Finatech

Insight into great design - see through bus connectors

2011-01-19T19:50:00.001+01:00

In Switzerland, the buses are quite long and can seat a number of people comfortably. The front part is connected to the back part of the bus using a fin-like elastic connector which you see in the picture below on the right-side. There is also some place to stand next to this connector, which I'll call the middle part of the bus.

It used to get quite dark standing in this middle part, even in broad daylight. Changing this to a see-through connector is one of the nicest innovations I've seen. In the new bus model from the manufacturer MAN, the connectors let the daylight pass through as shown in the picture below:

This lets the sunlight pass right through the fins, and brightens up the bus and my day. Great thinking and design.

Nokia N900 SIP settings - Configure your phone for VoIP

2010-04-13T21:10:00.008+02:00

The Nokia N900 is quite a capable mobile computer. For example, I use a VoIP provider to make cheap calls all over the world. And described below is how you would enable your N900 to make calls over the internet through the SIP protocol.

Pre-requisites: You have access to a broadband wireless LAN network and you've already set-up a VoIP service account (for example, an account at www.actionvoip.com).

Steps to set-up an SIP account on the N900:

Click on the status area (top row on the desktop). Connect to your wireless LAN if you haven't already.

Click on Availability.
Click Accounts. Then click New.
Click the blue SIP option.
In the Account Setup, see the settings below and customize them for your VoIP provider:
Address: username@sip.actionvoip.com Password: accountpassword Advanced: [tick] Use for telephone numbers User name: username (without server address) Transport: auto Outbound proxy: [leave blank] Port: 5060 [tick] Discover public address [untick] Loose routing Keep-alive mechanism: Auto Keep-alive period: Auto [tick] Auto-detect STUN
Click Sign In. After less than a minute, you should now be logged in to your SIP account. Make sure your availability is not set to Offline in order to make SIP audio calls.

To make a call, simply click a contact and use the "SIP" option to call. It's that easy.

Success and Failure Drive Innovation - Polly Sumner, Liz Tinkham (Salesforce & Accenture) Interview transcript

2010-03-13T11:44:00.001+01:00

My notes from the interview of Polly Sumner and Liz Tinkham (Salesforce & Accenture).

Polly and Liz represent two extraordinary information technology companies in the world. Liz is one of the main partners at Accenture. Accenture is one of the most resilient and entrepreneurial technology companies in the world. Salesforce.com is a newer entrant, which has changed the way we think about software and Customer relationship management. Liz will be interviewing Polly.

L: Polly why don't you give us an overview of what you've done.
P: I've been in the technology industry since 30 years. Started with IBM, from where I took away the understanding that customers are going to shape the companies of the future, and understanding the path to the customer is going to be the next step of leadership. Worked in the small systems division. Went to work with a time-sharing company called McDonald Douglas where we did mainframe applications over a thin client. Then did a couple of startups, and one of the main themes in my career has been not being afraid to take risks and not being afraid of failure. They were great learning experiences for me. Late 80s I had a choice to go to Cisco or back into information management systems. I chose Oracle. I was kind of an entrepreneur inside Oracle. Then went to work as President and CEO of a small company. Then spent 4 years consulting for large private equity firm in new york. Helping them with the health of the companies, could the developers truly develop, could the sales people really sell, was the product truly innovative or what the product just a feature of somebody else's product. Then joined salesforce.com since two years. Chief adoption officer, overseeing whether customers adopt and continue using our products.

L: I've had one job for 25 years. At accenture you get to work with a lot of different companies. I've worked at government, telecommunications, high-tech, electronics. Started with technology based work, mainframe, client-server. Mostly developing customer based applications throughout my career. Then moving more into strategy and new data services, new product entry. Today I oversee consulting business for communications, high-tech and media globally. Spend a lot of time in silicon valley as there is so much new thinking and new ideas. Most of our clients love that silicon valley can talk about new technologies and new ideas and how to make it practical in their very large businesses. Liz, talk about how entrepreneurship plays out in large companies vs small companies.
P: Starting your own business is a big piece of entrepreneurship, but inside a large company there is a lot of entrepreneurialism goes on. Lot of it happens in products, business processes, way people comm and collaborate. Finance also like automatic bill-pay, pay-pal. You get a lot of innovative and entrepreneurial ideas from customers, and I would argue that if you listen to your customers you would get a lot of innovation. E.g. Oracle, running a team in DC. Sybase was beating us in couple of key areas. In navy and interesting applications in department of defence. They were able to do things which we from a database perspective didn't think were important. Like I proposed having Lat-Long coordinates in a database. My teams didn't agree. So I went back and thought more, on how some innovations couldn't happen without Lat-Long (cell phone, ship on the sea, airplane in the air). All applications which were nascent. All it took was understanding the idea that Lat-long were two very important parameters to track in the database.

L: At oracle how was entrepreneurship encouraged?
P: It is the culture. I left some companies that I didn't fit. I failed in devoting my time correctly which is limited in life. Culture that suits me: No idea is a dumb idea. You get that instilled when you grow up. You (students) know a lot about this world. And companies are looking for you to come and talk to them about your ideas. In an interview, I always ask "What's an idea you've had that could work here?".

L: I was interviewing someone for a media job, and I asked how we were going to make $100 mill at Warner Bros. It is challenging from a consulting perspective to drive monetization of anything which is not theatrical. E.g. how do you make a lot of money out of your sales force, finance and performance. It takes a while to come to a conclusion.
P: The kind of people VC invest in, they haven't been afraid to take risks around an idea they believe in. I ask companies I want to work for: can you tell me the last time someone got promoted when they had an interesting idea.

L: How many times have you failed when you did that.
P: Many times. As CEO didn't see dot-com bubble. Did not properly instill the discipline of only presenting one use-case to the customer, in a sales and marketing company I worked with. We ended up in trial-test. We didn't have one use-case that we could scale. If I had kept the sales with me, only sold direct, evaluated the use cases by myself to find one that could scale. I learned a lot from this experience. Learned a valuable lesson at a price.

L: Did your thinking about failure change? when did you think you could fail and recover?
P: It started when you are a little kid. When your team loses in sports, you try harder. When you fail once and win the second time, the win is so much sweeter. My failures have turned into a stepping stone to something that was a win.
L: I never failed when I was growing up, straight A's etc. I wish I would have failed earlier. My first failure was really hard, because you have nothing to fall back on. When I reflect back on my failures at work, those are the best things that happened to me.

L: What's your secret sauce in building great teams. Salesforce.com is a great place to work at, and you've had huge success.
P: When I started working, people thought of success based on how many people worked for you. Now we don't work in a hierarchical way any more. All companies today are made of teams. Today teams are like free-agents. If you don't like the team you work with, you can go and work for another team. People have to work to belong to a team. Key ingredient is transparency and communication, focusing on results, rewards, great comm, no idea is a bad idea.

L: You are very global and your teams are global. How does that transcend outside the US? There is transparency and openness in the US, but not as much outside.
P: It still is important to look the other person in the eye. It is very difficult to not know the other person. Video is great, you get an idea about the other person. We use technology, tele-presence. We believe very strongly in writing skills. There are some people today who cannot write, due to the prevalence of voicemail in their growing years. It is very important to write an effective email. Clarity of writing is so important. Understanding the customer is very important, and you gotta understand the big growth areas in the world. You need to understand Brazil, Russia, India and China. Whether it is part of being part of a company's market entry team, whether you've fortunate enough to have grown up there. These are the places where people will buy things.
L: With accenture, we've changed our management promotion, people have to have done some tour of duty in these countries. Mexico and Africa are very interesting as well. One of my colleagues was doing some not-for-profit work in Sierra Leone.

