Ideal vision of Companies

No company should try to make temporary solutions to prolong the problem indefinitely and keep making money on solving the temporary problems.

For example, there are a number electrical and electronic companies brought in "planned obsolescence" to bring down the number of hrs of usage of products so that the customer keeps rebuying the new version of the products to replace the old ones. One such company is Apple.

But, at the other end of the spectrum, there are many companies that are into sustainability and try to repair or replace parts to enhance the longevity of the products.

I am yet to come across a pharma company with an ideal vision.

A pharma company's vision and mission should ideally be "To eradicate the problem of _____"

Fill in the blank of what it is it that you want to solve the problem fully.

And once that problem is solved, the division or the company should shut down or change its vision to eradicate another problem.

Big Hard disk companies skimp over providing data

I wanted to buy an external hard disk drive and had a tough time finding basic data to compare and choose the product. I wanted to buy among the big hard disk drive companies Western Digital and Seagate products, but their information on their website is grossly inadequate.
They provide so many varieties in the segment of portable external hard disk but do not provide sufficient information to distinguish one from another within this category.
Have a look at the information on their websites:

First, the real idea of portable is missing. I was looking for the dimensions of the products.
Second, the weight of the product is missing.
Third, their backward compatibility to the old operating systems is also missing. Will they work with Windows Vista? I cant say.
Fourth, what technology are they using? Are they mechanical or solid state devices?
Fifth, at what speed do they run? 5400 rpm or 7200 rpm? The faster they run, the hotter they get.
Sixth, WD speaks about the backup software in it. But what is the difference between these? Where am I supposed to look for it?
Seven, what is the power consumption of these hard disks? There should be some examples or range of numbers. Nothing is available.
Eight, I have seen some external hard disks being connected to laptops with two usb drives in the past as they need more power to run. I cant make out whether they need single USB or two USB ports to run.

Some of these are very technical, but some are very basic for usability and trade offs while buying a product.
The sad part is not only are these available on the website, these are also not available in the outer box of the external portable hard disk I bought. WD fortunately had the OS compatibility printed on it.

Hard disk companies talk of providing TBs of data but skimp on providing even some basic bytes of important data.

The future of PPFAS

Yesterday was a sad day for the financial sector in India with the passing of Mr.Parag Parikh. He was one of the famous value investors in India. His mutual fund, PPFAS is a pioneer of sorts. It has only one scheme, no dividend option and the owner, the manager and the employees themselves have stakes in it. 

Although its returns have not been extraordinary in the short period of time it has been active, its concept is in long term value investing and not going by the flavour of the season and hence, is difficult to criticise considering the concept.

Now, with both the leader, Mr.Parag Parikh and its fund manager Mr.Rajeev Thakkar having passed away in a car accident, what is the future of the mutual fund where a majority have invested in their faith of Mr.Parag Parikh's thinking, insights and knowledge? Is the concept institutionalised enough to carry on the legacy and thinking of its founder? Will it shut shop soon? Will new investors be willing to invest their moneys now? Investors would/should be anxious and be waiting to hear from the company on the steps ahead.

RIP Mr.Parag Parikh and Mr.Rajeev Thakkar.

Lacuna in Annual Reports

The Annual Reports of listed Indian companies are able to hide a lot of information currently. This should be made available for the general investors to take a more sophisticated analysis of the businesses.
Some of the data that should be incorporated in the annual reports are:
1. Past 3 years and Current External Credit Rating (which is anyway publicly freely available)
2. Long term loans repayment schedules (Investors can then see how much the company will get further stressed in the years going ahead as repayments loom)
3. Securities provided to secure the loans
4. Market Valuation of the properties once in three years (This is anyway done for the sake of banks.
5. Promoter pledging and purpose for pledging
This will allow the investors understand/discover the true/appropriate market value of the companies)

As an investor, I would like to know my company better and these can be a better way for investors to understand their companies.

