I Exist

Well that's about two months since I posted last. Given my irregularity these days, you are not even going to ask me what happened. I give it to you there! But I will still rant on what I had been doing all these days.

Of course you know I have been busy organizing world's information and making my home. The third thing is what I want to update you on.

The better half has started a blog. It is called All About Presentations. You can access it here. If you are even remotely interested in presentation design or making presentations, this site is going to be of immense help! And I am taking care of the blog - hunting hacks, tips and tricks around for it.

I am wondering something about that blog - even though it has had so many visits and pageviews, why are the comments so low? Can you figure out whats amiss? Gotta fix that one soon...

Till we meet next...

~*~ Bhars

Trip to Puri

We had planned to go to Puri immediately after our marriage in January! This plan made my sister and cousins scrap each other on orkut saying what kind of a 'pazham' I was to go to a pilgrimage place for honeymoon! By the time I got married, I was unwell and the trip got canceled. May be I should say postponed to September.

After arriving at Puri and checking into a hotel, it was around noon we went to see the Lord Jagannath. Amidst great hunger and intolerable heat, we arrived at the temple. There was a whole set of pundits who were after devotees wooing them into making pujas. Apparently that was common in that place. One of the pundits stuck to us like a leech and was bent on making us do some rituals. While I was getting irritated and tense, the better half held his calm and kept answering to all the unsolicited comments that guy gave. Finally the pundit gave up when he understood we were not the type that was going to give in.

Puri Jagannath temple is a small place (but then when you have been to a whole host of temples in the south – Madurai, Kanchipuram, Kanyakumari, Rameswaram, Srirangam, Thiruchendur to name a few and have your home in the city of 'Big' temple, every other temple will seem 'small') divided into smaller temples to give space for different Lords. Even inside the sanctum sanctorum, the devotees were not let be in peace. The leeches were still around. For example, one guy closed his eyes and lied down for a sashtanga namaskaram. One of the pundits ran and stood just in front of his head and gave blessings suddenly. When the guy got up and opened his eyes, he started demanding for money for his blessings. Blame it on the hunger, or the irritation left behind by the rude priests and stalkers or the hot sun – I hardly remember what I saw in the temple.

Post our temple episode, the better half and I went to have some food. After searching for a decent restaurant in the hot sun for more than 30 minutes, we settled for a Oriya restaurant. I should mention here I am hardly a sport when it comes to trying new kinds of food. I went to Udhaipur once and hunted for a south Indian restaurant and had all my meals in the same place hearing the scoldings of friends :D. So I go and order this Oriya food thinking I might have changed someway and that I should be open to eat different kinds of food, experience different cultures bla bla blah. Finally came a meal with rice and potatoes – 4 different ways of cooked potatoes. I managed to finish about 20% of the meal. The better half got me a packet of Sunfeast cream biscuits (I usually hate other brands - being a total Britannia loyalist) which I gulped down to add to the meal and went for a great afternoon nap.

It was 5 in the evening when I woke up and understood the best thing we had done in Puri was to choose a sea facing hotel room (even though you would get rooms at half the rent which are non-sea-facing) in Puri Hotel. The setting sun and the evening breeze were phenomenal. We went for a walk in the seashore and slowly started forgetting the frustrations of the day. As the sun set we moved away from the sea to the shopping areas. The initial idea was to just ask for a few prices and buy some stuff if they were reasonable. Oh boy, we bought a big bag full of stuff for under 500. The handloom tops and kurtas were awesomely priced. While there was bargaining that won in the seashore shops, the formal shops in the city had fixed prices – the prices were so low you wont even think of bargaining. It was some fulfilling shopping experience that filled our bag with clothes, some bags, purses, some showcase items and other junk stuff.

Watching the sun rise from the horizon is a divine experience indeed. I remember seeing the sun rise from the sea in Kanyakumari. I thought of it and both of us woke up at 5 and sat by the balcony awaiting the morning sun. But it was a day with a lot of clouds and we couldn't get a full view of the sunrise. But the slow spread of the rays made our day anyway! We went to the sea for a morning walk and started our day.

