June 27, 2008


Wall-E releases today

Today the Gods at Pixar will unveil Wall-E, their latest masterpiece. Predictably, it has received rave reviews from critics. Not that their reviews really matter to the world. As Antan Ego, the food critic from Ratatouille, puts it "In many ways, the work of a critic is easy. We risk very little yet enjoy a position over those who offer up their work and their selves to our judgment."

The movie is enjoying a whopping 98% positive reviews on Rotten Tomatoes. The devotees of Pixar are busy lynching the two blasphemous critics.

I can do nothing but wait for a gazillion seconds before it arrives in India.

My previous posts on Pixar - Cars and Ratatouille.

Picture Courtesy: Pixar via NYT



First Mover

[August 2007] I wrote First Mover Advantage is Dead

[June 2008 2005] Don Dodge writes First Mover vs Fast Follower - Who wins?

Update: Don wrote this article 3 years back and republished it couple of days back.

Hmmm.... go, smirk and call me an idea stealer.

June 26, 2008


Who is your competitor?

A few years back Nokia became the world's largest camera manufacturer ahead of Canons and Kodaks of the world, thanks to the camera phones.

Now, Facebook is the #1 photo sharing website. It has approx 6.5 billion photos, almost thrice of Flickr, the standalone numero uno destination.

June 25, 2008


Silent Evidence

Were you amused to see a bell, the kind which you see in Hindu temples, in Pizza hut when you saw it for the first time? I was. The idea is if you are happy with the food and service, you ring the bell (dong! dong!) and the entire staff shouts back the gratitude in unison - "Thank You!" During the 40-60 minute dinner you might hear the bell a dozen-odd times. It almost acts as a reminder that the food you are eating is delicious and waiters are extremely courteous and prompt.

But, what about all those people who did NOT ring the bell because they were less than satisfied with the food or service? Well, the system is designed such that you don't notice those responses. They don't have an electric bell which creates cacophony and staff will apologetically shout "Sorry." This is what is called silent evidence. The evidence which disproves a theory or conjecture simply doesn't show up. You need to ask for it.

On one of the stock investing groups some folks gloat about their acumen of stock picking by showing multi-baggers (the stocks which returned say 10x of investment) from their recommendations. What they don't talk about is the recommendations which have sunk to 20% of their recommended buy price. Or the history of all of their recos and cumulative returns. Those data points will give me a whole lot confidence. These multibagger recos will be classified as outliers till there is evidence to suggest otherwise.

Whenever you are given a theory with some data supporting it, ask if there is data which shreds this theory to dust.

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June 22, 2008


Amnesia, greed and black swan

Today's Business Line has a news item regarding promoters increasing their stake in their companies by borrowing funds at 14-18% interest rates. The rationale being the current prices are "rock-bottom" and make it a juicy level to buy.

Exactly 3 months ago, promoters of Orchid Chemicals suffered a big blow for doing exactly same. They borrowed money to increase the stake. The collateral offered was their own shares. A Black Swan event hit them really hard, where the financiers sold the collateral as the stock fell below a certain threshold. Mr Rao of Orchid called it a "mistake."


Go Green. Shun the Annual Reports.

annual-reports It is that time of the year when my hobby of stock market investing generates a sizeable number of mails. The annual reports of the companies start flowing in every week. These reports are of printed on A4 size paper (glossy ones in case of big names) and have more than 100 pages each. They are so huge that our humble mailbox can't take these reports, which forces the postman to fold and awkwardly put it in the mailbox. Also, postage paid for these reports is upwards of Rs 20.

Now think of the utility value for these reports on which so much of money and paper has been spent. I personally don't even look at it. If I need some information from the report, it can easily be downloaded from their website. If any company doesn't provide its annual report in pdf format on their website, it's time to revisit the decision to invest in such a company. In this age, when holding stocks for a few weeks qualifies as "long term investor" or people buy/sell stocks just because there is a positive or negative speculation on a business channel, it is too optimistic to think that majority of investors evaluate companies by going through their annual reports. Essentially average lifespan of the annual reports is somewhere between 18 to 42 seconds. That is a colossal and criminal waste of paper and money.

I can bore you with details of the number of investors in the large companies and size of their annual reports. But you can easily appreciate the magnitude and save efforts on my part.

Here is my suggestion to SEBI. Make filing of annual report mandatory in pdf format for companies and post it on the website of SEBI and the exchanges (BSE, NSE) where it is listed. Investors are sent a small booklet highlighting the achievements of the company. If somebody is interesting in a physical copy, they can SMS their demat account number to a short code. (Stock investor base is much larger than the internet penetration, so there should be a way to get printed copy.) The company will send the annual report in all its printed glory to those investors who have explicitly requested a copy of the same. Imagine all those forests we are leaving for future generations. And all the investors' money saved. It will give you a warm and fuzzy feeling.

