...of Money, Crazy notions and Emotions

Read well

Amitesh Jasrotia — 2010-07-28T11:43:11-07:00

At the beginning of this year, I made a resolution to read at least 25 books this year. Admittedly, so far, I haven't worked towards my target with great vigor. Add to that, a lean month in May when I was really faced with a reader's block and hardly set my eyes on books. Now, July is almost over and I have read only 10 books.

This past sunday, I decided to do a bit of introspection and came out with the conclusion that when it comes to reading, how much you have read, perhaps, may not be as significant as how well you have read what you have read. As a result, I have decided to wring the most out of what I read and not focus on numbers yet. Incidentally, I am on the verge of finishing 'The Myth of the Rational Market' - it's a phenomenal book by journalist-cum-author Justin Fox about the history and evolution of finance. Anyone who wants to take more than a peek into world of economics and finance would love this book. Will soon publish the review in 'Book Review' section.

SEBI Chairman's outburst on Mutual Funds: Time for Introspection

Amitesh Jasrotia — 2010-06-24T11:53:27-07:00

After suffering an excruciating jolt through Government's mandate on ULIPs, fund houses got another shocker when SEBI chairman C.B. Bhave, quite contrary to expectations, gave MF representatives an earful in a mutual fund association conference. Apparently, Bhave questioned the inadequacy of fund houses in winning over customers even when they (mutual funds) are sure of the competitive edge they hold over their counterparts such as ULIPs and the fixed income instruments. Many are wondering what was behind this schoolmasterish outburst of SEBI chairman. Was he just preaching or was he venting his frustration about the MFs ineptitude? The debate about righteousness of C.B. Bhave's speech could go on for another couple of days. The moot issues, however, might get bogged down under all this hullabaloo. In my opinion, following issues, if properly addressed, could work to the advantage of MFs as well as MF investor community at large:

a) Thematic funds and Feeder funds (SBI One India, ING Latin America Equity fund, etc.) have never been high on the shopping-list of investors. Further, these funds are high on oomph factor than on substance, e.g. SBI One India fund, when launched, was pushed on the premise that it will invest your money in different parts of the country (basically meaning the top holdings of this fund would be the same as any other equity diversified funds). Even more so, despite the history being against the said funds, why do fund houses and fund managers continue to dish them out begs for an explanation.

b) Index funds (funds that track or mirror the index) continue to be downplayed by fund houses. One reason could be their low-cost, passive nature, thus, incurring relatively low expenses vis-a-vis other diversified funds. EMH (efficient market hypothesis) enthusiasts vouch for Index funds and not-so-surprisingly, these funds have also matched up to the expectations. The new breed of Exchange-traded-funds (ETFs) (index funds whose units can be bought and sold like stocks on an exchange) is also a grey area on the investing landscape of many investors, at least, till now.

c) NFOs (new fund offers) get extensive plugging from fund houses than the funds that have continuously outperformed or met the market average. Truth is NFOs are used as a bait to dupe many naive and unaware investors. They are coaxed into entering the fund at the face value of Rs.10 as if entering later would drastically diminish their chances of making money. Basically, the more the new investors (suckers!) the higher the chances of fund house meeting the marketing expenses of new fund offer.

d) Strong need of awareness among investors, especially, among retail investors. Lack of effort on this front would only lead to such outpourings as the one by Mr. Bhave yesterday. The onus for educating investors lies as much on fund houses as on SEBI. It shouldn't have been a surprise for Mr. Bhave and co., given a chunk of investors are as ignorant about their own MFs as an infant about its toys. How many retail investors do you think bother to check the change in holdings of their mutual fund? How many do you think are abreast of something called 'operating expenses' that they will have to shell out at the time of redemption? Questions are many but the way forward is simple - focus on investor education. Otherwise, fund houses will continue to maximize their profits at the expense of naive investors.

Reading ten books once or one book ten times?

Amitesh Jasrotia — 2010-06-21T11:07:18-07:00

A rough assessment says you remember only 18% of the book you have just finished reading. And as the days go by, that 18% figure further fizzles out to a negligible, decimal-like figure. In the nutshell, if you were asked to take a trip down the memory lane and exhume ten salient points of the book you read last christmas, the likelihood of your coming out tops is as good as a nightclub deploying crowd control force at breakfast time. This is about retention. What about your own perspective on the topic of the book or on the author's viewpoint? Do you think you can get it right in one stab?

