The Kite runner and Shogun

Shogun happens to be the book I read almost 10 years ago. This is probably the first book which has some incisive observations about the Japanese culture. I do not know what is written is the book is true or more likely, a flight of imagination by the author, James Clavell. But I loved the Japanese as seen in 16th century Japan and I have been a fan of friction based in South East Asia.

So when I came across Sishir with a copy of Shogun, I was plesantly suprised. Further enquires revealed that it is part of series of 5 books. The next book in this series, Tai-pan, runs through a frictional account of the European traders involved in trade with China. James Clavell view about the integration between the west and the east with the political sub-text. Though the book was not as interesting as the Shogun, it was still a good read.

The kite runner is written by Khaled Hosseini, an American afghan. The story actually heart rending tale of a boy, Amir, in Afghanistan in the mid 70’s. Amir wants the approval of his father, who feels that his son spends too much time in his books and does not stand up for himself. Amir sees his opportunity in the kite flying competition to gain the love of his father. The last kite to be cut is seen as a trophy and he asks his childhood friend and ‘servant’ to get it for him. And then begins the tragedy. The story is also covers aspects as to how the Taliban had changed the Afgan society with emphasis on their cruel methods.

The Bartimaeus trilogy

An entertaining fantasy book at last. The last two harry potters were frankly dissapointing. As I said in my last post, the dijinni is really a great character. And fortunately, this book has none of the loose ends that have vexed me in Lord of the Rings. Most charcters have a complete ending though the ending actually is not as interesting as the journey itself. The tongue Bartimaeus has!!!!

Moreover, though the book carries parallels to current political move towards more obtrusive and spooking governments, it is not overwhelmed by it. The book thankfully never launches into a debate or a diatribe. Thats actually a reason why I hate Ayn rand books. You do not want to read 55 pages of some god forsaken speech(trust me, its very boring. In spite of claims by its fans of great philosophical insights, I stongly urge you to never touch a Ayn Rand).

Anyways, the second and thrid part, the Golem's eye and Ptolemy gate were worth the money. The gamble has actually paid off. A depressing day before the birthday might just have rewarded me with a great experience.

The Amulet of Samarkand

Djinnes(genies)!!!!!!!!!. The first genie book I have read and man, it just bowled me away. I brought the Amlut of Samarkand half afraid that it would be some kiddish book. Couldn't have been more wrong. The characterization of the genie is too good. Though it does mean that the magician though necessary is not a very interesting character. And the foot notes are full of sarcastic comments though it is pretty much kept in check. I have it when authors overload the books with sarcasm.


Now this is one book I can recommend to one and all. Unlike fooled by randomness which would be passing interest to a non-fin guy. And the book pushed into reading the second part of the trilogy, the Golems eye. Due to this book, i spend half the time in office dreaming when I could just run away home.

By the way, planning to start the driving classes soon. They are not as expensive as I thought it would be. That would take care of at least one of the targets before year end.

Fooled by randomness

A must for everyone ever interested in trading. The book is by a propitiatory trader who has been in the business for a long time. The main philosophy of his trading career has been how not to blow up. Blow up means not just losing money but losing more than expected. There are lots of instances and examples of people who blew up and why they blew up. And he heaps loads and loads of scorn for analysts like me.

Moreover, the book touches upon some of the sublime issues with human behavior. We always tend to compare our success relative to others in our close proximity rather than consider the whole population. For example, no matter how much better off I am as compared to 90% of Indian population, I will still compare my financial well being with the limited number of people I studied with.

Wretched Birthdays

As it happens every year since the past 5 years, Yesterday was another wretched birthday. This day is celebrated every year till your death and in some cases even after your death. The birthday, as the name implies is not the day you were born on but rather a day every year to commemorate that day of the month and the month you were born on. I never in the fast 5 years have got the feeling of celebrating life at birthdays. I have always felt a disgust at the things that I promised to do and never got around to doing then. The things I could have done but couldn't. Truthfully speaking, they are the days I get the blues.

