satire

A Cryptic Cocktail: Mixing Cricket Commentary with Stock Markets and Investing

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The wealthy man living in the sprawling bungalow near my house with his BMW and Mercedes speaks very sparingly. And whenever he speaks, it is quite cryptic. So one has to really concentrate when he is speaking, and think hard after he is done. So the other day when my South Indian friend Swami and I were just walking across from my house to get a coffee, we saw the wealthy man taking a walk with his dog. He knows Swami, who by now has had a number of ‘question-mark’ conversations with him in the past. So he wished me good evening, and this time before Swami could ask him anything, he just told him with a wry smile, “The situation is tense but under control.”

I first heard this term being used by the Mumbai police during the Mumbai riots in the early 1990’s. It was so conveniently cryptic and became so popular that the Home Ministry started using it. Now I think it has become the de-facto phrase used by government officials, specially Home Ministry ones, to describe, in an imprecise way, what is happening whenever there are riots, earthquakes, floods, strikes, accidents or anything remotely like those.

So I was a bit surprised when the wealthy man used it, not quite clear what he was referring to. So I took the liberty of asking him if he had some time for a quick coffee. The wealthy man does not easily say yes, but this time, he surprisingly did – so in a few minutes, we found ourselves chatting with him over a coffee.

After an awkward silence for a few minutes, my South Indian friend Swami had to ask something. He tends to lose his patience with Jigneshbhai, but with the wealthy man living in the sprawling bungalow, you cannot do that. So in polite language, he asked him for advice on the current state of the markets.

The wealthy man replied, “This match is very much in the balance now”. And added in his baritone voice, “It is not going to be easy for the batsman to get bat on to ball on this pitch.” Further, neglecting our confused looks, he continued, “It will provide assistance to the bowlers, but if the batsmen apply themselves, one can play a long innings.” I knew he spoke sparingly, and was cryptic most of the time, but this seemed out of context. So we thought he probably misunderstood the question – perhaps he heard matches instead of markets.

So Swami tried to explain – “Yes sir, but I was referring to the markets, not to the Champions league matches. I have already lost so much, would be great if you could throw some light on what to do next.”

This time, we thought we will hear some gems of wisdom. But the wealthy man continued. “Well, given the conditions, it should be good toss to lose”. This was getting a bit out of hand. Even I was starting to wonder what was happening here. But Swami was now getting a bit aggressive. He clarified, “Sir, I am losing money everyday in these volatile markets. You have been playing the markets for so many years. Should I sell and get out now?” Again with eager eyes, we were looking for some pearls of wisdom this time. And the wealthy man said, “We had a cracker of a game today, but at the end of it all, one will have to say that the team that kept its nerve better prevailed”.

This was getting too much to handle now, even for me. We were starting to fear if the wealthy man had lost it – maybe growing age and the stress of his wealth getting eroded at this stage in life was getting to him. Or perhaps he was watching too much of TV, and business and sports channels were getting mixed up in his head. Swami gave me a strong stare, almost warning me that he is going to stop having coffee with me. As if handling my broker friend Jigneshbhai was not enough, now he had this wealthy man from the sprawling bungalow to make sense out of.

So we started wrapping up with our coffee, and hoped that this was it. It did not seem to make sense to press the point now. Not wanting to take the discussion further, I asked for the bill, and while waiting for it, asked the wealthy man which team he was supporting in the Champions League. I casually added, “The Royal Challengers seem to be up to it this time, but you never know with them. The Mumbai Indians could spring up a surprise.”

I thought this conversation was now making sense. We were both talking about the same topic. At least we will leave on a sober note. No more mixing cryptic cocktails of cricket and markets, I thought. So as we left, we were stumped when the wealthy man threw another cryptic one. “Indeed, in these conditions, I am in support of investing in wonderful companies with good long term potential. For the true fan, this pitch is just what the doctor ordered.”