A couple of years back, I came across the following piece of advice in an article: "You get more out of reading a book ten times than out of reading ten books once each." A little exaggerated? Yes, it is. Let's face it. Unless you are on an island, marooned. without even a scrooge puppet to talk to, you can't expect anyone to expect you to read a book ten times. Levity apart, the moot question here is whether this theory of reading a book more than once to gain more out of it has some degree of significance or not. The answer is an emphatic yes. Reason: Reading has its own periods of peaks and troughs. It's difficult, if not impossible to read something with 100% concentration all the time. Going back and reading a book or a chapter can help you iron out the inaccuracies and pitfalls in your perspective the first time. Not to mention the slip in concentration that made you attribute the 'unintended consequence' theory to Robert C. Merton (Financial Economist Son) instead of Robert K. Merton (Sociologist Dad).

A footnote: Isn't it a little disconcerting how people write reviews about a book by reading it just once? The same book that perhaps went through dozens of manuscript overhauls before materializing into its present form. Food for thought!

From a bibliophile to a bibiliomaniac

Amitesh Jasrotia — 2010-05-27T12:06:18-07:00

One of my resolutions for this year is to read 25 books. And so far, I have done well towards achieving my goal. The only thing that has started to disturb me even as I am pretty content with my reading goal is the ever increasing pile of unread books (I call it the backlog) on my bookshelf. As a part of the habit, I always tend to have 2-3 surplus books other than the one I am reading. This, I feel, gives me a decent maneuvering space besides allowing me to go about my habit in a FIFO (First in, first out) fashion.

I always take pride in being called a bibliophile (a much milder word meaning a collector of books). Of late, however, my backlog has grown to 17 from an average 3. And, a lot of it has to do with this almost psychotic urge to buy more even when I don't need to. I almost condoned this trend until yesterday when I finished a book and sat down to picking up the next one. All of a sudden, it struck me that my unflinching passion has gone a bit overboard. Instead of just being a collector, not to mention an avid reader, of business/non-fiction books, I have transformed into something else. A bibliomaniac, perhaps! Since in the last couple of months, more than just reading, I have only been obsessed with ownership and acquisition of books.

This madness of sorts made me oblivious to the fact that with each new book I buy, my catching up goes up proportionately. As I write this post, I am not sure how I am going to handle this problem. RIght now, I am busy reworking the order of my long reading list.

India VIX - a useful indicator of volatility

Amitesh Jasrotia — 2010-05-25T11:37:29-07:00

PIGS bloc has certainly got the fear indices worldwide in jitters. India's fear index, also popularly known as India VIX (short for Volatiliy Index) has shot up from the levels of 15%-16% a couple of weeks ago to mid 30s. For the starters, NSE has borrowed the trademark VIX from CBOE (Chicago Board Options Exchange) to come up with India VIX. Basically, India VIX has the Nifty 50 index options as the underlying. VIX rises when traders/investors on sensing trouble, take the plunge and start hedging their risks. Traders usually buy more options when they sense higher risks ahead � similar to people buying insurance.

Approximately, VIX hovering in sub-20 zone is an indication of proverbial calm seas whereas it hurtling into 20s and above is usually a red flag with 'volatile market' written all over it.

For more information on how Volatility figure is calculated, click here

Adversity is the best teacher

Amitesh Jasrotia — 2010-05-24T10:52:32-07:00

The prevailing market chaos has got everyone bamboozled. Just a couple of days until the biggest intraday fall this year (i guess it was May 6th), I was quite sure about selling a couple of my equity investments. Just when I was all set to push the button, all hell broke loose and I had to crawl back into my shell. As I write this piece, I am just biding my time and hoping that markets get back on track.

