Savings Rates de-regulated

Savings Deposit rates are finally de-regulated. Whatever makes the common man excited to see full-page ads announcing 6% rate of interest- Beware! This is the season of peaking interest rates. There will also now come a time when your savings rate will slip below 4% - to as low as 1% or 1.5%! In one stroke, RBI has made savings rate an effective tool of monetary policy. Had RBI done this when inflation and interest rates are plummeting, nobody would have noticed. Perfect illusions of the mind! I think whats coming next are - small savings deposit rate freeing and diesel price deregulation.

On Rajat Gupta

Some prominent Indians like Deepak Parekh and Shekar Gupta lament the culmination of events leading to the arrest of Rajat Gupta. Its both fun and sad to see icons of Global Indiana get smattered like this. The jury is out on whether Rajat Gupta has a legacy that will outlive his (mis)deeds. We live in interesting times where bits and titbits about us in all spheres of life will make us or mar us. No more black and white - its all grey shades of a personality. It may be unfair to judge a person by what is alleged until proved. Even Steve Jobs, as I am reading his biography has had his share of felonies - but we just extol him as a God-send. Ultimately, your Karma - good and bad will work to redeem what is going to be the way you will be remembered for. If you read the obit column of Economist magazine ( I have all the obits from 1853-2003) they make it out as dispassionate as purgatory - judgement in totality. Thats the way to form an opinion not go by media reports - which make capital out of a transitionary phase of a public figure. People like me are happy to carry our crosses the way we want to live and die.

7th Sense Movie Review

7th Sense was a little short of fireworks at the movie hall but was worth a watch. To be fair, "7th Sense" has an amazing plot that has even got Aamir Khan interested (who doesn't repeat his director ever - AR Murgadoss). The plot has got Martial Arts, unbelievable stunts, a cuter Shruti Hassan and a variation of two characters... for Suriya. As Bodi Dharma - a Hindu King who emigrates to China in the 6th Century, saves folks from disease and injury from enemies, becomes a monk with unlimited powers and then adapts himself to Chinese good- Suriya looks strikingly handsome. Thats the utlimate paisa vasool of the movie. As a junior circus artiste, second role, he looks ordinary until the science fiction of Murgadoss feeds and realises on celluloid this bizarre idea of imbibing the DNA code of BodiDharma for tackling the modern menace in the form of the villain - again from China. The story is one-dimensional and the screenplay doesn't sizzle you with excitement because the director doesn't use flashback technique well - the first 30 mins. which forms the soul of the film runs like a documentary - it could have been more effective. Second half shows some dramatic scenes but the plot is out by then. What makes the film watchable? Undoubtedly, Suriya and his maginificent stunts composed by Peter Hein. And a few (very few) relief moments from Shruti Hassan's improving screen presence. A few songs by Harris Jayaraj also come out good especially the one in Chinese backdrop. But what could have been better? Violence (which was needed for the plot) is too graphic. Nil Comedy (atleast I couldn't spot any but the Elephant joke). The movie could have been a tad more dramatic given the 7th Heaven expectations I had - but thats how movies turn out sometimes. Is it worth Aamir Khan betting his next movie on? Needs more fleshing out by dir Murgadoss. I googled Bodi Dharma after I saw the movie - and didn't find any stuff thats closer to whats projected on screen. The movie could be renamed - The Monk who smashes Ferraris. Unlike Bodi Dharma - who is zen-like and peace-loving. Watch it once but not ga-ga.

Happy Diwali!

Ralph Waldo Emerson, my all-time favorite essayist (ok, besides E.B.White) remarked in one book: "Money, which represents the prose of life, and which is hardly spoken of in parlors without an apology, is in its effects and laws, as beautiful as roses." He could be referring to the week-long celebrations of Diwali-India's festival of big money which will begin literally from today. Ahmedabad wil...l be inactive till Nov.10. Mumbai will work with maximum "leavers". Rest of India will barter sweets, buy goodies and gifts, GoldLate-night card-playing will be on the cards. Priests with three mobile phones will charge their bonus-outstripping tariffs. More than twice GDP output of Greece and Portugal will go up in smoke in India in the form of crackers. Stockmarkets will celebrate Diwali and fair-looking men and fairies on CNBC, etc. will talk alongside their experts that Optimism is the only realism at this time of the year and dizzy levels of Sensex are round the corner.Eighty per cent of sugar, jaggery, kaala jamun, kova consumed in India will be amalgamated in orgy of sweets- liquid and solid. Pigeons and cats, dogs and sparrows will be moving helter-skelter thinking the sounds of fury is the sign of the world coming to an end. Meanwhile some 6000 screens all over the world and India will watch "Ra.One", "7th Sense" (and its Tamil Suriya Original) over the coming week. It aint getting bigger than this. India knows how to celebrate with style and I am throwing my hat in the ring from today. Happy Diwali to all in advance! Safe and Sure-fire!

