Nehru was right. And Manmohan Singh and Modi too

Rich-poor divide

Have you thought why rich remain rich and poor remain poor? What drives this phenomenon? Let us see through few simple facts.

a. Access to education: If a child is born in a poor family, it’s parents do not have the affordability to send him/her to good school. Despite the talent and interests, higher education may not be possible for economic reasons.

b. Job and Income level: Without higher education, it is not easy to get a high paying job. Accepting a menial job would mean the income is not sufficient to get out of poverty zone.

c. Marriage and inheritance: A rich room is likely to get a match from the well to do family. That marriage will result in a union of two rich families. And they are likely to inherit the wealth of their parents. So, the cycle of rich becoming richer continues while for the poor gets trapped in vicious cycle of poverty.

So how do you create a level playing ground? Not at individual level but at the country level.

Creating a level playing ground for India

Nehru’s socialist approach: When India became independent, majority of the residents were poor and if left on own, things would not have changed. Nehru was a socialist. His Govt. was not a liberal one but that was what India needed. He taxed the rich as poor were not able to pay any, but he built Govt. machinery to help the poor. Not only primary education, IIT, IIM’s got built where the education fee structure was subsidized. Both poor and rich could have the same opportunity as the talent was the selection criteria and not the economical background. It needed to be so for few decades. At least until two generations got access to better education.

ManMohan Singh’s economic reforms: When you have a good number of people with good education, you should let them start businesses, support them by minimizing Govt. intervention. That’s what ManMohan Singh did. He ended the license raj. Gave liberty to businessmen who created the new wave of service industry which provided employment to the new generation of workforce.

Modi’s protectionist policies: With so much protection given to backward castes and the likes for a longer period since independence, at the disadvantage of General Merit class, someone had to revive the Hindu religion. Also, its farmers with efforts to double their incomes to catch up the with the rest. And carry out tough reforms like GST.

You might think I am pointing out only the good things each of these PM did. But think of Modi as first PM of India, it would not have worked well. Similarly, Nehru’s socialist policies in today’s world would have done more harm than help to India. But these happened in the ways beneficial to India. All these PM’s did good to India and did what was the need of the hour.

When I hear criticism of these PM's, it appears to me like we are forgetting the context these PM's operated in.

ಸಾರ್ಥಕತೆ ಎಂಬ ನಿರರ್ಥಕತೆ

ಮಾಗಿದಂತೆಲ್ಲ ಅಭಿಪ್ರಾಯಗಳು ಬದಲಾಗುತ್ತ ಹೋಗುತ್ತವೆ. ದುಡ್ಡು, ಜನಪ್ರಿಯತೆ, ಸ್ಥಾನ-ಮಾನಗಳ ಸೆಳೆತ ಕಡಿಮೆಯಾದಂತೆ ಮೂಲ ಪ್ರಶ್ನೆ ಹುಟ್ಟುತ್ತದೆ. ಜೀವನದ ಸಾರ್ಥಕತೆ ಏನು? ಅದು ನಿಮ್ಮ ಕುಟುಂಬದ ಅಥವಾ ಸಮಾಜದ ಒಳಿತಿಗಾಗಿ ದುಡಿಯುವದೋ? ಎಲ್ಲ ಆಸೆಗಳನ್ನು ಮೀರಿ ಸನ್ಯಾಸ ಸ್ವೀಕರಿಸುವದೋ? ಸ್ವಾರ್ಥಕ್ಕೆ ಒಳಗಾಗದ ಯಾವುದೇ ಕೆಲಸವಾದರೂ ಆದಿತೋ? ಯಾವುದು ಜೀವನದ ಸಾರ್ಥಕತೆ?

ಪ್ರಾಣಿ-ಪಕ್ಷಿಗಳನ್ನು ಗಮನಿಸಿ ನೋಡಿ. ಅವು ಯಾವುದೇ ಧರ್ಮ, ನ್ಯಾಯ, ನೀತಿಗಳ ಬಗ್ಗೆ ಚಿಂತಿಸುವುದಿಲ್ಲ. ಅವುಗಳಿಗೆ ದುಡ್ಡಿನ ಉಪಯೋಗ ಗೊತ್ತಿಲ್ಲ. ದೇವರ ಗೊಡವೆ ಬೇಕಿಲ್ಲ. ನ್ಯಾಯ-ಅನ್ಯಾಯಗಳ ಪರಾಮರ್ಶೆಯ ಅಗತ್ಯವಿಲ್ಲ. ಹಾಗಾದರೆ ಯಾರ ಜೀವನ ಆನಂದಮಯ? ತತ್ವಶಾಸ್ತ್ರದ ಜ್ಞಾನಮಯಿ ಮನುಷ್ಯನದೋ ಅಥವಾ ಆ ಕ್ಷಣ-ಕ್ಷಣದ ಬದುಕು ಸವಿಯುವ ಪ್ರಾಣಿ ಪಕ್ಷಿಗಳದೋ? ಯಾರ ಜೀವನ ಹೆಚ್ಚು ಸಾರ್ಥಕ?

ಮನುಷ್ಯರನ್ನು ಮನುಷ್ಯರಿಗೆ ಮಾತ್ರ ಹೋಲಿಕೆ ಮಾಡಬೇಕು ಎಂದಾದರೆ, ಮತ್ತೆ ಅದೇ ಪ್ರಶ್ನೆ ನನ್ನದು. ಯಾರ ಜೀವನ ಹೆಚ್ಚು ಸಾರ್ಥಕ? ಹಿಂದೆ ಬೆಟ್ಟ ಗುಡ್ಡಗಳಲ್ಲಿ ವಾಸಿಸುತ್ತ, ಬೇಟೆಯಾಡಿ ಬದುಕುತ್ತಿದ್ದ ಆದಿ ವಾಸಿ ಜನಾಂಗದವರೋ, ಅಥವಾ ನಂತರ ವಿಕಾಸಗೊಂಡು ಕೃಷಿ ಮಾಡುತ್ತಾ, ಸಾಕು ಪ್ರಾಣಿಗಳನ್ನು ತನ್ನ ಹಿತಕ್ಕೆ ಬಳಸುತ್ತ ಬೆಳೆದ ಸಮಾಜವೊ ಅಥವಾ ಇಂದಿನ ಆಧುನಿಕ ಜಗತ್ತಿನಲ್ಲಿ ವಿದ್ಯುತ್ ಅನ್ನು ತನ್ನ ಆಳಾಗಿ, ವಿಧ ವಿಧದ ಉಪಕರಣಗಳನ್ನು ತನ್ನ ಶ್ರಮಕ್ಕೆ ಪೂರಕವಾಗಿ ಬಳಸಿಕೊಂಡು, ಆರಾಮದಾಯಕ ಎನ್ನುವಂಥ ಜೀವನ ನಡೆಸುವ ಈಗಿನ ಪೀಳಿಗೆಯ ಮನುಷ್ಯನದ್ದೋ? ಯಾರು ಹೆಚ್ಚು ನೆಮ್ಮದಿಯಾಗಿದ್ದರು?

