Wednesday, June 26, 2013

Decoding fineprint

Business world is not entirely fair. Not surprising, isn't it? But in what all ways corporate can twist the information in their favor and commit frauds?

Auditors job is to assure that the financial statements they audit are true and there are no accounting frauds. But they are paid by the corporate who are supposed to be investigated. You know the outcome. Remember Satyam’s case?

Hospitals depending on their scale (50, 100 beds or so) along with the facilities they offer have to earn their depreciation. They need minimum of number of patients to keep their business going. If there are not enough new patients coming in, existing patients will have to extend their stay or have to go through series of tests, check-ups one more time. In maternity hospitals, deliveries which are supposed to be normal can turn into cesarean section deliveries depending on the utilization % of the hospital at that time or return on investment promoter is expecting. Death of humanism? Yes, it is a chapter’s name in this book ‘Bullshit Quotient’ by Ranjeev Dubey.

In Casino, house always  wins (almost). How else they can operate if there are equal of chances of winning for both the participant and the house? Stock market is also run by market makers who set the odds and lets you play. If you are lucky to pick the same side of operators, you will make money but not for long as the game changes. How many small traders find success in the market? What does it reveal?

Pick the book to clear out some of the myths which corporate world wants us to believe.

Bullshit Quotient: Decoding India's Corporate, Social and Legal Fineprint

Sunday, June 23, 2013

Bookless in Baghdad

How many books do you read in a year? 10, 50, 100 or more?

Shashi Tharoor during his growing up years gave it a try and he could count 365 well before the year ended! He started reading at the age of 3! (I guess they were comics). Being an introvert during his childhood made him make friends with books than in neighborhood.

This book ‘Bookless in Baghdad’ is a selection of the columns author has written for newspapers in the past few years. So this book does not put forward a single theme, but part memoir and part literary criticisms. This controversial author shares his love for Woodhouse, praise for Rushdie, goes on expressing his opinions on the authors and their works with his probing mindset and analytical thinking.

Bookless in Baghdad

A non-fiction on fiction

This one is not a fiction but a non-fiction about world famous novels of all times and understanding what makes them great. Orhan Pamuk, author of ‘The Naive and the Sentimental Novelist’ looks into the intimate connection shared between the writer and the reader, makes the book thoughtful, and deeply personal.

The book begins with a chapter named ‘What our minds do when we read novels’ and progresses with review of the works of world’s all-time best authors from Tolstoy to Naipaul. You will get a favorite list of books of the author and also of the authors he reviews in this book.

If you are a book lover (your spouse would hate this passion of yours), this book is a must on your reading list.

The Naive and the Sentimental Novelist

Identify risks for trading opportunities

At the high level, risks can be classified into financial and non-financial risks.

i.                 Financial risks include Market Risk, Credit Risk, Liquidity Risk
ii.                Non-financial risks include Operational, Legal, Political etc. risks

Identifying and understanding these risks in detail gives us plenty of opportunities to trade. It is illustrated here with an example.

Market Risk is associated with interest rates, currency exchange rates, commodity prices etc. Every business firm is exposed to such risks. Coal India is the biggest consumer of crude oil and the variation in crude prices will impact the margin structure of Coal India, so the stock price has a negative co-relation to oil prices. But neither Coal India’s stock price nor Brent crude pricing can go in one direction for long. They reverse, find equilibrium but not for long. Disturbance in market forces set them apart but again there will be a reversal at some point of time. This information gives the trader an edge to create trading positions in both and use technical parameters like convergence, divergence to book profits and wait for another opportunity to initiate trade.

Remember there are other risks playing out during the same time, which can alter the identified relationship, so the trader need to be cautious and have watchful eye to identify what is driving the individual stock or commodity price.

Saturday, June 22, 2013

The fates of human societies

This book ‘Guns, Germs, and Steel’ authored by Jared Diamond is about the evolution of human societies during pre-historic times. It won Pulitzer award for him in 1998.

In this book, author examines the factors which shaped the evolution of early societies like farming, domestication of animals and development of communication skills including writing etc. The societies which acquired these skills had a distinctive advantage over others which lacked them. The farming power gave the ability to prepare for a war without a need to hunt for food every day. And the writing skills helped pass on the knowledge to future generations. The societies which had no clue of these skills during the same time could not compete with the ones possessing them and lost land and lives. Darwin simply put it as ‘Survival of the fittest’ but Jared explains it to us in detail. His other book ‘Collapse’,  is a book with a reversal theme, about what made strong societies like Mayans disappear.

While fiction readers may find this book heavy, non-fiction readers loved it and made it a best seller in its time.

