Picking companies to investment...

Sunday, March 29, 2009

Today, I read an article in a leading new paper which is also published / backup by the author (Mr Shyam) in his blog. Its a good article and look forward for the rest of his series.

Based on his article my thought are as follows.

  • Its never an easy task to identify a good company to invest. The audited Balance sheet / fund flow statement might not always give you the correct picture. Look at what had happened with Satyam / Enron. So in this case, how do you arrive at return-on-capital based on the figures given by the company. One arguement could be not all companies would be like Satyam, but then Satyam could still have been a financially strong company to invest, had Raju not disclosed the financial 'dressing' of the balance sheet.
  • I believe generally a small investor compares FD Vs Stock market. He is unlikely to think of running a business on his own(icecream or restaurant) try to calculate the ROC. If you are running your own business, even 10% to 15% ROC could be a good investment, if you are deriving other benefits out of the business in the form of salary and other perks, benefits etc

I do agree with his point that blindly buying the stock for that matter making any investment based on recommendation on newpaper, magazine ,web or 'expert' advice might not be a wise decision.

Also, I believe, for any investment, foresight and timing is important and hence, if you are not sure and do not see the value for the investment at this point due to reason such as overpriced, people preference etc, it better to keep money in FD and wait until time is ripe.

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Positive view of life

Saturday, March 28, 2009

I found a below quote about life by Srini Rao (Thanks Srini!!) in one of the web online business news, it was a nice one and we should feel really blessed about what we are having,

The life has come down in the few words given below:

  • If you have food in the refrigerator, clothes on your back, a roof overhead and a place to sleep, you are richer than 75% of this world.
  • If you woke up this morning with more health than illness, you are more blessed than the million who will not survive this week.
  • If you have money in the bank, in your wallet, and spare change in a dish someplace, you are among the top 8% of the world's wealthy.
  • If you can attend a religious meeting without fear of harassment, arrest, torture, or death, you are more blessed than three billion people in the world.
  • If you have never experienced the danger of battle, the loneliness of imprisonment, the agony of torture, or the pangs of starvation, you are ahead of 500 million people in the world.
  • If you can read this message you are more blessed than the over two billion people in the world who cannot read at all.
  • As you read this and are reminded how life is in the rest of the world, remember just how blessed you really are!

Thank God for what we have, and spare a thought for our less blessed brethren. Just think how we feel or behave when we are deprived of even 5% of what we have.

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Innovation of the decade .... Part 2

Tuesday, March 24, 2009

In my blog post on March 22nd, I was wondering as what would be the future innovation. I received two links from my friends, these are truly mind blowing and really amazed by the spead in which growth happens..

i) The first one is more toward analysis of the past (Courtesy : Youtube) on the technology front.

Did you know

ii) The second one below is the amazing technolgy innovation, might well be a future product similar to mobile phone we have today (Courtesy : TED)

Sixth Sense Innovation

Don't go into the dream world after watching both the clipping....

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Innovation of the decade........Part1

Sunday, March 22, 2009

There is a definite difference the way business is conducted now and the earlier decade, I asked this question to myself as what was the major impact the way the business is done today and to later part of 1990's. I am sure these innovative products had made the difference, I am sure business cannot survive without these.....

One is i) Internet and ii) Mobile phone, this is what I considered as important innovation, though these innovation might be more the decade old, its availability to common people's reach is less than a decade. Can you imagine any business without these products??

I was just wondering today, as what would be the similar kind of product which can make a major different in the next decade... I welcome readers innovative mind comments.....

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Global economy crisis

Monday, March 16, 2009

I am not an economist, what ever I had written is just out my own thoughts.

As per a recent article in the a leading new paper, "Global imbalance" are the cause for economic crisis. The US is running a huge deficits and countries such as Japan & China needed an outlet to deploy their surpluses. These surplus money had found its way into US and since the interest rate was low it inflated the real estate prices, shares and asset and finally the bubble burst. This rather, I would say as one dimension of economic problem.

There are accusation that China is undervaluing its currency to increase it export and remain competitive, on other hand US,UK, Japanese currency are getting stronger(against Indian currency) but unfortunately the job losses seems to be maximum at these countries as well as the economy is in bad shape in those countries. Ideally, if countries economy is in bad shape then, I believe the currency should depreciate.

Also, I feel for 1$, one could get much higher value commodity/service in countries like India , China compared to what the money can buy in US,UK or Japan, naturally any business man would like a source his goods or service from that part of the world.

Even in your very house, if you look around you would only see international brand electronic products, hence in this era faster information exchange , easier airtravel , GATT/WTO agreement any commodity particularly consumer electronics, which has price tag above $100 and less than 10 kgs in weight (call it 100/10 rule) has to mass produced (there could be very few expection) and entire world is the market and if the manufacturer concentrate a particular region then the manufacturer could become extinct or acquired due to competition. Hence, product manufacturer has to optimize all categories of cost, this would naturally lead to locating manufacturing plants and jobs in low cost countries.

In my opinion, when there job losses and the economy is showing shunted growth, and if the country currency gets stronger it might end up in creating multiple problems.

I welcome reader's comments.

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All the Best Satyam!!!!!

Saturday, March 14, 2009

Had written earlier in the month of January 2009 about Satyam. It's good to note, that few of the companies has shown interest in acquiring Satyam. But, expression of interest is just one part of it. In the current economic condition acquiring/merging and keep it alive is the most important part.

