Business consulting in IT firms: Role of a consultant

Business consulting in IT firms: Role of a consultant


Have you always wondered what kind of work business consultants do in an IT firm?

Are you aware of the different consulting groups in leading IT firms such as TCS, Infosys, Wipro and HCL?

If these questions have been bothering you for a long time and you have no clue about what business consultants do, no issues!

You can easily get a peek into the role of a consultant working as a business consultant in IT firm!


Check out my article published by a leading Indian business blog Trak.in

Here's the link:

http://trak.in/tags/business/2012/07/30/business-consultant-role/



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Why Chennai Autowallas charge you exorbitantly?

Why Chennai Autowallas charge you exorbitantly?


I was in Chennai for a month. During this time, I used to frequent by Autos.
If you are not aware, the chennai autowallas charge too high in our country.

For 10 kms, you pay around 80 in Mumbai, and around 90 in Delhi.
Whereas you may have to shell minimum 150 in Chennai.

This is a pure game of demand and supply, along with rules and regulations governing autowallas.

In Chennai, public transport is too good and is too cheap. When people have to wait for just 3-5 mins, and have to pay just Rs. 10-12 for 10 kms distance, why would they pay 150 for an Auto !
Also, the city has good number of people with their own vehicles. Most people commute by bikes or by their own cars. Thus, the Auto-wallas are left with almost no passengers !

Its common to observe that whereever volumes are high, prices are low.
In Mumbai, Autowallas are almost always occupied. You will see that there are more people waiting for autos and so there is more demand for autos and less supply. Since volume for autowallas is high, they can afford to travel at low cost. Also, add to it the stringent rules and regulations that are enforced upon them. So the authorities strictly control the auto fares in Mumbai.

In Chennai, the equation is totally opposite. The supply of autos is more and demand is too less. Since volumes are low, autowallas have no option but to charge v high from those who take an auto. Add to this, no strict govt rules and regulations and so the prices are controlled by autowallas (as in they work like a cartel)

As an example, if an autowalla is travelling 200 kms per day in mumbai, charging Rs 8 per km, his revenue is Rs 1600 per day. If an autowalla is travelling 100 kms per day in chennai, to make Rs 1600 revenue, he will have to charge you Rs 16/ km !! which is 2 times that of Mumbai !

So, how has been your experience with Auto-wallas in your city ?
If you enjoyed my article, do subscribe to my blog.

PS: You should say sorry to Chennai autowala if you dared to quote him below Rs 30 (even for 1 km)

Impact of US downgrade on global markets

Guys,

My article on "Impact of US downgrade on global markets" has been published by InvestmentYogi.com.

Here's the link to the article. 

http://www.investmentyogi.com/investing/impact-of-us-downgrade-on-global-markets.aspx

Check it out, below as well:

What we have witnessed in the past few days is the bloodbath in markets across the world. The S&P downgrade of US from AAA to AA+, in my opinion will have a short to medium term impact on the world economy.

Reason is that most economies deal with US for business and if US is hurt, tremors will be across the world (butterfly effect). An example is IT industry. With downgrade, US will get less fund flow, and so the organizations will find it difficult to raise money and so this will impact their capacity to implement IT solutions. This way, they will cut down on IT spending, thus hurting IT vendors across the world.

But when we look at emerging economies like India and China, they have too much domestic consumption, so even if these countries are hit on exports, they will make it out on domestic consumption. So, In my view emerging economies will have only short to medium term impact due to this downgrade.

Investors across the world will now move to safe haven like gold and other metals and so the prices of these commodities will definitely rise as more investment flows in these asset classes.

There is definitely a cause of concern for economies which are heavily dependent on US for exports. For example- Japan, which exports around 16% of its total exports to US; and Taiwan, which exports around 10% of its total exports to US. Such export driven economies which have high dependency on US will have to look at measures to reduce their exposure to US by diversifying their exports and by making domestic consumption better.

China, followed by Japan, is the highest holder of US treasury securities, which means that these countries will have a huge concern over the downgrade of treasury.

So overall, China will be hit by its huge accumulation of US treasury securities; but will be protected by it's huge domestic consumption.

In the long run, I feel that the BRIC nations will be less affected compared to other economies. There is definitely impact on shares of Indian corporate, but this also offers an opportunity to buy blue chip stocks at throw-away prices. One should look for investment in those companies which have strong fundamentals and whose stocks are available at low prices and go for long term investment in such companies. 

Subscribe for more updates!

Recent developments & business opportunities in Indian financial markets

Dear Friends,

Good news !

