Archive | March, 2013

Are we really a Global Village?

28 Mar

I ask this question after it took me nearly two months to find a pair of cycling shoes. Let me step back and set the background. Spinning  (RPM) s a great group exercise – 1 hr of Spinning can help you burn 800 – 1000 calories. A few months of regular spinning can help you lose weight real fast.


I started Spinning nearly 6 months back and since then have got addicted. When I travel abroad I look for hotels that have Gyms with spinning stations. And most people in the class are – the morning batch at our gym Zela is sold out 30 min before the class and of the group of 15 women, many come as early as 1 hr before the class, its a cat-fight to get the front row bikes  (I am still not sure what attracts them –  exercise or the instructor)


After a few months as you build stamina and want to push yourself more you are looking at means to improve efficiency.  One way to do it is get the right gear.  The right shorts and shoes can help you improve performance by as much as 50%.

Ladies Cimson and Creme Shorts

This is where the saga begins. I visited Decathlon at Sarjapur Road in late Jan and bought the right shorts and a pair of shoes with Cleats. The technician fixed it and I was all excited. The next day at class I realized that the Cleats were embedded too deep inside the sole of the shoes and it was not possible to use them in the cycle.


I went back to Decathlon the next weekend and tried to exchange the shoes – unfortunately the other model with the cleats jutting out was not available in my size. The store manager was friendly and said stocks were expected in a weeks time. I visited after a week – but still it had not come – Decathlon was kind enough to give me a refund.

A few days later my instructor informed me of a new online store that specializes in biking gear. The CEO was nice enough to get back with lots of options but unfortunately did not have my size. (Before people think I am a giant – my size is 11 , which is pretty normal). He promised to order my stock from Italy and assured me that it would be available in a few weeks by end Feb. I kept following and finally yesterday they acknowledged they had goofed up and the stock was yet to be ordered.

On a visit to Whitefield yesterday I spotted a Decathlon there and took a chance again. Luckily they had my size in the variety I wanted. But then there was no technician to fix the cleats ( It requires a special instrument to screw the cleats). Going to Decathlon is a challenge as it can take ½ a day – however my enterprising driver figured a way to get the cleats fixed.

So here I am after nearly two months finally with the shoes I wanted. I am hoping it works today evening when I go for my class.

But the question that bugs me – would I have had this problem in any other large city in US or Europe or even Singapore? When it comes down to getting stuff like these shoes or even Mascarpone Cheese, or Halloween Costumes it’s a big challenge even in a Delhi, Bangalore or Mumbai – you literally have to hunt down the few stores which have a remote chance of stocking them (Mascarpone Cheese is a key Ingredient to make Tiramisu) – chances are 9 out of 10 you wont be lucky.

So what makes us say we are in a Global Village  – or do we have to wait for some more years for the Wal-Mart’s & Tesco’s to come before we can truly become a Global village.  Let’s hope that happens soon.

Brilliant, Down to Earth people – A dying Species

22 Mar

Recently I had an email debate in our building Yahoo Group with a very intelligent person – who stuck to his point even when he knew he was on the wrong track.  And I asked myself where does this behavior come from ?  One thing led to the other and here I am trying to present a new theory in the form of a simple grid to try and position people

Over 2000 years back the Greek physician Hippocrates (460–370 BC) incorporated the four temperaments – Sanguine, Choleric, Melancholic & Phlegmatic into his medical theories. Since then these have formed the basis of many psychometric & behavioral testing methods. (Source – Wikipedia) This is indeed complex and difficult to understand.

Lets look back –  over the years we would have interacted or been influenced by thousands of people – famous personalities, teachers, friends, office colleagues, managers, team members , all the people you have interviewed for potential jobs , a shopkeeper , a Pizza delivery boy…….. And I ask myself is there a simple and easy grid that can be created, to plot the behaviors of all these people, something that is effective & simple. Something that does not require a degree in Psychology to understand.  Here is a simple grid that I propose – let me know if this appeals to you.

First let me ask you two simple questions

a)   Would you like your Child to be Brilliant or Dumb?

b)   Would you like your Child to be Arrogant or a Simple Down to Earth person?

The answer is obvious. So I guess the same thing applies for everyone you interact with. Using this simple principle I have created a grid called the B.D.A.D template. A visual speaks more effectively than words so I am enclosing the grid with samples of few people who fit in beautifully into the four different quadrants.

BA Final copy

The BA Type (Brilliant Arrogant) 

The name is self explanatory. These guys are world beaters. They are best in class. Many are Brilliant bordering on eccentricity. They Know it – and thats where the arrogance comes from. They are probably less than 0.1% of the global population – brilliant & hardworking they are a deadly combination. They are high achievers and are almost always right with their logic – but on that rare occasion when they are wrong they do not accept it and stick to their guns. They come from the best of colleges & universities what they missed out was a simple sentence that can be so powerful – “Sorry I was wrong” ! In India the IIT/IIM ‘s generates many of this type of personalities.

