Your Broker As A Cheat (Part 9)

The News channels are flashing that SEBI has finally cracked down on companies with shady IPOs.  Readers of the blog will not be surprised as this was mentioned in my earlier write up on December 23 2011.


The entire IPO process is being reviewed.  The companies are being banned from raising further funds and some merchant banks may be banned too...  Let us hope that there is some integrity in all this.


Below are two links


http://www.moneycontrol.com/news/cnbc-tv18-analyst-markets/sebi-cracks-down7-recent-ipos_641041.html

http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/sebi-bans-7-firms-from-fund-raising-pg-electroplast-one-life-slips-over-10/articleshow/11289624.cms

If your Broker did recommend this IPO, do have a word with your broker and study all the justifications provided by him/her.


Happy Investing!!

©Nitesh Kotecha

Your Broker As A Cheat (Part 8)

There is a joke…

Two women were walking through the woods when a frog called out to them and said: "Help me, ladies! I am a stockbroker who, through an evil witch's curse, has been transformed into a frog. If one of you will kiss me, I'll be returned to my former state!"

One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other woman, aghast, screamed, "Didn't you hear him? If you kiss him, he'll turn into a stockbroker!"

The second woman replied, "Sure, but these days a talking frog is worth more than a stockbroker!"

Newspapers have reported that Equity NFOs (New Fund Offers) have reached an 8 year low.  I’d say that is good news.  You all will remember the NFO craze of 2004-2008.  This was a ridiculous time in the history of India.  There were NFOs every month.  The fund houses were advertising them like crazy.  And Indian equity investors poured out crores of savings in these schemes.

Here is the deal on scam behind the NFOs.

The SEBI allowed the fund houses to 6% of the NFO collections to be debited to the expenses account for all NFOs.  This allowed the fund houses to immediately “transfer” certain expenses to the NFO.  The fund houses had a major problem about retaining their fund managers on account of their fees.  The fund managers were in high demand at all fund houses.  An NFO would permit the fund house to nominate the name of such a fund manager and thus give a window of opportunity to indirectly hike the compensation to the fund manager.

The NFO would allow the fund house to market the NFO along with the name of the fund house.  This advertising expenditure of the fund house would be borne by the NFO and its gullible investors - the fund house would not have to debit the advertisement expenses to the existing funds.  The existing fund investors thus profited at the expense of the new fund investors.

It was a rarity if the NFO was significantly different from the existing funds in the fund house’s portfolio.  The fact that the NFO was not so different from the existing portfolio is a hint to all investors of the real intention of the fund house – basically redirect expenses to the NFO and make the existing funds more profitable as a result.

The stock brokers and the middleman played a very clever game in the marketing of the NFOs.  The standard marketing line offered to the investor was that the fund was offering its units at a NAV of INR 10.00.  Any investor worth his salt should have figured this one out as the NAV offer rate could be any amount as it makes no difference.  The investors were fooled by the perception that they were getting equity at INR 10.00 in a booming market.  The stock broker just played their clients like a song.

There are other tricks in the NFO business but the above should suffice.  SEBI cracked down hard on the mutual fund industry and thus we see that fund houses are rarely advertising their existing funds and those NFOs are rare.

Ever wonder about the crackdown on the mutual fund industry?  Is it for the investors?  “Aaah… humbug!” as Ebenezer would say.  However, I leave it to you to figure it out and ponder over the holidays.

In an unrelated story, the Times of India reports that a stockbroker in Mumbai was killed by four of his clients.  Below is a link to the story

http://timesofindia.indiatimes.com/city/mumbai/Share-broker-hounded-to-death-by-4-investors/articleshow/11287123.cms

Happy Investing!!

© Nitesh Kotecha

Understanding Positive Thinking (Part 2)

The desire and obsession with perfection can mar your thinking pattern and create a cesspool of negativity that one can drown in.

There is no problem with aiming at perfection.  It is a good way to work with your goals and objectives.  However, the pitfall lies in interpreting the outcome when things don’t shape up well.

John Lennon said that “Life is what happens to us while we are making other plans”.  There you have it – truth from one of earth’s profound poets.  Things don’t go as planned – so what?  You make amends.  Wallowing in self pity is symptomatic of our lack of understanding of the process of life.  Rolling is the dirt is not the best way of becoming clean.

Positive thinking is not about fooling yourself or rationalizing all the important feedback that you get from your friends, peers, colleagues, school, and college or from home.  Feedback has its value.  A disease is a feedback that you have not been paying attention to how you have been treating your body.  Failure is a feedback showing you that you need to prepare for something. Positive thinking is about assessing the feedback in a motivating manner and without any ridicule to oneself.  We are our harshest critics, as some say.

It’s a harsh world. There is no need to make it more so with ridicule to oneself.   However, there are times when it’s ok to Thank God that elephants don’t fly!!

