Mahant!

I once read a quote "Life is like a game of chess. We should first look at all possible strategies & moves and then make the best possible move, but importantly keep our escape routes open at all times." It is a very smart quote. It reminds me of Abhimanyu and Chakravyuha. I remember an anecdote I read which went like this. Once a reputed surgeon was asked why a medical student required such a long education, usally lasting 5-8 years. The surgeon replied, I only need about a year to teach students how to transplant the kidney but to teach them how to handle things "when things goes wrong" I need that long time. It is usually found that bulk of the knowledge learnt is never used, the are but reserves for the times "when the things go wrong". Because of this man a times, we feel that for the work & the acivities we do, a simpler amount of education and experience would be sufficient. But it is when the unexpected happens, does the real differece betw...

The exam starts at 9:55 - 10:00AM in the morning. The quirk in this test is that are no question papers. There are no questions. There is no need for the answers too. The real question is to discover, realize and solve the questions as the exam progresses. If we have done our home work, that should help a lot. The scores are released at 3:30 -4:00PM. The report card is either positive or negative. Market is such an exam, for the daily takers. :) Falkor

I have given some concepts of economic term in previous Parts. Now I will try to put together, a story of the where we are in present situation. We will begin our story from the beginning of the last century. One significant event in the beginning of the twentieth century was the World War I. And the war is the serious consumer of money. It sucks in money from all corners. It puts so much of money into the economy that it prospers, even after the war is over. This global/country prosperity has always taken place when the wars have been waged. And they have been great tools for Bankers to earn significant sums of profits. World War I began in 1914. So, how can the country finance its military adventures? Simple, print the money. There is nothing more easy in the world than printing your own money and buy whatever that would be required. Rich Man did that. [But, you know the price he paid.] Most of the Europe was engaged in bloody war. To finance this all the countries involved, be it Ge...

So, has the time come for such a situation as yet. No. Not at all. But we are getting there somewhat closer every passing month. It could be years before we see some bad situations or we may never even see them in our life times at all. Hopefully so. But does that mean we can party hard and forget the hangover? That would not be prudent. One of the smartest investor explains the risk management like this. Suppose you have to cross a street every day. Intially, you check out if there are any vehicles approaching, and carefully cross the street. And everytime you find that there are no vehicles approaching, so does that mean the next time you are crossing the street you need not be careful. 'That' crossing perhaps could end up being the last crossing. So let the party continue, enjoy, just be aware what you have to do, when the party is over. What should we do? Here I would not like to make any suggestions, for no matter, I am still do not know enough to suggest that. There are m...

The scenario that is being described here, has happened many times in past world history. It is nothing new. It is a possibility. Understanding it is important. Because it is painful. To talk from an economist point of view always sounds like a robot talking, so inhuman. But to understand some concepts we have to take non-partial look. I am sorry I have to do this. I have to stop the story, and take a big tour. We will first try to understand some concepts we have discussed, and then come back to our story. I hope you find the journey interesting. What is Money? What is that we understand by the term money? Do you think the notes you carry around in your pockets is money? Do you think the zeros you have in your bank is money? So so wrong. They are not money. They are just "currency". They are simple "papers". And if you are using the 'plastic money', then you only have the notion of money. It is ridiculous to think that we slog 24 hours a day, so that at the...

In this part let us take the negative possibilities, if Rich Man's friends and investors are not able to help him out. One way of trying to help the Rich Man is for his loyal friends to buy up all the Promissory notes issued by the Rich Man, thereby increasing the credibility of the Rich Man's Notes, and supporting their own wealth, in exchange of some concessions and security conditions from Rich Man. In effect, the Merchants would have successfully "colonized" the Rich Man, or bought large pieces of land and revenue. Rich Man, anyway you look at it, has to pay. There are many possibilities, of how things can go out of control. Some are here. If the Merchants decide to encash their Promissory notes, Rich Man will loose all its richness. Because, as pointed out, there is not enough gold in the entire village. This is because of Inflation. Rich Man may have to sell off many assets to repay the creditors. This would be a disastrous consequence. It seems unlikely any cou...

We will take the possibilities and their impact in different sections, so that we can clearly segregate the scenarios. Let us, in this Part see what will happen if the Rich Man's friends are successfully able to bring out a transformation and help Rich Man out of the situation. All the Merchants who have traded with the Rich Man are trapped. They cannot sell and convert the Promissory notes into the gold because there is not enough gold in the whole village!!! [We will see how this happened later on] The value of the Notes in the eyes of the Merchant community is falling rapidly, and with it the total net worth of the Merchants to whom the Rich Man owes large sums of gold. One of the ways of helping out the Rich Man is to continue selling to the Rich Man in exchange of Promissory notes, until the Rich Man's consumption equals or is lesser than production. In other words, the Rich Man has to maintain a position wherein his production exceeds his consumption. This is a tough and ...

We will continue our story of Rich Man and the Merchant. Since now you know who they are, please do not confine your self to thinking about the two characters only. I write these pieces, because I want to communicate the economic issues and concepts underlying. Rich Man and Merchant are just players in our game. Though very much factual players. I would like you to look at the broader issue, while understanding the concepts. Much of this Part and the rest are imaginary, only using the foundations built on the Part 1, to explain some economic concepts. At the ending of Part 1, we saw how the Rich Man put much pressure on the Poor Merchant to reduce its debts. But, the Poor Merchant cannot give the discounts and forgive all or even most of the debts. After all he is under no obligation to do that. But Merchant understands one important matter that, if the Rich Man is not able to buy much, then Merchant will loose more than just his future business, he would also loose much of the money t...