The BD Type (Brilliant – Down To Earth) 

The world would be a much better place if we had more of these people. Everyone loves these guys. They are Brilliant & Simple. Their class speaks for themselves. They are so talented that they shine & sparkle. Sadly this is a tribe that is continuing to diminish in numbers – call it the curse of Kaliyug. Its great to have these people as your manager or your team members – it just makes your job a breeze , thankfully I am in that spot these days.

The AD Type (Arrogant & Dumb ) –  This is a deadly combination . A dangerous type and you want to stay away from these people by a mile. They are loud, thick-skinned, and inconsistent. Some are also wily and that makes them a deadly and miserable specimen of humanity. You will see them all over the place – the guy in office taking credit for work he has not done, the cricketer who knows he has friends in BCCI, the kid whose father is a big shot “babu” ……… Some of them have done very well in their careers – one even went on to become the President of the US !!!  I may be biased here but I feel that in India this specimen is found in higher density North of the Narmada, specifically in and around the NCR region.

And finally the type thats probably 80% of the world population , The Dumb – Down to Earth (DD) Type

This is the common man, Not sure if this is the group that Justice Katju was referring when he said that 90% of Indians are dumb. These guys don’t have a public view and tend to get swayed easily. These people love to be in groups and follow the voice of a leader. They are simple, down to earth people, not harmless in any way. They are just the quiet silent mass.

So are there just 4 types? Like in any grid there are shades of traits of these four characteristics in every individual. With this Grid its easy to create a scale where 10 = Most Brilliant, 1 = Big Dumbo  & again 10 = Most Down to Earth and 1 = Most Arrogant

So a B10D10 = Best profile of someone who is extremely Brilliant & Rooted to the ground. Thats a dream profile. We all need to work hard to get there or maybe its just in the genes.

The other end of the spectrum is B1D1 = Someone who is extremely Dumb & Arrogant. In-between these extremes you have all the different permutations & combinations where we can fit almost everyone we know.

So the next time you need to hire a person – you can send a detailed JD to your HR manager but top it with a ” I want a B5 D5 guy” –  because that may best explain the cultural fitment you need for your team.

Wealth Managers – do they really grow your wealth ?

14 Mar

18 Months back my wealth manager sold me a financial instrument. It was a structured product from Deutsche Bank and was linked to the growth of the Stock Index. While there was no written commitment I was assured of returns that would be much higher than a bank FD – lots of upside , no downside – I was promised. Last month I got my money back – but not a paise in gain. Input 10 Lacs – Output 10 Lacs.  During the 18 month period the Nifty did go up  – Deutshe Bank made money , Axis Bank made money , my wealth manager made her incentive – and I was left looking like a sucker. (If I had put this money in a  FD I would have made ~ 1.5 Lacs in Pre Tax profit)


Ever wondered how Banks / Wealth Managers make money. What funds the fancy offices and hefty bonuses ? They have no manufacturing , IP , Code, product  to sell ? Why is it that they promise a lot but never commit even 1 % more than a bank FD ?

The harsh truth is they  make money out of you. Insurance policies , Complicated Structured products , the stock market itself – are all designed smartly to ensure that the retail investor is attracted but very soon left high & dry. The head of  Wealth Management of a large bank  told me that 90% of retail investors lose money in the Market. After 20 years of stock market investing I tend to agree with him – whether in the US or in India you gain big & lose big but Nett Nett if you do not have tremendous discipline its difficult to make money in the stock market.

So the next question is where do you invest ? How do you beat inflation ?  India’s gross domestic savings rate has increased near-steadily over the Five-Year Plans and is among the highest in the world ( Nearly 35%) . The recent savings rate of the country is comparable to Indonesia, Thailand and Korea but much lower than that of China, Malaysia and Singapore. (Consumer states like the US and the UK had their savings rate as low as 11% levels in 2009, while the rate is 17% for France and 21.4% for Germany. Among emerging economies, Brazil had a low savings rate at 16.5%.)

Lets look at simple FD – its easy to understand , easily available in every branch , has high liquidity. If you see the table below for people in the 30% Tax Bracket your FD interest rate does not help you beat Inflation !


Talking of Tax – most of us think we pay 30 % Tax – but we pay a lot more. There is service tax on everything you buy , add education Cess , Metro Cess and inflated prices on Petrol – we probably end up paying 10 – 15 % on everything we buy – so our actual Tax Liability is much higher than 30%.

Real Estate has got expensive. 10 years back  when you bought a new flat you paid Registration on the undivided share of land only. Today you pay on the entire flat value – add to this the Service Charges & VAT on construction  – you actually pay close to 20% of property value in Taxes & Registration. Builders take away most of the profit and appreciation is limited.

