Is it the right moment ?

Is it the right moment to ask her out ?

Is it the right moment to ask the boss for a leave ?

Is is the right moment to change a job?

Is is the right moment to invest in gold ?

Is it the right time to message your client ?

We all grapple with such questions, day in day out, all through our lives. It is hard to find the right moments and harder to find time and act on it when those moments do arrive.

Thank God, Zoment application exists to take care of some of those questions. At least my messages reach my friends & colleagues at the right moments!

You wonder what Zoment does for you? Well, Zoment enables you to schedule your messages for location and time.

So the request for leave reaches your boss at sharp 9 AM, when you know he will be fresh thus giving  your request the best chance of approval. And your plead to meet that girl next door reaches her when she is visiting a cafe nearby, a time perfect to make a pitch ...... Cool, isnt it ?

Do try Zoment , an easy tool that helps you cash in on some of those special moments!

Here are the links -

http://goo.gl/bI6E5 (iOS)

http://goo.gl/uKF6a (Android)

Is OneYear MBA a disruptive innovation?

“Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”

To put out simply, a disruptive innovation is cheaper, dumber, and unattractive to the existing set of customers. Rather it attracts a new segment of customers. Lets evaluate the 1year MBA program being offered in India by IIMs, ISB and few other premium management institutes on the same scale of disruptive innovation.

a    Unattractive to a typical MBA aspirant – In India we are taught to learn and then earn contrary to the western philosophy of earn and learn. Learning, in India, for few doesn’t stop after graduation as they chose to complete their masters in business management before they take on the corporate world. Many students chose an MBA early on (read just after the college or when they have 1-2 years of experience) as they think that a two-year program from IIMs is a sure shot way to success in life. For many of them “Placements” is the biggest attraction, probably higher than the learning part. Then there are few who are so nostalgic about their graduation days that they are driven towards another college stint. Similarly many other reasons do exist for young people to choose a regular MBA program.

This mindset has created a flux of young, mostly fresh out of college, aspirants, who compete vigorously to secure a seat in the prestigious two year MBA programs in IIMs and other reputed institutes. Data corroborates this hypothesis, as 80% of the two year MBA class at IIM comprises of people with 0-2 years of experience.  For these folks time is an abundantly available resource as they try to take mileage out of their MBA. And mileage is important, as placement is the key driver for their MBA. For them a one-year capsule course is not attractive, as it doesn’t have the mass placement muscle that a two-year program enjoys.

b.   Dumber: Compare 860 contact hours of a two year full time MBA (IIM-C data) with a 800 hours one year full time program.  Holy Cow! You may wonder. That’s the reality! The course design for a one-year MBA program is no different. The same knowledge capsules designed for a two-year participant are shrunk slightly and made available to a one year MBA participant. The teachers, the courses, the structure, the workload, the assignments, the methodology everything remains the same. So from outside (well from inside as well) it appears to be a dumber course. It appears that not much intelligent thought has been put in the course design and execution making it dumber and unattractive for many. Also many wonder if one year is good enough to transform an individual, which they think a two-year program does help in achieving.

c.      Cheaper – I know many would be inching to grab me by my scuff reading this absurd statement that one year MBA is cheaper.  Lets look at it objectively. Two year MBA at IIMs will roughly cost 12 Lacs or so for two years. Plus the living expenses would constitute another 8 Lacs or so. So one can expect to dish out a total of 20 Lacs in two years. Is that it? No way. One needs to add the opportunity cost of two year of job forgone to calculate the total expense. So suppose a guy with 6-8 years of experience earning 10-12 Lacs of yearly income goes for a two year MBA, his total expense would be:

Two year MBA – 12 (tuition fees) + 8 (living exp) + 2*10 (opportunity cost)  = 40 Lacs for two years.

