Long time

OMG- the last time i posted inflation was at 5 odd percent:) Now it is 12% give up! Lehman brothers no longer exits. Fed became the largest PE investor by investing 80 billion in AIG with a debt+equity structure:) How the world changes in 6 months! We have a new airport in Bangalore. Good for early morning flights but not so great if you want to come back in the evening around 6! Markets are down to 13k again!

Hopefully it wont be that long till I post again:) Lets see how much more the world has changed!

finally!

I am so thrilled with this - Cleartrip Train Search http://www.cleartrip.com/trains
its still in beta and should work well soon. Its good they have done this without IR support which goes to show any search engine could have done this! NICE!

Inflation back up again

At 5.11%, the number is scary because this is a wholesale price index and a retail/consumer level price index - which is expected to be atleast a percent or more higher. A good part of the increase is due to the fuel price hike ( from about 4.25% a month ago). Whats scary is that the crude price isnt coming down and the new budget has been extremely disposoable income friendly which is bound to increase investment as well as consumption which in turn will lead to higher inflation. Again a bout of loan write offs for farmers which i think are good save for the usual problems-like did the deserving people really get it etc- will ensure some more cash flow albeit notional. Also loan write offs lead to a moral hazard problem - farmers will think they can usually take the loans and govt will always save them. The signalling problem is higher than anything else. So i am willing to switch to a home loan that offers a fixed rate of 9% anyday! my floating rate looks likely to go up again! Funnily the RBI and the Govt seem to be acting in oppossite directions towards inflation. Reddy garu must be worried!

Ada does a rajini!

After Baba, a lot of distributors who had blindly believed the rajini magic lost money. Rajini was the producer of the movie as well - so he did something which had not been done before - he just returned back the money to the distributors so that they still kept faith in the R Word! Now after the reliance power debacle I was wondering what would ADA do. Reliance is pretty much built on the retail trust - institutional investors rarely say nice things abt the company and it was Dhirubhai Ambani's faith in retail investors that made the company/group what it is today and if ADA sat quietly then the retail investors would go away atleast from his group. Moreover with another of his group companies coming up for listing - reliance infratel - he had to do something to ensure that issue doesnt bomb and voila he has decided to give free shares to reliance power investors - but it probably wont solve the problem for long term investors - for short term traders this is a good sign - with no revenues and profits and only projects that open in 2012 onwards - any price is expensive for the stock right now! He could have probably given RPower investors a discount in the Rel Infra issue - but he will still manage to regain some of the faith that retail investors had in the group.

Fed cuts 75 bps

As I was telling my bro - all this market fall is just plain blackmail to the fed - cut or else! It is important to understand that the two biggest recessions in US memory were caused by huge stock market crashes and the fed is very wary of that - in the US a growing or stable market also feeds in to their ever growing consumerism - alan greenspan himself says that in his book - so the fed is extremely wary of another stock market crash causing a cut in spending as well whenever it sees a huge market crash. The problem is that I feel that the market has been using this to blackmail the fed - u look at the days before sep 18- markets worldwide fell by a huge margin and in the US and the fed reacted by cutting 50 bps. My friend ganesha doesnt agree - he says no fund will take such a huge loss to make the fed cut - I disagree these losses are notional - and they will recover them quick enough. Now again the funds held the entire world to ransom pushed down every damn market - and then fed cut rates by 75 bps even before the us markets reopened. Amidst inflation concerns et al! Here are the markets sledging the fed to say u better cut that! While everyone I knew today was saying what to buy - how is this correction and all in my office and my batch mates and colleagues - the one question that crossed my mind was when will fed cut and by how much- and when my bro called - told him i expect the fed to cut 75 bps asap! and then cnbc breaking news - fed cuts by 75 bps! - for the love of coincidence

