------------------------------------------------------------------------------------------

The Old Judge had embarked on a long travel when he was a student. His father had furnished him comfortably with money. As was his wont, he had squandered money in some disreputable places and there was no way he could account for his spending. One night he found himself sitting outside a railway station, shivering, contemplating what to do. The Judge had a strong spirit, so, nothing drastic occurred to him. He was thinking of what jobs he could do when a drunken man slumped beside him. The man was quite intoxicated yet he continued to swig. He staggered up to vomit but ended up vomiting around. The Judge walked away disgusted by this man.

He walked around the station twice. He came back to his old spot, to find the drunken man sprawled out on the platform. He looked at him for the man did not look like a bum. His dress was old, but the pieces of clothing were well chosen. It occurred to the Judge that the man could have obtained it from a second hand auction or as a hand me down. He still had taste to wear them in that manner.

The man seemed to be unconscious. He took the cask from him and drank the whiskey. He felt like a thief but the whiskey felt delicious in the cold. But he stepped away in shame, for he still felt bad for drinking without permission. After some walking around, he again came to the place where the man lay. He saw his wallet jutting out. He looked once, turned away, shocked that the thought passed over him. Then he reached for the wallet thinking he would have a look and see who the guy was so that he could contact his dear ones. He took the wallet and immediately darted to a dark area nearby. Unable to see anything, he edged towards some light from the station.

The Judge opened his wallet to see fresh notes. Then a strange thing happened, something he had tried to analyze and justify for years. He just snatched the money, placed the wallet back and ran.

It was as simple as that. Robbery.

As the sun dawned, remorse overtook him.

Perhaps, his family in the village needed this money and they would starve.

On the other hand, maybe he himself had been a thief. For a responsible family man would not have got drunk like that.

What if it had been a one off? Would his family die?

Maybe he was a drunk and wife beater.

Whatever he was, the man would tell the police.

But there were no witnesses.

What if there had been one? He came from a respectable family. All he had to do was to wire home, maybe his parents would have suspected, but they would have still given him enough to be respectable.

He actually sobbed for a moment. Then ran back to the station to the spot the man had been. The man was gone.

This incident troubled him for years. Had he acted out of self preservation? What is right? Hurting someone is clearly wrong. He had actually been waiting for the comeuppance and when karma did not extract its price, he went into penance.

Then he sighed. Let us, for a moment, suppose that this information was to get out. Would it then void his decisions as a judge? For clearly, had he not shown poor judgment? Had he been penalized for his misdemeanor he would not have been a judge. Yet, he was going to sentence a man to death, simply because he had tricked society to give him that license.

He came to the conclusion that he always came to - laws never prevented crimes for the criminal never really thought of the punishment when he committed the crime. A society bereft of spirituality would always find a way to beat the law. However, the organizations responsible for promoting spirituality, the religious organizations, seemed to promote everything but spirituality. And herein lay the conundrum he had grappled with for his life.

We've Had Some Letters*

2009-01-26T06:27:00.000-08:00

Dear Middler,

I have been following your blog regularly, though, even I do not know why. The blogs are long and rambling. The sentences are jerky and have too many commas. In addition to that you choose to inflict upon us some "art". Despite that I follow you, because like me, you too like to start sentences with "Basically". (Psst... Are you Tam-Brahm?)

I beg to ask a question. I find it difficult to maintain a sunny disposition. I feel blue whenever I think of myself. How is that you cope with the existential dilemmas that come upon one like waves on the shore that leave only to return?

Yours,
Feeling Blue
Male, Dustbin near Independence Park

Dear FB,

I am touched by your insightful letter. Basically, the fact that you observe so much indicates either a) you are an astute observer or b) you really ought to find a job. Anyway, coming to your problem many people think alcohol is a way out of the blues. I would advise otherwise. I used to resort to alcohol once. Yes, in the good old days, when I did not know of things better, I used to swig Old Monk with Pepsi a la rickshaw-puller, as I did my homework. But, I do find a definite correlation between developing what is cutely called a "traffic police mama paunch" and the perusal of alcohol. Ergo, with much sadness I have cut down on the habit. (sigh)

In the absence of -OH beverages, what then are the options? If you can read this blog, you can access the internet. Hence I recommend Youtube videos of the kind below to "beat 'em blues".

Exhibit A

(I got this video through Raghav :))

Of course, before you cluck your tongue in disapproval, you must know that I believe, in the manner of Bertrand Rusell, that the intellect while giving man many advantages gives one singular disadvantage; it makes him anticipate sadness and when that sadness transpires he still, paradoxically, feels sad though one would expect him to feel happy for having anticipated that sadness. Hence, when negative thoughts enter, I resort to means that drain the blood from my head to judiciously allocate it to other parts of that body that may use it more fruitfully. Seeing the wholesome goodness of two babes cavorting away to a kuntry song in itsy-bitsy clothes is indeed the meaning of life. (Tears of Joy)

{joke}
It is said that Nayanthara visited her tailor and gave an order for a dress. By mistake her kerchief slipped out. When she came to collect the dress, she found that the tailor had made the dress out of the kerchief and such was his honesty he also gave some bit of the cloth that was unused.
{/joke}

Thanks for writing in. Not that I give a Rat's Arse.

____________________________________________________________________

Dear Middler,

I find that in addition to being an engineer and worshiping Pink Floyd I also love Monty Python. Will I get laid before marriage?

Yours,
Very Anxious,
Male, Computer Club

Dear VA,

No. But you, son, have known a rare pleasure that few men know of, so take that you biker dudes! Now that you are not going to get laid, why don't you spend some time on "A Bit of Fry and Laurie". In some parts, they are even better than the Pythons!

Exhibit B,C, D:

Thanks for Writing In. Not that I give a Rat's Arse.
____________________________________________________________________

If you have any such profound questions on life, relationships, academics then fire away to the following address:

Subject: Dear Middler
c/o middlergivesaratsass [at] gmail [dot] com

(read as middler-gives-a-rat's-ass)

If on the other hand, you need money from Africans or male enlargement pills just check your spam folder.
____________________________________________________________________

*This was too one of their sketches though I am not able to locate the video now

On How Being "Cool" is Just Not Cool

2009-01-22T06:06:00.000-08:00

The last three blogs of mine have been kind of heavy, preachy and long. So here is one that is light, short but still preachy.

One of my favorite pastimes is watching videos on youtube. I discovered Goodness Gracious Me, some good music and most recently, the American Talk show host Craig Ferguson. I find Craig Ferguson spontaneous, warm, great with expressions. More importantly, his brand of comedy is markedly different from the usual galaxy which includes Letterman, Leno, Colbert, Kimmel and many others.

Anyway, I happened to see an interview of Paris Hilton by Craig.

Paris looks stunning, the flowing blond hair, the red frock-ish outfit, just gorgeous. However, I really got irritated by the way she spoke. Let me clarify one thing. One has heard and read a lot about Paris. But I think she has potential. For one, I do think she can look like a heiress when she puts the effort. And I have seen videos in which she has tried different things. (Not those, you pervs!) But this interview put me off. I strongly disapprove of this "umm... yeah... I umm.. well, yeah" kind of talk. The body language is put-off-ish. The giggle comes across as artificial and disingenuous. The school girl giggle, few people like it on school girls, but on a woman it is just not nice at all.

Writing is indecent exposure and I guess what I am about to say also reveals something about me. Well, what the heck. My favorite women characters in American sitcom (in order) are Julia Louis-Dreyfus' Elaine, Patricia Heaton's Debra and Cobie Smulder's Robin Scherbatsky. So, I looked at the video of Julia Louis-Dreyfus' interview with Craig.

She is a billionaire heiress too. But she starred in such a plain Jane role in Seinfeld and her bits for Saturday Night Live are also pretty good. Most importantly, since she is not being "cool", look at the folksiness, the ease with which Craig and Julia banter along. Must be the upbringing which makes all the difference.

Book Review: Adventures of a Bystander by Peter Drucker

2009-01-19T02:49:00.000-08:00

(I finally ended up profiling Peter Drucker for the course. It is damn hard to profile someone and frankly, this is not my usual style. At some places, I admit, some sentences are contrived and affected. Also, it was a 2700 word essay which I have edited a bit. But despite all that, I think it is a pretty entertaining read and it is my first attempt at newspaper type writing. So ... here it is)

Adventures of a Bystander

Life and Times of Peter Drucker

Peter Drucker is widely considered the “Father of Modern Management” after the publication of the book the “Concept of Corporation” in which he predicted the rise of corporations as the dominant form of organization in the post World War II era. The book borne out of a study of GM also brought in vogue the “Management by Objectives” paradigm. With time he was credited with the predictions such as the decline of the command and control form of management - characteristic of the assembly line approach - and the rise of decentralization. He also predicted the rise of Japan as a modern power and a credible alternative to US. Some of his predictions which came in for criticism such as his assertion that top management pay should never be more than 20 times that of rank and file appear to bear significance in the light of recent events in the financial services world. Interestingly, Drucker predicted the decline of the R&D system in the US characterized by the creation of a number of PhDs, post-doctorates and the competitive research grant process. There is little data to support that prediction and the American R&D system continues to be the most envied in the world.

Given his phenomenal predictive power and status as a thinker ahead of his time, the objective of this essay is to glean insights from his autobiography “The Adventures of a Bystander” to explain his subsequent success in life.

The context under which Drucker grew up is vastly different from ours. He grew up at a time when formal degrees were optional. When Drucker was researching on GM in the early 1940s, he got access to biographies of everyone of the senior management easily except one. He figured they were hiding something about him and when quizzed it turned out that the person in question had possessed a PhD. Apparently everyone else had risen from the level of clerk or mechanic and it was considered de rigeur to rise to a top position without “manly” experience! Drucker’s career involved a lot of transitions which would be hard to imagine today. After finishing high school, his first big job was with the Daily Frankfurter General Anzeiger. There he rose quickly upto the post of senior editor, partly due to the fact that a whole generation had been wiped out due to the First World War. He did a part time doctorate in Law while at Franfurt. Increasingly repulsed by the rise of Nazism he decided to move to London. There he found a job with a merchant bank. This experience helped him financially but more importantly it earned him some good connections, but after some time, he decided to move to the United States. His first shot to fame came with the publication of the book “The End of Economic Man” in which he alerted the American audience to Hitler’s Final Solution.

He brought out his next book while a faculty at a place called Sarah Lawrence. In the book “The Future of Industrial Man” he recognized the increasing role of corporations. After joining the faculty at Bennington University he was looking to write an indepth analysis of a company – from the organizational structure to the operations. When he approached industry, he was rebuffed by suspicious executives. His break came when GM approached him to do a book. The book “The Concept of the Corporation” laid the foundations for management as a modern discipline. It also made him a consultant to many top businesses, launching a separate career for Drucker.

Some themes emerge from this. It is no doubt that Drucker’s growth was characterized by the written word. However, he was not a writer of fiction. The interesting thing is that Drucker’s interest lay in human affairs, how humans behaved in the structure of institutions that are imposed upon them. However, that neither fits economic theory nor does it fit political theory. So unknowingly, he ended up creating his niche – management – which did alienate him from both the fields. It is tempting to speculate on why he thought the way he did. Drucker grew up in a Europe that was still debating on how society should be organized. Young men were still pre-occupied with debates over the superior ideology – Communism, Socialism, Fabianism etc. Therefore, when Drucker came to America and looked at American society, the notion of the corporate as an alternative to these ideologies would have occurred. However, to develop into the formal system that he eventually managed, required ability.

The title of the book itself is an insight into a defining characteristic of Drucker – that of the detached observer, questioning, pondering but rarely judging. The chapters in the book are named after people who shaped his life at various stages of his development. Drucker narrates his story through their influence on him. These influential personalities range from his grandmother, to friends of his parents, to men of fame such as Henry Luce (The publishing moghul who founded Time and Fortune) and Alfred Sloan (The CEO of GM for more than 30 years)

What is surprising is that even at a young age Drucker shows an emotional sophistication far beyond his years. While describing the bizarre antics of his grandmother who was the source of many family jokes, Drucker alone is able to go beyond the mocking and perceive the underlying value system that led her to function in that way. On reflecting about it, he realizes that much of her “goofiness” was due to her stubborn insistence on following an outdated value system in a world that was in a state of flux. However, the fact that it was outdated did not mean it was wrong or funny. On the contrary he suspected a deep wisdom and grace behind that value system that people of his own generation lacked and sorely needed.

There is a pattern to the people he admires. Drucker shows a tendency to admire strong and independent personalities. His heroes are eccentric, strong willed, acerbic, rebellious but always genuine and honest to the point of hurting themselves. He speaks of Dr. Hermann Schwarzwald, a prodigious civil servant known to his family. Hermann or Hemme as he is referred to was a crippled Jew with a bitter tongue, who rose to stratospheric heights in the closeted Austrian bureaucracy. Hemme was also incredibly eccentric. Drucker tells an interesting story. Being a Jew, crossing a certain threshold in the services required a discrete conversion to Catholicism. Hemme steadfastly refused even after a letter from the Emperor. But Hemme’s genius was undeniable; hence the requirement was removed expressly for him. After he got the post he crusaded that Jews must come to the post only after ridding themselves of the Jewish spirit! (Hemme considered himself a Confucian!) Drucker accepts these seeming contradictions but again manages to go deeper into a person’s psychology. He argues that Hemme’s behavior was entirely consistent. He rejected the Emporer’s request because it just discriminatory. On the other hand, Hemme himself disapproved of some cherished Jewish values! This aspect is crucial to understanding his success as a management thinker. Ultimately, beyond all the fancy analytical tools developed today, business is about human beings – aspirations, needs, emotions. Going beyond the superficial and understanding the unstated and contradictory human yearnings is key to understanding management and this is precisely what Drucker took out of his experiences.