Plus he only starts earning after two years. In contrast a one-year MBA student spends 14 (IIM-C) -20 Lacs (other IIMs) as tuition fee and then 5 Lacs as living expense for a year. After adding opportunity cost of job it comes to:

One year MBA  - 20 + 5 + 1*10 = 35

So total comes to 35 or so for a year. Hardly a difference of 5 Lacs one may wonder. Not exactly! One saves a year of employment, which can give around 18-20 Lacs in return, which is 50% on average more than what a two year program can fetch for a fresher, and that too a year early. So by the time the clock his two years the situation is:

Two year MBA – 12 + 8 + 2*10 =40 + a 12 Lacs job (on average)

One year MBA  - 20 + 5 + 1*10 = 35 – 18 =17 + 18 Lacs job (on average)

 Now see which one is cheaper for a person with 6-8 years of experience? The scene is entirely different for a person who has 0-2 years of experience.  For him the two years expense would be around 25-26 Lacs as his forgone salary would be in the range of 2-4 Lacs. He would need the backing of a more renowned course (read 2 year PGP) for securing a good job. Plus he (in general as exceptions do exist) wouldn’t be able to command an 18-20 Lacs job right after a one year MBA.

So it doesn’t make sense for a less experienced guy to go for a one year MBA right now. In other words one year MBA attracts those 20% of students who are not interested (or can’t afford) in a two year MBA. Thus the argument that it attracts a new set of consumers in the market holds good as it brings in those students who otherwise would not have pursued MBA.

To give credit to Mr. Christensen – a one year MBA does fit the bill for a disruptive innovation. As it has picked up and become popular in Europe, it has the potential to become the preferred course in India well. As the popularity will grow, as the alumni base increases and does well, these one year programs would start attracting folks with the 3-5 years of experience. And time may not be far away when these courses may become equally popular if not more. 

However, the focus of the institutes should be on making the course more relevant than just re-packaging the same two-year course. That would take the proverbial dumbness out of these one-year programs. 

Is Euro one of the culprits in creating and protracting the latest European credit crisis?

Is Euro one of the culprits in creating and protracting the latest European credit crisis?

European union was formed in 1999 with the vision of creating “One Europe”.  Its objective was to increase the economic and political unity and financial integration thus leading to a sustained economic growth. One of the means employed for achieving this was to have a common currency – the Euro. The idea was to curb the costly currency conversion between European countries thus allowing free flow of money towards better business opportunities across the countries thus leading to harmony and prosperity.

Seventeen member states of the EU adopted the Euro. Additionally, few other countries in the central and eastern Europe, such as Baltic countries, pegged their currencies to the Euro thus linking their monetary policies to that of the EU central bank. This EU worked well for a decade, during which the member countries experienced rapid growth and high employment rates. However, the very environment created by Euro, which was initially congenial for growth, in the background fostered a credit bubble.  

How did that happen?

European union consisted of core countries (rich developed economies such as Germany, France etc) and periphery countries (poor growing economies such as Spain, Greece, Ireland etc).  The merger in EU created different effects for each of these groups. Historically, the public and the private institutions in the poor periphery countries had to pay 4-5% more interest (spreads) than their rich core counterparts on its bonds resulting in a higher cost of capital.  However, when Euro was introduced these spreads completely disappeared. Capital was made available for everybody at the same price. This brought an immediate tangible benefit in the shape of lower funding cost for governments, corporations and households.

The free capital flow not only fueled the demand for credit but also triggered a boom in asset prices and domestic demand. This increased money supply also resulted in a greater demand for imports and stimulated a rapid expansion in the non-tradable sectors such as real state and financial intermediation. The effect was rapid increase in wages and cost, which in turn affected the profitability of tradable sectors (such as manufacturing). Net result was that the higher costs negatively affected exports. 

Secondly, the rapid growth in non-tradable sectors further attracted bank and FII investment in it whereas low growth in the tradable sector resulted in a reduction of FDI investments. Increasing imports and decreasing exports resulted in current account deficit and inflation. And once the current account deficit started increasing, these poor countries became increasingly dependent on the foreign capital inflow to fund their deficit thus further increasing the risk of financial disruption incase the flow stopped.

The situation was somewhat different in the richer countries as they witnessed expansion primarily in the tradable sector during the same period. Thus their export to the GDP ratio increased whereas the periphery countries saw a decline in the same.

