Take 1
Two engineering students were walking across campus when onesaid, "Where did you get such a great bike?"
The second engineer replied, "Well, I was walking along yesterday minding my own business when a beautiful woman rode up on this bike. She threw the bike to the ground, took off all her clothes and said, "Take what you want."
"The second engineer nodded approvingly, "Good choice; the clothes probably wouldn't have fit."
Take 2
An architect, an artist and an engineer were discussing whether it was better to spend time with the wife or a mistress.
The architect said he enjoyed time with his wife, building a solid foundation for an enduring relationship. The artist said he enjoyed time with his mistress, because of the passion and mystery he found there. The engineer said, "I like both." "Both?" Engineer: "Yeah.
If you have a wife and a mistress, they will each assume you are spending time with the other woman, and you can go to the lab and get some work done."
Take 3
A pastor, a doctor and an engineer were waiting one morning for a particularly slow group of golfers.
The engineer fumed, "What's with these guys? We must have been waiting for 15 minutes!"
The doctor chimed in, "I don't know, but I've never seen such ineptitude! "
The pastor said, "Hey, here comes the greens-keeper. Let's have a word with him." [dramatic pause] "Hi George. Say, what's with that group ahead of us? They're rather slow, aren't they?"
The greens-keeper replied, "Oh, yes, that's a group of blind fire-fighters. They lost their sight saving our clubhouse from a fire last year, so we always let them play for free anytime." The group was silent for a moment.
The pastor said, "That's so sad. I think I will say a special prayer for them tonight."
The doctor said, "Good idea. And I'm going to contact my ophthalmologist buddy and see if there's anything he can do for them."
The engineer said, "Why can't these guys play at night?"
Ouch!!
Traditionally engineers have been viewed as geeks or nerds who do nothing but study strange kinds of things and manufacture big machines and buildings. Even nowadays when some coaching institute puts up an ad showing engineering aspirants they would put up posters of people with formal boring shirts and a metallic cap which the mechanics wear in garages. Whereas the doctors they'll show are all smart and dashing with matching colourful shirts inside their white aprons.
I mean why such discrimination against engineers. They would make serials like sanjeevani and dhadkan for doctors. Do only doctors have the charm to woo girls. And engineers are all boring people found glued to their computer screens or buried inside a pile of machines.
Come on, engineers are not like that. At least not what I've seen and known.
Then who are engineers and what are engineers. Well understanding this species is extremely difficult. However the common characteristics are:
Extreme
Whatever they do has to be on an extreme. No study for the 4-5 months of the semester and no sleep for the 4-5 days before the exams. The same student who you'll find with his torn jeans and the college t-shirt jumping out of the class(or rather bunking out of the class), impressing the panel of interviewers from the very best companies of the world.
The same stud whom you found half-conscious and fully drunk lying outside the hostel gate in the garden, can stun a gathering full of scholars while delivering a speech on consiousness.
Adaptive
Engineering students are supposed to be the most indisciplined and rude fellows on campus who are always clumsily dressed. But what happens to these guys/gals when they hit the corporate floor. They are the most smartly dressed people and present the face of India Inc.
They are as comfortable in the college-side khokha(dhaba) eating maggy sitting on the mat as they are while having lunch with their clients in a 5-star hotel.
Matter-of-factly
The 4 years of engineering teaches engineers how to learn. Learn different concepts, languages, techniques and anything else. Engineers are basically learners. Engineers doing well in CAT and other entrances are not because they are engineers but because they are good learners and can adapt to the changing situations.
To the optimist, the glass is half full. To the pessimist, the glass is half empty. To the engineer, the glass is twice as big as it needs to be.
Wednesday, September 17, 2008
Investment Banking - What do they do
An investment bank uses its proprietary book (own money) to lend others and invest. It started with the subprime crisis. Banks like Lehman, buy mortgage loans from other banks, and then package them to sell bonds against the loan pool. Often they add cash to make the loan pool more attractive, so that the bonds can be sold at a higher price.
Suppose mortgage was earning 6%, these bonds are sold at 4%. The difference is the spread which the investment bank earns. By selling these structured bonds, it raises money and frees capital. But when homebuyers started defaulting, these bonds lost their value. It all began like this, and then the virus spreads across markets.
