Sep 20, 2008

FINANCIAL TERRORISM - " Lehman Brothers crisis"

Any one who leads to such panic in the market should be termed as “ Financial terrorist”. Reason for using the term “ Financial terrorism “ is that even the good assets are being badly hit because of negative sentiments and many small investor like me lose .

Ask the best brain about the problem with Lehman and they will confuse you by using terms like “ Institution being over leveraged “.

That's truly CONSULTING - “Simple things being made Complex “

I am not saying its wrong but the common man will never understand the real problem.
Always Credit Crisis occurs when loan and investment books are much bigger than its capital.

I will attempt to simplify it further …

An Investment bank uses its own money to lend other and invest. Banks like Lehman, buy mortgage loans (like housing loan etc ) from other banks and then package them to sell bonds against the loan pool. If mortgage earns 5%, than investment banks sells bonds at 3.5 % . The difference between 5% and 3.5% (i.e. 1.5%) called as spread is the earning of investment bank. They also add cash to make loan pool look attractive so that the bonds are sold at higher prices. These banks sell these structured bonds to raise money and frees the capital . BUT WHEN THE HOME BUYERS START DEFAULTING THESE BONDS LOSE ITS VALUE.

Banks like Lehman face redemption when these bond start losing its value. Also Lehman has to repay another bank it has borrowed from. Under such situation it sells mortgage –backed bonds whose prices have fallen . Since this selling will not raise funds as expected ,so investment banks sell some of the good assets or bonds which has nothing to do with mortgages. As a result situation in the markets dips prices of these good assets /bonds . This crisis spreads which termed as DOMINO EFFECT .

This impacts balance sheet as all the banks are required to mark –to- market their investments. So , if the price of an instrument falls , the difference between the price at which the instrument was brought and the current prices is to be provided by deduction from the earning . But the bigger problem which has deepened crises is “ How to provide when there is NO MARKET “ ie when bank actually goes to sell the derivative , it discovers that there are no takers . This is due to derivatives being marked –to –model than being marked –to- market.

Huge Loses are suffered with difference between the prices thrown by these artificially constructed financial models by best brains and prices that buyers are willing to pay in the market . Problem compounds further due to strange accounting practice and also disclosure issues.

Such Crisis shows banks /financial services industry should employ not just the best brains from IIT/IIM but also those who are best on ethics & can relate to comman man.

Sep 6, 2008

TEACH INDIA how to LEAD INDIA with millions doing filthy jobs like “Night Soil workers” ,”Rat catchers","Mortician"&"conservancy worker"

I guarantee you that reading this article will educate you for sure on unique JOB Openings .It will also make you feel ugly and sorry on the state of affair of thousands of workers who take-up filthy assignment.

Jobs are really hard come by in Mumbai . Reason to believe this was when I heard political interference in the recruitment of “ Rat Catchers “. Yes you read it right …..

1)RAT CATCHERS : Job description of this profile is to kill a minimum of 30 rats a night, anything above that gets them a bonus of Rs. 5 per rat. If they kill less than the required number, they get just three days to fill the backlog. Salary offered is Rs 8,000 a month plus incentives. Also one needs to perform consistently for three years for the corporation to confirms them . Recently , the municipal corporation (Mumbai ) in the first round of recruitment hired 13 rat catchers out of close to 400 who had applied for the job. Only 39 of the 400 cleared the written test and only 13 of the 39 aced the practicals.

It seems that the corporation needs 30 more to keep the city’s rat population in the check and recruitment advertisements for the same would be out soon.

Few more openings that I read recently are:

2)NIGHT SOIL WORKERS – Job describes the daily work of manually cleaning and removing human excreta from dry (non-flush) toilets across India. If dignity is denied to people without toilets, what is left for people who clean up human excrement?

3)MORTICIAN – Morgue is where dead people are stored until they go to the funeral home for burial or cremation. A mortician is someone who works at a funeral home and prepares the body for burial, cremation and prepares for the funeral. In Hospitals, Although medical officers are supposed to carry out post mortem examinations, in actual fact it is the doms, a sub-caste of the Dalits (untouchables), who are usually completely uneducated and often drunk on the job, simply cut the bodies and open them using crude tools while the doctors are simply observers and sign the necessary documents.

4)CONSERVANCY WORKERS: Job requires to keep the roads and lanes clean .The Brihanmumbai Municipal Corporation (BMC) planning to appoint 6,000 workers to keep the roads and lanes in the suburbs clean. BMC already has almost 34,000 conservancy workers to clean the city.

I hope “Guaranteed Rojgar Ujna “ initiative is not opening us such Jobs.

Reading these JD , my maid and car cleaner will feel lucky and good at the Jobs they are doing .

Last Diwali I gave the Rs 5000 /- to initiate micro finance . This time I plan to give gloves to the BMC workers who come with the van to collect the waste.