L: One problem our clients are struggling with is how do you monetize this social networking thing and how is it going to change how we work with customers, and how we do development. At accenture, we do have some social networking tools but they are nothing as good as facebook, because they've been developed by someone who is too old. There is some power there which could drive innovation.
P: We're in a new level of sharing and transparency. People really want to share.

L: What is Marc doing to keep you guys excited at salesforce.com?
P: Couple of principles. One, there's magic in simplicity. John seely brown is a firm believer in this concept. When you make things simple, to use, to deliver value, people will use them. Like iPhone, cappucino makers work as there's one button to press. There's a relation between innovation and simplicity. We really focus on that at salesforce.com.
L: I would add, related to writing. Being able to write well, and to be concise, and to be able to keep it simple.

Questions.
Steve Blank: Liz, you spent time at Silicon valley, but your customers are the Global 200. What is the thing you wish startups knew that they always get wrong about investors role and big companies are looking for?
Liz: Easy answer. Unless you have an incredibly simple, disruptive technology that most people understand and get quickly, the problem most startups have is that the big company cannot figure out how they can inter-operate with all their systems and environment. If your technology doesn't work with all their stuff, it will be very hard to convince them.
Steve Blank: You alluded to this while talking about your career. Was there some culture shock going to a startup of that small size?
Polly: It was hard because I did a few things at once. So if you're starting ideas in a big company, you start with a very small team. The smallness wasn't a big problem. Problem was I had to learn a lot of things as a CEO. One of the things was motivating development. You have a set of DNA in you. You need to understand what your DNA is (Sales and Marketing, Product development, Finance). The older you get, you hone your DNA because you have been successful. In entrep. you need to make your scope wider. You are always looking at a problem through your DNA. Other people which I led were saying that I need to fix the product. It was difficult for me to lead all disciplines. I said to myself, what could I add to my DNA, i.e. add to me team the DNA of the other roles which are important to go forward. Relationship between CEO and board was also difficult. It was difficult to think of the money people gave the company as a loan.

Stanford: Entrepreneurial Thought Leaders » Young Entrepreneurs Interview Transcript

2010-03-10T19:13:00.004+01:00

Panel of Young Entrepreneurs - Steve Garrity, Clara Shih, Kimber Lockhart, Jeff Seibert, Josh Reeves, Tristan Harris were invited to Stanford. You can find the audio here. Below are the notes I made from the Interview. They are very quickly (badly) written, excuse me for this.

Interview
Q. What is your background?
- all stanford students, started their own ventures
- apture - reimagines the way you access information on the web, computer science student at stan 2006 grad
- computer science student, helping companies innovate in collaboration
- stanford cs 2008 crayo solutions.
- Stanford 05 elec. Buzz.io marketing platform for small businesses
- social media crm applications

Q. Lots of reasons people start companies: They want to bring new tech to people, want to work with a great team, want to solve a problem. What were your reasons?
They wanted to bring social media tech to the business.
Startups have one of best possible environments to work.
Was looking for more challenge. Was working for company for few years.
Was a process for us, and we wanted to solve a big problem.
Very interested in building products. Wanted to a variety of things.
Wanted to influence the whole product rather than simply coding.

Apture: publishing industry was collapsing. We had brainstorming sessions with journalists on how to create good news experience. Dropped out of masters program and after 9 months of deliberation decided to go ahead with this idea. One of the founders had worked with me on assignments. Other was the most talented guy in the cs class. We convinced him to join us.

Q. Would you recommend starting a company while being a student.
We built first prototype in cs class. In 10 weeks. We ended up winning competition. Then we started to brainstorm on how to turn this into a business. Senior year was spent doing this.
Use all opportunities available to you outside of studies while being a student. If the time is right for you and your team, go for it.
We got no recognition for our product during final year, but we could still turn it into an idea. Persistence. We met with enough people and got enough feedback on the idea and felt comfortable dropping out of masters.

Q. How important is it to have a partner, how do you divide the roles, is it important to have someone to get buy-in from.
We divided the tech and business part. Steve handled the product and I handled the sales. You both went to companies (google, salesforce, microsoft). While at salesforce I created this side project on integration between salesforce and facebook and this project became quite popular. That lead to my book. I realized that this was a huge opportunity - social media and business. I also got connected to a lot of companies which gave me the courage to leave and start my own thing. She sells faster than i can make the product.
We run a lot of decisions through each other.

Q: did you two pick each other because you had complimentary skills?
I hadn't seen anyone who could code like him.
Foundation is trust and transparency. If there's and issue we can discuss. Important for co-founders to communicate and trust each other especially because you want to trust them to do things you want to do. Especially if you're a stanford student who thinks you can do all things on your own.

Compere: Its a huge advantage to know your co-founders and to have seen them in the wild as opposed to in an interview.
Most investors don't invest in "couple" startups (startups whose founders are romantically linked) cause its a huge liability if they break up. We talk about everything. We will draft the email and other will review it. Pick someone that compliments your skill-set.
Three founders: we brought on third founder 9 months later. We were all technical. We did have different skill-sets. My co-founder was a voracious reader, so I delegated business tasks to john. Bob is the best engineer. We found a way to complement each other.
Even though we run things through each other, Important to trust the others. So if one is on an airplane, he trusts others to take the right decision.

Q: All of you have taken venture capital. But statistics shows: only 2% of businesses are vc funded. You chose this as opposed to bootstrapping and using customer money to fund growth. Why?
We were fully bootstrapped (money from operations, cash flow, and/or savings to fund the company. Our product was making money from day one. We didn't really need the vc money. Lot of times companies go and raise money straight, which is not recommended. We had 6 months to try different ideas before vcs came in.
It was 6 months before we took vc money. You have lots of ideas and you decide on one and you end up changing it one month later. We did a lot of prototypes. We first wanted to know this thing works. We wanted to havel real customers. Primary motivator to raise money: our customers demanded these features to be built. We wanted to accelerate product dev cycle.

Q. Why not loans?
We wanted to put all eggs in one basket and put a big bet on this. We got enough validation to go with vc. One of our partners had great connections and was experienced.
If you are in the web space, you don't need a lot of capital to prototype something. Fund raising takes away time from product development.
We wanted someone backing us for our customers and a recognized name behind us. Vc names are more recognized than angels. Was it helpful in negotiations: yes.
Compere: Basically you're saying that needed money to pay our employees. You said needed money to get credibility. Needed money to put more resources behind the product.
We needed to grow fast.

Q: These investors/VCs have the power to replace you at your company. Comments?
They would only do it if we don't do well.
Lawyer helped us understand that your baby might grow up and do its own thing.
Lot of startups fail because of people issues, ego issues. People weren't doing the right thing for the company
aquisition is like making a child grow. Wanted business to have every chance at success. Getting acquired by box was best thing for crayo.

My notes from the lecture by David Heinemeier Hansson

2010-02-21T10:48:00.005+01:00

I watched a very interesting lecture given by David Heinemeier Hansson on Stanford Entrepreneurial Thought Leaders, and here are the main points I took away.

Lecture title: "Unlearn your MBA"

You want to "make a dent in the universe".
Great time to start a business cause in times of crisis, there is no option but to start a new business (as there are no jobs).

Unlearn your MBA to startup

Unlearn you MBA to start a business (Veer away from heavy management theory).
When running a startup, your customers are not going to ask you about which management theory you used and then buy your products. They want the product.

Planning is guessing

Startups don't need five year plans, they have no clue what the situation is going to be like in 5 years.
Worry about tomorrow. 37signals worries about about 2 weeks, max about 2 months.
Most decisions in a small company are incredibly temporary.
Just get going with your startup.