ಆಯಾ ಕಾಲಕ್ಕೆ ತಕ್ಕಂತೆ ಸಮಸ್ಯೆಗಳ ರೂಪ  ಬೇರೆ ಇದ್ದಿತಿನೋ? ಗುಹೆಗಳಲ್ಲಿ ಗೆರೆಗಳಿಂದ ಗೀಚಿದ ಆದಿ ಮಾನವನಿಗೂ, ಇಂದಿಗೆ ವಾಸ್ತವಿಕತೆಗೆ ಹತ್ತಿರವಾಗಿರುವ ಬಹು ವರ್ಣದ ಚಿತ್ರ ಬಿಡಿಸುವ ಕಲಾವಿದನಿಗೂ ಎಲ್ಲಿಯ ಹೋಲಿಕೆ  ಎನ್ನುವಿರಾ? ಆದರೆ ನನ್ನ ಪ್ರಶ್ನೆ ಕುಶಲತೆ, ಜಾಣ್ಮೆ, ನೈಪಣ್ಯತೆಯದಲ್ಲ. ಸಾರ್ಥಕತೆಯದು.

ಆಲ್ಬರ್ಟ್ ಐನ್ಸ್ಟೀನ್ ವಿಜ್ಞಾನದಲ್ಲಿ ಸಾಧಿಸುದ್ದು ಬಹಳಷ್ಟು ಆದರೆ ಅವರು ಅವರ ಹೆಂಡತಿಯನ್ನು ಜೀವನ ಪೂರ್ತಿ ಕಾಡಿದ್ದು ಅವರ ಜೀವನವನ್ನು ಸಾರ್ಥಕಗೊಳಿಸುತ್ತದೆಯೇ? ಅಂಬಾನಿಗಳ ಶ್ರೀಮಂತಿಕೆ ಅಪರಿಮಿತ ಆದರೆ ಅದರಿಂದ ಸಮಾಜಕ್ಕೆ ಆದ ಉಪಯೋಗ ಅಷ್ಟರಲ್ಲೇ ಇದೆ ಎಂದರೆ ಅವರ ಜೀವನದ ಸಾರ್ಥಕತೆ ಸಾಮಾನ್ಯ ಮನುಷ್ಯನ ಜೀವನಕ್ಕಿಂತ ಹೆಚ್ಚಿನದೋ? ಒಬ್ಬ ಮನುಷ್ಯ ಒಂದು ರಂಗದಲ್ಲಿ ಪ್ರವೀಣನಾಗಿದ್ದು, ಇನ್ನೊಂದರಲ್ಲಿ ತೀರಾ ಕಳಪೆ (ಇವರ ಜೀವನಕ್ಕೆ ಬೆಂಕಿ ಬೀಳಲಿ) ಎನ್ನುವಂತಿದ್ದರೆ, ಅವರು ಜೀವನದ ಸಾರ್ಥಕತೆ ಕಂಡುಕೊಳ್ಳುವುದು ಎಲ್ಲಿ?

ಈ ಸಾರ್ಥಕತೆಯ ಹುಡುಕಾಟ ಮರೀಚಿಕೆಯ ಬೆನ್ನತ್ತಿದಂತೆ ಅನಿಸುತ್ತದೆ. ಕಾಣಿಸಿದಂತಾದರೂ, ಕೈಗೆ ದೊರಕದು. ಅದೇ ಮನುಷ್ಯ ವಿಕಾಸದ ಗುಟ್ಟು ಇದ್ದರು ಇರಬಹುದು. ಆದರೆ ನನಗೆ ಈ ಸಾರ್ಥಕತೆಯ ಪ್ರಶ್ನೆಯೇ ನಿರರ್ಥಕ ಅನಿಸುತ್ತದೆ.

Getting under the skin with help of Robert Greene

I have been reading and re-reading Robert Greene’s book ‘Power’ for couple of years. It has become a good reference book for me to understand the strategies adopted by those who wielded power – all kinds of dominating figures in the history ranging from dictators, military generals, political leaders to achieve what they wanted and keep a control on their subjects which we also can learn and put to use in our own circumstances.

Author’s grip on historical facts, the ways to interpret them, ability to see through the masks people wear to conceal emotions and explaining to the readers lucidly how it can be internalized is really fascinating. I was drawn into this author. In the quest to understand this author better, I watched his interviews on Youtube, learnt about his past and how he puts things together. He only impressed me further. I bought another book of his - ‘Mastery’, which is about those people, not the rulers, but who mastered a particular subject or a skill and how they could clear past through other attractions in their lives and keep distractions away as well.

Recently came out his new piece of work – ‘The Laws of Human Nature’, it is an outstanding work on the subject of human psychology. I found it much more effective than my past experiences of reading the similar works by other authors. As it got under my skin, I was completely immersed into this book and read it feverishly, wasting no available time or opportunity I got to read this. As soon as I was done, I started reading this again for the second time. Most likely, I am likely to go back to it again as the concepts are so useful and the subject itself is so vast.

Though I attempted reading books by other authors and move on to a different subject, the urge to read this author again made me buy his book ‘War’. Though it is based on war strategies, they can be largely used in multiple situations in our daily lives too.

This author will wake up a different person lying deep inside you. As you understand yourself better, your ability to get under the skin of others will also deepen. You will begin to read their faces, body language, tones to get clues of what they are up to and you will begin to ignore the words – plain language they use to conceal their true intentions and there will be nothing hidden from you as you get better with your understanding of human psychology and the strategies people adopt to get what they want. You want to become a better person at human psychology or you want to outsmart those who are already good at this, Robert Green can be of great help in either cases.

If you are ambitious to build a kingdom (or a company or a small team or a name for yourself) and want to learn the tricks from people who built vast empires in the past and controlled them well, these are the books you should be putting your hands on. You are not ambitious but want to save yourself from those who want to manipulate you by getting to know their true intentions at the very early stage, again Robert Green is a must read for you.

Oil’s bear grip on India is ending

Like any oil importing nation, India’s economy too is at the mercy of crude oil price. As the dependence on oil increased, the impact of price swings too increased. But there are significant structural changes which are happening, though at a slower pace, are determined to free India’s economy from oil’s hostage.

1. Increase in Ethanol mixing: From the current 2% mixing of Ethanol with Petrol, there are lots of policy measures taken to increase it to beyond 10%. It works well for the sugar cane farmers too. Their crops can get better prices as sugar factories divert the cane juice to production of Ethanol. It may take two years or so for new distilleries to begin production but there are definite actions being taken to make it happen. With Sugarcane crop glut and high import prices of crude, Central Govt. has hit two targets with a single arrow. The money saved (from importing crude) flows into investments into Ethanol facilities (creating jobs) while also boosting farmer income.

2. Higher domestic oil production: Vedanta’s Anil Aggarwal says he can produce crude oil in India at $7 a barrel. Wow, that is 1/10th of the price we pay when we import it. His company Cairn Oil has won bids for the oil fields along Rajasthan border. Though we need to see how much of oil is available there, it looks promising for now and can surely take domestic production up from current numbers. Any increase here is savings in the import bill.

3. Railway Electrification: Indian Railways is the biggest guzzler of diesel in entire India. As their lines get electrified (they got huge sanctions in the last budget), demand shifts from imported crude to domestically produced coal.