My article on "Recent developments and business opportunities in Indian financial markets"- has been published by CoolAvenues.com

Here's the link for the article:

http://www.coolavenues.com/mba-journal/finance/recent-developments-and-business-opportunities-indian-financial-markets

I have covered the recent developments in Indian financial markets and the business opportunities that one can avail in this space.

Please read the article [ http://bit.ly/jSEBr3] and I would be thankful for your comments and feedback.

Have a good weekend and do subscribe my blog via email to keep receiving regular updates.

Can less liquidity on an exchange be beneficial ?

Well friends, I am one of those who believes that more the liquidity on an exchange- better it is for the exchange. It helps get more business, more volumes and thus more revenues for an exchange- in terms of getting more transaction tax - if more volumes.

But, can an exchange benefit if the liquidity is too less ?

Naturally, by common sense - one would say that less liquidity is killer for an exchange. But there can be some circumstances where it can be asset.

Let us look at one such circumstance.

Let us suppose we have 2 exchanges. On first one (A) - we have huge liquidity- almost 90% liquidity. Remaining 10% is with exchange (B).

Now, if 2 parties have to do a block trade - which one would be a better place to do it ?

Well, it will not be A, but rather the exchange B. The reason is as follows -

On exchange B, since the liquidity is less, the prices would not move fast- so an intermediary involved in block trade would sell stocks for one party and simultaneously buy stocks for another party. Since exchange B is not so liquid, the intermediary can protect prices for the 2 parties involved in block trade and would be in a better position in getting the buy and sell prices for these 2 parties.

Now, what would have happened had we done this on exchange A:

Since A is highly liquid (90%) and so the bid- ask spread are very tight, it would mean that if a huge buy order is placed, it would be absorbed very quickly from ASK side and similarly if a sell order is placed, again it would be absorbed very quickly from BID side. So movement will be very quick as liquidity is high on both bid and ask side. So, problem is that - for an intermediary, as soon as he buys it, there may be someone on other side who comes and sell all its stock at a very huge price and so the intermediary may suffer losses. And so conducting a block trade can become a challenge because your average buy may not match up very well with your average sell price.

Such a condition would have very less chances to arrive at exchange B- reason being that due to less liquidity, spreads would be far and there would be less players trying to game this exchange. So if intermediary is buying a huge stock, it would have less chances to get someone who sells a huge stock. So on a less liquid exchange, intermediary can buy for one party and simultaneously sell for another party and very well ensure that these trades match up and so the two parties can do block trade with quite stable prices while using an intermediary.

This way the buy and sell prices can be somewhat protected and we can do a much better block trade compared to exchange A.

I hope I have made my point. Any comments in this regard are appreciated.

Do subscribe me by email for more updates !!

How to clear Bloomberg Aptitude Test [BAT] ?

Do you know what BAT is ?

Well it is Bloomberg aptitude test.

So what does this test contains? And what benefits will you get if you pass this test ?

I definitely feel that this test is a value addition to you. For 2 reasons:

1. It adds value to your profile and potential recruiters would know that you are serious about making a career in financial markets.

2. When you study for this test, you will learn many areas that are covered in this test.

Well, friends, here are my experiences while appearing for the Bloomberg test:

1. I found the test easy as most things were already covered during my MBA program- so if you are in midst of your MBA, its a big plus for you.

2. Following were the key areas from where the questions were asked:

Economics

Financial Statement Reporting and Analysis

Valuation

Investment Banking - Corporate Finance and Financial Advisory

Investment Banking - Capital Markets Issuance / Syndication

Global Markets

Investment Management

Verbal Skills

Math Skills

Situational Judgment

Ethical Reasoning

Tasks

So friends, what are you waiting for?

If you want to add value to yourself, do check out the Bloomberg aptitude test !

I have collected the following links to help you with your preparation for BAT -

https://www.bloomberginstitute.com/bat/start/what.php

http://www3.imperial.ac.uk/newsandeventspggrp/imperialcollege/administration/careers/news/news_15-12-2010-10-36-11

http://lsefinancecareers.wordpress.com/2010/10/27/bloomberg-financial-aptitude-test/

http://rightoffthebat.wordpress.com/2010/11/20/bloomberg-aptitude-test/

For more updates, you can subscribe by email to my blog and receive regular updates via email !

Games2Win creates controversy on facebook by creating a 'Kill Osama' game

Games2Win.com creates controversy by creating a 'Kill Osama' game

We all know that Osama died a few days ago ! Today, I came across an interesting game and what's more interesting is the response that this game has received.
Games2Win has created a game which has created a controversy on facebook and has not been taken up very well by the facebook users.

For me what's interesting is the way this game has been taken up by the people.
Response for this game has been overwhelming !