Venture capital is a time bomb.

You get to play with other people's money and you waste five years of your life. Wasting five years of your life on something that doesn't work is pretty bad.
Without venture capital, you would need to prove that your idea is good enough and your business is self-sustainable.
When time bomb blows up, the venture capitalists own your company and they're putting you out of business and you have nothing to show for your 5 years.
Bunch of entrepreneurs DHH knows says they wouldn't take venture capital again if asked to do so.
Once you get Series A, you start looking for series B and spending money on making presentations to get series B instead of concentrating on your business.

Don't play with other people's money

You care much much less about other's money. When you spend your money you care much more.
When you spend your own money, you can't just put out a product without a price.
Being forced to come to this point sooner, is the best thing for a business.
You need a sense of urgency which comes from spending and earning your own money.

Playing it small doesn't mean not making money

VC says small is a beginning, it is inconsequential, it is a path to a billion dollar business. They are not happy with a business of few million dollars.
Few million dollars are lot of money provided the money goes straight into your bank account.
Your odds of building a million dollar business are much higher than building a billion dollar a year business. You atleast have a chance to build a small business, which might still involve luck of course.
Most big business start small. Very few businesses can become huge in a small amount of time. There are just enough cases for us to believe in making a big business in 18 months (e.g. YouTube). And the VCs also believe this. Hence VC business is a hit driven business. Fund 20 businesses, one might make it big. But they waste the time of those other 19 businesses and their people.

Great ideas derive from well rested minds

Misconception that if you want to succeed, you need to be a workaholic.
Basecamp was built with DHH spending just 10 hours per week during school.
When you spend 80 hours per week, only 5-10% of your work matters.
In the industrial age (manufacturing) this might have been true. The more you hammered, the more you produced. But in the software business, the idea, and the "less" execution matters.
This comes from a well-rested mind.
Many entrepreneurs brag about how less they sleep. This is stupid. When you don't sleep, your mind is not working at peak performance, and you'll develop shoddy products.

Constraints are your friends

"I'm going to work 10 hours a week only"
No choice but to under-do your competition. You have no chance to out-effort Microsoft and put more programming hours. Thus you don't compete with them, also cause there is no need.
Constraints force you to do way less than your competition.
Consumers generally love this. They say "we love how simple it is". We love all the things that come from doing less, having fewer features.

Overnight success does not exist.

No matter what you do, yo won't be an overnight success. Most overnight successes have been at it for 10 years.
Companies take a long time to get to something good. You can either take those 5/10 years at a reasonable/comfortable pace to get to the comfortable place for your business and you are also the owner of your business, or you could take VC and blow up in 5 years.

Questions:

DHH started programming with a gaming website (game reviews etc.) and that's how he got started with programming. He was also VC funded and VCs had no clue how to make money out of his idea, but decided to pay him a princely salary.
He then joined another bad software company and he learnt how not to do things. There was terrible management. Managers who have never worked for somebody else tend to be terrible managers, hence going from college straight to management is a terrible idea. You can't empathize, you can't put yourself in other's shoes and you can't build a good working environment and hence you can't build a company worth working for.
He then went to copenhagen business school, he then started collaborating with 37signals. He did basecamp which was the birth of rubyonrails. As there was 7 hour time difference, he didn't waste time in pointless meetings. The only way we communicated was by showing work. Learnt how valuable constraints are. 37signals was built on this, most of the people in Chicago work from home, and the rest are spread out all across the world. Now, they constantly try to go back to this way of working (how did we get stuff done when we were only 3 people)
Scalable startup - no correlation between number of (stupid) company policies and revenue growth. There is no one-to-one relation between revenue and number of people, e.g. revenue going up by $500000 doesn't mean you need to hire 2 people.
How 37signals got into Basecamp: They were trying to manage projects over email (customer emails, latest version of files etc.) so they built a product for their own needs.

Install Ruby On Rails in Ubuntu 9.10 Karmic Koala: The Quick and Easy way

2010-02-13T08:51:00.007+01:00

I've installed Ruby on Rails in Ubuntu multiple times, and below is the quickest and easiest way I know to get it up and running.

Installing Ruby and Rails
Run the following commands in terminal:

$ sudo apt-get install ruby-full build-essential
$ sudo apt-get install rubygems
$ sudo apt-get install rails

This should install Ruby and Rails in Ubuntu. We still need to setup the database, for which I will use MySQL. You can also choose to install the sqlite3 database.

Installing MySQL database

$ sudo apt-get install mysql-server mysql-client
$ sudo apt-get install libmysql-ruby libmysqlclient-dev
$ sudo gem install mysql

I usually leave the root password blank in MySQL to keep things simple. Of course, don't leave it blank on production databases.

Create the development database

Log into mysql to create the database:

$ mysql -u root

mysql> create database myrailsapp_development;

Create other databases (test, production) if needed.

Test your Rails installation

To test your Rails installation, generate a new Rails project using the command below. This will also generate a folder named 'myrailsapp' which will contain all your project files.

$ rails myrailsapp

Change the database.yml file under the 'config' folder to match your mysql database settings:

development:
  adapter: mysql
  database: myrailsapp_development
  pool: 5
  timeout: 5000
  username: root
  socket: '/var/run/mysqld/mysqld.sock'

Rails assumes that the MySQL socket file will be found in /tmp/mysqld.sock. In Ubuntu/Debian, this is not the case. Be sure to change database.yml to reflect the actual location of the socket file:

socket: '/var/run/mysqld/mysqld.sock'

Go to the project directory called 'myrailsapp' and start the rails app using:

$ ruby script/server

You will see the url on which you can access your application in the notifications. Your application should now be live on that url.

Firefox mobile, and the N900, saves the day

2010-02-01T21:41:00.001+01:00

It had snowed 20cm in two hours here in Switzerland, which is a lot. It seemed as if someone had covered my town with a clear, white blanket. The traffic had slowed down to a crawl. I was stuck at the bus stop as all the buses were running very late. My wife called asking me to check the status of a certain important assignment both of us were dying to know the result of. I started saying I don't remember the website password and she'll have to wait till I get home, which could be anytime between 30 min to a few hours. She was quite disappointed.

Suddenly, like a flash of lighting, it struck me. I had Firefox Mobile on my Nokia N900. I fired it up and would you believe it, it had all my passwords stored due to the excellent Weave sync add-on. While talking to my wife on the phone, I logged into the website and told her the status.

Technology, including the N900 and Firefox mobile, saved the day again.

Nokia N900 and Maemo OS: Excellent Design

2010-01-28T21:58:00.011+01:00

The Nokia N900 mobile computer brings together the best in hardware and software, and presents it in a very user-friendly package. The N900, together with the Maemo OS, is one of the best examples of design I've seen. This is due to its excellent incorporation of user feedback in both software and hardware, in my opinion.

Let's start with the software. The N900 user interface (screen) always shows which actions are possible, in a very subtle and eye-catching way. For example, the active part of the phone will be clear and in the front, while the inactive part will be greyed out. If you want to go back or exit the active view, just click on the inactive part which is in the background. This was my default reaction when trying to exit. Features like these, in design terminology, shorten the gulf of execution: the user always knows what actions are possible with the interface.

Second, status notifications and the status area are both well designed, providing appropriate and alluring indicators about the current state of the device (screenshot below). The status notifications show up as yellow strips on top of the desktop with a pleasing sound, making them immediately noticeable. The status area has important indicators, like the type of mobile network connection (3G), battery level, active Bluetooth connection etc. They can help conserve battery, by turning the active connections off when not required. The two vertical bars below the Bluetooth icon are my CPU and memory usage respectively, obtained after installing the excellent cpumem-applet. This lets me know whether an application is working in the background, just like on a PC. There are also other status indicators shown here, which pop up upon tapping the status area once.