This is my fourth year of investing in pure equities (yes, I am a newbie!). And, I have already faced the doomsday scenario (I would love to call it '2012' scenario) quite a few times now. The protracted crisis of 2008, which was stigmatized as the worst crisis after the great depression ruffled my feathers pretty good. Like umpteen retail nvestors out there, I was battered and bruised. And, by the time the dust settled, I had learnt many important lessons that would come in handy in the future crisis:

Outperforming the market is a toilsome task and should be left to geniuses like Warren Buffet and co.
In stock-market, everybody knows nothing. The financial markets always humble those who think they can predict it.
Avoid kneejerk responses. Don't sell or buy because everyone else is. Sleep over your financial decisions.
Always remember the hackneyed cliche that equity outperforms other forms of investments only in the long run.
Avoid the temptation to peek into your portfolio everyday. Checking your investments everyday is not just bad addiction but a recipe for doom, too. This could induce the urge to buy more when markets are headed north and sell like crazy when they are headed south.
Don't invest on tips. Always do your homework.
Don't invest under the influence of temporary sways. Just an 'indication' of Ambani brothers burying the hatchet should be no reason for a conservative investor to jump on the 'Reliance' bandwagon.

Oil spill brings in Externality Tax

Amitesh Jasrotia — 2010-05-16T12:29:42-07:00

Latest Oil spill in the Gulf of Mexico may not have done any good to America's image of being the epicenter of Capitalism. One thing that it has done, however, is that it has pushed the US administration to consider slapping an 'externality' tax on the Oil companies active in the Gulf.

According to Tim Harford, author of the bestseller 'The Undercover Economist', externalities are the off-shoots of economic decisions that have side effects on bystanders. To borrow Harford's example, each time you pull out your car, you indirectly cause a negative externality since your car is emitting Carbon monoxide and people on the walks are inhaling it. Negative externalities like driving and Oil spill don't often result in any compensation offered for the costs they inflict on other people.

In order to counter the anti-offshore drilling lobby and the public sentiments that support it, President Obama has decided to pass a bill which, if passed, will see a penny tax being levied on the Oil companies like BP, Transocean, Haliburton. Yes, some might say that this is President Obama's desperate attempt to shore up the clean-up efforts in the gulf (some estimates peg the clean-up costs in the neighbourhood of $20 billion) while others might put a spin of 'Socialism' on Obam'a's move. At a certain cerebral level, however, it's a valid attempt of making the Oil moneybags payback for the damage they cause to the environment, albeit, inadvertently. I guess taxing the externalities in this case is the only way to keep the unbridled capitalism on a leash.

Party or not to party?

Amitesh Jasrotia — 2010-05-14T07:09:40-07:00

Dhoni's bewildering statement in the post-match conference and the subsequent eruption of outrage over IPL parties have thrown open the can of worms. Dhoni now finds himself on a sticky wicket after that uncalled-for statement-cum-excuse. On one hand is the BCCI who has unmatched ability of making scapegoats of people and on the other hand is the media which, these days, generally acts as a duct to unleash the kneejerk, emotional reactions of people. Amidst all this chaos, the moot question still stands - is IPL to be blamed for Indian team's debacle in T20 world cup?

It's quite easy to take sides on this issue. Those who aren't happy - and they are in majority - with Dhoni and co. would simply bring up last year's performance and the fact that it was again after a protracted bout of IPL that Indian team went into the world cup and lost, consequently. It's a pattern, afterall. And, people love theories based on patterns. Those who are on the other side of the barricade - a fringe side - will simply accept the unflinching nature of the T20 beast. Even a heavily armoured side like South Africa also couldn't make it to the semis. Pakistan, whose players were conspicuous absentees in the IPL3, made it to the final 4. The argument that IPL parties spoiled Team India's party at the world cup is perhaps as baseless as the argument that Pakistan won the last world cup because they didn't play in the IPL. And if Pakistan wins this year, then rest assured, all hell is going to break loose. Media's inherent tendency to see patterns even when none exist is going to shake up a lot of players.

BCCI needs to plug the genuine chinks in Indian cricket's armour rather than going on a witchhunt expedition every now and then. Players' fitness is one key issue. Also, their inability to play the short-pitched deliveries. The need here is to eliminate the real problems plaguing team India; acting on or reacting to what is said, shown or written in media will only lead to self-created chaos.

Coal India IPO faces Unions blockade

Amitesh Jasrotia — 2010-05-09T09:51:46-07:00

Coal India Ltd.(CIL), the world's largest coal producing company with the proven reserves amounting to 63 billion tonnes, is slated to hit the primary market tentatively in the month of July. CIL's might be the biggest ever IPO to hit Indian markets with an estimated size of over Rs. 12,000 crores. However, the proposed issue might not see a smooth sailing as Unions get ready to confront management.