Join me in this initiative by providing safety kits to people who are doing thankless CRITICAL jobs in our society

Jun 20, 2008

Unknown Wealth Management Skills of Mr. Kesar Singh ji ( AC cab owner)

We reached an hour before the scheduled meeting with Financial Institution, hence went to CCD to pass the time . All along the discussion my colleague went on cribbing about how poor she is inspite of taking home fat salary. Thanks to the lovely café frappe which made me feel better . Post our meeting we struggled but managed to get a AC Cab driven by Sardar ji .

That 90 minutes in the AC Cab from Lower parel to Vile Parle was an experience worth quoting .

The moment the traffic was getting jammed, I found this cab driver pulling the window down and would start whistling. The result was the jammed traffic would move. He went on doing this and the traffic was getting cleared every time . I was surprised at this and was very curious to know the connection between the whistling and traffic clearance. On asking, sardar ji informed that most of car owners keep talking over the mobile while driving and this tends to slow the traffic. The moment they listen to the whistle they disconnect the call and concentrate on driving. Thinking that traffic police was near by .

Wow!! Papaji what a thinking!!!

His creative mind prompted me to start a conversation with him. Soon I came to know his name was Mr Kesar Singh . He has been driving the cab since 1971 and owns a 500 sqft house at Powai . He had four daughters and one son, all were well educated and settled in life . Eldest daughter being MBA , 2nd daughter was B. Ed and 3d Daughter was MA (Economics ) . The youngest son had done marine engineering and serves for Foreign shipping.

Hearing to all that my colleague suddenly woke-up and started actively participating in the conversation . She discovered a Rich Dad in this Poor man . I could gauge what she must be thinking and hence I asked Kesar Singh about his earning . He was open and revealed that average earning is Rs. 20,000 per month ( Tax free ) .

My colleague was not able to digest the fact that Kesar ji was happy and successful inspite earning 1/10th less than him .

People like Kesar ji are real Wealth Managers. They manage all the risk in life so well without exposure to ANY Insurance or Equity or Mutual Funds. They not only teach us how to live a content life, they also teach that happiness has no connections with your earnings.

Many people like Kesar sing Ji have mastered the art of whistling whenever the live Jammed. They are the unknown FUND MANAGERS.

Please congratulate Kesar Sing Ji today on +91 9869156377. May be you can hire his AC Cab and also learn from him the art of whistling out the trouble in life.

Apr 4, 2008


The battle for your success is fought and won nowhere else but in your mind.

Your success or failure is does not necessarily depend upon where you are born or brought up, your bank balance or also your level of formal education. Although, they are important at the initial stage of career . But I'll always weigh a sharp mind, determination, ethics and perseverance over a good education every time. Your success or failure does not depend upon what your family, your friends, your peers or your co-workers feel are your chances.

I know for sure there is scope for debate on every point that’s mentioned. The point is - Your success depends on what you have inside. Let’s think and find some answers of tough question - Are you a winner?

Because most winners fail. In fact, a great many winners fail over and over and over again. Are you able to be knocked down or knocked out in your attempts to succeed, but have enough courage and tenacity to get up time and time again, brush yourself off, figure out what went wrong, what you did wrong, and then start again?

In the midst of failing, can you endure your closest family, friends or loved ones saying "I told you so", "I knew you couldn't do it", "I don't even know why you wasted your time/money/effort", when you know in your heart that you are capable and you can achieve the success you so desire?

Can you face customers, partners, or investors when all your resources has run out and you still haven't made a go of it, yet you have to go ahead with more resources, because you know it will work?

Can you cope with the loneliness and isolation that is often an inherent part of leadership, because no one else shares your vision or can see the future the way in which you see it?

Are you strong enough to break through or break free of limitations you put upon yourself or that others have placed on you? Are you able to lift yourself beyond your current circumstances? Can you drive yourself forward, even when it means challenging and overcoming immense fear?

Hope you have know why everyone is NOT winner. If only academics were the reason for success in Career than every IIT/IIM pass out would have been a CEO of the company . If you don’t believe check out how many companies you know have a CEO who have great academics .

Winning is much much more than that . Winning is a hard, difficult business. If it was so easy, everybody would be winners. People get tired, people get lazy, people change their minds about what they want and what they're willing to settle for.

Hope this blog makes you believe you what it takes to succeed in corporate jungle. I believe that there is a reason , a time and a place for everything.

Its not yet late … Still you can DISCOVER THE WINNER INSIDE YOU. My best wishes to you .

Mar 18, 2008

SALARY EXPECTATION CALCULATOR - ”What should be my salary?”

Often I have seen employees are not satisfied even if they are paid well. They are unable to establish - right expectations. They keep comparing or get swayed by the salaries quoted in business magazines.

I have collated the views expressed by number of my colleagues / friends on various occasions and attempting to put forward a calculator for salary expectation . Here it goes ...