The hardware also includes great design decisions on feedback: the phone vibrates when the screen is touched, informing the user the touch has been registered. While this is a small feature, it has tremendous implications on usability. I've been able to use this phone and its excellent MicroB internet browser better due to this handy feature.

And I absolutely love the N900 resistive screen, and I prefer it over capacitive ones. I don't need to take my gloves off in order to operate it, which at a temperature of -5° outside is a life saver. Plus the 800x480 screen resolution is absolutely amazing, allowing me to configure my desktop as I want it. The desktop above has my office calendar and some shortcuts.

Overall, Nokia and the Maemo community have succeeded in creating a powerful piece of technology in a very user-friendly package, and a stunning example of industrial design. They set out with the goal of creating a computer which also had phone capabilities, instead of the other way round. In my opinion they've succeeded.

Best "Back to School" Laptops - Dell XPS Vs Macbook Pro Vs Lenovo X200

2009-11-18T15:01:00.004+01:00

Here is a comparison of your options for "back to school" laptops/notebooks for 2010:

Apple Macbook Pro ($1,299)

My "ready-for-school" configuration includes:

2.26GHz Intel® Core™ 2 Duo with 3MB on-chip shared L2 cache 1066MHz frontside bus
NVIDIA GeForce 9400M 256 MB
13.3-inch (diagonal) LED-backlit glossy widescreen display
4GB 1066MHz DDR3 SDRAM - 2x2GB
160GB Serial ATA Drive @ 5400 rpm
SuperDrive 8x (DVD±R DL/DVD±RW/CD-RW)
1-year base warranty

Dell Studio XPS 13 ($1,184)

Recommended configuration:

Intel® Core™ 2 Duo P8700 (3MB cache/2.53GHz/1066Mhz FSB)
NVIDIA® GeForce® G210M – 512MB
Edge-to-Edge 13.3" HD WXGA LCD with 2.0 Megapixel Camera
4GB Dual Channel DDR3 SDRAM at 1067MHz (2 Dimms)
320GB 7200 RPM SATA Hard Drive
8X Slot Load CD/DVD Burner (Dual Layer DVD+/-R Drive)
2 Year Ltd Hardware Warranty, InHome Service after Remote Diagnosis

Lenovo X200 ($1,263)

Recommended configuration:

Intel Core 2 Duo processor P8700 (2.53GHz, 3MB L2, 1066MHz FSB)
Intel Graphics Media Accelerator 4500MHD
12.1 WXGA, 2x2 UltraConnect II antenna; with Camera and Wireless Broadband Upgradeable
4 GB PC3-8500 DDR3 SDRAM 1067MHz
160GB Hard Disk Drive, 5400rpm
1 Year Depot Warranty

I would recommend getting the Dell XPS 13 due to the better graphics processor and the 2-year hardware warranty, all at a lower price. Don't underestimate the hardware warranty you'll need. In my experience it is quite handy and has saved me a ton of cash.

If you are more interested in the design and look of your laptop, get the Macbook Pro.

The Defensive Investor

2009-08-06T23:31:00.000+02:00

In this post, I will discuss the philosophy of "Defensive" investing as opposed to "Active" investing. Defensive investing should be and is followed by people who don't want to take undue risk and who are not willing to take the time to actively analyse companies and stocks. I will mainly concentrate on investing in stocks, but defensive investing principles also apply to other investments. The biggest advantage of defensive investing...it is so easy!

What is defensive investing?
Defensive investing is explained very well by Benjamin Graham in his classic book 'The Intelligent Investor'. I quote:
"The defensive (or passive) investor will place his chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions. The determining trait of the active (or enterprising, or aggressive) investor is his willingness to devote time and care to the selection of securities that are both sound and more attractive than the average."

Based on this definition, defensive investing implies investing in relatively safe stocks (securities), and freedom from constantly monitoring your investments. If you get hold of the concept of defensive investing, you lose the urge to constantly monitor your investments and the stock market. You sleep much better too. Active investors on the other hand devote much time and care into hand-picking stocks which are both sound and give better-than-average returns. Generally they do it as a full-time job.

My main aim in this post is to tell you that there are other ways to invest in stocks besides sitting constantly in front of a computer screen and yelling Sell, Sell, SELLLL...

Are you a defensive or an active investor?
One of the first things that you should decide is whether you are a defensive investor or an active investor. To be an active investor, you need to devote a substantial amount of time to researching stocks and companies, and you should be doing it as a full time job. If you know that you cannot devote this time to your investments, then I suggest you become a defensive investor like me.

How do I become a defensive investor?
Lets take a look again at the traits of a defensive investor:

Avoids serious mistakes
Doesn't devote too much time to investing

How can defensive investors accomplish this with little or no knowledge about stocks? By Diversification. In my view, the essense of all this is to diversify your investment. Diversification is the key for defensive investors, and if your portfolio is adequately diversified I would say that you are protected from the pitfalls of stock investing.
The next point is the type of stocks to buy. For investors to be safe, they should aim at building a sufficiently diversified portfolio with the 30 largest, blue-chip companies available. These large-caps, as they are referred to, have a substantial history behind them and investors are pretty much assured that the money they invest in them will never be wiped out.
The last point would be to keep investing periodically. The reason why investing periodically is safe is because of Cost Averaging. Investing periodically removes all the hassels of timing your stock investments, and frees you.

So, where can you find sufficient diversification, a primarily large-cap portfolio, plus the opportunity to invest periodically?

Index funds - A boon for defensive investors
I would have thought the answer was obvious. Index funds offer instant diversification, and the main indices like India's Sensex and Nifty track the best of the best large-cap blue-chip companies. You also have the option of taking a systematic investment plan (SIP) with an Index fund.
So, just take an SIP with an Index fund and then forget about it for the next 10 years. Increase your SIP amount as your salary increases. Simple.

You say...But is that all???
Yes, investing is not difficult. Defensive investing, especially, is easy for the know-nothing investor. You just need to get your basics right, read a couple of good books on investing and you're set. Happy investing.

Security hole on IRCTC's portal, lets you book free train tickets

2008-06-01T09:31:00.017+02:00

There is a security hole on IRCTC's online train ticket booking portal which lets you use a GET request to make the payment for a train ticket, without actually making any payment through your bank. Let me take you through this story.

Today, a fine Sunday morning in Switzerland, I wanted to book my train ticket on www.irctc.co.in to travel from Delhi to Bhopal. I think I had too much time on my hands. I noticed that when I finished making the payment on my bank's payment gateway using the direct debit payment option in IRCTC, the bank gateway confirmed the payment using a GET request, i.e., a URL which goes something like the following:

https://www.irctc.co.in/cgi-bin/bv60.dll/irctc/booking/bankresponse.do?ClientCode=4567&MerchantCode=IRCTC&TxnCurrency=INR&TxnAmount=1581.00&TxnScAmount=11.23&MerchRefNo=1234567890&StSucFlg=N&StFailFlg=N&Date=06/01/2008+12:09:00&BankRefNo=601120915&Message=&method=T&methodtype=

I copied this to my clipboard and wondered if this can be used to confirm tickets which are waiting for payment confirmation in IRCTC's portal. So I did the following:

Started to reserve a ticket on the IRCTC portal, e.g., travel from Delhi to Bhopal.
When the portal took me to my bank's payment gateway, I didn't make the payment.
Then I modified the above GET request to suit the ticket I had just booked (using information I found on the IRCTC portal), entered it in the firefox address bar and hit enter.
The IRCTC portal confirmed that I had booked my ticket, and I saw that my reservation was confirmed.