CIL, on its part, is doing its bit to woo its employees. Country's largest employer is doling out free demat accounts in its endeavor to rally everyone around in the upcoming issue.

IPL fiasco: No moral high ground for BCCI !

Amitesh Jasrotia — 2010-04-27T00:14:34-07:00

With all the sleaze surrounding IPL, some questions invariably ask for rapt attention and need to be answered by those who claim to be the guardians of cricket in India. IPL's now formerized Commissioner Mr. Lalit Modi has been circumlocutorily hinting through his 140-character communication that he has been a victim of witchhunt. No one who has followed Indian Cricket for years can deny the involvement of dirty money in the system. Allegations of match-fixing and betting are not new. So, the latest act of malfeasance shouldn't really surprise people. Loads of slush money floating around in the system coupled with dearth of stringent mechanisms makes for a highly seductive bait and Modi, by no yardstick, was an epitome of honesty. He fell for it.

However, what is really dubious is the role of the nervecenter of Indian cricket - the BCCI. There are many issues/questions related to the role of BCCI that stick out like a sore thumb and beg to be answered:

a) Shady deals worth millions of dollars took place right under the nose of BCCI and no one in the BCCI or the IPL governing council had a clue? You've gotta be kidding!

b) Figures like Sharad Pawar, with whom Lalit Modi was almost like hand-in-glove, never had a sniff of the latter's conducts of impropriety?

c) It was public knowledge that Suresh Chellaram, co-owner of Rajasthan Royals franchise, was related to Lalit Modi. It's simply indigestable that BCCI woke up to this fact after 3 years. And if BCCI says that Modi had failed to declare the stakes of relatives in IPL, then this only makes the role of BCCI even more questionable. Either BCCI had put itself in the hibernation mode for the last 3 years or they are simply trying to weave a spectacular cover-up.

d) Last not but not the least, how will BCCI come clean of the issue of the 'conflict of interest' involving its functionary and simultaneoulsy, the CSK franchise owner N. Srinivasan? How's BCCI going to claim the moral high ground on this one?

Yes, Modi should be impeached but who is going to put a noose around the BCCI? I hate to see the Government's intervention in the domain of cricket but given the way things are, it only looks plausible. If nothing happens, then this fiasco might end up being about the cover-up, not the crime.

Now, REC goes the NTPC way

Amitesh Jasrotia — 2010-02-23T22:52:12-08:00

Government's often touted concerns about the participation of retail segment in PSU issues have started to sound a little flimsy. NTPC's failure to attract retail investor population has been quite sadly backed up by REC. Of a total of nearly 6 crores shares available in retail quota, only 1.3 crores were subscribed to. In percentage terms, that is a paltry 23%.

It won't be long before the jury is out again on the cause of REC debacle. However, instead of going witchhunting, I believe the Empowered group of Ministers need to look inward and conduct a simple root-cause analysis. Hell, you don't even need to have investment bankers in the room to tell you what's been going wrong with PSU issues. There is not an iota of doubt that PSU's, in the last 5 years or so, have brought about a substantial change in their perceptions. From being having an image of also-rans in the corporate arena, several PSUs have now reached a revered status, courtesy, the awe-inspiring performances even in one of the worst slowdowns ever.

Now PSUs may have been going from strenght to strength in their operations, but what has failed to change is the risk perception of retail segment, especially, in the aftermath of the financial crisis. A reasonable discount on the further issues (read: reasonably priced) could have had small investors participating in throngs, no pun intended. When markets are range-bound, and the floor price* of the issue is like a next door neighbour to the current market price, expect no miracles. Let's face it. A majority of retail investors interested in a public issue wants to subscribe and book profits on listing. Amongst this vast majority, there would be a fringe of long-term investors, too. Many of these investors would be holding on to the stocks from the initial issue and in case of a decent opportunity/discounted rates, I make an assumption, they would lap up even more. So, Government and the PSUs, in totality, have nothing to lose since the share flippers will in any case flip out and long-term investors would always stick along.

