With this thought, here is this post, to commemorate a day in mine!
Friday, May 18, 2012
With this thought, here is this post, to commemorate a day in mine!
Tuesday, April 24, 2012
On the question of the pay gap, you always wonder whether it is the cause or the effect. Do women do more housework because they earn less or do they earn less because spend more time and effort in managing the house (and consequently less time on activities that build value). That an equally educated woman earns less over her lifetime than a man is a reality true even for those with the best qualifications, and part of the explanation is logical. A women takes more breaks from her career, whether to support her spouse or to raise children. In fact, way back in 2005, I came across a study of female graduates of Harvard which found that as many as 40% of them took time off at some point in their lives. The post is here.
In 2009, New York Times reported a study done by Payscale. It found that adjusted for the type of jobs taken up by a female, industry, type of company and other factors, at least for jobs earnings less than $100,000 an year, the 20% pay gap between men and women disappeared. So the difference can be explained by career choices than discrimination, except at higher salaries.
This has always been an area of interest and the relevant sources are documented below. I have always believed that - if you control for other factors - how gender roles were played and household labor was split between parents is significant determinant of how much responsibility a man takes at home. One day, hopefully, I will find a study that explores that.
1) 2012: The economist article, “The ironing lady”, is here.
2) 2012: The Research Paper, “The Role of Preferences and Opportunity Costs in Determining the Time Allocated to Housework”, is here.
3) 2009: The New York Times article, “Women Earn Less than Men, Especially at the Top,” is here.
4) 2004: My own post, “Work, Family, Personal Life: Why Not All Three,” about the conference and study at HBS is here.
Monday, April 09, 2012
Apart from the fact that women’s causes naturally resonate, a big reason I joined Life-Changer was guilt. I regret not doing enough for someone very close who went through a tough situation in her life. But as I look back I realize that the work I did gave me a sense of purpose to anchor my own life. Apart from helping with their outreach, marketing and activism, I worked closely with few of Life-Changer’s clients. This portion of my work was the most rewarding.
On my first such case I advocated for Amy (by now you know that’s not her name). Amy married someone from her own country and moved to the United States with him. She needed to get a US passport for her recently born baby. The Life-Changer staff member who was working with me had told me the details of the case. Amy had been here for less than a year. Like many women who move with their husbands, Amy wasn’t eligible to work, and had no source of income.
I met Amy at the steps of the court-house. This was her third visit. Passport application for a child needs to be signed by both parents. Only problem was that Amy’s husband deserted her before the child was born and Amy had no idea where he was. We said hello and talked a bit using signs. Amy spoke little English. This was a woman living alone with a newborn baby in a shelter. Amy was in a country different from her own; she was not very fluent with the language and had almost no support structure. For someone going through all this Amy was really strong. I was worried earlier, but I realized apart from the language, Amy didn’t need me much.
We went in the court. I did my part – filled up the baby’s papers, presented them to the officer and just before she was about to put the rejected stamp on our application - told her Amy’s story, mentioned the relevant exception to the law and presented the documentary evidence. She was sympathetic and filled an additional document to expedite the case while we were standing at the window and the others were waiting. I thought she must have seen many such cases before.
Amy was happy when we came out of the court. She understood that her application was accepted because the officer hadn’t given it back to her. I tried to tell her that she should get her son’s passport in week to ten days. I wanted to walk with to her public transport location and make sure she could take the right route to the shelter. She politely refused. As we said good-bye she hugged me. I watched her go. Amy was ready, to take the world on her own. She would be first of the many women who I will learn from.
Thursday, February 09, 2012
Of course when you become Steve Jobs, your personal brand turns weaknesses into strengths and terms such as “reality distortion field” are coined. Other mentions in the FBI report – such as the fact that at least in the early part of his life Steve neglected his daughter and his girl friend - are corroborated in his recent biography.
Thursday, February 02, 2012
A commentator on Bloomberg mentioned that Zuckerberg has never taken money out Facebook unlike the executives of few other technology companies that recently came up with IPOs. As you read the text of the Zuckerberg's letter to his investors you can't miss the fact that he believes in what he is doing. The letter is in part an attempt to build an ethos among the people associated with Facebook.
Though there are a lot of ideas, the following few caught my attention:
...Simply put: we don’t build services to make money; we make money to build better services.Since the man is worth billions, you need to put his statements in context before you start renouncing the too much (or the too little) that you have. I agree that money is important because in a social setting or a relationship it often becomes a proxy for power and authority. I have a friend who insisted on paying (though we always split the check and paid him back) whenever we went out because he believed it gave him the power whenever there was decision to be made, even if was simply about where to go.
... These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits.
But the undeniable fact is that money is the means not the end, and the two are different. In the end Zuckerberg knows what is most important for Facebook because it is most important for all of us.
There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future.