Big Brands are no better

It is a popular idea that while the small shops and smaller brands are suspect in their wares and methods, the big brands are reliable and honest in their business.
But, truth be said: it is not true.
While some which operate in pharma or food may be selling adulterated stuff without enough quality checks or some goof up once in a while, there are certain sectors which violate the norm in a "business as usual" manner. The particular sector I am referring to here is jewellery. There are a few unique aspects to this business. Firstly, women are highly seduced into buying this making this somewhat impulsive and hence less cautious. Second, it is a social norm to buy enough for occassions (marriage, diwali, danteras, etc.). Third, most customers cant differentiate between the quality of stuff sold. Forget carats of diamonds, even 18/20/22 carat gold cant be differentiated by a layman. To top this, fourth, the metals are sometimes plated (by how much thickness?) and are sometimes embedded with stones (diamonds, rubies, etc.) and it is impossible to measure the weight of it without damaging/destroying the item.
All the above make for excellent toxic environment to cheat the customers even in the best light of the day and get away with it scot-free.
It is because of these reasons that this business is done based on trust and from the below article, this business is mostly run by cheats.
Big Jewellery Brands Cheating
When big well known brands like Mangatrai Jewellers, Sri Krishna Jewellers, Meena Jewellers, TBZ Jewellers and Kalyan Jewellers, RS Brothers Jewellers, South Indian Shopping Mall and Chennai Shopping Mall, it is time to stay away from Jewellers itself as much as possible.

The very needed attitude of verifying

In today's fast paced and ruthless world, people usually tend to agree with the stated without any questioning of the fact. When the sales guy in the saree shop shows a 9 yards saree and says it is 9 yards, you trust his word and choose the design and colour to buy. When the investment deposit form says Rs.25000 invested at 13.32% p.a. gets you Rs. 41650 in 5 years, you trust the calculation. When shop sales guy says the table I am interested in is 4 by 3 feet, one tends to strike a match with our requirements in mind and move to other factors.

But, in days of ignorance, marketing and plain lies, you should not trust what you hear on the face of it. In the first instance, when my mom came home and tried the saree, it was 8 yards, not the nine the shopkeeper confirmed it was. His defence on returning, everything we sell is 8 yards as 9 yards. Do look at the below picture: a part of the deposit form from Shriram Transport Finance Company Ltd.: 

Turns out the actual rate of interest in the cumulative option of 5 years is 10.75% p.a.compounded annually, not the high 13.34% p.a. by which I was actually attracted to the scheme (13.34% is simple interest and why would any sane person look for simple interest in a cumulative scheme?). In the third case, the table shown to be was actually 4 by 2.5ft and not 4 by 3 ft. It looked suspicious measuring it by my eye and I asked for a tape to measure it. It was only 2.5 ft by width. The sales guy only had a sheepish smile to respond with.

Such are the various cases of buying in today's world. It usually was in finance, a phrase called "Buyers beware", but in today's case, almost every single fellow is up to tricks fooling customers.

The concept of trust cannot be blindly held. A more sane logic of he is the expert of things and we should trust him also does not find meaning nowadays. The shopkeeper knows that the worst case for him is that he will have to reverse the sale or better, exchange it when they complain. There is a perverse upside to the seller at the cost of the buyer. There are not many ways to get over it as of now, except to be aware and verify things, however untrustworthy you may seem to be.

A mandatory pain in their arse sanity check is necessary before buying to prevent a pain in your arse at a later point in time.

Government's lack of application of mind

The government of India does not seem to apply its mind thoroughly these days. It makes half baked implementation policies. Not many months ago, in the middle of the financial year when the government decided to reduce the subsidies on lpg, it said 6 subsidized cylinders per household, without mentioning whether it was calender year or financial year and whether the subsidy would be provided on a pro rata basis or fresh starting from that month. 

This lack of clarity caused a lot of confusion and harassment to the customers and the sellers of the lpgs (the big 3 Oil Marketing companies). Now, the government has yet again gone the same in another place. Applicability of Service tax on air conditioned high end restaurants from April 1, 2013.

As mentioned here, http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/new-service-tax-from-april-1-ambiguous-on-host-of-entities-like-home-delivery-chains-take-away-joints/articleshow/19313468.cms

the tax is actually to be levied on service, but where is the service element in take aways/canteens/mess, etc.? In the absence of this, many chains including McDonalds have started applying service tax on the bills on the safer side. If the government later clarifies that they are out of the ambit of the service tax and refunds the service tax collected to the companies, as there is no way to return the money back to the customer, the companies would end up making a good profit as they sieze on it.

On another angle, most restaurant business run a scam/sham of getting the customer's money by charging service charges and a service tax on the whole bill which is itself a fraud (by design or ignorance). More on this here:

http://www.business-standard.com/article/pf/how-restaurants-can-overcharge-you-113032600554_1.html

The lack of government's application of mind is helping the people give away more of their money to the already crooked restaurants.