As mentioned earlier, he looks for models from various spheres of life and is open to learn from anyone who fits this mode. One of Drucker’s earliest jobs was at a merchant bank in London. There he met Ernest Freedberg, an old fashioned private banker who enjoyed nothing more than a good deal, yet maintained the highest ethical and professional standards. There was an incident when Drucker had to check a claim of 80,000 pounds (in 1920s) against his firm. He found that his firm was indeed on the wrong and wrangled a deal for paying damages upto 50,000 pounds. On getting back, Freedberg quizzed him on his actual estimation of the liabilities. When Drucker admitted that the firm was indeed morally responsible for the 80,000 pounds, Freedberg phoned the firm, apologized for the mistake and offered to pay the full sum as damages.

Freedberg also brought Drucker in contact with some remarkable personalities. Drucker speaks of Uncle Henry, owner of a retail chain in the United States, whose lessons on human behavior and business ethics profoundly shaped Drucker’s sensibilities. There is a story of how retail chain owners across the region found that store clerks were pilfering merchandise. While other store owners brough security agencies, Uncle Henry figured there was something wrong with the compensation system and changed that to deal with the problem. Such thinking is of course common place in management today and one can speculate that Drucker learnt these lessons from such personalities. However, Uncle Henry never went to a school all his life. There is also a Dutchman called Willem Parboom whose abilities to spot deals and implement them was genius. Drucker speaks of how Parboom approached the Austrian minister when a crucial industry was going down and offered to restructure the ailing industry, which he did with great aplomb! Parboom too never had any formal education, but he possessed a quick mind and enormous drive.

It is no doubt that exposure to such strong personalities at a formative age shaped Drucker’s character extensively. What is amazing is his extraordinary access to such people. Is that an accident? On the hand, Drucker appears to have unfailingly impressed every employer he worked for. On a number of occasions he was chosen as an envoy or a representative by his ex-employers. Even factoring for modesty, Drucker does not come across as an academic prodigy. Definitely his family’s standing did provide the introduction, but Drucker appears to have built upon it with great success. It is hard to ascertain what exactly that quality was that helped Drucker to gain his employer’s confidence.

One theme that comes up repeatedly in the book is that of learning relevant lessons from history. In this respect Drucker is uniquely gifted in that he possesses a wide reading. His understanding of history and context is genius. For example, even as a young man barely twenty, Drucker gets into an argument with a law student over what can be called the “Great Man Theory”. The law student (who was later to become Henry Kissinger’s mentor) contends that foreign policy is supreme and hence requires a great man at the helm. Drucker counters with the following remark by Benjamin Disraeli. Disraeli commenting on Bismarck’s diplomatic triumph in the Congress of Berlin says that*:

“Poor Germany; Bismarck is old and cannot last long. And then they will try to fill the giant’s shoes with a lieutenant of Marines who will either be timid and not dare do anything or [he would be] so besotted as to believe he can play Bismarck. Either way Germany will be lost”.

From this, he points out that every great foreign minister be it Bismarck, Richelieu (France) or Metternich (Austro-Hungary), though celebrated in their times, sowed the seeds of the decline of their countries simply because their successors could not match up to their brilliance.

I am of the following opinion. Some skills of life can be taught. Arithmetic, writing, bookkeeping can be mastered by diligence, hard work and a set of good learning tools. Some other things like conflict resolution, attitude towards failure and success, attitude towards money arise from the surroundings viz. parents, relatives and peers. Based on this one can feebly speculate on the source of his intuition.

Peter Drucker was born into the lap of education and intellect. Born to a family of civil servants in Vienna, Drucker was surrounded by personalities of immense gifts. His father was a senior civil servant in first the Austro Hungary empire, then in the Austrian Republic. His mother was one of the earliest women graduates in Vienna, passing the exam for the university at a time few women attended university. Drucker narrates of an incident when his mother was the only woman sitting in on Freud’s lectures which consisted of many references that may embarrass a woman. It was undoubtedly an elite progressive environment that he grew up in.

Drucker also grew up in a Vienna where Freud and Jung were discussed on dinner tables. In these conversations, the scientific method was dissected to bits. This was also a time of extreme ferment in the world of Physics. Drucker speaks of a conversation in his house between Oskar Morgenstern and a professor of psychology by name Karl Buehler. Oskar Morgenstern later was to lay the foundations of game theory in a seminal work with Von Neumann. It was this upbringing that gave him the depth to formalize a very fuzzy field such as management.

From such a background, one would expect superior academic and intellectual qualities. It is hence not surprising to see Drucker’s predisposition to intellectual pursuits. Also his brother became a doctor. However, it is interesting that Drucker chose this path and his brother chose the professional path. This gives rise to the age old debate between nurture and nature. While it is of no doubt that being in an intellectually stimulating environment ensured intellectual interests, it does not explain why some people choose to employ their gifts in one field and some in others.

In the preceding paragraphs we saw some aspects of Drucker’s personal development that could have contributed to his success. However, the real question of interest is: If we speculate some reasons could be the secret of his success, will mimicking them ensure success? Can every child growing up in an elite progressive intellectual environment become a Drucker? One can say that children growing up in such an environment are likely to do better simply because we would expect that such an upbringing emphasizes professional discipline. But what about the other Druckers all of whom were in the academic world but yet did not reach this fame? Peter Drucker undoubtedly possesses an intuition that is superior. How does one develop wisdom and intuition? Is it then a by- product of your environment?

In my opinion, the fundamental values that helped Drucker were curiosity and ability to deal with multiple viewpoints. He speaks of personalities very different from himself. Yet, Drucker was able to not only tolerate the difference; he was able to look at the good points. These are lessons every manager must learn. Interestingly, a mind interested in many things can also be accused as one lacking focus, and it is one that he admits in the book. Also, Drucker seems more interested in the moral than the details of the story, and his characters are too perfect and heroic. At times Drucker has been criticized on his interpretation of data. However, what remains is that his unrelenting questioning, polished by a sophisticated upbringing made him uniquely suited for a role such as an advisor or consultant.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

*Pg 154, Adventures of a Bystander, Allied Publishers Pvt Limited, First Indian Reprint 1980

Indian Plays in English

2009-01-17T09:59:00.000-08:00

(Some parts of the blog may come across as arrogant. At places I could have "softened " the sentence by writing "In my opinion" and "In my view". But I think that it is redundant given that all the content here is "my opinion" or "my view". Bewarned that this is a purely subjective blog without any objective references.)

We are required to review an autobiography/biography of a successful person, as part of a course. Even before the assignment was announced I had been reading Somerset Maugham's "Summing Up". It is a viciously witty account by a remarkable writer. As I have also mentioned many times before, Muagham is my most favourite writer and I loved the book both for the content and the style of his writing. In the book, he lays down three characteristics of good writing viz. simplicity, lucidity and euphony.

Simplicity refers to the simplicity of both the vocabulary and sentence construction. And this is really a tricky thing for someone who aspires to be half decent. Simplicity changes with time and medium. I love Maugham's style and language. But I doubt if could be used at this age. One must remember that Shakespeare's language was often considered "racy" and unconventional for his times. Also, he invented words to suit the dialogue delivery. Similarly, Maugham's writing too was criticised for using colloquial phrases. Trying to be a show off only distances the author from the reader. On the other hand, people nowadays may "lk to rt lk ths". Should one then shamelessly pander to the audience? What about the artist as one who leads the way? Ah damn, we get into one of those chicken and egg questions which one can debate endlessly and arrive at an MBA answer like "It is a trade-off between X and Y". My opinion is, just do whatever works for you, after you are reasonably confident in your technique. Here is a nice story.

Drucker speaks of a great piano teacher he knew of when he was growing up in Vienna. Drucker visits him as the teacher is giving piano lessons to a gifted pupil. After she finishes rendering a piece looking at the notes, he asks her to play it again, this time playing it the way she heard it. This may seem funny. How are the two different?

Imagine you had to make something, say a chair. Of course, imagine that you are perfectly competent in making a chair and have all the tools. You are given a manual which is extremely well written. On the other hand, imagine, you saw a chair in someone's house and had to come home and reconstruct it. Would the outputs not be different? More importantly, won't the chair in the second case be more representative of you, have more of your style? Of course, the concern of your style in chair making comes into question only if you know to use the tools in the first place. Someone like me who got a C in workshop cannot be expected to reconstruct from memory when I could not even meet the basic requirements. I don't like Chetan Bhagat's "writing". It would be tiring to parody it. But the language is simple and the treatment is straightforward. If the book is called "One Night at a Call Centre" you know that the book is about a call centre. On the other hand, I have no fucking clue what the few pages of "The Moor's Last Sigh", that I read, were leading to.

The next virtue is lucidity. Lucidity is the ability to put forward an idea in the simplest terms, but without compromising the idea in any way. If it takes two paragraphs to express the idea, take two paragraphs. Don't take three, don't take one. But, you may ask, maybe it is possible to express an idea in two paragraphs if you used high falutin words, maybe it takes three if you use simpler word. That is left to the discretion of the author. If your intended audience is mass audience, then yes take three. (It is not to disparage the masses, well, ok, maybe a bit disparaging)

The one I am most interested in is euphony which refers to the phonetic quality of the words. Of course, most of us never realize that consciously. Somerset Maugham made his name by writing plays. He writes that actors sometimes asked for an extra word here or a word less there, so that the "flow" can be maintained. When we read a book, we too, in a sense, read it aloud in our minds and the phonetic quality of sentences are of great importance.

There is an ulterior motive for me to write this. In the 4th term, I had taken a course which consisted of lectures from artists. One of the components required us to stage a play on the artist's life as per our interpretation, a week prior to the artist's lecture. (Of course, I was not a great fan of this idea, given that this would cut into my "peace time", but I must say our team did put up an excellent show) After that we had a discussion on the play. (I know, oh-so-arty :P)

Usually, I try to maintain a low profile. But since I entered the class late, I was forced into the first 2 rows. And this is the problem. When I am in the last benches, I remain gloriously indifferent. Thrust me into the first few rows and at times I get the itch to put CP. (Class Participation) The discussion came to something about Indian plays in English and I started to say something. Unfortunately, the itch to put CP was magnified by the presence of this very nice looking lady. Normally, I do not like women cutting their hair short. If it is short by nature, good. If it is long, even better. But I found the lady quite attractive. Of course, it could be purely an attraction of opposites thing you know - someone in the arts as opposed to engineering. Being surrounded by geeky engineering women who kick your ass in courses (even the quanti ones) takes its toll. (It has been 6 years people, show some pity!)

Anyway... I started to say put CP and I kind of botched up the point. The problem was... what I wanted to say was, "Somehow I find English plays in India... peteru". I did not know how to say peter-u politely. There is no equivalent for that. You cannot say "I find English plays in India condescending and distant". These words are too harsh and not really accurate. Peteru is a more harmless word, it is a lightly sarcastic term for people who may be trying too hard to be "in". And that statement is more closer to the truth.

Therefore, when an audience sees a play in which all the characters are Indian, the setting is Indian and everyone speaks in English, that premise itself creates a distance. This is entirely different from an Indian actor playing a Hamlet role. The audience would find the latter very acceptable but not the former.

What is the problem? I contend that the fundamental differences lie in the way Indian languages are pronounced and the inflections in our voice while pronounciation. We are an effusive people, prone to demonstrations of emotions. The English are a people known to pride themselves for understatement and restraint in emotions. There is bound to be some disconnect when you use their language to express our emotions.

To demonstrate the difference between peoples, consider the difference in the sense of humour between the two peoples.

Compared to the west, our sarcasm can be really caustic. (Goundamani-Senthil jokes would be brutal if translated to English. It would be a good day for Senthil if he got away with "You black pig head"/ Karuppu panni thalaiya) The metaphors we use in our double meanings (not double entendres :P) are also more interesting (Refer Petromax) and varied and at times too far fetched. Third, there is quite a bit of self deprecation. Fourth, compared to English comedies there is a lot more slapstick humour. But most importantly, the inflection.

Exhibit A:

In one of S Ve Shekhar's play, there is the following situation:

In Tamil:

Patient: Doctor Doctor, kaala aani irukku

Doctor: Adhuku inga yen ya vara... nalla calendar-a eduthu maatiko

In English:

Patient: Doctor, I think I have a nail in my foot

Doctor: Nail? Why do you come here? Go hang a calendar.

Exhibit B

In Tamil:

Random Person: Annaen, enakku chappal vaanganum.

SVS: Poyi vaangiko

RP: Aana kadaiyile poana size-a kekaraangaley

SVS: Naan onnoda kaal size trace panni tharaaen. Poyi kaatu. Nalla velai underwear-ku en kitta varaliyey

In English:

RP: I need new chappals. (The lack of the Annaen Annaen itself reduces the comedy)

SVS: Why are you asking me? Go buy in a shop.

RP: I don't know my size.

SVS: Okay, I will make a drawing of your foot so that the shopkeeper can give you the correct size. (Aside) Thank God he does not need new underwear.

For those who understand Tamil, you can really see the jokes falling flat. For those who cannot, I think you get my point.

Why is that? Part of the comedy is in the way the patient conveys the urgency. He says "Doctor doctor" in a manner that acts as a cue for comedy. Note the repetition of the doctor. No english author ever repeats something like that. That is the point of sound of inflection coming in.

To take another example. There is a famous Vivek line "Epdi irundha naan, ipdi aayitaen". Half of the joke is in the way he delivers it, that look in his eyes when he says that. If you were to say that as "How my situation has changed"/"How the tables have turned", you see it lacks that punch. On the other hand if you say "How I was, How I have become", maybe it comes near the sense of the situation. It is a bit "I walk english, I talk english" level, but it carries that punch.

