Visiting the queen is about to get costlier - Article for the day 29 June

Well, after the serious post yesterday I thought I'd switch gears a bit and move into a more humorous post.

For all the ruckus that Britain's proposed 3000 pound security deposit for visas has caused, this was a nice take.

http://www.firstpost.com/world/uks-visa-bond-yet-another-reason-to-skip-london-904405.html


P.S. The logic behind these posts can be found in this post

What is democracy? - Article for the day 28 June

Following up on this post I am starting off on a pretty heavy note. The riots in countries all over the world against the existing regimes will probably be what history remembers this decade for. This well articulated piece in The Economist talks about what democracy means. Just winning elections does not a democracy make.

Sharing food for thought

So a few days ago I came across this article which stated that Facebook was broken. A few friends and me started discussing this and were wondering what we could do about it. Google+, Twitter, and LinkedIn were discussed as possible alternatives. The worst of them was a email chain to groups of people. (I feel we deal with email overload on most days). At the end I realized that most were "push systems". I am trying to push my content out to people who are friends with me, followed me, have me in their contacts etc.

So my attempt at a solution is to use blogger as a pull system. I will post articles that I like (possibly with a little commentary) on my blog. People can then read them here at their leisure. It won't get lost in a stream of newer updates. People can comment on it and start a discussion without it disturbing their day. It probably won't get a lot of traction, but hey, I have a ready list of good reading material for a rainy day.

What say?

P.S. Incidentally this is my 100th post. Yay!! Looks like the next 100 will come a lot faster :) 

Photoblog - Summer and Beaches

Summer. The word brings back memories of summer holidays and days spent idly on the beach. Growing up in Mangalore I could spend hours just watching the waves crashing along the shore. As fate would have it, I landed up at KREC (Or NITK to use its present name) the only college in India to have its own private beach. The lighthouse and beach have been home to many a story through the years. 

The clouds gather before a storm

Coconut tree lined beaches

The Surathkal Lighthouse

View from the Lighthouse

View from the light house 2

After graduation and into the working world, wanderlust took root. Work hard and party harder was the motto. Weekends and holidays meant trips to various places. The first among the exotic trips was a visit to Egypt.

Pictured here is the Citadel of Qaitbay. It was built on the ruins of the Lighthouse of Alexandria (One of the seven ancient wonders of the world).  Alexandria was founded by Alexander the Great and was the sea port between Greece and the Nile Valley. . 

Speaking of the Nile valley, the next is the Faiyum Oasis. This oasis in the desert is different from others in the world, in the fact that it is fed from the river Nile and not underground springs.

Another one of these trips took me to Sri Lanka. Pictured here are the beaches of Unawatuna, Galle fort and Hikkaduwa. Una-Watuna literally means “fell down”. 

 

This stems from mythology as a part of the mountain that fell down when Hanuman was bringing back the mountain to help heal Lakshman. Hanuman was unable to figure out which herbs were required by Jambavan and picked up the whole mountain and brought it back to the battlefield.

Hikkaduwa has brilliant corals and is a lovely place to do snorkeling or scuba diving

Galle Fort is a Dutch fortress built in traditional European style. The sunset from here is a must do and pictures really do not do justice to the beauty of this beach. 

 .

Work took me to Los Angeles and one particular long weekend, we did a road trip from San Francisco to Los Angeles. Pictured here are some of the photos of places along the way.

 

Elephant seals are one of the highlights of this trip where the whole beach is covered with these huge animals (They weigh between 2 to 2.5 tons) who have come ashore for the mating season. This happens only in December.

Pebble beach, as seen in the picture, is a beach completely covered by pebbles that have been polished smooth by years of exposure to the waves. 

Malibu beach’s claim to fame is the number of Hollywood stars who have moved there. It has its own helipad and is awash with surfers and people building sand castles. 

For people who dream of beach retirement homes Manhattan Beach is the place to be. Its beauty has been used as the film location for greats like Starsky and Hutch, Tequila Sunrise and more recently TV series like CSI: Miami, The O.C, Weeds etc. It is also home to the Wimbledon of beach volleyball, “The Manhattan Beach Open volleyball tournament”. However, with people like Tiger Woods and Shaquille O'Neal moving in, the cost of owning property here just a dream for most of us.

Well, this is what summer means to me. The sun, the sand and the travel. What about you?


P.S. This post was written as an entry to the internal magazine of the company I work with. The topic was "What does Summer mean to you".

The Great Facebook IPO

In the last few days one of the main things dominating the Business news pages is the Facebook IPO. For me the similarities with the failed Reliance power IPO seem to keep jumping up to say, "Those who fail to learn from history are bound to repeat the same mistakes".  

1) IF successful, this would cause it to break IPO records. 

