Very critical for an entrepreneur

In Infosys, I brought certain beliefs to the table and my colleagues were kind enough to accept them. First, I only believe in the bottomline. I don't believe in topline. For me, if you are running a business, you have to be the most profitable business in that industry. From Day One, that is the way I have operated. Second, to me, every decision has to be based on verifiable data, fact and models. That's why, in our acquisition strategy, I had laid a set of conditions and said that unless those filters were met, we would not go further. Last but not least, I always believed in recruiting people who were smarter than me. I realised that if I start recruiting people who were less smart than me, and they started recruiting people who were less smart than they were, then before you can say Jack Robinson, the company would be full of idiots.

I am a man in a hurry. For me, speed is of the greatest importance. I realised pretty early in my career that speed is extremely important, especially in a growing economy like India. So even today, every decision I take as a chairman has to be completed by 5.30 pm. My deadlines are always in hours.

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16 SAMSKARAS

1.	Garbhadan	The first coming together of the husband & wife for bringing about conception.
2.	Pumsvan	Ceremony performed when the first signs of conception are seen, and is to be performed when someone desires a male child.
3.	Seemantonayan	A ceremony of parting of the hairs of the expectant mother to keep her spirits high & positive. Special music is arranged for her.
4.	Jatakarma	After the birth of the child, the child is given a secret name, he is given taste of honey & ghee, mother starts the first breast-feeding after chanting of a mantra.
5.	Nama-karana	In this ceremony the child is given a formal name. Performed on the 11th day.
6.	Nishkramana	In this the formal darshan of sun & moon is done for the child.
7.	Annaprashana	This ceremony is performed, when the child is given solid food (anna) for the first time.
8.	Chudakarana	Cuda means the 'lock or tuft of hair' kept after the remaining part is shaved off.
9.	Karna-vedha	Done in 7th or 8th month. Piercing of the ears.
10.	Upanayan & Vedarambha	The thread ceremony. The child is thereafter authorized to perform all rituals. Studies of Vedas begins with the Guru.
11.	Keshanta	Hairs are cut, guru dakshina is given
12.	Samavartan	Returning to the house
13.	Vivaha	Marriage ceremony
14.	Vanprastha	As old age approaches, the person retires for a life of tapas & studies.
15.	Sanyas	Before leaving the body a Hinddu sheds all sense of responsibility & relationships to awake & revel in the timeless truth.
16.	Antyeshthi	The last rites done after the death

Online classified - Dated but good

Interview with Fabrice Grinda -Co CEO – Olx Inc

posted in India, INTERNET, Websites by puchoo

I had written an article on online classifieds and the industry in general , about a week or so ago and was delighted to note that one of the visitors who had left some feedback was Fabrice Grinda , the Co CEO of Olx Inc, one of the largest classifieds site network in existence today.

Fabrice was kind enough to accept a request for a brief email interview which is published below.

What according to you is classifieds?

Classifieds are a form of (usually text based) advertising that allows individuals and companies to solicit sales for products and services. They appear online and offline and can be free or paid for. Traditionally they have been print ads in newspapers, but are now moving online to specialized sites like Monster or general sites like OLX

Reasons which prompted you to set up a classifieds site?

I left my previous company, Zingy (www.zingy.com) in November 2005. As I started looking for business ideas, I notice the tremendous value that Craigslist was bringing to consumers in the US market. It was bringing classifieds to the masses by allowing everyone to find roommates, baby sitters, couches, etc. for free. I also noticed that outside of the US the classifieds markets were still dominated by the newspapers who charged an arm and a leg to post.

It struck me that there was a tremendous opportunity to bring free classifieds to the rest of the world and thus provide a great public service to local communities. We took the basic concept from Craigslist – simple, local, free – and improved upon it and localized it for each country.

What is Olx’s strength with respect to the global scene and specifically India?

We have built a great product with differentiated features:

A great mobile site accessible at http://mobile.olx.com

A nice Ajax Wysiwyg editor to have rich colorful listings without having to have knowledge of Html.

- We support embedded pictures and videos.

- You can display your listings on Facebook.

- One can track multiple listings through “my olx”

Specifically for India, we have all the main regions and cities covered and we will be launching our Hindi version in the first quarter of 2008.

What do you predict with respect to the growth and size of this industry in the Indian context?

Free classifieds will grow the market tremendously as people start posting classifieds for things they would never pay for in a newspaper: roommates, baby sitters, dog walkers, caterers, dates, etc.

How much traffic, and how big a registered database do you have in India. How fast is it growing?

We get 800,000 visits per month in India which is double what we had a few months ago.

Primary hurdles for a classifieds site?.