Ironic visions of Companies

It is very rare to see companies these days with the kind of vision that is actually required for the betterment of the humans. Say, a vision of a company in the healthcare industry "We intend to understand, find solutions, eradicate the disease and close down by 2030"

The true purpose of a specialised healthcare company would ironically be the successful conquest of the diseases in the area and shut shop when it is done. Any other reason for its existence raises a stink about its real purpose. Unfortunately, today, most companies are only profit oriented and they actually have the ability and the audacity to slow down the solutions to the market giving out incremental solutions despite having a full solution that can save many lives. And what can anyone do about it as long as these are shareholder and employee friendly instead of being society friendly.

The nature of some of these companies should be more on the lines of UN peacekeeping missions where once the task is done, the mission is closed and the people move on to the next role. Sure, companies can even encourage employees to find one stop solutions and reward the employees with life time salaries and shut the shop. The prize of attaining full lifetime salaries for all employees in the next few years may help the employees reveal such solutions to the market. But, the shareholder/management too needs to be of the idea to support the ironic vision.

How to drink coffee aboard a flight

Indigo:
Step 1: Order the cabin crew a coffee or a cappuchino.
Step 2: Pay Rs.60
Step 3: Receive hot Nescafe Cappuccino - Ready to drink in a paper cup stirred with hot water by the cabin crew herself.
Step 4: After drinking, give cup to cabin crew while they come to taken things to discard.

Jet Konnect:
Step 1: Order the cabin crew a coffee.
Step 2: Pay Rs.60
Step 3: Receive a (puzzle looking) box bigger than a pack of 52 playing cards.
Step 4: Receive a big paper cup with plenty of hot water (to drink or drown oneself?) and a stirrer.
Step 5: Struggle opening the cellophane tape on the box.
Step 6: Discover three small sachets inside - one everyday whitener costing Rs.1?, one sugar packet costing another Rs.1 perhaps and one nescafe instant coffee power definitely costing Rs.1.
Step 7: Open the sugar packet and pour into cup.
Step 8: Open the dairy whitener and pour into cup.
Step 9: Struggle opening the plastic pack of instant coffee at one end. Try another end. Finally, it opens.Pour into white solution.
Step 10: Stir, stir, stir!!!
Step 11: Drink extra-diluted warm by now coffee.
Step 12: After drinking, pick all the stuff and give back to cabin crew (total of ten items including pieces of sachets [3 sachets and their respective 3 opening bits], stirrer, the box top, box bottom and paper cup)

Differences:
1. A well known brand of Rs.15 worth superior 3 in 1 cappuccino sachet is being used by Indigo. Jet uses clearly evident Rs.3 worth of material for the same Rs.60 coffee. Premium feel to Indigo. Feel being looted by Jet Konnect.
2. User ordered to drink coffee in flight. Indigo served ready to drink coffee. Jet Konnect asked user to make his/her own coffee (with no real customization options) and then drink it.
3. "Order-Drink-Give cup" procedure of Indigo. "Order-Mmmaaaakkkkkeeeeeee-Drink-pick all pieces and give"  procedure of Jet Konnect.

The Apple Tree

Conclusion: We clearly see an explosion in the number of products as we go forward, even for Apple which creates one of the minimum number of models in a year unlike a Nokia or a Samsung which flood the customer with maddening amount of choice. Going forward, it is going to get worse unfortunately - both in terms of obsoleteness and hence creating more e-waste.

These 10 Companies own pretty much everything

What Apple could do with its $100 billion cash?

http://mashable.com/2012/01/28/apple-100-billion-comic/

Goof ups

In 2011, Blackberry services outage down for 3 days, UBS illegal trades and Billion $ losses, S&P mistakenly downgrades France, NATO bombing Pakistan's guard-posts and Indian govt. accepting a USD 9 billion export error.

Previously, irresponsible statements "We do Gods work" by Goldman Sach's CEO Lloyd Blankfein, 

"Its not our fault" by Tony Hayward, then BP CEO.

The frequency of the goof ups are increasing and the scale of it is getting bigger and bigger.

It is for someone to find out why. Could it because of increasing pressures of the jobs & faster deadlines to produce results without having enough quality checks? I believe so. Also, the touhgher environment thanks to the slowdown and recession is causing the extra pressure on growth and profitablity.

Compared to this, is any goof up we do in our daily work really that bad? Everyone screws up. As far as NASA's philosophy is supposed to go, the reason for any screw up is not any person, but the fault of the system. If there are enough checks and balances, screw ups should never happen, atleast of the kind mentioned above. It is time systems are given importance, and not just the profits. It is time systems are held responsible for irresponsibility and not the people on whom ridiculous expectations are held!

