Monthly Archives: July 2010

How did I become rich?

Time: 1988-92

Location: Tinplate Colony, Jamshedpur

Growing up in Jamshedpur and about a year short of being a teenager, I had turned out to be my mother’s only help who could visit shops to purchase daily supplies. Instead of handing me a list of things to procure, she preferred to speak out, “दो कीलो आलू, एक कीलो मसूर दल , एक  कीलो मसूर धूलि , चीनी एक कीलो, 250 gram जीरा, धनिया पावडर 250 gm वाला पाकेट, एक पाकेट टाटा नमक, थोड़ी हरी मिर्ची सब्जी वाले से ले लेना etc…” A good exercise for me- if I bought all what I was told, I cleared the memory test, else it was exercising to and fro to shops to buy the forgotten items. By the way, I re-visited shops only to buy what my mother had missed out in the first instance.

My father worked with Tinplate Company of India Ltd. with a take-home salary of not more than INR 3000 per month in those years. This was lot less in a sense if you consider this- 2500 square feet house provided by Company, electricity cost nominal and medical facilities free to all members of family.

After winning a long argument with my grandfather, my father had decided to go ahead with the decision to educate both his kids in an English medium school. This was sometime around 1980. The decision was paying off quite well. While my sister was a bit sharper and smarter compared to me, I use to score better in exams compared to her. My habit of slogging is since then. 🙂

In expectation of a great future, our parents worked hard and continue to fund our schooling at INR 250 per month per kid- almost 10 times a hindi-medium school in those times and 1/10th of what I pay for my elder daughter today. So I am rich today since I meet such increase in expenses.

Year 1992, I was in Class IX at Gulmohar High School and when Iraq attacked Kuwait. We enjoyed the images of war on Black&White TV branded, Uptron. However, as a kid what I remember the most is the increase in Oil prices- overhearing my father’s conversation at petrol pump, “इतना मेहेंगा, क्या करेंगे आगे जा कर”. Petrol prices, if I am not wrond increased from INR 8-9 per litre to around INR 15 per litre and within a short span of time to INR 22 per litre in and around gulf war.

I use to worry about the pressure on pockets of middle class people (courtesy of growing in an industrial township) as expenses grew faster than salaries. Everywhere I use to hear adults discussing मेहेंगाई (became friend of “inflation” only after my graduation)- sugar prices had increased to INR 10 per Kg. Since then sugar prices have increased 300% and petrol prices by 225%. So I am rich today since I drive a car and have a 2-wheeler as well.

Year- 1999-2001

Location: Indrapuri Colony, Indore, Madhya Pradesh

 I had grown up to live my fantasies in real. Had fallen for Monica at age of 17.5 and we were married at age of 22. Living in Indore, we use to pay rent of INR 2200 per month, used soyabean oil for cooking at INR 30 per litre. Dinner at शराफ्फा  बाज़ार costing not more than INR 100 and post stomach full of डोसा, पाँव भाजी, साबूदाने की खिचड़ी, दही भल्ला and गुलाब जामुन.

Our breakfast use to cost INR 20 for 2- पोहा at INR 4 each and 250 gm of जलेबी for INR 12. With MBA curriculum at the back of my mind, I use to find it cheaper to have breakfast outside than cooking at home. 🙂

Today, in Delhi we consume Safola lite as cooking oil costing INR 90 per litre. Rent paid is INR 16000 per month and a weekend outing costs us atleast INR 500-750 for a meal. I can spend all this and also a movie to multiplex at times. So I am rich.
 Monica believes, money has always worried me but I know what is worrying for me. Its failing to be more disciplined in life with regards to money. I spend, when felt at heart and on anybody and for anything. After all, I am rich. 🙂
 I promise nothing more on inflation from me till I watch Peeply Live.

Work Pressure

At work, pressures can be of 3 types- Atmospheric pressure, Boss pressure and Task pressure.

There is only so much that we can do about atmospheric pressure. As per medical science a healthy human body builds its own pressure within, which offsets the pressure from outside. If the pressure within is higher compared to outside pressure, you suffer from high blood pressure and vice versa.

Some of us consider boss management an important trait in our work life. Managing boss has its own pressure. Will he like what I have done? Why does h/she not like what I do? Is he unsure about my capabilities? Moment of we tend to impress/influence others with our actions, loci of control lies outside. Theoretically, loci of control should lie within us.

Basic principle on which capitalist societies are built is “Invisible hand” – Adam Smith referred to the natural force (invisible hand) that drives every individual to maximize self-interest by competing for scarce resources. Why do we then need bosses? Is Boss a “scarce resource”? The reason we do not act on basics i.e. work hard, be sincere and truthful.

Task pressure is the pressure to complete the task at hand, best if it’s executed effectively and completed on time. Task pressure runs high in most of us throughout our working lives. Tasks are testimony to ones capabilities since task well performed gives us promotions, increments and appreciation (momentarily).

An Urdu shayari that goes well for people with Task pressure-
Maktab-e-ishq ka dastoor nirala dekhaa…
Us ko chutti na mili jis ne sabaq yaad kia

Of all the pressures hence I wish only for TASK PRESSURE

Missed opportunities- I need to be more careful

Year 2005 was when, I was working quite closely with journalists- courtesy a Print Media company. I realised that despite a formal education background in a particular field of knowledge, some of my colleagues could come up with some excellent articles. This prompted me to start expressing what I thought.

Had it not been MBA in finance, I would have been in literature but then I never envisioned myself to be so expressive. All those years (schooling ones) when I could have worked on nurturing this skill, were lost mugging-up history lessons. Without any special effort on my part, I secured myself post graduation in business administration. I opted for finance as specialization  in 2nd year. Since then I am known as a finance professional.

So when I am a finance professional as per the voices inside me, I decided to take-up the challenge of writing company analyses from an investment perspective. I smartly aggregated (had I been a Consultant  “analyzed”would have been the word) the secondary information on some of the private Indian banks. Some of those banks were Kotak Mahindra Bank, South Indian Bank, Karur Vysya Bank etc.

I was aware of the fact that as per RBI regulations, promoters of new private sector banks will not be allowed to offload their stake within first 5 years of their banks’ incorporation (not very confident if it was 5 years). I could visualize in 2005-06 that these banks, likes of Kotak Mahindra or Yes Bank will be aggressive in their strategy to grow to help their promoters dilute their stakes in next 6-8 years.

Investing in some of these stocks would have been like a ‘Warren Buffet Strategy’, but that did not happen. I always believed- “I still do not earn enough to save and invest.” And today we all know the capital gains that some these private Indian banks have to offer.

Not enough- I share one more missed opportunity.

Tata Motors stock was trading around INR 90 per share in 2000-01. As a case study one our finance professor told us to analyze the company. I still remember what he said- “While the company is incurring losses and attempting an entry into passenger vehicle segment, its a stock to invest given its strong fundamentals.” Stock of Tata Motors today trades at INR 760- annualized return of 27%. Shucks! which business gives you this return at an opportunity risk of 7-8% on your returns.

पाल सोचा मत करो, बस करो- कब होगा यह. काश!  

I have not lost yet..I know some more opportunities where to invest. Oh! how can I share them on my blog?