People who list need to get replies. People who are looking for something need to see ads for what they are looking for. It sounds simple but it’s hard to implement. When you start the site is empty and you have no traffic so getting traction requires a lot of work.

Once you have traction, the main problem for free sites become spam and scams.

User experience is very important, what are the initiatives Olx has taken to better this.

We keep testing new features and designs to continuously improve the user experience. Over the past 12 months we completely redesigned the site. A few things we changed:

• Ggreatly simplified the posting process.
• We put pictures in the listing results page which decreases page views since visiting that specific page is not required anymore but improves usability.

• We put 50 ads in the listing results page as opposed to 10 or 20. This again decrease pageviews but is more convenient to users.

We are in the process of introducing filters on the listing results pages which are currently only live in India and the Phillipenes right now.

Steps taken to take care of fraud, multiple listings, inaccurate data etc.

Spam and scams are extremely tough problems for free classified sites. We rely on both automated and manual processes. We blacklist keywords, IP addresses, countries, etc. and also have a 20 person customer service team monitoring the site, removing duplicates, spam, etc.

The process is not perfect yet, but improving. We intend to more to 24/7 monitoring at some point in February or March. We are also working on what we hope will be a phenomenal proprietary new spam/scam filtering tool.

What are the revenue models available? Do you see yourself opting for banner advertising etc?

Most classified companies charge fees to post an ad. However, there is a wide range of business models – I have seen subscription models (in matrimonial sites for instance), charges to reply to ads (often on roommate sites).

We have chosen to be free to post and free to reply – and intend to remain so forever! We make money by displaying text ads (currently provided by Google) on the listings results page and on individual classified ads. We don’t intend to put more ads in the short term.

We will eventually charge users who want to feature their listings by having them appear on the home page of OLX or the top of the listings, but we don’t plan to launch this in India in the immediate future.

Anything which we can expect to roll out from the Olx stable in the coming weeks.

We will be deploy the filters we first deployed in India on the listings results page to the other OLX countries in the coming weeks. We are also working on making them specific to each category.

We have a lot of new features in the works, but the most important Indian specific feature is the launch of Hindi in the first quarter.

Anything else ,of note, you would like to mention.

It is probably worth mentioning that in India we work Atul Khekade, who was nominated as one of the top entrepreneurs in Asia under 25 by Businessweek Online in 2006.

Stay invested in a mkt decline

www.peninsulanewsreview.com/opinion/286370141.html?mobile=true

PETER DOLEZAL: The consequences of timing the markets

By PETER DOLEZAL December 19, 2014 · 9:38 AM
0 Comments

Despite compelling evidence on the folly of attempting to time financial markets — equity or fixed income — many investors still cannot resist the urge to try periodic moves in and out of various investment products.

A recent Dalbar Inc. study, Quantitative Analysis of Investor Behavior — 2014, delivered perhaps the most startling proof of the price investors pay when making investment changes based on personal predictions of market moves.

This study looked at investors' actual returns relative to the 20-year annualized returns to December 31, 2013, of both the S&P 500 (equities), and the Barclays Aggregate Bond Index (fixed income).

Annualized returns of Equity investors during this period averaged 5.0%, whereas the S&P had averaged 9.2%.

In fixed income, investors' returns averaged 0.7% annually, compared to 5.7% delivered by the Bond Index.

What this extensive survey shows is that had the typical investor, rather than moving in and out of investments, remained invested in his/her equity and fixed income portfolios over the entire 20 years, annual equity returns would have been some 84% higher, and fixed income returns some eight times higher.

Sometimes, an investor's motivation for selling holdings is not an effort to time the market, but rather fear.

When a significant market sell-off begins and markets adjust downward, some investors bail out, rather than watch their portfolio value decline on paper. The difficulty of course, is knowing when to buy back in. Many end up buying back into the market at higher levels than when they sold — thus assuring themselves of an actual net loss on the two transactions.

Over the past 60 years, North American markets have experienced a dozen major negative corrections (Bear Markets), with an average decline of 26% and an average duration of nine months. On the other hand, the major positive (Bull) markets have delivered an average total gain of 120% and have lasted, on average, 44 months.

Even more telling is that in the same 60 years, the worst S&P/TSX Composite Index performance in any five-year period of was a loss of only 1.9%. Over their worst five-year period, U.S. market losses were comparable.

This compelling evidence emphasizes that by staying the course, and riding out the inevitable shorter-term market corrections, an investment portfolio should be worth far more in the long term.

Investors must realize that they do not incur a real  loss just because markets adjust downward. However, if they do sell in a downward market, they may well crystallize an actual loss, which will in turn affect their long-term returns.