© Nitesh Kotecha

Understanding Positive Thinking (Part 1)

There is a lot of talk out there about positive thinking.  There are zillions of books that talk about this.  I am taking the opportunity here to say something about it

1.        Positive thinking, first and foremost, requires that you look at your past with satisfaction and not with regret.  This means that, all incidents in your life would require you to transmute the experience from one that of gloom to that of a possible growth opportunity or learning experience.  The events may range from a divorce, death of a loved one, disease or even simple disagreements that we may have blow out of proportion.

2.       Another aspect of positive thinking is not to project the past into the future.  Negativity implies not only such projection but also a significant amount of certainty that we may tend to associate with the possible outcomes.  The mind has a task – to ensure our survival and it may be a natural tendency for us to exaggerate and stretch the possibilities of the outcome.

3 Have a sincere friend with whom you can have a chat so that you may be able to realign your own thoughts and develop a fresh perspective on the matter at hand

© Nitesh Kotecha

The Well Is Not Interested In Your Thirst

A well is filled with water.  However, it is not interested in your thirst.  You have to get the rope, the bucket and the wherewithal to access the water and quench your thirst.

Any pursuit will require initiative.  Here are the characteristics or mannerisms that indicate our ability to take initiative:

Becoming a self starter – A person with high initiative is a self starter.  He does not wait for problems to push him.  A leader sees a situation and takes control of the situation WITHOUT SPECIFICALLY BEING ASKED TO DO SO.  He sets the ball rolling.  A self starter need not be dictatorial or dominating.  He needs to clear the dust so that further action can be taken.

Contagious – A person with initiative is the envy of all.  Not only is this person proactive in terms of action, he is also contagious in the spirit of the matter. The high initiative on display unshackles the chains that bind others and propels forward a spirit of enthusiasm.

Independent – A person who takes initiative is independent of the mindset of other people.  Our ability to take initiative comes from our conviction of the relative importance and relevance of the matter at hand.  The person with initiative has the necessary nerve to take action, despite all odds.

© Nitesh Kotecha

Your Broker As A Cheat (Part 7)

There is a joke...

A centipede with arthritis sought the advice of a wise old owl. ”Centipede,” the owl said, ”you have a hundred legs, all swollen up. Now if I were you, I would change myself into a stork. With only two legs you will cut your pain by ninety-eight percent, and if you use your wings you can stay off your legs altogether.”

The centipede was elated. ”I accept your suggestion without hesitation” He said. ”Now just tell me, how do I go about making the change?”

”Oh,” said the owl. ”I would not know about the details – I only give general advice.”

Equity markets, especially when booming, breeds these kinds of general advice mongers. Brokerage houses will set up advisory services and engage in the business of selling advice.  This is something you do when brokerage is not kicking in from the volume of transactions.

Soon there are times when stocks are out of fashion.  Guess what – the advisory services have other things to you advise you on.  Commodities, Forex, Precious metals, Debt, International Collectibles, Property and what have you.

The proliferation of such junk advisors creates and environment of mass conformism which gives you the feeling that if you are not getting any advice, then you are left out.  The perception of “ being advised” (and consequently better informed) created by the advisory services gives you the illusion of being smart and actively participating in intelligent decision making.

The advice given by the advisory services suit the broker’s own philosophy and of the brokerage - not your personal goals.  The broker has a burning desire to be right.  He has a further desire of creating conformism within his clients so that there is a collective consciousness that acts as a unifying force protecting your broker’s deficiencies.

There is another thing.  It is a lot less risky ADVISING OTHERS than to put your money on the line of investments based on the advice you just doled out.

There is no better advisor than you.

© Nitesh Kotecha

Your Broker As A Cheat (Part 6)

There is a joke...

A minister dies and is waiting in line at the Pearly Gates. Ahead of him is a guy who’s dressed in sunglasses, a loud shirt, leather jacket, and jeans.

Saint Peter addresses this guy, “Who are you, so that I may know whether or not to admit you to the Kingdom of Heaven?”

The guy replies, “I’m Nirmit Pothia, stockbroker of Mumbai.”

Saint Peter consults his list. He smiles and says to the stockbroker, “Take this silken robe and golden staff and enter the Kingdom of Heaven.”

The stockbroker goes into Heaven with his robe and staff, and it’s the minister’s turn. He stands erect and booms out, “I am Simon Chacko, pastor of Saint Mary’s Church for the last forty-three years.”

Saint Peter consults his list. He says to the minister, “Take this cotton robe and wooden staff and enter the Kingdom of Heaven.”

“Just a minute,” says the minister. “That man was a stockbroker– he gets a silken robe and golden staff but I, a minister, only get a cotton robe and wooden staff? How can this be?”

