Friday, June 15, 2012

Alone


My dear children
Whichever road you may choose
You could win or you could loose
Either way
You must learn to walk alone

This world is your playground
You could play or just go round n’ round
Either way
You must lean to run alone

You may have no room at all
You may have your back against the wall
Anyway
You must learn to crawl alone

I could go on and on
But its time that I move on
I will always be there for you
But, you must learn to think alone.

© Nitesh Kotecha

Thursday, June 14, 2012

Mathematics By Rote

Believe me, I knew my algebra, the rational (and the irrational) numbers and how to find the hypotenuse!

Nevertheless, herein lays the problem for me at school.  Why on earth was I working so hard at my algebra?  I could never understand for the life of me the purpose of learning the algebraic identities, the rational number sequences etc.  Why does one need to know by rote the properties of rational numbers?

My issue was that Students need the Teacher to explain to them the use of such techniques and bridge the gap between the textbook and the real life.  (AC)^2 = (AB)^2 + (BC)^2  by itself just did not work then, at least not for me.

Our Mathematical questions did have some practical connotation "If a rope of length so and so is laid alongside a wall of length...etc" but believe me; these problems were taught in a mechanical fashion like "If the word problem contains length of a rope or a shadow, use the Pythagoras formula to solve the problem..."

Here is some more.  CBSE pedagogy prescribed the deduction of a "half a mark" for not writing the abbreviation "Ans" at the last line. Likewise for the letters "QED" at the end of the theorems. My teacher would warn us that the Board would deduct such marks and we should be careful about it.

I am sure all here will reflect on this ludicrous emphasis that the Board put, in order to ensure that we have this clerical mentality and penchant for the silliest and the most insignificant details on earth.  It is this attitude that reduced Mathematics to a rote.

A word now, for my Math teachers.  I perfectly understood, later, that it was impossible for them to do what I thought they should be doing.  The number of students, course syllabus, CBSE rules and rituals, etc., binds the teachers.

So, as much as I would like to absolve my teachers, Mathematics and the CBSE still deserve every invective for the way the subject was designed in the 1970s!

Yes, Mathematics still needs to grow up and solve its own problems.  If it needs our assistance, then it better make efforts to convince us that it shares a symbiotic relationship with us students! (He He)

I have a copy of a text book on mathematics for Grade 8 by Orient Blackswan.  I will write for here, word for word, the manner in which it introduces the topic on rational numbers

"There is a need to extend the number system to find answers to problems like 1/3 - 1/2 or 5 divided by 3.  Just as we extended the whole number system to the left of 0 to get negative integers, we now extend the number system to so as to include all fractions.  In this number system, corresponding to every positive fraction to the right of Zero, there is a corresponding negative fraction to the left of Zero.  Thus:

-1/3 corresponds to + 1/3 and so on.  We call this the rational number system."

There is nothing wrong with what is written above except that it is as boring as steamed rice.

The text mentions, "there is a need to extend the number system..." This is an assertion, which can sound unconvincing to Grade 8 students. I am sure somebody can do a better job of making the use of this subject matter more interesting for students.

Now, for a little bit of my experience with mathematics in USA.  My Professor was from Russia.  When he taught us mathematics, he made it clear that he is not interested in "Mathematical Regurgitation" (He actually had another word for "regurgitation" but it would be inappropriate for me to use it on this forum).  He was of the opinion that "Mathematical Regurgitation" is something Asian students love to do.

He insisted that all problems are to be solved to a simple level and not to its simplest level.  This meant that once we had reached an answer (say) 3 + 2, we were advised to stop working on this problem and move ahead to another problem as the answer 3 + 2 is simple enough. There is no need to total it to 5.  And here is the best part - He said that he would deduct a mark for writing 5 as the answer as we would be wasting time and not adding any meaning to what was already simplified as 3 + 2.

This system is markedly different from our Indian counterpart.  In my opinion, the Indian draconian system of marks allocation, for every significant and insignificant step of the mathematical problem, is more an extension of the latent desire for power and domination that many in the education department and government harbor (apart from imparting a petty and clerical mentality on students).

The math class in USA eventually prepared us for a level where we understood the implications of calculus on financial statements, how algebra is a must for a newspaper layout editor etc.

Therefore, the point is that the system in USA put a great deal of emphasis on "knowing the subject at hand and enhancing one's ability to solve one's problems by using mathematics".

I consistently use Calculus for my management accounting and financial reporting work.  However, one can argue that this is all at graduate school level.  However, I am sure, similar simple practical uses can be demonstrated to students in primary and secondary schools so that students clearly understand their own need to study mathematics.

© Nitesh Kotecha

Lessons From Nokia – The Customer Cannot Be Damned!

What was the most successful European company of the 1990s?

Easy. The Finnish mobile phone manufacturer Nokia Oyj.

And the most disappointing one of the 2000s?

Easy again. Nokia.