Wow, I can use this to book free train tickets in India. Plus I can also cancel this ticket and IRCTC will refund the money for the ticket, the money I never paid. Sadly, the good guy in me forced me to send an email to care@irctc.co.in to inform them about the security hole. Dammit!

I love software.

UPDATE Aug08: They seem to have changed the process of confirming the bank payment, maybe after I sent them the email, but they are still using a GET request. A basic rule is that one should never use a GET request to change something at the database. These guys are violating this rule blatantly by confirming the payment from the bank and changing the status of the train ticket on the database using a GET request.

UPDATE Nov08: Now the IRCTC portal uses only POST requests to confirm payments from banks. That's the right way to do it IRCTC. Security hole fixed.

Mind Your Own Business

2008-04-06T09:10:00.012+02:00

Do you mind your own business? Do you take care of your finances on your own? Or do you expect others to take care of them for you? When we expect our employers to take care of us, maybe give us a better salary, we are actually asking them to take care of our financial needs for us. This might, and does, lead to disappointment. But why expect others to take care of you - when you have the power within yourself? All you need to do is Invest.
Ladies and gentlemen, I'm here to tell you about this power, the power of investing, and how you can use investing to take care of all your financial needs, to start minding your own business.

What is investing?

Investing means to put your money in a place where it grows and gives you more money. People usually invest in Stocks i.e., they buy a part of a company which they think will do well. People also invest in precious metals like Gold hoping that the value of gold will go up. And you can also invest in fixed income investments like bonds which give you a fixed return on your investment. These are the main avenues of investment, and you can use these to make your money grow. I find a combination of these investments to suit me personally. I invest a majority of my money in Stocks, and a part in gold and fixed income. Hence I diversify across these investment avenues.

But investing requires time to understand and you need to know what you're doing while investing. So, Why should you invest? Why should you spend the time needed to learn how to invest?

To become rich. And what does “being rich” mean? Does it mean that after retirement you have enough money to lead a comfortable life? Does it mean that you have enough money to send your kids to college? No, anyone can do that. Being rich, for me, means that even after I’ve lived a comfortable life, I leave a substantial amount of money for my future generations, so that they may build upon it even more than I have. That is being rich. And to do this, you need to hold on to the money you have instead of spending it away.

And how does investing help you do hold on to your money?

Let me explain with an example. Two people, Mr. Spender and Mr. Investor, want to buy a new plasma HDTV which costs 3000CHF. Mr. Spender saves up for the television and then buys it by paying the full amount. What will Mr. Spender have in about 3 years? After 3 years, he will have a television which then would be worth half as much as the original value or 1500CHF. So he has spent half of his money away.

What does Mr. Investor do? The investor waits, he waits till his investments generate 3000CHF. Then he buys that television and uses his profits to pay for the television. What will he have at the end of his 3 years? He will have a television worth 1500 CHF, plus he will still have his initial investment. So investing lets you keep the money you have and still lets you buy the things you want. This is the fundamental concept of investing.

Before I conclude, I would like to put in a word of caution. Investing without knowing what you're doing is dangerous. That’s why I would recommend you read a couple of good books on investing. They will help you get started. Investing is pretty easy once your basics are clear. I'm no financial analyst of money manager and if I can do it, anyone can.

And where can investing take you? There is a guy called Warren Buffett. He did not make any software; he did not inherit any money. All he ever did was invest. In his first partnership at the age of 25, he started with investing just a $100. His personal fortune now totals $62 billion. He my friends is the world's richest person and the world's greatest investor.

P.S. Good books to learn about investing:

Collaboration & the Web, v2.0

2007-10-26T00:04:00.000+02:00

The internet has always been something special; it has always had the potential to change the world. It took its first small step with email and revolutionized communication for us. And now it's taking its next small step. The web is becoming more dynamic, more interactive. This is the new Internet, the new web, version 2.0. And the essence of the web2.0 is collaboration, collaboration between few people, between thousands, between millions of people.

Dear friends, today I would like to tell you about this new version of the web and how it can help you collaborate with thousands of people instantly.

As always, it all started with an idea. Ward Cunningham created something called a wiki. In the past, websites were static and you could only read what the website had to say. The wiki however is a website that anyone can change and put in content, easily.
Two people Jimmy Wales & Larry Sanger had this idea. They thought of using a wiki to get content for an encyclopaedia they were managing, from their users. They created a wiki meant to be an encyclopaedia, called it Wikipedia and made it freely editable by anyone. What they created is now the single biggest source of information on the internet and has more than 6 million users collaborating and creating content for this encyclopaedia.
What Ward Cunningham created was a collaboration platform and Jimmy Wales used this platform to collaborate with millions of people across the world. We created a small wiki in my company which we use to manage the user manual of a software, and this manual is maintained also by the users of the software.

And then someone had another idea. Kevin Rose and his friends were unhappy with the news they found on the internet. They felt they could find better stories. They created a news site where the news editors are the users of this website. They are also the ones who submit stories to this website. They called it Digg. On Digg users "Digg" or vote for stories they like and the stories with the most votes come to the front of the website. Digg is a website that is dynamic, it changes based on the inputs of millions of people collaborating together to bring you the best news stories from the internet.

And speaking of collaboration, one of the most useful collaboration tools we use are spreadsheets also sometimes known as Excel. What web2.0 is doing is helping you to create spreadsheets online, share them and collaborate on them with hundreds of people at the same time. In my group of 20 people, we used an online spreadsheet to manage the trips we were planning to take in Europe. Here we listed out our trips and then everyone put in their names into the trips they wished to go on. And we all did this at the same time. In the end, everyone could see which people were going on which trips and hence coordinate these trips better. Google documents is a free tool that you can use to create and collaborate on documents, spreadsheets and presentations online.

In the end, web2.0 is all about sharing information. And to summarize the goal of such technologies, I would like to quote Jimmy Wales explaining his motivations about Wikipedia... "Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That's what we're doing."

Mutual Funds 101: How to avoid choosing a bad fund

2007-01-08T12:38:00.000+01:00

I was planning to write this for quite some time now. I will draw on my (short) experience of 3 years with mutual funds for this article, still with the aim of getting more people to invest in the Indian stock market and the Indian economy. I am writing this article for Investors, not for traders/speculators. It will be a bit of a long article, and I will describe the steps I take before I put money in a mutual fund.

What is a Mutual Fund?
A Mutual Fund is a group of people that takes your money and puts it into stocks/bonds etc. of companies which they think will do well and hence generate returns for you. Since this group manages your money, they charge a commission annually which is a percentage (Expense Ratio) of the total amount being managed. And they will charge this commission even if they incur losses on your money. The only thing that you can surely predict about mutual funds is that in any eventuality, even if they lose all your money, they will still charge you expenses!
So you provide the money, you assume all the risk, you will lose money, and they will still get their expenses. Can you guess that I don't like fund expenses? :). These expenses assume crazy proportions over the long term.

On predicting the future.
The most important thing that I can tell you before you get started is: You cannot predict which mutual fund will do well (better than average) in the future, and you cannot also predict the stock market. That said, what you can do is avoid choosing a bad mutual fund which gives you bad returns and hence loses money for you. 4-5 well chosen mutual funds are enough for any investor.

On the goals of a 'know-nothing' mutual fund investor.