Suppose mortgage was earning 6%, these bonds are sold at 4%. The difference is the spread which the investment bank earns. By selling these structured bonds, it raises money and frees capital. But when homebuyers started defaulting, these bonds lost their value. It all began like this, and then the virus spreads across markets.
Monday, September 15, 2008
3 Ways to Persuade
Aristotle (right) says, "Calm down, Plato.Campaign rhetoric isn't that bad."
The U.S. presidential campaign is kicking into high gear. That means both sides will be pulling out all of the rhetorical stops to try to persuade folks to pick their candidate. So, for a little perspective on the art of persuasion, we're turning to a political commentator unlike any on TV. We're turning to famous Greek philosopher Aristotle (384-322 BC). He wrote the book on rhetoric--called The Art of Rhetoric--way back in the 4th century BC. We asked Aristotle, how should those politicians persuade? He told us that, aside from "tortures, depositions, and the like," there are only three ways: logos, pathos, and ethos. In English, you might say logic, emotion, and character. Put it all together, and you get a reasonable argument, passionately made, by a person you trust.
Logos
Logic is an obvious one. After all, who isn't a sucker for irrefutable facts, verifiable numbers, and the inexorable march of reason across the course of a well-constructed speech? In fact, for many thinkers, including Aristotle's mentor, Plato, logos is the only legitimate way to win friends and influence people. The rest is sophistry. Logos was even more persuasive to ancient Greek philosophers, because they had a pretty expansive notion of what logos was. It could be the simple reason in the words of a speech, or it could mean the supreme reason of the universe, which all rational appeals naturally plugged into.
Pathos
Still, unlike old Plato, Aristotle was willing to look beyond strictly rational appeals. He recognized that people "do not give judgment in the same way when aggrieved as when pleased"--especially, he snobbily wrote, "audiences of limited intellectual scope and limited capacity to follow an extended chain of reasoning." Enter pathos. Let's face it, said Aristotle. If you really want to persuade people, sometimes you have to resort to emotional appeals. It's why campaigns try to wrap themselves in the flag and make you fear the other guy. It's why a winning smile and puppy-dog eyes work magic in getting your way. It's why lawyers have the saying "If the facts are on your side, pound the facts. If the law is on your side, pound the law. If neither is, pound the table." Of course, emotional appeals can take more subtle forms, too. Aristotle pointed out that eloquence itself is a kind of emotional persuasion. "Style makes the matter more persuasive," he wrote, "for the mind is tricked as though the speaker were telling the truth."
Ethos
For a reason-loving philosopher like Aristotle, admitting the power of pathos had to be hard enough. But he goes even further with ethos. "Character," he wrote, "contains almost the strongest proof of all." Quite simply, it matters who's trying to persuade you. If the person trying to sway you shows "common sense, virtue, and goodwill" (for Aristotle, an ethical trifecta), then really, aren't you more likely to believe what that person says? Aristotle thought so, and so thought that persuasive attempts must work to "establish the speaker himself as being of a certain type"--namely, the type of person you'll believe. Sometimes ethos is the only thing that matters. If, based on arcane medical tests, one doctor says you need immediate surgery, and another says you don't, how are you going to decide--except by judging who seems more credible? Similarly, lawyers put dueling experts on the stand, and politicians put dueling wonks on TV. Their reasons are obscure and technical, and only ethos makes the sale. That's why the old vaudeville philosophers used to say, "If you can fake sincerity, you've got it made."
Tuesday, September 9, 2008
Rohtang Tour
I went to visit Rohtang Pass while I was in Manali in month of August, 2008. It was a very unique experience for me. I was there with my mother and my maternal uncle and we enjoyed each and every bit of this journey and stay. Though I just wished if I was there with my friends as it would have been a different experience altogether. I do have many memorable moments from that journey. More than words, let's use snaps to go through the tour.
Roads on each turn seemed to end in the middle of the way. Sun was playing hide and seek that day, but it was a quite enjoyable weather while we were moving towards Rohtang.
In-Progress, keep visiting for new information and snaps !!