“Up here, we work by results,” says Saint Peter. “While you preached, people slept; his clients, they prayed.”

An overview of the markets for the calendar year 2011 will show you that IPOs were the greatest wealth destroyers.  Did you broker ask you to subscribe to any of the year’s IPOs?  Well, if he did, you better say goodbye to him before the year is out.

I would like to introduce to you all another game player who can possibly a part of this con job.  It is not really surprising to note that many of the 39 IPOs in India this year had very high ratings.  Well, what does this tell you – the rating agencies are in on this.

There are a zillion ways in which figures can be adjusted, manipulated and reinterpreted so as to obtain a rating of an undeservedly higher level.  It’s not just a computer that calculates and summarizes a credit rating – there are people who feed the data in.

An IPO process begins very early – at least three years before the subscription date.  The order book is cooked, the sales are arranged, the balance sheet ratios are first determined and the books are arranged from that perspective, the contracts are timed etc.

If your broker is smart, he should know this.  However, your broker may have another “strategy” in place.  He will know the listing premium and ask you to make some clean money during the first minutes of the listing.  I don’t deny that you can make money this way.  However, what cannot be done repeatedly cannot be done even once.  And this is something a good broker must do – prevent his clients from ruining their own potential.

But your broker has a dinner to host.  Remember?

Copyright © Nitesh Kotecha

Living Through Our Mind

We live through our minds.  Events that seem to have a physical occurrence are deceptive and we soon see that they have a psychological root.  It is difficult to believe that illnesses have psychological roots for their occurrence.  The body has to follow the mind.  It replicates what the mind does.

Let just see one particular manifestation of some of these thoughts – the inability to accept joy.  Due to reasons of self pity, a negative mindset, or deep rooted pessimism, we coerce our mind to adopt one particular pattern or outcome.  We reject all possible hopeful probabilities for other positive outcomes and opt for the familiar negative one.

This low level thinking comes from our lower mind which triggers our survival instinct.  The brain now prepares for the survival by release grease in to our system.  This instant energy is rarely used by introspective brooder and so lies dormant.  The constant brooding instigates the mind towards constant release of such grease.

The mind blocks all “paths” through which some relief or joy can possibly pass.  Likewise, the body blocks all paths and uses only the familiar one.  The release of accumulation of such grease is what is what is known as hypercholesterolemia.

Once again, meditation comes to the rescue.  We must induce a certain state of consciousness wherein we “unblock” the paths of joy.

Copyright©Nitesh Kotecha

Your Broker As a Cheat (Part 5)

Stockbroker's creed:  A person is a client until proven broke.

When you do decide to select a broker, don’t be fooled by the big broker names.  A big brand means nothing - even more so in India where the laws are worth donkey poop.  A big brand comes from brand management and brand name extension - it has nothing to do with whether the broker made money for his clients.

Go for the broker who offers you the lowest transaction costs.  Most brokers in India charge  INR 0.50p per 1000 rupees worth of trading.  This is horribly expensive.  The justification for this kind of charge is a standard cliché – “we give strong and solid advice”.  Steer away from such rubbish.  Your broker will immediately convert your stock to a long term stock the moment you realize that he has put lemons in your portfolio.

However, often the key reason of losses is not the market, but your broker’s inability to grasp the market dynamics and his lack of knowledge and skills. Equity markets are a rapidly changing phenomenon.  SEBI rules have many loopholes that allow the high and mighty to get away with murder.

A good broker is supposed be able to provide all the necessary explanations to the client and be always available for communication.  Always check the news in the market with what your broker is suggesting.  I repeat here what I have said earlier – if the market and media is filled with hype about your stock – SELL IT.  Ignore your broker and the long term growth story that he sings to you about the stock.  You should be wary of such a broker and refuse his services.

However do keep in mind that good brokers are primarily interested in establishing long-term relationships with a client and do help clients.  Just make sure you have a good one.

Happy Investing!

Copyright © Nitesh Kotecha

Your Broker As a Cheat (Part 4)

There is a joke….

The Kapoor's invited their new friends  over to dinner. During dinner Mr. Kapoor was asked what he did for a living.

Eight years old Rohan jumped in and said, "Daddy is a fisherman!" To which Mrs. Kapoor replied, "Rohan, why do say that. Your daddy is a stockbroker, not a fisherman."

"No mom. Every time we visit dad at work and he hangs up the phone he laughs, rubs his hands together and says 'I just caught another fish'."

Many Stock brokers suffer from a disease – Lacunar Amnesia.  This is your average Ghajini kind of “memory loss” except one small thing – Lacunar amnesia refers to a memory loss about a particular event.  The particular event that I am referring to is the losses their clients took on the stock the broker recommended.