The game begins by locating Osama and then shooting him. Once he is shot dead, the player can cut his throat by drawing the knife on the neck and cutting the neck slowly.
Then the game shows that the blood is flowing from the neck of Osama and he dies.

The first comment on facebook (after Mr Alok Kejriwal- founder of Games2Win - declared that his game has been created) is as follows :-

"Holy God!!! are we really this sadist???"


I certainly agree with this comment and feel that this may not have good impact on value system of any human being.

Since games are meant for relaxation of mind and are very well taken up by children and by society, such a game which shows blood and slow killing would definitely
have a negative impact on those who play it.

Though Osama was responsible for death of innumerable people and what finally happened to him is right - in the sense that he got the punishment for wrong doing. But
again as per humanitarian grounds - his killing would not be right as human nature is that of care and of protection and natural death is the proper way of leaving the world.
Since Osama did acts which were beyond the imagination and he killed so many people, his killing is a relief for the world and is not taken up by human rights activists.

Now, coming again to the game. Here are some more comments on this game. Please read the following:

"Well....not sure if I will want to play it..maybe Great Execution.....but Sick idea.... "


"Awesomely cool. Who was the sick mind who came up with this ?"

"The knifing part is really gory"

"cudnt cut down the neck..........thatz y I didnt like it"

"In very poor taste :("

"the idea to it becoming a game... not ok"

"I feel like this has the potential to negatively impact the brand. Killing, or capital punishment etc are sensitive issues. Majority of the developed nations have eradicated capital punishment anyways (US excluded). This is very much against the basic instinct of human beings,which is to protect, care etc. But you maybe able to get away with this one as this is guy is the worst possible human being since world war 2. Overall a thumbs down from me:) "

"Nothing has changed. This game is just the shoe on the other foot. Osama killed 1000s, the US through its policies has killed at least 10x that amount. Nearly every government is guilty of that at some point in its history or future. This is nothing to do with Osama being a bad guy. When we strip away the sanctimonious bullshit it boils down to this: we just need a legit outlet to indulge in our blood lust and glory in it. The same emotion that charges a WWF ringside cheers and jeers. This game feeds off that blood lust."


Finally, I feel Alok is in dilemma about the way this game has been taken up by the community.

Anyway, my question to my readers is:
What you feel about such a game?

Do you like such games or you feel that such games are sick and sadistic ?

What is Product Management ?

Today, I was discussing with my friend in XLRI GMP "Eric Nishant Ekka" about what Product management is all about ? Eric has been in product management for a long time and he has extensive experience working with products.

He brings tremendous experience in product strategy. Well, so here are his inputs about what product management is all about ?

About product management:

The role is v good. You will thoroughly enjoy it.

It will have its own set of challenges and rewards. Pay scale for a product management position would be definitely good.

Employer's will need someone who can understand domain v well. So you need to be good at domain.

Also, this involves strategy- so you will have to give inputs about positioning/ segmentation and targeting of the product that you are managing. Though not directly involves sales, but may have to interface with sales personnel.

But more of a product strategy role.
In future - 5 yrs down the line, you can should target the senior role in strategy and marketing- like VP Strategy/marketing. This is how a person seeking career in product management should plan his career.

The role is more towards strategy (80%) and less towards marketing( 20%)

Also, you should be able to compare products, and be dynamic in understanding how industry is evolving- what changes shud be incorporated ? and how you can design the product to make it even more appealing to the clients. You have to make sure that a wonderful product is created. Selling and business development- that is not your work.

As a product manager, your area is to make the product successful.

You have to prove yourself in terms of strategy and in product roadmap - esp product design/ development and how it should be positioned in the market- what kind of similar products are already existing - regulatory compliances - etc.

Also, the focus is also on strategic management. A product manager also needs to focus on NPV/ IRR - that is important to show senior managers how you will analyse - how product is performing- about PLC (product life cycle) and about various growth stages in product lifecycle- is the market in growing phase or mature market ? if growing- what new areas are coming up ?

That's all about product management.

With thanks to Eric for his wonderful insights.

What is Private Equity ?

What is Private Equity ?

Well, I got a good exposure to Private Equity when I attended the 1 day workshop by one of the renowned PE players in India when he visited the XLRI Jamshedpur campus.

So here is what Private Equity or PE is: Private +Equity

It's private which means that the way it operates is not known to public and equity is nothing but stake.

So what a private equity firm does is it invests a corpus in a portfolio of companies.

Now, where is this money coming from and who is managing it ?

The funds are invested by players known as LPs (Limited Partners) and fund is managed by GPs (General partners)

So, basically GP is the one who is investing the fund in 1 or more companies (portfolio of companies)

If LP is gone, GP is gone too ! In simple terms, if LP stops putting in money, PE firms start facing issues.

