Camping with Bear in Yosemite

Bear Warning [Yosemite National Park]

Image by via Flickr

“I can’t stay in the place. This tent is just made of cloth & does not even have door.  I can’t bear this cold in this snow”. This was the first words my wife uttered on seeing the Housekeeping Camp at Yosemite Valley in California. Born & brought up in Mumbai, the only cold she is experiences are the medical ones. Even through 3 layers of winter clothing the cold was chilling the bones.

 The last 3 hours had been an adventure in itself. With snow falling all around us, very low visibility, driving around without the help of GPS in pitch dark the Yosemite valley on curvy, slippery road, fearing that we may get lost was an adventure in itself. The dim-lights of the Camp ground gave me the joy which Archimedes felt when he ran around shouting “Eureka”. Had the seatbelts not restrained me I could have tried something similar.

 But the accommodation created a flutter. At 12:00 Midnight there was no other option. All the 8 of us, including me, myself, my brother, sister in law, mother, my  6 year old daughter & my brothers two sons 4 yr & 2 yrs respectively, tried to ready ourselves for the a good nights sleep after a grueling drive of over 12 hours that day. Least was I to know that the adventure had just begun.

 A black iron box, the size of car trunk, outside the tent puzzled me. Before I could unravel the mystery, I came across a note stuck on a pole, which instructed that wild bears visit the camp in search of food at night & thus all the food has to stored & locked in the iron box. Not to keep any eatable inside the tent as the bear may try to get at it. The bears are known to break car windows to get to food inside.

 Me & my brother quickly emptied the car & put all the food items into the iron box. We also removed the ice box from the car & left it open as per the instructions. While I was doing this the only thing that crossed my mind was what if a bear decided to pay us a visit while we were doing this transfer. The instructions did say that bears are very intelligent & have a strong ability to smell even small quantities of food at long distance & also that they have padded feet so you cannot hear them coming towards you. Every shadow seemed like a bear. We decided to keep two bottles of milk inside the tent for the kids as they may need in night.

 Before going to bed we decided to go to the common toilet available nearby, a distance of only 100 feet, but the pitch dark did seem to make it a mile. When we came back, my wife saw an animal moving near our tent. But others chided her that it is the mind playing tricks.  

 The others went into the tent but I noticed that something had changed. The open icebox that we had left outside seemed to have gone for a walk. It was 5-6 feet away & when I went to check it I could see muddy paw-marks on the box. We had been visited by somebody. My wife indeed was not wrong. I did share the news with my brother not wanting to alarm everybody.

 Soon every body was asleep. The cold was forgotten, but my eyes remained glued to the door. Expecting the bear to peek thru it anytime. I am usually a very sound sleeper. In fact I can fall asleep anywhere, all my teachers & friends can voucher for it. In fact, sleeping while standing in a local train is also something which I can do easily. But the bear who had not stolen any food yet had stolen my sleep. Every minute turned into an hour & the hours stretched to eternity. I am an agnostic, but still tried to summon the Gods to stand guard at the door. At least they could do this much & prove to me that they existed.

 When Sherpa Tenzing scaled the Everest, he must have been extremely exhausted but very happy. I too was in a similar state at the first crack of dawn without a wink of sleep the whole night. My mom is an early riser & seeing me awake she assumed I too just got up. She asked me if I could accompany her while she went to the toilet. I peeked out first like a trained commando to check if the ground is clear. When we were returning from the toilet, we had company. A bear was sitting in front of the entrance to our tent looking at the iron box. The rest of the people in the camp were still to wake up.

 The instructions had also mentioned that if you sight a bear make lot of noise & the bear will run away. I was in a quandary. Mustering all the courage that I could collect I shouted loudly. The bear just casually turned around had a long look at me. His demeanor suggested that he was saying, ” If think you can scare me with that, you must me nuts. I had heard that humans have better intelligence”. He kept sitting for the next 2 minutes, just looking around, completely ignoring me. I was not even a concern in his scheme of things, which certainly did hurt my ego as the protector of my family. But probably he too understood that chivalry is better part of valour & sauntered away. When we reached the tent the kids had got up. It was probably their noise which made it move.

 Every body was excited to know that we saw the bear. Even the people in the next tent joined us to hear about what had happened. Yosemite is indeed a beautiful place & we thoroughly enjoyed the waterfalls, the snow & the mountains.

 Later during the day we learnt that the bears are afraid of humans & rarely attack them. No deaths have happened at the camp due to bears. But the bears are extremely smart & powerful & thus easily manage to get food which is left unattended & can vandalize to do so. Only if I had known all this few hours before, I would not have missed out on my sleep. But would it have been worth it.

