Saturday, August 1, 2009



TOM CRUISE performed a mini-show for concert-goers at BEYONCE’s Los Angeles gig on Monday night – by singing and dancing along to the superstar’s hit tune SINGLE LADIES (PUT A RING ON IT).

The Mission: Impossible actor attended the gig at the Staples Center without his wife Katie Holmes, who is shooting a new movie in Australia, but still managed to enjoy himself as he strutted his stuff throughout the night.

According to People.com, the Hollywood star raised cheers when he was spotted walking into the arena, and attendees couldn’t believe their eyes when they saw Cruise following Beyonce and her dancers as they performed the famous dance routine for the catchy song.

A source says, “Everyone was laughing and taking pictures.”

Saturday, June 20, 2009

Why following tips will never make you rich?

n the past, Indian investors have faced a problem of information scarcity. In the 1990's & before, there was no internet, no business channels, only 1-2 business newspapers etc. People used to invest only on the basis of what their brokers/friends recommended without any knowledge of the company business, financial performance etc.



In present times this has changed to a problem of information overload. There are hundreds of websites, TV channels, business newspapers where analysts are recommending new stocks daily. The investors today have become smarter then past generation and so they listen to analysts before investing but still the returns of the portfolio are not as good as expected, why?



Let us try to answer this question using an analogy and the concept of 'probability' which we have all studied in schools.



There are 4 boxes and in each box there are 10 balls of either gold or brass.



· Ist box is Smart Investor No.1 and has 9 gold balls and 1 brass ball.



· IInd box is Analyst No.1 and has 8 gold balls and 2 brass balls.



· IIInd box is MF No.1 and has 7 gold balls and 3 brass balls.



· IVth box is TV Channel No.1 and has 6 gold balls and 4 brass balls.





Probability of finding a gold ball in each of the box is 0.9, 0.8, 0.7, and 0.6 respectively.



Now a person is blind-folded and asked to pick a ball randomly from each of the box. The probability of finding a gold ball becomes 0.6 x 0.7 x 0.8 x 0.9 = 0.30 which is indeed very poor.



As the number of boxes increase or the numbers of balls per box increase this is going to be even less. Probability is equally bad when there is only 1 box but the number of balls is higher.



We can calculate the probability of finding a gold ball for our portfolio by calculating the total number of boxes (sources of tips), number of balls (tips by each source) and the number of balls we pick (stocks we buy based on the tips).



Of course the person is frustrated and starts blaming the boxes (Analysts, TV Channels, Mutual Funds, Smart investors) or the balls (Companies) for the poor performance.



After a little introspection, the person decide to make extra efforts, does a bit of analysis/research and finds out that there are some characteristics that differentiates the gold ball from brass ball like smoother surface, a bigger size etc. but still he is not 100% sure. Out of 10 balls he can be sure 7 or 8 times. Next time he picks up a ball from each of the 4 boxes, he draws 3 gold balls out of 4. Great performance!





There are other reasons as well why you should not blindly follow the tips:



· Analysts can always change their views and they have no obligation to tell it to public (Example: Rakesh Jhunjhunwala bought TV today at 70% and stock went upto 120 in a few days as people rushed to buy it . After some time he switched from TV today to TV 18. People who bought it at higher price are in losses even after 3 years while TV18 has been a multibagger).



· Analyst can have a different time frame in mind while buying/selling a stock. He may have bought it for short term and you might think it is a good long term bet.



· There are some manipulators in markets like a recent case where the analyst had taken a reverse position on the stocks he recommended. He sold stocks he recommended to buy and bought stocks he recommended to sell.



· You may buy it at much higher price or sell at much lower price (Example Rakesh Jhunjhunwala still made profit on TV today while all others who bought at higher price made losses).



Unless you have a conviction of your own you will sell a good stock just because there is some bad period or the market sentiment is down.



Learning of the week:



We have find out a simple mantra of success in the markets. If a person is in a desert (equity markets) and wants to quench his thirst (desire to create wealth) he should dig his own well (analysis/research) rather then running after the mirages (tips). If he does not get time to dig the well he should use the services of a person (MF/portfolio manager) who has already dug a well earlier.