This is exactly what happened during recession. LPs were not willing to put in money in new companies and so PE firms had a tough time.

Ok, I got it. But what's the difference between PE firm and a VC(Venture capital firm) ?

Well VC firm typically provides seed funding to startups. The VCs get you started. They take stake in the company but let the owners run the company independently. Whereas a PE firm would nurtue (harvest) the company and would not invest at seed-fund level.

In PE, the crucial aspect is that of timing- meaning that when should a PE firm get in a company and when to get out (exit)

So who are the major players in PE? Well KKR, Carlyle group and Blackstone are world renowned PE firms. PE industry is known because of US/ UK as it started here.

But these days PE firms are coming to Indian as well as other emerging markets like China too - where they see huge growth potential.

So, what is it that PE firm makes? Ok, good question. Well this industry typically works on 2+ 20 model. Let me explain it further..

2 means 2% of assets managed by the PE firm. This amount is taken by PE firm as operating fees.

20 means 20% of the investment profits goes to PE firm.

So there is huge money in the PE industry- and so it the risk. If the company that the PE firm is investing in does not picks up and closes down- it can be a huge loss too !

I hope you got an overview of this industry. In my future posts, I will cover more on PE and the way this industry works. Any suggestions - more than welcome..

What is a merger ?

What Does Merger Mean?

The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.
It also means that the two companies will stop existing and a new entity (merged) will come into existence.
The formation of ArcelorMittal is an example of a merger. Arcelor and Mittal existence came to an end and a new entity called ArcelorMittal was born.

All India Pagalguy (PG) Meet 2010- Experiences

Attended the All india Pagalguy meet on 22-23 May 2010:
========================================

Started the journey to Virar ( to visit Arnala beach resort) with Mayank( caterpilar)

When I reached Arnala resort, met estranged_gnrs( Rohit- PG team). This guy was roaming with a towel on his shoulder and wearing a cap( which mostly politicians wear) - kind of ishtylish !

Met the guy, whom I had been longing to meet since a long time..
The founder of Pagalguy- Allwin Agnel (pagalguy). Had a good discussion about how almost all Bschools fudge salary figures.


Met some famous PG stars like: Grondmaster( Harshal modi), mahip (Mahip Vyas)

Had a lot of fun while playing in swimming pool. Mine was white team and we defeated the non-White team several times.. ( or was it the other way round ! )

In the evening, our Grondmaster started off with some Question Answers which helped the audience know more about PG.
At the same time, everyone introduced himself/herself. I too spoke about my fight since 2003 for quality mba education and that finally I am going for 1 yr Executive mba from XLRI( GMP)

Awesome guitar played by chuck_gopal and apurv pandit. One more 'gentleman' from BodhiTree ( with a rich voice) - his mimicry of Steve Jobs was simply awemsome !!

Also, visited the beach and got to know that our TJ( Tarun Chawla) is a professional photograph. he took some pics on the spot and they were really mind-boggling ! Also met 'shashank3012' ( doctor) who cracked CET ( his article Dont overstudy to crack CET- was recently published by PG)

At night, we had a great time while playing Dumb-sharads. PP (Puri pallavi) is not only a good dancer, she is a good entertainer also
She kept the energy in the group and we started enjoying dumbsharads. I got 'Pakeezah' - but was fortunate enough to enact it and good work by my team( thanks to shweet gurl 'nevergiveup' that she guessed it within 30 seconds !! was good to have Ganesh ( IIMA guy) - who kept giving typical Bhojpuri movies and Bhojpuri songs to Gujju guy ( rajaramvarun)

Oh, forgot to mention that also met many other guys and gals and cant remember their names and ids..so guys, if you were there and we met, pls do leave a comment here.

Finally, it was time to go back.. Made lot of good friends and enjoyed a lot in the PG Meet !

PS: To know more about PagalGuy, visit www.pagalguy.com

Results of SEO Techniques: I kept my promise :)

On 16 Mar 2010, i had set a challenge for myself that I would optimize my blog and come on 1st page for search term "NCFM Certification" in 1 month time.

Here is the promise I made on 16 Mar 2010:
http://www.ankitarora.net/2010/03/displaying-real-time-results-of-seo.html

I am glad - I could acheive this target within 20 days :)It's been 20 days and I am publishing the results. Here is the screenshot:The following screenshot shows my blog on first page of google for search term "NCFM Certification"



Not only this, my blog is on first page for other search terms also e.g. "NSE Certification". Here's the screenshot:

So, Am glad- I respected the promise I made with my readers and my SEO techniques really gave results :)

In my future posts, I will write how you can optimize your blog also so that it starts ranking higher on google search results.