4. Electric Cars: Though the electric car market is not deep, there is huge interest being shown by automaker as well as policy makers to increase their numbers. As these cars hit roads but don’t pay visits to petrol pumps but charging stations, oil consumption comes down by that proportion. With each passing year, the ratio keeps changing and probably 10 years down the line, things would have changed drastically.

Apart from this, recent price surge in crude oil and its retracement backward shows that similar changes are happening in the international market too. Any price surge may become temporary phenomenon as other channels begin to open and alternatives begin to play a catch up.

The risk to assumptions made could be in the timelines, it may take longer than expected but oil’s golden era seems to be getting over.

Floods are no more rare events

Kashmir, Kedarnath, Kaziranga, Chennai, Kerala, Kodagu…. these are the places which witnessed how much damage can floods cause in the recent past. In each place, reports said it had not happened like that in the past few decades. Yeah, not in the same place but in half a decade it happened in many places all over India. South East monsoons which first hit Kerala’s coastal line, begin there journey from there and the clouds take the routes where the pressure drop is high and pour the rains there. if no where else, as a last stop, they reach the Himalaya’s and empty out themselves fully.

What seemed to be a rare event, is no more a rare one if you observe the regularity of it happening in one or the places of India. Of course, global warming is for real. It is making the seasonal patterns abrupt and taking the sea water levels high too. As a result, we are experiencing extremes of weather – too hot and sunny during summer and water pouring from the heaven during the winter.

If we look at how we respond, we are not doing any great job with weather forecasts. And when things break loose, our citizens just cry for help. Why did they built their houses on the riverbeds and encroached lakes in the first place? What happened to the rain drains? Where did they disappear? Why did we build such low bridges across the river streams? What kind of town planning did our Corporations made? It is a collective failure in anticipating risks and managing them.

If no one takes responsibility and pass through this again as a one-off situation, nature will continue to give us lessons every year. It is time to take long term corrective actions and learn the ways of the nature. History shows those who did not adopt to nature’s ways like those of Mayan civilization (and our own Harappa too) did not survive the master strokes of the nature. Hundreds of years of civilization disappeared in a matter of few days when they were faced with floods, earthquakes and other natural calamities. We Indians are surviving for 5,000 years but it does not mean we will survive in future too. Last week’s chaos and deaths in Kerala showed how ill prepared we are for the nature’s ways.

Mother nature is kind and nurturing. But she will wash away all those getting on her way too.

Business Vs Environment (Protests at Sterlite Tuticorin)

There were protests at Sterlite copper factory in Tuticorin, which took a violent turn and caused few deaths in the past month. State Govt. ordered closure of the factory. It drew my attention and I started looking into the details. Protesters claim health hazards rising in the surrounding communities where the factory operates in. The copper factory blames that on other power plants operating in the town and says its own factory is safe for community.

Most (if not all) mining and ore extraction companies cause environmental damage at varying levels, many a times they are irreversible. Few companies do take ownership and employ sustainable measures to keep the harm to a minimum and they also take initiative to develop the communities living nearby as a token of offsetting the loss caused to them. Keeping that in mind, a copper smelting factory at Tuticorin had zero discharge (no waste bi-products), so factory’s claims of being safe cannot be ignored. But the society’s suffering is real, so instead of targeting only this factory, a wider survey needs to be undertaken and all those causing environmental damage should be made to take necessary corrective actions.

That was one side of the story. Another side, this was one of the India’s biggest copper producing units. With its closure, India must import copper now, so the costs are going up substantially and all the value-chain using copper as input are suffering business losses and many jobs are at a risk. If 2,000 jobs are about to be lost in the copper smelting unit, at least 10x more jobs will disappear in the subsequent chain industries, if the the situation continues.

As a trade-off, I feel both the copper factory and protesters need to take a back-step from their stance and come to terms. Protesters should not only target this company but make all the polluting companies responsible and at the same, the industry needs to adhere to safety norms and spend more than they are doing now on developing the communities living nearby. Govt. need to strike a balance between jobs and the environment, rather than taking a side. That is easier said than done. If the protests were politically motivated targeting only the Sterlite, then it is a sorry state for the environment. Once those political leaders get their pay-off, copper factory will come back to life but the environmental damage caused by other factories will continue to remain an issue and an opportunity to fix it is lost.

Stock Pick (Fundamental): Nava Bharat Ventures

Trade wars will make India stronger

India’s GDP growth is driven by consumption and not by international trade. In fact, India has a trade deficit, it imports more than exports. When there are trade wars, it greatly affects those countries like China, Germany and Japan whose economies are export driven.

For India, if our exports are affected it would affect Pharma and IT but take a close look. Most of pharma exports are low priced generic drug. There are not may places you can make it cheaper than in India. Similarly, IT service exports are driven by the talent availability along with low cost. Again, you can’t easily get those millions of English speaking IT engineers at the cost which India operates anywhere else. Given these competitive advantages, though these two sectors will see a setback they don’t vanish. Other exports such as Textiles, Jewellery, Agri commodities have loyal consumer base for Indian exports. They too will see headwinds but their survival may not be under threat.

When it comes to imports, though oil & gold have the lion share but there are lots of other stuff like industrial equipment, automobile spares, etc. which in the times of trade wars becomes expensive and create a fertile ground to make them in India. That, over a period, will drive investments, creates new jobs and saves import bill. Remember that auto industry was non-existent in the 1950’s in India and now our car makers produce indigenous designs made for Indian consumers. Similarly, our defense spending, which is mostly spent on imports now, can slowly transform into the one which drives domestic industry growth. Since trade wars make imports expensive, it makes commercial sense to produce them out of India, wherever possible.

I hope and wish that India makes use of the opportunities provided by the trade war and come out stronger.

Sugar: The problem of plenty

Excessive sugar in our body affects our health. Excessive sugarcane output is hurting the farmer’s health who are already lean and do not consume much of what they grow. The bumper crop output for second consecutive year in Brazil, the world’s largest sugar producer and India, the second largest sugar producer, took the sugar prices down from Rs 50+ per kg to the levels below Rs. 30 per kg.

Sugar consumption or demand growth is in the range 5-10% year on year. But on the supply side, crop output is cyclical and in the last two seasons crop output is 50% higher than usual. Also, the extraction rates (percentage of sugar out of sugarcane) is also improving. That damaged the sugar prices significantly.

The optimum price level needed is Rs.40 per kg for both farmers and sugar mills to survive. Govt. has announced few relief measures that lets the farmers barely survive but the profitability is out of scope. Since the sugar stocks are already high in warehouses, best way out of this is to export them. There are few takers like China who import sugar in large quantities. There are trade wars and sanctions which may act as a hindrance yet whatever can be moved out needs to be done quickly.

Alternate markets for sugarcane like Ethanol, which is used as a bio-fuel, also molasses making for liquor industry are not encouraging as those markets are limited in size and can’t consume the million tons of additional crop output.