The onus is with the EGoMs to change this apathetic attitude of retail segment towards public issues. NMDC's FPO is next in the line, and, if things don't change for better, then the Government and i-bankers should stop wooing small investors and concentrate on entities which matter - the QIBs.

NTPC FPO - A disaster with retail segment

Amitesh Jasrotia — 2010-02-06T11:34:02-08:00

In my last post, one day prior to opening of NTPC FPO, I had cast my suspicions on it success with the retail segment. Quite sadly, the issue hasn't come close to the expectations from a PSU issue. And, now when the issue hasn't delivered up to the expectations of the Government - retail segment subscription being less than one-fourth of the allotted quota and QIBs saving the day - a witch hunt has been started probing into the likely causes behind this fiasco. Irrespective of the conclusions that would be drawn in the aftermath, the question whether this FPO was indeed a well-structured product needs to be answered first.

Government's planning with all its emphasis on disinvestment program and retail participation has actually come a cropper when it comes to gauging the minds and hearts of small investors. Stock markets, after staging an impressive comeback, have continued to plummet in the last three weeks almost in a precipitous fashion. For some strange reason, it seems to me that neither the EGoM nor the consortium of elite i-bankers could read the ramifications right. The floor price of the issue was frozen at Rs. 201; this was also the offer price for retail and HNI segment. Cut to 5th February - the last day of the issue - NTPC's counter on the secondary market closed at Rs. 205. Why would someone who has only got to buy 50-100 shares invest in the issue when the variance between the offer price and the market price is as thin as a wafer-cake? And worse yet, with markets still on a downhill trip, and with the monkey of disappointing public issue on its back, NTPC stock might just drop more than expected. So, those who wanted to subscribe but couldn't need not despair because they haven't missed anything. Wait for next week, bad news from Eastern Europe is still flowing in. Who knows? A couple of bond market collapses mixed with weak market sentiments and there you are - proving yourself to be smarter and wiser than investment bankers.

The truth of the matter is that there were no incentives for retail segment to invest in this issue. A floor price in the range of 180-185 might have done the trick. Hope the Government and bankers get it right in the next round, as for now, it's too late.

NTPC FPO - Subscribe or not to subscribe?

Amitesh Jasrotia — 2010-02-02T08:33:44-08:00

The behemoth of power generation sector NTPC is ready with its FPO (follow-on public offer). As bidding opens tomorrow, there is something about this issue that sets it apart from any other issue hitherto. This is the first public issue in which 50% QIB portion of the total allocation would be auctioned where as the 35% retail portion and 15% HNI portion would be sold at a relative discount. QIBs will have to start bidding from the floor price and the higher they bid, the higher are their chances of getting substantial allocation. Towards the end of auction, EGoM (Empowered Group of Ministers) and investment bankers will decide on a minimum and maximum price. Any bids higher than the maximum price would be cancelled. This kind of auction is called French Auction.

As I write this, EGoM and a group of i-bankers have zeroed in on Rs. 201 as the floor price of the issue. Now the dilemma, most retail investors are going to find themselves in is whether to subscribe to this issue at the floor price or wait for market to slide further and then subscribe. Ministry and I-bankers, three weeks back, were in discussions over a floor price of Rs. 250, thus, bringing the mop-up money to be around Rs. 11,000 crores. However, due to the current slump, the consortium of bankers has quite reasonably set the price at Rs. 201/share.

The only thing that may set back the expectations of the ministry and the investment bankers is the lack of any swashbuckling performance by the stock in recent times. Contrary to expectations, NTPC's performance since 2008 hasn't been close to mediocre. Yes, for those who have stayed invested since its IPO would have bagged spectacular returns by now. But, let's say, if you had invested Rs. 1,00,000 in NTPC two years back on this day, i.e., Feb1, 2008, your hard-earned money would have grown to Rs. 1,00,270 today. Yes, that's a return of 0.27%. You don't have to be a genius to realize that you would have been better off investing in bank FDs and other fixed income instruments. Nevertheless, NTPC's been touted as a long-term investment, courtesy its status as Asia's largest power generator and a strong balance sheet. In my opinion, any investor who can't hold on to this stock for at least 5 years should stay away from this issue.

Where is the bad news ?