So guys, what are you waiting for ? If you know some SEO techniques, do share it with me and I would be glad to add them to my future blog posts; and if you want to learn about SEO - keep checking my blog OR subscribe by email to get regular updates :)

How to clear NSE NCFM Certification in Capital Markets- Dealer's module ?

In my previous post ( http://www.ankitarora.net/2010/03/how-to-clear-ncfm-certification-in.html ) I had mentioned how you can clear the NCFM Certification in Financial markets- Beginner's module.

In this post, I would give you insight into NSE NCFM Certification in Capital Markets- Dealers module which I cleared in June 2009 with 84% marks.

As the name suggests, this module is mandatory for those who want to work in brokerage houses and those who want to learn about capital markets. This certificate can help you become a dealer at brokerage houses in India. With this module, you will understand:

a) Clearing, Settlement and Risk Management process

b) Capital market trading operations of NSE.

c) Eligibility criteria to become member of NSE.

What is it that "NSE NCFM Certification in Capital Markets-Dealers module" covers ?

An Overview of the Indian Securities Market:

Introduction - Market segments, products and participants; Primary Market; Secondary Market; Derivatives Market; Market Design - Primary Market, Secondary Market, Derivatives Market; Reforms in securities market

Trading : Concept of Trading System; Functionalities of NEAT system; Order management; Trade management; Auction; Limited physical market; Retail debt market (RDM); Internet broking and Wireless application Protocol (WAP).

Clearing and Settlement : Clearing and settlement mechanism; Securities & Funds Settlement; Risk Containment Measures; International Securities Identification Number; Dematerialization and Electronic Transfer of Securities; Investor Protection Fund; Clearing Software-Data and Report Download.

Trading Membership : Stock Brokers; Membership in NSE; Sub brokers; Authorised persons; Broker-client relations; Sub-broker-client relation; Dispute, arbitration and appeal; Code of advertisement for trading members.

Legal Framework : Securities Contracts (Regulation) Act, 1956; Securities Contracts (Regulation) Rules, 1957; Securities and Exchange Board of India Act, 1992; SEBI (Intermediaries) Regulations, 2008; SEBI (Insider Trading) Regulations, 1992; SEBI (Prohibition of Fraudulent And Unfair Trade Practices Relating to Securities Markets) Regulations, 1995; The Depositories Act, 1996; Indian Contract Act, 1872; The Companies Act, 1956; and Income Tax Act, 1961, Money Laundering Act, 2002

Fundamental Valuation Concepts : Elementary statistical concepts; Coefficient of variation; Covariance; Correlation coefficient; Normal distribution; Time value of money; Understanding financial statements.

Tips to clear the NSE NCFM Certification in Capital Markets- Dealers module:

1). If you are a trader and are familiar with basics of trading like order book, outstanding position, and price-time priority of order, and you understand legal framework of exchanges, then this will be very helpful and you will not need to spend more than 1 day to prepare for NSE Certification in Capital Markets- Dealers module.

2). Go through the material that NSE provides 2-3 times.

3). Solve the model test paper on NSE website 3-4 times till you get atleast 90% marks !

4). At end of each chapter in book, there are sample questions and answers- Go through them 4-5 times - each chapter !

5). If you have done all the above 4 points that I mentioned, i am sure you will clear the NSE NCFM Certification in Capital Markets- Dealer's module !!

All the best !!

How to clear NCFM Certification in Financial markets ?

How to clear NCFM Certification in Financial markets ?

NCFM Certification in Financial Markets (Beginner's module) is the most basic module of all the modules available under NCFM Certification.If you have been reading a financial newspaper like Economic Times or Financial Express or Business Standard for some time, and if you know what is Inflation, then clearing this module is quite easy.

I can tell you from my experience that I studied for just 2-3 hours using the material provided by NSE and could secure 94% marks. But I already was interested in financial markets for last 8-9 years and have been reading Economic Times for last few years.

Now, even if you have no financial background and you dont understand financial terms, even then it would not take you more than 1 day to prepare for this module. There are some basic mathematical questions in this module which are same as in the model test that NSE has given on it's website.

The NCFM Certification in Financial Markets course is structured to help understand the basic concepts relating to different avenues of investment, the primary and the secondary market, the derivatives market and financial statement analysis.

There is no negative marking and you need to secure 60% marks to clear the NCFM Certification in Financial Markets.

One benefit to study this module is that if you find it difficult to understand various financial jargons in financial newspapers, then after clearing this module, those cryptic financial terms will start making sense.