So, this is what I did for birthday. Woke up, office, back home, read a book and off to sleep, after having food at regular intervals. I might not remember what I did the day I was born. But I am pretty sure all I did was wake up and go back to sleep after some milk. This, according to me, is an ideal way to celebrate the day you were born.

On a different note, I really like how some people remember my birthday instead of depending on Orkut. Maybe, they maintain a different database. Whatever it is, I like the gesture. Among those good enough to remember it were my parents and sister, Praveen mavauya, Kanwal, Kris, Katra, Meghana, Skg, Aditya, Vikash and Sanjay. Love you all.

Let’s stop the mushy stuff for now. Let’s have a party this weekend. More than anything else, it’s a good excuse to meet up. Next post is going to be on that book I promised “Fooled by Randomness”.

Racism in India

Yesteraday evening, after a game of Risk II with Aditya and SKG(friends from IIML for those who do not know them), myself, PP and SKG got into a discussion on problems we find in general in India. After wandering and trashing communists, TATA's, Birla's and Pratiba Patil, we did come across an interesting and disturbing aspect. Indians are highly racist. Racist not in the conventional sense where you discriminate against based on race but racist in the sense where discrimnation is based not on your abilities/qualifications.

The first and obvious instance is matrimonies. 90% of matrimonies feature either caste or the widely prevalent, "wanted fair, beautiful bride". I have no clue how Indians get fascinated with fairness. Are dark people not beautiful? Will a dark-colored woman make marriage life difficult? Or do fair women result in lower electricity bill due to their radiating light all around them. But we have the gumption to go all around saying that Indians are discriminated against.

The other major racism instance is while dealing with people from Africa. In India, there is a strong belief that people from Africa are inferior, lazy and quite recently I came across this one, drug junkies. And all these beliefs based on the observation of a small number of students who come to study in our colleges. The students, who lack of knowledge and communication skills in English, are mistaken and mislabeled as being dumb. And as far as drug junkies, it is just bull.

We complain about the treatment given to Md Haneef, who we presume to be innocent. But are we willing to extend the same trust in the hundreds of people languishing in Indian jails who go on for years even without seeing a trial? What about those who are victims of street justice which the lot of hindi news channels show us? Our media doesn't get into frenzy about it. I do not find interviews of the victims in newspapers. I am not saying that what's happening wtih Haneef is right, but that what's happening in India is also wrong.

P.S: Just started reading the book fooled by randomness. Will certainly publish a review once I am done with it.

Random stuff

Being sick, I have been reading blogs for the past few hours. Came across a few interesting one. Found one which is quite random like mine. The guy is actually tech guy. Another one who posts forwards which are interesting especially since I cannot get them at office. And I think I found Naga's blog.

Moreover got one really good one about blogging. It is a good one about what a person needs to start a blog. This guy in fact has 23 questions on what kind of person should blog. Going through made me realize that I need to know more about blogging software provided by google. So the cntl+shift+a makes a link.

These are the benefits of being sick. Got to watch a lot of movies on star movies. Especially liked Big Mamma 2. Really hilarious movie about a FBI investigator who dresses as an old and grossly fat lady to go undercover. Then I also watched a couple of telegu movies. But hopefully I will get well soon. Maybe, will get to see some apartments which could be rented out. And maybe, just maybe, NT will give us a treat.

Goals for the Year

I remember in march, when i stepped out of IIM, Lucknow, I had made a list of all the things I would like to do in the vacation. The list went something like this

1. Learn to drive a car
2. CFA level II preparation
3. Learn a musical instrument
4. Cooking
5. Travel and visit hometown
6. Jog and join a gym
   

Other than the CFA preparation, I had done nothing else. That sort of makes me think, should I make a list now? Will I be able to fulfill at least 50% of the goals that I have set for myself. And am I losing out the "joy of life" by focusing too much of goals and targets rather than enjoy the journey? Or is this a thought process that is a manifestation of an upset stomach?

These are the goals for the year for me

1. Lose some weight-at least 5K
   
2. Learn some basic cooking
3. Plan a proper holiday for a week before the year end
   

The short list would at least make me beleive that I can achieve these targets. Moreover it will at least make me focussed on something rather than diverting my attention to different goals in life.