So the point is... I think plays written in English staged in an Indian context for Indian audiences should get more natural. They currently come across as peteru max. It appears that I have nicely identified the problem but have not offered a solution. Well, the moral is, authors who aspire to write more contemporarily need to look at succesful work in their local tongues and apply lessons from that in their English writing. To apply it to my own "writing", I faced a difficulty when I wrote the story "Romances of the Past". Somehow I could not invent characters by the name Ram and Lakshmi as the lead characters of that story. Somehow it does not gel. On the other hand for the story, "Big Man, Mad Dog and Velachery Vimala", I think the lines sounded consistent with the premise even though the whole story is written in English.

On Managerial Challenges

2009-01-07T16:21:00.000-08:00

The recent events at Satyam have been quite shocking, starting from the Maytas announcement to today's startling confession. The letter itself is a must read. It has been well crafted and one almost feels sympathy for Ramalingam Raju. I suppose the ensuing events will be avidly watched. However, the events set me on another line of thinking. The musings below are related to the incident but are in no way my views on Satyam as a company.

I use the word "He" for the manager. I understand it is completely inappropriate given the times, but I am used to writing like that, so Mea Culpa.

I have an agenda for writing this. Up till now, being a student, it was easy to blame the world, pour scorn on authority, blame it on the old people. Now, that I am about to pass out (and possibly never return to student life) I experience the occasional bout of nostalgia. As a graduate of two premier institutions, I suppose I have been trained for those very authority positions that I once happily poured scorn on. Those fancy degrees carry some responsibility, no two ways about that. Being a student is in a way... seductive. Crib without responsibilities, sleep whenever you want, eat whatever you like, dress however you like. Is it worth leaving all this! Should not be tough to kill time as a grad student somewhere else, I suppose. Then I remember exams and CGPA and the cloud clears. Let me at 'em :P

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The Problem of Yes-Men

There is the recurring phenomenon of perfectly good top managements bungling up in a large scale that smacks of stupidity. This is obviously perplexing. The worrying thing is if it can happen to people who thought themselves to be smart, could it also happen to us? (:)) Often people rationalize that by saying that it happened to that company maybe because their performance appraisal mechanisms were not good to begin with. Possibly the HR systems were flawed. But it won't happen to us. Possible. That is the first point of check.

However, I would contend that even companies that had perfectly good HR processes are prone to fall into this trap, despite the best intentions. Note the Italics. I am not saying that all companies are doomed. I am just saying that the effects of management are felt in a very subtle and nuanced manner and it is easy to see the effect but very tough to trace the causes.

Note that I am talking about senior executives - upper management and the top layer of middle management maybe. (NOT about freshers :)) As people start moving up the corporate ladder, I argue that it is very easy for them to get stuck in clubs, cloistered circles, groups. Remember that though senior executives have lots of people indirectly reporting to them, ("under them") they repeatedly talk only to a few executives for critical decision making inputs.

Given two equally good subordinates, senior executives will be more likely to pick those with whom they have a good working relationship. And this is where the problem and subjectivity comes. Why does the senior manager pick the subordinate with whom he has a better relationship? Is he irrational/evil/dishonest? Not necessarily. Given that both candidates have similar calibre, working with someone with whom you have a good chemistry can really zoom productivity. It is extremely expedient. For example, in IIM, after a point, group formation falls into a steady state and when teams have to form in 2nd year, usually there is a core group of 3/4 that always sticks together. Even if the output is not mindblowing atleast you would have had fun working this group, so you stick to it. It is a perfectly sensible thing to do.

Of course, the basis of the excellent working chemistry can be random. It could be linguistic similarity (that old complaint in every IIT fest coord selection ;)), similarity in outlook, similarity in movie tastes, anything! Of course, it could also just be sucking up and the manager could be dumb not to see that, but remember we are talking of "good managers".

Hence, these perfectly rational managers have a predisposition to taking people with similar viewpoints. I argue that this phenomenon to make things more efficient also leads to biased information flow. How does that happen?

To understand this, one must always bear in mind this axiom: "Human Beings Respond To Incentives"!

A lot of situations in life are inherently ambiguous, maddeningly ambiguous. When you look at the data in one way, you can say one thing. When you look at it in another way, you can say the completely opposite thing! I am sure people who have worked in any sort of data crunching exercise would testify to this. But say, you had to take a stand. How would you respond?

In the real world, often the subordinate has an estimation of the boss. (Even the geekiest of them) Given that you are faced with the unenviable task of coming up with a recommendation in an ambiguous situation and have to recommend something. You have twisted and turned data every which way, but it refuses to throw insights. Deadline is nearing. What do you do, sport?

You have two options. Most probably, you know your boss' bias. Most probably, you have an estimation of what his decision would be like. If you give a recommendation that drastically differs from his view and he takes it and it goes kaput, then the penalty is likely to be high. If it goes well, then the reward is also likely to be high.

On the other hand, if you concur with him, if it goes wrong, he is not likely to blame you too much. (Because he was thinking that anyway) And if it goes right, he is likely to be happy for seconding his "intuition".

If you are a risk averse rational individual what do you do?

Most probably you would recommend what you think that your boss was thinking, but you may add a rider here or there for the contrary view. (:D)

What?! Aren't you being dishonest? Shouldn't you fight for your cause, you worm! But the beauty is, the situation is so ambiguous even you do not know what cause you are fighting. It is better to do the safe thing. Once this becomes a habit, your boss' world view starts becoming your own because that is the "tie-breaker" you use to resolve data ambiguities. Soon, an information filter steps in.

(Stupid example, but one that illustrates the point. Imagine, you were at a Roulette table and your boss forced you to pick a number for him. You know that he is predisposed to 10 say. The sensible thing would be to just say that. Similarly, lots of decisions in life can be akin to taking the blind guess, even after all the analysis.)

Remember, all these people were perfectly sincere, perfectly rational people. What is the solution? I don't know. Maybe there is some HBR article which looks into it in detail. My solution to everything is just to be aware that this could be a problem and factor that into practice. That is all. There are no magic solutions. When you see some things are consistently not adding up, just break out of your routine for the heck of it. Talk to people who may have previously annoyed you, just for the heck of it.

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Why is integrity so tough?

When I was in school, I used to get bewildered when certain personalities were praised as men of impeccable honesty, integrity and character. I used to wonder what was so great in that. After all, they were just honest. As a kid, being honest is not really a big thing. And even dishonesty is mostly mischief. (Note that I have used the words "mostly mischief". Kids can be more sophisticated in their emotions than adults give them credit for) So I never understood what was the big deal in being honest. Now, of course, we understand that honesty is the basis of the social contract that society must revolve on.

But that is the problem! It is naive to think that crime does not pay. The truth is... it does, it must, otherwise why will so many intelligent people do these things. (Madoff was NASDAQ chairman!) The truth is there are lots of dishonest people who are doing quite well. Every reader can name a few. This raises a few questions.

Are all these dishonest people the product of some genetic orientation?
Laughable. But there are lots of well educated people who harbour these views and let them out only when drunk or in amenable company.

Are kids born in a certain type of environment prone to more dishonesty than others?
Possible, very possible. HOWEVER, the determinant of that environment is not wealth. There could be suitable logical arguments to state that people from a poorer environment are prone to be more dishonest. I would qualify that and state that "Perhaps people from a poorer environment may have compelling reasons to be more dishonest than the average, but the maginitude of the dishonesty is rarely large." Perhaps the dishonesty is to get a few 100 rupees but it is rarely more harmful than that. Then what could that factor be? I don't know.

The seeds of one man's dishonesty are almost always sowed by the succesful act of dishonesty of another man. And in the case of corporates, one act of dishonesty by a competitor is enough to justify it amongst managers and make some other dishonest act acceptable. In this case, all the other IT companies appear to have carried themselves well, so this idea may not hold. From the point of view of incentives however, this would be a logical proposition.

Extending this idea, one may well speculate that the idea to fudge the balance sheet would not have occurred to the promoter on his own. The person who would have advised Raju may have told him that he has done this kind of thing earlier. Or there may be stories of other companies which must have done this and gotten away. That could have tempted Ramalingam Raju. Of course, I may just be wrong, in which case he was just foolhardy.

But the point that I am trying to make is that despite all the Panchatantra tales and Bibles, there is something that draws humans to commit crimes, every time thinking that they can beat the odds. What gives them that feeling? That feeling will repeatedly arise only if there are odds to begin with. That is, if people were sure to be punished then they would not play the odds. However, due to physical limitations every crime cannot possibly be punished with utmost fairness. Hence when there is atleast one instance when a breach of law is not punished immediately, some individuals are emboldened to play the odds.

Of course, I am not advocating crime. The humiliation that is caused to people around you is just not worth it. I am merely speculating on the processes that lead to these behaviours.

I think this much is obvious. Most people would immediately walk out from a company that was indulging in dishonest things. But that is the beauty. No company will ask you to do something that is blatantly illegal. Similar to the data problem, the ethical dilemma may arise because looking at the problem from one way, it will be right and looking at it from another way it will be wrong. HOWEVER, unlike the data problem, if there is an ethical confusion, invariably there is something fishy about it. There is rarely an ethical ambiguity.

But let us address a common justification. Say the macro environment is itself corruption ridden and organizations justify unethical acts on the basis of that. While no one may do illegal things, people may even take pride in going the extra step to "help the company in operational matters". Imagine the dilemma of a high integrity individual who quits whenever he encounters unethical practices. Quitting the first two jobs on grounds of integrity may be okay. But after that it does not look good on the resume. By the third or fourth job the individual is left with no option to turn a blind eye. How does one resolve it?

Ideally, it is good to work for a ruthlessly scrupulous organization. By that argument, it may appear that there may be a handful of companies that we believe to be scrupulously honest. Then are the rest of the high integrity individuals left with no option but to become teachers and rant and rave against the immoral world from the safe confines of academia? Of course, one can also become an entrepreneur and create a high ethics institution.

I must admit I have no real solutions. I must resort to a traditional recommendation that there is no such thing as moral ambiguity. If confronted with such situations and if one cannot walk away from the company, the nest best course of action would be to design a creative and ethical work around. If that also does not work, I suppose the best thing would be to distance oneself from it. Of course, there will be professional consequences, but over time (hopefully) one will make back these losses in form of a premium for a name that inspires trust.

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A Note on the TATA NEN Hottest Startup Contest

2008-12-29T20:23:00.001-08:00

I stumbled upon the TATA NEN Hottest Startup contest yesterday. The site can be accessed at http://hotteststartups.in. The site features a slide show on the 30 finalists, 5 of whom get declared as the hottest startups in India. I spent some time going through the websites of the finalists and I found the array of ideas and business models extremely stimulating.

A word here. It is one thing having an idea, it is another making it work. "Making it work" involves pricing it right, selling it in packages the customer wants, having flexibility to adjust to demand, managing operations, managing short term and long funding etc. Essentially, the same idea can be operationalised in different ways. One way to break down the operational aspects of a company are in terms of the 4Ps. (Product, Price, Promotion, Place) One can take an idea as old as the hills and play around with this mix and come up with an entirely new offering. Therefore, you could have a lorry business, but maybe if you came up with an innovative pricing scheme, and if pricing was very important to clients in this business (which is the case), then just that innovation could make your company different. You can take this one step further and become a company that comes up with pricing solutions for the lorry industry. (Of course, the demand would have to be large enough and all that) This is on the marketing side. On the finance side, for a startup, if your idea does not generate cash quickly, the pressure is that much more. Getting all these elements right ensures success. Frankly, it is not as complex as it sounds. One must always remember this. The MBA program is 100 years old, Corporate Finance in the modern form is 50-60 years old. Business on the other hand is thousands of years old. Hence, all these fancy terms constitute a checklist of stuff that the entrepreneur needs to be wary about. A more organized form of this "checklist" is the business plan.

Enough talk. Let us get into some ideas that I thought were worth sharing. (Please note that the list is very very subjective. These views are shaped purely by the personal experiences of one individual and in no way a reflection on the other startups)

There is a startup called Wyn Brands whose business model is based on managing the supply chain for fresh vegetables for customers like McDonald's, Domino's, Pizza Hut etc. Till now, I assumed that this would be an in-house function. Apparently, these firms outsource vegetable procurement (maybe even cutting of vegetables) to vendors! Who knew! But once you are aware that this opportunity exists, it makes perfect sense. If I ran a big restaurant and my vegetable demands are well understood (which is usually the case), why not leave the headache to someone else and just focus on quality check. I like this because the idea is simple and the value is clear. The problem is that it is easily replicable and risk of margin pressures in the future (due to competition). But that is ok. I am sure something can be figured out in time. What matters is that someone has got this to work. The company started in 2003 has a turnover in the range of 1-5 crores. Again, it would be interesting to see the net profit margin, but I still quite like the idea.

Another interesting startup is FieldTurf Tarkett. This company offers artificial grass for landscaping, indoor sports flooring, synthetic tracks etc. I would have expected that designers/architects would have normally been responsible to find a subcontractor for this kind of thing. In the case of sports flooring, I suspect that one would have had to contact foreign vendors. Currently, there is a lot of interest in non-cricket sports in India and I think these guys have come in at the right time. Of course, there is always the question of pricing and profits. But the reason I am highlighting this idea is that just by looking around us and asking how did this get here, we could get thousands of ideas. All of us walk into beautifully designed offices day in and day out. Some of us admire them, but we just assume that the builder would have taken care of it. But even the builder would have to contact so many vendors to achieve that goal. Just breaking down those elements and researching about them could be a starting point to ideate for the budding entrepreneur. For example, maybe, specialized energy management solutions for buildings are a big business segment. Observe and ask!