We were on our way to Konark by 9 in the morning. It is about 40Km from Puri, taking hardly an hour's ride. We went to Konark to see only one place. The sun temple. No wonder Orissa tourism has chosen this as its USP. It is by itself beauty personified. And with God watering the temple just after we arrived added as a special effect. I don't know how long it is going to stand – already lot of engineering work is being done to keep it safe. I'm so glad we went!

So are you thinking of going to Puri? My verdict is GO! A few tips -

• Stay in a sea facing room
• Be prepared for eating more. Something in Puri's air makes you hungry.
• Take an extra shopping bag. You will want to buy lot of stuff.
• Visit Konark and the beach.

Happy Journey!

~*~ Bhars

Of difficult times…

When every index worth its while comes down crashing, I suppose it is a difficult time for all who have some market investments, Vishal and Suhas included.

The past 1.5 years have been a great learning for me as far as markets is concerned. (When you have internet and no work and all social networking sites are blocked, I suppose watching the market rise and fall is a great hobby) I started investing officially sometime start of 2007. I did not know anything about the market when I started. So I stuck to mutual funds. One thing led to the other and I ended up with a bunch of funds by end of the year including a tax saver fund bought when BSE was at 21000 :) Oh yeah a demat account to trade shares was opened on 3rd Jan 2008. By end of 2008, I have seen, learnt and understood (hopefully) how the markets work! Wonder if it all were staged just for me ;-)

The stocks I thought had hit the bottom and bought started hitting new bottoms the next day. The stocks that I thought reached their peaks and exited started rallies or stayed put there! Well if only I sold the stocks I bought and bought the ones I sold, I'd have been a great investor now ;-) When I login to my demat account these days, it asks me 'Bharathy, do you really, really really want to see your portfolio? Are you sure?' and then shows me the shades of darkest reds possible!

Ever since I bought my first mutual fund, I started advising everyone I know to put their money in the market ;-) One of my managers at Dell – in spite of being a financial risk expert and years of project financing experience – says a strict no to markets. I tried to convince him it was a great way to diversify his funds… I am glad he didn’t listen to me. My dad, a wonderful banker – doesn’t have a demat account – except for managing my sister’s account once in a while. Another person I tried to convert and failed. My previous functional manager – another guy who saved his money by not heeding to my advice :D

When you see a 10K investment grow to 16K on your first fund in under one year, you tend to do that! You don’t start asking a 'Why' when you haven’t seen downsides at all... You don’t start by asking 'What is your financial objective' or 'What is your investment timeframe'. You just 'invest' at 60% per annum!!! You talk about 'concentration' putting eggs in a single basket. You start giving financial advice to every single person you meet in the cab. And yeah, one of the cab conversations I overheard – when two salesreps where talking… One said ‘stock market is a great thing. We all must start our demat accounts. Even if we get JUST 5000 per month, its extra money, no?’

When Sensex went down to 19000 from 21000, I was in a deep asset allocation dilemma. Whether to extend my loans and invest my money or just pay the loans off with the spare cash? Of course the market had a 'crucial support' at 18924 ;-) Somehow my instincts led me to believe 'even if you miss a 50% investment opportunity, you meet your obligations first' - that old fashioned scenario of giving up 'investment' opportunities to clear credit first you know! So, I finished off my earnings in paying back loans and missing great opportunity at 18000, greater opportunity at 16000 and whatever at 14000.

I loved ‘One up on wall street’ by Peter Lynch when I read it first. Now, I am thinking of making it a Bible for financial markets. When I read it in late 2007 where the markets were up up and away, some of what he says looked like a bit outdated - like pearls of wisdom from the past century. Of course this century is the technological marvel… You can just make 60-70% a year just like that! Now with sensex down at 10000 odd from 21000 odd a year ago, those pearls remain pearls instead. I also get reminded of reading Warren Buffet say most people get rich by investing in them than by trading in the stock market... May be that is true as well.

One thing that strikes me so hard over this period is the brokerage ratings - when sensex was at 21000, they predicted 28000 by year end. Now the same guys say 8500... ICICI bank was a great buy at 1200 with a target of 1400. Yesterday its price was 300 odd. Well that’s why Lynch says 'Analysis' has to be done by self. Or maybe just index investing is a good strategy without much analysis... Ya, some difficult time this is - to clarify for oneself what one wants to achieve financially!