Friday, August 29, 2008
Systematic Investment Plans aka SIP
Systematic Investment Plans (SIPs) are much misunderstood. For one, investors often mistake SIPs as an investment avenue rather than a mode of investing in mutual funds. Then there are investors who invest in SIPs expecting quick results without fully appreciating the need to invest via SIPs for the long-term.
In an earlier article, we discussed how SIPs are perceived incorrectly by many investors as standalone investments. This explains why one of the most common queries we receive on the website is – which is the best SIP? Unfortunately, these investors have not been educated by their investment advisors about SIPs i.e. SIPs are only a mode of investing and not an independent investment avenue.
Minimum tenure of an SIP In our view, investors should ideally invest via SIPs over at least 2-3 years. This way they can exploit the most critical benefit of an SIP – rupee cost averaging. Let’s understand how this is possible. For an SIP to deliver the goods, it must witness a falling market. This way the investor can average out his cost of purchase. If the investor does not witness a downturn, i.e. he is only exposed to a market rally, the average purchase cost of his SIP will rise over a period of time.
Another misconception investors have about SIPs is with regards to the minimum tenure. Most fund houses have a minimum SIP tenure of 6 months. This leads investors to believe that 6 months is the ideal time frame for investing via SIPs (just like a lot of investors invest Rs 5,000 in mutual funds simply because that is the minimum investment amount for several mutual fund schemes).
| Month of investment | NAV (Rs) | No. of Units |
| January | 11.00 | 45.45 |
| February | 12.00 | 41.67 |
| March | 12.50 | 40.00 |
| April | 12.90 | 38.76 |
| May | 13.25 | 37.74 |
| June | 13.40 | 37.31 |
| Avg. purchase cost of 6 SIPs | Rs 12.45 |
In the above table the average purchase cost of the SIP is Rs 12.45. Clearly, the SIP has not worked in the investor’s favour. Why is that? Because if he had instead invested lumpsum in January, his purchase cost would have been Rs 11.00 as opposed to the average purchase cost of Rs 12.45 over a 6-month period.
| Month of investment | NAV (Rs) | No. of units |
| January | 11.00 | 45.45 |
| February | 12.00 | 41.67 |
| March | 12.50 | 40.00 |
| April | 12.90 | 38.76 |
| May | 13.25 | 37.74 |
| June | 13.40 | 37.31 |
| July | 12.10 | 41.32 |
| August | 11.20 | 44.64 |
| September | 10.30 | 48.54 |
| October | 10.10 | 49.50 |
| November | 10.50 | 47.62 |
| December | 10.20 | 49.02 |
| Avg. purchase cost of 12 SIPs | Rs 11.50 |
However, if the investor had opted for a longer investment tenure of say 12 months, he could have benefited from greater fluctuations in the mutual fund’s NAV. These fluctuations which arise over a market cycle lower the average purchase cost of the SIP over the long-term.
This is apparent from the above illustration. As is evident from the table, if the investor had taken an SIP for 12 months (instead of 6 months) his average purchase cost would have declined to Rs 11.50. Compare this with the average purchase cost of Rs 12.45 for a 6-month SIP.
It can be argued that there is no way for the investor to know when there is likely to be a turnaround in the markets (in this case a downturn). That is exactly our point. Since the investor does not know when markets will fall (and lower his average purchase cost), he must opt for a longer SIP tenure. Or at least he must manage his investments in a manner so that when his existing SIP terminates without witnessing a dip in stock markets, he can extend it further. This way should the markets fall, his SIP can benefit from a dip in the mutual fund NAV which in turn will lower his average purchase cost.
Points to remember before opting for an SIP 1) Ironically, while SIPs are meant to eliminate market-timing, investors must opt for a long-enough SIP tenure so as to ‘time’ the market downturn. 2) SIPs are equally beneficial in a falling market. Most investors believe that lumpsum investments (as opposed to SIPs) prove more beneficial in a falling market. This is only partly true. Having an SIP in operation during a falling market can ensure that investors stand to benefit should markets fall even further.
Tuesday, August 26, 2008
Health Insurance -- An Insight
Health insurance is a catch-all term that covers three distinct policies.