Posted in Uncategorized | 6 Comments

A world without notes & coins

Assorted international currency notes.

Image via Wikipedia

Niall Ferguson in “The Ascent of Money– A financial History of the World” says that money is a medium of exchange, which eliminated the inefficiencies of barter. It allows transactions to conducted over a long period or distance. To perform these transactions it should be available, affordable, durable, fungible, portable & reliable. Thus money has evolved from metals to notes & coins today. 

“Money’s the same, whoever gives it to you. That was the point of money, after all: crisp and clean or wrinkled or disintegrated into quarters – a dollar was always worth a hundred cents.” says Scott Westerfeld, The Last Days, 2006. How correctly said. One of the properties which money adopted was that it loses trace of what it was used for very easily. From where the money came does not matter. In a world where blood diamonds are abhorred, goods made using child or prison labour are despised, there is black money, there is drug money, but all of this can be & is laundered so that it loses its identity very soon. 

Scientific American reports that a study of US Dollar bills across 18 cities in 2009 showed that 90% of them has Cocaine traces. While this is alarming itself it is not possible to trace the people who did use it or sell it. Can we make it difficult for money to loose its identity. It was not easy earlier but now technology is available which can make this possible. When you give a currency note to someone the transaction itself is an anonymous one unless for some other reason it is recorded. But if we remove the notes & coins from circulation & allow only electronic (credit cards, mobile, online) & Bills of payment (cheques, promisary notes, etc.) to be allowed it can solve many problems at one go. 

How? Today electronic banking & more importantly mobile technology has provided a solution whereby monetary transactions can be done thru mobile. Infact, in 2009, 4.6 Billion people already have a mobile connection. Of the others who don’t have half a billion each stay either in India or China. Going by the growth rates in these countries it shouldn’t be long before almost everyone has a mobile phone. The technology of making payments thru mobile phones already exists. Zain with its service Zap already provides mobile banking to over 200 million in Africa. When Bharti acquired Zain it possibly acquired a bank of the future. 

Record of all the monetary transaction will achieve many objectives: 

1. Help in preventing tax evasion: If all the transactions are captured & linked to the person who did it, it would be very difficult to avoid paying taxes. This would go a long way in actually reducing tax rates) 

2. Trail for finding criminal activities: The way we need to interact & do transactions with many people to live our life so do criminals. They cannot solely operate outside the financial eco-system. This tracking will make life miserable for them, or so I hope. Thus it can go a long way in reducing funding for terrorism, drugs, illicit trafficking, etc. 

3. Financial inclusion of the poor: The banks like to deal with people who have very strong financial credentials. They like to lend to those who don’t need money. Electronic payments will leave a trace of financial activities for all the strata of the society, specially the poorest. This can be used very effectively by the Microfinance Institutions & later on by bigger banks as well. 

4. Enforce a better moral code: Compliance does play a good role in shaping what we stand for. People who have to follow rules later on quite emphatically state why those rules are good for them. This learning from behavioral economics can be put to good use. The fear of being found out can stop a lot of people from doing activities which they socially cannot own up. 

This is no panacea for all the evils: 

1. Tax havens need to co-operate else they will be the backdoor entry. Also all the major economies need to collaborate, else only the currency will change. 

2. The nefarious elements will just move to the other modes of transferring value like barter. But this is better as it will make their lives a bit difficult. The other modes have their own set of problems. They also can be tracked without creating problems for the law abiding citizens. 

3. As Robert Jackman says “Men are more often bribed by their loyalties and ambitions than by money”. Till people will want more than they are capable of getting they will try shortcuts which are not acceptable. 

What I suggest is simple. Make mobile banking universal & remove all coins & currencies out of circulations. 

Posted in Economy | Tagged , , , , | 5 Comments

Sensex at 1,00,000 by 2020

The Bombay Stock Exchange, in Mumbai, is Asia'...

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Lunch time at office is very entertaining, stress relieving & learning experience. Entertaining because one learns about all the grapevine, stress relieving because it allows you to crib and let some steam out & learning experience because it allows to pick the brains of extremely intelligent people from different expertise & background. 

This particular lunch happened about 5 years back in 2005. I was a young convert to equity investments. I started investing when Sensex was at 3000 & riding the wave to 10,000 by 2005. My early successes came completely by fluke but the advantage of early success helps one to learn & try & become an expert. When someone said that it better to keep the money in PPF especially because of the tax benefit, I was challenged. I had to study if my choice was right or it was just the irrational exuberance of easy initial success. I did my study & reached a conclusion that Sensex would be 20,000 by 2010 & it does not make sense to exit. When I shared this few days later, I was a lone heretic, nobody shared my confidence, many thought I was mad. 