Campari calender 2012

P.S:click on the images to get larger size photos

http://www.rediff.com/getahead/slide-show/slide-show-1-glamour-the-campari-calendar-2012/20111031.htm

Organisation charts

Congizant India: another Enron/Satyam?

Congizant Technology Solutions has come a long way from being a mid size player to a heel behind the third largest IT company (Wipro) and will soon overtake it. The growth it has seen in the last three years has not been even matched by one of the peers and is far ahead of the peers(TCS, Infosys, Wipro, HCL Tech,etc). I have a few friends in this company who have been lucky to get 200% bonuses (never ever heard of in IT companies). I asked a few of them, what is the reason for this tremendous growth in topline and profits? All of them say "I really dont know." Nobody I talked to clearly is able to tell me what magic they have done in getting new businesses and maintaining margins.

This answer sounds similar to a few earlier cases. The magic of Enron seemed to be accounting. Satyam was not far behind, though they used magic to just show the industry growth level.

The lack of clear insight and understanding of what CTS did to get the outperformance even from their rivals is whats startling.

I just hope it is not one of the Enrons' or Satyams'.

Digital Name hijackers

There is only a very limited number of common names and english words in this world. And the first movers (that is our generation) is lucky to get a name for ourselves so easily. Say an email account of your precise name you want or the blog site or the website with the right words to describe your blog. Some in our generation aren't all that lucky also. I also am a victim of Digital name hijacking. After quite some time of thinking when I started my blog, I wanted my blog site to be named "thinkdifferent.blogspot.com", as I felt it was appropriate at that point of time. But that name was already occupied. Being occupied is not hijacking, but the creator of that blog just had one or two blogposts in all for years together. And thats what I call Name Hijacking. No use for anybody and still permanently occupied not allowing anyone else to use it either.
The same has been used as a great business model to make money by several people. Domain name sitters/hijackers get all the probable names of upcoming companies/organisations  or organisations that don't have an online presence till now registered and then demand a ransom to let go of these names to the companies. There is good amount of money to be made in this business and knowledge of SEO(search engine optimisation) can only help this business model further. All this business model needs is some students with idle time and some pocket money with some imagination. Well, I guess this post is a rant starting somewhere and ending somewhere else(probably due to the background songs and simultaneous chatting).

Changing the Life insurance game in India in one masterstroke

There is a great big market opportunity for one of the life insurance players in India to become get a good big market share pie and tap the untapped markets. They need to unsettle the market just as Tata Docomo radicalised the telecom market with the 1paise/second plan. Everyone knows that there is a huge market for life insurance in India but none of the existing insurance players are taking the strategy of large volumes and lower commisions as in the best and purest form of life insurance called term insurance. Today when people talk of life insurance, people's first recall is LIC or rather LIC is the synonym of investments and life insurance together. The company which is willing to go the term insurance path can show that the benefit of low insurance costs for huge amounts of sums insured and can easily attract people. As many Indians are too stuck up with the idea of getting something back, they can show an advertisement of how somebody buys a car/bike insurance without a second thought for saving his/her bike, but when it comes to their own life, they dont seem to be concerned about the family in case of the loss of the earning member. The potent combination of low premium costs and likening it to auto insurance can get the middle class out of the rut of LIC's highly agent driven (read brainwashing) customers.

Now, only if someone out there is listening!

Organised systemic cheating

You can call it cheating or disrespect purposeful ignorance, but certainly not innocent. A lot of big companies say a lot of big stuff but when it comes to practice, they are trying to shortchange you and certainly not what they promise. Recent experiences of Nokia, Tata Indicom, pizza shops and hotels prove this.

My new mobile from Nokia went dead in two weeks and I gave it to their service center at Mumbai. After a week they tell me that the mobile which was repaired in Delhi has come back and it is still dead. So they will send it back to Delhi. The next week they promptly tell me to come and pick up my handset. After waiting for half hr in the line, I see them inserting the battery into a phone whose colour is different from the one I had given. Now I have asked for the same couloured repplacement or I am not taking delivery. Are they doing door delivery service or rather their disservice? I am still paying for my time and money spent travelling to their service center and waiting in line, not to mention the time spent to configure the new phone.

Tata Photon plus is even more slower in service. They cancelled a post-paid to prepaid connection change as they wanted an address proof. They have the address proof in the post paid and yet wanted another one for prepaid. After a month and threatening them to take them to consumer court, the issues have been resolved (for the time being).

This is something I fail to understand. Why do companies prefer to have an old incorrect address rather than have a new address where the customer is verified when they operate an all India network and distribution facilities?