Guns, Germs & Steel - The Fates of Human Societies

Where stones tell you a story

A Forgotten Empire

My fascination towards Hampi and the history of Vijayanagar kingdom begin with my first visit to it during a school trip. My interest grew with each succeeding trip and I have found myself at Hampi a dozen times after that.

All history books mention the glory of Vijayanagar kingdom. Many authors and researchers have put forward conflicting views about its rise and fall. After going through many texts, I found that ‘A Forgotten Empire written by Robert Sewell, a British officer in colonial India gives the best description of the forgotten times.

You can download a free copy here:

The Quest: Energy, Security, and the Remaking of the Modern World

Oil, oil, oil….petroleum

So goes the background song in a documentary video based on Daniel Yergin’s book ‘The Prize’ on the oil industry. (

The Prize: The Epic Quest for Oil, Money and Power

The Prize got him Pulitzer award, but that was two decades ago. After that oil industry has changed a lot, new supply sources were identified, geopolitics became one of the influential factors in oil pricing and energy security became an important consideration for governments all over the world. There was look out for alternatives but the difficulties faced there increased the importance of oil further. 

So it made Daniel to come out with a new book The Quest to document all the changes in the industry and their implications. Interesting read for those who want to know more about the black gold and the politics around it.

The Quest: Energy, Security and the Remaking of the Modern World

Friday, June 21, 2013

Market chooses its winners (and losers). Is that our choice too?

Last 6 months chart for Nifty, its winners and losers

Last 6 months chart for Bank Nifty, its winners and losers

During uncertainty of a break-out or a break-down, straddle or strangle are the tools available for options traders to put to use. That means building positions in both directions in the same stock or index.

Another way of trading this could be to identify the winners and losers and buy at the money calls and puts in those identified stocks. When a break-out is expected, buy a call of an expected winner from the trend and a put of an expected  loser.

Advantage of this method is, profits are better than in a straddle in a single stock. But one needs to verify that trend reversal possibility for those stocks are minimum.

Wednesday, June 19, 2013

Last 3 months Bank Nifty chart and some of its components

Bank Nifty has remained flat. ICICI and HDFC Banks remained in a narrow range. 

Money has flown out of SBI but IndusInd and Yes Bank have gained.

Nifty chart for last 3 months along with heavy weight stocks

On a 3 months chart, Nifty & Bank Nifty have gone nowhere, so are Larsen and Reliance. But the clear break-out comes from Sun Pharma and break-down at Infosys.

Tuesday, June 18, 2013

FII data and Nifty movement from June 10 to June 18, 2013

FII data along with Nifty Close from June 10 to June 18, 2013
Chart showing index futures influencing Nifty movement

Discovery of yourself

The Discovery of India

India is incredible. India is full of contrasts. India is unity in diversity. India is you.

When someone writes about India’s entirety, its history, geography, religions, languages, rulers, movements, almost everything under sun, it will not be a stand-alone book but it will be a book of books. Nehru’s The Discovery of India is full of foot notes, sometimes extending more than a quarter length of the page.

With this book, you will be set on a journey of 5000 years, starting from its roots in Harappa, touching up on Veda, Upanishads, practice of yoga, early Hindu rulers to Mughal sultans, arrival of East India Company, and freedom movement up to 1945.

By the time you are done with this book, you would have figured out what next to read or research. And when someone says he/she knows India enough, you can smile at them.

I am not taking on those who instantly criticize Nehru here, instead asking them to read this book to find that he was a well-read person with fine writing skills.

The Discovery of India

Alida Mele by Shivaram Karanth

This short novel written in first person begins with author receiving a letter from his friend who seeks help to act on some of the instructions after his death. 

Author travels to Mumbai to complete the last rites of his friend, takes possession of his goods and starts acting on his last wishes. And the life history starts opening up uncovering many of the finer details of his friend’s past life which author was not aware of when he was alive. Author travels to far away destinations meeting the relatives of his dead friend, goes through many embarrassing and tricky situations and takes his own calls wherever instructions from his friend are incomplete. 

It makes an interesting read as the central character is no more alive in the story but the whole plot revolves around him and his past actions.

Monday, June 17, 2013

Try Tagore and have stronger roots

If you want to read just one author and just one form of writing, it has to be Tagore and his short stories. I enjoyed reading ‘Cabuliwallah’ in my childhood, I think the new generation would also see value in his stories. All those students in schools, rebels at college, individuals with earning or no earning, middle aged going through a crisis, all kinds of people from all walks of like can find themselves or their future beings in Tagore’s stories.

Does not matter if you want to read a quick story in a bus or have whole night for reading, it is not the time you spend in reading but it is the time you spend later on to digest the story because the emotions triggered will not settle down so easily. It is stories like ‘The child’s return’ and ‘The trust property’ which moved me inwards and it took good time for me to come out of melancholy.

Want to get in touch with your human side again? Let Tagore be with you.