If no effective solution is found soon, farmers are likely to stare at huge losses. They better limit the acreage for this crop in future and move on to other non-cyclical crops. Considering sugar cane is water guzzler crop, it would be good to discourage as that much of water can be used for other productive purposes. Lower prices of sugar are already driving farmers toward discarding it. Had they reduced the acreage after one bumper harvest last year, they would have avoided the mess they got into now. I wish our farmers make more informed decisions.

Science creates history and not vice versa

Lots of feeds on my Facebook on how great ancient India was not only annoys me but makes me worry about the state of our society. Sure, our forefathers achieved lots of great stuff. They could do so because they thought innovative. Had they spent singing how great their ancestors i.e., cave men were, there would not have been any development of a subject like Ayurveda. While numerous of them worked on studying and developing subjects from Astrology to Astronomy, ancient India flourished building upon the expanding knowledge base. They made India great, a sought-after nation by remaining relevant to their times and not getting lost in their past. Their contributions to science created history.

Now many of us spend time praising achievement of ancestors on a smart phone manufactured in Taiwan or China on Facebook application which is developed in the US using the Internet as a medium, the technology of which again is not developed in India. I wonder those spam the Facebook feed, don’t they feel ashamed? What is the use of saying that aircraft technology is many centuries old and it was in use in ancient India? Why and when did it disappear? What point do they want to prove tracing the evidence of Mahabharat? I think what else we are doing apart from it is more important.

Greatness comes from creating new solutions for the current problems. Go and find solutions for new age diseases, that would make India great. Grow the talent who will rule the space technology and challenge Elon Musk. Build finer products than Apple does. Find newer materials for battery technology and free up world’s dependence on oil. Help farmers increase output multiple times using less land and water and make sure no one in the world goes hungry. Things like that will make India great. Contributions to science creates history. Just praising history leaves us where we are and we lose the race to those who live in current times.

We need to be proud of ancestors. But need to remember that they fell victim to invaders because of their own weaknesses. Blaming the foreigners for today’s issues leads us nowhere but building upon the good things done by our forefathers can make India great again.

Why does Investors have an edge over Traders?

Why do most traders lose money?

1. If you observe most of the large cap stocks produce 15-20% annual returns on average. But the same stocks, on daily basis, move up or down easily to the tune of 1%.

2. There are 5 trading session per week. In an year, there will be 250 sessions approximately. (5 per week x 52 weeks = 260 less 10 general holidays = 250 trading days). If market is unidirectional, those stocks would produce 250% gain or losses. But markets go in both directions or remain sideways. Considering 20% gains a year on an average, which can come in 20 sessions, what the market does in rest of the 230 sessions? It plays ping-pong. Gains will be reversed and falls will also be reversed, resulting in no net gain. Take away is, for 230 sessions, probability of gains or losses is roughly equal.

3. If you are a day trader, going by simple arithmetic of 230 sessions erasing gains and losses of each other, every day you have an equal chance of winning or losing. But consecutive win probability reduces with the time. For example, first day it is 0.5, winning the next day too is 0.5 x 0.5 = 0.25. Probability of consecutive win for 5 days is, 0.5^5 = 3%. So your winning streak or luck does not last long.

4. Psychology impacts decision making skills and staying rational. If someone wins for few days, he becomes overconfident, increases his bets while his chances are winning again are reducing with each day. You know what will happen to him when his luck vanishes. Similarly, when someone loses consistently, he loses the confidence and reduces his stake. He does not know that probability of losing consistently is reducing with each lesson.

5. A trader can train oneself to play a bull or bear. Trying to be both is hard. Changing track is not an easy thing as one can interpret the signals wrongly and increases the losses.


What works for an investor?

All the disadvantages which the traders face are not shared by investor community as they largely ignore the daily volatility. Their focus is on the annual gains and not the short-term volatility. So they need not worry about law of probability of winning everyday. Yet they too can lose money, if they had picked a wrong stock or paid a wrong price.

One of the famous quotes from Warren Buffet is, “Rule 1: Do not lose the money. Rule 2: Don’t forget the Rule 1”

Well, how can an investor not lose money in the stock market? The stock you pick may go down the next moment you bought it. But there are many measures you can employ of setting the game in your favor.

1. Avoiding a wrong pick: You should learn about due diligence. You need to learn about business valuation. You should understand the underlying business, not just the stock. How does that company generates revenue? Who are their customers? What drives those customers to buy the products or services of the business you are evaluating? How long the revenue growth will last? How is their financial model? What are the margin structures of the business? Does that company generate sufficient cash to honor their payments, also invest into the future? Finally, the intention of promoters. Are they willing to share the profits with a common investor? Have they paid dividends in the past? Are they honest enough in their communication? Getting answers to all these questions is a lot of hard work and better you do that else you run risks of losing your hard-earned money. Proper due diligence is the only way out of a wrong pick.

2. Diversification: You do not invest all your eggs into a single basket for a reason. You want to live another day to fight back and not lose out if the only stock you hold runs into an unknown issue. Building a portfolio gives a balance. It reduces risks and also returns. Since our Rule 1 is to avoid losses, building a portfolio and avoiding concentration in just 1-2 stocks makes sense. As you build portfolio of 15-20 stocks, you need to make sure those stocks do not belong to the same industry or sector. Take a look at any mutual fund portfolio and observe how many stocks they hold, what is their Top 5 stocks concentration and also Top 3 sectors concentration. You will get a fair idea of how they structure a portfolio. You also want to have a fair mix of large cap, mid-cap and small cap stocks.

3. Avoiding wrong pricing: Once you have identified the stocks for your portfolio, you do not want to put all the money in one go. You will identify the fair price band for each stock and you will wait patiently for a discount before you invest into it. You do not want to enter at whatever price the stock is trading but buy at only discounts as per your estimate. Since you will put only a fraction of money in the market each time and continue that way over a period of 4-6 quarters to fully invest into a stock, it gives you good time to study that company and assess if your estimates were right or not and take necessary corrective actions.

With this knowledge, you can very well say now “When a trader makes money it is mostly luck at play, while an investor makes money it is mostly patience and hard work”. Many traders struggle to earn a living while many patient investors earn their fortunes in the stock market. Capital follows knowledge. Acquiring knowledge should become the primary aim of investor. Fortune will follow subsequently.

This too shall pass but what is the take away?

Everyone’s life comes to an end. All phases of life are momentary. Look at the picture of Pele on the wheelchair. He was a legendary, one of the greatest footballers of all times. He had to run across the field several times, taking the ball under his control, hit a goal and repeat the process again! What kind of energy his legs had then and now why they are failing him even to walk on his own?


Coming to my events in my personal life, in the last couple of weeks, I had to meet two bed ridden people who were very active physically before uncertainty of life gave them a blow.

First one is my relative in my native town of Maski, who is in her seventies. I had never seen her sick before. She was always active, treating all her guests, keeping a conversation with all the people at home, also moving in and out of kitchen, ensuring that they are all fed properly. She had not only raised six of her kids but also several grandchildren to adulthood. She had never missed any gatherings among the relatives, kept a close watch on all the happenings and developments and many a times she had led the developments herself. Now when I went to meet her, she was sleeping on the bed. I could see her senses were active as before but the body is not able to keep up with her active mind. She could not sit on her own, was on a liquid food diet and someone had to help her answer nature’s calls. Body is aged, not her soul for sure. But her situation is no better as she has become a dependent for simplest chores of the daily routines.