So guys, what are you waiting for ? If you have no background in finance, you can start with NCFM Certification in Financial Markets.

If you are already in Financial markets for some time, you can skip this module and focus on other modules. Because this would be a cakewalk for you. But yes, this will help you in revising and rechecking your basics of financial markets!

PS: I have added the NCFM certificate, but modified it to avoid it from getting copied and getting misused.

Displaying Real Time Results of SEO

I am pasting here, an image that i have captured today
The search term is "NCFM Certification"

There are "72800" results for "NCFM certification"

For those who dont know what is NCFM- it is NSE Certification in financial markets- courses offered by NSE( National Stock Exchange of India)

If you go through my old posts, i have never written anything about NCFM and so I have never optimized anything for it.

Now, my target is to be on the first page of google search for this search term. Right now, i do not figure anywhere. Over next few days, i will write some articles about NCFM and show you how my blog will start ranking better.

I am quite sure that after 20-30 days, it would come on first page.

So, keep checking my blog

And keep searching for "NCFM Certification". You will find me on top in some time. And then, as a proof, i will provide you with another screenshot :)

FIXGlobal Face2Face Meet in Mumbai on 13-Apr-2010

I am planning to attend the FIXGlobal Face2Face meet in Mumbai on 13-Apr-2010.

If you are a stock broker OR a software developer working in stock markets OR a business analyst working with various exchanges OR infrastructure company in stock broking segment OR are keen to learn about Electronic trading in India, do check out this event.

Here are the details:

Connecting the FIX Community
The event leverages the tremendous success of the FIXGlobal Face2Face India conferences over the last two years which saw many buy and sell side participants attended to learn more about electronic trading and the FIX Protocol.
The 2010 forum will look into the business requirements for electronic trading in India via FIX, the current extent of FIX usage in India and the future development in this rapidly growing market.
This event will be free for all delegates but strictly by invitation only. It will consist of a series of presentations, panel discussions, and delegate driven Q&A with solution providers and industry peers specifically designed to get you Face2Face with the people you need to see.

Topics to be discussed:
• Electronic Trading globally and in India
• What Algorithmic Trading means for India?
• Regulator and Exchange Views - Reform and Developments
• Exchange Technology – The Latest Update
• The Buy Side Wish List
• Technology Developments and The FIX Protocol
Delegate driven Q&A with solution providers and industry peers. Networking and Q&A sessions designed to get you Face2Face with the people you need to see.

For more details, pls visit:
http://www.plus-concepts.com/f2f2010/india/

Happy birthday Mom ! I love you !

This post is dedicated to my mom as it's her birthday today and since she is the most wonderful person in my life, so I want to share with the world, how I have grown up as a person with my mom's caring and lessons.

I also dedicate this post to all the wonderful mothers in this world.

I have imbibed many personal traits from her and have taken the first lessons of management from her. She always says that if you are not successful, you need to work even harder. This helped me in developing my perseverance.

I have seen her managing innumerable roles with such an ease. Once, I was packing my bags while leaving for college. I couldn’t fit all my clothes in the bag and asked her to give me a bigger bag. She arranged all the clothes in the same bag, and showed me that, if arranged properly, that bag was big enough for all my clothes. Such experiences helped me learn how to effectively utilize resources. 

She also imbibed in me the qualities that a person should know how to live independently. He should know how to cook, wash his own clothes and how to iron them. This helped me during my stay in Toronto, where I had to cook myself, wash and iron my clothes, as these services were not available easily. My mother always asks me to eat proper food and take care of my health. She always says that if a person is healthy, then only he will be able to take care of other people and work effectively. And I follow her words every day to remain in good health. She also imbibed in me the quality to look at the strengths of each person.

It's been 10 years when I moved out of my town to attend college. Whenever I leave home to go back to the city I work, there are tears in her eyes. She never lets those tears come out and holds those in her eyes. This way she shows her strength. She knows that if her kids have to grow in life, if they have to succeed, they will have to move out- they will have to take new challenges and struggle and then only they will come out with flying colours.

She is the most satisfied person and i never saw her complaining about anything in life. She maintains her patience in tough times and has always guided me and my sister to remain composed and strive for excellence by patience, not by aggression.

Your mom will never tell you that she needs you- that she is waiting for you to come home. because she wants you to go ahead in life. But dont be selfish, call her.. Ask her if she is well.. If you cant go and meet her- ask her to come and stay with you.. 

If it's her birthday or it is mother's day, send her flowers- send her gifts. Even though gifts cant replace the love that your presence would give her, still the gift will carry your love towards her- that gift will make her feel good, feel special, she will feel that you are with her- always...
Remember that even if the whole world hates you and goes against you at some point of time, your mom would still love you and stand by you. So never break her heart. Take care of her. Love her. Adore her. God bless you and your mom ! 