One totally whacky idea on first encounter, but kind of obvious on reflection is Sacred Moments. The company offers designer pooja kits! Outwardly, all of us like to pretend we are oh-so-rational, but face it, all human beings need something to hold on to. One would expect that this business is not only recession proof but one that thrives in recessions! I am sure these Bhakti Packs are sold for a few hundred rupees, but I doubt if it would cost much to put one of these things together. The biggest costs should be packaging and transportation costs. I would expect it to be a high margin business. Since I am currently not a pooja doing type, I don't see the value of this product for me. It would be interesting to see how this evolves. But I still like the entrepreneurial thinking! :) This is to highlight that you don't need to have high funda to the max ideas to become a "succesful" entrepreneur. If your objective is to earn a steady and comfortable income by working a few hours, then such "low funda" ideas could give you more bang for the buck.

In the Indian business environment, legal services and logistics are two huge huge gaps. Remember both of these are essential for the smooth functioning of companies in the macro operating environment. In the field of legal services, the startup featured here is TakeOverCode.com. Imagine, there is a fresh faced kid right out of school who wants to start something. The biggest stumbling block or the "fear factor", in my opinion, is the labyrinthine legal system that one may have to confront. I guess most people would go to their family lawyers. What if you never had a family lawyer? Then you would go by referral. Normally, lawyers do not advertise. (Someone told me that they are not allowed to advertise) This kind of a site, while clearly not advertising, serves just as that. By presenting some oft needed resources on the net, the company must be able to strike up quite a few clients.

Coming to logistics, we have Chennai based Ennovasys. Ennovasys' company profile says that "..[It] is a software company providing real-time asset visibility across supply chain." This is a really cool idea. Imagine you were a trucking company owner and could monitor your assets on real time basis. For the right price, I would buy it.

A related idea is Rasilant Technologies which offers tracking services based on RFID. However, their product offering is quite interesting. They offer inventory management systems, smart card solutions for campuses and clubs as well as secure access systems. There is nothing new about the business model but the reason I have featured it is because they have claimed in their profile that "Rasilant tackles Security concerns and improves organization processes through RFID automation and has a turnover of INR 1 Billion in three years." If this number is true, damn, who knew!

This post has gone for too long. The full list of finalists can be found here. In the IT services sector I liked DeskAway. I did not understand the exact value proposition of some of the other ones, but some of them have really high turnovers.

I will conclude shortly. There are two business models that I found to be very innovative but not sure about the take off for these ideas. One is librarywala.com. This startup uses the internet to revive that beautiful tradition of lending libraries. You choose a Price plan and the books get delivered to you! They claim that there are no late charges! Even with all that, I don't see myself signing up for such a service. But again, I would be very interested to observe this startup.

The other one is Mumbai based Ecomove solutions. While the argument that increasing pollution would see people switching to alternative modes like bicycles is well taken, unless the government makes special facilities for cyclists I don't see the idea taking off. Again, I could be wrong. It is not for nothing that these startups made it to the top 30 from over 500 nominess.

There are many more exciting startups here. Happy ideating!

Book Reco

2008-12-27T03:52:00.000-08:00

I guess this is not the time when people would be going behind books on Derivatives, but I recently came across a nice book. It is called "Option Volatility and Pricing: Advanced Trading Strategies and Techniques" by Sheldon Natenberg. The Amazon Link can be found here.

The most popular book used on Indian campuses is "Options, Futures and Other Derivatives" by John C Hull. It is cheaper and much easier to obtain. It is my personal opinion, but I found Hull verbose and difficult to read.

The basic difference is, Hull gets into the mathematics, whereas Sheldon Natenberg is more of a "How Things Work" kind of book. Sheldon Natenberg was an Options trader while John Hull comes from an academic background. Both books are excellent in their own ways but the difference lies in the language and the mode of presentation.

Hence, if you are looking for a starter book that is mathematically less intimiditating or if you have read Hull and found it a bit above your head, I would strongly recommend Sheldon Natenberg.

Another book that has been strongly recommended to me (from the point of view of practise) is "Dynamic Hedging: Managing Vanilla and Exotic Options" by Nicholas Nassim Taleb.

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'Tis the time for alternate views

Given the current turmoil, one chances upon more articles questioning the integrity of the markets. In my view, the question is not so much as to whether markets work, but more of whether we must accept the boom and bust behaviour that has been characteristic of markets. While all of us enjoyed the highs of the boom, the current "bust" (which would be an understatement) has left most people questioning whether that was all worth it. (In fact, whether it was all there to begin with in the first place)

One such work which questions market fundamentalism is "The Alchemy of Finance" by George Soros. He delves a bit into philosophy, raising fundamental questions of how the human mind learns and understands. He uses that to build his "Theory of Reflexivity" making some important observations in the process. Frankly, I have found the book very difficult to read. I have been truly laboring through the pages. In fact, if it was not written by Soros, I would have discarded after one sitting. This blog is purely meant to highlight the existence of the theory. I shall not attempt to explain the theory as I am not sure I even understand it.

It may also be noted that the Theory of Reflexivity has not been taken very seriously in Academia. But, there are some intuitively appealing points for the practitioner. Again, if you have never been truly convinced or impressed by the Efficient Markets Hypothesis, this could be an alternative viewpoint to consider.

A Musical Treat

2008-12-20T01:42:00.000-08:00

A gifted singer. One of the most sensual yet powerful voices that I have ever heard.

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Where is the party?

I was waiting to get on the train to Turku to catch a boat to Stockholm. I had half an hour to kill, so was just wandering about when I came across this.

Ladies and Gentlemen, presenting the Chemical Toilets. The way it works is, when people want to organize an outdoor party to enjoy the sunny day, they setup stalls for food and stuff. They also call in the chemical toilets people who install this so that you can enjoy the outdoor party without doing chee-chee on the environment around you.

Of course, after some time these chemical toilets get kind of unbearable. However, I think there is some potential for this in India. The next generation Sulabh anyone?

Anyway, upon seeing this, I guessed that a fair or party of some sort must be going on nearby. I came across what could have been an impromptu performance by the Finnish Royal Orchestra. It was superlative and it piqued my interest in Western music. Any suggestions on pieces I must listen to? Also, does anyone happen to know anything about this gifted singer?

(Note 1 to self: Too much pondy and toilet talk. Must clean up act henceforth)

(Note 2 to self: Must sing paeans about the Exchange (Erasmus) program at Helsinki School of Economics (HSE). Anyway, if you are looking to go on an exchange program, I strongly recommend the Helsinki School of Economics as a place where there is a good balance of fun and academics. More later!)

Romances of the Past

2008-12-09T01:08:00.001-08:00

It was half past three in the afternoon. Rita stood at the small balcony in her friend's house overlooking the Juares metro station. She savoured the warm Parisian day. The sound of happy chatter from the cafe below made her feel elated to be back in Paris. She had just returned from a trip that she would rather not think about and on returning to Paris, she headed straight to Crazy Betty's apartment. Betty had promised her that some boys would be visiting in the afternoon and they could start off the party in the evening itself.

Rita heard the bell ring. She opened it to find four boys, all full of excitement due to their first visit to Paris, happily chatting away, living in the moment. Betty, Rita and the four boys sat down to tea in the cramped apartment. Soon, the apartment was filled with the sound of happy chatter.

Rita noticed that one of them did not speak nor did he even appear to be interested. He was mostly peering out through the window, and sometimes took out a black comb to style his hair.

"Vain sonofabitch", she thought to herself.

After half an hour, the chatter died to a comfortable silence. Betty started speaking about the plans for the day.

"Can I smoke in the apartment?", the guy who had not spoken so far interrupted.

"No honey, please step on to the balcony", Betty replied.

"When did you become such a prick?", he said, with a shy smile.

"Oh no... I don't have a problem. As you can see this is a small place and my landlady - that self righteous boring nosy teetotalling old fart - is visiting tomorrow", Betty sighed.

"You do love her don't you. Well, if she is visiting tomorrow, we cannot have the party here tonight, can we?"

"That is what I have been saying Dan. Don't you ever listen?"

He was already on the balcony before she could finish.

After some more talking, everyone got up to leave. This was going to be a legendary night, they exclaimed.

"Come on Dan, Rita", Betty shouted from the door.

Just as Rita stepped towards the door, Dan grabbed her by the hand, pointed to her watch and showed five on his hand.

"Hey Betty, I have something to catch up with. Will be with you in some time, you guys carry on", Rita shouted.

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Dan stood up from the bed. Rita looked at the clock which showed half past five.

"You leaving already", she asked

"Maybe"

"Well... Betty is not going to be back any time soon, if that..."

"Are you begging me to stay"

"Not begging you mister", Rita said making a face. She reached out for a cigarette and lit it.

"You know, I have wondered if there is a Freudian interpretation to women smoking"

"Well if you are suggesting anything, it is not happening", she giggled

Dan smiled and took out a writing pad and pencil. He positioned himself on the opposite side of the bed from where he could get a view of Rita lying on the bed.

"Have you forgotten about Betty's landlady?", he asked

"Who cares. What are you doing?"

"Nothing. Just stay still"

Rita shifted her weight on to her side and placed her hand in a position to obscure her bosom.

"You got to tell me if you wanted to sketch me in the nude, you know. I have to be mentally prepared. I wish for my derriere to be given prominence"

"You shall henceforth be my muse", Dan said with finality.

Rita blew a cloud of smoke. She expected him to continue. After another puff, she said, "Oooh... am I supposed to be honoured? Where will this go?"

"Nowhere"

"So, these are the trophies for your conquests. Your trunk of love?" (wink)

"It is interesting", he interrupted as if he did not notice. "Have you noticed that the nude is actually less erotic than concealement. I have a clothing theory to evolution. The Modern Man has to go to great lengths to get women out of their clothes. He can succeed only if he has money, valour, power, personality or any combination of the above. This forced modern man to invent machines, organize labour, get into politics. On the other hand, cave man could see all the breasts he wanted. Bereft of mystery and the lack of a chase in life, the cave man just met his basic needs.

If you see the pace of progress, it took the cave man thousands of years to move from the stone age to the iron age to the bronze age. Whereas look at the rate of progress achieved by modern man. All because the latter was forbidden to see the woman in nude without any effort"

"Horse crap. Geez, I thought you were one of those strong silent types. After some time in the bed you turn into a drivel machine", she laughed

"I knew an Algerian girl who used to pose the very same way", Dan continued.

"It was my first trip to Paris. I had come here with my friend Jack... to paint. We took boarding in a tiny hostel. The bar in that hostel was run by this girl. I fell in love with the city. Jack fell in love with her. She was going to be Jack's Raging Passion."

"Ah...", she muttered softly and leaned forward.

"Stay in one fucking position", Dan commanded

"Well, if we were fucking, I would be in one position", Rita retorted.

Dan paused for her to pose.

"My first painting of a nude was an amazing experience. Somehow, tracing those sensual lines of the female form on paper, was an aesthetic experience in itself. So it was for my friend as he hurtled to Jack's Heavenly Torment"

"Tut tut... poor sick bastard"

"The girl had skin the colour of olive oil and hair as black as jet. She wore a floral patterned gown and a black blouse atop. She was the picture of calm and had an almost holy air of innocence. Jack tried his best to win her favour, but she remained faithful to her lover who had gone to Algeria for a while.

This enraged Jack. He could not fathom how that uncouth beast of a man could win the devotion of an angel. Soon Jack was going crazy. Then he remembered the experience at art school. He convinced her to pose naked for him. She charged a hefty sitting fee. He made one sketch, then a second, promised he would stop with a third and after many a sketch, was soon penniless. She refused to let him inside the bar. At the end of his wit, he took to selling the nude portraits on the streets of Pigalles. He would go back to that bar every time he made money. One day the lover returned. He discovered these paintings and thrashed Jack. He was about to knife him when the police intervened."

Dan paused. A cloud of smoke hung in suspended animation, as if waiting for Dan to end his pause.

"Jack begged for some days on the streets of Pigalles for money to buy some paper and pencils. He needed to make money. The only thing he could think of was to get to Sacre Cour where tourists paid for caricatures. After a year of that he went back to art school. He was famous there. Even now tourists come in search of the artist with the scar under his left eye."

Rita gasped. She went and embraced Dan and tenderly caressed the two inch scar under his left eye.

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(I had challenged myself to write a "clean" dirty story once. I think this fits the bill quite well . Was inspired by couple of pages in "On The Road" by Jack Kerouac)

(I also thought it would be cool if Edward Norton played the role of Dan and Salma Hayek played the role of Rita) :)

The Porn Industry in Crisis?

2008-12-07T18:53:00.000-08:00

(Point 1: This is a NSFW blog. (Not Suitable for Work) Of course, I know that warning just made you read further just like the "Video is Flagged" tag actually increases the tendency to watch a video on Youtube. One of these days I am going to put a NSFW tag and make people read a boring post on Indian economy or something)

(Point 2: What with this being a momentous days for our polity, the topic below is... somewhat... unsuitable. I figured the net must be full of analysis anyway, so I might as well do my thing)

I have been extremely disturbed by the emergence of Youporn and Redtube. As I shall demonstrate below, the problems in the internet porn industry are a reflection of the troubled times we live in.

First of all, look at the names Youporn and Redtube. Both are plays on the same word Youtube which is anyway a boring word to begin with. Booble is not innovative but does merit a giggle, but on the other hand how unspiring are Youporn and Redtube! Can't they atleast play on some other thing. How is "Porn R Us" for example? Funny in a twisted and audacious way methinks. :P If anything, there are red light districts but blue films, so not to be anal or anything, but shouldn't it be Bluetube?

Gone are the times when sites had names like Milfhunter. Now that was a name that launched a new word in the vocabulary, a signal of who was in and who was not. ("In" as in... oh forget it)

That invention alone places the founder of the site in the ranks of other word inventors like Shakespeare and the black rapper dude who says shizzle, dizzle and all that.