Another instance where the dongle (any usb internet access device) sellers cheat is that they sell you the dongle and wont refund the money for the dongle when we close the connection. My friend tells me that he read some TRAI regulation that they should reimburse the money when the device is returned back, but the low down company people will only say, taking back is not part of company policy.

Some hotels and many a Pizza shops are a great set of cheaters. They charge service charge on their bills of as high as 10% of the bill. Some bigger cheats put this 10% on the amount after tax (which means they are charging service tax of 10% on the tax amount too). Scam of the first order. Only governments can charge charges on the tax. Fortunately, someone I distantly know has approached the high court and the pizza company has been ordered to change their system and not charge service charge on the tax amount.

Why I hate (many) Marketers

From when did babies start having 3 different life STAGES? I thought babies/kids was one life stage.

Lets see how Johnson's does it:

Three Life stages:

New born, Baby & Toddler.

New Born:

Head to toe baby wash, Baby lotion, Baby shampoo, Baby oil, Head to Toe foaming wash, Head to Toe fragrance free baby lotion.

Baby:

Baby Lotion, HEAD-TO-TOE^® Baby Wash, Baby Powder, Moisture Care Baby Wash, Baby Bar, BEDTIME^® Bath, BEDTIME^® Baby Bubble Bath & Wash, Baby Bubble Bath & Wash, Vanilla Oatmeal Baby Wash, Soothing Vapor Baby Bath, Honey Apple Baby Wash, Baby Cream, BEDTIME^® Lotion, Shea & Cocoa Butter Baby Lotion, Vanilla Oatmeal Baby Lotion, Baby Lotion with Aloe Vera & Vitamin E, Baby Daily Face & Body Lotion SPF 40, Baby Shampoo with Natural Lavender, Baby Oil with Aloe Vera & Vitamin E, Baby Oil Lavender, Baby Oil Gel, Baby Oil Gel with Shea and Cocoa Butter, Baby Oil Gel with Aloe Vera & Vitamin E, Baby Creamy Oil Cocoa & Shea Butter, Baby Creamy Oil Aloe Vera & Vitamin E, Baby Powder Calming Lavender & Chamomile, Baby Powder Medicated with Aloe & Vitamin E Medicated, Baby Powder Pure Cornstarch with Aloe Vera & Vitamin E, Baby Cologne.

Toddler:

Baby Powder, Baby Bar, BEDTIME^® Bath, BEDTIME^® Baby Bubble Bath & Wash, Baby Bubble Bath & Wash, Soothing Vapor Baby Bath, Honey Apple Baby Wash, Baby Lotion, Baby Daily Face & Body Lotion SPF 40, NO MORE TANGLES^® Shampoo, NO MORE TANGLES^® Extra Conditioning Shampoo, NO MORE TANGLES^® Detangling Spray, NO MORE TANGLES^® Leave-in Conditioner, , Baby Oil with Aloe Vera & Vitamin E, Baby Oil Lavender, Baby Oil Gel, Baby Oil Gel with Shea and Cocoa Butter, Baby Oil Gel with Aloe Vera & Vitamin E, Baby Creamy Oil Cocoa & Shea Butter, Baby Creamy Oil Aloe Vera & Vitamin E, Baby Powder Calming Lavender & Chamomile, Baby Powder Medicated with Aloe & Vitamin E Medicated, Baby Powder Pure Cornstarch with Aloe Vera & Vitamin E, Baby Cologne, BUDDIES^® Moisturizing Body Wash, BUDDIES^® NO MORE TANGLES^® Easy-Comb 2-in-1 Shampoo, BUDDIES^® NO MORE TANGLES^® Detangler, BUDDIES^® Easy-Grip Sudzing Bar, KIDS^® HEAD-TO-TOE^® Body Wash Tropical Blast, KIDS^® E-Z GRIP SOAP™ Berry Breeze, KIDS^® NO MORE TANGLES^® Detangling Spray STRAWBERRY SENSATION™! If you have read all these so far, I congratulate you for your sense of detail or boredom!

Can any normal mother tell me what on earth all these products are for and how many of them are  DIFFERENT... like the difference between baby cream/ baby lotion, baby wash/ bedtime bath/ baby bubble bath & wash/ bedtime baby bubble bath & wash and so on and so forth...

FMCG Marketing at its wits (or otherwise)....and so called Innovations!

If the mother starts using all these products, I wonder if she will have any time for anything else and if she will end up being a good masseuse or complain of hand pain!