Namesake

Ganguli/Ganguly is the anglicized name for Gangopadhyay. Thats one thing I have learned today. Thats what happens when you read "The Namesake" by Jhumpa Lahiri during office hours. Thats the amount of work I do at office today. Do not know where this kind of behavior will result in. Every time my MD came to my unit, he has always found me playing spider solitare.

Coming to the book, its amazing. But the view point is from that of an immigrant who has moved out of India. There is some recognition and identification with the protagonist but there is an element missing. Its not a complete identification with the character. Yet to find a character with whom I can identify with. The kind of character who still lives in India but still faces a disconnect with the Indian on the road. One who despises corruption but will pay to fasten the process of passport issuance. One who wants APJ to continue as president but will never turn up at a election. Waiting for that book and its been a long wait if you ask me.

Anyways hoping to read the last book of the Harry Potter series soon and watch Die Hard 4.0.
And the English use Cheers a lot. Came from The Namesake and phone calls with a analyst in UK. Every conversation with her always ends with a Cheers. Would have suspected that she drinks a glass a wine after every conversation if I did not know better.

A Is passive investment in IPO’s a viable strategy?

On June 11th, 2007, ET ran an article stating that investing 100 shares in all the IPO’s has resulted in a return of 72%. The following is an analysis on the same question with a different set of assumptions. Some of the assumptions in the article do not suit the general investment strategy followed by most retail investors. Most retail investors do not target owning 100 shares but rather go in for maximum number of shares they can apply in the limit of 1 lakh. And given the widely prevalent belief that the IPO’s are under priced, most of the issues are oversubscribed. The effective investment is then reduced below the 1 lakh limit. The following are the assumptions that are different from the analysis done by ET:

1. Instead of 100 shares in each IPO, the investor applies to shares worth 1 Lakh ruppees


2. The number of shares that the investor has on his portfolio would be in proportion to shares issued on a pro-rata basis if the issue is over-subscribed


3. The analysis will be performed from the view point of retail investors, non-QIB’s and QIB’s


4. The actual allocation is based on lot sizes and the results of an actual portfolio might vary slightly from the pro rata returns calculated


5. The retail investor deposits 1 lakh rupees for a small period of time(approximately 1 month) which also includes an excess amount over the value of shares allocated


6. The current prices that I have used are closing prices as on 20th June, 2007

The 11 issues covered in this year by ET are Advanta India, Asahi Songwon, Bhagwan Banquets (Bhagwati Banquets & Hotels Limited), Binani Cements, Fortis Health Care, ICRA, Insecticides India, MIC electronics, Nitin Fire and Orbit Corp. Some observations regarding these 11 stocks

1. 6 stocks are trading below their issue price


2. 3 issues were under subscribed in the retail segment


3. Out of the 5 stocks at market prices higher than issue price, 4 have holding period returns (HPR) of more than 100%

The result of this analysis shows that a passive investment strategy does give returns of around 17.3% rather than the high 72% as stated in the article. Moreover the non-retail segment following the same strategy would have resulted in negative return of -4.6%. The NIFTY in the same time period achieved a return of 11.2%. Hence in the current market conditions a passive investment strategy into IPO’s is not advisable.

Reference:
http://www.nseindia.com/ : Current prices and issue price
http://www.bseindia.com/ : Current prices and issue price
http://www.chittorgarh.com/ : Subscription details
http://www.moneycontrol.com/ : Subscription details

Roof in Mumbai?? Too expensive!!!

The search for housing in mumbai is a pain. That too in spite of sites such as magic bricks which are supposed to help find a rented accommodation easy. I went to the same apartment block that I rented out 3 years ago and it now costs 14,000, an increase of 100% in three years. There can be multiple reasons for this.

1. There is a seasonal shortage of houses which has resulted in demand-supply mismatch. For example, its quite possible that December-march period there is an abundance of houses available to be leased out but not enough people wanting to take up the lease. In the period between May-August, most graduates are stepping out of college and have started looking for house. At this time, its quite probable that there is a shortage of housing. The evidence supporting this fact is that housing has turned to be 30% more expensive in the past 3-4 months.