But, I had done my research. Hopefully well. To answer these questions we need to go a few years back. Bombay Stock Exchange is the oldest stock exchange in Asia. What is now popularly known as the BSE was established as “The Native Share & Stock Brokers’ Association” in 1875. In 1986, almost 110 years after its existence it decided to launch a Index called as the Sensex comprising of 30 stocks. The base year of the Index was 78-79 & the Index was set at 100. By 90s the Index reached 1000. After many ups & downs the Index reached 10,000 in 2005. For the first 10 times growth the Index took 12 years, the second one it took 15 years. Thus every 15 years Sensex can multiply 10 times, which means every 5 years it will grow by more than double. This gave me the confidence to say that Sensex will grow to 20,000 by 2010. It raced to 20,000 much but could not sustain it. But now it almost back there & hopeful before the end of the calendar year should reach there. 

Now that we are almost at 20,000 in 2010, the next forecast would be to reach 1,00,000 by 2020. For this we also need to establish when we should look at growth from a multiplication point of view & not linear. One of the most important things which Peter Lynch teaches us that when evaluating something over many years use logarithmic scale & not linear scale. I am using the same logic here. This logic applies to the US stock market which has data for almost 80 years. The next 10 times growth would come in another 15 years. Thus by 2020 Sensex should reach 1,00,000. A number which looks gigantic today but very much achievable because of many factors 

• Our GDP is growing much faster today than it was in the previous decades. 

• India was the primary market place for our companies earlier, but now the world is up for taking. 

Indian companies, management, products & business models are fast catching up with the best in the world, in fact may be surpassing/redefining a few. 

Let us look at this from a different perspective (annual one). A 10 times growth in 15 years only means a CAGR (Annual growth rate)of 16.5%. Is it possible? Our GDP is growing at 8%. Agricultural GDP is 30% which grows best at 3%, rest of the GDP grows at 10%. Sensex companies operate in the non-agricultural space. This is real GDP in which inflation has been removed. When we add back inflation at 5% the real GDP growth for non-agricultural sector is only 10%+5%=15%. Thus it is not difficult for the largest companies to grow marginally better than Indian GDP growth. 

But what does this mean for us. What are the alternatives. The other choice for long term investment is fixed Interest earning savings. The average that you can expect from them is 8% per annum return. Over 15 years Rs 1 lakh invested in Sensex should give you Rs 10 lakhs while in Fixed Interest investment at (8%) should give you Rs 3.7 lakhs. The difference is huge. The difference is so much that even if you had to pay income tax on getting the money in first place it would still make sense . As after paying income tax the Rs 1 lakh corpus would shrink to Rs 70,000 which would grow 10 times to Rs 7 lakh, still double of the fixed income. 

There are some investments which we do with very long-term horizon. The corpus which we want to have when we retire or achieve financial independence. For someone who has just joined the workforce this is good 30 years away. For someone who around 40 this is still good 15 years away. Also many people who are retired or about to retire have some investible surplus after taking care of investment which will give them monthly fixed return this can be a good route. The Sensex or Equity route is best for investments with a 10 year plus horizon. 

Be careful about just one thing when it comes to Equity investments. It is a roller coaster ride. Fear & greed can hurt us a lot. Don’t invest out of greed when market has already risen & don’t sell out of fear when market already has fallen. Easier said than done. If you can do the opposite it would be great. Buy when the market has fallen to ridiculous lows & sell when it is at peak. Very few people manage it. 

I have another bet going for the 2020 Sensex made when the Sensex was around 8000-9000 about a year & half back. A past-colleague has said it will not be above 30,000. I said it will be at 1,00,000. Lets see who wins. 

Posted in Investment | Tagged , , , , , , | 12 Comments

Coke & Santa Claus: An interesting relationship

Christmas Coke

Image by Rennett Stowe via Flickr

 If you aspire to be a celebrity in Bollywood then one thing is very important, you need to be good-looking, young & fit (like the different belts in Karate, fitness for men is measured in packs, with six-packs as the highest grade & Zero figure being the best for women). But then there are exceptions to this rule. Mr. Amitabh Bachchan still rules the world giving his competitors his son’s age a run for their money. Celebrities are brands & brands are celebrities in their own way. 