Exhibit B. Look at the name of the actresses. It is always a Nicky, Vicky, Heather, Sandra or Nicole. As a result of this, every "dancer" from Wan Chai to Shinjuku gives these as their fake names. Another example of American standardization killing Asian creativity.

Exhibit C. The wonderment of porn is lost with these free sites. There was once a time when teenagers found a lost credit card, exclaimed hallelujah and tried it for porn. Imagine, the modern day youngsters growing up on this... this free stuff. Galling!

Exhibit D. I am getting bored of augmented assets. As they say, if they do go either way, they are usually fake. How about going natural this season? Go girl power!

Last but not the least, the days of wonder are dead. Gone are the days when one saw certain videos and thought to oneself, "Damn, they can do that!". Now it is all the same stuff. A typical outcome of our times where self aggrandisement leads to boredom. Where is the shock and awe I ask, where is the shock and ugh?

The Dying Lion at Lucerne

2008-12-01T08:42:00.000-08:00

A Hero's death

One of the memorials that impacted me deeply was the monument of the Dying Lion at Lucerne, Switzerland. The sculpture of a wounded lion is carved onto a granite cliff.

The expression of the lion is a work of genius! Who can believe that such emotion can be crafted onto emotionless stone. Somehow the sculptor has managed to capture the last few moments before the lion's death in one motionless piece.

The wounded lion lies vanquished in its last few moments of existence, yet one gets the feeling that it was a brave death. Even in this position, the lion's mane gives it an authority and there is a nobility in the face. Is this the elusive hero's death that the epics talk about?

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Epilogue

I spent a few quite moments there, bought a souvenir of this monument and continued my journey. I just knew this to be a monument for Swiss soldiers who died in some battle. I did not bother to find out about the battle.

Today, I stumbled across this link which tells the story of the monument. Apparently, this was a monument built in honour of Swiss Mercenaries who died while defending the French Royalty in the French Revolution!

I was a bit surprised. The monument which affected me so powerfully was intended to honour people who were protecting the "bad guys" of the French Revolution. However, this still does not diminish the artistic brilliance of the monument. I will ignore the meaning and just take the beauty out of this. More importantly, whatever may have been the intention, it is still a fitting tribute to bravery, valour and nobility.

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The Swiss Mercenary Tradition

I was intrigued by the phrase "mercenary tradition". Here is an interesting article on the same.

"For more than 500 years, young Swiss men went out into the world in a controlled military environment at an age when they are quite naturally a little wild," said Anselm Zurfluh, director of Geneva's Museum of Swiss in the World.

"They usually returned calmed down and wanting to work, settle down and have families. I firmly believe this is one reason Switzerland is so peaceful."

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Lucerne

Analysis Of The Disparities Between Nations - Part I

2008-11-25T16:45:00.000-08:00

Well, the video did set me thinking on one angle. Scandinavia (Sweden, Finland, Norway and Denmark) pays a lot of attention to inequality. Throughout Europe there is a strong thread of socialism in society. This can be witnessed in the high tax rates and excellent social security systems.

For example, primary and secondary education is free in Finland and in some cases even undergraduate education can be free. Tuition fees at undergraduate levels are quite nominal throughout Europe in government funded schools. And if you can prove your financial difficulties, then state aid is assured. Compared to our own socialist experiment, we would expect that government funded schooling = poor quality education. However, the bulk of the population in Finland goes to the government funded schools. If the quality of education were poor, then a market for private schools would have emerged. But from what I know, it is not the case.

However, this does not mean everything is hunky dory. There is one section of people that really finds it hard to make ends meet. My observation is that this section is dismissed as "bums" or "drug addicts". The argument is that, if they are in their plight inspite of all that the government does for them, well, it cannot be helped. In that sense it can be pretty tough for a few. It is not a perfect world but broadly, the western European nations appear to have done a good job.

But how do we test this or quantify this? The most commonly used metric for inequality is the Gini index. The Gini index is based on the Gini Coefficient which is calculated as follows. Let us play around with some statistics.

The data was taken from Human Development Reports. I had to make one assumption to smooth over data issues. The Population and GDP Per Capita figures in the excel sheets are for 2005. When I try to access the Gini Index data for 2005 it links to the 2007-08 data. I have assumed that the situation has not changed too much in the past 3 years in terms of inequalities.

Here is a list of top 15 nations in the Gini Index. I have also included the US and the BRIC countries. The analysis is based on a sample of 126 countries.

The Scandinavian countries are all in the top 10. But other than Japan, the rest of the company is not exactly enviable. Slovakia, Bosnia and Herzegovina(!), Hungary, Ukraine... Purely from casual reading we know these nations are not exactly the kind of nations that the world wants to emulate. Therefore, it appears that most of the equitable nations in the world are equitable because they appear to make everyone poor! The Hindu rate of growth!

Let us look at the BRIC countries. Amongst the BRIC countries we seem to be doing the best. We are at 54 while China is at 93 (yay!?) and Brazil at a really low 116. However, doing good on the Gini scale may not be such a great thing as the previous table suggested. That great model for the world (not anymore?) US is at 71. So only do nations that have low prosperity end up with a high Gini score? How do we measure prosperity?

One measure applied for prosperity is GDP per capita. GDP per capita has some flaws since it is an aggregate measure. But since we are taking that and Gini index into account, it should be an interesting exercise.

This makes more sense doesn't it? The ones whom we thought as not worthy of emulation have low GDP per capitas. Bosnia and Herzegovina has $2500, Slovakia at $8616, Ukraine at $1761. The Scandinavian countries stand out here too. Sweden has $39,637, Denmark at $47,769, Finland at $36,820 and Norway at a whopping $63,918.

Looking at the BRIC countries, there does seem to be an inverse relationship between Gini Coefficients and GDP Per Capita. Can we not grow without increasing inequality? (Afterthought, the same analysis will be better done with PPP adjusted GDP Per Capitas)

Let us do one thing. Let us take the nations with the highest GDP Per Capitas and check out their Gini Indices. Remeber when it comes to Gini Index, lower is better.

Interestingly, among the top 25 GDP per capitas we have countries like Qatar, Kuwait, Bahrain. These countries are there on the strength of their natural resources and comparing them is really not going to help us. Let us drop them and build a new table. And the BRIC countries were left out in this one.

(I could have skipped it, but really just wanted to illustrate a point. I also wanted to show how thinking processes really are iterative. When we read from textbooks, we read the end result of a thought process. Unfortunately, the thinker rarely gets to that stage without many a slip betwixt the cup and the lip.)

Okay, last one, I promise. This one shows the GDP Per Capita rank and Gini Index rank for nations.

A cursory glance seems to satisfy the hypothesis that the most prosperous are quite unequal. Let us look at those that have done really well. I define "successful" nations as those whose difference between Gini ranks and GDP Per Capita ranks is not greater than 10. (It is an arbitrary cutoff)

Those are: (Drumrolls please)

Norway, Denmark, Sweden, Netherland, Austria, Finland, France, Canada and Germany.

And what do you know. Barring Canada, the rest are in Europe. I know that they have a strong socialist philosophy. But how come socialism works for these people while it does not work for Czech Republic, Bulgaria, India, China?

Or wait, are these metrics developed in Europe? (!) Is it the result of a built-in bias in the metrics?

For a moment let us discard the "skewed metrics" theory. The question that remains is:

What went wrong with the socialism of India, China, Czech Republic, Bulgaria, Slovakia, Russia yet works for these countries?

PS: I had a fun 2 hours playing around with data. Another delectable tool for data handling is GapMinder. Check it out! Playing around with data could lead to interesting observations and voila you have a theory of your own!

PPS: What was the purpose of all this? In addition to raising some questions, I also wanted to demonstrate how to go about thinking about national development. I also observed that in the western world, there is a lot of obsession with development and growth. Maybe we could take a lesson or two from that.

A Matter of Perspective

2008-11-25T14:36:00.000-08:00

I came across the following video from a friend's GTalk status message. You would have most probably watched this video, either on someone's status message or in a forward. It would have definitely provoked some emotion simply because every viewer identifies himself or herself with one of the respondents on the video. In that way, it is a pretty nice video.

But it was interesting to see the comments. Some people got moved and agreed wholeheartedly. Whereas some others took the "heretical" stand and said, "Spend. That is the way to boost the economy". However, I was interested in some other things about the video.

a) Let us take the methodology. It is a survey and the question is fairly straight forward. "What would you do if you got Rs. 500?" Usually respondents are anonymous in a survey. It makes sense because that way people are likely to be more forthright with their opinions. On the other hand, this "survey" seems to reinforce the stereotypes. All the young people seem to have "frivolous" wants i.e piercings, booze (oh no!) and smokes (oh no no!), eating joints etc. And clearly, the sponsors of the video had a motive, there was a message they wanted to convey. So you can expect the responses to have been chosen with a bias.

The reason this point occurred to me was I would have never said some of these things if I knew I was being filmed. My actual response would have been (if the survey were anonymous) "500... I will spend it on food." What would have happened is that it would have got spent on food, alcohol or a bus trip to Chennai. If I knew it were on TV, I would have said,"Buy a ticket to go home by Volvo bus" (Awww... :P) I think there is a term in Kotler for this, but I will call it "Posing effects". How you pose the question i.e wording as well as environment affects response in a very strong manner. (Is it called Framing Effects?)

Therefore, I am pleasantly surprised that some people were frank enough to admit what they really wanted. In Indian society, I believe there is a lot of false humility and false virtuousity that goes around (yours truly included) and if people are coming on TV and saying what they would really think, 3 cheers for that.

Another feature of presenting such a survey is that the viewer cannot help forming a moral judgement on the respondent, because the viewer now has well... additional data - body language, face, clothes etc. Imagine an older person seeing the guy who said he would get a piercing or the girl who said she would get a haircut, the temptation to form a judgement is inevitable. Again, the question is just "What would you do if got Rs. 500?" The respondents may not have known the context their responses were going to be presented in. It may appear that some people are staggeringly selfish. But how do you know the respondent does not do some sort of charity already. If I gave Rs. 1000 from my income as a habit to charity and spent this Rs. 500 on alcohol would that make me good or bad? Also I don't mean to trivialize but if you asked a kid how he/she would spend money, the response can never be booze or smoke or even piercings.

Again I think I am overthinking this. The video is pretty nice at the end of the day and very very thought provoking. I only wished they had shown the responses and left the ending as a question and let the viewer take away his/her own message. This led me to a different string of thought that I have published here.

A Snowy Afternoon

2008-11-23T04:28:00.000-08:00

I woke up today at 2 in the afternoon and it already felt as if the sun had set. I got up and groggily opened the blinds to my window to be greeted by the following view.

A better view from the window in the common area:

(The blurred image is not due to any of my mistake, the visibility was quite poor. Of course, this is just the beginning and it only gets heavier.)

It was snowing heavily! I usually do not get excited by this, but somehow the presence of snow and the layer of white on everything adds a very different kind of beauty to the whole environment. The whiteness everywhere sets a background against which anything coloirful stands out by contrast. It is as if the whiteness accentuates the little colour that is there. I am looking forward to the view in the night. The light reflecting off the snow seems to make the night brighter!The snow seems to have a "calming effect" on nature and everything grinds to a halt. It is the time of the year when the trees are dead, bereft of leaves.

The leaf-less trees reminded me of a story by O.Henry called the Last Leaf. (Actually Maro reminded me of the story in Amsterdam) I think this story was there in the CBSE English textbook. (It can be read here) The story is about two people, a sick girl and an old painter. The sick girl believes she is about to die and her time would come when the last leaf falls off a tree. The old painter, tired of his mediocre commercial efforts, is still in search of his magnum opus. Obviously, the two characters are connected by the leaf and read the story to find out how. It has a really nice twist.

Anyway, the best thing to do in this weather is to curl up in bed, drink something hot and just watch a lot of movies. This is God telling us humans to pack up and hibernate. Amen to that!

Current Track: The Nowhere Man by The Beatles

Carnatic Music Primer

2008-11-22T15:21:00.000-08:00

Last term I had taken a course called Tracking Creative Boundaries. During the course, the professor mailed us an excellent primer to understand the technical aspects of carnatic music. Like always, I did not read it during the course. (sigh... a bit of discipline is all I ask for :P)

This is a classic guide for dummies. The biggest stumbling block for many a beginner interested in classical music is the forbidding jargon employed by aficionados. As a general rule in life, I am suspicious of people who use too much jargon and I have always harboured a suspicion that most people who "ooh aah" about carnatic music may not really be that good as a beginner may think. (A bit more discipline and a little less cynicism... the list grows!)

Anyway, the treatment (if one can use that word) in these 4 parts is accessible, yet sufficiently technical. Most importantly, the language is easy to understand. I have read the first part so far and I have found the analogies very useful to get a basic picture. Enough talk! The links can be accessed here.

I really liked this, so at the risk of repeating myself, if you have always wanted to know something about carnatic music (or even just about music) but was scared to look like a dumbass, you just have to read these pages.

P.S: These are pretty long HTML pages. One easy way would be to ctrl-A, ctrl-C, ctrl-V on to a word file. It is unlikely you would read it in one sitting. I found it easier to keep track of where I was.

Resource for learning HTML

2008-11-19T03:20:00.001-08:00

I am embarrassed to admit this, but I really did not know HTML coding until yesterday! It is so cold to step outside, I get out only when I have to. Gone are the days of walking by Helsinki's port, or the walks to Hietsu beach.

As a result of being confined inside and the absence of a TV and the presence of an awesome wifi connection, I spend an inordinate amount of time on the internet. I came across this site by Dave Raggett. You can find info about the author here.