On Wealth Management, RMs and Fees

This is my seventeenth year in Advisory profession. "Trust" is a critical element in any relationship between a Wealth Manager and a client and that is a function of three, no infact, four variables - Credibility (which comes from giving you advice thats not short-term but what counts for you), Reliability (in which the RM has to be there all times - in bear and bad times as well and more importantly service-oriented), Intimacy (the level at which you connect and like the RM). All these three build up the trust but what divides the trust is another factor - Self-Orientation. If the RM is selfish, or works for his goals at the detriment of your goals, you will have the same experience as what you outlined. Its when this trust gets depleted because of the interplay of these four variables (of which self-orientation is the most undesirable component) that the experience gets soured. If the charges are not disclosed upfront, it is more "self-orientation" and hence lower trust. According to me, a good Advisor is one who doesn't distinguish between advising his client and his father, in the sense of giving advice that works well and honestly for his circumstances. My last point, I want to drive home, is that in my experience of over 17 yrs, I find that the HNWI as a group, across the world, expect returns without risk - which they don't expect in their business or profession. The best way is to build market portfolios aligned with one's financial planning goals with least outgo as expense/charges. Do not believe anybody who says they can time the markets well. If the Sensex this year is down 25%, no way any Mutual Fund can return even 5% (I am generalising). Failing to recognise this sets them up to fail or get disappointed in more ways that makes the experience itself self-fulfilling. You often get what you expect. And in the process, they move advisors - Advisor swapping also erodes the wealth - because the timeline from now till retirement or investment horizon, if it is so long, would make enough money provided we are patient and make those tactical and strategic changes periodically. Everytime we think there is money to be made from a new advisor, than what the market is offering, we eventually lose out - in fees, in charges, in commissions, in brokerage, and then taxes. There is no statistical evidence for persistence of performance - in life or markets - why then make our portfolios gyrate with advisors? But I hope I have made some points that make sense. This is my individual take - and I am passionate about this profession and have been sincere and diligent about these points before any moon and six pence is promised.

Nobel Prize for Economics

I await the Nobel Prize for Economics most after literature and peace. The remaining interest me as much as Pluto interests anyone in Solar System- but more out of ignorance not borne of irrelevance or irreverence. (How the paneer will I understand what are two-dimensional quasi-crystals, for example, object of this year's Chemistry winner? My Chemistry cousin in London will decode it far better ...and hopefully also win a Nobel one day). But back to it, Economics may be a dismal science and the pecking order of Nobel Prize for Economics also keeps it last for announcement. Btw, the Economics award is the only one instituted by the Swedish Central Bank but handed out as part of the "Nobels". As a student of Economics, I am thrilled to note this years' winners: Prof. Thomas J Sargent (Columbia university) and Prof. Christopher A Sims. (New York) for their work in cause and effect theory of macroeconomics using VAR models and forecasting. Although it is funnily lamented that the economists have predicted nine of the last six recessions - the drivel is used to forecast. Michael Spence, Paul Krugman and Amartya Sen are the last of the Economics winners I think should be seriously read as they make lot of sense. But from whatever I could google, these guys' works looks promising and should be top-of-the-tree reading in months to come. Maybe a new book from Columbia University. Congratulations! Long Live Economics - for anything to do with money or lack of it.

N J Yasaswy - ICFAI founder - A Man Who Never Tired

NJ Yasaswy passed away on October 8 amidst unprecedented shock and surprise from his well-wishers which included stalwarts like Mr Raju (Nagarjuna Group), Mr Kondal Rao, Mr Nrupendar Rao (Pennar), thousands of employees of the ICFAI group and hundreds of ex-employees including people like me who grew like saplings under the Banyan Tree called ICFAI which spawned the biggest service-sector boom in education, research, publication and policy-making India in general and Hyderabad in particular has ever seen in the 90s.