When the world is the stage, two such images which stand out are Coke & Santa Claus. Coke has been there for the last 125 years & its best not to get into the origins of Santa Claus. They are brands which occupy a prominent space, one it terms of brand value to other in terms of recognition. 

Coke is only sugared carbonated water with some flavors (most important one is of coca leaves after the cocaine has been eliminated). Santa Claus can hardly be called impressive, pot-bellied, huge, old man, always wearing the same old red clothes & always so ridiculous the way he works. Even the courier industry has found out that best way to deliver anything is at the front door, rather than thru the chimney on top of the fire-place. His size must pose a few problems for him or for the chimney designers & in winters the fireplace is surely on, so he sure does not get fire insurance. I am sure insurance companies in western world don’t entertain fire claims in Christmas as they could have been caused by a negligent Santa Claus. (Acts Of God & his agents are not covered in most insurance contracts, do check). 

There are 3 things in common to Coke & Santa Claus: 

1. Both of them stand for Happiness: The cold winters, piles of snow & smaller days of few hours is something which we don’t experience in temperate India (certainly not in Mumbai, where AC is required even in Winter). Santa & Christmas in this cold climate bring a huge touch of relief by providing warmth & comfort that some one out there cares for you & will give you a gift. Coke as a cold drink also does the same in the hot summers. It gives us a huge relief. That is what festivals & gods are for. To give has happiness & relief from the drudgery of life.

2. Both of them look the same: No…No…they don’t have the same shape…but look carefully what is the same about both of them. Yes, your observation powers are good. The color of his clothes & Coke label is the same. Microsoft Word provides paint as a synonym of colour starting with “P”. Thus paint can be added as the eight P of marketing (last that I know,  7th P of marketing was already there, originally they were just 4 as per Philip Kotler) One thing you cannot blame Coke is of changing colour like a chameleon, it has been steadfast, so has been Mr. Santa Claus. In fact fashion trends come & go every six month but he is unchanged, very strange for a celebrity. The same for Coke. Just sets me wondering, there must be some sinister story behind the same colour. Was is it just a coincidence or some brilliant marketing strategy too.

3. Both work for the same company: “For God, Country & Coco-Cola” Mark Pendergast, writes that a Swedish Illustrator Haddon Sundblom drew St. Nick (that was his correct name) delivering Cokes to thirsty children. Prior to this Santa wore clothes of all colour. But Sundblom decided to dress St. Nick’s in Red to deliver Coke not by chance, but by design as he was commissioned by Coca-cola Company to do so. Strange it is that Santa Claus’s dress is Red because Coke’s colour was Red, rather than the other way round. In fact Coca-cola company has  a patent on the colour. Santa is clearly a Coke Man.

Now that is called perfect celebrity endorsement for brand. You don’t get a celebrity to endorse a brand. Create one to do the job. Such subtle influencing goes  a long way in influencing our choices. To understand it, do read Sheena Iyengar in “The Art of Choosing“. It’s a wonderful book. And thanks to my dear friend Baiju Mohan, for gifting it to me.  

 While we believe that our choices are rational, in fact they influenced by many subtle elements sub-consciously & some are planted by expert marketers. 

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6 year old serial entrepreneur

My daughter is a serial entrepreneur.  She is 6 years old now, but since the age of 4 she has wanted to do things. One of her first entrepreneurial venture was to be the toll collectors on the toll booth on highway. Her logic for getting into that business was very simple. I give a note to the toll operator & he gives me back a few notes & a piece of paper. So the toll operator must be a very rich guy who can just give out so many notes every day. She has since moved on after noticing that currency notes have different values & giving away money need not make you rich.

Her next venture was even more interesting & really grand. She likes painting & learnt that good paintings are kept in exhibitions so that every one can enjoy.  Since she could generate about 1 painting a day (not more considering she has to give due respect to her supreme god (…I mean teachers) by studying)) she would need a large space. A nearby park about 5 Acre big would suffice. She wanted me to withdraw money from bank & buy the piece of land. She had already chosen two partners (not her friends, because they did not have the requisite expertise) but one of my friends (a Mr. Shah) to look after finances & the father of a close friend of hers as he can speak well on a mike & is good to people (incidentally, he happens to be in the top management in marketing in a FMCG company). The pricing & the work timing were all worked out. The only reason this venture could not go further was because the Angel investor did not have deep enough pockets to buy the required land.

This and the many more entrepreneurial ventures, got me thinking. Our role models when we were young were professionals. Today, while we as parents have not encouraged any particular ones, seem to entrepreneurs.

