August 2008

If u look in to my "Previous Post" section, u'll definitely notice something. There is at least a post for each month, since I started blogging in March 2003. However there is no post for the month of August 2008. One may think, it was because I'd nothing to write. However, the fact remains that I intentionally did not post anything in August. By using this small trick, I was able to erase August 2008 from my past on the blog.
Alas, I don't have the powers to erase it from my life too.
Now, August 2008 was certainly one of the worst month in recent past.
I could not clear CFA Level-II. A big setback :(.
While deciding to join AIM, I'd set this short term goal to clear CFA Level-II before I graduate in December 2008. Now I can not achieve that target. I did come pretty close, but failed in the end.
If this was not enough, my daughter broke LCD screen of my laptop and also damaged my mobile by pouring water over it :(.
However, the biggest setback was that for the first time in last 14 months, I felt as if things are going out of control. To be honest, I felt insecure, underconfident, lost, and unsure as to how to bring everything under control. One of my senior, with 4 "I" in his resume, was not able to get a job of his choice. And this was worrying me about my own prospects, considering the fact that I was looking forward to switch sector.
Thankfully for me, as the month ended, things are looking more promising.
I'm hoping that, like indian movies, there will be only happy ending for my MBA at AIM :)

Teri yaad saath hai

"Every day that I have been prime minister of India I have tried to remember that the first 10 years of my life were spent in a village with no drinking water supply, no electricity, no hospital, no roads and nothing that we today associate with modern living." ... Dr Manmohan Singh, Prime Minister of India (After winning the no-confidence vote against his government on 22.07.2008).

This reminds me of my first 10 years. I too spent those years in a similar village in one of the poorest state of India. Till standard 5th, I studied in a government school and afterwards moved to a moderate city and took admission in a big and famous government school. Afterwards I embarked on a journey which is continuing still....

Don't get me wrong, I'm certainly not trying to compare apple with orrange. Dr. Manmohan Singh has too high a place in my eyes that i'll ever want to compare him with anybody, let alone myself.

In fact, after reading Dr Singh's speech, I'm feeling a bit nostalgic and want to hear the song from movie, Namastey London.... "Main Jahan Rahoon, main Kahin bhi Rahoon,..... Teri yaad saath hai.

"Teri yaad saath hai. "

Tryst with I-Bankers

Almost a year ago, the newspapers were ga-ga with losses due to sub prime mortgage crisis in US. Every day, their came a new estimate of possible losses. It kept on increasing from a few billions to a few hundred billions to trillions of US Dollar. All this while, investors and press repeatedly asked Fed to come up with their estimate of losses and Mr. Bernanke simply ignored this demand and went ahead with his plans of cutting interest rates at an unprecedented rate.

This was really hard for me to understand. Why these investment bankers are unable to build a concensus among themselve for the possible losses due to mortgage crisis?

Then, only recently, I read that a leading bank is firing more than 10% employees of its I-banking division as the management think that its only the greed of I-bankers which has caused the whole world to go through this difficult phase. Now is the pay back time and they should pay for taking high risks. This perplexed me even more. Only some time back, they were being hailed for their role in generating capital so necessary for increased economic activities.

In last couple of months, I was working on a project where we had to finalize the re-investment strategy for more than a few hundred millions of US dollar. And this led to an opportunity for me to work alongwith some of the leading I-Banks of the region.

During my association with them, I could understand one thing for sure, that at least the Fixed Income division of I-banking is all about "trading" various possible risks.

For most of the I-Bankers, large percentage of their salary is in the form of bonus, attached with the volume of businesses they generate for their employers, and this leads to a situaton where they are forced to trade whatever risk that can exist. With one underlying bond, they form dozens of structures, all of whose return depends on the performance of the bond.

Fixed income being one of the oldest division, all possible simple structures has been exhuasted and the new ones coming up are really complex and innovative. This was one of the reason why it was so difficult to estimate the damage caused by mortgage fiasco.

Whatever others may say, I'm in awe with the innovations that I-bankers have done in the realm of financial engineering and for that reason I believe that they truly are the worthy owners of title, "Master of the Universe".

Tu chal, Main aaya.

Its ISEP season in AIM right now. Including me, 40 students have been declared (on the basis of GPA) eligible to go on exchange. Since AIM has tie ups with a number of good colleges around the globe, all eligible students can go on exchange if they opt for it.

Going on exchange is not free. It has some undiscountable costs:

1) Air fare and living expenses, which goes up to 300K INR in some cases.

2) The extra pressure of finishing MRR in less than 10 weeks (Others will get 18 weeks).

3) In all probability, one opting for exchange will not be able to attend campus interviews.

4) Those opting for exchange will not be able to attend elective on offer in final sem.

I've decided not to opt for exchange mostly because of reason number 4.

I firmly believe that the choice of a school for ISEP (International Students Exchange Program) should be guided only by its "fit" with my short term & long term plans. e.g If I want to specialize in finance, I'd look for the electives on offer and faculty, as well as college's reputation in finance. In some cases, the Reputation of college may overwhelm everything else (who would not like to go to Wharton or Columbia).

However, the way my batch mates are selecting their school, really perplexes me. Barring a few, most of them seem to be die hard believer in hindi saying, "Tu Chal main aaya" (U please proceed, I'll follow). Or may be I'm wrong, they are all making intelligent choices, only i'm not able to see it.