Nonsense Generator: A Step by Step Ready Reckoner to become a Market Expert

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For individual investors who have ambitions to become market experts, I have devised a step by step approach that can be followed by almost anyone. No background in investing is necessary, but a learning attitude is important. It does not guarantee success (like market disclaimers!), but it is a sure and steady way to market expertise.

For those interested, here are the steps involved:

Step 1: Take any word in column 1 and another word in column 2 from the attached Excel sheet to form a cohesive set of meaningful terms. Like “Macro Environment” or “Monetary Policy”.

Step 2: Repeat step 1 to come up with two or three such cohesive meaningful terms. You can add more, but beyond two or three, it can tend to get difficult for people to believe that you are a genuine expert. So let’s say, you choose “Macro Environment” and “Global Uncertainty”.

Refer to the Excel file nonsense to practice steps 1 and 2.

Step 3: Now assuming you have mastered steps 1 and 2, add a few verbs to this term, and perhaps also a few adverbs after the term. This is actually something that cannot have copy-book instructions. Hence I do not have a table for it. But that’s where experience counts.

So finally after adding some non-core words to your core terms, you should come up with a nice expert sentence like: “Given today’s macro environment, lack of foreign liquidity and global uncertainty, going overweight is not recommended. Though long-term valuations and structural factors are still favorable.”

Or you could come up with something like: “The market may be going through technical consolidation, and fundamental research may not hold ground. Unless global cues are favorable.”

(Expert Terms underlined above)

Caution: Step 3 is very crucial to ensure that you have the right mix here. Do not go overboard in using the terms here. There is no sure-fire formula for this and can only be mastered with creativity and experience. It is a bit like cooking. An expert cook always knows what are the right ingredients and what should be their proportions so that the dish does not get spoilt. So keep practising step 3 till you reach perfection.

Step 4: Finally, any writer can write a speech, but it takes a true expert to deliver it in all seriousness. That is what step 4 is all about. Deliver it in true seriousness, preferably with a ‘lost in thought’ look, as if you actually understand what you are saying. That is the sign of a true market expert.

PS: For those who cannot master the steps just based on the notes above, practical demonstrations of step 1 to 4 are available mostly 24 by 7, but certainly between 9 am and 4 pm Mon-Fri on any business channel on TV.

बैठ जाइये: Takeaways from Parliament’s Lokpal Debate

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‘All of humanity’s problems stem from man’s inability to sit quietly in a room alone’ – said Blaise Pascal.

On those lines, there might be some truth in extending it a bit – ‘All of a nation’s problems perhaps stem from their parliamentarians’ inability to sit quietly and agree in a room together.’ If only more of our parliamentarians could agree on solutions to more of our nation’s problems more frequently, a lot of our problems would perhaps be non-existent, or definitely solved faster.

At the very least, the problem that our speaker faces daily of having to repeatedly keep saying “बैठ जाइये” so often would definitely go away. Pity the speaker of the house trying to control the proceedings of the house – specially on days like Friday of last week, which is, perhaps, more like a normal working day for Parliament. It was evident that whenever someone would stand up to ‘make a respectful submission’ or a ‘humble point’, all it would result in would be noise from some section of the house, followed by a different version of “बैठ जाइये” from the speaker. Honestly, how many different ways can you say “बैठ जाइये” after all? It seems that there is an inverse relation between the number of “बैठ जाइये” pleas made by the speaker and the quality of output from the house. One could see that on Friday, after all the constant “बैठ जाइये” pleas, finally the house was adjourned, and on Saturday, with only a few intermittent “बैठ जाइये” pleas, the house achieved some meaningful debate and reasonable output. How I wish we had more such occasions where parliamentarians could sit in peace and agree more!

For the past two weeks, common citizens – led by an uncommon man – have found it much easier to follow “बैठ जाइये” instructions. They have all been ‘sitting in peace’, in protest silently, non-violently – all agreeing on the common need to root out corruption at all levels in the country. Somehow, they have also presented a solution to the problem in the form of a bill, that some agreed on, some did not, but everyone felt was on the right lines at least. And if a whole country, well almost, but a significant part of it could do so, it was high time that a set of 540-odd elected representatives could find a way of sitting quietly and agreeing in a room.