I wonder about all those 'early retirement' guys. What are they doing now? Whatever would have lasted for 40 years they thought would now last only 20 years? May the best way to retire early is to get a job you love - you just don’t have to work a single day!

I got my peak of fears when I saw 300 people queued in ICICI bank to withdraw their savings. I did not have much left to withdraw is a different issue, but that is even possible! In today's technology and advancements in finance, that is a possibility one should consider. It was worse than the only bank run I've ever seen (in 'Its a wonderful life' movie). While I'm worried about my job, the better half's job, the economy, the slowdown, the crisis, I am thankful in a few ways...

I am glad - none of my father's or grandfather's savings are there in the market. For them life is as usual - at least financially. Just fighting inflation is all they have to do

I am glad - I had seen 'a black swan' right at the start of my investing history (in just a year and half that is). Now I know what is possible... atleast I will account for it somewhere.

I am glad - it happened when I am near 30 and not when I am near 60.

Thank you Peter Lynch, Warren Buffet and Taleb for educating me by your words, SUCH crashes are possible.

Thank you God for everything else :)

~*~ Bhars

Organizing World's Information

I know I haven't been writing for long now. Mostly because of frustration and partly because of active job search :). A quick post here to share my search ends here - as I move on to Google as a business analyst.

God bless!

~*~ Bhars

Me, the internet and the long tail...

A few days back, I came across THE LONG TAIL blog. I was much impressed by the concept and the thoughts of the author. Promptly, I went and ordered a copy of the book on landmark. As I read the book, I looked back at my own experience with the internet...

I had my first email account somewhere in the year 1999 when a friend of mine created one for me. I sent an email to his account and he replied back. And that account was forgotten. When I was doing my internship in AUKBC a center for internet technologies (then), my friends were telling me I should be proud of my 24 hour connection to internet. I told them I was coding AES in Java and that did not need internet connection. And ya I did not even connect to the net in those two months...

Then I entered the corporate world in 2002 and started coding in ASP. I was good enough to google for code bits and search how to fix apache and jrun when they did not seem to work... I learnt more of my HTML, Javascript, VBScript, ASP, etc from W3Schools than from the SSi course that I went to learn from. Ya I registered for classroom courses for Java - which I think I should have learnt from home with a book. I did that for linux programming though.

In 2003 I advanced enough to search for whatever would help me in cracking the CAT. I joined Pagalguy which took more than fairs hare of my days time but added more than fair share of my CAT knowledge as well. Had an online bank account... Ordered something from eBay.

Then came 2004 IIMA - 24 hours of internet and full use of the computer to get anything to complete assignments, chatting with long lost friends, blogging, orkut, gmail, etc. Big time online fund management (had to count every penny in every account to make ends meet then), online credit card bill payments, eBay shopper, etc...

Then started work in 2006... Keeping track of blogs became a difficult thing, hence switched to RSS reader... My friends who used to write diappeared from their online worlds... Suddenly all the information was there - but time became a premium... I became information overloaded... So cut back on internet time...

Today I use internet for work related searches, code syntax (I still code sometimes - ASP, VBA), bills payment, funds transfer, trading / investing / tracking stocks, reading blogs, shopping for books... the last one in particular comes handy in Hyderabad. Earlier in Bangalore, I will walk to landmark in forum and I know I will get the books that are in my list. Here, I am yet to find such a store which carries that amount of variety. Also driving back and forth in the traffic!!! The equation is all in favour of online order in landmark!!!

The book also brought to my notice, the field of self-publishing (Lulu) When I read the paragraph on that, I ran and grabbed the computer from the better half and started browsing on what it is... It struck me hard that I could write a book and get it published for under Rs.10,000. Till then I thought of writing a book as a dream that would never get fullfilled in my lifetime unless I improve my writing 10000%. Now I can just get it published for under.... God!!! I was so enlightened about this I couldn't go back to reading this book, but kept on dreaming when I would write and what I would about... (reminds me of calvin writing his autobiography in 2 sheets of paper)

So all in all I had a great time reading this book... and understood so much about web 2.0 (which might not have been the author's intention)

~*~ Bhars

P.S: Going by this book, this blog is in the loooooong end of the tail, but still useful enough for a few who come in here everyday... Thanks readers!