In the pre Euro regime, every country’s central bank controlled its currency, regulated local interest rates and credit conditions. However, with the euro, that power now rested with the European Central Bank (ECB); And ECB adopted a uniform policy.  Unfortunately, this one policy didn’t fit all. Low interest rates became suitable for core countries whereas it were too low for the “periphery” countries. At the same time, governments in the peripheral countries failed to effectively use the fiscal policies to control rising inflation and account deficit.

Additionally, Euro’s creation gave private investors a feeling of reduced risk. It was widely assumed that the strong core countries would protect the weak peripheral countries from any eventuality. Hence capital kept flowing in at a rapid pace resulting in further compression of interest rates. For example: In late nineties, rates on 10-year Greek government bonds averaged 9.8 percent, compared with 5.7 percent for similar German bonds. By mid 2000, Greek bonds fetched 4.3 percent, just above the 4.1 percent of German bonds. It is evident that the Euro helped in creating this credit bubble resulting in a higher account deficit and inflation.

This boom came to a sudden end when Lehman brothers filed for bankruptcy. Staring Sep 2008, all capital flows reversed. The most severe retrenchment was seen in the banking flows from the core countries. As risk aversion rose and equity markets sank, banks in the core countries faced capital shortage. In turn they curtailed their supply to the peripheral countries. This resulted in a sudden dip in investment and consumption in the periphery countries triggering recession. The loss in demand negatively affected government revenues too, thus further increasing government deficit and compounding the existing current account deficit problem.  Lack of capital further resulted in increased financing cost for both government and private sector.  Governments in these countries needed fund to sponsor their account deficit that was not available now. But no bank, government or private institution was willing to lend them. Thus what appeared to be a banking sector problem soon translated itself into a sovereign debt problem, pushing these economies to the brink of bankruptcy.

Did Euro impede recovery as well?

Once the credit bubble had burst, the euro impeded the economic recovery as well. The periphery economies needed money for recovery, which they found hard to find. There were few ways how the periphery countries could have crawled their way out of this recession. First, if they had the monetary policy under their control (independent currency) they could have printed more money and could have sponsored their debt as well as invested in infrastructure thus fueling demand. Second way out for these countries to recover from the financial crises, was to depreciate their currencies. This would have made exports and local tourism cheaper, creating more jobs. Here again, these countries couldn’t leverage this option as they were latched to the euro.

The problem now is that if any of those peripheral countries defaults, it would create a panic situation where investors may dump bonds of other periphery countries fearing failure in those countries as well. That could lead to sharp increase in interest rates and put more losses on European banks. A banking crisis now in turn will endanger the economic recovery. Thus the prime focus in Europe right now is to prevent any fragile peripheral economy from defaulting till those countries figure a way to handle their debts. And the cost for it is being bore by the core economies for now. Contrary to the intent, this very process makes the euro a source of contention, as countries shift blame as well as costs to others. Given Europe’s huge debts, the question is how long this model can sustain itself?

Last day email sent on Mar 31, 2011, exactly 2 hrs before India Vs Pakistan cricket world cup semifinal...

*****************

As they say “its inherent for water and aspirations to keep growing” .. So it’s time for me “to stop dream living and start living a dream!”

For almost nine years I never chased balls outside the off stump..never fallen trap to sucker balls.. played only to those deliveries that were closer to stump or on my legs..  worked hard for my runs, ran hard, did well both on the homely spinning tracks as well as on the bouncy and swinging overseas wickets. There were few lofted shots in between but all of them were well calculated risks (or at least I think so).. I feel I played a satisfying inning so far ; however, now it’s time for me to turn it on.. I hope that now  when I play those lofted shots aiming for the boundaries, I still get lucky enough to see my edges fly pass the keeper or hope to find a Kamran Akmal dropping the straight ones... I need every bit of luck and wishes in the remaining part of my inning..  head down, fingers crossed and praying!

The updated  score will always be available at  http://in.linkedin.com/in/XXXXi or  XXXXXX@gmail.com.  For all  your needs now, please contact the new star batsman of our team - XXXX and  ever reliable XXXXXX.