Well – it looks like they did achieve a way of doing that on Saturday. But the people outside are still not convinced that this is real. “यह तो कमाल कर दिया” – said my broker friend Jigneshbhai, also a supporter of the India against Corruption movement, just returning yesterday from one of the rallies. May be it was a one-time miracle, may be it was not. Perhaps the ones outside the house will agree, sit and protest again, maybe when they realise that the ones inside are not able to sit and agree again.

And then, unfortunately, the problems for the speaker are sure to start again. She will have to find new ways of saying “बैठ जाइये”. I have a suggestion. May be she should change it, and say “बैठ जाइये नहीं तो अन्ना हजारे को बोलूंगी”! Who knows – maybe that will work and we will have miracles like Saturday again!

The Government on Lokpal: Giving Precedence to Form over Substance

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A few observations I made over the past few days, since Anna Hazare went on a fast for a strong anti-corruption law.

That the government’s recent responses to Team Anna and the public demand for a strong anti-corruption law seems to be like that of someone asking a dying man to fill a form at the hospital.

That someone needs to ask the government, similar to the way Munnabhai asked Dr Asthana in the movie “Woh casualty ke bahar aadmi mar raha hota hai, to usko form bharna zaroori hai kya?”

That the government still does not get it that it must give precedence to substance over form, intent over procedure, at least for something as important as setting up a strong Lokpal.

That saying that ‘the Delhi Police is following procedures to maintain order’ and ‘Parliament should be allowed to make laws’ look like giving more priority to procedure over intent.

And responses like ‘present your views to the standing committee for consideration’, or ‘a private member bill cannot be introduced when there is already a government bill introduced’, or ‘the legislative procedure will not allow the bill to be passed in this session of parliament’ – all of these are akin to asking people who are already desperate for change and action – ‘to fill forms’.

Like the government is looking more and more like Dr Asthana from the movie, bashing its head over how to handle the non-violent rebellion from a group of  ‘common citizens’ who have garnered the support of thousands more.

That the government still does not understand that decent, law-abiding, normal citizens of society generally do not join protests spontaneously on roads. That despite fully knowing that it is not the ‘proper’ thing to do, there must a strong reason for their doing so, which the government needs to fix.

That it is a clear problem of giving precedence to form rather than substance, and procedure rather than intent.

And that the more the government focuses on procedure, the more its intent will be doubted.

That this is not the time to think about vote banks, urban versus rural, communal versus secular for the government. The people who are fasting, joining the protests and supporting the movement do not seem to be thinking about it.

That while some people may think Anna’s procedure is not right, most people are not questioning his intent.

That while some people may think the government’s procedure is right, most people are questioning their intent. Which is not good news.

When It Rains, It Pours: What to do when things go wrong in a heap

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My South Indian friend Swami had a new reason to complain since this morning – the rains. “I really got caught in the rains today – it was really bad, the weather, roads and traffic” , he told me as I met him today.

Monsoon in Bangalore is, at best, mild, so a steady bout of rain in the past 48 hours or so was enough to set the tone for a sad, wet morning for him, apparently. Unlike in places like Mumbai or Chennai, no one carries an umbrella in Bangalore. So the people with two wheelers stop in underpasses or under the remaining trees when it rains, and people with four wheelers crib about the two wheelers, and their own hardly replaced wipers when it rains. Every one else who is not on the roads and in some IT office complains about the roads and the traffic. And every one else who is not on a two-wheeler, four-wheeler or an office complains about how Bangalore is no longer what it used to be, and how it got spoiled due to the people with two wheelers, four wheelers and offices.

In Mumbai I have not seen people complain so much about the rain. The rain is heavier, the traffic is perhaps worse, and the distances definitely longer. And when it rains it really pours. So the Mumbai person resigns himself to the reality of losing a few more minutes of his daily life to his commute. Hence, people complain about the trains every year, and how they either stop or run a few minutes late when it rains. The intensity of rains in Mumbai is progressively captured when the Harbour line first gets closed, then the Central line, and finally when the Western line closes. That is when it must have really poured. Once in a while, you have really bad days when every one stays at home, or those who left early, walk back home in knee-deep water.