...it starts small — with the relationship between two people.
Personal relationships are the fundamental unit of our society. Relationships are how we discover new ideas, understand our world and ultimately derive long-term happiness.While I write this I am reminded of a conversation I had with a friend. I was at a crossroad unable to decide. She helped me think rationally with the simple question, " What would make you happy ?" I am grateful for the people who enrich my life. I realize that they are the end in my life, and not the means and the distinction is critical.
But there is more worth reading in the letter. The full text is here.
Wednesday, December 28, 2011
Wednesday, November 30, 2011
All cultures have their notions of religion, morality and the supernatural. Religion is most commonly based on dogma and defines morality. Divine powers are someone you turn to in your hour of difficulty or need because they can do things that you can’t. I am going through an interpretation of Homer’s Odyssey, set in eighth century Greece. Couldn’t help but compare how our thinking has evolved on the subjects.
First interesting insight is about religion. Religion in Homerian Greek (and more so a few centuries before that) is primarily based on rituals and ceremonies than on dogma and doctrines based on nature of God and man. As a result it is flexible and open to interpretation. Gods aren’t the upholders of morality, just beings which can be approached by mortals. God’s are not beyond their vices either. (I can’t help but draw a parallel with certain aspects of Hindu religion). But in the Homerian Greece Gods are more moods than powers. When Aphrodite (the Greek God of love) shines on Helen, that emotion overpowers all her decisions and actions to the extent of her leaving her husband and child for another man. Homer’s protagonists of do not make a choice against the will of Gods. They don’t engage in deliberation to act. They go with the flow. In fact those with the power to choose against the will of Gods are actually bad people (the suitors). Professor Dreyfus, who teaches a psychology course based on the poem at University of Berkeley, says that Homer believes that those who go with the emotion actually lead a fuller life. (He was kind enough to reply to my mail almost immediately. Bragging Time – I finished the full podcast series.)
Also thought provoking is the Greek idea of morality which (at least till then) is very tribal. Friendship, though more valued than love, is an alliance based on mutual advantage. Humanity – supposed to be an instinct today – is an aspiration, often forsaken under forces of passion and interest. An average Greek (not the philosopher) owes service to a friend as much as he owes pursuit and injury to an enemy. Mercy, compassion and reasonableness are special graces than necessary duties.
I can’t help but contrast with the thinking of today. My first instinct is to lean towards the right to making one’s own choices. I also believe that the choices have to be deliberated e after weighing the pros and cons, including how one’s actions affect other people. I am also guilty of assuming fairness, compassion and reasonableness are fundamental traits defining us as a species. The idea that less than 2000 years we thought completely differently is an eye-opener.
PS: That we seek divine help in difficult times is another human weakness I guess.
Monday, October 03, 2011
Saturday, February 26, 2011
One of the limitations to generating abnormal returns is the size of portfolio. As your portfolio size increases, your ability to make more profitable bets reduces. One of the reasons is that your individual bets become large enough to affect the price of the asset in consideration due to liquidity demanded and time in which a trade needs to be executed. We recently discussed the tradeoffs between these (the execution costs) and opportunity cost.
Guess who has been feeling the pinch - Warren Buffett (the other explanation is that he is one of those upfront in setting the right expectation). The book value (BV) of Berkshire Hathaway (which considers the right performance measure) rose 13% as compared to 15.1% return on S&P 500. In the letter to shareholders of Berkshire Hathaway he says, "The bountiful years, we want to emphasize, will never return. The huge sums of capital we currently manage eliminate any chance of exceptional performance."
It nice to have immediate validation / application of things you learn in class. Read more at WSJ (needs subscription) and Dealbook at New York Times.
Thursday, August 26, 2010
Since May of this year when the Greek debt scare coupled with woes of the Euro region rattled the world markets, most experts have been talking about a double dip in the developed world. In these constant forecasting of doom, two articles with a contrarian viewpoint on the editorial pages of yesterday's Wall Street Journal captured my attention. The editorial titled, "The Housing Mirage," reflects on the record fall in existing home sales in July (the drop was 27% as compared to a consensus forecast of 13% by Bloomberg). WSJ editors try to tell us that housing is an effect and not a cause of the recovery. So housing will not help not hinder recovery beyond a small measure. Of course they go on to critique the administration's policies to support housing, but that's a different discussion.
The other article, an opinion piece written by DeVol from the Milken institute points out that investment in equipment and software is strong along with the outlook for exports. The growing tigers of Asia and South America aren't relenting on their American imports yet. Referring to their study, "From Recession to Recovery, analyzing America's return to growth," based on, "extensive and dispassionate econometric analysis," the article predicts a GDP growth of 3.3% of 2010 and 3.7% in 2011. They argue that relationship between rate of recovery and peak to trough decline of GDP is well established historically. The opinion piece goes to give suggestions to what the administration should do to ensure and bolster the recovery.