Second one is my neighbor. He was the first one I got introduced to in the neighborhood when we started building our house in the outskirts of Bangalore. He was into marketing, he roamed around Bangalore on his bike, clocking 100 km's everyday easily. He was very quick in making friends, getting to know things early and spread the message around with same ease. A total extrovert person, an easy going person, he had to face lots of uneasy things of life. Call it bad luck or destiny, he had to go through serial physically injuries. First one was an electric shock blowout when an electric transformer exploded during the rainy season. It burnt one of his hands badly. Before he fully recovered from it, he had to go through a surgery and the recent one is a bike accident which broke his leg and now he is forced to take bed rest. And likely he will not able to ride a bike for the rest of his life.

When life is going good, we think it will be so eternally but the normal aging process or a sudden accident can bring a screeching halt to the pace of life. Now I am questioning myself, what should be the priorities of life? What am I doing after getting the wake-up call?

If life is momentary, it shall pass too. When you wake up from a bad dream, you will realize that whatever had happened in dream is not real. Similarly, when death happens to us, it would make us feel that the lives we had lived were momentary like a dream. While it is certain that death happens to everyone, it is uncertain that when that would happen.

The choice we have is to make the life we lived a pleasant one, Execution seems to be more important than mere planning. I am asking myself, what am I doing? Do you have any recommendations? Not the philosophical guidance I am seeking, it is the practical adjustments you have done in your daily lives that will be interesting for me.

ಎಲ್ಲಿಯ ವಸಂತ, ಎಲ್ಲಿಯ ಕೋಗಿಲೆ?

"ಬೀಸೋ ಗಾಳಿಯಲಿ ಹರಿವ ನೀರಾಲೇ

ಹೇಳು ಏನೆಂದಿದೆ ಓ ಗೆಳತಿ?"

ಈ ತರಹದ ಹಾಡುಗಳನ್ನು ಕೇಳುವ ಅಥವಾ ಗುನುಗುವ ವ್ಯವಧಾನ ಯಾರಿಗೆ ಉಂಟು ಈಗ? ಅದರಲ್ಲೂ ಬೆಂಗಳೂರಿಗರಿಗೆ ಕ್ಷಣ ಕ್ಷಣಕ್ಕೂ ಧಾವಂತ. ಸರಿಯಾದ ವೇಳೆಗೆ ಆಫೀಸ್ ತಲುಪುವುದೇ ಒಂದು ಸಾಹಸದ ಕೆಲಸವಾಗಿರುವಾಗ, ಬೀಸುವ ಗಾಳಿ ಏನು ಹೇಳುತ್ತಿದೆ ಯಾರಿಗೆ ಬೇಕು ಸ್ವಾಮಿ? ಹರಿವ ನೀರು? ಅದನ್ನು ನೋಡುವುದು ಯಾವಾಗ? ಈ ಊರಲ್ಲಿ ಯಾವುದೇ ನದಿಗಳಿಲ್ಲ. ತುಂಬಿ ಹರಿಯುವುದು ಕೊಳಚೆ ನೀರು ಮಾತ್ರ. ಅದು ಹೇಳುವುದು ಮೂಗು ಮುಚ್ಚಿಕೊಳ್ಳಿ ಎಂದು.

ಈ ಹಾಡು ಈಗಿನ ಸಂದರ್ಭಕ್ಕೆ ಸರಿ ಹೋಗುವುದಿಲ್ಲ ಎಂದಾಯಿತು. ಆದರೆ ಇದು ಕಳೆದು ಹೋದ ಕಾಲದ ಜೀವನ ಶೈಲಿಗೂ, ಇಂದಿನದಕ್ಕೂ ಇರುವ ವ್ಯತ್ಯಾಸ ಎತ್ತಿ ಹಿಡಿಯುತ್ತದೆ. ಏರ್ ಕಂಡೀಶನ್ ಗಾಳಿ, ಫಿಲ್ಟರ್  ನೀರು ಸೇವಿಸುವ ನಮಗೆ, ಪ್ರಕೃತಿ ನೀಡುವ ಸಂದೇಶಗಳು ಗಮನಕ್ಕೆ ಬಾರದೇ ಹೋಗುತ್ತಿವೆ. ಋತುಗಳ ಬದಲಾವಣೆ, ನಮ್ಮಲ್ಲಿ ಹೊಸತನ ತರದೇ ನಮ್ಮನ್ನು ಅನಾರೋಗ್ಯಕ್ಕೆ ಈಡು ಮಾಡುತ್ತಿವೆ. ಇನ್ನು ಎಲ್ಲಿಯ ವಸಂತ, ಎಲ್ಲಿಯ ಕೋಗಿಲೆ?

ತಲೆ ಎತ್ತಿ ಮೋಡ ನೋಡಿ ಮಳೆ ಬರುವ ಸಾಧ್ಯತೆ ಇದೆಯೋ ಎಂದು ನೋಡುವ ಬದಲು ನಮ್ಮ ಸ್ಮಾರ್ಟ್ ಫೋನ್ ನಲ್ಲಿ ಅಥವಾ ದೂರದರ್ಶನದಲ್ಲಿ ಅದರ ಬಗ್ಗೆ ಏನಿದೆಯೋ ಎಂದು ನೋಡುತ್ತೇವೆ. ಹೀಗಿರುವಾಗ ನಮಗೆ ಕಾಳಿದಾಸನ ಮೇಘ ಸಂದೇಶದ ಕಲ್ಪನೆ ಅದ್ಭುತ ಎನಿಸದೆ ಒಂದು ಮೋಜಿನ ಸಂಗತಿ ಎನಿಸುತ್ತದೆ.

ಹೀಗೆ ಗೊಣಗುವುದು ಬಿಟ್ಟು, ಸುಮ್ಮನೆ ಹಳ್ಳಿಗೆ ಬಂದು ವಾಸ ಮಾಡು ಎಂದು ಹೇಳುವಿರಾ? ಅದಕ್ಕೆ ಅಣ್ಣಾವ್ರ ಹಾಡಿನ ಬದಲಾಗಿ, ಅವರ ಮಗನ ಚಿತ್ರದ ಹಾಡು 'ಸಿಕ್ಕಾ ಪಟ್ಟೆ ಸಾಲ ಇತ್ತು ಲೈಫೀನಲಿ' ಎಂದು ಹಾಡಬೇಕಾಗುತ್ತದೆ. ಇಷ್ಟಕ್ಕೂ ಬದಲಾವಣೆಗೆ ಒಗ್ಗಿಕೊಳ್ಳದೇ, ಸಾಧ್ಯವಾಗದ್ದನ್ನೆ ಬಯಸುವುದೇ ಜೀವನ ಅಲ್ಲವೇ?

