some random ramble....

Why the stereo type - Have you watched the veneta cuicine ( did i get the spelling right?) - Its an animated ad - with a jingle going " its a funday cooking in a veneta cucine ......" the maid is shown as a black woman while the rest of the family is of a different colour - How did anyone approve this ad? Yeah as a country we are not so touchy about racism, but I think this was in poor taste

I read some article which had brought a similar observation - The Singapore girl on the Singapore airlines represents the ethnic look and feel of the average woman in Singapore, but on none of the Indian airlines would you see the air hostesses seem like the average woman in this country - mostly fair woman is what you would see. No wonder " Fair & Lovely" has a large market!!!

What to do when you quit a job?

This is a post that is a follow up on my learnings from job post - People asked me how do you exit a company.

I have exited a company thrice by now and each one was an experience in itself. When I quit the Bangalore stock exchange - people were happy for me as I was heading to IIM-B and they wished me luck. Even now when people from the Exchange meet me, its a family feeling and they are proud of where I have reached.

Coca Cola, my next employer was the worst exit till date for me. I quit and I thought I indicated quite well why I quit. I was asked to deliver on a few things before I left and ensure the thinks I was working on did not completely fall through. My last 30 days were far more chaotic than what most people on 'notice period' would have. The HR people kept dilly dallying and my notice period writeoff (90 days in all and I served 60+ days). I was told by my department it will get waived but ultimately I shelled more than 2 months take home for they actually took stuff like PF, canteen money etc from me while cashing my leave ( 45 days) at a piddly basic rate.

KPMG was very nice and professionally done. And the exit was so smooth, its a pity they put their best face when I was on my way out. So what are the lessons

1. Speak to your boss first when you have decided - have an official chat and an unofficial chat ( the latter if you share the rapport)
2. Immediately speak to your Head of department and tender the resignation in writing copy marked to HR - Get your HR to tell you the procedures and get your boss/ HOD to tell you what is expected of you before you leave
3. Create a backup of all your work and cross reference them for future use within the organisation. Leave notes where required - Trust me being a good employee also shows great professionalism
4. Inform the team you work with ( when , depends on the understanding with your boss/ HOD) and ask if there is anything that they need from you - You might work with again so leave a good taste - Also people reference these days through a lot of things - you never know the guy in the next cubicle might be the guy they call!!
5. Start your signoffs sooner than the last day. It usually takes time. So dont wait for the last day. Leave your contact details - let people know where they can find you.
6. Keep in touch with people who were good friends - to put it differently, keep in touch with people you know will be of any assistance. Remember its quid pro quo - if you are useful to them, they will be of use to you.
7. If you had a mentor in the organisation - stay in touch - my guide from coke is still my best career advisor, the manager I worked the best in KPMG is still my guide when I am stuck.
8. Every organisation builds you professionally - acknowledge the good part, leave constructive feedback ( most organisations dont take it well - so dont criticize too much!!) and see the people in the organisation different from the organisation

Action points on the financial front

I have been investing in the market for a long long time, but had stopped in the middle for some years during my MBA and then for sometime during my first employment primarily due to lack of investible funds. Then about 3 years ago I started investing and have been regularly. Then somewhere, I decided to actively plan my finance completely. So I have been trying for a complete coverage - not just on the assets side but also on the liabilities side. I used my bonuses to pay off my education loan well before time, then took a loan to put that down payment on a flat and paid it off with the next bonus. Now I have a loan taken to fund my brothers education and I will let it run its course, since the cost of prepaying that loan is very high.

I have a SIP running every month - and I juggle around which funds I invest in based on how my portfolio is looking. I take turns in investing in a base fund like Fidelity equity, HDFC equity then shift to growth options like Reliance growth, Reliance Regular savings fund, Magnum Global and then sector/ contra bets like magnum contra, DSPML Tech, Bank BEES.

I have investments in equity directly. Most of them are shares not owned by the funds I own. Its also to do with the thought process of benchmarking my own stock picking skills over the fund managers :) , Will post how I did in about a years time.

Right now, I think I have a low insurance cover. I want to buy term cover - have explored the options, just need to execute it. Actually, I will increase my insurance cover drastically over the next 2-3 years, but primarily term covers with residual cover after the premium payment period if possible.

I need to brush up on my derivatives front and start investing there - but that is the target for April 08 - when I estimate I will have more investible funds ( read - can also lose more!!)

Need to evaluate if I should take a pension plan anytime soon and how it will work out.

Investment in commodities is also on the horizon - but need to think through.

Primarily - I want to setup a sizeable passive income stream which will contribute to my investment corpus soon.

In case I seem to have missed out on some very obvious things - leave a comment, will be grateful.

A sub optimal way of investing

I have had banking as a sector to invest for a long time, but due to time constraints, have not been able to research on the sector and identify the right candidates. While the obvious ones stand out, I would still like to research before I invest. So as to not lose out on the opportunity, I invested in Banking Benchmark exchange traded fund ( BANK BEES). My average cost of entry has been Rs 684 (adjusted for brokerage and divindend) , the current rate is 807 - over 3 months thats a return of 17.98%. Which is quite Ok I think. The other way I could have participated in this is through a banking mutual fund. The average category return is ~22.5%. If I were to adjust the entry load that most funds would levy, it comes down to 19.45%. So I have lost about 2.3% for not having invested in an actively managed fund.