You can use the tips or analyst reports as the starting point but you have to understand the business as if you are buying a stake in the company, check the financial performance of the company quarterly/half-yearly and build a conviction of your own. This will help you stick with a good company even in difficult times.



If you do not get the time to do analysis or track the results of the stocks you hold, you should invest through either a Mutual Fund or a portfolio manager on whom you can rely fully. In US 95% of retail investors use this route and Indians will follow soon.



Recommended Books on investment:



1. One up on Wall Street by peter Lynch(Beginner Level)

2. The Dhandho Investor by Mohnish Pabrai(Beginner Level)

3. The Warren Buffet Way(Advanced Level)

4. The Intelligent Investor by Benjamin Graham(Advanced Level)

5. The Essays of Warren Buffett(Advanced Level)


Warm Regards,
Tushar Sarda

Friday, June 19, 2009

Keep the Spark Alive

This guy is simply amazing! Take a few mins to read it entirely! If you are busy now...come back later and read it...but take it sincerely...not seriously! :)

Cheers!





Keep the Spark Alive
Inaugural Speech for the new batch at the Symbiosis BBA program, Pune 23rd June, 2008
By Chetan Bhagat
Good Morning everyone and thank you for giving me this chance to speak to you. This day is about you. You, who have come to this college, leaving the comfort of your homes (or in some cases discomfort), to become something in your life. I am sure you are excited. There are few days in human life when one is truly elated. The first day in college is one of them. When you were getting ready today, you felt a tingling in your stomach. What would the auditorium be like, what would the teachers be like, who are my new classmates - there is so much to be curious about. I call this excitement, the spark within you that makes you feel truly alive today. Today I am going to talk about keeping the spark shining. Or to put it another way, how to be happy most, if not all the time.
Where do these sparks start? I think we are born with them. My 3-year old twin boys have a million sparks. A little Spiderman toy can make them jump on the bed. They get thrills from creaky swings in the park. A story from daddy gets them excited. They do a daily countdown for birthday party – several months in advance – just for the day they will cut their own birthday cake.
I see students like you, and I still see some sparks. But when I see older people, the spark is difficult to find. That means as we age, the spark fades. People whose spark has faded too much are dull, dejected, aimless and bitter. Remember Kareena in the first half of Jab We Met vs the second half? That is what happens when the spark is lost. So how to save the spark?
Imagine the spark to be a lamp's flame. The first aspect is nurturing - to give your spark the fuel, continuously. The second is to guard against storms.
To nurture, always have goals. It is human nature to strive, improve and achieve full potential. In fact, that is success. It is what is possible for you. It isn't any external measure - a certain cost to company pay package, a particular car or house.
Most of us are from middle class families. To us, having material landmarks is success and rightly so. When you have grown up where money constraints force everyday choices, financial freedom is a big achievement. But it isn't the purpose of life. If that was the case, Mr. Ambani would not show up for work. Shah Rukh Khan would stay at home and not dance anymore. Steve Jobs won't be working hard to make a better iPhone, as he sold Pixar for billions of dollars already. Why do they do it? What makes them come to work everyday? They do it because it makes them happy. They do it because it makes them feel alive. Just getting better from current levels feels good. If you study hard, you can improve your rank. If you make an effort to interact with people, you will do better in interviews. If you practice, your cricket will get better. You may also know that you cannot become Tendulkar, yet. But you can get to the next level. Striving for that next level is important.
Nature designed with a random set of genes and circumstances in which we were born. To be happy, we have to accept it and make the most of nature's design. Are you? Goals will help you do that.
I must add, don't just have career or academic goals. Set goals to give you a balanced, successful life. I use the word balanced before successful. Balanced means ensuring your health, relationships, mental peace are all in good order.
There is no point of getting a promotion on the day of your breakup. There is no fun in driving a car if your back hurts. Shopping is not enjoyable if your mind is full of tensions.
You must have read some quotes - Life is a tough race, it is a marathon or whatever. No, from what I have seen so far, life is one of those races in nursery school, where you have to run with a marble in a spoon kept in your mouth. If the marble falls, there is no point coming first. Same with life, where health and relationships are the marble. Your striving is only worth it if there is harmony in your life. Else, you may achieve the success, but this spark, this feeling of being excited and alive, will start to die.