Walk into any broker’s den, and he will sing a song to you about all the money his clients made in a particular stock during the past week.  Ask him if there were any calls that went wrong, you will see him shifting in his chair and not just that - you will get a lecture from God.  “This is a market. You win some, you lose some.  But we have strict stop losses.  Would you like a cup of coffee or something else that I can offer you?”  Well, you should refuse the offer and tell him what he can do with his advice.


"The less you know... the more you believe"

There is nothing on earth that will induce a broker to be honest with you about the losses he generated for his clients.  The broker experiences dissonance this way.  The internal conflict between the self-delusion that he is a smart guy versus the losses he gave to his clients, is unbearable for these poor mortals.  The only resort then would be Lacunar Amnesia.

It is necessary for a broker to create a perception of “instant wealth” for you. People fall for it and it is that which gives him and his family the family dinners and the ability to invite friends over.

Happy Investing!

Copyright© Nitesh Kotecha

That Thing You Do

Let me narrate a familiar scene.  Two children are playing and suddenly they fight over something.  This can end up as a small quarrel or with both kids promising not to play with the other.  Soon, we find that a few hours have gone by and the kids are playing together again.

What happened?  Well, the kids chose to be happy.  They chose to forget what happened and instead are now focused on “what’s happening”.

Most of us adults have forgotten to make such choices.  Adults have somehow found the time to complicate their existence and add all sorts of drama to their lives.

We CAN chose to drop this drama and move on and be playful again.  Here are some actions that can help us take direction:

Communicate effectively – the ability to assert and ensure that the assertion is properly decoded by the recipient will allow us to manage the situations while keeping everyone’s self esteem intact

Understand that though conflicts bring in pain and discomfort, it is still a reality. One does seek a life with no conflict.  A minimum amount of conflict is healthy as it gives all the opportunity to understand each other.

Life is just too short for all of us to allow such drama.

Copyright ©Nitesh Kotecha

Be An Astronaut Of Inner Space

Some time ago, I was attending a Parent’s meet at my child’s school.  Parents were asked to give on spot presentations on topics that ranged from the mundane to the esoteric.

I was asked to talk on “How can we make sense of our senses?”  Here is the basic gist of what I said.

Our sense organs allow us to explore the world as we know it. We touch, see, taste, hear and communicate.  This involves us in the downward journey of “pravrutti”.  There is much mundane joy in the exploration of our sense organs.

However, these very organs, when withdrawn from their obligatory duty of world exploration, do not give up their basic function and take us on another journey – the journey within.  We then become astronauts of our inner space.  This astral journey has no equals or parallels.  The river then merges with the ocean, losing all its individual identity and we become one with the cosmos.

Bon Voyage!

Copyright© Nitesh Kotecha

Be Grateful

Gratitude is an attitude that we have to develop.  Our material world offers us little opportunities in this regard.  We are grateful – but we have the attitude of gratitude only towards those things and beings wherein we have received the tangible gifts that permit us to be grateful.

The idea is to be grateful for the state, our existence.  We can begin by being grateful for the air that we breathe.  If it is really so hard to do that, we can put this in perspective, by comparing our state to that of a person who was buried underground in an earthquake or a landslide.  We suddenly see the matter in a whole new light.

Let gratefulness become our very being – like it is in our genes.  We can be grateful not just to everybody, but also to everything.   This metamorphosis will culminate in to a state where we have no complaints.  The absence of complaints will remove misery.  The absence of misery allows us to be happy and then we are in the rhythm of life where we simply exist with whatever we have.

To quote Sinead O’Conner

“so I'm walking through the desert,

and I am not frightened although it's hot;

I have all that I requested,

and I do not want what I haven't got;”

Copyright ©Nitesh Kotecha

What A Prayer!

I recently came across a prayer by E Hubbard.  I was completely mesmerized by the words and the intention of its author.  Here it is…

“The supreme prayer of my heart is not to be learned, rich, famous, powerful, or “good,” but simply to be radiant. I desire to radiate health, cheerfulness, calm courage and good will. I wish to live without hate, whim, jealousy, envy, fear. I wish to be simple, honest, frank, natural, clean in mind and clean in body, unaffected—ready to say “I do not know,” if it be so, and to meet all men on an absolute equality—to face any obstacle and meet every difficulty unabashed and unafraid.”

“I wish others to live their lives, too—up to their highest, fullest and best. To that end I pray that I may never meddle, interfere, dictate, and give advice that is not wanted, or assist when my services are not needed. If I can help people, I’ll do it by giving them a chance to help themselves; and if I can uplift or inspire, let it be by example, inference, and suggestion, rather than by injunction and dictation. That is to say, I desire to be radiant—to radiate life.”

Observe the desire here – to radiate life.  This is such a great departure from the mundane desires that people bundle as a shopping list in their prayers.