2. There is a housing bubble in the making here. A 2 BHK near fantasy land costs 1 crore which is 250,000 USD. Apartments in Brooklyn start from 200,000 USD. Moreover in Andheri east, there is neither a mall and only one screen to watch a movie. And in no way, can New York prices can be compared with India. No MBA grad in NY would be paid 1,100 USD for a month!!!

3. Excess liquidity. This term keeps cropping up these days on news channels and papers. What it means is there is lots of money with the people and failing to find investment avenues has resulted in investments with lower returns. So for lower returns, as the future price is assumed to be fixed, will result in higher current prices. Though it seems intuitive, I seriously doubt whether excess liquidity alone would increase prices to such an extent.

4. There is a genuine shortage of housing in Mumbai. Mumbai has around 2 Crores(20 million) in an area of 400 square kms. Assuming a unit size of 4 per family and only 50 sq Kms available for housing, it works out to be 100 sq meters(1076 sqft) of land for a family of 4. By the way, in Mumbai, you would 2 BHKs with 1000 Sqft. Which might be too less if we consider only flat housing. But fortunately we can built multi-storeyed buildings.

5. The expected present value of future cash flows demands such a price. This assumption is easy to justify. Any discounted cash flow(DCF) analysis uses a lot of assumptions and if we take rent as an indicator of future cash flows, it would justify the current prices.
For example, a property that gives out rent of 24,000 per month would give out 28,800 per year. Assuming 20% tax rate with expense of 60,000 per annum for society charges, water, maintainece etc and a discount rate of 11% post tax, would give the value of the apartment to be 1.1 crs. But the rent is based on the price of the property. This serves nothing but as a self serving device!!!

Just for argument sake, if I buy 1 crore flat using a bank loan for a period of 20 years, the EMI would work out to be 80,000!!!

p.s:I still have to call up a bank and find out how much is the EMI.

One more day at work

The more I work, the more I hate what I am doing. I get this sinking sensation that all that I have learnt is of no use in the kind of work that I am being made to do. Moreover, I do not work for more than 3 hrs a day. And that’s enough for me to despite the kind of work I am being made to do by this fine firm. For a fact, the work I do is more aligned to an IT firm rather than a finance firm. No wonder, some smart ass registered this firm as an ITES firm.

Anyways, it’s great that the rains have stopped. This indeed is a moment of joy as the temperatures have reduced and everything looks green and bright outside. Alas, my stream of thoughts was interrupted when a branch fell of my head. Luckily, I did not suffer any serious injury. Post that, I just managed to wave to Pote as we crossed paths at Sher-e-punjab.

Things seem to have stopped or rather moving in the opposite direction on the personnel front. There is this looming threat of losing all the hair on my huge scalp. As it is, I seriously lack a personnel life and on top this, baldness!!! I am afraid that being bald will rule out any chances of a romantic encounter. Seriously, I am yet to come across any bald guy claiming that he has a girl friend. The closest was the bald guy in Seinfeld(George Gaztanza), the sad loser who gets jacked whenever he goes out on a date. But that guy at least had a date.

I think I have to do something of a continuous learning program so that I would be abreast with the latest happenings around us. I have already started dreaming of going to a gym, playing basketball in the weekends and a trek every month. Let’s see how many of these plans fructify.

The rains have started

Finally the rain god is showing us mercy. That was my thought when it started raining yesterday. It was only after I could not go to the theater to watch SIVAJI that I realisied that it was a boon but a curse. Sure the temperatures have gone down but mobility is severely restricted. I even planned to meet Anshu after 6 months this weekend. We should have some mechanism through which we can moderate the rainfall that falls on a particular day. Or have means which would make us oblivious of the rain.

Anyways, I am yet to find a roommate. This whole interview process for a nariman point position screwed up my plans. Now I have to adjust with someone who I know very little. Lets see how it works out to be.


The damm stupid camera is costing 5k to be serviced. Have decided to chuck that thing and get a new one. Man, no idea why the camera costs so much. It looks like the companies are trying to make out of servicing parts and other accessories. Nice strategy though it looks like I am on the wrong side of this strategy.

