How true !

An unemployed man is desperate to support his family. His wife
watches TV all day and his three teenage kids have dropped out of
high school to hang around with the local toughs. He applies for
a janitor's job at Microsoft and easily passes an aptitude test.

The human resources manager tells him, "You will be hired at
minimum wage of $5.15 an hour. Let me have your e-mail address so
that we can get you in the loop. Our system will automatically e-
mail you all the forms and advise you when to start and where to
report on your first day."

Taken back, the man protests that he is poor and has neither a
computer nor an e-mail address. To this the manager replies, "You
must understand that to a company like ours that means that you
virtually do not exist. Without an e-mail address you can hardly
expect to be employed by a high-tech firm. Good day."

Stunned, the man leaves. Not knowing where to turn and having $10
in his wallet, he walks past a farmers' market and sees a stand
selling 25lb crates of beautiful red tomatoes. He buys a crate,
carries it to a busy corner and displays the tomatoes. In less
than 2 hours he sells all the tomatoes and makes 100% profit.
Repeating the process several times more that day, he ends up
with almost $100 and arrives home that night with several bags of
groceries for his family.

During the night he decides to repeat the tomato business the
next day. By the end of the week he is getting up early everyday
and working into the night. He multiplies his profits quickly.
Early in the second week he acquires a cart to transport several
boxes of tomatoes at a time, but before a month is up he sells
the cart to buy a broken-down pickup truck.

At the end of a year he owns three old trucks. His two sons have
left their neighborhood gangs to help him with the tomato
business, his wife is buying the wholesale tomatoes, and his
daughter is taking night courses at the community college so she
can keep books for him. By the end of the second year he has a
dozen very nice used trucks and employs fifteen previously
unemployed people, all selling tomatoes. He continues to work
hard. Time passes and at the end of the fifth year he owns a
fleet of nice trucks and a warehouse which his wife supervises,
plus two tomato farms that the boys manage.

The tomato company's payroll has put hundreds of homeless and
jobless people to work. His daughter reports that the business
grossed a million dollars. Planning for the future, he decides to
buy some life insurance.

Consulting with an insurance adviser, he picks an insurance plan
to fit his new circumstances. Then the adviser asks him for his
e-mail address in order to send the final documents
electronically. When the man replies that he doesn't have time to
mess with! A computer and has no e-mail address, the insurance
man is stunned, "What, you don't have e-mail? No computer? No
Internet? Just think where you would be today if you'd had all of
that five years ago!"

"Ha!" snorts the man. "If I'd had e-mail five years ago I would
be sweeping floors at Microsoft and making $5.15 an hour."

Which brings us to the moral: Since you got this story by electronic means
you're probably closer to being a janitor than a millionaire.

Sadly, I received it too!!!! [:)]

Of Risk and Certainty (or the lack of it)

Risk is a word often associated with uncertainty and chaos and sometimes as a harbinger to failure. Not all of us wish risk coming in our way and most of what we do everyday is a means of subduing risk in any form. Fortunately, there are those of us who think otherwise, who think of risk as an opportunity to be taken advantage of. Had it not been for the few who think unconventionally, we would not see the world evolving and changing (hopefully for better) everyday. We would not have realized the enormity of human thought and the power of dreams. We would not have seen nations and forms of administrations and businesses evolve, multi billion dollar organizations come up and weave the world with a magical web.

Every risk presents an opportunity. We can be quite sure that it took a lot of valor and fortitude on the part of those who chose the road less taken to live life king-size. What it takes to understand the risks involved and conquer them by converting them into opportunities is a great vision and imagination that has the power to distort reality in one's favor. If risk were to to be treated as a market today, it's value is well beyond any gargantuan estimate that anyone on the Street can come up with.

It's funny that many times one's risk turns out to be others' opportunity. Many businesses today thrive on the fact that as organizations are growing complex, so are their risks. Consulting is one such business (and I'm proud to be a part of it :)

While risk may be desirable, uncertainty isn't. May be it is what makes some people shy away from taking risk. Like every good flower comes with a thorn (a dialogue from Albela by Govinda who sees Ash's aunt coming along with her: "Jaanta nahin Bhagwan har phool ke saath kaante kyon deta hain"!), every risk has uncertainty associated with it. This is what probably decides who deserves and who don't. Converting uncertainty to a desired certainty is a challenge and needs ability to predict and foresee things and change them into one's favor. This part of the process needs a great detail and demands a separate post, I will come up with it soon.