I cannot comment much about the above as doing so will take the charm out of the eloquence with which it is written.  The intention of the prayer is as noble as any other prayer – but somehow it has a heart.  I found peace.  I hope you all too…

Copyright© Nitesh Kotecha

Why Meditate?

In the daily motion of our life, we are bound to be emotionally high-jacked.  We could be surrounded by emotions such as greed, anger, spite, envy, jealousy, etc.  Our body moves towards its death, every second.  We fall ill – sometimes seriously ill, and the whole world comes crashing down.

Alternative healing presupposes that most of our illness spring from our disorderly and negative emotions.  Mood swings, depression and negativity cause real damage.  Programs have been designed to induce relaxation in our body so as to alter our mental and physical state.  However, there is only so much that it can do.

Meditation is used to defy the above condition and induce a state of thoughtlessness.  The idea is to overcome thought.  A saying goes “The lesser the traffic of thoughts in our mind, the smoother the journey”.  The monkey mind no longer stirs and we are introduced to an alpha state.  Meditation refocuses our energy to the higher self where greed, anger, spite, envy, jealousy, etc have no place.  The energy used up by the lower values is now free for attaining the highest state of consciousness.

All education must first begin with the introduction to meditation.  The rest follows just like the shadow follows the person.

Copyright© Nitesh Kotecha

The Title Trauma

This incident happened to a friend of mine.  His production in-charge was due for a raise and review.  The manager insisted that irrespective of the rise in salary, he now wanted the post of “President - Operations”.

The fact of the matter is that he was the boss of the department.  He has two assistants and then there were the labor.  The fellow had joined my friend's  organization by retiring from the post of “Vice -President” and so he wanted to look good on the resume by an apparent "President" Title.

Here is the issue.  Why are these executives crazy about the post titles?  I am not planning to throw a Robin Sharma on you here with this question. I would like to approach it differently.

An executive is a person who, by virtue of his knowledge, skill, or capacity, contributes in such a way that he or she positively affects the capacity of the organization to perform and to obtain results.  In this sense, just about every person is potentially an executive.  There may be some who approach their task in a lackadaisical manner but let’s leave them aside.

A higher title in an organizational hierarchy must result into an enhanced potential for strategic decision making – and the person must be equipped to take those decisions better than anyone else suitable  for the job.  The higher title must have more latitude and be more empowering.  Under these conditions, a higher title is desirable and may be sought.

In sum and substance, a blue collar worker is an executive too.  The scope of his work and the latitude in decision making may be limited – but I don’t see this fellow any different from the CEO of a company.


The idea is to be effective and have an impact.  Nothing less.  Other than that, a title for namesake is a trip to fantasy land via the vehicle of self deception.

Copyright © Nitesh Kotecha

Not Being The Permanent Doormat

I have met many who live the lives of a doormat – they allow people to walk all over them.  I can understand that we may be tolerant and considerate; especially with the ones we love and care about.  However, to have somebody run over you is a pathological condition.

India, as a country, has been invaded so often, that our culture has adopted aggression as the norm.  Our mindsets have been attuned towards respect for power.  Power displays by our elected representatives is hangover from the British era.  The lack of accountability of Indians in public service adds glamour to holding power.

These factors damage our ability to assert ourselves.  Our schools project the teacher as not someone who teaches but someone who must be revered.  This conditioning of the child during the primary years creates a non-assertive mass where the group norms of submission get programmed and validated.

Religion and religious norms are oppressive and laden with guilt.  The rites and rituals are designed to bring about conformity.  The focus on the academic performance has been made so critical to life that independence in thought and action is short of a crime.

Success lies in our ability to assert ourselves.  We may assertively choose not to assert ourselves, and that is fine too.  However, we must cross over the various cultural and religious boundaries of thought and protect our individual rights.

Here is a short story to illustrate this point –

A man slapped a Christian monk. The monk was just as a monk should be; he gave him the other cheek: according to the rule.  The man slapped the other cheek too – and hit him even harder. He thought this is a great opportunity, if the fellow offers the other cheek then why leave it?

He hit him harder. But as soon as he had hit hard he was very surprised. More surprised than when the other cheek was offered because then the monk immediately pounced on him, sat on his chest and began beating.

The man said, “Brother, you are a monk, a Christian monk, what are you doing?”

The monk said, “There is no third cheek, now I will give you a taste of fun. Jesus’ rule is fulfilled now. Now it is me against you.”

The monk was very zestful.  He gave him a good thrashing.  He said, “Jesus said offer the other cheek – I have done that.  Now I am on my own.”

If you are offering the other cheek to defeat someone then you are in the situation of this monk.  

Soon you will have to spring...

Copyright© Nitesh Kotecha

Move Beyond Personal Growth

A need for leaders in a group is to have the ability to move beyond personal growth.  What are the conditions that will not allow a person to embrace the ability to support others?