Peace

My long two-pointed ladder's sticking through a tree
Toward heaven still,
And there's a barrel that I didn't fill
Beside it, and there may be two or three
Apples I didn't pick upon some bough.
But I am done with apple-picking now.
Essence of winter sleep is on the night,
The scent of apples: I am drowsing off.
I cannot rub the strangeness from my sight
I got from looking through a pane of glass
I skimmed this morning from the drinking trough
And held against the world of hoary grass.
It melted, and I let it fall and break.
But I was well
Upon my way to sleep before it fell,
And I could tell
What form my dreaming was about to take.
Magnified apples appear and disappear,

Stem end and blossom end,
And every fleck of russet showing clear.
My instep arch not only keeps the ache,
It keeps the pressure of a ladder-round.
I feel the ladder sway as the boughs bend.

And I keep hearing from the cellar bin
The rumbling sound
Of load on load of apples coming in.
For I have had too much
Of apple-picking: I am overtired
Of the great harvest I myself desired.
There were ten thousand thousand fruit to touch,
Cherish in hand, lift down, and not let fall.
For all
That struck the earth,
No matter if not bruised or spiked with stubble,
Went surely to the cider-apple heap
As of no worth.
One can see what will trouble
This sleep of mine, whatever sleep it is.
Were he not gone,
The woodchuck could say whether it's like his
Long sleep, as I describe its coming on,
Or just some human sleep.

-Robert Frost

Wish I went to sleep everyday like this... but ya today I will.

~*~ Bhars - the contented

Z.E.R.O

Know what, having a zero balance saving bank account helps :)

And ya, I am debt free :) Yay

God bless
~*~ Bhars...

Tirumala...

I always liked Tirumala / Tirupati for one good reason - the climb up the mountain. This arduous task of walking 9Km seems pretty tolerable to me, compared to the wait times in the long queues. I have climbed it many times since childhood, but for the past few years, I haven't done that. Hence went for a trip with the better half.


The 9Km journey from Alipiri (foothill) to Tirumala can be divided into two different stretches. One - the first 2 Kms - is highly inclined and made of steps. You can watch out for milestones every 200 m. The end of the steep climb is marked by the Kali Gopuram.


The second stretch - 2nd to 9th Km - is a cake walk compared to the first. The walk is on smooth plains and slight slants with fewer steps, studded with deer parks, beautiful sceneries and if you are in the early morning a wonderful sun rise. One mistake first time climbers do is to walk fast in the first stretch and lose their energy when the start the second stretch. I feel one should rest and relax as much as necessary in the first stretch so that energy is conserved to complete the second in time. 2hrs each for each of the stretches would be my unsolicited recommendation to first time climbers.


I get disturbed when one has to be in a queue for 48 hours (thats the case these days on weekends) even when all amenities are taken care of. Agreed, Balaji is a big guy - amidst all those Gods who give things that you ask, this is one guy who gives you things with out even you having to ask! But so much crowd? The last two times I've been to the dharshan I always felt guilty coz I was using influence to get ahead of the queue.


I prefer dealing with the God who stays closer to my home... particularly the one with less crowd...

God bless!
~*~ Bhars

Memorables

In 26.5 years of life, I have accumulated enough memories. It is hardly feasible to recollect all of them everyday. In the normal routine of day to day activities and deadlines, I hardly recall any memories at all these days. Sometimes, a trigger comes in form of an old email that someone forwards, or an old piece of paper that falls out of a book, or some other way. These memories come in all flavors, good and bad, happy and sad - but precious all the same, for its all mine!!!

Hyderabad has a wonderful climate here in June. I wish I could bunk office and go for a long drive in my activa everyday. But see, I am my sincere (ahem ahem) self, hence end up dragging myself to office. Last Thursday was no different. I looked out of the window and would have bet it was 6PM, but my watch, computer and internet all showed 12 noon IST unanimously. You know, my lifestyle is great. I wake up, cook, get ready, come to office, work, go back home, eat, sleep. Whattay! I hardly get out of office, not even to see how it looks from outside. Well I thought, the climate is so nice, lets go for a walk! The walk triggered some memories...

I saw an image of the girl walking past me in the very same hitec city roads with an umbrella... She was the only one in the road who was walking in that hot mid may afternoon. She was walking one kilometer when all her friends came by auto. Well, she's saving money. After all, she's going to get higher education soon, every penny saved will matter, no?

