Thursday, October 30, 2008

Worse than Divorce ...

In the recent tumble down of the stock markets where people lost loads of valuation (read 'money') ...
a Trader commented ...
"This is worse than a divorce. I've lost half my net worth and I still have a wife."

(Caught this on the status message of a friend, Karan Sadhwani)

Optimism !!

The glass is not only half filled but there is nice refreshing fruit juice in it !!
Dont you think that is taking optimism just a tad bit too far ??

Wednesday, October 29, 2008

Perils of Consulting in Festive Season !

When I got into Consulting ... friends said "Cool ! Now you will be travelling places !"
Well .. I did travel ... 14 months in Geneva, Switzerland - 6 months in Kuala Lumpur, Malaysia - now in Dubai, UAE ....
Ever since 2005 ... I have been away from Home ... during Diwali and also during my Birthday ...
Fate invariably ensures that i am away from home, from family, from friends on these two very important occasions ...
Diwali is a festival where the entire family gets to come together ... its the festival of lights, joy, togetherness, lots of home made sweets, meeting relatives and friends, wishing everybody prosperity and happiness .... and so much more .... AND ... I end up ebing away from home !
My Birthday is a day when i am supposed to be at the centre ... wish wishes, emails, ecards, phone calls, gifts, party all flowing towards me from friends and family ... AND ... I end up being away from home ...
It all started in 2005 when i went to Swiss just before Diwali ... in fact i did return after a week only to see Mumbai celebrating Diwali from 22,000 feet above sea level ... and then just before my Birthday I had top fly off to swiss again on a long term assignment.
In 2006, I was in swiss .. during Diwali and my B'day ... no chance of coming to India for that ... Although I enjoyed both out there ... Indian Association of geneva (IAG) made my Diwlai fantastic and a few good friends (Pankaj & family and Shruti and sister) made my birthday memorable !
in 2007, I was in Malaysia with my wife .. I cheated fate and flew down to Mumbai on Diwali day with my wife and surprised my entire family. From the airport before taking off, we even called up home adn talked to mom-dad cribbing about the fact that my job was keeping me away from family on festive occasions. :) Birthday was once again away from home, in Malaysia, BUT i was not alone. My wife was with me adn we had a good time celebrating my Birthday at a nice height with a fantastic view at KL Tower !!
In 2008 ... the worst years of all ... I had to fly down to Dubai on a project just before Diwali (infact .. literally on teh first day of Diwali) and i will be returning home after a month ... just after my Birthday !! Cruel are the designs of Fate when their mood is in a wierd sense of humour !!
So here I am .. cribbing about myself being away from home in festive season ...
What about next year ... i dunno !! I just hope I am with my family on both occasions !!
if it does not happen ... I might just make it happen !!
Happy Diwali !! Happy New Year !!
Wish you a very happy diwali and a prosperoud new year ahead ....

Friday, October 24, 2008

Outsiders ! Grrrrrrr - MNS !!

Tuesday, October 21, 2008

Life and Philosophy !

When life does not find a singer to sing her heart,
she produces a philosopher to speak her mind !

Thursday, October 16, 2008

Questions in Life !!

"Alchohol may not be the answer for all your questions !" - Swami Vivekananda

... to which a friend of mine added ...

"But it sure helps you forget the questions :)" - Vasantha Sapalinga

(BTW ... NO .. I do not believe nor subscribe to the thoughts above. I
am fine with the questions in my life and do not feel the need to
'forget' them using alchohol :)

Sunday, October 05, 2008

Left Right Left ...

The following quote is relation to the recent Economic / Financial Bubble Burst ..

There are two sides to a Balance Sheet - Left & the Right ( Liabilities and Assets respectively). 
On the Left side there is nothing right.. and on the right side there is nothing left.

Friday, October 03, 2008

Understanding the Financial Bubble !

I have never been a good student of Finance ... not even Economics. So all this talk of financial bubble, Lehman Brothers Bankruptcy etc was Latin and Green for me ...

I came across an interesting blog post by Great Bong wherein a simple (yet complex for me) explanation has been attempted.

Also, my best friend took some pity on my 'poor' state of mind (economically speaking) and sent me an even simpler version of the story which she received as a forward from someone who received it as a forward and so on ... I reproduce here that simple explanation ... and if the author happens to see this .. kindly write to me so that i can give the credit where it is due :)

Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

1) There were 3 citizens living on this island country.  A owned the land. B and C each owned 1 dollar.

2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.

* The net asset of the country now = 3 dollars.

3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.

*A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B sold his land and got 2 dollars, so his net asset is 2 dollars.
* C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
* Thus, the net asset of the country = 4 dollars.

4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.

* B loaned 2 dollars to A. So his net asset is 2 dollars.
* C now has the 2 coins. His net asset is also 2 dollars.
* The net asset of the country = 5 dollars. A bubble is building up.

(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.

* As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
* B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
* C loaned 2 dollars to B, so his net asset is 2 dollars.

* The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.

(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blew, and an evil thought came to C's mind. "Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more."

(8) A also thought the same way.

(9) Nobody wanted to buy land anymore.

* So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
* B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
* C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.
* The net asset of the country = 3 dollars again.

(10) So, who has stolen the 3 dollars from the country ? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B's net asset is still 2 dollars, his heart is palpitating.

(11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.

* A owns the 2 coins, his net asset is 2 dollars.
* B is bankrupt, his net asset is 0 dollar. ( he lost everything )
* C got no choice but end up with a land worth only 1 dollar

* The net asset of the country = 3 dollars.

************ **End of the story; BUT .... ************ ********* ******

There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.

A few points worth noting -

(1) When a bubble is building up, the debt of individuals to one another in a country is also building up.
(2) This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss.
(3) An over-damped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game,  he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.
(8) As in the case of land, the above phenomenon applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.


So ... do u feel better !!

I definately do ... Thanks to GreatBong and my best friend (and the person who wrote the above ABC story! )

I taught Retail Marketing at IIM Shillong !! (Not really)

Nice title na ... :)
but before you begin to think too much .. let me reassure it .. the title is a piece of fiction :)
Well ... I definately did not teach at IIM Shillong ... in fact .. I havent even been there.
But a very good friend of mine did. She recently visited IIM Shillong and took 2 sessions on Retail Marketing ...
So whats this about the title of this blog post ??? Read my friends post here and u will find me there (albeit tucked away in a corner)
Franky, i just helped my friend in her preparations and provided some good amount of moral support

Wednesday, October 01, 2008

Life is a 5 ball Jugglery !!

Speech by Bryan Dyson (CEO of Coca Cola)


Imagine life as a game in which you are juggling some five balls in the air.
You name them - work, family, health, Friends and spirit and you're keeping all of these in the Air.

You will soon or one day understand that work is a rubber ball. If you drop it, it will bounce back.
But the other four Balls - Family, Health, Friends and Spirit - are made of glass. If you drop one of these; they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same.
You must understand that and strive for Balance in your life.'