This is a story that happened in a small village. About 200 families made it their home. There was a rich man in that village. The rich man was the head of the village also. And there was a hard working but poor merchant there. Our story begins long back, when the grandfather of the Merchant decided that he has to break some rules. The Merchant was poor because he was in the habit of trading with the people he knew well. He did not sell his merchandise to any body else other than, selected few people of his community. Grandfather decided that it would be better for his family, if he began trading with the Rich Man. Grand father was very respected in the household and hence there was no opposition to what he said. The family was strict and respected its elders. Merchant met the Rich Man for the first time after many years and expressed his wish to sell his merchandise to him. Rich Man agreed because the Merchant had very good wares and sold it for a small profit only. Rich Man was very ...

Hi, This is an attempt explain few things in a simple manner. But economics is not a simple cake. It has been made tough as hell by the jargons that keep sprouting. It tough also because, every event is different in the eyes of different people. What is income for somebody is somebody else' expense. What is demand for one, is somebody's supply. But it is an important part of life. Having knowledge of economics will sure not hurt. It may just help. This attempt, is by no way the most "correct" method. I mean the terms may not be exactly defined as such. But it is close. My only attempt is to create interest and make aware of few things. I hope is simple enough for you consider to start reading economics in details. If there is a central theme you must remember at all the times while reading these passages, then it is this: The Party is still on, enjoy the Party. Don't worry too much about the future, live the present. But plan, who will drive you to home when you h...

This is a chat transcript between me and a friend, when I was trying to explain to him to be diplomatic! It's ended up in a funny manner. Falkor: You are not saying anything you should not be saying, but you are saying things you want to say, the way you want to say, and not what they want to hear. But they will not be able to understand, that this is not what they want to hear, even though you say the things you want to say only. With out any considerations for what they want to hear :D :D :D Falkor: Thats Diplomacy, I think. you end not saying what you want to say, and dont understand what you say !!!!! :) Falkor

Listen. Don't explain or justify. Meaning: Listen. Learn. Enjoy. Listen. Learn. Enjoy.................. Dont speak. The first duty of love is to listen. Meaning: If you love her, she will love you back. She will care for you and guide you. So, listen. It is the province of knowledge to speak And it is the privilege of wisdom to listen. Meaning: The most profound objects in the universe are simple and silent. Wisdom speaks in the language of silence. A good listener tries to understand what the other person is saying. In the end he may disagree sharply, but because he disagrees, he wants to know exactly what it is he is disagreeing with. Meaning: It is a privilege to disagree with anybody. To enjoy the privilege try to understand her better. Doubt yourself and you doubt everything you see. Judge yourself and you see judges everywhere. But if you listen to the sound of your own voice, you can rise above doubt and judgment. And you can see forever. Meaning: Nobody will love you, if y...

THEY shut the road through the woods Seventy years ago. Weather and rain have undone it again; And now you would never know There was once a road through the woods Before they planted the trees. It is underneath the coppice and heath, And the thin anemones. Only the keeper sees That, where the ring-dove broods, And the badgers roll at ease, There was once a road through the woods. -Rudyard Kipling Meaning: There was once a Road. Nobody sees it anymore. That Road is still there. Many people have forgotten about it. But you DONT forget, there was once a Road and that ROAD is still there for you to take. :) Falkor

How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving, and tolerant of the weak and strong. Because someday in your life you will have been all of these. - George Washington Carver

My failed trade - Road to TA This trade happended some time in the mid of 2003, most probably Mar-Apr. The general sentiment in the market was bearish. This was probably my second or third trade in my personal account. During those times, my idea was to take position trades using options. Pick the trend, buy an option, sit on it. In the mid-2003, my boss, also a very good trader himself and Vivek Patil, one guy I used to watch for 'tips'; were both bearish. Or so, I understood. I therefore took a Nifty put option, with few days to expiry. [I had no idea about theta]. This was an OTM, simply because it was "cheap". If I remember correct, it was two strikes out of the CMP. Initially, the market stayed rangebound. But I kept my position, because two of my bellweathers were still bearish. Markets during the final days drifted close to my strike, but was still comfortably above my strike. Then something happened. Overnight there were some terrorists killed about 14 Kashmir...

I am a great fan of Peter Drucker. It would be fitting to present my first post, as tribute to him. I have no realization when I became a convert. But ever since I recall my management interest and education, two names have been prominent. Jack welch and Peter Drucker. I knew Jack Welch was somebody who was incharge of a magnificient company called General Electric. The fascination for Peter Drucker has its own little story. I describe that here. In the graduation school, I had taken up management courses out of interest for the business and its methods. But once inside, the routine boring, zero value drag had me disenchanted. A year or more so passed, as I tolerated this, just hoping the course would get over, and I would move on to something useful. Thankfully, our library had a small set of good books that covered wider knowledge. But most of the others were routine text books, that were simply copy-paste of some authors. I read them but was never satisfied with the knowledge they p...

I know not by what methods rare, But this I know: God answers prayer. I know not if the blessing sought Will come in just the guise I thought. I leave my prayer to Him alone Whose will is wiser than my own. - Eliza M. Hickok