She walked back 3Km to reach her room. She finished the pathetic hostel dinner and went back to studies at 7PM as usual. She studied amidst the main road's noise and friends' chatter. She went through the practice tests she had taken that morning praying to God she did not repeat any mistakes. She studied, practised, strategized for the next test - till the clock stuck 11, long after her roommates had slept. She closed her books, said her prayer and went to sleep.

She woke up at 4:45 to answer the alarm, enthusiastic as though she was going to change the world that day. She opened the balcony door and saw the empty main road shining with bright neon lights. She prayed again, hoping her future was bright as well. Another dawn another test for her. She evaluated her tests (usual silly mistakes awww), woke her roommate and went to have a pathetic breakfast. She walked through the balcony staring at the morning traffic and started mugging up the words from Barons. Even an hour a day was not enough to get her English improved. Duh! Out she came at 8:30 with her bright violet umbrella and started walking again.

That active, cheerful, studious, hardworking, god fearing young lady was doing a penance in the name of CAT. All this to make the lazy, cynical, confused, unclear, probablistically spiritual me who wakes up at 7:30 after snoozing off the alarm twice and goes for a job that I hardly like... Duh! Dont you hate me? I do :)

Thank God, memories exist!

~*~ Bhars

Research Paper

Wonder if I bragged about this here... After a long time, I was browsing through WIMWI website and found the following interview in a newsletter. Something somewhere sounded vaguely familiar... Oops this was the project I had done 3 years back! Its already THREE full years now??? Wonder if anyone not so familiar with portfolio allocation (for that matter, even the ones who are familiar with it) will understand the following interview, leave alone the original research paper. The project report looks like its worth 28$ a copy! I have no clue where the money goes - that is if somebody takes the pain to buy a copy!!! So apart from adding 4+ GPA to my CGPA, the work has added more value to me and the world (hopefully ;-) Over to the interview now...

Portfolio Allocation: Beyond Mean Variance

Professor Arnab Laha

Q Arnab, you have moved away, or if I may say, dared to think beyond Markowitz, a Nobel Prize laureate. Where and how does your work differ from that of Markowitz?

A Markowitz’s mean-variance framework assumes that returns on the stocks constituting a portfolio have finite mean and variance. It has been known for quite some time that some stocks do not obey this requirement. In such situations one cannot obtain the optimal portfolio using Markowitz’s approach. Our paper discusses portfolio allocation when some stocks (or assets) in the portfolio do not have finite expectation and variance.

Q What are the benefits of your model vis-a-vis Markowitz’s model?

A Our model is more general than that of Markowitz and can be applied to obtain optimal allocations for any portfolio and makes no demand that the returns on the stocks in the portfolio have finite expectation and variance.

Q What is the new criterion developed by you to take care of stocks which show “heavy-tailed distribution”? Arnab, as I am using a technical term from your paper, can you please explain in simple terms the meaning of these terms.

A The term “heavy-tailed distributions” refers to distributions for which we have higher chances of obtaining extreme values (high or low) than that would be expected for a normal distribution. There are a large number of distributions which are heavy-tailed, of which, some do not even have finite expectation and variance. We develop new criteria for portfolio optimization which are applicable for any type of return distribution.

Q Can an investor use this model? What are the benefits?

A Yes, investors can use this model to their benefit. The results in this paper show that if the returns of one or more of the stocks in a portfolio are heavy-tailed, then the portfolio allocation done by our method performs much better than the portfolio allocation obtained by a naïve application of the mean-variance method.

Q Can your model account for the recent crash in the share market? If yes, why and if not, why not?

A No, ours is not a market model and hence it is not expected that it will be able to predict market crashes. However, the results in the paper show that an investor may be better protected if they do portfolio allocation using our method than the mean-variance method.

Laha, A K; Bhowmick, D and Subramaniam, B (2007). “Portfolio Allocation with Heavy-Tailed Returns,” Applied Financial Economics Letters, 3(4), 237-42.

You can click here for the paper and here for the interview !

~*~ Bhars

P.S: Also, this becomes the 150th post in 4 years now! Lets see how and where it goes!!! Bbye!