Reliance Power attracted $27.5 Billion in opening bids creating IPO records. However, by the end of the first day it was trading at a 17% discount of the issue price. In the days to follow it only worsened to the extent that Reliance ended up issuing bonus shares. However, for stock that listed at Rs 450 and was rumoured to hit 800 - 900 on listing day, it has never gone above list price.

Facebook announced that it has increased the number of shares on offer and the price band and is looking at a valuation of close to a $100 Billion. This is insane when looked at along with #2

2) No Revenues really

Facebook has been trying to capitalize on its huge user base. Industry friends say that the Ad rates are horribly expensive.The general sense was people advertise once and don't see the response. They increase ad spending hoping based on the marketing team telling them they need more to make an impact. But with weak pull thoughs they eventually stop. While I have no evidence of this and it is mainly hear say, GM just annouced that it would stop its FB ad spending.

The same was true of Reliance power. They wanted money to fund their new projects. There were no underlying existing assets. There were only assets that were going to be built.  

3) Talk of windfall gains is drowning out the possible negatives

Given that Facebook net income is valued at $3 Billion with a profit of $1 Billion, it seems strange that it can command valuations of $100 Billion. If everyone is talking about selling it at 1.5 to 3 times the listing price on listing day, who is going to buy?

It seems like the Emperor might be walking around without his new clothes. But is it true and is anyone willing to say so?

Links
More on the Reliance Story on Wikipedia
Reliance to list at Rs 800 - 900
What actually happened to Reliance

Facebook targets a valuation of over $100 billion
Facebook revenue valuation
General Motors pulls the plug on Facebook advertising

The myth of investing in small companies and hitting the jackpot

Most people have heard about the story of, if you had bought Infosys shares at the time it went public and just held them, it would have made you x lakhs through dividend, stock splits / bonuses and appreciation. Example here

It is the traditional rags to riches story. However, I have a few major issues with the argument.

1) What never gets told is the number of companies that never made it big. There are lots of statistics that most of the start ups fail. I have a few friends who bought into small companies and the companies have just gone bankrupt. Unproved companies can go both ways. That is exactly why they are "Unproven"

2) The romanticizing of the story has people convert Rs 10,000 in today's terms. If I had 10,000 to invest in a unproven company in 1980 I would have already been in the top 1% of the country's earners. In 1980 people still talked in 4 annas and 8 annas. In 1992, we still had 5ps and 10ps coins. I remember saving them for Bubble gum and other small stuff. 10,000 was a princely sum.

Extending the idea above, to make any meaningful returns on 200% or 300% increases, the initial capital commitment is high. The 10,000 in 1982 (noted for Wipro) is 78,500 now. The 10,000 in 1992 for Infosys is approximately 60,000 now. ( For the mathematically inclined, the inflation index I used is here

3) As anyone who has traded in the market will tell you, the moment your investment doubles or triples, it is a little difficult to stay unemotional. We think of the spectacular crashes that have happened and cash out with handsome gains of 200 - 300%. The problem is that seeing the investment go to 600% causes us to look back at 300% with disdain. No matter that 300% bought us 3 times as much as what we could have hoped to buy. We feel stupid and foolish at missing out 600%

Thus take a closer look at numbers offered to you and don't blindly follow the herd. Definitely aim for the stars. But realize the dangers lurking along the way. While I am a staunch supporter of the buy and hold strategy, I think the investment in small companies is over rated.

mGinger and opt in Advertising

Most people I know end up having a lot of SPAM in email and SMS advertising. While email filters in Gmail and Yahoo do a pretty good job in moving them where they belong SMS is a completely different ball game. You end up opening that message and looking at it before realizing that it belongs in the trash bin or realizing that the event / item is not available in your city. It was during a time like this that I wondered what would happen if advertisers had to pay for each of the emails / SMS's that they had to send. Would this reduce the amount of SPAM that all of us are grappling with? What if we took this to the next level and the money that the advertisers paid got channeled to your pocket?

Well, it isn't a wild fantasy anymore. mGinger actually does the same with opt in advertising. You sign up and provide your preferences. Advertisers then have to pay per sms in order to provide targeted advertising. In an ideal world, this kind of targeted advertising thus means that you would not have to receive advertisements from products you are not interested in.

What I liked about mGinger is that they have taken a page out of the book from sites like Groupon, Snap Deal and My Dala. Imagine that instead of just getting deals in your city emailed to you, get deals in your city based on your preferences emailed to you.

CNBC TV 18 covered mGinger sometime ago and has a lot of explanations for the doubting Thomas in you. The amount per ad is pretty small (Rs 0.20). But like my primary school teacher used to say "Little drops of water, little grains of sand, make the mighty ocean and the beauteous land"

P.S. If you decide to sign up please use this link and I will be able to make a little money at no extra cost to you.