I got thinking, I am sure there would have been better returns if I had spent time on researching, but given the fact that I am not too sure of evaluating banks ( you cannot go by the traditional way of researching companies to evaluate a financial institution) and since I did not have the time, I took a lazy way out. Maybe I should use those hours I clock in the flights on reading up on such things and researching. It will be time worth spent. But first I should get my sleep quota, which I try to fill in on the flights.

But I am still bullish on banking, will post on my picks...

Reinventing the wheel in financial inclusion

Financial inclusion seems to be the latest buzz word. I have been hearing it over and over again in the last month or so and it seems to be everywhere. This is financial services own "bottom of the pyramid"story, and as usual our press has taken to it - the latest flavour of the month.

Micro finance and micro credit have become big money spinners, while RBI seems to be coming up with an innovative plan of accrediting village money lenders to bring them into the mainstream financial system. Micro credit has drawn some flak for what people claim are exorbitant rates that they seem to charge. Do they? am not too sure, I take the argument that the Micro finance institutions dole out about high cost of delivery and the related crap. There is scope for lower rates, it just needs more competition but I don't think regulation is the way to go.

But coming to my main observation. The main hitch that most of these organisations claim is the lack of grass root level staff who can assess credit risk and effectively deliver the services. The typical last mile problem faced in a B2C industry. But for those who are old enough to remember, Indian Banks used to have a 'pygmy collector' who used to go around to small businesses and such daily and collect money and deposit to the bank next day. The pygmy collector used to get a small commission ( i think, am not so sure), knew the market like the back of his hand and had tremendous linkages. Why didn't the Indian banks use this system to reach to the "financially excluded"? Why not revive this scheme ( am sure it still exists in a few banks, but as usual waiting to be discovered by the ICICI , HDFC banks of the world) - Bring it on, let them loose, and see the low cost deposits swell and see that level of inclusion soar.......

As an aside :

I think I have become a weekend blogger, new job barely leaves time to exist.... but will try to be proactive...

Where is the error?

I use a fundamental analysis mode to shortlist stocks and then watch them for sometime to get a feel of the range in which they seem to move and then buy in....I seem to manage to get good set of stocks into the watchlist... but then I seem to be going wrong in my execution - while I picked Gujarat NRE coke, IVRCL and RNRL at the right time, I missed out on Crompton Greaves, ICICI and Sesa Goa.

I am trying to understand why I finally execute the trades I do and the ones I dont - still not very sure. The other problem is the target price I have - once I hit 30% return, I get jittery and some how feel like its time to exit, while the stock might be headed higher ( E.g - ACC ) - I need to improve my target pricing, which will hopefully also let me understand the margin of safety on a stock.

I am stuck with a dud currently - Federal Mogul goetze - its more than 45% down from my acquisition price and will do some research and dump it very soon - didnt cut my losses in this stock - I could have done it when I was 25% down but then that figure looked daunting - stupid move - Will post what my thinking was, and why I think I should move out in a different post.

Current on the watchlist - Manugraph, ICICI bank and Vijaya Bank

Lessons learnt in each job....

I have been in my new avatar as an investment banker for close to a month, its been exciting, tiring, interesting and all those good things you can say about a job... This is my third role post my MBA and this got me thinking.... this post actually is a notes to myself, because I want to actually list what I learnt in each place and a private note on the screwups .... so here goes -

1- Corporate -

• Initiative is rewarded- no structured learning happens, so if you think a step needs to be taken to meet a goal take it - speak to your boss, he might want credit if it works, it is always good to let them take credit. Finally as long as he is fair, you will thrive.
• Politics is prevalent - dont let it ruffle you- use it, dont play dirty , but dont spare the jerks
• People are important - technical stuff anybody can learn - people will bail you out where knowledge might fail - and people teach you stuff which you might take years to learn by yourself
  
• Dont forget the obvious - stating the obvious might lead to the best result
  

2 - Consulting

• With access to the net - information is abundant - make intelligent connections - When searching in google, the most obvious string might be the best
  
• Communicate communicate communicate - there is no such thing as over communication within your team and with your manager
  
• Solve the problem - but first know what it is - A problem might be the symptom -
  
• Structure your moves - Sometimes the only value might be structure to remove the clutter
  
• Read the text books - They didnt write those fat books for nothing!! but learn from the team
  
• Presentation is as important as the content ( forgot this last week :( )
  

3 - Ibanking

• Multi tasking - Compartmentalising your capability to work is important
  
• God is in detail ( has been important in all jobs, but impact will be higher in this role)
  

I am sure there will be more in the third bucket. Note that I am not talking about the technical skills like presentation making, financial model making, industry landscape generation etc... they are job specific and you anyway learn them.... I want to record the softer skills, so that I dont forget....and these become second nature


So , if some of you who have worked with me want to contribute, pl feel free to add......