The following pages give you a quick guide to coding up a half decent website. He has divided it into Basics, Advanced and Adding a Touch of Style. It took me around 3.5-4 hrs to do the whole thing. But that it is because I took lots of breaks in between which in turn is because I hate reading off the laptop screen. If you have always wanted to do HTML, but haven't, this is really a quick get to work kind of a guide.

The Rich Merchant

2008-11-14T03:29:00.000-08:00

A rich man once gave his son 500 gold coins* for a trip the latter was going on. Once the son returned he inquired about his journey. After dispensing with the pleasantries, he came to the question he had been itching to ask.

"So son... was the money enough? How much did you spend?", he enquired

"500 gold coins", the son said.

"Haha... that was the amount I gave you. How much is left?"

"Nothing is left. First day we went on this boat trip, then had this delicious dinner..."

"What?! You mean to say you have no money left after the trip?", the father asked in an alarmed tone

"Was I supposed to?", the son said, bewildered.

The father snapped.

"You wastrel, you idiot, you pampered brat! This irresponsibility is your mother's fault! There was a time in my life I could not afford three square meals a day. At your age if my father had given me 50 gold coins, I would have spent 10, told him that I spent 25, put the 15 coins in the bank and returned the rest. I was expecting this kind of sharpness from you. Instead, you come and stand before me having spent everything. At this rate, you will just eat away all the wealth that I have amassed with so much care. What do you have to say for your irresponsibility?"

The son regarded the tirade coolly. He was used to it.

"Your father was poor, so you had to scrounge. My father is rich, so I don't have to!"

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While this may seem frivolous, the fact is the retort is absolutely spot on. It is amazing how many authorities do not grasp the significance of this simple moral. Contexts change, moral views change, outlooks change. The best strategy to preempt rebellion is to take the European way and create a space for new outlooks within the existing framework.

Corporate Finance Link

2008-11-13T12:15:00.000-08:00

Stumbled on to Prof. Aswath Damodaran's page from a friend's status message.

If you have taken Corporate Finance before or even if you did and think that your teacher was the studdest prof. to take the subject, I would recommend the webcasts on Corporate Finance.

The website can be accessed here. To access the webcasts, click on Classes&Support -> Corporate Finance (Full Semester MBA Class) -> Webcasts.

Wish more people really tore apart the subject as Prof. Damodaran does!

Despatches from Europe*

2008-11-12T07:05:00.000-08:00

A Grand Bollywood Museum?

Salzburg is beautiful. That statement needs qualification. Much of Europe is beautiful in its way. However, Salzburg's beauty is different from Paris. Paris is a big city which throbs with life. There is a hustle and bustle and the cafes which act as islands of calm from which you can admire Paris. Salzburg's beauty is one that calms the mind, soothes the soul, helps the mind pause before letting it soar again. If you had a nervous breakdown or wanted to write a treatise, there are few places to beat Salzburg. Talking of beauty in Europe, the cities are so well maintained and so beautiful that after a point it begins to fade and when that happens, the headiness induced by beauty is replaced by a void... a void filled by boredom. The flip side to perfection?

At the risk of betraying my philistine tendencies, I was not going to visit Salzburg! I thought of heading straight to Vienna, but there is a God and the proof of His/Her love was that I was not sleeping as the train pulled into Salzburg.

(Houses nestled in the hills. There was a fog when the train pulled in, which gave it an almost dream-like quality)

One of the must-see sights in Salzburg is the Mozart residence. They have an extremely impressive museum in what was formerly the residence of the Mozart family. I was a bit hesitant to enter. The entry fee was 7.5 euros and I really do not know too much about western classical music. But enter I did and glad I was.

When you buy the ticket, you get an audio guide along with it. This is a really simple and handy device. The museum itself is very small, just one floor. As you enter a room, there are numbers attached to the exhibit. You key in that number and a narrator talks about the exhibit, with classical music playing in the background and also mentions a line or two about the musical piece. This is a beautiful but simple innovation.

I think we should have a huge museum dedicated to Indian music with such an audio guide. I use the term Indian very specifically. In my view, Indian music should consist of Hindustani, Carnatic and Film music. This would throw the purists into fits of horror and if I had the money I would do that just to get sadistic pleasure out of it!

On a related note, I think we need to build a huge Bollywood museum in Mumbai or even better Goa. It would make oodles of money. I cannot count the number of people who have said, "You are from India? I really like Bollywood movies!" It is kind of important. The reason is... for much of the west, India is about living with poverty, snake charmers, the Apu trilogy, the caste system and now cheap outsourced labour. Even though I am not the greatest lover of Bollywood movies, they change that perception of India.
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The Art of Correspondence and Ambitious Fathers

The Mozart museum houses a significant body of letters that were exchanged between Father and Son. The exchanges reveal a proud but protective father worried about keeping a mischievous son on track to what the former thinks is the latter's potential. Mozart showed signs of genius quite early in life, early as in 3 years of age not 15 years of age! Father writes the following about his son to a friend,"...A God has been born in our own Salzburg" Mozart's father was an accomplished musician himself and comes across as demanding. Therefore, one can imagine the worry he would have had to go through.

The letters reminded one of the lost art of the correspondence. Of course, in today's times, there is no need for long communication. In fact, it would be frowned upon. But as a consequence, the charm of reflective thinking, witty and cutting observations that delight are lost.

A biography of Nehru by M.J.Akbar draws extensively on the correspondence between Jawaharlal Nehru and his father Motilal Nehru during Jawaharlal's days in England and it throws great light on the father's role in the development of his son. If I recall right, (and correct me if you think I am wrong) Motilal sends a picture of English Governor Generals of India (or some such high post) and writes to the effect that he would like Jawaharlal in that position.

Of course, from one perspective such things place undue pressure on the child. But from another perspective, perhaps these parents played the role of protective guides, showing a path and stepping in when the person looked like he was straying too much.

Either way, somehow I left with the feeling that writing letters leads to a kind of fulfilling relationship that modern methods be it emails or chats miss out on. Of course, that does not mean one has to write on paper, but if one writes proper emails, the way your english teacher would have liked it, perhaps it is more fun.

(View of Mozart house)

(Another shot)

(Christian Doppler's house is next to Mozart's :) For a town of its size, Salzburg has produced many achievers. Must be all that beauty! However the Doppler residence seems to have become commercial space. Note the ad!)

(One can imagine Doppler working at one of these windows)

(How to talk Arty!)

* I have always wanted to write "Despatches from " :)

Wintry Nights at Scandinavia

2008-11-10T07:03:00.000-08:00

View from my balcony at 5 pm :) Oh Sun Lord, where are thou?

Bern, Baby!

2008-10-31T16:05:00.000-07:00

The weary traveler strolled about the streets of Berne in an attempt to kill some time before his next connecting train. The journey so far had been amazing and the cherry on the cake had been the Monument of the Dying Lion at Lucerne. The traveler was heading out to a well deserved break in Amsterdam. As he was walking aimlessly, a pang of guilt seized the traveler. Clearly, Switzerland had been the best experience so far, yet he was seeing so less of it. However, did Switzerland have much to offer a la Prague or Paris? In his perception, Zurich and Berne were staid financial centres and the beauty of Switzerland could be best experienced from the train rather than walking the streets of these cities.

The traveler sighed out of tiredness. A puff of vapour went up the air.

It was very cold. He reached out into his pocket and collected whatever remained of his Swiss Francs. They were all in coins and amounted to not more than three and seventy.

He looked about for a Kebap shop. The only kind of shop that would even deal with this amount of money could be a kebap shop. And even there, this money may be good for one coffee. But yes, a coffee would be good.

The traveler’s reveries were interrupted by the haunting sound of a bagpipe. Whoever would play bagpipes in Switzerland? The traveler headed in the direction of the sound. There, by the side of a road, stood a person playing his bagpipes. He was stomping his feet in the direction and the sound of trinkets (salangai) acted as an accompaniment to the music.

The effect of the music was mesmerizing. It would be futile to attempt to capture the beauty of the music in words and the author shall not attempt it. Slowly, a crowd grew around this musician, swaying to the tunes of the bagpipe. If we were the townspeople, he was the Piper. The traveler recollected the story of the piper. Finally, after many years of having heard the story, it suddenly became richer in meaning. The power of the instrument was remarkable indeed and the story was no exaggeration.

The piper played on. The cold did not seem to matter now. The traveler emptied his pockets in genuflection. The destination did not seem to matter now. The first connection to his destination was missed. However, only the moment mattered. It is well said that the best journey has no destination.

Travel Acquaintances

2008-10-27T05:22:00.000-07:00

6:45 PM

On the train from Goteborg to Copenhagen

On the ship to Stockholm I met a Finn who works as a bouncer and a Russian electrical engineer who had been on a long trip to India. I forgot both their names, so let us call them Jari, the Finn and Dmitry, the Russian.

I was initially taken aback to see Jari in the room. I said a silent prayer. You see, just outside I had seen 4 “Yo Dude”s and was hoping that no one like that would be sharing my cabin. I had a long bout of travelling to do and getting a sound night’s sleep was a priority. Most travelers on the Turku-Stockholm ferry came for the cruise rather than for Stockholm. The ship is a gigantic amusement park actually. There are decks of amusement, from casinos to discos to saunas and it is more of a let-it-all-out trip. And I did not want anyone in my room to let it all out that night.

I entered my room to see a swarthy guy with tattoos all over his body. However, as these things turn out, he was quite soft-spoken and was keener than me for a good night’s sleep. I must confess to find his behavior a tad disconcerting. He kept looking out of the door, and saying, “Wonder if we are alone”! I was reminded of the tunnel scene from the movie Eurotrip and that did not help! However, in the course of the conversation, I learnt that he was going to Stockholm for a Jujitsu competition and hence did not want any party dudes. I was however eager to learn more about the bouncing profession. But before I could quiz him on how one became a bouncer, the interview process, tips and all that, a most curious person entered.

In entered a short and stout man who started moving about the small space looking to place his bag. Usually, the formality in such occasions (though it is not written in stone, one might add) is to exchange pleasantries with the others sharing the cabin. On the contrary, the new visitor seemed keener to learn the topology of the room. After having placed his bags and coat, he greeted us. I tried not to laugh.

The inventor of the phrase pot belly must have seen Dmitry when he coined the phrase. The man had a properly pot-like belly. He was balding, but he compensated for the lack of hair on his pate with a well groomed beard. His English was not that great. He spoke in broken sentences. But when he realized that I was from India, he immediately took out his passport and showed it to me. He had visited India in 1976. He had visited India as part of a government delegation and had gone to Mathura, Rishikesh, Haridwar, Darjeeling, Kalimpong and Nepal. He spoke in short sentences about those places and to confess I found his manner of speaking more interesting that his experiences. Clearly, he had been on a “Karma Cola” trip, seeing India in clichéd terms. But still, it provided a common conversation point.

I learned that he too had a similar journey schedule like mine, except that he was doing Europe on a bus. Then he started on his dinner and I took out a book. It is really very comfortable traveling on the ship. After some time, I really could not help noticing the concentration with which Dmitry ate his food. He had bought a lot of pre-cooked stuff and seeing him go about using each one was interesting in itself.

After that novelty wore out in five minutes, I drifted off to a dreamless sleep! One does meet all types in the ship!

Saar, where be the next Idli Shop?

2008-10-22T18:13:00.000-07:00

(With due apologies to a Mr. Jim Morison)

Oh, Show me the way to the next Idli shop,

Oh, don’t ask why, oh don’t ask why,

Show me the way to the next idli shop,

Oh, don’t ask why, oh don’t ask why

For if we don’t find the next idli shop,

I tell you my tongue will die, I tell you my tongue will die,

I tell you, I tell, I tell you my tongue will die.

To all this pizza and pasta,

We must say goodbye,

Helsinki don’t have any dharshini bhavanas,

And we must’ve sambhar-idly,oh, you know why

These Markets...

2008-10-22T17:12:00.000-07:00

The bloody thing keeps losing the gains that it makes! Reminds me of the story of a man whose soldier could not stand up long enough for anyone's good :P

Ah... Rangeela

2008-10-21T10:55:00.000-07:00

(Some parts of this post may Not Suitable For Work. I can rest easy knowing that this warning will cause more people to read it. It is just like those videos on youtube which are flagged. You may not pay attention to them if they weren't. But if they are you almost definitely end up watching it :))

Whatever may have been the lofty intentions behind the invention of the internet, one of the biggest consequences has been the infinite avenues to vettiness. Remember how the Internet was sold when it came to India, some drivel on how it was the information superhighway or something. The real reason was known to Generation X. (or Y... I always get confused) It was a porn superhighway, sowing seeds of perversion that the Indian mind had never known before. Honestly, before the internet how many of you thought the organ used for ingestion could be used for anything other than that. (Chee Cheee....)

Anyway, I digress. (As usual... humph) Coming back to the infinite avenues of vettiness, none is better than youtube. Youtube? In a world of bandwidth shortage by using Youtube for vettiness am I not cheating all those who have got on the internet in search of information! Hahaha... I know it is scary, sometimes I look out of my hedonist life!

Moreover, Scandinavia can be faulted for a few things (being perfect and boring?) but none can fault it for bandwidth. Does it not warm the cockles of your heart when you can just watch a youtube video without having to buffer it. It would also warm other parts of your anatomy when you can watch the other site starting with "you" without having to buffer it :P

One of the nice features for aiding vettiness is the related videos tab they give. I started from somewhere and landed on this. For those who are not in a position to see it, the link is a video of the song "Tanha Tanha" from Rangeela and it immediately triggered one of those nostalgic trips.