According to me, all mutual fund investors should aim to do the following:

To invest in a well-diversified basket of 4-5 mutual funds, not more
To invest so that he has exposure to Large, Mid and Small Market Capitalizations [1] (which is implied by diversification)
To stay invested in a good mutual fund for at least 10 years

All Indian investors should know that there is no tax on profits if you stay invested for at least a year i.e., there is no long-term capital gains tax. So if you buy a mutual fund and hold it for 1 year or more, you will not pay any tax on the profits and they will be completely yours. Mr. P. Chidambaram (India's finance minister) has done a good job with this policy to get more people to invest for the long term.

Choosing a mutual fund Step 1: Expenses

The first step should always be to know the expenses of the mutual fund which is indicated by the Expense Ratio [2]. In India, the usual expense ratio is around 1.9-2.4% and is very high. Average expense ratio in the US is 1.5%. You can find out the expense ratios of mutual funds on www.personalfn.com. Besides the expense ratio, all mutual funds have to pay the broker who tricked you into investing in their mutual fund. This is called the 'entry load' and is about 2.25%. So whenever you invest in a mutual fund, you lose about 2.25% at the start and 2% annually.

What I do is to try and choose a good fund with the lowest expenses i.e. minimize expenses. And this is where Index funds have an advantage, they have the lowest expenses and generally no entry load. The expense ratios of all other actively managed mutual funds in India are more or less the same and therefore the expenses have not played that big a role till now. They will when the expenses start going even more crazy. In the US, mutual funds with high expenses are known to give below average returns.

Choosing a mutual fund Step 2: Portfolio Turnover

All investors should be looking to invest for the long term and not trade. But if the mutual fund they invested in plays trading games, then the whole idea of being an investor is lost. The Turnover Ratio [3] is a measure of how frequently the mutual fund trades stocks. To explain it simply, a turnover ratio of 50% means that this mutual fund changed half the stocks in its portfolio during the previous year implying it holds a stock for 2 years on average. Mutual funds who sell stocks without holding them for at least 1 year pay taxes on the profits, and these are passed on to you.

Since I am a long-term investor, what I try to do is choose a fund with the lowest turnover ratio i.e. try to minimize turnover ratio. Index funds are not supposed to trade and so have TRs of less than 10%, i.e. they hold a stock for 10 years on average. I could also find a regular fund that had a TR of 20%. Now that is a good fund. This also implies that this fund researches its stocks before buying.

Finding the turnover ratio is an arduous task in India, and it takes a lot of phone calls to find out. If you're lucky, the MF will publish its turnover ratio in its fact sheet.

Choosing a mutual fund Step 3: Asset Size

One of the things I observed with my investments was that funds whose asset size is huge, tend to perform below average [4]. This is explained in many books as: when the mutual fund has a lot of cash to invest, it has trouble finding sufficient number of good investments to put money in. Hence I try also to minimize asset size. I try to choose funds which are not huge and don't need to find that many good investments.

Choosing a mutual fund Step 4: Past Performance

I repeat, you cannot predict whether a mutual fund will do well or not, you can only avoid choosing a bad mutual fund. Past performance does not mean that this mutual fund will do well in the coming years also. In fact, it is more likely to do badly [5].
Hence after I decide on my mutual fund based on the above 3 criteria, only then do I look at the past performance and the mutual fund rating just to make sure that this fund indeed can deliver an average performance. You can find that on www.valueresearchonline.com and also www.personalfn.com.

My mantra is: ETA - minimize Expenses, minimize Turnover and minimize Asset size.

P.S.
For the past 2 years, Index funds have outperformed almost every other type of fund by a wide margin as shown in the picture below:

Appendix.
[1] Market Capitalization
[2] Expense Ratio
[3] Turnover Ratio
[4] Asset Size
[5] Past Performance

Mind Your Own Business, Invest

2006-10-24T00:06:00.000+02:00

(This is an edited version of a speech I gave at Toastmasters, Zurich. Toastmasters is an organisation that helps you become better public speakers.)

Most of us spend our lives working for some person or company. Most of us hope that this person or company will take care of us and our needs. And when these needs are not met, we change jobs in the hope that some other company will take better care of us. But what we don't understand is the fact that when we work in a company, we work for someone else. Why would this person take care of your needs at the cost of his? He would first take care of himself, and then if something is left over would he look towards you. Fellow toastmasters, today I will tell you how to get out of this vicious circle. Today you will learn how to start minding your own business and stop worrying about salaries, today you will learn about Investing.

What is Investing?
Investing, simply put, means to put your money in a place where it will grow and give you more money. People generally invest in Stocks i.e. they buy a part of a company they think will do well. People invest in Real Estate i.e. they buy land which they think will go up in value. People buy precious metals like Gold hoping that the value of gold will go up. These are the three main avenues of investment. Investing in Stocks is the most convenient by far and probably the best way to invest. All you have to do is open a safekeeping (demat) account with your bank and you can start buying stocks. I would recommend investing money in Mutual Funds, which analyse companies and buy stocks for you.

But investing requires time to understand and you have to know what you're doing. This brings me to my second point of Why should you invest? Why should you spend the time to learn how to invest?
To become rich. But what does it mean to be rich? Does it mean that after retirement you have enough money to live a comfortable life? Does it mean that you have enough money to send your kids to college? No, anyone can do that. Being rich, for me, means that after you die you leave a substantial amount of money for your future generations, so that they may build upon it even more than you have. That is being rich.

And how does investing help you do this?
Let me explain with the help of an example, consider the simple case of buying a car. A normal person buying a 30,000 CHF (swiss francs) car takes a loan to buy it. He pays a little more than 500 CHF a month for 5 years. So at the end of 5 years, what does this person have? He has a car that is worth only half as much as the original value i.e. about 15000 CHF.
What does an investor do in this case? An investor waits. He waits till he has enough investment to generate 500 CHF a month. Then he takes a loan and his investment pays for the loan. So at the end of his 5 years, he has a car worth 15000 CHF plus he has his initial investment. This is not like saving money to buy a car, investing lets you keep the money you have and still lets you buy the things you want. This is the fundamental concept of investing.

Before I conclude, I would like to again put in a word of caution. Investing without knowing what you're doing is dangerous. That is why I have included the names of some great books on investing in the handout that you have in front of you. They will help you get started.
And where can investing take you? There is a guy called Warren Buffett. He did not make any software, he did not inherit his money. All he did since he was 25 years old, is to invest. He my friends is the world's second richest person and the world's greatest investor.

(Books on investing mentioned in the handout are the same as the three mentioned in my previous post: Investment Vs Speculation)

Investment Vs Speculation: How to Invest

2006-09-26T11:58:00.000+02:00

The situation today in India is that only 2% Indians put money in Stocks, and even fewer are Investors. Most people in the Indian stock market today are Traders or Speculators. This at a time when stocks are one of the best investment avenues available. In this article I would like to explain what the difference is between Investment and Speculation, with the aim of getting more people to start investing in stocks. There is a lack of investment knowledge in India, which I would like to change.

What is an Investment?
"An investment operation is one which, upon thorough analysis promises safety of principle and an adequate return. Operations not meeting these requirements are speculative." - Benjamin Graham
When you make an investment, you must make sure that there is a promise of your principle amount invested being safe. You can get this promise of safety with stocks only when you buy stocks with a long-term perspective and with thorough analysis of the company. Yes, analysing a company is not so easy for 'know-nothing' investors. Even I don't know how to analyse a company, yet. But having a long-term perspective is not difficult. And this is what I would like to stress - please invest for the long-term (>5 years) and keep investing periodically (SIP). Invest in mutual funds as they would do the company analyses for you. Only then will you stop worrying about stock market crashes and stock charts, and start becoming an Investor. This is specially relevant for IITians as they shouldn't spend their time hooked on to the stock market, they should spend their time changing India.