I may be wrong here, but like the rains, sometimes I see the same thing in the happenings around us too. When it rains, it really pours. Sometimes you get caught in the downpour unexpectedly.

So when you have Dhoni and his cricket team clicking well, you thrive on seeing them beat Australia in the quarterfinals, Pakistan in the semifinals and Sri Lanka in the finals to become World Champions. And then three months later, you have them losing Test matches badly; first by 196 runs, then by 319 runs and then by an innings and 242 runs. So when it rains, it really pours – on both sides perhaps. Looks like the world thrives on extremes.

So when you have an honest, educated, distinguished person, almost a non-politician returning to power as Prime Minister, it seems to everyone like the return of the dream team for Indian politics and economics to take us on the path of prosperity where India ‘lived happily ever after’. And then, two years later, with the economy facing problems and corruption on his back, he seems like a civics teacher with no voice, telling everyone how parliament makes laws, or an economics professor who knows the theory, but cannot quite put it to practice.

Any my broker friend says the same happens in the markets too. “When it goes up, it just keeps going up, and when it goes down it just keeps going down”, he says. But then I reminded him, “But it hasn’t gone anywhere for a while”. “Well”, he said, “when it does not go anywhere, it just does not go anywhere. Everyone is waiting for the flood or drought.” Hmm, may be, I thought.

So I told my south Indian friend Swami not to complain about rains – because it does look like when it rains, it really pours. “So I got it” said Swami – “so what’s the big deal, I still don’t like it that way. With all of us getting sticky and wet and slippery. Got to find a way out to deal with these rains!” “Do what people in Mumbai do”, said Jigneshbhai. “Carry an umbrella. Or like the ones where they don’t get enough municipal water – get your buckets out. Or better still, do this. Take a break and go to Khandala or Lonavala. At least you will enjoy the rains.”

What does the US Economy suffer from? Diabetes or Heart Disease

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I often wonder what is a worse condition to have, diabetes or heart disease. And what is easier to live or die with.

Like the wife says it is easy to fix heart disease if it is only that. You may be able to detect it before you get a heart attack, and do something by quickly having an open heart (by-pass) surgery. At least for a while, that’s enough.

And the wife also says a diabetic may not seem very ill, but must realize he is suffering from a chronic condition that has no cure. The only cure is to get out of that condition. And it is only possible to get out of that condition, if he eats and exercises well, and also takes the insulin and medicines.

And it is tough being a diabetic, specially if you are unable to manage it. The first step is to accept that it will be a chronic condition that you can live with and manage. But that does not mean it is not serious, and will not affect you eventually, if you do nothing about it.

Like I sometimes feel that the US Economy got a heart attack 3 years back, and the doctors of the economy thought this needs quick fixing. So they did something like a quick and urgent by-pass surgery, so that the world does not go into a seizure. That it was required at that time to save the patient, and it actually did.

Like it worked for a while, but seems like there are blocks in the heart that keep coming up every now and then in the US and other Western economies. And every time you do an angioplasty or a by-pass surgery here and there, you seem to have fixed the problem.

But it seems that the real cause of the heart disease is a chronic spell of diabetes over the past 3-4 decades. When people and governments gorged and gorged, despite high levels of sugar, and now are unable to understand why the heart disease is not getting fixed.

Like every time they go on a diet and insulin for a while, they seem to be getting back into shape, but some part gives up as it is not used to it, and asks for more food. And it seems life threatening every time, or does it?

Like the doctors and patients need to realize that it is diabetes. And diabetes is not something that can be fixed overnight. In fact it cannot be fixed at all. It can only be lived with and managed. It needs a change in habits and lifestyle. But if you do not do anything about it for 30 years, don’t be surprised if your eyesight becomes bleary.

The only cure is to manage your diet, build an exercise discipline, and pray to God that everything gets better. It eventually will, but that’s the only way – time and discipline.