This song made my jaw drop when I first saw it and I still think it would win an award for the category "Songs Showcasing Pretty Things in Small Clothes" category. I am sure it would have ruled the Superhit Muqabla charts. Anyway, note that it is very gracefully done and there is more a feeling of mischief than obscenity. People go gaga over this (Babuji** Zara Dheere Chalo) and the Bipasha number in that film which was supposed to be a remake of Othello, but I don't know.
As far as the song goes, obviously Rehman killed it and Asha Bhonsle's dusky voice has just the right lilt to enchant you, but it is really the beach, Urmila and her perfect legs that makes the song what it is.

The opening sequence is the stuff dreams are made of. (Not the soul uplifting variety of dreams but... ok ok, it is getting boring, I get it!) Urmila Mataondkar running down the beach, her hair flailing freely in the wind, dressed in a white underthing gives a sense of freedom, liberation but most importantly the pleasure of seeing a hot girl run in skimpy clothes. Of course, we are Indians so no bikinis! But this song has been so well shot that you don't miss the bikini! Sigh... life!

My last blog post was a weepy whiny one on the meaning of life. Who needs that when Urmila tops Tanha Tanha in the same film with this yummy number. She looks "...saucier than a direct hit on a Heinz factory". Amen to that.

** Talking of Babuji, curiously that is how the bouncers in Roppongi Tokyo used to solicit Indian looking people. (me at least) More curiously, almost all the bouncers from Shinjuku to Roppongi were swarthy Africans and it can be kind of intimidating when such a guy calls out to a scrawny-almost-pure-vegetarian like yours truly. "Babuji, wanna have a good time" was the sales pitch with the bro twang and the perfectly white teeth. See, that is what gets my goat. Whatever happens I can never get my teeth as white as them Africans. Life can be unfair!

Somerset Maugham

2008-10-20T13:10:00.000-07:00

Stumbled upon one of my all time favourite short story, The Verger by Somerset Maugham.

The story can be found here. (the webpage looks a bit plain but will be worth your time)

Two other favourites are:

Lord Mountdrago (A Google Books link)

Mr.Know All

Do read these if you are in the mood for a good read.

What it would take to write like this!

The Bridge on the River Kwai and the Futility of Human Action

2008-10-20T10:53:00.000-07:00

Watched Bridge on the River Kwai yesterday. I think it is 65 on the IMDB top 250 but I would rate in my top 10. Do watch the movie when in the mood for some food for thought. I have written about the movie in the first part, but if you have seen it you can jump to the second part where I have rambled on about my thoughts.

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The story is about the construction of a bridge across the river Kwai by British POWs. (Prisoners of War) The bridge has to be completed by a certain date and failing to do so would result in loss of face for the commanding officer of the camp Col. Saito. The British POWs are led by Colonel Nicholson (Alec Guinness) who is very particular about maintaining the dignity of the uniform. He is particular about rules and refuses to take prisoner like treatment. The Japanese Colonel Saito however has a different view. In his book, a true warrior would rather commit suicide than be taken prisoner.

During the first month little progress occurs on the construction of the bridge chiefly due to a dispute between the two colonels over the status of officers. Col. Nicholson points out that according to the Geneva Convention officers were not required to work, whereas Col. Saito believes that they have to bend to his will as they were prisoners. Col. Nicholson is thrown into solitary confinement in a shed called the oven but he refuses to budge. Seeing the intransigience of the British soldiers, Col. Saito lets the British officers command the soldiers and exempts them from hard labour. Much to his surprise, Col. Nicholson responds by deciding to build a fine bridge instead of the makeshift ones the Japanese are used to throwing together.

Unknown to Col. Nicholson, another party in the British HQ in Ceylon is planning to bomb the bridge. A key person in this mission is the American Commander Shears who just escaped the camp as Col. Nicholson's men marched in. The rest of the story is about how a fine bridge is built and finally it is blown up.

A notable scene in the movie is when the prisoners come marching in whistling the Colonel Bogey March. You can listen to it here and check out this link for the lyrics.

Hitler has only got one ball,
Goring has two but very small,
Himmler is somewhat sim'lar,
But poor old Goebbels has no balls at all.

A real blues beater!

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PG Wodehouse takes a dig at Russian writers in his golf story, The Clicking of Cuthbert. "Vladimir specialized in grey studies of hopeless misery, where nothing happened till page three hundred and eighty, when the moujik decided to commit suicide."

The weather yesterday felt like that.

You can therefore imagine the mood I would have been in after watching The Bridge on the River Kwai in that weather. Suffice to say I fell into a putrid pool of pessimism and started reflecting on the something that has always intrigued me - the seeming futility of human action.

Let us ask a question. Is it that a beggar's life* is less meaningful than that of an individual who has risen to the highest post of the land? (Note, it is not about worth. The assumption is that all human lives are of equal worth.)

If the answer is yes, then is it that a life of achievement is the only meaningful life? Then what of countless people who have tried earnestly and given up? Does not their life carry meaning? This is admittedly a defensive stance catering to the "losers".

This can be argued in another way. We can define achievement in terms of impact on other people. Therefore, the head of state's life is more meaningful since he/she made some positive difference as opposed to someone who did not. Alternatively, if as the head of state that individual caused more harm then that person's life is less meaningful than one who has done nothing.

But should this be the metric? What about people who may have affected just one person in a profound way? We are psychologically tuned to believing that "doing good" for others is a meaning of life. The chief flaw of this thinking is that it draws meaning from the suffering of others. What if there was no one who needed your help? Does it rob life of meaning then? Is not such a defintion of meaning fragile?

More importantly, it is often the case that this sort of thinking unleashes an army of do-gooders all set out to find "victims" to do good upon. What about some people who may conceptualize things without care for other's "good"? And in some cases, what is good?

What about the middle path then? ;) Is it that it is about trying your best and having been convinced of that end defines a meaningful life?

I prefer the view that there is no inherent meaning in life. It is what we define it to be or more usually what our environment defines it to be. We draw meaning from our environment and taken out of the environment the meaning may be different. There is no magical purpose for which God has created the unique snowflake that we may consider ourselves to be. We were born by a biological event and that event will run its course. In this interval we have to amuse ourselves.

But if one were to take this cynical stand, there is no incentive for action. We could all just dope ourselves away to death.

The answer to me often appears that we must pass through different stages of wilful cheating of ourselves. In the youth we must convince ourselves that achievement is the source of meaning. As time goes we must take different views on the meaning to life!

*No offense to beggars! Just hyperbole!

On Soaps of the television kind

2008-10-05T05:01:00.000-07:00

What explains the popularity of soaps of the type aired on Sun TV or the Kabhi-Saans-bhi-something-something variety? It is all well to mock people for being hooked to them, but as students of marketing one has to take a different look it. What hidden need are these serials catering to that they hook people so strongly to them?

I used to see two serials quite regularly when I was in 9th and 10th. One was Marma Desam and I really used to enjoy that. My memory is very hazy but there was one "season" when people used to get killed mysteriously by lorries and the symbol of a dog used to occur frequently. There was also some nadi astrology fundaes. Overall it was a pretty engaging whodunnit. But that was only one year. The next edition was pretty boring, so I lost interest.

Another thing that I used to watch regularly was Dindigul I Leoni. For some reason, the name is etched in my memory. He used to draw most of his material from mocking the tamil songs of the day. But that got predictable after a while.

Another show of this type was Yugi Sethu's Naiyandi Durbar. The man was especially in form during election time. But after a point, the material got stale. (It is quite amazing then that Letterman, Colbert etc. keep their game up for so long.)

Chithi had actress Radhika in it. And I don't even know why I used to watch it. Maybe the slot was right during dinner time or just afterwards. I don't know, but I guess most families eat between 8:30 - 9:30 PM and that slot is very important. But the after slot of 9:30 - 10:30 will also be important because after eating, you want to relax and the relaxation after a heavy meal is one of life's greatest pleasures.

As an aside, I really miss those Sunday afternoon meals at Sri Krishna Kafe after L square. Typically, I would be at L square till 2-3 am and then crash till 1:30 - 2pm. (In Europe they don't use the AM/PM thing. It is the 24 hour clock. AM/PM is a redundancy if you ask me) I hope you can imagine my state then. Ravenously hungry, savage hunger would approximately describe my state. At that state, going and hogging away at the unlimited meal at SKC is the closest to orgasmic bliss that I have experienced.

In Finland too, we have parties that go really late, like friday night's. But as a vegetarian the possibility of eating to my heart's content is just not possible. For one, there are no proper Indian restaurants near the area I live. And secondly, it costs 7 euros for such a meal! The unlimited meal at SKC costs 1.4 Euros equivalent and that is itself costly if you ask me. One must not convert, but the cost structure in Scandinavia is so ... much! So much that yours truly has been forced to cook just to save on money... sigh!

Anyway, coming back to the topic of soaps, the one theory I can think of is that most of these soaps have strong women characters. Maybe, the sight of men grovelling before an ugly matriarch (there is usually a matriarch and she is hideous) may be the stuff of every woman's dreams. I don't know. It would be interesting to hear perspectives. Fire away please, for I am really curious.

Swearing

2008-09-28T11:10:00.000-07:00

There was a time when using the word "Fuck" was cool. A symbol of rebellion may be. A sign of growing up perhaps.

But now, I hear the word used so often, it just sounds boring. It is not shocking any more. I think a world with lesser "Fuck" usage (but not lesser fucking mind you) would be a better one. Or am I getting old?

The Diary of a Traveling Salesman

2008-09-08T13:24:00.000-07:00

(I came across this competition from Sidin's website for flash fiction two hours before the deadline. I have not been too excited by the prospect of writing very short short stories as my belief is that often the descriptions are as important as the plot. But anyway thought of giving it a shot and cooked up something real quick. Have posted my entry here. Hope it is fun)

Jun 26th

I cannot believe it! She agreed to my proposal! I cannot believe that I am going to marry the one whom I have been wooing so ardently for the last year. I am besotted by this woman and so intoxicated by her that I have not touched a drop of alcohol since I met her.

I must be the luckiest man on earth!

Jun 27th

When I looked at myself this morning, a troubling thought struck me. While my lady-love looks like a Nordic Goddess, I look like her pall bearer! I am short and of a dusky complexion. While I was earlier proud of my perfect teeth, I just realized that in the night they are like the headlights of a vehicle.

The complexion cream Handsome&Handsome(TM) that I sell so well, does not work on me! I am overwhelmed by these thoughts. This has led to poor performance at work. I failed to sell a comb to a balding man! Will this union last? How do I make it work?

Jul 2nd

My friends think I am the luckiest man on earth. Little do they know the turmoil inside me. I have been thinking and I guess I am a victim of my own success! My job as a salesman requires me to understand my consumer’s psyche and exploit that. At the risk of sounding immodest, I must admit that I am one of the best. Did I just sell myself to her as if I were an insurance policy? Is this relationship based on love or does she think I am a "great deal"?

I have also been plagues by doubts on my performance. I feel inadequate and repulsive. Oh Gawd Help me!

December 2nd

It has been three months since our marriage and just as I had feared my performance has not been up to the mark. I can feel her losing interest in me. I do not like the way she talks to my friends, she speaks too much to them. Does she tell them of my shortcomings? Recently, I have been noticing that she has been extra attentive of the gardener boy. Must fire him soon. I am a traveling salesman and I am out most of the time. I get nightmares of being father to a b***tard son. Should I end this marriage?

January 1st

Dear Dear Diary,

I had the loveliest new year’s day I have ever had. My resourceful and intelligent wife figured out the solution to my problem. Just as we were lying on our backs after another frustrating attempt the other day, she spotted the picture of my parents in my bedroom which funnily lies in my direct line of vision. She removed it and seduced me yesterday and I must say I roared like a lion. Funny how small things can affect life so much. Anyway, must run, and guess I won’t be talking to you for a while. (giant smiley)

A different approach to Business Education

2008-08-04T09:58:00.000-07:00

After a year of management studies, I am beginning to doubt the aptness of the term “B-School”. The term B-School or business school conjures up an image of a place where “business” is taught. To most people (or atleast me) that brings images of entrepreneurship. However, the primary objective of the Indian Institute of Management must be to create managers. But are managers and entrepreneurs poles apart that the terms “B-school” and Management should appear contradictory?

Usually, the entrepreneur is portrayed as this swashbuckling man of action, stepping boldly and bravely into areas outside the realm of the common risk-averse common man who is contented working for others. I have always felt this portrayal cinematic and an unrealistic dramatization.

A framework that I came across recently sums up the difference better. In different situations, people either behave with a trustee mentality or a promoter mentality. (Reference: A Perspective on Entrepreneurship by Howard Stevenson) The term trustee more closely corresponds to the term manager and the term promoter more closely corresponds to the term entrepreneur. Therefore, any action can be classified in this spectrum as “trustee”-like or “promoter”-like. To give an example, a trustee may view a resource as something that has to be controlled while a promoter is willing to rent/borrow (or beg or steal) for this resource.

The crucial distinction lies here. Therefore, the association of entrepreneurial with certain personality traits is wrong and misguided. What is more important is the association of entrepreneurial with certain world views. Say, there is a person who wants to open a metal fabrication shop. He is new to the metal fabrication business, but his father and grandfather were traders of some commodity. Since they were traders, he is ready to rent machines, taking the gamble that the machines would pay for themselves. Now, would one call this an entrepreneurial personality or a promoter like world view? The individual may consider himself to be the most risk-averse person on earth, he just does not think it is a big deal renting out the machine. To extend this argument, our metal fabricator could show extremely un-entrepreneurial qualities in other matters.

Why all this Ramayana and how is it related to the title? Well, I just think you could design a different kind of business school education with the intent being to foster an entrepreneurial world view. What does that mean?

I would like to design a “B-school” for entrepreneurs in the following manner. The course is of two years duration. It has the semester system. However, each semester has two halves in terms of breaks. There are 60 days of holidays but they occur in 4 regular intervals of 15 days. (The benefits of a wise rest cycle can never be over emphasized).