I will miss each one of you and this wonderful company!! Till we meet again.. keep playing straight until the life comes calling J

Thanks,

XXXX

PS: BCC to all who I liked working with.. My apologies if I missed anyone..

Critical guidelines for a Critic!

Well we all might have heard about that saying on critics – if you cannot do it then teach. If you cannot teach it then criticize! Critics are not rare but are everywhere. Thanks to their omnipresence, Karan Johar was forced to admit in an interview that he hardly finds audience for a movie now, what he finds always are critics. I have to agree with the chap once here (even if I find it hard to digest his cloying melodramas). We have so many critics around, ready to share a piece of their mind on the first given opportunity. Some of them might have a few valid points to make but most of them are not even as intelligent as my milkman, who by the way always miscalculates my monthly bill even after using a calculator.

Last week, I saw news about Ms Roy. A flashing breaking news sign on my TV screen attracted my attention on a Tuesday evening. With due respect to her, looks like, she went overboard with her romance with Naxalism and Maoism. Here are few of her quotes which I felt lacked both compassion and intelligence.

“"The Naxal movement could be nothing but an armed struggle. I am not supporting violence. But I am also completely against contemptuous atrocities-based political analysis"

"It ought to be an armed movement. Gandhian way of opposition needs an audience, which is absent here. People have debated long before choosing this form of struggle"

"I am on this side of line. I do not care...pick me up put me in jail"

Now, I am not a born critic, however, I cannot help but dissect these statements of hers. Probably this would help her understand what actually she has said.

Let’s look at the first one - “"The Naxal movement could be nothing but an armed struggle. I am not supporting violence. But I am also completely against contemptuous atrocities-based political analysis"

The first sentence starts with a conclusion. The Naxal movement, according to her, ought to be an armed struggle. Okay! That’s a point of view. She, like everybody else, has the right to have her view. But in the second sentence following that she states that she doesn’t support violence. Well, logically, if she thinks that Naxals have to use the arms to pursue their agenda then I fail to understand what is she is expecting them to do with the arms if not kill people? They were not defending themselves when they sabotaged that Mumbai bound train that killed more than 150 innocent people and when they blew up a bus carrying civilians, along with few army men! Now, by making these contrasting statements she conveyed the confusions of her twisted mind. Those men with arms are not mere actors of a bollywood movie; they are killing machines out there who have raged a war against the country. For her third sentence – I have only one thing. In India, many people/communities/regions/states have issues. If they all go by this philosophy, you will surely irritate some hardliner with your childish rants and would soon find your head on a chopping board!

Now, let’s look at the second statement - “"It ought to be an armed movement. Gandhian way of opposition needs an audience, which is absent here. People have debated long before choosing this form of struggle ".

The first sentence looks to be a repeat of the first sentence in the first statement just worded differently. She thinks Indians are not smart enough to understand that she is lacking thoughts and hence is coining different sentences to convey the same message! Anyway, let us focus on the last two sentences – “Gandhian way of opposition needs an audience, which is absent here. People have debated long before choosing this form of struggle.” Now did Gandhi ji have a ready audience, eagerly waiting to follow him, before he actually got the thoughts of non violence? Or was it the case that Gandhiji influenced millions of Indian, and foreigners alike, to adopt non violence? Ms Roy, audience is always there but it needs a leader to influence their psyche. Do not blame your incompetence to impart your point of view to their lack of presence. And who are these Maoist who debated these issues and with whom they debated? Do they really represent the masses? If yes then why they didn’t fight and win a single election thus becoming the change agent for the future of their people? That may be because they do not represent people.

The last statement of hers that I will look at is- "I am on this side of line. I do not care...pick me up put me in jail". No, we need people, whose wrong ways can be corrected to be in jail. And we certainly do not want somebody like you to be in jail and influence those established goons by your non Gandhian views so that they take up some armed struggle as soon as they come out of the jail and kill more innocent people. So my suggestion for the government is to deport you to Pakistan, where you will find many takers of your views!