In the end, if God gives you only 2 options to choose: a) 1000 failures OR b) your mother
- you can choose your mother. With her presence, you would overcome 1000 failures and succeed for sure !

Happy birthday mumma !

Understanding the sub-prime mortgage crisis in laymen terms

Understanding the sub-prime mortgage crisis in laymen terms

There are different kind of people who want mortgage in US. Those who are good people( who have the ability to pay back) are called prime borrowers. Similarly, those would are not good( those who may not be able to pay back) are called sub-prime. Now there is a guy called mortgage broker. You can assume someone from credit card industry - a credit card agent who is asking you to take a card- someone like that who is asking you to take a house on mortgage. Now, this mortgage broker knows the capacity of different people. He is issuing mortgage at small rates( 4-5%) to prime guys and on higher rate( 11-12%) to bad guys( sub-prime guys) He is doing this because he knows that they ll not be able to pay back, so he tells the bank that take higher interest from them and since they ll not pay back, we will do foreclosure of property and we( bank+broker) will get the house back and we ll make money also in this process. So, what happens is that due to his greed, mortgage broker gives huge loans to bad guys. Now there are so many houses which have been taken up by bad guys. mortgage-broker is happy due to his commisions and bank is also happy that it has put so many houses on mortgage.

So far, the story is good ! Now there is a twist in the story..

Now, here is what goes wrong. One by one, all bad guys start declaring bankruptcy. They are not able to pay back( since they never had the capacity to pay back) and so there are many foreclosures. So now, what we have is more number of houses chasing less num of takers !
By looking at this scenario, all the good guys say that why should we pay higher installments when the houses are so cheap and so they also start defaulting. Due to this, what happens is that banks are left with houses which no one wants to purchase !! And so the banks have no cash. only houses - which have depreciated a lot ! So banks become bankrupt and those who are not bankrupt, they need support from govt ! So the entire financial system has collapsed. And since the value of houses has become too less, the cost price has decreased tremendously- which means that growth is -ve OR there is recession in the economy.

All this, due to the greed of mortgage brokers and the bank officials who filled their pockets-without doing any chcks on people who will default !!!

PS: Dedicated to my friend, 'Ankit Sharma' who asked me to write a simple article on this topic. I hope I am able to give an overview of this financial mayhem in simple language

Is India ready for Genetically Modified crops ??

I have been witnessing tremendous brouhaha over the BT brinjal during the last few days. I really wonder if opening the doors to BT brinjal will bring disaster ?If you have not been following the issue, here's what's up:

From Rediff:
A host of studies show that GM crops have adverse effects on animals and humans. Consider some. In 1996, the UK launched more than 50 long-term safety studies on GM foods. A team under Arpad Pusztai of the prestigious Rowett Institute tested GM potatoes engineered to produce an insecticide called GNA lectin by feeding them to rats. The feed adversely affected virtually every organ of young rats, including the brain, liver and testicles. There were signs of 'immune system damage'.
Rats fed non-GM potatoes spiked with the lectin were relatively unaffected even when fed 700 times the amount of the lectin the GM potato produced. The team concluded that the damage was caused by 'the genetic modification process itself'.
In 2003, nearly 2,500 sheep died after grazing in Bt cotton fields. DDS instituted another sheep study. Two groups were fed two varieties of Bt cotton and the third non-Bt cotton. Sheep from the first two died within six weeks. The non-Bt cotton-fed sheep remained healthy.
Adverse effects have been reported from the Philippines, the US and Germany [ Images ] from GM maize, cotton and soyabeans, including allergies in humans and permanent damage in pigs, cows and chickens. In the US, a GM food supplement called L-Tryptophan killed about 100 people and produced swelling, coughs, rashes, pneumonia, mouth ulcers, nausea, muscle spasms, difficulty in concentration and paralysis among 1,000 people.
This is only one set of problems with GM. There are others too. Studies suggest that gene insertion may disrupt the seed DNA, the protein inserted by the Bt gene may cause problems, and the foreign protein may be different than that intended. Besides, genes may get transferred to human systems.


Kiran Majumdar Shaw, CEO Biocon:

“We would really like to ensure that we take this whole issue of Bt brinjal on a scientific basis and not on unfounded fears, creating a fear psychosis,” "Bt is a very safe science and regulated technology”.