Nokia is in the news lately.  It is probably up for sale.  Samsung has given it the thumbs down and Microsoft is discreet about it.  However, this blog is a part of a series of articles on what we may learn from Nokia and how they brought about their downfall.

Nokia did not respond to the Market and the Customer.  This is a violation of everything we learnt in Marketing 101.

Nokia was so focused on sameness that it assumed that a Nokia user either calls people or sends a text message.  There is not much variation between the Nokia 6600 (2003-2004) and Nokia N8 (2010).  By variation, I mean not in terms of how the camera graduated or the processor evolved.  Look at the basic layout of the Symbian Operating System in both the cases.  There is nothing exciting about it.

Nokia cell phones did not have the ability to block a call or a text message.  One had to resort to expensive apps.  How could Nokia not have figured this out?

Well only one way – “The Customer be damned.  We are Nokia”.

Nokia had this huge range of cell phones that essentially did the same thing.  This is a con, on the consumer, who is now under the illusion that there is a wide range of the Nokia cell phones available as a choice.  Have we not heard before that “Less is More”.  Look how Apple is handling its range.  It is focused and concise.  Samsung is doing what Nokia did – throwing out this huge mindless range of cell phones where there is not much of a difference in what the cell phone does.

Nokia cell phones were expensive.  People paid top dollar for it.  Should the company not have focused on delivering value to the customer?

© Nitesh Kotecha

Tuesday, June 12, 2012

Your Broker As A Cheat (Part 13)


I have frequently reiterated to the readers of the blog the possible collusion between merchant bankers, brokers and sub-brokers and stiff the public with high priced stock or junk stock.

Let us talk today about the Indian IPO market.  Reliance Power Limited, in my opinion, was the reason for the beginning of 2008 stock market crises in India. Most of India’s merchant bankers and who’s who in the IPO business, created this hype and glory about how this stock would change your fortunes.  Many brokers and sub-brokers assured their customers that the stock would list at four-digit figures despite an initial high price of Rs 450/- per share.

Here are some more details, mostly from gossip and grapevine.  The people associated with this fraud decided to spread the message by spending millions on a campaign.  The campaign included the grey market operators who initially bought the shares for a premium of Rs 3000/- per share application. This amount got many investors curious.  The operators then decided to move the premium up to Rs 5000/- per share application.  The Indian public got crazy about the stock and began fantasizing about the price at which the stock would list.  The operators then decided to move the price up to Rs 7500/- per share application.  This was done near about the application date.  The people of India soon decided that they were about to hold the bluest of the blue chip stocks.

The Draft Red Herring Prospectus clearly listed the fact that it would be eight years before the company would go operational.  However, Indians lapped up the issued.  The share listed poorly and is quoting today at 25% of that value.

Further attention is drawn towards SKS Microfinance, DLF, etc.

Did your broker sing you a song about these stocks?  If so, you may want to rethink about the quality of information he/she may dish out to you.

© Nitesh Kotecha

Sunday, June 10, 2012

The Amorphous House


Our past, in some way, gives a certain direction to the future.  We all must bear the burden of our past, for all those who do not remember the past are condemned to repeat it.

It is this idea that has fomented a series of linear, non linear, and tangential  thoughts in my mind which I would like to share.

We all live in houses with four pillars defining the area covered.  This rather amorphous house (the subject of this short story) is short one pillar.  Why do I call it amorphous?

It is necessary in the house that the pillars remain equidistant from each other, in order to maintain symmetry and balance.  It is not so and therefore the house is amorphous.

The house tilts as a result, precipitating a need for external support.

A single bamboo shoot supports the house today.

Bamboo shoots support houses made of bamboo and not of cement and brick.

Bamboo shoots cannot guard against cyclones.

Common sense says a house of cement and brick is much stronger than a house made of bamboo.

Worms gradually eat into the bamboo making it weaker and hollow.  We cannot blame the worms.  Bamboo is of use to them.

Bamboo shoots break when a concrete house leans on it.

It is not the function of the bamboo to support the house of cement and brick.

The residents of the house cannot see the house tilt.

They cannot see because it is dark.

It is dark because there is no light in the house.  Worms thrive in the dark.

There is no light because the electricity has been turned off.  In addition, the shutters have been pulled down on the windows.

The residents pride in their ability to see in the dark (like bats).  Unlike bats, they stumble and fall in the dark.  Scars, bumps and abrasions prove this.

The light is barred from the house because it blinds the residents.

Reality surfaces when there is light.

Reality exposes all illusions and breaks all dreams.

It is essential to differentiate between vision and a dream.  Vision is a flower on the stem of reality, which in turn, is rooted in life.