And you may still need to keep checking your heart to look for impending heart attacks.

As Buffett said in one of his letters, “No sooner is one problem solved than another surfaces—never is there just one cockroach in the kitchen.”

Diabetes is the lurking cause, heart disease is the effect.

And so I met my broker friend and told him about my theory excitedly that the Western Economies seem to suffer from diabetes, and the doctors of that economy are giving them medicine for heart disease. And how it won’t cure the economy and it is the wrong medicine due to a wrong diagnosis.  He just flashed a wry smile at me, as if I was the last person in the world to come to that conclusion.

In a worried tone, he said, “That is fine. Just hope and pray that it is not Cancer.”

The Good, The Bad and The Ugly: Observations in a World of Divergent and Opportunistic Opinions

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good-bad-ugly“Are you a vegetarian or non-vegetarian?” asked the waiter at the hotel to my South Indian colleague Swami. This question always confuses him. “I am a vegetarian mostly, but I can eat chicken, except on Tuesday and Friday. So it depends on what everyone else is ordering”, he replied. Such responses always confuse waiters in hotels, who have a simple way of classifying people. According to them, there are two types of people in the world – vegetarian and non-vegetarian. Alas if only it was so simple – my South Indian colleague Swami being a case in point.

“There are two kinds of people in the world, those with loaded guns, and those who dig. You dig.” Clint Eastwood made this dialogue immortal in the movie “The Good, The Bad and The Ugly”.

It seems to me that there are two types of people in the country, or maybe the cricketing world, at least for now. Those who think that MS Dhoni was right in calling Ian Bell back (in the Trent Bridge test), and those who feel he was stupid to show such generosity on the English team.

Among those who think he was right, again there are two groups – those who think he was a true statesman of the game, doing it to uphold the spirit of the game; and those who think he was just a pragmatist, and hence did it to ensure that the Indian cricket team’s brand value (and hence the money they earn) does not go down.

And then there are those type of people (mostly media commentators!) who change their views according to the situation. Those who initially started justifying the morals of how Dhoni was right in appealing for the run out, and how the spirit of the game itself has changed in today’s world of cut-throat professional cricket; and later changed to applauding Dhoni for his generous act on realising that Ian Bell was walking out to bat again.

There are some other ‘two types of people’ in the world today too.

Those that think Breivik, the person who fired at and killed 70 odd people in Norway, was an example of emerging, right-wing, ethnic extremism in Europe, and those who think it was not that – that it was just the delirium of a madman.

Among those who feel he was an extremist, again there are two groups – those who are shocked by the scale and brutality of the murders irrespective of who did it, and those who are shocked because the killer was not an Islamic terrorist, but a Christian Westerner who hated the tolerance of multiculturalism.

And then, there are those type of people (mostly Western politicians!) who change their views according to the situation. Those who started condemning the killing as another example of ‘acts of terror’, and then called it a madman’s act after realising that the killer was not an Islamic terrorist.

There are two types of people in the markets too.

Those who think long-term fundamentals-driven investing is the right way of making money in the markets, and those who think there is nothing like long-term, as all of us are dead in the long-term – so short-term technicals-driven trading is the way to go. Those who invest for wealth creation, and those who trade for income generation.

And then there are those type of people (mostly Brokers and people on business channels!) who change their views according to the situation. Those who say investing is the way initially, and then, when the markets go up tell us to become traders. Or those who tell us to make money as traders initially, and then, when the markets go down, ask us to become long-term investors.

So it seems the world is made up of two types of people with two sets of clear but divergent views. And then, there is a third type who change their views depending on what suits them; but who somehow seem to matter and drive their worlds.

And finally, there is a fourth category. That is the type of people who have no view as such, perhaps the majority, depending on the arguments between the first three types to form an opinion. If you are neutral and have no view, your individual view probably does not matter much, and is there for the taking to be influenced. You are probably the common man with no voice, and in the markets, you are probably the retail guy with no choice. Like my South Indian colleague Swami, you are dead meat even before placing the order!

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