Amitesh Jasrotia — 2010-01-07T11:42:03-08:00

Indian stock markets have started year 2010 in a peachy fashion. Both Sensex and Nifty continue to inch their way towards the historical highs of year 2007. Except for some degree of anxiety on interest rate hikes and on eventual yet systematic withdrawal of stimulus, Indian markets look in fine fettle. Again, with the exception of telecom, all other sectors look to boom. And this is what I find quite unsettling - absence of bad news. There is no detrimental piece of information that could induce jitters in investors. Or is there?

It's an acknowledged fact in markets that the damaging information, before full eruption, is always hidden behind a facade. Now, this might sound like a weird analogy but I find it quite akin to those ladies in a masquerade ball wearing lorgnettes. On the face of it, they all look very seductive, however, the truth underneath is always shrouded. Same goes for the stock markets or for the stocks, to say the least. Picture the current scenario. Metals as a sector, after having rebounded sharply northwards in the second and third quarter, has already received a thumbs up from the analysts for the final quarter. Autos are on a roll. Sugar, Cement, Banking, Realty are all looking good. This anticipated jubilation has started to gnaw at investors' foresight and circumspect approach. How? Well, observe the trading volumes in some of the abhorrent penny stocks, of late. While I grapple with the absence of bad news and wonder how everything is so hunky-dory, simultaneously, I remind myself of Warren Buffet's witticisms about such euphoric times.

War of the Bourses

Amitesh Jasrotia — 2009-12-28T09:48:52-08:00

What should have been a cooperative competition between India's two stock exchanges has turned into a bizarre game of oneupmanship. Asia's oldest stock exchange BSE has been at loggerheads with the newfangled NSE for some time now. This battle only got intense with the change in the top echelons at BSE. Madhu Kannan, the new CEO of BSE had turned on the heat on NSE ever since his selection to the coveted post.

In a recent twist, however, both the exchanges have embroiled themselves into a situation that could have been best avoided. BSE after having failed to leverage its brand equity has been trying hard to wrest volumes in Derivatives segment from the leader NSE. When BSE advanced the trade timings by 10 minutes, NSE not only followed suit but later, temporarily, outdid the oldest Asian bourse. As I write this piece, both the exchanges will be opening one-hour in advance from January 4, 2010.

The consequences of this grotesque conflict could be far-reaching for small-time brokerage firms and for those who play on margins. For small brokerage firms, this move is an ostensible kick in the groin. Longer working hours would be accompanied by higher operating costs which small brokerages will find hard to digest. What I found quite amusing was the manner in which regulatory watchdog SEBI absolved itself of any role in the issue, whatsoever. One can only wonder whether this was a calculated decision on SEBI's part allowing scope for consolidation in brokerage space.

What are they thinking?

Amitesh Jasrotia — 2009-12-23T09:27:07-08:00

Anyone who knows the ropes in business slightly would be abreast with the kind of fix the state-run Oil marketing PSUs (HPCL, BPCL, Indian Oil) find themselves in every year. According to the latest news, oil companies are staring at an estimated loss of over Rs. 45000 crores in this financial year. I believe panoptic subsidies have not only plunged the state-run companies into losses but at the same time have made these enterprises inefficient. Come to think of it, what kind of business would sell its products below its cost and for how long?

Now, every year, Government compensates the Oil PSUs for their under-recoveries (a euphemism for revenue losses) by way of issuing them bonds. However, this time around, Government has opted for cash instead of bonds. Now, technically speaking, it doesn't make any difference whether the Government issues cash or bonds. Nonetheless what matters is that bonds can provide a short-term cushion to the Government (since Oil companies will only redeem them after a certain period) whereas the issuance of cash will only strain Government's increasingly worsening fiscal deficit. Meanwhile, as I write this, the debate is on as to how the losses of Oil marketing PSUs should be calculated. This one has caught my fancy and I will be following it in the weeks to come.

Dubious Dubai goes Downhill!

Amitesh Jasrotia — 2009-11-30T11:26:25-08:00

It's a random world - a world which we not only don't understand but also the one which we will perhaps never understand. Just when everything seemed to be getting back on track, life once again takes a U-turn, thus, mocking the soothsayers who had declared the end of recent crisis. In the last 8-10 months, bad news from Dubai was coming in thick and fast. It was just that Dubai's plush prominence on the global landscape, somehow, seemed to extinguish the underlying sparks near the tinder box called Real Estate.