© Nitesh Kotecha

Thursday, June 7, 2012

Dream It


Oh my children!
You are so lovely
I know you both will make it
But, nothing will happen unless you dream it

Our life is our thoughts
And when we think, we create it
And it will happen just the way you dream it

Things may look good on the surface,
Ignore the bottom; ‘n the top? Just skim it
It works only the way you dream it

Private Victories are fundamental
It’s the bigots who yell and scream it
Triumph comes to the silent who just dream it

Oh my dear ones
When we walk down the road
The rocks may cause us to fall
Get up and move, once you cleanse it
Nothing else will matter, once you’ve dreamt it

©Nitesh Kotecha

Your Broker As A Cheat (Part 12)



There is a joke…
A long time ago, a visitor from out of town came to a tour in Mumbai.


At the end of the tour, they took him to the financial district. When they arrived to the Gateway of India, the guide showed him some nice yachts anchoring there, and said, "Here are the yachts of our bankers and stockbrokers."


"And where are the yachts of the investors?" asked the naive visitor.

All those concerned with regulating the markets are taking the Indian Investor for a ride.  Here is a typical pattern –

A company’s stock is usually in the hands of Foreign Institutional Investors and the Domestic Institutional Investors and the Promoters.  There are very little shares in the hand of the retail investor.

The price of this stock is then jockeyed into stratosphere.  Specific targets are given to the jockeys and market operators.  The main broker then gives a signal to his sub-brokers.  This is the time when the broker will issue a “Stock Analysis Report”.  This report is an advertisement and a gimmick.

At this stage, your broker or sub-broker may furnish you this report.  As a prudent investor, you must keep checking the shareholding pattern of the company’s equity (www.bseindia.com).  Here is what will happen if there is a game going on.

You will see a steady decline in the quantum of shares held by the Foreign Institutional Investors (FII), the Domestic Institutional Investors (DII) and the PROMOTERS!!  Guess who is now holding the stock – the other category, which are essentially the retail investors.

Grapevine has it that the FII is actually the Indian Politicians who route their transactions from countries like Mauritius etc.  The DII are Indian Mutual Funds.  The point here is that, if the grapevine is true, one must never be impressed by the amount of stock held by the FII as it is just and illusion of "foreign" investment.  The stock will be transferred to the retail investors at a high price – come what may.

I suggest to you readers to surf the Bombay Stock Exchange website and look for all stocks have lost more than 70% value in terms of their lifetime high price.  You will observe the pattern of “stiffing the retail investor” as mentioned above.

If your broker has recommended any stock to you that has this pattern, then know your broker to be a cheat.

Happy Investing!
© Nitesh Kotecha

Tuesday, June 5, 2012

Your Broker As A Cheat (Part 11)


There is a joke…

Two stockbrokers are in a bank, when, suddenly, armed robbers burst in, waving guns and yelling for everyone to freeze.
While several of the robbers take the money from the tellers, others line the customers, including the two stockbrokers, up against a wall, and proceed to take their wallets, watches, and other valuables.
While this is going on, one of the stockbrokers jams something into the other stockbroker's hand. Without looking down, the second stockbroker whispers: "What is this?"
 The first stockbroker: "It's the $100 I owe you!"

Today I would like to write about one of the worst sub-broker I have ever seen.  This lady is Satan roaming as a human on earth.

The con began with the Global Financial Crises of 2008.  One of India’s top broker went belly up during the last quarter of 2008.  The broker called up one of India’s Top Businessman and the businessman willingly put the funds to save the broker.  The broker now had a financial obligation right?

Wrong.  The Broker’s sub-brokers and clients had the financial obligation.  The target set was to generate as much brokerage as possible for the broker so that the businessperson could be paid off.

The sub-broker, or Satan as I refer to, was given an agenda in the following stocks

Mox Limited
Resurgere Mines and Minerals
Future Capital Holdings Limited
Reliance InfoComm
Reliance Capital

A pretentious marketing campaign was put out glorifying the above junk.  The sub-broker ensured that her clients pile up millions of these shares.  The result was predictable – 95% reduction in portfolio value.  

Below are statements that the sub-broker used to enhance her credibility about the junk investments, which were bound to deplete share holder wealth:
-“ I just had a word with a top executive at Reliance/Motilal/Similar Big Name etc.  This is his stock of the year.”
-“I have distilled many stocks so as to finalize on these stocks.  These are the most undervalued and fundamentally strong stocks.”
-“A top Mumbai broker is holding a position in this stock.  He needs an exit price and so is planning to jockey this stock up so as to cover his losses and ensure gain for the pain he bore.”

The truth of the matter was that the Broker wanted to offload his positions in these stocks.  Readers of this blog should check the charts of these above stocks and you will see what SEBI will never see – FRAUD.

We, overall, underestimate a sub-broker’s need for continuous brokerage.  This is the one and only reason why these people end up recommending junk.

As prudent investors, we must ask our brokers and sub-brokers the wrong questions and see if you can see greed in their eyes.  And greed you will see….

Happy Investing!

Disclaimer – I don’t own any of the junk stocks mentioned above.

© Nitesh Kotecha