View point of Yoga Guru-Baba Ramdev:

"How can a government make a mockery of its country? GM (genetically modifies) food can lead to kidney disorder, liver disorder, cancer and physical disorders among millions of Indians. Doesn't government feel shame to mull over commercial cultivation of GM crop?".
Minister of State for Environment and Forests Jairam Ramesh :Ramesh is facing angry protests of farmers in Hyderabad and Kolkata over a move to produce the genetically modified Bt brinjal. Protesters are demanding that the government reverse its decision. Ramesh said this was the first time he was facing such an unbecoming and unwarranted protest. Last year, Ramesh had promised additional consultations with farmers' groups, NGOs, scientists and other stakeholders before the release of Bt brinjal.


From EconomicTimes:
Leading scientist Pushp Bhargava, who was also the Supreme Court nominee to the country's biotech regulator, warned that if Bt Brinjal is allowed it would be the "single largest disaster". "Scientists all over the world have opposed GM foods. Renowned scientists like Rupert Sheldrake and many others have said that they don't support GM foods. They have written to India saying that it should not be allowed. If despite all this and the public hearing against Bt Brinjal, it is released it will be the single largest disaster in the country," Bhargava is also the independent nominee of the Supreme Court to the Genetic Engineering Approval Committee (GEAC), the country's biotech regulator.
Bhargava stressed that when the entire European Union had denied Bt products, the only reason wellknown faces in the biotech industry like Kiran Mazumdar Shaw were vouching for its release was business interests.

My viewpoint:

Now, after going through all this, all i can say is that Jairam Ramesh would have a tough time to go ahead with Bt brinjal, when he has just 10 days to take a decision. As the results of bt brinjal are not yet established and there is sufficient evidence that GM crops may have adverse effects, I feel that GM crops in India would take some more time of research and proper testing. Once it is established that there are no ill-effects of GM crops, then only the govt should go ahead with GM crops. Moreover, if the government decides to go ahead with GM crops, it should make sure that they are properly differentiated from normal crops and customer should know what he is eating !

So, what do you feel ? Should we go ahead with GM Crops ? Are they really safe OR do you see some hidden motives of business people and govt in pushing these crops ?

Do you think Automated Trading has bright future in India ??

Do you think Automated Trading has bright future in India ??


A few days ago i had asked the following question on linkedin:

Do you think Indian Stock Markets are mature enough for Automated Trading ??
Automated trading in US and UK is not a new phenomenon. The term high frequency trading may be relatively new to indian brokers, but in US and Europe, it started more than 10 yrs ago.
Nothing to blame on indian markets, which have just gone into demat format a few yrs ago. So naturally, we had to get opportunities in algo trading v late compared to US/European markets.

So, my question here is: Do you feel that indian markets are mature enough to give the liquidity and volatility for Automated trading. If yes, why ? If No, when you think the markets will offer such opportunities.

I received 5 replies for my question. Here i am publishing the best response as per my knowledge of automated trading. Pls feel free to comment on my question.

I would assume your question is about Algorithm trading and HFT introduction in Indian markets.

As you have said we have not matured in term of market structure to move into these sophisticated means of trading. In my personal opinion here are some of the prerequisites that need to happen –

1. Volume needs to increase (India our daily share volumes should be couple of million viz. US it about 10Bn / day)

2. Spread (bid/ask ration) has not become so thin as in US markets

3. In the passing decade market venues have increased in US from 2 to something like 40, thus creating the problem of liquidity fragmentation. We still are grappling with 8hr trading window with two exchanges… for now forgetting dark pools, ECNs, ATSs

4. One more thing is liquidity moves from one venue to another like a wave across US markets in milli/micro seconds… to capture this liquidity we definitely need to move into the realms of HFT, SOR , Algo trading

5. In the literal sense we don’t have market markers in the Indian context… someone like Madoff securities, Knight capital in the US context are non-existent in our securities market

6. Even in terms of revenue model of the B/D (in US)….there is significant pressures on the commission the B/D collect from investors… revenue from execution only model has been peeny+ized …. While execution+ model has some margin left with them still, as this come with value added services to the investor. So B/D don’t want to incur opportunity cost in not liquidating any small spread that may come up in the various market venues

7. Trading strategies have evolved more towards quant models which are beyond the human traders ability…thus crossing over to the Sci-fi region where machines are better than human traders

8. As you have stated volatility is also a contributing factor for the introduction of HFT & Alog trading. To quote, one of the main reason for Algo and HFT to take a lion-share of the trading techniques in the US market, last year(2009) was the high level of volatility in the penny range($0.001) the investors experienced

Hope this gives a sense of what needs to happen in term of market structure in India viz US.
- Rajasimha Makaram

Feel free to write what you feel about how automated trading has come along in India and how is the future for auto-trading in India.