The first semester has courses – Marketing, Corporate Finance, Organizational Behaviour and Operations. The third semester has a course. That is it. Conspicuous by their absence is Micro Economics and Macro Economics. Frankly, I am in a dilemma in this regard. On the one hand, it would be downright foolish to argue that micro and macro economics are not required by a businessman. Yet, say when you are brainstorming for ideas, or talk about new venture creation, frankly, you don’t use any of those principles, maybe a bit of game theory. Whatever economics you need can be obtained from the net or there are lots of “Economics for Dummies” books. Read it from there. (As an aside one book strongly recommended is Thinking Strategically by Avinash Dixit and Barry Nalebuff.)

Then what about consumer surplus or pricing? My submission is that whatever you need for a business is distilled into marketing. But when it comes to these four courses, just drive people crazy by the rigour. For new venture creation, you do not need accounting, but you need to be able to understand balance sheets. You do not need economics, but you need to know to do marketing research. You do not need to get into indepth quantitative modeling, but you need to be able to interpret SPSS results.

That is first semester. The next semester is spent on coming up with business ideas and refining them. This is where things get tricky. There are no classes as such but faculty mentor business idea teams. Therefore, the class size has to be small. If the intake is 20 say, then there could be 20 business ideas. (though that is unlikely) As and when the guys hit a hurdle they go and talk to the faculty. But there is a catch. What if these guys grow dependent on the professors running to them for every little thing? Every team gets a cap on the time they spend with the faculty. Therefore they better do their homework and come for the meetings. The first term is supposed to have taught the student the basics. Ideally, he/she should be able to google and figure out whatever can be googled and figured out and approach the teacher only when the limit of his/her thinking has been reached. That is why it is important to adhere to this rule very clearly.

The second year is spent on implementing the business plan. Two courses are run now. They are one hour courses that are optional. The two courses are “Business Law” and “Business Ethics”.

Here is an outlandish idea for what the school could do. What if the school gave everyone a sum of money in return for equity stake in the company? (The precise details of this system may have to be worked out) Issues crop up now. In this kind of an arrangement, will innovation truly survive? What if the school has a bad year, will it go out of business? For one, this sum of money will be given to a person and it will be lesser than the individual fees. This also unintentionally incentivizes people of the school to join together. But by giving money, the school also walks the talk. Also, the school could also grow to be obscenely rich or go bankrupt. The consequence of such a system would be to prevent its copying by others and that can be good or bad.

But let’s leave the “school-putting-money-where-its-mouth-is” idea out for a while. The second year is spent on implementing the business idea. The school arranges for legal help, which is again free upto a number of hours after which the startup has to start paying for it. The school organizes seminars and focused networking events. The main merit of the model comes here. Prospective investors (angelic or most often non-angelic) or Venture (Vulture) capitalists would find a lot of incentive to attend these events as they are ideas which have already been whetted to a certain degree.

At the end of the two years, everyone is given a degree. There are no examinations; the market place is the only judge. Also, the need for CGPA is primarily driven by the placement process. Oh and I forgot, this school does not organize a placement process. You are welcome to drop out at any time, you just forfeit the fees, which will be on the lower side.

Therefore, what are the incentives of someone who goes halfway though the course and realizes this is not for him/her. For one, surely outsiders would be very interested in knowing the various ideas that individual worked on. Also, the course could unintentionally create a market for entrepreneurial managers. But the creation of this market must be “natural” and the school must not do anything. That will be a test of the idea as well.

How does it tie-in with the initial framework of Trustee and Promoter. As you would have felt, the course is marked with uncertainty and constraints. This kind of an environment should alter the world view of anyone irrespective of personality. The fundamental point is, you don’t need to know all the answers, you just need to improvise as the problem comes up. From the little anecdotal evidence I have gathered, few people start out on a grand vision and few things started with a grand vision work. So don’t wait for that great idea to come, just look to do different things with small ideas, for a starter.

This just popped into my head today. Do comment on this

A Proposal for a Market for Trading Bunks

2008-08-01T04:49:00.000-07:00

The inspiration for this idea is a certain course whose classes are quite drab. Much to my chagrin I realized that I had unknowingly exhausted my quota of bunks and am doomed to attend all the classes henceforth. The distant reader has no idea of the torture that yours truly undergoes! The torture is not so much the class itself, rather the fact that I had chosen this course as an elective i.e out of my own volition and hence have no one else to blame.

Then it occurred to me that certain individuals do not bunk classes at all or, at any rate never use, nor even intend to use up their full quota. Let us call these people who have the bunking quota to be “possessors of bunks”. Therefore, (the logical mind thinks), on the one hand we have people who need bunks and on the other hand we have those that are not particularly enthusiastic about the said bunks.

Eureka! There is a market here! Before we get into the details, there is an assumption here. The assumption is that the penalty for not meeting attendance requirements is hefty and it is strictly enforced. If it is not strictly enforced or the bunk penalty is not significant, there is no need for a market. Just suck up to whomsoever it may concern when you are in trouble!

The question begs to be asked and I shall ask it “Why do some individuals not bunk?” For us to build a market there must be an economic motivation underlying bunking/non-bunking which gives value to it in the first place. That economic value is value of time. If I think I would be better off sleeping that attending class then there is an incentive to bunk. This is important from the non-bunkers’ side. There are two species of non-bunkers.

There are some who derive a moralistic pleasure out of non-bunking i.e for these folks “non-bunking” is a way of creating a moral pedestal, a way of telling the world, “I am more perfect than you because I don’t bunk, you depraved turd.” Sadly, there is no cure known for moralists and these people shall grow on to becoming social activists, cause fighters, prohibitionists and other generally undesirable elements of society. In fact, my belief is that, as much harm is done by people who set out to do “good”, as those who set out to do “bad”. For who decides what is good and bad? If he who doth bad, doth not think it is good from his viewpoint, he would not do it, would he?

The second class of bunkers would be my target audience. These people go to class with a none-to-sure emotion. Years of being sincere makes them feel that missing class, would somehow do them harm, but basically they are kids who would like to have a good time in life. They just have a voice in their heads which keeps on chiming “After all, there is a chance that something significant could be done in class…” Correction, all of us have that voice, just that some of us have stopped listening to it a long time ago. However even they know that some classes are just a drag. More fundamentally, they have nothing better to do with their times. Nothing better to do with their time. Therefore, if these possessors of bunks could be compensated with something for their time, then there is a chance they would bunk.

Out of this crucial insight flows the market for bunking. As a first step, let us assume that only bunks can be traded for a particular subject. Therefore, is we have some course, say Creative Financial Accounting 101 and 60 people take it, then the bunks are traded only within these 60. We develop a software system where each guy in the class offers his bunks for sale or bids for bunks.

A system would look like this:

Since it is only one course, the same guy cannot buy and sell bunks. However, there is one issue here. What if someone sells bunks without having enough of them? Why would he/she do that? In an educational setting, you know everyone usually. But what if it is a huge campus? And what if the market for bunks is irrational and over-pricing it? Then maybe someone would profit by selling bogus bunks.

This is where the assumption fits in. If the penalty is strictly enforced, then the seller of bogus bunks does not have the incentive to sell it, because he/she is putting his degree in jeopardy.

But anyway, just to prevent any irrational behaviour, we can have an additional field for available bunks so that people boycott bogus bunk sellers.

But this kind of a system is really not very optimal. In our example, Middleton may not like Creative Financial Accounting but he may like the course “How to make Common Sense Sound Sophisticated” while Middleshwar may prefer the latter to the former. In this case, they end up taking these courses, and because of our first requirement, their pool of bunks is restricted to their respective classmates. To solve the problem, we relax the requirement of bunks being traded only within a section. Therefore, if an individual takes 5 courses and he/she is allowed 5 bunks per course, then that individual has 25 bunks to trade.

One thorny issue remains. What if Middleton takes Creative Financial Accounting as well as “How to Make Common Sense Sound Sophisticated” (HTMCS3) and the former course has marks for attendance while the latter does not. Can that individual transfer bunks to himself free of cost or should he pay the market rate for HTMCS3 bunks? Till now we have also implicitly assumed that there is no agency like an exchange.

Again, going back to what we have said, the 25 bunks is Middleton’s property. Therefore, he/she should be allowed to transfer it free of charge. But as such I am not in favour of it.
The better system would be to insist that Middleton pay the going rate for HTMCS3 bunks.

Voila! Again we apply the power of Adam Smith’s invisible hand to setup a most satisfactory system for allocating one’s time. Sigh, if only someone would implement it.

The Hotel at TinStop Hill (Concluded)

2008-07-23T03:42:00.000-07:00

(The Second part of the story, The Hotel at TinStop Hill. The first part may be found here. If you have not read the first part, it really does not matter. You could read that after this one)

The Mysterious Mr. Travistock took a thoughtful puff on his cigar. “Capital”, he muttered, looking into the distance. He could have been referring to the quality of his Cuban cigar or the source of his single biggest problem. After an interval of five minutes, he looked back at the papers strewn across his mahogany table. It was an antique table once gracing the study of the King’s Advisor of the Isle of Sumatra. The table had a unique scent which put his mind to peace and helped him concentrate.

Mr. Travistock had unique powers of concentration. He could do many things at once. It was as if his brain was compartmentalized into strictly exclusive parts and each piece of information went into the relevant slot. This was best illustrated in the manner in which he dealt with the papers strewn across the big table.

On one side, lay the latest version of a catalog of antique lamps. In front of him lay papers on a new project he was working upon, his next venture (hopefully) and to the other end lay the papers concerning the Hotel at TinStop Hill. Watching the mysterious Mr. Travistock at work was indeed an experience. He would pick the catalog, flip through it two, three times, then suddenly seize a bunch of papers on the Hotel at TinStop Hill and make furious notings and then just as suddenly go back to the catalog. To an external observer the movements seemed sporadic/random and irritating. It was this tendency that had made him conclude very early on that he would never take a partner for his business or in fact, work too much with other people if he could avoid doing so.

Just earlier that day he had got the news of Jim’s resignation. It did not affect him. He was glad in a way. He respected Jim too much to tell him that he had to leave. He hoped it would start a wave of panic that would result in everyone leaving. But he knew that would not happen. Human beings after all had to stick on to that damned thing called hope even if reality came and slapped them on their faces, he thought cruelly.

As per the contract there were no liabilities to the Hotel at TinStop Hill if they resigned. He felt nothing at all, for as far as he was concerned they had been extremely well compensated.

His biggest worry was with respect to the finances. It looked like he was going to lose money and a considerable amount at that. That per se did not affect him. The Mysterious Mr. Travistock had started as a Tobacconist (under his real name, that no one knew today) and was a compulsive entrepreneur. No, he was actually a compulsive gambler but his bets were on companies. Starting from a humble tobacconist, the Mysterious Mr. Travistock had grown to be one of the richest men in the world. Yet, being a borderline misanthrope, he went to often crazy limits to avoid human interaction and no one knew the actual identity of the man. This was in direct contrast with the rest of his peers who threw money lavishly in a desperate bid to showcase their wealth.

Looking at the papers of the Hotel at TinStop Hill, Mr. T finally let out a sigh. This was going to be a loss. No way out. Again, that morning he had had pieces removed from the Grand Steps to Serendip and auctioned them. They had been sold at a considerable loss, which had in fact crashed the market as well, but he needed the inflow to keep the venture afloat. That caused a momentary pang of panic in him and Mr. T chided himself for allowing a human emotion to affect him.

He laid down the papers and took the drink in his hand. He stood up and approached the window. It was time for reflection. Clearly, he had taken risk he could not handle. The Hotel at TinStop Hill had been envisioned as the ultimate and default destination for powerbroking. He had hoped to build a kind of International power centre at his Hotel. The first few days went like a dream. The crème de la crème of the world’s political stage wanted to come to the Hotel at TinStop Hill. The conversations carried out were of the greatest import and the Hotel provided a plethora of communication facilities, anti-bugging devices, motion sensors and anything else that caught the fancy of the world’s elite security agencies. The access to those devices was controlled by Mr. T himself and a few select individuals. With time tremendous pressure came to be applied on these individuals by rival intelligence agencies in a battle for information. Of course, Mr. T did anticipate all that, and his whole idea had been to provide trust in return for exorbitant amounts of money. When he had started, he had been extremely clear on one thing which was that he would not compromise on integrity, come what may.

He was not unduly worried about personal security. His house, a bungalow that he had bought on TinStop Hill, from a dying old ammunitions baron who had no children, was equipped with the latest security devices in the world. Also, no unnatural deaths ever occurred in the TinStop bungalows, the repercussions would be too much.

However, with time, the pressure from a certain quarter had been too much to bear and he had crumbled, letting out information on one deal. Somehow, and he never understood how, for he had extracted a number of concessions to safeguard him and his business, the word got around and soon some of the most powerful organizations in the world started beating upon his door making all sorts of requests. And then literally, everything crumbled. He found himself caught in bizarre power plays that were eroding into his personal wealth. Such was the enormity of that wealth, the he was still amongst the richest, but the mental pressure had been quite in excess.

He caved and struck a number of compromises which essentially ensured that his career was dead. The negotiations had sickened the usually unemotional Mr. Travistock. As mentioned earlier, he loathed unnecessary human contact. He found human beings terribly petty and insecure. More irritatingly, a set of insecure human beings always seemed to gang up and stifle those who appeared to be secure. In many of these negotiations, he felt he had seen a sadistic glimmer in the eyes of men, who were keen to see the Mysterious Mr. Travistock on his knees.

As he returned to his table, he was too strong, he would not sink. But clearly to continue swimming, he would need another identity. The Mysterious Mr. Travistock took out a piece of paper, scribbling furiously…