Mediclaim Policy
This health policy reimburses you the actual hospitalisation cost for treatment of any disease and is offered only by non-life insurers.
Hospitalisation Policy
In this health policy, you primarily get a daily allowance for every day spent in the hospital. Some policies also provide higher daily allowance for stay in intensive care unit (ICU).
Others have a provision for lump sum payment if you undergo any of the surgical procedures covered in the policy.
Critical Illness Health Policy
This policy is in a way a specification to any of the above two policies. The next type of health insurance covers critical illness. Given the increased stress and strain of modern life combined with unhealthy and sedentary lifestyles, most of us are prone to serious illness.
But advances in modern medicine ensure that most of us survive these. This, however, comes at a cost and makes a serious dent in our ability to pay, either from salary or business. This is where a critical illness cover can step in and pay off a lump sum benefit.
Most life insurers have for long offered these covers as riders (riders are covers for additional risks or to enhance the existing risk covers). Now, these critical illness covers are also being offered as standalone policies for specific illnesses like cancer . These policies are recommended for salary earners.
A relevant question would be whether one would need a hospitalisation policy if s/he already has a Mediclaim policy?
A Mediclaim policy only reimburses the expenditure incurred in the actual treatment of the disease/illness at a hospital. The policies offered by life insurers are actually an addition and not replacements for Mediclaim policies. It can not be replaced by any other kind of policy.
Under the umbrella of Hospitalisation and Critical Illness Policies, Life-Insurers provide excellent products. Such policies should be a necessary part of your risk cover portfolio.
Policies offered by life insurers (Hospitalisation and Critical Illness Policies) cannot be cancelled during their tenure.
Non-life policies (Mediclaim Policies) can be cancelled.
Also, policies issued by life insurers guarantee a cover during their entire tenure.
For more information, you might find these links pretty useful while deciding which one to choose:
http://www.apnainsurance.com/index.html
- Mediclaim Policy
- Hospitalisation Policy
- Critical Illness Policy
Mediclaim Policy
This health policy reimburses you the actual hospitalisation cost for treatment of any disease and is offered only by non-life insurers.
Hospitalisation Policy
In this health policy, you primarily get a daily allowance for every day spent in the hospital. Some policies also provide higher daily allowance for stay in intensive care unit (ICU).
Others have a provision for lump sum payment if you undergo any of the surgical procedures covered in the policy.
Critical Illness Health Policy
This policy is in a way a specification to any of the above two policies. The next type of health insurance covers critical illness. Given the increased stress and strain of modern life combined with unhealthy and sedentary lifestyles, most of us are prone to serious illness.
But advances in modern medicine ensure that most of us survive these. This, however, comes at a cost and makes a serious dent in our ability to pay, either from salary or business. This is where a critical illness cover can step in and pay off a lump sum benefit.
Most life insurers have for long offered these covers as riders (riders are covers for additional risks or to enhance the existing risk covers). Now, these critical illness covers are also being offered as standalone policies for specific illnesses like cancer . These policies are recommended for salary earners.
A relevant question would be whether one would need a hospitalisation policy if s/he already has a Mediclaim policy?
A Mediclaim policy only reimburses the expenditure incurred in the actual treatment of the disease/illness at a hospital. The policies offered by life insurers are actually an addition and not replacements for Mediclaim policies. It can not be replaced by any other kind of policy.
Under the umbrella of Hospitalisation and Critical Illness Policies, Life-Insurers provide excellent products. Such policies should be a necessary part of your risk cover portfolio.
Policies offered by life insurers (Hospitalisation and Critical Illness Policies) cannot be cancelled during their tenure.
Non-life policies (Mediclaim Policies) can be cancelled.
Also, policies issued by life insurers guarantee a cover during their entire tenure.
For more information, you might find these links pretty useful while deciding which one to choose:
http://www.apnainsurance.com/index.html
Friday, August 22, 2008
Trip to Manali - Details of Journey by Road
Well, to start with, after I did all my research about travel options, among air, rail and road. There were 3 airlines, Indian Airlines, Spice Jet and Jagsons Airways providing flights from Delhi to Bhuntar, airport in Kullu. Information on net told me that airport to Bhuntar is 55 kms. However, when I discovered that Bhuntar was on my way from Kullu to Manali and taxis were pretty easily available from Bhuntar to Kullu.