One last thing about nurturing the spark - don't take life seriously. One of my yoga teachers used to make students laugh during classes. One student asked him if these jokes would take away something from the yoga practice. The teacher said - don't be serious, be sincere. This quote has defined my work ever since. Whether its my writing, my job, my relationships or any of my goals. I get thousands of opinions on my writing everyday. There is heaps of praise, there is intense criticism. If I take it all seriously, how will I write? Or rather, how will I live? Life is not to be taken seriously, as we are really temporary here. We are like a pre-paid card with limited validity. If we are lucky, we may last another 50 years. And 50 years is just 2,500 weekends. Do we really need to get so worked up? It's ok, bunk a few classes, goof up a few interviews, fall in love. We are people, not programmed devices.
I've told you three things - reasonable goals, balance and not taking it too seriously that will nurture the spark. However, there are four storms in life that will threaten to completely put out the flame. These must be guarded against. These are disappointment, frustration, unfairness and loneliness of purpose.
Disappointment will come when your effort does not give you the expected return. If things don't go as planned or if you face failure. Failure is extremely difficult to handle, but those that do come out stronger. What did this failure teach me? is the question you will need to ask. You will feel miserable. You will want to quit, like I wanted to when nine publishers rejected my first book. Some IITians kill themselves over low grades – how silly is that? But that is how much failure can hurt you. But it's life. If challenges could always be overcome, they would cease to be a challenge. And remember - if you are failing at something, that means you are at your limit or potential. And that's where you want to be.
Disappointment's cousin is frustration, the second storm. Have you ever been frustrated? It happens when things are stuck. This is especially relevant in India. From traffic jams to getting that job you deserve, sometimes things take so long that you don't know if you chose the right goal. After books, I set the goal of writing for Bollywood, as I thought they needed writers. I am called extremely lucky, but it took me five years to get close to a release. Frustration saps excitement, and turns your initial energy into something negative, making you a bitter person. How did I deal with it? A realistic assessment of the time involved – movies take a long time to make even though they are watched quickly, seeking a certain enjoyment in the process rather than the end result – at least I was learning how to write scripts, having a side plan – I had my third book to write and even something as simple as pleasurable distractions in your life - friends, food, travel can help you overcome it. Remember, nothing is to be taken seriously. Frustration is a sign somewhere, you took it too seriously.
Unfairness - this is hardest to deal with, but unfortunately that is how our country works. People with connections, rich dads, beautiful faces, pedigree find it easier to make it – not just in Bollywood, but everywhere. And sometimes it is just plain luck. There are so few opportunities in India, so many stars need to be aligned for you to make it happen. Merit and hard work is not always linked to achievement in the short term, but the long term correlation is high, and ultimately things do work out. But realize, there will be some people luckier than you. In fact, to have an opportunity to go to college and understand this speech in English means you are pretty damm lucky by Indian standards. Let's be grateful for what we have and get the strength to accept what we don't. I have so much love from my readers that other writers cannot even imagine it. However, I don't get literary praise. It's ok. I don't look like Aishwarya Rai, but I have two boys who I think are more beautiful than her. It's ok. Don't let unfairness kill your spark.
Finally, the last point that can kill your spark is isolation. As you grow older you will realize you are unique. When you are little, all kids want Ice cream and Spiderman. As you grow older to college, you still are a lot like your friends. But ten years later and you realize you are unique. What you want, what you believe in, what makes you feel, may be different from even the people closest to you. This can create conflict as your goals may not match with others. . And you may drop some of them. Basketball captains in college invariably stop playing basketball by the time they have their second child. They give up something that meant so much to them. They do it for their family. But in doing that, the spark dies. Never, ever make that compromise. Love yourself first, and then others.
There you go. I've told you the four thunderstorms - disappointment, frustration, unfairness and isolation. You cannot avoid them, as like the monsoon they will come into your life at regular intervals. You just need to keep the raincoat handy to not let the spark die.
I welcome you again to the most wonderful years of your life. If someone gave me the choice to go back in time, I will surely choose college. But I also hope that ten years later as well, your eyes will shine the same way as they do today. That you will Keep the Spark alive, not only through college, but through the next 2,500 weekends. And I hope not just you, but my whole country will keep that spark alive, as we really need it now more than any moment in history. And there is something cool about saying - I come from the land of a billion sparks.
Thank You!