Google and Railway bookings

I have always kept wondering what google can do to improve its services in India - and one opportunity is to look at the railway booking thing. While railway booking has made tremendous advances - you no longer have to stand in the queue and all but with the kind of speed in India and the way irctc.co.in works sometimes it can get painful to choose a particular train, check availability, then type in names, pick berth, choose a payment gateway and then finally pay. Now I dont know how many of you have used google for a flight search - internationally like Bang to NY and then you can pick dates and choose a service provider to check fares along with availability. I keep wondering why cant google do the same for Indian Railways - you search for SBC (Bangalore) to MAS(Chennai/Madras) - fortunately there is only service provider - so you can probably key in the date after that as well - say SBC to MAS 23/2/08 in the search box. Then it should give you the list of the trains and availability on particular class - like

Train SL 3AC 1AC 2AC
Bangalore mail - 225 25 1 5

and let all of these are links and then you click on say 225, a small window pops up - you can give your name, age, id proof and birth preference (ideally you could just opt to enter this out of ur google a/c profile if its for u) and then it goes to a google check out payment gateway automatically and ur ticket is e-mailed to you Of course, google could also work with irctc and figure out what ads it should put on the print out so that it matches with origin station and destination station and age/profile of traveller!

I probably dont know how tough this is technologically but if its done it can make life easier for a lot more people. And i keep refering to google - any of the search guys could do this - live/yahoo. Its all about integrating technology with user needs!

What would warren do:)

One of my all time favorite articles is what would disney do which discusses what walt disney would in this amazing new world of technology. Now with the recent market crash I am wondering what warren buffet would do - the last time he gave an interview he said he was sitting with more than 50 billion dollars of cash - and he dint know any decent company that was worth his while. He has been recently investing in Burlington Northern and has invested over 4 billion in that co . I am wondering what he would do with the rest of the 46 billion. Will he go out and start buying now - what will he buy - my guess is he will go back to old fundamental stocks - probably stocks like GE/Amex(which has fallen quite a bit) - will he buy the beaten down sectors like housing/financial companies. Whatever he might be doing, I am sure he is just waiting there for a correction like this and has his mouth watering for opportunities like this! somewhat like how slip catchers are waiting on a bouncy track in cricket:)but will he look at investing in India?

Finally!

If you have been reading my blog and also ET for a long time, you would know that I had issues with BCCL investing in companies and not disclosing interest. Now after a long time BCCL has started giving disclaimers in news items concering their investing companies:) Which is good - but i still stick to my old stand - that ideally no one should do an ad for equity deal - it kind of disturbs the journalastic independence.

Good graph

My friend gunz was telling me which was probably obvious - Infys market cap has not grown in the last 7 years while its revenues and profits have grown multi-fold - could this be the case of a lot of other companies today - wise to invest today? Take a look at the graph - http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1197898171000&chddm=875058&q=NASDAQ:INFY

Business model of politics

My friend Ajay has an interesting series of articles on the state of Karnataka Politics. As I read them I wonder that probably the core of the problem is because the business model is such - spend a lot of money to get to power and once you get to power you loot the public to get the money back. US solves this problem by ensuring candidates directly raise money through donations or contributions. Other way to solve this problem is by giving promises like free power - but every political party can do it and the one which doesnt is a loser - classic prisoners dilemma problem. Another option India is considering is to let the central government allocate funds to parties to fight elections - dont know how far this will go but does seem to be an interesting idea!

Joost: From the founders of Skype

While ebay wrote off a substantial amount of its skype investment, the founders took it to create their next venture called Joost which is basically anytime, anywhere TV off the net. If you have a good broadband connection you can basically watch most of Americas TV Channel's online - more importantly for free. I tried it but its asking too much for an indian broadband connection but I could actually see some stuff.

They will probably sell this to ebay as well;) given the loss ebay has made on skype - it should have a right of first refusal on any future project of these guys. Given that ebay took such a huge loss on skype, the promoters will also lose a lot of negotiation power in the future ventures - a good example of why one shouldnt be greedy:)

Amazons Kindle

Check out amazon's kindle its an electronic book reading product through which one can also access books wirelessly. It charges the user inclusive of bandwidth charges for download - one could subscribe to free blogs and get them for a fee - which goes towards download for sprint mobile(i think). This has kind of put off a lot of people since amazon is trying to make money off free blogs. Why would someone buy a kindle (its sold out btw on Amazons site) when one has a laptop to access blogs and stuff - will e-books be such a craze and will kindle make reading off it as easy as reading any normal book - if not this version lets hope the future versions do. Some innovation in book reading at last!