The key to remaining calm during a market downturn is to already be comfortable with the caliber of one's investments. Portfolios should be well-structured in low-cost, solid-yield, well-diversified holdings, both in terms of asset class, sector, and geographically. With a solid foundation, waiting out occasional market corrections will almost always prove to be the smartest long-term strategy.

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Seth Klarman - Source: Lalit

Recently bought Cheneire energy..

Some of his thoughts on investing....

Klarman's sometimes cruel but unmissable quotes:

"In all games the difference between the amateur and the professional is that the professional plays the odds, while the amateur, whether he realizes it or not, is among other things a thrill seeker. Investment, too, is part science and part a game, and just as in poker, you need to sort out your motives. The essence of the whole matter is buying a company in the market for less than its appraised value. Fortunately, most of the other investment players are quite emotional, so if you are thorough and patient, you can find good deals. However, they will rarely be easy, since many other people are looking for the same thing. Thus, to prosper in the investment game, as in any other, requires that you be right—so you'll win—and different—so you'll get attractive odds. I hope that this book will help you do that."
Two key lessons from this statement. The first one is that valuation matters a great deal, it is the compass of every investment thesis. While valuation ranges may vary across the investing community, I personally like cases that I can understand and present limited downside with upside potential under adverse conditions. While infrequent, as Klarman mentions, patience to get the right pitch is key. The second lesson is that it is very hard to find attractive opportunities where everyone else is looking. I have come to realize that good opportunities usually are far from consensus, in beaten down sectors or industries. They generate some uncertainty because it's hard to let go of the crowding effect.

"It is vitally important for investors to distinguish stock price fluctuations from underlying business reality. If the general tendency is for buying to beget more buying and selling to precipitate more selling, investors must fight the tendency to capitulate to market forces. You cannot ignore the market—ignoring a source of investment opportunities would obviously be a mistake—but you must think for yourself and not allow the market to direct you. Value in relation to price, not price alone, must determine your investment decisions. If you look to Mr. Market as a creator of investment opportunities (where price departs from underlying value), you have the makings of a value investor. If you insist on looking to Mr. Market for investment guidance, however, you are probably best advised to hire someone else to manage your money."
The key lesson here is that the market is there to serve us, not to guide us, paraphrasing Buffett. It will present good opportunities to buy at low prices and sell at high ones, and that cheapness or expensiveness will be determined only by comparison to our intrinsic value estimates. Following the crowd can prove very costly, since without a clear range of value estimates, we are navigating the ocean without a compass.

"Investors will frequently not know why security prices fluctuate. They may change because of, in the absence of, or in complete indifference to changes in underlying value. In the short run investor perception may be as important as reality itself in determining security prices. It is never clear which future events are anticipated by investors and thus already reflected in today's security prices. Because security prices can change for any number of reasons and because it is impossible to know what expectations are reflected in any given price level, investors must look beyond security prices to underlying business value, always comparing the two as part of the investment process."
Prices are volatile but businesses and operations take longer periods of time to reflect their nature in intrinsic value. While we might get lost as investors in price quotations, we should always reflect and wait for business data to display and confirm (or reject) our investment thesis. Only after thorough analysis we might come up with a decision to sell, hold or buy, depending on what the data tells us. Sales, operations' expansion, inventory, ratios and trends are some of the things that will tell us how the business is really doing.

"Unsuccessful Investors are dominated by emotion. Rather than responding coolly and rationally to market fluctuations, they respond emotionally with greed and fear. We all know people who act responsibly and deliberately most of the time but go berserk when investing money. It may take them many months, even years, of hard work and disciplined saving to accumulate the money buy only a few minutes to invest it. The same people would read several consumer publications and visit numerous stores before purchasing a stereo or camera yet spend little or no time investigating the stock they just heard about from a friend. Rationality that is applied to the purchase of electronic or photographic equipment is absent when it comes to investing."
I like Klarman's example a lot, basically because it shows how different we are under slight changes in variables and conditions. When shopping we compare (sometimes exhaustively) using the internet, friends and other sources of information. When we invest, however, we sometimes go with our gut feeling. This discrepancy only reflects why the efficient market hypothesis will never hold 100% true, investors are not always rational.