Insecurity – Insecurity can permeate any leader on any competitive point.  Insecure leaders put checks and controls on the team under clever disguises.  They complain about insubordination, prior approvals and the like.  Insecure people feel vulnerable and look inward - and this coerces them to restrict the development of the potential of his team.

Trust Issues – A leader, especially an inexperienced one, will have trust issues in a group.  The ability to foster a spirit of trust is the hallmark of a leader. Humans are naturally disposed to trust and our ability is marred by bad parenting, conditioning in schools and media related negativity.  Trust is integral to our area of influence while biases and prejudices developed from the social environment chip away at our ability to work and lead.

Commitment – The cultural messages that we get from our mythological stories stress the fact that small things done consistently carry more value than loud actions take sporadically.  The leader’s commitment to bringing out the best in the group requires consistency in thought and action.  The behavior and tone of the leader must demonstrate this commitment.

The leader has to commit to various leadership roles within an organization.  Bringing out the best in others will require a mindset that will allow, on one hand, the leader to assert his position in a group in, say, managing a subordinate’s behavior in the presence of the group while supplementing his own goals for growth and development.

Copyright © Nitesh Kotecha

Your Broker As A Cheat (Part 3)

There is a joke...

"I hear that you lost some money on Dalal Street. Were you a bull or a bear?"
"Neither, just a plain simple ass."

The whole IPO (Not “Initial Public Offer” but “Its Positively Overpriced”) business is a business about an inside job.  Let us break it down in steps and understand it.

It begins with an insincere company wanting public money.  It may have a business model in place.  The next job is to meet a venture capitalist or a private investor.  The “critical investor” will now “develop” the business model and make it more market savvy.

It is at the above the stage that the business has value or creates value.  However, the private investor or the venture capitalist would have negotiated hard and acquired shares in this company at a dirt cheap price from its promoters.

It is at this stage that big brokers and /or financial service providers take a stake in this stock.  The stock is then placed privately with them – either directly or indirectly through benami companies or other off- shore companies.  Please remember that most corporates have huge amount of benami companies that they own through some back-hand way.  It is rumored that many of our Sensex and Nifty companies have more than 25000+ benami companies that help the main company adjust their books of accounts, amongst other things.

This is the part where the game is set.  The financial service providers or brokers have a team that markets this stock heavily.  Your broker will be a part of this racket.

The retail investor now subscribes to this IPO.  Newspapers and the news channels join this game and create a perception for the retail investor.  Your broker will sing a song to you about how great this stock and its future are.  He will talk about valuations, long term growth, value investing, Peter Lynch and Warren Buffet – basically any nonsense through which he can increase his own credibility with you and persuade you.

You and your money are soon toast.

Read more of this in the way “critical investors” exited Air Deccan and Kingfisher Airlines stock immediately after an IPO.  You will know more.

Beware of the broker who asks you subscribe to an IPO.  Ask him why you should subscribe to the IPO and he will tell you that he has got news about it from "the smartest guys" in Mumbai.  He will succeed on you because of your greed.

If you like IPOs, make your own choices.  Junk your broker.  He is a humbug who is more interested in the turnover in his account than your money.

The current financial environment sucks.  So, why are there no IPOs?  Are there not many companies out there that honestly need the public money to grow and take part in the India story?  Are there no good companies that are riddled with debt and could do with some equity to get rid of it?


The problem is that the private investor / the financial services company will not get the 500%+ return that they are expecting on their money as the retail investor is currently not participating in the markets.

The last year, Indian investors lost over INR 10,640,000,000 (USD 221,666,667) PER HOUR OF TRADING.  Are you guessing where the money went?


Well, it’s the private investor, the venture capitalist, the financial service providers, the bank.

And your broker.

Happy Investing !!!

Copyright © Nitesh Kotecha

Prosperity Quote # 1

A man is insensible to the relish of prosperity 'til he has tasted adversity.

Sa'Di

When You Have Got God, Why Would You Want Anything Else?

Our most typical agenda for prayers is a demand for a wish or a desire that is unfulfilled.  The other reason for prayers is a state – the state of fear. If I leave aside conformism and parental conditioning, the above two reasons – a menu or a fearful state - are the most typical motivators for prayers.

God does not run errands.  He is not somebody who takes orders.  In fact, God appreciates the fact that there is no demand (representing absence of desire) and no fear (representing karma consciousness).  In fact, the pearly gates of heaven are open to those who want God for God’s sake.

Below is a short anecdote by Osho.

A person died. He had spent his whole life praying. He went to the synagogue and shouted his prayers out loudly. When he went to bed at night he would again shout out his prayers. If his sleep was broken, again he would shout his prayers –“Listen God!”