Sadly, most people playing in the stock market today are speculators with a time frame of a trade being a couple of days, even less. These speculators/traders are looking to get rich quick, make a quick buck. Why else would people put money in a stock with the aim of taking it out in a few hours. And in here lies the risk that most people refer to when talking about the stock market. It is for you to decide, whether you want to become an investor or a speculator.

The Temperament of an Investor.
It's important for an investor to have the stomach for stock market swings. An investor is someone who did not take out her money in the recent market crash in June. She is someone who waits for such crashes, and then invests big. To see your money go down by 30% or more and still manage to get a good night's sleep takes special courage.
An investor is one who expects only an adequate rate of return on his investments, and his financial goals are based on this expectation. When he buys a stock or a mutual fund, he intends to hold it for at least 3-5 years. I am slowly learning to not check the stock market everyday, and not constantly monitor my portfolio.

Does "Investing" work?
So, is 'value investing' for the long-term effective? The second richest person in the world today is Warren Buffett. When asked what his ideal time-frame for an investment is, he said "a lifetime". Warren Buffett has not made any software, he has not inherited his money, all he did since he was 25 was to invest. He has held on to some companies since he bought them, never selling, and intends to keep holding them. He, my friends, is the best investor in the world, averaging a return of 21.9% per annum over the past 50 years.

P.S.
To get started in investing, I suggest you read some books first. Some good suggestions are:

Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! - Robert T. Kiyosaki
The Warren Buffett Way - Robert G. Hagstrom
The Intelligent Investor - Benjamin Graham

Analogy to Real Estate.
When you make an investment in land, you stick with it for at least 5 years, even more. For me an investment in the stock market is no different. In the real estate market, is there a tracker that tells you the price of your property each day? Do you try to find out the value of your property every day? No. Stop looking at the stock market graph every minute. Look at it only to find the right time to invest - after a crash.

Mutual Funds are Costly, Invest in the Index

2006-08-13T10:48:00.000+02:00

Many of you, I hope, must be investing in mutual funds. That’s the safest choice for people who want to get in on the action in the stock markets without having any knowledge about stocks and companies. But I believe that mutual funds are costly even for the ‘know-nothing’ investor, who doesn’t know anything about playing with stocks and the stock market. They are better off investing in Index mutual funds or even better, investing directly in the stocks that make up the Index.

First, lets consider the Fees mutual funds charge in India. There’s the 2.25% Entry load, which is the fees that the mutual fund house pays the broker who made you buy the mutual fund. Then there’s the expense ratio of 2-2.5% per year, which is the yearly fees the mutual fund charges you for using their services. This expense ratio is adjusted in the daily NAV that the mutual fund quotes at. So if you stick with the mutual fund for a year, you would be paying ~5% to the fund. If your fund earns 20% returns in a year, you would only get 15%.
Imagine what the expense ratio (of 2.5%) does to your profits over the long term. Lets say you invest Rs. 1000 for 40 years and get about 10% averaged return on your money annually, this should give you about Rs. 45,259. But with a mutual fund, your annual return would be 7.5%. Your Rs. 1000 would only become Rs. 18,044 which is a difference of 60%. This 60% is taken by the fund.

But you say that it's worth it. The fund managers give you Professional Management of your money for this fees. You get better returns on your investment, right?…Wrong!
Almost all studies undertaken on this subject say that there is no correlation between high fees and high returns. The US Securities and Exchange Commission's website says:
“Higher expense funds do not, on average, perform better than lower expense funds."
What that essentially means is that the fees you’re paying doesn’t guarantee better returns. You’re better off investing in lower expense funds.

Index Funds, mutual funds that invest only in the stocks of an Index, like the SENSEX, are known for their low expense ratios and no entry loads. But that’s not all they’re known for. Index Funds (in the US) have been known to beat most mutual funds over the long term (3-5 years or more), which goes to show that the “professional management” of mutual funds isn’t all what you hoped for. The low expense ratio in Index funds is because all what Index fund managers do is put their money in the Index constituents, stocks that make up the Index, in the appropriate ratio as in the Index, and then go to play golf. If the Securities and Exchange commission changes some stocks in the Index, they come and do the same changes. Because of the low expenses, you are better off investing in Index funds. They earn better returns and charge you lower fees. E.g. Franklin Templeton Index Fund - Expense Ratio 1%.

But can’t you do what the Index Fund managers do? Can’t you put your money directly in the stocks that make up the index and then go to play golf?
Nope, you can’t. Golf is difficult to learn.
But you can very easily invest directly in the Index stocks. This way, you would avoid paying any management fees and would pay only the brokerage. To invest in the Index: Open a DEMAT account with a reputed bank like ICICI or HDFC. Look up the Index constituents break up on Google or look at the constituents of an Index fund like the FT Index Fund. Invest in each stock based on the ratio of each stock in the Index. You would avoid Mutual Fund fees altogether. But stay invested for the long term, atleast for 3-5 years (a lifetime would be ideal). Don’t let stock market crashes scare you.

So until you know how to pick stocks and calculate the value of companies, "Index Investing" and Index funds is the safest way to invest. This is what I’m going to do.

P.S.
Index funds haven't done well in India till now, but it might change in the future as the Indian market starts becoming efficient.
For another point of view specific to India, see this article:
http://www.valueresearchonline.com/story/storyview.asp?str=9040

Cracking the GMAT, for IITians

2006-04-01T09:25:00.000+02:00

Ok, I did reasonably well on the GMAT.
People have asked me about some advice on the same, so here it is.

The main questions I will answer are:

What makes a good CV for B-school
How tough is the GMAT
How to Prepare
What to do on D-day

What makes a good CV.
Only a good GMAT score will not get you into a top-10 B-School (BS from now). There are three main qualities B-Schools want: A good under-grad GPA, good solid work-ex/leadership qualities, and a good GMAT score.
How much importance they place on each point is irrelevant, you have to present a good overall picture.

I read something about Harvard BS once. The article went 'Harvard chooses people based on their potential to earn a lot of money later on in their lives, and donate money back to their alma mater. Hence it would take people who are already top performers in their fields of work, as they are its safest bet to minimize its risks. So in a way, Harvard doesn't really do anything. It takes winners and turns them into winners.'
So if you showcase yourself as a winner, you would get in.

How tough is the GMAT.
To get 600 on GMAT for IITians is easy. But to get above 700 takes some effort. A good score for IITians if they want to go to a top-10 BS is about 730-750, and some IITians get even more.
When you apply to a B-school in the US, an IITian is grouped with other IITians. You are not competing with Americans, you are competing with IITians. Maybe you should keep that in mind when you take the GMAT or start applying. The people taking your interview would be comparing you to other IITians, who typically have 700+ GMAT, good GPA (7.5+) and 3 years work ex.

The GMAT is an adaptive test, so it keeps on giving you tougher questions until you start getting them wrong. IITians typically breeze through the initial questions and come up to the highest levels. And there, when you're repeatedly hit with one tough question after another, you say to yourself 'Hey, its not as easy as I thought'.
I found the English section in the GMAT tougher than the Math section. I think almost all IITians would feel the same, so please work on the English section. That's whats going to get you past 700.