While some forms of uncertainty need to be tackled, some other forms are better avoided. Life inherently presents a lot of uncertainty and it may not be prudent on our part to buy additional such elements that make it an imbroglio. We encounter many such elements daily and it takes some judgment on our part to keep ourselves away from them. It is not fair to leave ourselves to the hands of uncertainty when there are people who care about what we do with our lives.
We can't be certain of what kinds of uncertainty unfolds into certainty that we desire, but life has it's own way of letting us know as time passes- just that we should not be foolhardy about it :)

Great People :)

Probably I took my Physics lecturer's words about independence a bit too literally. It was my first year of JEE preparation when I was very afraid to look into the eyes of my Physics lecturer (SMK sir) . As is the case with many people intrigued by the mystery and beauty of Physics, I had too many questions the answers for which did not exist- or so did I feel. SMK sir did not entertain too many questions. His idea was that the student should clarify his doubts himself instead of being spoon fed by others. He insisted that the student should develop a sense of independence given the novelty of JEE questions each year. He may clarify a 1000 doubts but the paper will give rise to a 1001th doubt. I was too afraid of SMK sir that I took his suggestions a bit too literally.

I started believing in independence of thought. I started making decisions of my own. Much of my JEE prep had been rebellious. Never did I care about the institutes' examinations, I prepared on my own and cared only about what I felt about my performance rather than what others felt. I was a frequent visitor to the principal's office, thanks to my inconsistent performance (highest in physics, least in chemistry one week and other way round the next week). Nothing could influence the way I thought or the decisions I made. The result was encouraging (a result of randomness, may be) !

My independence gradually grew into stubbornness. I became independent to the extent to ignoring suggestions from others even if they sounded to be in my best interest. I guess my idea was to avoid blaming others if things go wrong. If I acted upon my own decisions, there would be accountability and only one person to be blamed.

I was supposed to follow my heart. Instead, I started following my fear. My actions were motivated by fear of failure and I gradually became a prisoner of uncertainty. Too much independence started becoming a burden but I could not realize the problem. I started thinking too much. I did get useful suggestions from others but I programmed myself to listen only to myself.

In such circumstances, I happened to meet some great people, who made me feel very comfortable. Talking to them was like getting a huge burden off your shoulders, like cool breeze reaching your heart directly :)

How much ever independent we may wish to become, I think we should be in touch with good people. Good company makes a lot of difference. It makes sense to put any amount of effort to spend a little time with friends and seniors who make you feel better. Profound, sincere and heartfelt thanks to the few good people who have been making me feel a lot better over the past few days ! :)

It started in December 07 and quite paradoxically the best that we can hope now is for the worst to occur at the earliest. Only so we can start to see a new rise, a new beginning, out of all the chaos and ruins that this recession has created so far- and will create further. The very thought that the worst is yet to come is intimidating. Billions of dollars wiped out of companies' books, turning them into mere buildings on sale, jobs lost, even countries going bankrupt. Times are challenging, moreso for people in power.

More than anything else, the downturn has shown us through a magnifying lens, the wide-spread roots of globalization. A truck driver in China loses his job because his employer has to sell the truck. The employer has to sell the truck because his technology accessories shop has just had a sharp slump in sales as its regular customers from an Indian tech city stop buying from him. The Indian techies stop buying accessories because they are on a cost cutting spree to compensate for an abrupt shortfall in outsourcing contracts from their German auto making customer. The German auto maker could not redeem it's fire accident losses as it's property insurer in the UK was out of business. The property insurer is out of business as it has significant exposure to an investment bank on the wallstreet, which is the center of the holocaust. And then there are economists framing up the concept of decoupling theory that says the eastern horizon is immune to anything that happens on the other side of the world.