"Many unsuccessful investors regard the stock market as a way to make money without working rather than as a way to invest capital in order to earn a decent return. Anyone would enjoy a quick and easy profit, and the prospect of an effortless gain incites greed in investors. Greed leads many investors to seek shortcuts to investment success. Rather than allowing returns to compound over time, they attempt to turn quick profits by acting on hot tips. They do not stop to consider how the tipster could possibly be in possession of valuable information that is not illegally obtained or why, if it is so valuable, it is being made available to them. Greed also manifests itself as undue optimism or, more subtly, as complacency in the face of bad news. Finally, greed can cause investors to shift their focus away from the achievement of long-term investment goals in favor of short-term speculation."
Making a quick buck is an idea that drives the markets constantly, but here Mr. Klarman states what the goal of investors should be: invest capital to earn a decent return. I think about Buffett mentioning that his #1 job is capital allocation.

autoinvestors

Online Portfolio Managers

Over the past couple of years, quite a few online investment/portfolio managers have cropped up. Here's a list of services that I have come across. Let me know your experiences, if you have used these services.

Other services include Motif Investing, My GDP, NestWise, Folio Investing

Name	Philosophy/approach	Fees	Comments
Betterment	Automated diversification using index funds (based on MPT)	0.15 to 0.35%
Personal Capital	"mint.com" like tool for investments  + "full service" portfolio manager	tools are free to use; advisors cost 0.95%	their free tool has got some very good reviews
Future Advisor	Automated diversification using index funds (based on MPT)	Basic service is free	Free recommendations for 401(K) accounts
Covestor	Shadowing other investors	0.5% to 2%	Allows you to "mirror" the trades of other investors/money-managers
SigFig	Consolodates & analyses your portfolio	Free portfolio analysis; they get paid referral fees
Wealth Front	Automated diversification using index funds (based on MPT)	0.25%
Market Riders	Automated diversification using index funds (based on MPT)	$15 per month (or $150 per year)	"Compatible with any broker

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Best regards,

Chaitanya

Buffett - Airlines mistake

Warren Buffett doesn’t seem to have much financial luck with airline companies. The billionaire CEO of Berkshire Hathaway Inc. has decried airline investing ever since he got burned buying convertible preferred stock in USAir Group Inc. in 1989.

Berkshire eventually had to write down the $358 million investment in the commercial airline operator. In his 1996 annual letter to shareholders, Mr. Buffett wrote: “My analysis of USAir’s business was both superficial and wrong. I was so beguiled by the company’s long history of profitable operations, and by the protection that ownership of a senior security seemingly offered me, that I overlooked the crucial point:  USAir’s revenues would increasingly feel the effects of an unregulated, fiercely-competitive market whereas its cost structure was a holdover from the days when regulation protected profits.  These costs, if left unchecked, portended disaster, however reassuring the airline’s past record might be.”     Despite the misfortunes of USAir, Berkshire sold its shares in 1998 for a “hefty gain,” according to the company’s 2007 annual report.

It was a theme he returned to in his 2007 letter, where he said that a durable competitive advantage in the airline industry “has proven elusive ever since the days of the Wright Brothers.”

“Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down,” he joked. “The airline industry’s demand for capital ever since that first flight has been insatiable. Investors have poured money into a bottomless pit.”

More recently, Berkshire-owned private-jet operator NetJets Inc. has been a source of worry for Mr. Buffett. Although NetJets operates in the private aviation market, it deals with many of the same issues as commercial airlines, including high fixed costs such as fuel, and unionized labor.

NetJets is in midst of contract negotiations with several unions representing pilots, flight attendants and other employees. Negotiations have been especially testy with the pilots’ union, which contends that cuts proposed by the jet company are “unjustifiable” at a time when business has turned around and NetJets is seeing higher revenue and earnings growth. For its part, NetJets says cost reductions “are necessary” because Berkshire requires a greater return on revenue from the company.

More In Warren Buffett

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The company was nearly felled in 2009 when its wealthy customers cut back on private-jet use. Mr. Buffett has said the company would have “gone broke” had Berkshire not guaranteed its $1.9 billion debt load. Things have improved since then. With the economy bounding back, customers have returned to buying shares in NetJets planes in exchange for flying hours.

However, it isn’t one of Mr. Buffett’s best deals. Despite being profitable, NetJets has not managed to pay a single penny to Berkshire as a dividend in the 16 years that the conglomerate has owned it, according to a person close to Berkshire. Its net worth is also worth considerably less than the $725 million in cash and stock that Berkshire paid for NetJets in 1998. That would likely have been true for any company that Berkshire bought using its own stock, given the massive appreciation in Berkshire’s A shares. In this case, Berkshire hasn’t made its money back on the purchase even excluding the jump in its shares since 1998.

Source: WSJ blog

Sensex P/E

What I liked is Sensex performance is linked to PE expansion rather than the EPS increase !!

Starting P/E is far more important than GDP growth and Earnings growth forecasted

Midcaps and small caps very expensive at the moment!