I was forced to contemplate a checklist for all such self knighted critics. Here are the few guidelines:

a. If you have views then at least stick to it. If you support ways of Maoist then have the courage to brace the outcome of their actions also! You cannot just eat poison and wish away its harmful effect!

b. Chose your subject carefully. Do an IQ test to ascertain your intelligence level on a subject before you utter your grammatically correct yet disdainful illogical views! You may end up winning another bookers prize but you will not win hearts if you blatantly display your lack of empathy!

c. Do not live in Mumbai, Delhi, Kolkata or a Chennai and speak in a morally high tone at glittering forums. Instead go to the roots and help people uplift them! Help your education, understanding and compassion and make them see the correct path. Understand the issue from both the sides and stick to the Gandhian philosophy. After all that is more Indian then the AK-47 which are being used by your friends!

d. Be compassionate! Cry for those who lost their loved ones at the hands of stupid terrorists/maoist who didn’t even care (or had brains) to ascertain the track that the good train was going to use and ended up derailing a passenger train thus killing so many innocent people!

e. If this is all to enter politics, then there are brighter and righteous ways than just opposing whatever government does.

f. If you still cannot improve then you have two choices – relocate to China and hopefully you will adjust to their totalitarian approach (and I think you have already stretched the meaning of democracy to its limit) OR start commenting on Bollywood movies. They have so many critics so wouldn’t mind one more waste

Hope the sanity prevails and her made up socialism rests for few precious moments which can make her realize how badly she has hurt the sentiments of those who lost their family members in this not so holy war!!

Did Tendulkar really nick it?

Till this moment both Abhishek and I are not sure whether Tendulkar really nicked that out swinger from Aquib Javed. It was somewhere in early nineties and India was playing Pakistan in a one day series.  India was chasing a 250 odd score and was already two wickets down. Tendulkar was facing ominous Javed when that fateful delivery was delivered – the delivery that decided the future of my relationship with Abhishek. As soon as the ball passed Tendulkar’s bat, there was a huge appeal.  Tendulkar didn’t move an inch but the ball did after passing his bat; And Pakistani’s sensed the edge. They all went up for the appeal only to realize that the umpire was not amused.  He denied that appeal only to start a perennial cold war between us - two best friends.

Although highly disappointed, Abhishek was convinced that Tendulkar had nicked that ball. He was an ardent Tendulkar worshiper; however, he valued his honesty more than anything else. It was the era when snickometer was not yet invented and so everybody watching on television relied on their visual senses to judge any such incidence.  But then again, we both had different visual capabilities. I wore glasses and Abhishek didn’t.  So we saw, or rather interpreted, the incident differently. For me, it was certain that there was daylight between Tendulkar’s bat and that ball. In contrast, Abhishek, like the Pakistanis, saw a clear deviation of the edge. So I was happy and he was shocked when the umpire gave it not out. Our reactions surprised both of us.  I viewed Abhishek’s views as anti nationalist while he thought that I was being unethical.

Tendulkar, like any great player, would have walked if he really nicked it I argued. As my evidence I recalled a similar incidence when he walked off against South Africa on the faintest of the nicks which was also not evident to the naked eye.  So logically he would have walked had he nicked that ball. However, Abhishek was not ready to heed. He came up with his counter arguments. First, he argued that this was an India versus Pakistan affair, where stakes were very high for everyone, probably more for the best players.  Second, India was in spot of bother then.  But on the other day against South Africa, India was in a commanding position when he walked off. 

Tendulkar, a national hero, was bigger than life and was my personal favorite. So by saying that he nicked it and didn’t walk, Abhishek hinted that he was not upright. And then he was not even budging from his ridiculous position.  To me he was on the brink of blasphemy.  I insisted that is why we have umpires on the field - to adjudicate.  Even if he nicked it, he has the right to be there until he is given out. Abhishek countered that by saying why do then players walk when they are clean bowled or are caught at covers for that matter and not when they get a faint nick? Our arguments got hostile and it soon became Abhishek versus Ashish rather than remaining as India versus Pakistan.  We argued mercilessly till the deep roots of our friendship ruptured not to be mended again.