Most of the companies which had shown interest in acquiring are public limited companies and having share listed in stocke exchanges and naturally would expect the financial position of the Satyam known to its Stake holder.

Satyam had announced that it would be providing the details of it financial position to the bidding companies. Its important that, being a public listed company Satyam has to not only provide financial position to bidding companies but to public as well, so that acquisition or merger happen in a transparent manner.

Good Luck! let the truth (Satyam!!!) win.

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Electronic Data Interchange (EDI)

Wednesday, March 11, 2009

During my career in IT, apart from Project Management, I had worked on technical/functional side of ERP, Datawarehousing and also on EDI. 'EDI' was quite challenging, primarily because I underwent training and put on a client facing production support project the very next day.

Since I have now moved away from EDI, I made an attempt to recollect what EDI is all about, which might be useful for a layman to know whatEDI mean.

So Whats EDI?.
It stands for Electronic Data Interchange.

Ok....What does it mean?.
Computer to computer exchange of standard format business documents like PO, Customer invoice, Vendor invoice exchanged automatically between systems of legal company (called 'trading partner' in EDI terms).

How does this happen or What are the components involved?
Please refer the below pic representation

What are the Benefits of having EDI?

EDI is the paper less exchange of business documents, such as invoices and purchase orders.
  • EDI documents contain the same information as paper documents, but they are formatted in an EDI Standard format.
  • With EDI translation \ router software you can transmit a document from an application on your computer to an application on another company’s computer with little or 'Nil' manual intervention unless there is a some form of failure at the touch points.
  • You send and receive EDI documents over a communications line like VAN. You can also use a tape, diskette or e-mail to exchange EDI documents with your trading partners.
  • Are there any EDI standards:
    X12 and EDIFACT are the two most commonly used document Standards in the US and Europe today.The ANSI and ISO committees release new versions of X12 and EDIFACT Standards about once a year, thus there are multiple versions of most Standards in use.

    Though EDI is quite old, still many companies in many sectors (manufacturng, retail, banking etc) are still using them for their benefits listed. In the last few years, they has been in increased usable of XML instead of EDI but still a long way to go before EDI geting replaced by XML.

    Further extension from XML is SOA (Service Oriented Architecture) which uses BPEL (Business Process Execution Language).

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    Nearshore versus offshore outsourcing

    Monday, March 9, 2009

    In one of the online forum, I found an interesting discussion about growth of nearshore outsourcing Vs offshore outsouring. For those of you, who would like to know what nearshore and offshore means.

    If a client is US provides oursourcing contract to Indian IT company then its considered as "Offshoring" and if the same client provided a outsourcing contract to a company in Argentina or any LATAM country then it is considered as "nearshoring". There are additional benefits in "nearshore" outsourcing , they are, mostly in same time zone, there is lesser cultural difference and quicker travel to client location when required.

    Most of the prominent IT service provider has already set or in the process of setting near shore centre, so the question is that whether there would be higher growth to these "nearshore" centre compared to "offshore" centre in future?. If the growth happens in "nearshore" centre then it could impact Indian IT industry in the future.

    Regionwise, for US market Latin American countries are considered for nearshore centres, for Europe - eastern Europe\ Ukraine are consider near shore and for countries like Japan, Hong kong - China is considered as near shore centre.

    As these "near shore" centre become more mature there would be an increased competition to "Offshore" (Indian) centres.

    Its a) Price and b) Quality of deliverables within the defined scope & schedule of the projects are the driving factors for offshoring. If the nearshore center can provide their business in comparable terms (cost & quality) then , the client would definetely prefer nearshore center (for project deliverables) because of the added facility the customer can enjoy like same timezone, culture and in some case even language to an extent.

    Hence, apart from the general slow down in IT sector now, this is going to be an additional challenge in the near future for Indian software consultants and Indian IT companies, particularly the companies which does not have presence in these "near shore" countries.

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    U.S. Economy: Unemployment in U.S. Surged to 8.1% in February 2009

    Friday, March 6, 2009

    " The U.S. unemployment rate jumped in February to 8.1 percent, the highest level in more than a quarter century, a surge likely to send more Americans into bankruptcy and force further cutbacks in consumer spending.
    Employers eliminated 651,000 jobs last month, the Labor Department said today in Washington. Losses have now exceeded 600,000 for three straight months, the first time that’s happened since the data began in 1939. Revisions to the previous two months lopped off an additional 161,000 positions. ".

    (information courtesy bloomberg)

    So, what happened to economic stimulus funding of 700+ Billion USD??? Has it not gone into the "Vehicle" called economy to take it forward?

    What has been working well for US about a decade back is not working anymore?!!? .... I believe with the internet age, location is not a constrain and hence I feel, US has to look out for cost effective solution instead of going into a protection mode.

    Read more!

    India going to Polls in April - May..

    Monday, March 2, 2009

    Lok Sabha polls are scheduled to held in 5 phases between April 16-May 13. It going to be held at a challenging time when the world economy.

    Let hope and pray that the Indian people elect a new dynamic PM who can lead India from front.

    Every Indian new dream PM

    • Eradicate Corruption.
    • Concentrate on providing good infrastructure to its people.
    • Do not depend on vote bank politics or money power
    • Dynamic personality who is respected not only in India but also in countries world over.
    • Protect her, lets not have any more of 26/11

    Let India unite and select the best person for this job.

    Read more!

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