Making money has indeed become difficult in the last few years . Which brings me back to the question of what are the options to beat Inflation – I see a few of them.

1. Debt Funds – which should hopefully give 10% + Post Tax returns if the RBI governor starts cutting Interest rates

2. Land – yes its not Liquid and requires a lot of research to get a clean deal – but with population growing and mass exodus to Metro’s difficult to lose money on good land deals.

3. Gold – Not so sure on this one. Looks like it will crash. But given the wealth and black money that exists in this country the demand for Gold may not drop and with india being one of the biggest markets for Gold globally – it may keep shining for many years. But this is virtual profit – because no indian family sells Gold for cash at a profit ( not many Jewelers give you cash too ) – they either hoard it  trade it for newer jewellery  , or loan it  to Muthoot finance.

4. Maybe buy  the Index ( Nifty-bees) – because from a long term you can go wrong on individual stocks or mutual funds – but its very difficult to beat the Index. That may be the simple and safe way to 12% annualized returns.

Who says Inflation is 7 % ?

4 Mar

The latest issue of Business India has a cover story that talks about workers in Hero MotoCorp demanding hefty annual salary hikes that would translate to them earning about 1 Lac /month in next 3 years. I hope it happens. Corporate India, the rich  (the 42,000 people who officially earn more than 1 Crore / year) , the IT workers, Successful Businessmen & Traders  – get richer & richer, while the common man on the street struggles with his day to day life.

I do my neighborhood walk once in a while (Its more of an obstacle course these days with broken footpaths & cars parked all over) and it was interesting to see the increase in cost of a few items that we all tend to consume regularly.


Coconut water is healthy and is now available every 500 m in major Bangalore roads. A truck visits these footpath outlets twice a day and delivers stock. (Looks like there is s smart entrepreneur who has figured out a big business opportunity with no investment). For many years you could get a nourishing coconut drink for Rs 10, a few months back it became 12, had a fleeting stop at 15 and has now rested at Rs 20/- .  That’s a 100% hike in the last 12 months.

Every Sat morning after my visit to the temple I stop by at the Darshini or any other standing joint and have a cup of Coffee. I always carried coins for Rs 6/- so that there was no hassle of change. The price of Coffee went up from 6 – 8 – 12 in less than 6 months. Again a 100% hike.

I also visit Ballal Residency (Residency Road) frequently on my way back from the Gym. My normal order would be a Moosambi Juice, Idli Vada and a Coffee to top it up. Normally its about 80 Rs – yesterday when I gave the 100 rupee note the waiter pointed the bill and showed me the rate as Rs 180/- . Again a 100% + rise.


The truth finally sunk in when on my evening walk I stopped by at a Puchka seller (Gol Guppa) – something I do once in 6 months when temptation kills rational thoughts. A plate of 6 used to cost me 60 P many moons back when I was a kid, but for many years in Bangalore it was Rs 10, became Rs 12 and is now Rs 15/- . A 50% + Hike.


And finally the Sona Masuri I have been buying for Rs 38/kg for the last few suddenly shot up to Rs 51/Kg ( A 30 – 40% increase in a few months)

Government, RBI & Economic Survey data claim that WPI Inflation is now under control at 6 – 7%. (And I wonder how they calculate this). The inflation on the street is easily upwards of 15 – 20%.  And if we create an Index that consists of Vegetables, Fruits, Cereals, Petrol, and Transportation Costs – we may well see the rate of Inflation well above 25%.

Companies like Hero, Bajaj, Mico Bosch, Maruti Suzuki and many other manufacturing firms hire less than 50% of the staff on their rolls, rest are contractors and pay them very low salaries and hardly any perks. I have heard that a Diploma Mech Engg in a Pune manufacturing plant works 6 days a week, 12 hrs. shifts and earns Rs 7- 10,000/- month.  Labor Unions have become meek and even Hindi Cinemas no longer focus on the challenges of the poor but take us to magical lands of joy & prosperity. (Here is an opportunity for Abhsishek Bachan to come back in some of his father earlier avatars as the messiah of the poor)

Tax  copy

Source :

India is growing but we are a country where 650 M do not have basic sanitation facility and less than 10%  of our 15 M wage earners have an income of > 1 Lac / Year . I shudder the think how the common man earning 15 – 20 K / month manages his daily life.


The price of Onion is up by 80% and many a Govt has seen its fall when the price of Onion goes up drastically. This divide and the sense of helplessness amongst the common man  is fast going to accelerate the sense of anarchy that is spreading across the nation.

As Mr Modi says its time for a Government with Mission to come and fix the mess in the country while those who survive on Commission are shown their way out.