I still think that Abhishek was wrong in debating about that incident- Tendulkar had clearly not edged that ball. But I do realize now that he sure hinted towards pseudo ethics that do exist in each of us.  When he argued that probably players looked at the scoreboard and the opposition before they decided whether they should walk, he hinted that we sometimes evaluate the situation before deciding whether to behave ethical or not.  Why to blame the players, we ourselves would not have walked had we were at 1 and would have walked with pride had we were at 100, not out! Also, we probably might not have walked against our arch rivals but might have done so against any other opposition! And above all why do we need a third person, an umpire, to judge whether somebody is out?

Is this discussion limited to cricket only? Don’t we face such dilemma’s day in day out in our lives? What do we do then? Would we behave the same way if we find a 500 rupee bill vis-à-vis 500,000 cash lying unattended and especially when no one is watching? Would we have the same conviction when we confront our boss vis-à-vis any other subordinate when defending some ethical point? Aren’t we a tad lenient when dealing with our kids vis-à-vis that of our neighbors when they misbehave? Don’t we feel the urge to drive on the wrong side of the road when the traffic in our lanes at Hinjewadi is jam packed? Don’t we feel there is something wrong with the moral/ethical scale we use? 

Ideally, we all should behave the same way irrespective of the situation. Those among us who do that follow some basic principles in life, for them ethics and morals are absolute and not relative. Those people don’t dilute their values to cater to their surroundings. They have a fixed scale for their ethics/morals and hence their value system remains intact in every situation. They might be rich, they might be poor but they are always ethical.  However, most of us are not that way. Why? The answer rests with the basic human urge to win (probably win at any cost). And since everybody wants to win, our sense of right or wrong fades away. The only thing remains is the win.  And hence there is a need for an adjudicator - a judge, who can tell who won and who lost. He is probably not the one who decides who is right and who is wrong, he just decides who won and who lost based on the evidences at his disposal. And that is why there is an umpire in every game to take these on-field decisions.

But what about our day to day lives? We do hundred of things every day – some are right and some are wrong. So who adjudicates on these issues? It is our conscience that helps us makes those decisions. First, it drives us to take right decisions even when they are clearly not the winning decisions and sometimes the other way around.  And this is something we see in real life too. We often see those who win are not always right and those who are right don’t always win.  Second, many a times it also gives us the power to admit our faults and helps eradicate the associated guilt. Andre Agassi probably was a relieved man when he admitted taking a banned substance to enhance his performance. People might criticize him for his admittance now  quoting that he was doing this to publicize his book; but those people forget that he could have lived a life of a saint and even then could have sold copies of his book and that he is no short of money, so it wasn’t about money probably!   May be it was about redemption for him as he had already risked his reputation admitting that. Although late, however, he chose the right path; and so we should also. Keeping our conscience clear is more important than anything else. Life is too small and too precious to live with the feeling of guilt.  Always remember – A clear conscience is the softest pillow! So sleep well.

In the end, I will stick with my gun - Tendulkar didn’t nick it and hence didn’t walk. However, if you nick it then do walk or best don’t nick it at all J

Highway 1 -- CA

Ever wondered about that winding highway - with breathtaking pacific on one side and tall cliffs on the other-  through which Sharon Stone drives her convertible on her way to her mansion in that 1991 thriller Basic Instinct?

I know, who cared about those views when the center of attraction was Ms Stone! We all were pretty busy gasping at Ms Stone's drop dead gorgeous looks and no body cared a damn at the natural surroundings! But believe me guys driving through highway 1 for the first time was a pleasure of unbound proportions!!

Our first drive was from SFO to Bigsur. We thourougly enjoyed the all the pit stops in between - Half moon bay, 17 miles drive and several beaches. The final destination was a waterall fall that opened right on the pacific. It was a breathtaking place with the perfect blend of wood, waterfall, sand and ocean.  The next trip I had on SW-highway 1 was from LA-SFO. It was a dream come true. I was finally driving through the posh suburb of Malibu. I spent good 3-4 hours driving to and fro between Santa Monica and Malibu. But to my bad luck I didnt get a glimpse of Ms Stone. Later I got to know that she was busy shooting for Basic Instinct -2 and that is why was not there to welcome me :)