How to Prepare.
I think it would take an IITian about 6 months to prepare well for the GMAT.
There are study books available which you have to do. You don't need special coaching for the GMAT, just study from those books. This is also cause all the coaching institutes in Delhi for GMAT/GRE are just crap.
KAPLAN's GMAT is a really good book, which takes you through the basics of both the English and the Maths section. I believe that Barron's GMAT is also ok, which you can take up after you finish your first book. It has a lot of extra questions for you to practice. Pay special attention to the really tough questions, you would be getting a lot of those in your GMAT.
Take a mock GMAT when you start preparing. It would help you gauge where you stand. When the GMAT is approaching, take the free GMATs you get when you register with www.mba.com, preferably the second one a couple of days before D-day. They are quite good in predicting the score you would get. I also think my GMAT was tougher than the mock GMATs, but my score was the same as I used to get in the mock GMATs.
The essay section is also important, read what KAPLAN has to say about it. You have to practice writing and typing essays on your PC. I got a 5 in my essay, which is good I think.

What to do on D-day.
Read what mba.com and KAPLAN have to say about the day of your exam, they have good tips.
Some observations I made during the test are:

Write the names of 5 B-schools you want to send your score to on a sheet of paper and take it with you. You can either choose to enter the names before the start of the GMAT on the PC, or after the GMAT on a form you get. You will not be allowed to take the piece of paper with you into the test room.
So maybe its better to fill the names later on the form.
The ear plugs they gave didn't really work for me. So I adjusted to the typing noise other people were making. You should also not let it bother you.
4 hours is a long time. Use the breaks you get in between sections effectivily to de-stress a little.

And chill, its just a test.

Comment: The Truth about Phoren

2006-03-31T14:45:00.000+02:00

Part 1: The truth about Phoren

Verma posted a nice comment about living in Phoren (See my post 'The truth about Phoren'). I would like to qoute him:

"IMO, those of us who come to work in "phoren" see it as an investment... at least the first couple of years.
Think of this: you earn more and so even if you save the same %, your networth (savings -> investments etc) grows faster out here than in India. If you're of that bent, you can create a sizeable asset-portfolio much faster than an upper income individual in India would be able to.

I think the best of both worlds is the Middle East. There, you can earn like you do in a western economy (in terms of absolute buying power) and afford all that you're used to in india: dhobi, mali, and kaam-wali."

I agree, there are things that can be said for living abroad, and one of them is the amount of money that you can save. Even if it is the same percentage as in India, it is more. But in the end, you would have to go back to India and spend your savings there, for them to count as more.
Its all relative I think.
But one thing's for sure, I couldn't really think of buying on impulse my DELL Inspiron 9400 without earning in Francs.

I stopped for some time in Dubai, and I was amazed. Its India...without all the garbage. But you have to give almost half of your salary to the Sheikhs, and I agree that there is always the "constant dagger" of insecurity.
One interesting incident I came to know about: Once an Indian along with his wife went for dinner at a Sheikh's residence. I took this with a pinch of salt, but what transpired is that the Sheikh liked the guys's wife and he kept her! Imagine that, one minute you happy that you have a wife, the next minute you are simply without her.

The Truth about Phoren

2005-11-12T18:33:00.000+01:00

Here are my initial thoughts about being in a foreign country. I can't say that it would be the same for all countries outside India, but hear me out.
Two things I would like to talk about - Living and Working.

Life.
I've been living in Switzerland now for a while. I guess everyone says that it's the best country in the world to live. I'm not so sure.
One of the senior guys I met here put it very nicely. He said - "Here in Switzerland I have everything I had ever wanted, cars, money, nice house. But the best time of my life would still be the time I spent in India. There I got my clothes washed, my food cooked, my house cleaned for me...and that for me is true luxury."
And this is not an isolated viewpoint.
You get paid a lot more than you do in India, but here everyone else is also being paid as much as you are, maybe more. You can afford a lot of things and gadgets, but you wont be able to afford a maid.

As for things to do when you want to pass time, its too cold for there to be many things. Let me elaborate.
Switzerland is a cold country, the temp goes to 0°C routinely in the evenings for more than half the year. And the culture here has developed around that fact. All the shops close at 630 in the evening. Almost nobody is out on the streets in the evening, and people prefer to be in bars or clubs in the night. In India, its much better, with people almost out every night for window shopping and movies.
Someone had also said: "In Delhi we always had things happening and there was always stuff to do. Here you just feel lazy after coming back from work, and sit at home and watch TV."
Life in India is much more happening than the life here. Surprising.
There are adventure sports in summer. All for a price though.

Work.
The Work that an Indian would get in Europe or America is much better than the work he would do in India.
One reason could be that since Indians are good workers, the people here notice that and give us more responsible work. The natives who have just started work here, have a very easy attitute to work and I guess that shows.
Another not so significant reason could be the outsourcing business. All the work that is outsourced to India is work that is too boring or too expensive with regard to manpower. And this work is not good work. So when people say that all the real work gets done in America or Europe, they are not too much off the mark. Engineers from IIT wouldn't enjoy outsourced work, I am sure.

Well, what conclusions can I draw. Not anything concrete I'm afraid. All I can say is, and this was told to us by a respected gentleman in the IIT Alumni counselling session at IIT Delhi, "Go out for a bit, see the world, but then come back to India".

India for me is the best country in the world to live.

Ordering Pizza, Jwalamukhi style!

2005-05-31T14:23:00.000+02:00

Alas all this is just a memory now....

This is something we did in our final year at IIT Delhi, Jwalamukhi hostel.
We used to get pizzas from pizza hut in Green Park. Now their pizzas are good but prohibitively priced. But the price we used to get them for was peanuts...

We had a 50% discount coupon, and pizza hut was also running an offer at that time of giving a pizza of the same value free with an order from the international range of pizzas. We also had those coupons. Normally they didn't club two coupons together but for us they did cause they had allowed us this double option once and we reminded them about this everytime they tried to deny this option. So we ordered pizzas, got a second pizza absolutely free and also a 50% discount on the total price. And so we got medium international range pizzas from pizza hut for about 60 bucks...

Sometimes the total order exceeded 500 bucks, after which the 50% discount coupon isn't valid on the amount that exceeds 500. If we were lucky the person taking our call didn't notice and we got a discount on the whole. I recall once that we had announced the coupon to the guy on the phone but that didn't show in the bill and we argued with the delivery guy and got the discount on the whole.

And we argued with the delivery guy if he was late, even if he was late by 1 min because that made him forget that he had to take the 50% discount coupon from us...we used the same coupon almost 3-4 times, and also did this with other 50% coupons we got. Sometimes the delivery guy gave us a coupon out of frustration.
At the end, these pizza hut guys had started getting wise to us and started arguing with us quite intensely.

We also used to play with their ordering system...we placed an order, and after 7 min placed another order for the same address, like when we were ordering pizzas for four of us. That invariably screwed their delivery and earned us a 50% discount coupon.

Guys, those were the days...

Orphanages in Delhi, India

2004-07-12T19:34:00.000+02:00

I was looking for orphanages in Delhi, and found the names of a few but their phone numbers were all wrong.
I'd like to give new phone numbers for some that I found after much work, as on July 12th, 2004:

Missionaries of Charity
12, Commissioner's lane
Behind Oberoi Maidens Hotel
Delhi, India
Phone: +91-11-23950181

Missionaries of Charity
Jeevan Jyoti
Mathura Road
Jangpura 'B', New Delhi
Phone: +91-11-24315483

Church Of North India
Shishu Sangopan Griha
St Michael's Church Compound
Hospital Road, Jangpura, New Delhi
Ph: +91-11-24316806

SOS Children's Villages (Office)
A-7 Nizamuddin (west)
Ph: 91-11-24355835, 24359734, 24357299

SOS Children's Village Faridabad Project
SOS Enclave, Sector-29
Faridabad - 121008
Haryana
Ph: +91-129-5045191

Udayan
No 1, Doctor's Lane,
Gole Market, New Delhi
(Haven't found a phone number that works)