Though recession has been a bitter medicine to the whole of corporate world, its mechanism of making lives miserable is well structured and perfect. Unfortunately so. More than recession itself, its causes offer interesting insights. It may be a great product of innovation that pays investors based on repayment of home loans. Framing such a product may require more than common sense. May be those on the well street have more brain cells than an average person and work 26 hours a day. Today's financial world offers products based on anything as underlying asset, just anything. The idea of most financial products is to hedge against uncertainities- they are risk management devices. You buy a weather derivative not because it offers profits but because it reduces the risk of your loss (and to an extent the loss itself) in case unexpected adverse weather conditions take a toll on your harvest. But who trades in these derivatives ? Farmers ? Hell, no! It's our very own folks on the wall street. Is it because they are expecting a risk to their harvest ? It is because their math tells them that weather derivatives have been making good profits that they trade them. Do they stop at just trading them ? That would make their jobs
less complex and mean fewer zeroes in their pay. They would concoct products based on these derivatives to an extent that those buying will not even know they're weather based. And they use their so called persuasive skills and selling expertise to spread these products across a wide network- viral marketing: building a network of victims to take down with them.

Equally complicated are the mortgage backed securities (MBS) that pay investors based on home loan repayments. These products are so popular and widely spread- even Fed's own companies Fannie Mae and Freddie Mac owe(d) their existence to MBS. Most companies in the US have been having them on their balance sheets since long. No one bothers about how and when these products make profits or losses as long as they are yielding more than expected results. It is only when they start eating up your balance sheets that you realize you are growing snakes in your backyard. Probably our other set of friends in home loan giving banks wanted to revisit basics. Or they wanted to put a roof over the roofless. Their math told them that you could lend money to a pavement dweller so he can build his home and he is going to repay in future. Their math told them that they could put aside their qualms on creditworthiness for a while, something quite unusual in the US, given that they verify your credit background for almost everything. Little did they realize that the pavement dweller's inability to repay the loan is only the initial point in the complicated supply chain of mortgage based products which are spread over across the whole of corporate world.

The results are blatantly evident. For those who think we can go back to the good old days, we must only realize that the difference lies in the non-existence of firms like Lehman brothers.

Capitalism is a great concept- Capital markets are great devices to raise money from common people- money that no government can raise. Any amount of bail-out can never equal the capital raised from investors. And investors' decision to invest and contribute to a company's growth (or the lack of it ?!) depends on one simple thing: trust. During some times trust means huge profits, other times it means no losses. But when trust takes a hit like it happened when the speculation boosted bull market suddenly collapsed, it takes ages to restore. And trust has its own way of spreading- like a deadly contagious disease. Most invest not because their technical/ fundamental analysis reveals a stock is under/ over valued; most invest because many others are investing. Similarily, most stop investing because others do the same. The importance of trust can be illustrated by the best of mathematicians'/ bankers'/astrologers (!)/ anyone-for-that-matter's inability to arrive at a fair value for any asset (stocks). However accurate your cash flow
predictions are, you cannot predict the intrinsic value of an asset/ stock. People's perception cannot be quantified. If there were some means of doing it, there would be no trading in this world, no exchange and no secondary market. It is quite amusing at this point to think whether it would have been good or bad if it were so !


With the kind of sudden losses incurred, investors are as far from capital markets as they can be. They are hanging on to their money stronger than ever. With consumers' money out of the market, nothing can move forward. Any government measures like a bail out or printing money or buying treasuries to inject liquidity into the market will only be a temporary solution. The need of the time is to make sure investor confidence is restored. It is a real test to governments. Governments' act of cutting interest rates may prompt lenders to withdraw money from banks but cannot guarantee that they will spend more. You can take a horse to the water, but you cannot make him drink !

So the answer to the question- "When will things be normal again?" is, when investors start investing again. There are those who play the market intelligently to book profits. They made speculations that made stocks appreciate and they profited. Now they are shorting to realize profits in the downhill. It was a bunch of jokers who introduced us to recession and another bunch of jokers taking us deeper into it. We need a white knight to fight these jokers and instill trust in capital markets so people can start investing again when things are not widely over-valued or under-valued. And to prevent these things from happening, we need to realize that common sense - which is unfortunately uncommon - prevails where the most advanced of math fails.