PS: Tried researching Milken Institute and found them described as non-partisan at most places.
Wednesday, June 23, 2010
My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I've worked in an economy that rewards someone who saves the life of others on the battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into billions. In short, fate's distribution of long straws is wildly capricious.Yes, I know it is great that Buffett and The Gates (Bill and Miranda) are asking wealthy Americans to pledge 50% of their wealth to charity. But for me, it is grave unfairness of the haunting truth of the above statement that needs attention. This, if anything, is what I hope to leave with you today.
Monday, June 21, 2010
Disappointments and failures – both professional and personal – are a part of anyone's life. How you deal with them shapes your life and that of others around you. People handle disappointments in a many ways ranging from inability to control their emotions with behavior such as stomping feet, shouting and throwing tantrums, to complete denial and building a shell around them so that failures can't be discussed. Both these extremes make life difficult – at work and home. This post analyses the consequences of your response to failures on your career. Response to failures can basically be of four kind
- Aggressive - Lack of Self-Control, Shouting, Threats.
- Sophisticated and shrewd blame game, Successfully putting the responsibility on co-workers, procedures etc
- Remedial/Corrective – Finding where mistakes occurred and redoing things, correctly
- Innovation & Abandon – Trying a completely new approach
I don't consider the silly blame game as a response. You come out looking even more idiotic and unconvincing. A particular response may have a very different consequence for you depending on your career level. For example, you can get away with option a if you are senior enough though it is highly likely that you have destroyed your team's morale. The table below captures the impact of these behaviors on your careers. I think most of behave in a certain way in a crisis because it has got to do with we are than what the issue is. Cognizance of our own behavior pattern is the first step in modifying it to something more appropriate.
Behavior/ Career Level
Highly detrimental. Can even have immediate negative consequences.
Can be successful if well used. The key word here is sparingly, only when desperately needed. You can't afford to have a reputation for blaming.
Highly suited for repetitive jobs such as achieving the monthly sales targets
Mostly not welcome except for creative / non-repetitive jobs. Example – finding a new target segment. People want to know you can effectively follow directions and established norms.
Easier to get by than at junior level.
Not recommended. At this level people are looking at you to take responsibility.
Required as a part of managing others doing repetitive jobs
Needed. Welcomed more than at junior level. Be careful that innovation is not turning into escapism.
Though it appears that you can get by, there are huge disadvantages to behaving like this. It shows you not in control of a situation & can cause people to lose faith in your leadership
Since you have authority over & are responsible for everything, highly undesirable and ineffective
Needed. Shows that you are in control, and you can lead and teach
Required. Unless you have a different innovative idea for executing the company's vision, your subordinates won't have faith in your leadership.
We don't become different people in office. Most of us behave similarly in our personal life too, leading to same consequences. This understanding can help you & I become a better person.
Tuesday, June 08, 2010
I just finished Charles Morris's The Trillion Dollar Meltdown which was published in January 2008. Since the book is based on an area of professional interest, I think it deserves a detailed review and not just an update.
Morris' book was one of the first texts on financial crisis to come to the market. In less than 200 pages the book covers a huge breadth of topics. Starting from the precedents and history of the recessions during the Lyndon & Reagan presidencies, it goes on to talk about the previous market crashes caused by portfolio insurance & the failure of Long Term Capital Management. He describes the current crisis starting of course from the usual CDO's and derivatives, predatory lending practices including the NINJNA (No Income, No Job, No Asset) loans, the cascading effects of high leverage at hedge funds and other financial institutions and the roles of the raters, insurers and government bond market. He reconfirms my view that loose monetary policy at the time of Alan Greenspan was one of the leading causes of the crises. (Read my previous post here). Morris strongly approves Paul Volker's handling of the problem in 80's. But what really impressed me about the book is that it covers to the global distribution of money, trade deficits &surpluses and also reserves in countries like China, Russia & in the middle-east. By including the power of sovereign wealth fund of these countries and the recent academic debate about China's savings rate & currency valuations, the authors covers the issue from both domestic & international angles. Any review of the book must take into account that Morris was forecasting the future & not analyzing events.
But there are some drawbacks of packing too much into so few pages and shipping the first book and at some places it misses depth. But for a bird's eye of how thing went wrong and where, The Trillion Dollar Meltdown is great book. In fact I definitely recommend it for any bookshelf. Coming from the other side of the table, Morris sees huge limitations of free markets in cleaning up the current mess. According to him the only immediate option America had was to deleverage (and hopefully in an orderly fashion or things would turn really bad). With the benefit of hindsight, here is a passage from the book
Clearly even the best of people did not anticipate how many dollars the Federal Reserve and the government would be willing to print. Here are author's views about the $800 TARP in an interview in October 2008.