By the way, it looks like I am a float in this company. I get work when someone is leaving for a holiday or reporting sick. In fact, I was recently told that the company has exceeded head count. No idea why they hired me when they do not have any work for me. And it looks difficult to get through as I am weighted by two bloody years of IT work experience. This is really frustrating. Sometimes I think I should have done better during college.

And I am really missing playing basketball here. Hope to find some court soon. Cannot believe that there is no place to play in the entire Mumbai. Really hoping that the rain stops soon.

First week in Mumbai

Mumbai is not kind on new comers. First, it’s the filled to the brim and over flowing local trains. A journey in these local trains will generally generate a desire among the first timers to get medical assistance for asphyxiation. And if anyone dare enter a Virar local to get off at Andheri, he/she are sure in for a long ride.

Then there is the whole question of getting a roof over your head. This task is not so easy as it seems. First, there are the exorbitant hotel rates. Yours truly has spent 3300 ruppees for 2 nights stay. Second, the endless search for a house on rent. There are various factors to consider here. The building, society, whether there are any shops nearby, transportation to office etc. Third, you come across a tribe known as the brokers. Somehow, the broker always seems to be earning your month's package in a half a days work. That too, tax free. As for me, it took 4 days of painful walks on this damm shoes to find a place to stay before my company put me in a limbo where I would be located.

Thankfully, I got a good friend of mine to mooch off on. I am presently living at his company's provided accommodation. The daily train journeys have turned less painful as I now proudly possess a first class pass and travel at 8 AM in the morning, a good one hour before the office time.

Today, it was actually a fun day. There was supposed to be training at Nariman Point at 10 Am but luckily it turned out be a 1 hour training instead of 6 and guess what, I took the rest of the day off. Watched the Ocean 13 movie and had lunch at Churchgate. The movie is quite good. It’s well edited with enough funny moments and at no point do you feel that the movie is dragging.

The PM at the CII meet

http://www.mbauniverse.com/innerPage.php?id=ne&pageId=326

The prime minster at the CII annual session gave a speech and listed out 10 point social charter. Here are the listed 10 points.

1. Respect for and welfare of employees
2.CSR should not be only for tax purposes
3.Pro-active involvement of industry in promoting employment to less privileged
4.Resist excessive remuneration for to promoters and senior execs
5.Invest in people
6.Desist from non-competitive behavior
7.Invest in environment friendly technologies
8.Promote enterprise and innovation
9.Fight corruption at all levels
10.Promote socially friendly media

What has attracted the attention of the media are the forth and sixth points, those on remuneration for senior execs and a sentence related to non-competitive behavior where the PM said "Even profit maximization should be within the bounds of decency and greed!" And that is the reason why i spent a whole hour of my prep time for the CFA searching for the PM's speech. But as my CFA preparation seems to come to a halt, no regrets!

Relief...well, sort of

Gmail gave me excellent news today. CFA institute is paying $300 for anyone who is changing the CFA center to outside and appearing for the exam. It will at least partially offset the flight cost to travel to Colombo. Yup, there is a good chance that the moron writing this blog will be in Colombo for a day. The credit goes to Pranshu who has really helped me out in getting the tickets. I seriously don't know what I would have done without him.

This whole business of changing locations sort of put off the prep I was doing for the exam itself. Now one hand there is the problem of traveling to a totally new country called Sri Lanka and on the other, I have to answer questions such as 'how do u translate the financial statements of a subsidiary in another country?'

By the way, any comments on how to improve the blog will be appreciated.

Shocked!!!

After almost a week of being disconnected from the world, i got my on the net yesterday. And boy, what a shock it was! I came to know that the CFA level II exam for which I had been slogging for a month during the last huge vacation of my life might not be held after all. Did I need this now? Wish I had just spent the vacation visiting relatives who right now think I am too uptight to visit them. Or spent it traveling to all those exotic places which I would probably never get a chance. I am baying for someone's blood now.

The whole vacation now looks like a huge disappointment. All I did in this vacation was watch TV and study for that dammed CFA exam. Argggggggggggggg!! I had planned to learn cooking, driving, stitching and what not.