In front of him lived an atheist, who never prayed and never went to the temple. The person thought in his heart – he was religious – he thought, “Child, enjoy your two or four more days of fun and then you will fall into hell, then the score will be settled.” And he was happy that, “I will be in heaven. I have done so many prayers, I have earned so much virtue. You will fall into hell. Now enjoy your four days pleasure and delights. Enjoy playing on your flute. But after these four days of moonlight come dark nights.”

Thus he thought to himself, doing his prayers more and more loudly. In his prayers he asked heaven for himself and in addition asked hell for his atheist neighbor. By coincidence they both died the same day. The angels came to take them. They took the religious man off towards hell. He screamed loudly, what are you doing?

And they took the unreligious man towards heaven. The man said, ”This is unfair. My whole life it was unfair and now injustice again. I was suffering then, but I kept patient in every way, assuring myself, ’It is nothing, endure it. Just four days of suffering, then heaven.’ And you are taking this sensualist off to heaven? Certainly there has been some mistake. You must be carrying orders to deliver me to heaven, look at your letter. Take him instead, you have made a mistake.”

But they said, “There is no mistake. If you are too upset we will take you both to meet god.” He said, “Take us. Certainly. It can be decided there.”

Coming in front of god he shouted again, it was his old habit. God said, “I am in front of you, now why are you shouting? What do you want?”

He said, “Some mistake has happened; they were supposed to take me to heaven and took this knave. He is a sensualist, and he spent his whole life doing wrong things. He has never prayed. I was always praying, why was I being taken off to hell?”

God said, “Because of your prayers. You have been eating my brains. Should I invite you to stay in heaven now and put my life in danger, in this harassment? This is the fruit of your prayers. This fellow I am inviting because he plays flute, he lives in music and melody. He will bring a little gaiety to heaven. Your staying would not add gaiety, what little gaiety there is here would disappear.”

When you have got God, why would you want anything else?

Copyright © Nitesh Kotecha

Do You Collaborate?

Most of us, by nature do not collaborate.  However, I would like to qualify this assertion.

What is the probability of a group of people collaborating with each other on a train journey?  Or on a trip?  I would say that there is a good probability for a conspicuous amount of collaboration.  However, the collaboration that we normally exhibit in such situations takes a back seat in an organization.

Why is our employment in an organization not a journey?  Why do we not think of it as one?  Answers like organizational structure and dynamics are antique.  The change in the situation from a relatively riskless (and a fixed time frame) one to an ongoing and challenging one alters our behavior and approach.

The Bhagvad Gita extols steady wisdom in the Sankhya yoga.  Collaboration stems from a determination to work together towards a goal.  The determination to work together is rooted in the ability to remain steadfast.

Here are certain strategies that may be employed in order to enhance our collaborative nature:

1)       It is suggested that one be trained in the RIGHT skills.  Collaboration would entail reasonable command over people skills and the ability to manage your own behavior.

2)      Conflict can never be personal.  Every organization or every decision making hierarchical order may have at least one certified ignoramus who may have a personal or a hidden agenda.  The ability to steer the communication away from such agendas and refocusing on the issue at hand is a prerequisite for collaborative teams.

3)      The leader must assist the members in getting to know each other so that a deep collective determination develops as a part of the work environment.  People who know each other collaborate more.  The leader must invest time in social events and other forms of networking for his team.

4)      The leader must have the vision to manage and reinterpret the rewards that the team may receive.  This is the most vulnerable moment for any team.  Promises await those teams who can successfully handle success.

5)      Communication in the team must be purposeful.  Gossip and other trivial discussions create perceptions and these perceptions may interfere with our ability to know and relate to other people in the group.

6)      Mahatma Gandhi suggested that“be the change you want to see in the world”.  The leader must demonstrate his ability to collaborate and model that behavior across situations.

Copyright © Nitesh Kotecha

Creativity In Schools - A Speech To Remember

I am currently reading this book called “Speak” by Laurie Halse Anderson.  This book is about the trials and struggles that a teenage girl faces in a “typical” school in United States.  The book mentions her Art Teachers Welcome Speech on the first day of her art class.

I was bowled over and I thought of sharing this with you all.  Below is the speech, partially modified in terms of sentence structure in order to maintain continuity and flow.

“Welcome to the only class that will teach you how to survive.  Welcome to Art.”

“Soul – this is where you can find your soul, if you dare.  Where you can touch that part of you that you have never dared to look at before.  Do not come here to ask me to show you how to draw a face.  Ask me to help you find the wind.”

“You will graduate knowing how to read and write because you will spend a million hours learning how to read and write.  Why not spend that time on art:  painting, sculpting, charcoal, pastel, oils?  Are words and numbers more important than images?  Who decided this? Does Algebra move you?  Can the plural possessive express the feelings in your heart?  If you don’t learn art now, you will never learn how to breathe!!!”

“Here is an old broken globe that I used to let my daughters use as a football and kick around the studio when it was too wet to play outside.  One day Jenny put her foot right through Texas and United States crumbled in to sea.  