What are the qualities that we want in our children. What are the qualities that we would like in our employees. Entrepreneurs vs Professional? Subroto Bagchi has a wonderful treatise on what a professional should do & I for sure love that book. It have really brought out that a professional does work with genuine passion, demonstrates responsibility & produces great results. If there is one quality of professional then he is “dependable”.  The one who will do thing correctly.

On the other hand an entrepreneur brings out a different image. He is focused on the results, is innovative (is ‘jugadoo’ at times), takes risks. Entrepreneur takes ownership for his own success & thus is ready to subordinate other things. Also  he usually is far more customer focused. Entrepreneur need to consider anything & everything that can impact their endeavor. He charts his own course. The one who will be focused on the end objective.

Ideally we would want both the qualities but life is not so fair where you can eat the cake & have it too. If one has to choose, then in world where the result can be measured fairly, where uncertainty is high, I would always love an Entrepreneur. There are a few areas where I don’t know how to measure success &  would prefer a professional.

When it comes to children, though it would seem to be too late to think about it, I would prefer an Entrepreneur. Because  an entrepreneur takes responsibility for his or her success. Adapts & learns, which is very important in the unpredictable world out there.  Instead of feeding man if you teach him to fish you feed him for life. The same way an entrepreneur will chart his way far better. Entrepreneur will become a professional if that is essential for the success of the business.

So my daughter is on the right track, she already knows what to do, knows her limitations,  what kind of team to build, the skill sets required & cares a lot for her customer. They are her friends. How many companies can say that. This is true of most of the children of her age. They are far more entrepreneurial in their quest that we as professionals are. Lets cultivate the entrepreneur.

My learning from serial entrepreneur continues…. a game bus which can be parked in our society…. The angel investor is still short of money……

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Scientist vs Expert: Cultivate the scientist in you, send the Expert for a sabbatical.

Niels Bohr and Albert Einstein. The picture wa...

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Marc Goedhart, Rishi Raj & Abhishek Saxena, all three eminent consultants at Mckinsey had a very surprising finding to report in Spring 2010. Stock market analyst are followed by millions of investors for advice. They literally hold the Boards of many multinational companies to ransom over the earnings forecast. But these expert have got market right only on few occasions. In fact forecasting is a risky, especially about the future. Thus we should not be too harsh on them. But the report says that only 2 times in last 25 years has actual growth surpassed the analyst forecast. That is not acceptable.

Nonetheless, expertise is extremely valued in today’s world. People who are considered experts in their field make huge amount of money as their expertise is valued. How would one define an expert. “An expert is a person who has made all the mistakes that can be made in a very narrow field.” – Niels Bohr (1885-1962). That is possibly the reason Cricketers after retirement become expert commentators, managers quit their firms to become consultants, and media personnel past their prime become award juries. There is nothing wrong in this. In fact the word expert & experience has similar root. Experience is a very good teacher.

The Expert based on his or her experience is able to visualize what can happen & thus is able to see what will work & what will not. Thus his experience provides him unique ability to predict the future. This gives him means to take the right decision & deliver the best performance. Our entire education is designed to create experts. We not only learn from our experience but the experience of many generations before us which is brought to us as knowledge.

Scientist, on the other hand, conjure a completely different image. Some one who is a bit eccentric, in pursuit of his passion. They are certainly valued but the Value attached to them may not be always measured in terms of monetary wealth. The best definition has come from a very unlikely source “Nothing shocks me, I am a scientist” by Harrison Ford as Indiana Jones. The scientist is interested in finding out & thus is open to all possibilities. For his thoughts are just hypothesis which needs to be verified. Whether he is right is secondary finding the truth in the primary objective.

The scientist is an eternal student. The unknown attract him. His experience teaches him what works & what does not. His curiosity leads him to finding why it works & why it does not. A scientist is also an expert but he is focus is on the unknown. Thus his expertise keeps on increasing. Also since he is discoverer of truth, if the original hypothesis is found to be wrong it does not demotivate him. Also failures are just experiments which have to be learned from. Thus scientists can be far more innovative.

“In the beginner’s mind there are many possibilities. In the expert’s mind there are few. ” said Shunryu Suzuki. No one is an expert all the time or a scientist all the time. It is just a state of mind. If we are able to cultivate a mind-set of scientist we can learn far more, achieve much more, enjoy more, live a fulfilling life. Thus be a scientist, send the expert for a sabbatical, forever.

A scientist in his laboratory is not only a technician: he is also a child placed before natural phenomena which impress him like a fairy tale. – Marie Currie. Be the child who loves to explore & learn.

Posted in Behaviour | Tagged , , , , , , , , , , | 1 Comment