"Who will cry when you die?" asked Robin Sharma once in a book. Having seen NJY's last trip today, I was sad but also happy that more than 2000 people have turned up to catch a final glimpse of one of the most resplendent intellectuals India has ever seen. He was unsung not to people like us but to media. Our electronic media in Telugu which show low-IQ, 65% movie-oriented content have even failed to beam a snatch of the man who created monstrous jobs in Hyd and other metros and created an equaliser for students who aspired to do MBA. Only ToI and Hindu who once upon a time in Hyd used to get 50 per cent of their ad revenues from ICFAI's campus ads pan-India posted brief obits about NJY. IBS may not be as ivy-league as ISB but it has its place in the sun and its mindshare of the corporate world. Some of India's most successful fund managers, analysts, bankers, journalists, software and management professionals, thought-leaders, and thinking elite have some connection with ICFAI. Either they worked at ICFAI or they studied at ICFAI and its associate wings.

For a lot of people like me, he was a Godsend. My first break in journalism and corporate world I owe to NJY - he spent 4 1/2 hours with me one cold afternoon in 1993 as I gate-crashed to his office for a vacancy of Research Associate and seeing my sophomore background and my enthusiasm he gave a "stunning" stipend of Rs.2500 pm - my life only changed for the better after that. I will write more about this phase of many of my officemates who were aroused into giving our creative best in research and writing later. But coming back to the man, NJY may have many detractors but his positives probably outshone his negatives - shall we say Good Karma outnumbered Bad karma which is why, he survived so long. I had a sweet and intellectually-surcharged association with NJY for 3 yrs and have kept in touch over the years in short bursts - he always felt I should have been a writer than a banker and we have our discussions. NJY was 61 but he was never tired of talking about ideas - and their execution, delegating projects ably to people according to their strengths, always positive and respectful and looking at monetising any aspect thats unmined yet . Since he was perceived a failure in the corporate world (which was a misnomer I feel), he showed his prowess in corporatizing education and created a sterling business model out of it – I think it used to be Rs.1000 crores turnover in the best year since the last decade. He was quick to spot talent and pat them so that they will bat for long. The team of talents he once had in faculty, research, management and publication – was so rare like Halley’s Comet – and it may not come even once in 76 years. He used to speak chaste Telugu - the pure Brahminical style and spoke English in unaccented way – but his choice of words was measured and seldom he lost his cool – infact people were mesmerized into doing what he wanted – it was never perceived to be an order.

He has introduced me and many others to authors like Alvin Toffler, Edward De Bono, Stephen Covey, Howard Gardiner, Tony Buzan, Charles Handy, Kenichi Ohmae, Peter Drucker and talk about magazines others wouldn’t have even heard of in the days of ungoogled lore – Economist, Institutional Investor, Euromoney, Harvard Business Review, Wired, New Yorker. He was probably the closest I saw who practiced mind-mapping at work and he probably knew a thing or two about unleashing the brain potential beyond the Einstein percentage of 10% in a lifetime. He was whole-brain hyperactive - adept at creativity and execution, logic and out-of-box thinking, high IQ and super-high EQ et al. He would have been closer to 50% plus or more in terms of the Einstein specified usage of the potential of the human brain - But I am exaggerating. He wanted “Analyst” magazine to become as redoubtable a journal as any of the above-mentioned socio-economic journals. And it had the best of raw talent at one time – in marketing, management, editorial and research departments. It had its “15 minutes” of fame and unfortunately got closed down in August this year. (I will write about that experiment a bit later). Almost every book he read used to find its way into the ICFAI library which until a few years back was the best in town. (ISB overtook its collection recently). Walden the bookshop which faces imminent closure due to falling footfalls owes half its profits to ICFAI’s patronage – and a few years back Prasad who used to be a Store Manager in Walden was roped in as a Librarian in one its campuses. My book-love, nurtured by my dad became incurable under NJY's tutelage. But I digress.