Voila! An idea!  This broken ball could be used to express powerful visions – you could paint a picture of it with people feeling from the hole – the opportunities are endless…”

“ You will each pick a piece of paper out of the globe.”  On the paper, you will find one word – the name of an object.  I hope you will like it.  You will spend the rest of the year learning how to turn that object into a piece of art.  You will sculpt it.  You will sketch it, carve it or use the computer lab for computer aided designs.  But there is a catch – by the end of the year, you must figure out how to make your object say something, express an emotion; speak to every person who looks at it.”

“Welcome to the Journey!”

I have been dreaming and hoping all my life to see Boards and Schools that allow teachers to work with this kind of latitude.  I know there are some that come close to allowing this kind of creative expression – but like I said, there are only some.

The above speech related mostly to art, but I am sure such kind of work can be for social studies, environmental science, and science, including the most agonizing of all subjects – Mathematics.

Here is to wishful thinking.

Copyright© Nitesh Kotecha

Planet Earth Has 5 Years

The world has five years to avoid being trapped in a scenario of severe climate changes and extreme weather events.


Below is a Yahoo! link


http://news.yahoo.com/world-five-years-avoid-severe-warming-iea-170519443.html

The Fox Will Kill The Lion

AltaVista was the world’s most popular search engine by 1998.  The site had recorded 80 million hits a day in 1997.  Yahoo! Inc, via Overture, bought over AltaVista.  AltaVista died and Yahoo! lived.  Google came in and as of today Yahoo! is up for sale.

What does all this mean?  AltaVista set up the multi threaded crawler – the ability to search more web pages than were believed to exist at that time.  What happened to AltaVista’s drive and ambition to remain at the top?  Why did Yahoo! take over and why is the same Yahoo! up for sale today?

Leadership of the fox kind is the key.  There is no way that a fox can fight the lion – certainly not in the traditional sense of jaws and paws.  It is only a dumb competitor who would fight the mighty with tools that yield a competitive advantage only to the mighty.  The fox would challenge the “institutional skills” of the lion and instead rely on his “strategic resources”.  This would necessarily include an opportunity where the lion displays a “weakness” and the inability to fight back.

The above allegory summarizes what happens when the young and the fresh challenge and take over those with power over them.   Failure to focus on strategic leadership and its eventual result of strengthening the competition is well documented in business history.

The question then is what prompts one to take advantage and make better use of an opportunity while the mighty sit back and look on?

The motivation to supersede and win, despite the presence of market heavyweights, along with dissatisfaction with the status quo seems to be the basis of this leadership.

This attitude influences creative output as one is suddenly focused into the task at hand.  There seems to be fireworks not just in our ability to concentrate but also in our capacity to take risks. 

Motivated individuals are able to override programmed modes of thought in order to reflect critically and positively on the situation at hand.  I am sure this also has a lot to do with the ability to find meaning in a task.

Google is the world’s number one search engine.  Google became number one as the promoters were interested in a search engine that ranked websites in terms of importance and quantity of pages rather than the number of times the search items appeared on the page.

Google knew why they had to do it before they knew how they would do it.  The entire motivation seems to stem from altering the status quo and creating new ways of handling resources.

To end the allegory –

a)      The fox does not worry about claws and paws

b)      The fox does not feel the need to fight the lion in the traditional sense

c)       The lion is the king of the jungle and is fixed in his methods

Google is the Lion today.  Here’s to Google – Have a foxy day!

Copyright © Nitesh Kotecha

Keep Going and Find Something Better to Do

David Packard, the co founder of Hewlett Packard always said that he was a human being first and CEO second.  He was a very quiet man and avoided publicity and limelight.  He is quoted as saying “You should not gloat about anything you have done; you ought to keep going and find something better to do”.

There are some lessons here.  Keep going means we cannot rest on our laurels.  This is a trap.  There are many celebrities who have ruined their lives only because they were too proud of their achievements.

Nature has shown that every great invention has been refined and improved upon.  There is nothing in this world that is so perfect that we cannot improve it (well maybe not with the Mona Lisa Smile – but you know what I am talking about).  Thus we may savor the moment of our success and glory but it would be prudent to heed the words of David and see if we can improve upon our last achievement – before our competition does!

Finding something better to do symbolizes that there is always a higher value that we can achieve and aspire to.  An author can write a book and enjoy his new found celebrity status.  However, finding something better to do would mean that the author must now go beyond his last work and once again challenge himself.  The same would apply to a sportsman, a student or a businessman.

There are many benefits to what David advised us.  It improves our relationships across all levels, reduces anxiety and stress, encourages an open approach and attitude – and as paradoxically as it may seem, it enhances one’s self-confidence.

Copyright – Nitesh Kotecha