Movie Review: Rangasthalam (Telugu)

Whole of the movie is centered on the events that happen in a village named 'Rangasthalam' which is situated on the shores of Godavari backwaters. Like in most of the villages, this village too has a President (played by Jagapathi Babu) who dons the role of a villain, who controls the village using violence and eliminates those who opposes him. One of the dialogues in this movie goes thus "There are many people in this village who don't have food but there is no one who don't have have a loan to repay" which reflects the situation the villagers are into. But they are not aware that their loan books are cooked up. Farming yields are not enough to repay the loans and the frustrated villagers suffer in silence and those who oppose get killed which are masked as suicides.

The protagonist of the movie, Chitti Babu (Ram Charan) is a jolly person. He is partially deaf. Others have to speak to him in a louder voice else he can't hear them. That has made him innocent and quite unaware of happenings in the village. But he has a gift of reading lip movements.

As the incidents turn out, Chitti Babu's elder brother Kumar Babu (Aadhi Pinisetty) finds out the frauds of the credit society. As he tries to make it public, events take a violent turn and Chitti Babu hits hard one of the President's men and goes into Police custody. Taking local MLA's (played by Prakash Rai) help, his brother gets him out on bail and decides to contest the elections against the President of the village. After initial resistance, they succeed in getting the acceptance from people. As the election day nears, Chitti Babu's brother gets killed despite the heroic efforts of the protagonist to rescue him. Chitti Babu's deafness becomes a disadvantage for him as he cannot make out the last words said by his brother.


Who killed his brother? What happens to the village thereafter? Is President the lone villain? Will Chitti Babu succeeds in deciphering the plots? That is for you to watch on the big screen.

Movie begins with a documentary style of story telling and gathers pace as it progresses. Very neat camera work throughout the movie and the way sequences of the movie are pieced together makes this movie interesting though the main plot is centuries old. Though you might have watched hundreds of movies with this kind of story line, this movie becomes unique with its presentation style and role plays.

I do not watch Telugu movies much but this one was impressive and I felt this was the best among the movies I have watched in the recent times. So I could not resist from telling you.

We are coming

Looks like all the back-door negotiations have failed and the trade war has become real and staring at us. It is not just US and China. It would spread to other countries including India. We are very much on the radar.

If you see short term economic benefits, US seems to gain from the duties slapped on the international trade. US is the biggest consumer while China is export based economy. This move should make the US Dollar stronger in the shorter term. But at the same time you should not fail to notice the courage displayed by China in slapping back US with equal amount of trade tariffs. China is not standing on the loose ground. China is making arrangements to pay for its oil imports in its own currency avoiding the usage of US Dollar. Whole world is noticing it. Though US Dollar gained against emerging economies, it is falling against Euro and Japanese Yen at the same time.

Message is clear and loud. If you can look further into the future, China has ambitions to make its currency an international one, at the cost of US Dollar. It would slowly get off the vast US Dollar reserves it holds as and when its own currency finds takers. If we assume that Donald Trump continues to remain same in his approach, US Dollar will see serious damage to its valuation in the years to come. Its supremacy in the global market might end and Trump can make it as soon as possible by increasing the intensity of rivalry against China and other countries.

If we assume that US Dollar is going to lose value, it will have a greater impact on India too. Exporters (from India to US) will see their businesses shrinking and becoming infeasible. Talent drain will reverse at a faster pace. India is a consumption major economy unlike China which is export driven. Though two major industries (IT, Pharma) of India will see an adverse impact, rest of India would see things getting better for them with this structural change in the economy. Our currency getting better against US Dollar will help our economy as trade deficits would become thinner and gradually disappear.

Right now we say we are $2 trillion dollar economy with a national income $1500 to 2000 per person per year. If Rupee is going be stronger by 20-30% against USD, our GDP and per capita figures will also be revised by that gain in Dollar terms (though not much has changed in Rupee terms). This will help close the gap between us and rest of the world (mostly with the developed countries).

On PPP terms, India already has a decent ranking and it looks like it will only get better from here, may be at very fast pace than expected earlier. Except China, we can say confidently to rest of the world "We are coming."

5 Cultural Stages (TED Talk: Tribal Leadership by David Logan)

I have recently changed my job and was noticing the cultural differences between the organization I had worked for before and the one serving now. I was thinking what causes the difference in culture? Of course, it is it's people. But I wanted to get a better understanding how those people shape up the culture? This TED talk by David Logan gave the answers I was looking for. I found it impressive and interesting so I wanted to mention it on my blog.

David Logan shows how the tribes (a group of around 20 to 150 people) form and adopt a culture suiting their outlook towards life. He shows most organizations operate at Stage 3 which is incidentally the larger population too.

Source: http://www.triballeadership.net/business-culture/five-stages-of-culture

Having this knowledge allows us to identify what kind of tribe we are part of and why there are  cultural differences across the groups operating at different cultural stages and how to evolve and move forward. And this understanding also makes us more tolerant towards the groups in the lower stages of culture.

Book Review: Portrait of a Serial Killer by Khushwant Singh

This is a collection of 58 short essays written by Khushwant Singh over many decades published in various newspapers and magazines but not in a book form before. This book is divided into four sections, grouping the essays by People, Places, Indian Way and Politics.

In the first section about people, author writes about his meetings with Lata Mangeshkar at her home and a dinner with Dev Anand. There is a chapter on author's perspectives on Nehru as a writer and in another chapter he describes the life Amir Khusrau had lived being a courtier and being close to a saint at the same time. Book’s title ‘Portrait of a serial killer’ is a chapter in this section where in author constructs the life story and looks into how the mind of a serial killer works based on the information available about him.

Second section is about places. Here author gives summary of his experiences in visiting the places across India and the fascinating stories behind them. It has an interesting story of sudden appearance of numerous snakes in a village and how they find what had caused it. This section has chapters on Hyderabad, Agra, Amritsar, Haridwar, Delhi and villages in Madhya Pradesh.

Third section is about the way Indians think and behave. And the last section is about the political dramas and the stories as seen by the author. Here author dons the role of a journalist and the language becomes critical and he suggests how we should see things differently and act.

I thoroughly enjoyed reading the first two sections of this book. This book was on my night stand for a week as a warm companion to relax and put me to good sleep.


Khushwant Singh had many hats to wear – that of author, lawyer, diplomat, journalist and politician. He read and wrote voraciously and has numerous books to his credit. He died in 1994 at the age of 99. This book was a compilation of his works by his daughter and was published in 2015 on the hundredth anniversary of author’s birth.

Competition is good but who are we competing with?

From childhood we have been taught by our parents and teachers to compete and win. We were told competition is good and necessary. Probably they wanted to introduce us early in our lives to the unfairness life. But who are we competing with? During school days, we had running races with our own classmates. Of course, I did not win in any of them but I was congratulating the winners. I was scoring well in academics. It had made me feel good to draw attention and feel like a winner. But what about those who did not win either in sports or academics? How did they feel? In the eyes of teachers and winning students, they had remained an unimportant mediocre mass. Were they not destined to be successful?