Final twist to this idea is to take it global. Why should the average American or Chinese or Brazilian investor be different? If SEC adopts this idea in USA, other countries will follow the suit someday. Greenpeace can then pursue this matter vigorously across the globe.

Now, where is my Nobel Peace Prize?

Photo courtesy: Myself


June 18, 2008


Minor solutions needed to fix major annoyance

One of the curse of being a nerd is the insatiable urge to understand behind-the-curtain things. It is a curse because when things go wrong, you speculate which components in the entire chain are broken. Let me give you an example.

Our Tata Sky subscription was about to end on 17th June. At 1900 hrs on 17th June, the subscription was renewed for next month by paying charges through credit card on their website. At 0030, comfortably past midnight, they send me SMS to remind about subscription. Now, there are two problems. If my TV connection is unavailable for a few hours, world is not going to come to an end. Would the bosses at Tata Sky like to receive SMS at midnight saying "Yay, Shashikant has renewed his service!" No, right? Exactly my point. It can wait for few more hours. The second problem is this annoying message was sent with stale status. I could easily visualize, they have a service which queries database at an interval of 10-20 minutes to find subscribers who are up for renewal in that hour. Now the folks who designed the DB kept only date and time was set, by default to, 0000 Hrs. So, subscriber renewal condition is valid immediately after midnight. Since reminder service is not a critical service, somebody thought it's OK for it to operate on slightly dated copy of the database. They probably don't understand that it's always the eleventh hour that forces people to act.

Nice work, Tata Sky!

Same goes for Reliance communication. They send the reminder for bill payment with a request to "ignore the message if already paid."

Compare this with the alerts from ICICI Bank which sends the messages in the morning for the transactions done late in previous evening. (Now, I don't know if they send debit alerts immediately, which they should.) On a similar occasion ICICI folks impressed me. I have ICICI credit card and bank account. At an ATM I mistakenly used credit card instead of debit card to withdraw cash. First attempt to enter PIN, obviously, failed. In the middle of second attempt it dawned to me that it's a credit card. The system noted two failures.

Next morning ICICI folks called me to confirm that it was indeed me who had attempted it. They helpfully suggested me if PIN needs to be re-generated. But I politely refused as it doesn't fit in my own rulebook on credit card.

PS: While you are at it, read about how Reliance treated Rahul (hint, it's not nice) when he complained to them about goof-ups on their side.

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Statistics and Lies

Found this (little old) story linked from a group.

2 divorces for every 5 knots in Mumbai

This headline claims that a staggering 40% marriages end up in divorce. Here is their methodology. Count the number of weddings registered in last five years. Count the number of divorce cases filed in last five years. Compare them. Tada!

After reading the article, any person with IQ of mid-to-high double digits can figure out that sample set used in both cases is different. They should have counted the divorce cases filed where the couples were married during the period under observations. Well, then those facts would not have been so sensational. Somebody rightly said, media sells sensationalism, not news, definitely not facts.

June 17, 2008


World Record

Frankly, I never understood and bought the hype surrounding Firefox 3. Now, Firefox has been my primary browser since its infancy, when it was blazingly fast. In spite of the serious performance issues with Firefox 2.x, my loyalty was never under attack, thanks to bunch of add-ons and the mild reluctance to switch to IE. In fact, I posted a Firefox trick to save few minutes of entire lifetime.

Still, I set aside my thoughts saying it doesn't hurt to download the FF3 if millions of download is going to make it a headline in NYT. But, no. They let me down. The site was not designed to handle this kind of peak load. Classic case of marketing getting ahead of the operations.

Enough of record crap. I will revisit when you site is up AND most of the add-ons are working.


June 03, 2008



Recently, on this blog, you read about Bookeazy, a service for booking movie ticket online. I got a chance to use another similar service - BookMyShow. I am sucker for good movies and bargains. ICICI credit card along with BookMyShow is running a buy-one-get-one offer for movie tickets. Though it has various string attached - only on weekends, only two free tickets per month, only on "cheap" (priced less than Rs 250) tickets, etc. - it still is works fine for me.

So, here are quick notes comparing these two services from my view point. YMMV.

While it is evident that BookMyShow is a better service, I will continue to use both services opportunistically.

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June 02, 2008


How to lose money - the boring way.

You can lose money, if you have enough to begin with that is, in lot of fun ways. You visit the casino in Macau and lose to glory. You can trade in stock futures and options, speculate on commodities, take punt on currencies, etc. These activities may not be as much fun as casino, but you can no way call them boring.

The boring way to lose money is to put deposit in the bank. Seriously. With inflation officially crossing 8% mark, which I strongly feel is understated, it has crossed the 1-year interest rates on fixed deposit in some of the banks. This is not to suggest that one should go on spending spree. The old wisdom of saving for the rainy day still stays valid.

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