Book Update: Right now am reading 'The World is Flat' and 'Eat, Love Pray'.
Thursday, April 15, 2010
Nice Guy is this American teenager I met during one of our outreach sessions. The weather was biting cold and we were distributing hats, gloves and sweaters. He told me he didn't need any. We started talking to the other kids. He stood in a corner and then came around to ask me if he could take a cap and a pair of gloves for a homeless friend who wasn't around. I have often met kids/ young adults do not trust adults immediately. One of the first lessons homeless kids learn on the street is that admitting you are homeless makes you an easy target for predators. I thought Nice Guy wanted this stuff for himself and he was either shy of asking or lying to us. Nevertheless, I gave him whatever he needed. He told me that he lived with his aunt in Brooklyn for personal reasons. He didn't give me the details and I didn't push. I thought his eyes were misty when he asked me, "Why do you do this?" I didn't know what to say. I had started getting involved with non-profits in the US initially to find something to do with my long empty days. But you don't want to say that. You want to give a grand answer about how you want to change the world. I blabbered something inconsequential.
Suddenly Nice Guy spotted someone. He called over and handed over everything I had given him. I tried to find out more about Nice Guy. He worked at a Pizza outlet. I asked him if he made enough money. I wanted to make sure he wasn't going to go hungry that night. He told me, "I work 12 hours a day and overtime pays very well. I can even buy stuff for my friends sometimes." He had applied to college and had received an admission offer. He was going to do a bachelors degree and major in finance to get a job that, "will lead to great career." (To put things in context he was most likely planning to work through college to pay for his tuition and living expenses). Nice guy didn't want anything from the world except opportunity and he had no complaints. We shook hands and I wished him well before leaving.
When someone asks me next time, "Why do I do this?" I think I know better. I volunteer because it gives me opportunities to meet people like Nice Guy. It motivates me and makes me feel grateful for what I have. For the sake of Nice Guy I also wish and hope that Finance does lead to a great career, in spite of everything that is going on.
Book Update: SuperFreakonomics (Levitt and Dubner) – The book is an easy breezy read with interesting stories. However some parts are oversimplified such as those about climate change solutions. Often correlation is taken causation. It looks like the interest of the authors was in telling memorable stories from uncommon point of view than real research.
Sunday, March 28, 2010
In the morning, I attended the healthcare panel. I found the Sangita Reddy, (Director, Apollo Hospitals) had the most memorable insights. She pointed out the efficiency of health care services in India by comparing the back office & administrative costs in the two countries; 7 percent in India versus 25 percent in US. I am impressed that India has basically managed to keep the cost of a by-pass surgery stable for 27 years despite the high rate of inflation. She underscored her point by mentioning that Indian doctors were more willing to do a 'Beating Heart Surgery', a very complicated procedure that saves costs and has a greater probability of recovery. Apparently, 97 percent of heart surgeries are beating heart in India versus less than 10 percent in the US. You would think that a country as technologically advanced as the US would have adopted an advanced technique. This underscores the discussions about healthcare that I have with my friends, some of them healthcare professionals. They insist that in India doctors are more efficient and more willing to actually 'treat you'. My take on this has always been that a society with such a high instance of law-suits and 'do no harm' principle causes doctors to cover their backs first with multiple tests, before initiating any treatment. The inefficiency in the system is greater because the payment is made by a third party. Since the money appears to go from the insurance company's pocket, neither doctors nor patients are concerned about efficiency. Remember, your insurance premium is actually a 'sunk cost', money that you have spent anyway.
Bhargav Das Gupta, CEO and MD, ICICI Lombard talked about the new products to finance healthcare in India, especially for really poor people. The low penetration on insurance (less than 5%) is an opportunity for insurers, but the low awareness a huge challenge. Only yesterday I was reading how Indians do not care much about health insurance. There was the perennial subject of drugs patents and generics and branded drugs, and the long winded process to discovery of new drugs. What really stayed on with me was an interesting tit bit about ingenious water filters. Homi Khusrokhan, Advisor to Tata Healthcare explained how the Tata's successfully developed an extremely cheap water filter that removes 99.7% bacteria from water using burnt rice husk and nano silver, without power. On a personal note, I really liked Khusrokhan, the man had a wealth of experience with a really humble Lucknowi demeanor. The composition of the panel was extremely impressive. The organizers had ensured that there were representatives from delivery (Apollo), pharmaceutical (GSK and Excel life sciences) and the payers (Tata Healthcare, ICICI Lombard and GSK Venture), ensuring that all aspects of this complex issue are covered. I hope to write about other panels and speakers in my later posts. In the meantime you can have a look at the complete list of speakers & panel members here
Books Update: I am back to fiction for the time being. Finished 'Memoirs of Geisha' sometime back. Loved the portrayal and discovered few unknown aspects of the traditional Japanese culture