You need fit yourself in one the categories to know whats salary to expect :

Category 1(Post Graduate): If you have excellent domain knowledge with minimum 7 years experience and are able to project your work in the organization. Then

Minimum salary to expect ( Gross )= Age * Rs.100,000

E.g. : if your age is 33 than you must get Rs 33 lacs (Gross Salary )

Category 2(Post Graduate): If you have excellent domain knowledge with minimum 7 years experience but find it difficult to project yourself in the organization. Then

Minimum salary (Net take home) = Number of years of experience * Rs 2,00,000

E.g.: If you are at 33 with 8 years experience than should expect 16lacs ( Take home )

Category 3(Graduate or PG part-time): If you have acceptable domain knowledge and able to create a right perception. Then expect

Minimum salary (Gross) = Number of years of experience * Rs 1,50,000

E.g.: If you are at 32 with 8 years experience than should expect (gross) 12 lacs

Category 4 : If you are weak on perception management/ domain knowledge than consider yourself lucky that you are still employed .

The above categorisation is applicable for growing sectors like financial services ,banking ,telecom ,information technology etc in which quality of human capital is key success factor .

For the employee working other industry can apply a 25 % discounting factor to arrive at salary to expect.

One can put his /her career growth on 5th gear by right perception management backed by efforts to succeed. Few basic suggestions for perception management :

a) Work towards solution don’t discuss problems
b) Debate /discuss alternative solutions with your senior . Don’t argue.
c) Don’t escalate issues better to quit the job.Escalation rarely helps inlong terms
d) When you lose, don’t lose the lesson.
e) Learn from others mistake .
f) Relationships go a long way to shape-up your career .

Start calculating ...

Feb 2, 2008

Want to buy a Flat near a Slum or a Chawl ! !

My friend was planning to buy a flat in Mumbai. As always I was quick in helping him. I gave them details on one flat that was perfectly matching their specifications

My friend’s wife (Nita) wanted to know “ Is the flat near slum area?”

I informed Nita that it had no slum around 10 km radius and was expecting her to be happy to hear this. But I was shocked to hear when Nita mentioned that they looking at place that has chawl or a slum located atleast 2 to 3 km radius.

When enquired, Nita had a strong reason for such demand. She mentioned since they are both working, dependence on maid is heavy for cooking & upkeep of house. Also they need a dedicated resource to take care of their daughter Anjali. Even One day off request of the maid lead to a Chaos at home and Office. They are willing to spend Rs. 6000 to Rs 7000 for such services. Hence having a chawl or a slum close by ensures uninterrupted supply.

What Nita described looks like confirming research by well-known economist Roopa Purushothaman. Roopa’s latest report mentions urbanization will lead to generation of millions of Non farm jobs for rural sector. Urbanization is good for the country .We should not fear that it would result in Urban and rural divide. Increase in the urban consumption will result into increase in income level in rural sector.

We will see number of such needs that can be fulfilled by the semi skilled labour available at rural sector . Its an opportunity for an entrepreneur who can build a domestic BPO industry employing huge semi skilled labour in India.

Days are not far when India will also witness a dramatic change. A well dress maid will get down from her TATA NANO and flash a visiting card and say “ I am here to ensure the up-keep of our house!!.

Jan 9, 2008

Reliance Power IPO

In the first three months of 2008 , the total mobilization could touch a record Rs30,000crores as 170 to 180 IPO are lined up this year . ( this four times compared to last year)

Number of investors especially salaried class having limited funds to invest and are confused on which IPO to select ?

If you are looking for answer to the question " Should I invest in Reliance Power IPO? " than continue reading ...

Reliance is known for delivering high returns to its shareholders . When a group establishes such a trend than the trust becomes a single most important factor for investing.

This is main reason for the hype on Reliance Power IPO .

Relaince Power IPO will be oversubscribed and will be list at premium price giving good return for SHORT TERM .

However the prices will slide down or stagnate after listing in couple of months considering the nature of the industry. Power sector has high gestation period of 4 to 5 years .

Reliance is know for its power of execution and probability of setting up the power plants in record time is High . They had set-up Jamnagar refinery in record time .

Also The demand -supply situation is favourable for Power Sector . Accute shortage of power in the country will driving force for this stock in long run . Hence you will see an upward movement of share prices after couple of years

If you are not prepared to stay invested for a period of min 3 years than I suggest to Invest in this stock for short term ( 15 days )and make a quick buck .

Jan 5, 2008

SLOW TRACK option - a HR initiative

Life is stressful for a working women. At one end she has a demanding professional life and at the other end the personal life consumes lot of her time.

Under such situations its always the working women who has to dump the successful career and focuses on personal life . I am not saying its incorrect but the decision would have been different if the corporate in true sense create an environment that support the working women.The solution is simple.

HR to offer “ slow track “ option to the employees. All companies have a mechanism to identify “fast track”. The need of the hour is also to identify staff who is willing to be on slow track. This program to give an option of working for less number of hours for couple of years and proportionately the salary can be reduced. Also they should have an option to return back to normal working hours once are at comfort. The major difference being that the SLOW TRACK to be chosen by the employee and the FAST TRACK candidates are identified by the employer. Also HR to take care that slow track employees don’t get branded as Non- Performers.

This will be of a great help to working women, as the extra hours that she gets would help balance the personal and professional life. Especially for families with new born babies.

This HR initiative is in true sense will ensure the gender equality. If you agree to the thoughts than be quick in forwarding this to your HR Head and CEO. May be my blog can help you get “Tare Zameen Par ”.