Whatever! Why should I be worrying?

Hmm... may be because I'll miss some of them as they used to take level of discussion in the class to next higher level.

If you want something...

"If you want something, all the universe will conspire to help you achieve it".

Alchemist, Paulo coelho.

I fell in love with this line the moment I read it. This is so very inspiring. It always pushes me to dream, and work hard to convert that dream into reality.
A couple of years into my previous job and I'd realized that I'm going no where. There wasn't anything very challenging about what I was doing. I've not taken birth to do these mundane job all my life - This feeling was getting stronger with each passing day. Things had come to a point where neither the promise of reward nor punishment was able to get me interested in my job. Although, my boss never complained, but I used to feel that I'm drawing salary for contributing nothing. I was certainly looking for a change.
I decided that I'll do MBA. Wrote CAT to get into IIMs... the first choice for any MBA aspirant in India, but failed. I took it up as a challenge and decided to write CAT again. I came close, but cudn't clear it again. At some point of time, I'd also thought of doing MBA from abroad, but there wasn't enough money. So I wrote CAT again, this time too I came close but ultimately could not succeed.
I thought, its time. I should give up my dream of doing masters and start looking for opportunities in other companies.
But then, I wasn't aware that some conspiracy was already going on. One after another, bit by bit, everything started falling in place. All of a sudden, one day I filled up form of AIM and took a flight to Mumbai to write AIMAT. All of a sudden I got a call from XLRI. All of a sudden one day I took a decision that even if I don't get ADB scholarship, I'll take education loan and will join AIM MBA. It looked impossible, but I got edu loan too. One by one, everything fell in line and I realized that against all odds, I'm in Manila atending classes.
Its almost a year, and I can feel that some kinda conspiracy is again going on. I'm destined to get, what I so desperately want. Amen!!!

In KualaLumpur

Its been a while since I posted on my blog. Afterall so many things were happening at once that it had become difficult to find time for writting anything. First and foremost was ever present pressure of preparing for CFA level-II exam. Although the syllabus is not infinite, its taking more time to cover than level-I's syllabus.
Then the project work in China Bank had also started taking its share of time. Good thing is that with each passing day the work here is getting more interesting and challenging :)
I'm bringing my wife and daugter here in june, so was also busy selecting a condo. Good thing that I was able to find one :).

My portfolio which I started last month also took its own share of time. By the way, its doing good. However, I have yet to start trading in forex which will certainly help me diversify some of the systematic risk associated with Indian stock market.

Apart from all this, what took most of my time during past month was certainly the uncertainty asociated with my internship/Action Consultancy. I was supposed to go to Singapore, however my application for training pass/VISA started taking more time than it should have in normal circumstances. It was nothing less than devastating to know that after waiting for more than two weeks, my training pass request has ultimately been rejected for the industrial quota for that sector had already exhusted. It was really magnanimous on my company's part for they gave us an option of coming to their KL office where they also arranged for our accomodation. So this is how I landed up in KL instead of Singapore for my AC. My internship here would focus on commodity trading and finding a mathematical model for maximizing pofits.

Yesterday, with Russ, I went to KLCC where this boy was trying hard to capture both his parents as well as petronas tower in the frame. This pic certainly explains the height of this building which for a couple of years claimed the title of "World's tallest building".

SHEKHAR's Portfolio

Many a times in our Classes, during class discussion the topics used to revolve around a question: What makes one happy? I believe everyone will have a different reason to feel happy about. But for me... I guess, its always the challenge of doing something different from the rest. Something new and chellnging.

For past few days, I'm feeling good, because I was finally able to convince two of my friends to invest a sizable amount of their money in my portfolio. A portfolio which guarantees a minimum return in the time when the market is most volatile and is clearly not taking any direction. My special thanks to Gaurav sharma and Pankaj Dhawan for they were the first to show confidence in me (Of course, its a different matter that I offered them a highly lucrative, guaranteed annual return of 20% )

Today, I formally announced opening of my portfolio investment services and started marketing it to potential group of investor. All day, instead of preparing for exams, I was busy preparing terms and conditions for investing in Shekhar's portfolio. It took me an hour to come up with a formula to calculate return of my portfolio for a quarter. And throughout the evening , I was busy marketing it to different set of investors. It felt good when number of investors showed confidence and promised to invest their money in my portfolio.

Lots and lots and lots of more work remains to be done. Have to prepare Balance sheet, Proforma Income statement, Ledger account of all investor, Proforma for account statements that I'll be sending to investors and most importantly my model of equity valuation on the basis of which I'll decide whether I'll go ahead and invest in a particular stock or not.

Many people have asked me why am I doing all this? Why not I limit all this activity to my own money only. The answer lies may be in my past ventures where I used to invest on gut feel only. I used to lose money and then get out totally, then reinvest, and again commit same mistakes. I'm expecting that the sheer fact that this time I own the responsibility of generating money for others, will force me to "inculcate an investing discipline" in me.

There is one more angle to it. I'm thinking that today, I've less money but enough time to experiment and learn. In future, I'll certainly get busy with job and then I'll have money but no time to learn and experiment.

Whatever, I'm looking forward to the day, when people will start investing in my portfolio for the returns that it'll generate and not for the 10% annual return that I'm guaranteering now.