As far as train is concerned, I think we need to change the train somewhere in between as it is only Narrow Gauge in Kullu. So this idea did not suit me as I was going with my mom and uncle who are quite aged to change trains along with the luggage.
Next option was by road using either Volvo or private taxis. There are sevearal sites where you can book a cab from delhi to manali. However, I found them quite expensive @12000/- for a trip. I just felt that spending more on my journey part rather than on my accomodation and sight-seeing would not be a right thing.
Hence I decided to finalise with Volvo buses. I got good reviews from several people who told me that it is quite comfortable for aged people. And since I had never tried it myself, I thought to give it a chance.
There were many avenues to book Volvo buses from Delhi to Manali, some of them are:
http://www.volvo.com/bus/india/en-in/
http://www.volvobusesindia.com/ (I booked through this one as rest were going full !!)
My experience with Volvo's though was quite mixed one. Some key things which I would remember next time I use volvo to travel for long distances (meant over-nite) are:
We did face quiet tough times as our bus got stuck in a landslide near chandigarh. We were not really stuck in landslide but we could not move ahead Keerat Pur Sahib, 50kms from Chandigarh as the highway was supposedly closed due to landslide farther up the road. And hence several buses were there in the queue before us and most of the tourists were just standing on the road. Since it was 6 in morning, most of them were stretching and busy getting fresh. After an hour or so, we all realised that if we do not go back to local bus stand some 3-4 kms below the point where we were stuck, we might not able to move from there at all. This was due to the fact that line of buses behind us had already started increasing and was not stopping as more and more buses were enqueing.
Hence we came back to Keerat Pur Bus Stand and then had breakfast and ladies could freshen themselves and get food for children & infants. Next we started to talk to different people trying to find out ways to get manali. I saw some Tata Sumos standing at the bus stand . I went to a guy and found out the price he would charge for taking a cab full of us to Manali from that place. He told me it would cost me around 5500/- for a cab. I was not qutie convinced as I didn't know what to do. So I just came back and waited for drivers to tell if they got any news about road getting cleared from their colleagues up on the hill. Drivers normally have few of their colleagues coming back from the other side.
After talking to them, I could make out that they were not quite optimistic of getting this route cleared soon. Btw, tata sumos would have taken another route to Manali. Basically we went through
Chandigarh --> KiratPur Sahib --> Ropar --> Nangal --> Una (we enter HP) --> Badsar --> ShahTalai (distt BilasPur) --> Barthin (distt BilasPur) --> Prinni Nagar --> Sundar Nagar --> Ner Chauk (distt Mandi) --> Mandi Proper --> Pandoh dam --> Bajoura --> Bhuntar Airport --> Shamshi Main Market --> Kullu --> Katrain --> Manali.
Basically we had circled around the Gobind Sagar Lake to avoid the main chandigarh - Manali Highway which was blocked due to landslide.
So somehow we reached Manali at around 9:45 PM. Luckily the hotel manager was quite a nice person, Mr. Lalit. He was waiting for us and the cab driver, Monty just came withing few minutes at the bus stand to pick us up.
We reached our hotel, Dreamland which was around 2kms away from the main market and bus stand.
While coming back, I asked the hotel manager to book the front seats in the volvo bus. Charges were same, 1000/- per seat. Till our return date, government had permanently closed Chandigarh-Manali highway due to landslides. So the drivers chose to go via Simla. We left at around 7 in evening and I slept for almost all the night part of my journey. We were at Ambala at around 7 in morning. We had taken a hault at Ambala to get freshen up and have some thing to eat. Then we reached Delhi at around 12 and reached home till 3.
Read next blog for my experience and learnings during my stay at Manali.
=== Your Opinion Matters ===
As far as train is concerned, I think we need to change the train somewhere in between as it is only Narrow Gauge in Kullu. So this idea did not suit me as I was going with my mom and uncle who are quite aged to change trains along with the luggage.