Though emerging markets would hope that this flare-up doesn't have a fatter tail, the truth is that there would be an impact. The intensity of that impact might be debatable, though. Whether it raises a whiff of dust or creates a whirlwind remains to be seen. For one, capital flows to the emerging markets are going to take a hit. Countries such as India, for which, UAE is the top export destination may suffer more. Also, not to mention the consequential impact on remittances from Dubai, too.

Dubai's vertical growth in the last one decade or so has been truly bewildering. Of all the realty Behemoths, Dubai's was one of the biggest and its fall was expected to create a huge noise. According to an estimate, Dubai owes an external debt of $80 billion which is 103% more than its GDP. If I have to draw an analogy - Dubai's real estate market at present is like an overheated stock with a towering leverage and highly skewed debt-equity ratio. Investors of all classes might prefer to stay away from it unless it gets down to fair valuations. So long, Dubai!

Peter England sports shoes- Who's interested?

Amitesh Jasrotia — 2009-11-26T21:16:02-08:00

Perceptions are arguably the lynchpin around which the whole world of marketing revolves. Merit of having strong perceptions has been proven one time too many. So has the consequences of deviating from established perceptions. History is proliferated with instances of companies tampering with existing perceptions of their brands. Much of this is only to pick up short-term victories at the expense of long-term gains.

I came across this news story the other day that a lot of companies are eyeing the fast emerging sportswear market in India. For the starters, sportswear market is estimated to be around Rs. 35000 crores and is expected to grow at a CAGR of 45% in the years to come. It appears only logical if a formal men's wear brand like Peter England also declares its foray into this segment. However, it remains to be seen whether Peter England's marketing brass gives their brand a 'logical extension' or they decide to go against the grain and create a new brand. Positioning gurus Jack Trout and Al Ries have asserted the creation of a new brand while venturing into a new segment, time and again. Their idea: Perceptions are hard to change; perceptions always trump facts. Come to think of it, who would be interested in buying a Peter England sweatshirt or a Peter England pair of sneakers? Peter Enlgand stands for only one thing in mind and that is, formal shirts. Well, I won't even buy their trousers, let alone their sports apparels. Nevertheless, it's going to be interesting to see how they resist the temptation of not using an existing, established brand name.

MoCap fatigue lands me in Uncanny Valley

Amitesh Jasrotia — 2009-11-21T22:55:10-08:00

It may sound a little weird but Robert Zemeckis' latest movie 'A Christmas Carol' has left a distasteful feeling somewhere inside me. Robert Zemeckis, In addition to being the brains behind such award-winning movies as 'Forrest Gump', 'Back to the future' trilogy and 'The Polar Express', is known for his penchant for Special effects, especially, motion capture technology.

For the uninitiated, with the help of Motion capture or MoCap techniques, filmmakers record the live actions of human actors and then render them to animate digital character models in 3D animation.Motion capture brings 3D digital characters to life with a mathematical precision. Quite oddly, it was this photo-realistic nature of MoCap that gave me a sickening feeling. Why? I had no clue either before I stumbled upon Uncanny Valley Hypothesis. When robots/3D humans look and behave like actual humans, it causes a feeling of revulsion among some human observers. This hypothesis is called 'Uncanny Valley Hypothesis'.

Motion capture is a groundbreaking technology, and it will be unfair if I hang the whole blame only on technology. Zemeckis' has also failed to provide a meaty storyline to the movie. A dreary, slow-as-a-snail script compounded with overemphasis on special effects make for a heady cocktail of a movie.

Yet another entry for Murphy's Law

Amitesh Jasrotia — 2009-11-18T00:36:54-08:00

For weeks, I had been looking for James Surowiecki's 'The Wisdom of Crowds'. After having combed all the big bookstores for this book, I, finally, got my hands on it at a low-key bookstore in my vicinity - place that I walk past everyday but never bothered to visit until the last weekend. I am not sure whether this observation has the potential to be added to ever-increasing list of Murphy's Laws. However, seemingly, it works for me all the time.

"It's always the place I think of first and end up visiting last, where I usually find the stuff I am looking for."