Out of curiosity, I started learning how those my classmates are doing in their lives after a gap of 20 years we finished our schooling. Some of them had remained mediocre, time had not brought any change in them. But few were surprisingly successful. I started looking into details of their lives. They did not draw attention when they were in school but they had better social lives and had a wider circle of friends than winners had. They gelled with a broader society with ease. These mediocre students did not make their parents proud but they were the dependable most and were available at a call for any petty help to make things run during their absence. They made their parents social circles theirs too and slowly got into the business their fathers were running. When they had passed out of school or college, they were confident enough to run the business their parents were running. Over time they became street-smart businessmen too. Some of them ventured into politics. Few of them built schools though themselves were weak in studies but had hired the right people to run those schools. And the interesting point is, they had formed a network of friends (who too were mediocre in school days) and they stood for each other always. They became a testament to how good life can be if we learn to cooperate than compete with our own fellow schoolmates.

And those who were winners during school life, got on to corporate life and have continued competing at every phase of life. Today I was seeing how the office-goers rush out of a Metro station in Bangalore competing with fellow passengers to check out as early as possible. I was wondering how many seconds they would save by outsmarting fellow travelers. Well, competition is in their blood now, they would not let any opportunity slip off their hands. They cannot let go of any promotions in their office and they would compete fiercely to get to the top-notch job. They will tell you if they let go of the opportunity, someone else will seize it and step on you in the career pyramid. Wow, winning makes them less empathetic. They do care less about who are not winning. They did promote competition in their kids too. And the relay continued to the next generation.

Taking a step back, seeing both instances from a longer-term perspective of life, it feels important for me to have a happier life than competing constantly and winning. Winners will be left with few friends as their ability to to make friends reduce as preferences differ and they will be left with little choice. It makes sense for me not to win and retain friends thereby. I would rather cultivate cooperation in my kids than competition. I would feel good if we stood for each other than force ourselves through career pyramids. I see that many European countries are valuing life more than career (especially the Scandinavian countries). No wonder people are happier there than rest of the world.

After the metamorphosis, I took a conscious decision to get off the corporate treadmill. I still need employment for some more time but I would avoid competing with my own friends and make way for those who are in a hurry. I have changed the job to have a better work-life balance and foreclosed much of my debt. I have informed my family that I would not be buying any assets in future rather prefer a slow life being a non-rich person. I am letting go of the opportunities to earn higher amounts of money and acquire assets thereby. I am out of that race and I would not mind being termed a loser.

My desires are tamed now and I am at peace with myself. I think this is what Buddha had realized two thousand years ago, under a Bhodhi tree. And that is all any fool would learn in future as well.

Corporate Lessons: Observations from 20 years of work experience

While I was studying and when had I started working, I had assumed few things to be important over others. But over years, I learnt the hard way that those I assumed important are overrated and which I ignored were underrated. Let me describe those things here.

Dressing is overrated:
This is unless you work in a fashion industry or in a customer facing role. I do not contest at all the pleasing appearance good-appearance brings in. But one needs to go beyond that too. Having a great presence of mind is needed to shoulder higher responsibilities and fetch the rewards come with that. At the next level, a compassionate heart earns you comradery over fellow colleagues and that leads to the path of leadership.

Close your eyes and visualize the people you know well. You may likely see their face and their attitude towards you may come to your mind rather that what dress they wear. In the long term, we tend to remember the personality more than just outward looks. Now you may see my point. Another point I want to make is, I have seen may executives with not so pleasing looks but carrying themselves with high confidence and getting the results they wanted. If you only see their gestures and body language, you may conclude they may not be considered for a minor supporting role in Bollywood or TV serials, but they are business savvy. They make right business decisions and act on what is critical. Their deficiencies in physical appearance if any, is completely ignored by their conduct.

Networking is overrated:
In the beginning of my career I was told networking or how many people you know is important. It may be true if you are in marketing or similar fields. But for rest of us, it is grossly overrated. If you know just handful of people in key positions, it may be enough for getting mentored and for your career progression. It is just like having hundreds of friends who you barely know over few friends who know you better than you know yourself.

My point is, there is nothing wrong in knowing more people but rather spending that time and energy in strengthening the relationships with the people you already know might be more helpful.

Communication is underrated at junior levels and overrated at senior levels:
At junior levels, technical skills are perceived to be important but if the ideas and thoughts are not communicated clearly in written or spoken words, it may not have the desired impact and they may fail to draw the attention those junior employees deserve. Similarly, executives focus more on the preparing presentation slides and conveniently ignore the fact that Steve Jobs and Elon Musk did so well without slides.

In the beginning of career, while striving to gain mastery over one domain, it is also necessary to spend time in improving communication skills. And as one steps up the career ladder, they also need to stay relevant with the changing technologies to command respect from their juniors.

Interpersonal skills, most ignored but can be a dark-knight:
If you can read another person’s emotions, understand what drives or influences him or her and have tolerance to work with people having different attitudes and approach, there is nothing which can prevent you from growing in your career. Of course, interpersonal skills do come with mastery over one’s personal emotions which require understanding the emotional intelligence aspects. It would mean understanding how people behave in different phases of life, varying preferences across different personality types, cultural differences and different motivations and fears driving the human beings.

Go and study any great leader in the history, from Alexander to Napoleon, from Mahatma Gandhi to Abraham Lincoln, you would notice how they built trust in their followers. If you lack interpersonal skills, you are unlikely to have any following. Develop empathy and have genuine interest in others, you will see your circle of influence widening too.

Book Review: Two Saints by Arun Shourie

This is about the incidents from the lives of two saints, that of Sri Ramakrishna and Ramana Maharshi. Both were acclaimed spiritual masters lived similar lives but with slightly different
approaches to self-realization. Both had gone through similar phases in life and have faced similar experiences. Drawing upon those incidents, the author looks at what the medical and psychological sciences say about them. Drawing heavily from the research and surveys information, he tries to see if the experiences of the saints were caused by hypnosis or placebo effect or any other psychological illusions and observe the differences.

This book gives detailed account of the personal lives of two saints as observed by those who lived with them. Sri Ramakrishna had chosen the path of Bhakti Yoga. Though he was ardent devotee of the mother goddess Kali, he is also seen worshiping Rama at one instance and Krishna another time and Allah and Jesus too. It is mesmerizing to know he could take the diseases from those common people who were visiting him and suffer from those ailments while his visitors got cured. Much of it cannot be explained by the science so they just remain part of the spiritual world. Similarly some of the teachings of Ramana Maharshi like the one in which he says ”it is the ego which takes rebirth” cannot be affirmed with science. At the end, author concludes it will not be possible for all of us to do what those Saints did but an effort towards it can better our lives.

Arun Shouri is a seasoned journalist and this is his 37th book.

Trade wars and hypocrisies

I could not resist appreciating Donald Trump this time. He raised a simple question. When India levies heavy taxes for the bikes made in USA while they enter in India, why reciprocal taxes were not put in place? (Link: https://www.ndtv.com/india-news/donald-trump-slams-india-for-high-import-tariffs-on-harley-davidson-1812557)

When US allows lots of goods manufactured in India enter their country with zero taxes, this case looks unfair. What you can disagree with? In this back drop, China and India criticizing Trump on disrupting trade appear like hypocrite behavior. Heads of India and China gave long speeches at Davos on protectionism and how it is affecting global trade while what they do is against their own advice.