Collected Stories

Karvalo, in search of a missing link

I read Karvalo for the first time when I was studying in high school. It was a prescribed text in Karnataka for Kannada language paper-II that time. I picked it to have a glance at the book during summer vacation and ended up completing the book the same day. It has been 20 years since that and I have read it at least 10 times after that. It is the most borrowed book in my bookshelf. Some of my friends who are miles away from books have read it and appreciated it.

The entire story is told in first person, but the author himself is not the central character, it is the scientist in the town Karvalo and his assistant Mandanna. Karvalo is keen to locate a rare flying lizard which he thinks is a missing link in explaining evolution of nature. He seeks help from Mandanna, who is considered good for nothing by fellow locales. The turnout of events like the experience with honey-bees, marriage of Mandanna makes the read funnier and the team finally locates the lizard but will they succeed in capturing it? Read Karvalo and find out yourself.

Bhyrappa, for the broader experience of life

Reading S L Bhyrappa’s work was not possible for me when I was in my teens. It sounded a different and difficult world. But when I gave it another try after some more years, it all started making sense, and his books got into prominent place in my book rack.

Parva is my favorite among his novels. I read, re-read it a few times, and was discovering many angles to it each time I read it. Of course, the epic of Mahabharata has influenced Indians over generations, from kings to commoner and people from all walks of life. And many story tellers were fascinated by it and retold the story again and again. But the master story teller puts it in a different way here. You take out the mythology, godly status and divine powers of characters in Mahabharata you will have Parva in your hand.

Tantu has a plot with five leading characters, each unique and having a different attitude towards life. The story begins with the journalist visiting his ancestral village to find out more about the missing idol from the temple. He finds that things have changed, like the village hospital his grandfather got built bearing a different name but he finds comfort in a school teacher who runs a school on Gandhian principles and also comes across an young man who has devoted his life to music. Back in town, journalist’s way of keeping morale high above anything else does not go well with his wife and son, who are fascinated by materialistic things of the world. His wife eventually parts away with him to start off a Garment factory with the help of her childhood friend. She finds success in her mission but gets trapped in the favors needed to run the business and also her needs to affirm herself with the need of a man (Musician, her husband’s friend) in her life. Their son, expelled from school in town due to unacceptable behavior, joins the village school, where he gets a makeover. But once he is in college, he finds many takers for quick relationships. He leaves the country for higher studies and does not bother to visit her mother when she is in death bed. The journalist and the school teacher get jailed during emergency announced by Govt. and the story ends there with one of the inmates dying in the jail.

Sunday, June 16, 2013

Needed, A Rachel Carson in India

Not silent, loud enough to take note

Buy Silent Spring
With its recognition as one on the most influential books of the last century, 'Silent Spring' could change the opinions of farmers and Govt. of USA on the use of DDT. Opposing lobbies could not succeed in discouraging her.

With rampant use of chemicals and pesticides becoming part of farming in India, farmers are embracing the cousin of DDT, Endosulfan and other insecticides, without clear awareness of the dangers it is bringing to them. Cancer patients in Punjab or Keralites suffering from chronic diseases are waiting for a Rachel Carlson  to tell them the roots of their diseases lie in what they use for increasing farming output but at the cost of their own lives.

Silent Spring (Penguin Modern Classics)

Historical Fiction from Saradindu Bandyopadhayay

By the Tungabhadra

Buy By the Tungabhadra: Book
A must read for historical fiction readers
This historical fiction set in the 14th century, reveals many finer details of lifestyle of people lived in those times and you will get to know the main characters of the story better than your friends.

Two princesses from Bengal set to marry king of Vijayanagar travels via Tungabhadra river, along with a stranger saved from drowning, go through the journey with unanticipated turns and twists and its consequences.

Charismatic King of Vijayanagar, Devaraya, is at his best on keeping his enemies from Bahamani kingdom at the bay, but is not aware that his own younger brother has a scheme to get rid of him. King gets help from  unexpected corners but also discovers that one of the princesses is in love with a common man.

The book makes an interesting read as main characters influence each other and the outcomes of the situations.

By the Tungabhadra 

Band Of Soldiers

Buy Band Of Soldiers: Year On The Road With Shivaji 1st  EditionInteresting read but not an exclusive story of Shivaji

A boy in his teens, Sadashiv, joins Shivaji's band, plays many roles of a messenger, a soldier, and helps him on his mission to conquer the forts in Maratha region.

Shivaji, a charismatic leader helps the protagonist of the story to grow up to be a soldier and also get married to his childhood love.

I bought this book as I was impressed with author's other work 'By the Tungabhadra', even though I did not have the same level of enjoyment while reading this book, it is a good read as author maintains the same level of sensitive touch in story narration.

Band of Soldiers