Next option was by road using either Volvo or private taxis. There are sevearal sites where you can book a cab from delhi to manali. However, I found them quite expensive @12000/- for a trip. I just felt that spending more on my journey part rather than on my accomodation and sight-seeing would not be a right thing.
Hence I decided to finalise with Volvo buses. I got good reviews from several people who told me that it is quite comfortable for aged people. And since I had never tried it myself, I thought to give it a chance.
There were many avenues to book Volvo buses from Delhi to Manali, some of them are:
http://www.volvo.com/bus/india/en-in/
http://www.volvobusesindia.com/ (I booked through this one as rest were going full !!)
My experience with Volvo's though was quite mixed one. Some key things which I would remember next time I use volvo to travel for long distances (meant over-nite) are:
- You should choose the first 4 seats which are normally numbered as 1,2,3,4. Usually there are 2 drivers in each bus so that one can drive and other can sleep for the rest of the journey. Hence one seat is normally reserved for a driver. But this is not necessary and if there are no other seats, this seat can be given to passenger, but it depends and is discretionary to the driver and staff on board.
- You should keep necessary stuff with you in handbags as luggage would get locked in the rear compartment just like it happens in airlines.
- You should carry some woollens to use in nights as you never know if temperature falls outside the bus and ACs start working more efficiently :). Some travel operators do provide blankets which are quite sufficient in normal conditions.
We did face quiet tough times as our bus got stuck in a landslide near chandigarh. We were not really stuck in landslide but we could not move ahead Keerat Pur Sahib, 50kms from Chandigarh as the highway was supposedly closed due to landslide farther up the road. And hence several buses were there in the queue before us and most of the tourists were just standing on the road. Since it was 6 in morning, most of them were stretching and busy getting fresh. After an hour or so, we all realised that if we do not go back to local bus stand some 3-4 kms below the point where we were stuck, we might not able to move from there at all. This was due to the fact that line of buses behind us had already started increasing and was not stopping as more and more buses were enqueing.
Hence we came back to Keerat Pur Bus Stand and then had breakfast and ladies could freshen themselves and get food for children & infants. Next we started to talk to different people trying to find out ways to get manali. I saw some Tata Sumos standing at the bus stand . I went to a guy and found out the price he would charge for taking a cab full of us to Manali from that place. He told me it would cost me around 5500/- for a cab. I was not qutie convinced as I didn't know what to do. So I just came back and waited for drivers to tell if they got any news about road getting cleared from their colleagues up on the hill. Drivers normally have few of their colleagues coming back from the other side.
After talking to them, I could make out that they were not quite optimistic of getting this route cleared soon. Btw, tata sumos would have taken another route to Manali. Basically we went through
Chandigarh --> KiratPur Sahib --> Ropar --> Nangal --> Una (we enter HP) --> Badsar --> ShahTalai (distt BilasPur) --> Barthin (distt BilasPur) --> Prinni Nagar --> Sundar Nagar --> Ner Chauk (distt Mandi) --> Mandi Proper --> Pandoh dam --> Bajoura --> Bhuntar Airport --> Shamshi Main Market --> Kullu --> Katrain --> Manali.
Basically we had circled around the Gobind Sagar Lake to avoid the main chandigarh - Manali Highway which was blocked due to landslide.
So somehow we reached Manali at around 9:45 PM. Luckily the hotel manager was quite a nice person, Mr. Lalit. He was waiting for us and the cab driver, Monty just came withing few minutes at the bus stand to pick us up.
We reached our hotel, Dreamland which was around 2kms away from the main market and bus stand.
While coming back, I asked the hotel manager to book the front seats in the volvo bus. Charges were same, 1000/- per seat. Till our return date, government had permanently closed Chandigarh-Manali highway due to landslides. So the drivers chose to go via Simla. We left at around 7 in evening and I slept for almost all the night part of my journey. We were at Ambala at around 7 in morning. We had taken a hault at Ambala to get freshen up and have some thing to eat. Then we reached Delhi at around 12 and reached home till 3.
Read next blog for my experience and learnings during my stay at Manali.
=== Your Opinion Matters ===
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