The eco of bangalore?

I have subscribed to Mint now for their new one year offer at 299 and find the paper pretty interesting and fresh however I read a recent article of theirs - which was called the economics of bangalore - probably to keep their new bangalore readers thrilled. I was kind of confused after reading the article - Coase's theory explains why firms at all exist in the first place - because markets are inefficient due to high transaction costs but it can also explain China's boom and not just Bangalore's. I still find Bangalores success a mystery - its probably the weather - probably the only place computers could run without AC through out the year;)But a lot of Bangalore's success is due to Infy and its founders (I still have issues that they (Cos like Infy) dont pay a very high tax but thats a different issue) and probably even companies like Wipro. Bangalore somewhat is also an example of how a brand just keeps rolling on and on. But its taken a beating of late - due to the politics of bangalore and wht not but primarily because its over grown itself - but i was in chennai recently and the traffic in most of chennai is getting as bad or worst than bangalore. Bangalore roads are better in some places. What do u think needs to be done to bring bangalore back on its track and more importantly how does one de-risk banglore from a single Industry focus of IT.

MS buys a stake in facebook

A 1.6% stake for 240 mn:) thats a 15 bn valuation! I give up!

Credit Crunch

Here is a damn good article on the credit crunch scenario. While most other stuff make a hue and cry scenario of the situation, this article looks at the good points of the situation. The way i look at it is this - excess credit in the market at a macro level is somewhat like excess money at a company level. We all know at the company level this leads to agency costs and bad capital allocation decisions. With excess liquidity, the same thing happens at a macro level. This is what the article is trying to point out. At the india level I still think the underlying story is strong. I think the RBI has done well albeit a bit late on some of the issues - but as they say - better late than never

Facebook?

whats all the new hype about facebook about. One stuff is about how you can add your own applications around the social networking site something they technically call open sourcing application development. what it basically means is that you can add stuff like say a free gift application to the site where people can use that to give free gifts to their friends online. Now Facebook turned down a billion dollar acquisition offer from yahoo last year. There are rumors of it going to be acquired by MS at 6 billion. The company denies all of that however and says it will go public! It recently acquired Para Key founded by the same guys who built FireFox.

Take a bow!

Dilbert sundays are the best - probably bcos it just has more of the strip - Check this one out!

Dilbert on Management consulting

Here is what consultants almost did to Bajaj Auto

"take the case of Bajaj Auto. Abraham Joseph, head of R&D at Bajaj Auto, says that McKinsey advised against the Pulsar project – though McKinsey has publicly denied that this was ever the case.
“McKinsey’s recommendations were extremely conservative. They said we should stop the Pulsar project mid-way. They were against us making any new products,” says Joseph.
Rajiv Bajaj, president, Bajaj Auto, however, took a strong stand against the McKinsey recommendations, going so far as to threaten to walk out of the company if they were implemented. His father and chairman Rahul Bajaj eventually gave in.
“Nothing happened with the report. It just went into a drawer and was forgotten,” says Rajiv Bajaj. Today, the Pulsar is a money spinner for Bajaj Auto."

Time to remove APM

I think this is the right time for the Indian government to remove the administered price mechanism in petrol/diesel prices. I cant understand why the government should give subsidies to people who have huge cars or even bikes for that matter. With no elections near by and inflation at a 14 month low at 4.03% and expected to go down further, the government can easily pass on the mantle of setting petrol prices to the private sector and by the time the 2009 elections come, no body will think of the govt as the price setter for fuels and it can easily withdraw itself from the blame of high fuel prices in a market economy

Grand Buffet(t) Lunch

Thanks to my friend, Anand's Suggestion I got this great title. With an Indian - Mohnish Pabrai - winning the buffet's annual buffett - here is a galaxy of videos of my investment guru for those who cant afford the lunch yet:) I hope someday I will be able to afford that and warren will still be alive and kicking then. Enjoy

The MBA Talk




Charlie Rose Interview - 2007



Right after he donated the money



With hilary on the campaign Trail





At the 2007 Annual General Meeting



CNBC Interivew - Part 1