NJY was perceived to be a mammon worshipping Educational tycoon – but he had good sense of social responsibilities, aesthetics, scientific and intellectual temper and cultural sentiments. What came naturally to him was his ability to make gold out of gold dust. A seemingly useless idea or an innocuous thing would spark a business model in his mind. And he was a great practitioner in possibility thinking. In that sense, he was a great Economic naturalist – allocating capital to get optimal even phenomenal returns with scarce resources. But having worked with him and still keeping in touch with his associates and affairs – at a personal level, I owe a lot of my wisdom to his principles of money-making and fundamentals of financial well-being. He was frugal in his lifestyle - carrying the Ambassador 8558 almost till the 2004 years until brand-conscious folks prevailed on him to upgrade his car. He was an Educationist but he paid his best guys well. He was a relentless asset-builder, building capacities ahead of demand and then kick-starting the demand to exhaust those capacities. He used to announce a course before creating the paraphernalia around that course – and it all started with simple front solus ad. Anticipating the demand garnered by the ad, he used to galvanise all into delivering on the demand working backwards – quite a maverick at that. IBS is one of the most successful brands created in business education and credit will always go to NJY for master-minding it. Today, IIPM has sprung up the new kid on the block but many of the principles that underpin their business model are all derived from NJY’s school of thought.

Apart from this, not many know he loves Indian scriptures, he writes books – “Finance and Profits” and “Personal Investment & Tax Planning Year Books” are still being published. Every activity, according to him, has to be economically productive and socially useful – and every activity has the potential to be first a cost centre, then a profit centre. So, his books were reasonable best-sellers and his speeches delivered on Union Budgets in those days before Satellite TVs took over were as popular as Nani Palkivaala’s budget speeches. Everybody in his family and in his work environment had to be productive and economically useful – that was his credo. Until a few years back, despite having a lavish Educational empire, his wife Shobha was still working in a school until they launched the IRS schools. His daughter Vennela runs these schools and also edits a great spiritual magazine called “Splendour” which I started subscribing since I knew about it. Son Tejaswy is a chip off the old block but launched his own investment firm - photon capital and Banyan Holdings. NJY was a great believer in market-led economy – he made CFA degree and the CFA-MBA combination as much a killer-app as the CFA gold standard of the US. Only thing, he did rub the CFA Institute and the ICAI on the wrong side several occasions. But eventually, the last few years ‘ developments have taken a toll on his mental health it seems – the tirade against deemed universities, the loss of litigation against the CFA Institute, US, the steep recession which made NJY rationalise several departments and business units. But his principles ensured there’s enough for his family and mother who had to see so much grief at age 80. He believed in annuity income- and hence created assets for business expansion but created wonderful financial structures which ensured least amount of outgoing expense – the Nagarjuna Hills that dotted his multiple business unit offices is today better known as ICFAI Hills. The “Nagarjuna” connection goes back to the pre-ICFAI days when the elderly Mr Raju, impressed by NJY’s brilliance inducted him into theboard wherein he played a major part in several business restructuring exercises in those days. There were several other industrialists of the 1980s with whom NJY had a venerable association and I saw most of them at the funeral today – but I am not getting into that now.

What will happen to the Educational Labrynth called ICFAI hereafter? Who will succeed? Is there a succession plan in place? Will the legacy live on? Questions uppermost on all of us today. But things will work themselves out as we always see in business history. NJY created AP’s first private placement industry, first leasing deals, first stockmarket newsletters, first Management Consultancy,and the earliest traces of knowledge society – he loved Knowledge and Science and New Ideas that changed the world – yet he remained humble always working with a motivation to do something different, make a difference to the world of business and education, business education and publications. He believed that as long as you add value to a product or a service, it is morally right to charge a premium for it – as there’s nothing called “Not for Profit” activity; any activity that couldn’t be self-sustaining or perceived commonplace will die out. Its true of so many of his failed business initiatives – Merchant-Banking unit, Cignus Business Research, Hifco, Management Consultancy…After achieving near-to-impossible marks in CA examinations with scores like Auditing 98, Company Law 96 and Accounting 100 and so on – he started, according to my father, a coaching academy for CA/ICWA students way back in 1980s competing with likes of the venerable Butchi Reddy. He was always good at taking challenges, taking on the leaders, contesting the market-share that never existed before - the Blue Ocean Strategy as they say. In the last two years, he started some new projects - Promotion of Carnatic Music, B.Ed Colleges and an initiative called CP Brown Academy – which is doing brisk business in bringing timeless works of Telugu arts and literature into the community of the current generation. So much achieved at 61 and yet so many projects at hand…he is truly a doyen of formidable standing in AP and deserves a place in the history of AP business and Indian Education in general for his life’s work. He was also chastising people if they didn’t perform to their potential – He would be kicking himself in the grave even now for calling it a day too soon, for leaving early just because Sodium levels have dropped below normal. R.I.P. Yasaswy Nanduri Jyothilakshmi garu. I pray you will be as inspiring and energetic wherever you are now. Hope somebody takes up your legacy and carries on.



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