On another note, Trump’s talk shows that his country is no more a world leader but fearful of China and India. He wants to make his country great again. It does imply that they have lost that position. Look at their currency, USD has lost 20% against Euro in the past year. If they continue with protectionism, global trade will shrink. Along with it USD valuation will shrink too. And other countries will have the reduced need to hold USD as reserves. India has more than $400B as forex reserves while China’s reserves are five times more of India. As USD loses its importance and the global trade begin to use other currencies, it will become a serious blow to the US. Probably Trump is not thinking that far. His predecessors were surely smarter than him. They did not have reciprocal taxes in place but had ensured that global trade happens in their currency. They were bigger hypocrites than the current leaders of India and China. Now what Trump is doing is dismantling that empire built by his predecessors.

It appears to me that it is time to sell USD and get on to Gold.

PNB and NiMo saga

The scam which has hit Punjab National Bank is making everyone lose the trust in how the public-sector banks are managed. Fraud to the tune of Rs. 11,500 crores going undetected in a bank having a market capital of Rs. 30,000 crores is a wonder. Many are speculating that it would not just be a con job but it had the involvement of top management else the alarms would not have gone silent.

Govt. had recently announced its decision to recapitalize PSU banks. And where does that money ends up? Why con jobs would not repeat again? Had these banks been responsible, this NPA mess would not have happened in the first place and the new scam shows that money just runs out of these banks into fraudulent hands at a high velocity.

When Govt. provides capital to these banks, it does so from tax payers money. PSU banks lose it to scams and bad loans and they go back to Govt. with empty hands. And the cycle repeats every few years. No wonder rich-poor divide is widening. Middle-class pay the taxes which is siphoned off to ultra-rich individuals in the mask of promoters who will fled the country with that money. What a shame!

Loans on recovery mode – India slowly getting over NPA mess

Last couple of years, we saw NPA raising at alarming pace. But things seem to be turning around. Take a look at three news items in today’s ET.

1. Bhushan Power’s liquidation value doubled to Rs 20,000 crore (Read more at:

//economictimes.indiatimes.com/articleshow/62560426.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)

2. Lenders to take JSPL account off bad-loan list. The company's total debt was close to Rs 45,000 crore. (Read more at:

//economictimes.indiatimes.com/articleshow/62578088.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)

3. Enforcement Directorate to sell Rs 4k-cr Vijay Mallya shares in United Breweries. (Read more at:

//economictimes.indiatimes.com/articleshow/62563065.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)

Around Rs. 70k crore is collectively coming back into system. No wonder why RBI said things are improving during their last monthly report.

We don’t know how much of red figures turn into black. But we can see that trend is reversing. That money if used to fund the right businesses, it would add to economic growth.

Takeaway is, get onto Public sector Bank stocks. (Disclaimer: I am adding Bank of Baroda stocks to my portfolio).

Life is calling. Don't say you are struck in traffic.

I am a regular user of Bangalore Metro now. It feels like a wonder when you travel in it at a nice speed and you watch the traffic on the roads below it is struggling to move an inch. Ask any Metro passenger, they would appreciate its reliability and convenience. Especially the women passengers, Metro has made life little easier for them. Why the traffic in Bangalore has worsened despite Metro running at full capacity carrying thousands of passengers every hour? I see following reasons for it.


Metro construction: The extension line construction of Metro (at Whitefield, Mysore road etc.) has really taken a toll. New bottlenecks are created and the average speed has come down drastically. A travel between KR Puram and Whitefield, though it is just 8 km’s, takes past one hour to two hours as Metro construction has occupied half of the road width. Everyone agrees the pace of construction is relatively fast but yet it will take good time before the civil works are complete and the lanes are freed up.


Increasing population: More people are moving into the town. Bangalore’s majority population has always been migrants. Not just from other parts of Karnataka and neighboring states but people originating from all parts of India are making Bangalore their new home. Probably Bangalore ranks highest among all towns of India in the number of new jobs being created (while rest of India seems to be under performing in job creation). Those new jobs mean new workforce moving in with their families. It also creates the increased need for supporting services like Schools, Hospitals, and Banks etc. George Soros had called this a self-reinforcing phenomenon, growth creating new growth opportunities. It is good to see Bangalore representing whole of India. But the bad part is all these new people are welcomed by the same old roads of it.


Picked up construction: A secondary impact of the new migrating population is increased demand for housing, office space, and commercial real estate. So the construction activity has picked up and much of construction materials have to come outside of Bangalore into it. All those trucks and the material moving vehicles of all sizes rush in and out Bangalore for brisk business.


Elections: Elections are nearby. National leaders of political parties are frequently visiting Bangalore and the local leaders have become actively engaged too. They roam around a lot along with their party workers. And there are political rally of many kinds being conducted bringing in lots of floating population. They all hit the clogged roads of Bangalore.


Call it a booming economy or a under developed infrastructure, Bangalore’s traffic finds new reasons to worsen with time. The pace of economic growth is not matched with the infrastructure addition. Though Metro is helping, it seems inadequate. Bangalore's seamless growth has its disadvantages. It is not just commute time or air quality, a drought year can bring its citizens a serious trouble over water.


To make it sustainable, industries based in Bangalore need to create jobs in other towns and voluntarily move their offices out of Bangalore. That would happen anyway but to make it early it needs encouragement from Govt. in the form of providing the infra needed for such a move. It seems like Chicken first or Egg first problem for now. Who would make the first move? I think it is the industry and the tipping point for that would be when the costs (real estate, transportation costs and wages) begin to hurt their profitability. May be five years from now, we would be in the middle of that problem. Until then, we need to learn to cope with the traffic or find alternatives to cut our commute time. Yes, find a house near to work location (or find a job near to your house) or go in shifts avoiding the peak hour, do whatever works for you (I have changed my job).


Save yourself from spending all evenings on road. Life is calling, where are you? Don't say you are struck in traffic.

Rupee is stronger as Dollar is weaker

This blog post title is funny but it is what it is. When we look at the exchange rate of a currency we assume that the reference currency has remained the same. For example, Rupee was exchanged at 66 for a dollar few of weeks ago. Now you need only 63 rupees and some change to get the dollar. At first glance, one might interpret that Rupee is getting stronger and say kudos to Indian economy. But wait, think slow and you will realize that it is Dollar which is weakening against all other currencies. What made it so?

US Fed is raising interest rates, it was supposed to make the Dollar stronger but it did not. Thanks to President Trump. His policies does not promote international trade like his predecessors did. In that situation, the reason for other countries to hold US Dollar in their reserves diminishes. Whether it is political clash or trade disputes, China is not piling up US bonds as before and in fact it may have reduced its dollar reserves. That has increased the supply of dollars in the system and there are no big takers for it. So USD lost to the tune of 10% against Euro and other currencies.

Rupee is benefited too because of this development. Though our economic growth has reduced slightly, trade and fiscal deficits have not changed significantly. So Rupee rallied against USD and scored some points. RBI holds $400B as forex reserves and it is likely to slow down or stop buying the dollars. That will help the gains in Rupee sustain. In case RBI decides to sell some of its reserves (like China did), expect Rupee to trade below 60 a dollar. Good times are coming. Are not they?