Basab Pradhan's blog
I am in the middle of Fooled by Randomness by Nassim Nicholas Taleb. He talks about how we tend to draw the wrong conclusions about mutual fund performance by looking at the historical performance of today’s mutual funds. We don’t include the performance of all the funds that were closed or merged, generally on account of poor performance, because they aren’t around. This is called Survivorship Bias.
I find that Survivorship Bias is very useful in explaining the Godman phenomenon as well.
Last week the returning winners of the Twenty20 World Cup, jammed up traffic in Mumbai. Sharad Pawar, the BCCI President and also Union Minister for Agriculture, cancelled all his appointments to receive the Indian cricket team. There was a big press conference, at which he made a speech that was, it seems, more a political speech than anything else.
And why not? He is a politician in a cricket crazy country. Why shouldn’t he take advantage of the rare occurrence that is an Indian team winning a major championship? Many other politicians in various states had the same idea and showered gifts and cash upon their home state players. Everyone loves a winner.
I normally don’t post links if I don’t have anything to add to the matter. But this one is just so funny that I will.
Business Standard’s Kishore Singh wrote a review (here) of a book called “Entry From Backside Only” by Binoo John. An excerpt from the review
Now I am growing up in too many small places as Father is on transfer, and so I am not khit-pit in English in weigh these hi-fi people in Bombay and Delhi our, but I am knowing that this Mr John, he is kraking these jokes about small town people who are not so well knowing the language. At first, I am enjoying and laufing and saying, Oh, this Mr John, he is telling good-good jokes. But then he is saying that this is not write way to right English, and that this is Indian-English, which is not true English, and I am thinking perhaps he is CIA foreign hand, he is wishing to disallocate this great country.
Need I say more? If you grew up in India, go read the review, it’ll cheer you up.
I salute Kishore Singh. I wish I could write like that!
Is the Indian IT Services party over? Is a decade of growth and wealth creation coming to an end? And if that is so, what can we read in the tea leaves.
There are three fundamental reasons why the IT Services industry finds itself in a challenging environment. One, the dollar-rupee rate. Two, wage growth. And three, slower revenue growth.
A couple of months back, I wrote about Kerela’s ban on organized retailing. Most readers agreed that it was wrong-headed. But there was some skepticism about my claim that organized retailing would be beneficial to the farmers. Well, here’s the tangible evidence.
There is much good to be said about autos in Mumbai. They are generally available in plenty at all times of the day. And to a lesser extent even in the middle of the night. They generally charge by the meter, which is more than can be said about Delhi or Bangalore. And they (again generalizing here) have a more positive attitude towards their passengers and humanity at large than their brethren in other metros.
Among business newspapers in India, Business Standard is good and is constantly improving; Mint is new but very good too. Both have an online presence [B-S Mint] and do not have irritating pop-up ads. The B-S site is not password protected (Mint is) which makes it an ideal solution for linking to. I wouldn’t want my readers to be subjected to the advertising irritants that an Eco Times creates.
Here is my first link to B-S. An article in today’s B-S reports that BEST buses in Mumbai have installed TVs in their buses which will show ads. The idea is clever but not novel. It has been tried but has met with resistance in the US where fares are not (or less) subsidized. Bus Radio is a similar project that does radio advertising in school buses. In India where the fares have to be kept very low to remain affordable, this could be an interesting way to help keep the fares down.
I’m in India right now and over the weekend have been on a forced diet of the news channels. Top of the news menu is the possible fall of the government over the 123 Agreement on civilian nuclear cooperation between India and the US.
The coverage since yesterday on NDTV seems more like a soap opera than anything else. Like a soap opera it is low on content, high on drama but the acting is terrible. At the end of an hour long program in which many pols from both CPI(M) and Congress were interviewed, I was no more enlightened about the issues as I was before the program. (thank god for Wikipedia!). To the credit of the NDTV anchor, he tried his best to get his guests to talk about the issues, but it was clearly not a top priority for them. They preferred to refer to documents and dates without talking about what was in them. Make bombastic statements about the sovereignty of India being compromised or protected. And of course throw accusations at the other party about their motivations.
If you happen to travel in the US-India corridor, as I do, next time watch CNBC in the US and then go watch CNBC in India, or vice versa. You’ll immediately notice some differences.
One difference is in how the two channels see the stock market. CNBC in India treats the market as an ‘actor’. It doesn’t just go up or down, it often has a mind of its own and moves in ‘mysterious ways its wonders to perform’. A lot more air-time is spent on the ‘technical’ analysis of the market. CNBC in the US takes a more ‘fundamental’ view of the market – changes in the market are an ‘outcome’ of what’s happening to the economy, sub-prime loans, oil prices or whatever. More time is spent on analysis of companies and the economy. I wonder what lies at the bottom of this difference in how they see the markets.
Another difference that is immediately evident is how articulate business leaders are on CNBC in the US compared to their counterparts in India. They are not only better tutored on how to handle the press and TV but they are just plain better speakers.
Sell-side Research has had some very trying times in the past few years. And it’s not over yet. Unbundling brokerage services (trade execution) from research services has not only compressed research fees, it has also raised important questions like “What is this research really worth?” There seems to be no easy way to measure the value of research. So how does one price the service?
Expertise, which is what a sell-side firm has to offer, is sold in many other industries. There are primarily two pricing models that are common. Law firms and management consulting firms like McKinsey price their services by time. Technology research firms like Gartner sell their research through subscription based pricing models. There are other models of course (investment banks price their services as a % of the transaction value) but these are the two primary ones.
6 am pacific 