Stories: Selecting which battle to fight

There once lived a great mathematician in a village. He was often called by the local king to advice on matters related to the economy. His reputation had spread as far as Taxila in the North and Kanchi in the South. So it hurt him very much when the village headman told him, "You may be a great mathematician who advises the king on economic matters but your son does not know the value of gold or silver." 

The mathematician called his son and asked, "What is more valuable - gold or silver?" "Gold," said the son. "That is correct. Why is it then that the village headman makes fun of you, claims you do not know the value of gold or silver? He teases me every day. He mocks me before other village elders as a father who neglects his son. This hurts me. I feel everyone in the village is laughing behind my back because you do not know what is more valuable, gold or silver. Explain this to me, son." 

So the son of the mathematician told his father the reason why the village headman carried this impression. "Every day on my way to school, the village headman calls me to his house. There, in front of all village elders, he holds out a silver coin in one hand and a gold coin in other. He asks me to pick up the more valuable coin. I pick the silver coin. He laughs, the elders jeer, everyone makes fun of me. And then I go to school. This happens every day. That is why they tell you I do not know the value of gold or silver." 

The father was confused. His son knew the value of gold and silver, and yet when asked to choose between a gold coin and silver coin always picked the silver coin. "Why don't you pick up the gold coin?" he asked. In response, the son took the father to his room and showed him a box. In the box were at least a hundred silver coins. Turning to his father, the mathematician's son said, "The day I pick up the gold coin the game will stop. They will stop having fun and I will stop making money." 

Point: Sometimes in life, we have to play the fool because our seniors and our peers, and sometimes even our juniors like it. That does not mean we lose in the game of life. It just means allowing others to win in one arena of the game, while we win in the other arena of the game. We have to choose which arena matters to us and which arenas do not.

Sajeev.

#'Forwarded' label refers to stories and anecdotes send to me by friends or the ones I came across in net. I neither know the source of these stories nor its correctness. Being said that, I like the story and truly believe that readers will get inspiration/ motivation from these articles. 

Satyam Scam and Lessons Learned

After long legal battles, finally multi-crore infamous saga of ‘Satyam’ came to an end. CBI special court awarded 7 year Rigorous Imprisonment (RI) to Ramalinga Raju, his brother and 8 others. Apart from RI, Ramalinga Raju and his brother was also slapped with a fine of 5 crore each and eight others with 25 lakh each.

It is indeed true that Satyam Scam drastically changed the way accounting and auditing systems works in India. It also introduced so many checks and balances in the system. But, did we really fill gaps in the super-structure exposed by Satyam Scam?

1. Why fines are so low? As far as I remember, amount involved in scam involves thousands of crores. But the total fine was just 12 crore. I think even the prosecutor might have spent more than 12 crore to prove the case. What about then shareholders? It was a nightmare and bog loss for them as well.  Fine shouldn’t have been such a small number. 
2. I am still not clear whether independent directors in company boards are doing or able to do the job they are supposed to do. 
3. FTIL and other scams indicates that cooking up books and dubious transactions are still there. What we are going to do with that?
4. What about whistle-blower system? Do we provide enough incentive and protection to the whistle-blower to come out and provide evidence?

Satyam scam definitely improved a lot of things. But still there are lot more things to do.

Sajeev.

Greatest Paper Tiger of all time.

Anyone recently read Mint article on National Green Tribunal's verdicts? If not, its here - 'National Green Tribunal: Orders galore, but what then? - Mint'

I don't think who coined the word Paper Tiger. But that person might be knowing that, a certain entity called 'National Green Tribunal' is going to form in India. My only plea to government is, if it can't provide tooth and nail to NGT, then please dismiss them and save those sitting in the tribunal from further embarrassment.

Sajeev. 

The Return of Janata Party

An interesting political movement India currently witnessing is the consolidation of political parties to a particular group called Janata Parivar. By the way, there is hardly any ideology which brings them together. As often happens, the one fact which all of them have in common is the fear about the rise of BJP and protecting their base.

I wonder how long the Parivar will stay together. It is altogether different matter, whether Samajwadi Party (SP) – which hardly stands for ‘Samaj’ except in name; Rashtriya Janata Dal – which hardly ever cared about ‘Rashtriyata’; Janata Dal (United) – which showed some hope in the beginning and then went on a path about which one have any idea; Janata Dal (Secular) – which is more about a family and its affairs; Indian National Lokdal (whose leaders are in Jail over Recruitment scam) etc. will come together even for their own good.

What, leaders of these parties failed to understand is, India changed. The country is no longer the one, where they could supress people in the name of caste and religion. When Indians want their country to reach the level of Korea, Singapore and Japan; there is hardly any place for their narrow vision. More than coming together under a different a name, what they need to do is an introspection. Be the agent of modern Indian and try to do something for people.

Sajeev. 

Ola, Money and the Business Model

Ola and start-ups similar to that, attracted (and continues to attract) big ticket investments from foreign and domestic investment vehicles. Backed by IT infrastructure and GPS, Ola is riding on traveller’s need for economical, reliable, comfortable and safe travelling options. One of the big factors working on their favour is the absent state machinery (read traffic police and other related departments). After all who don’t want to escape from auto drivers’ hands, most of whom won’t ply by meters and says the first imaginary number coming to their mind as fare?

However, after seeing global funds’ hunger for picking up these stocks I am a bit confused. Do these companies business model really have such sky high valuations or are we going to see a 2000’s type IT boom and bust cycle?

My worries are,

1. The amount of money they burn each month. After all, the company is paying the difference to the driver (User is paying some 10 INR/km, which is lower than the amount Ola pays to the driver)

2. Driver don’t need to feel any loyalty towards Ola. If Uber or Maxicab is offering higher discounts, they can simply switch to the other one.

3. User also may not feel any loyalty towards Ola. They can also make a switch to other one, if it offers a better deal. This trend is already there, while buying electronic equipment, recharging mobile, buying books etc.

4. Unlike Flipkart or Amazon, which are also building up infrastructure, physical infrastructure is absent in Ola’s case.

5. It is still not clear how long it will take to witness a consolidation in market.

Even though this article is talking about Ola, it is not limited to Ola but applicable for all those service companies who offer services but don’t have any control over underlying assets/infrastructure.

I hope that all those companies do have a great business model and become profitable very soon.

Sajeev