Category Archives: Expert Speak

Lessons from India’s Best Market Minds

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Recently I was able to reclaim a magazine – Outlook Profit -19th March 2010. The cover page reads as “What I learnt-India’s best market minds on their investment journey so far.”

This is a very highly recommended reading for people investing/playing on the stock market. Try and get hold of the back issue of this magazine. The effort will be worth it.

Here are a few lessons-

  • Everybody learnt his lesson by paying a price. So if you have paid a price, quit the market. Capitalize on your learning.
  • You are basically buying into a business. You should have some idea about the business of the company.
  • No stock is worth buying at any price. Learn to quit the company if the valuation runs far ahead of fundamentals.
  • Businesses face storms. If the management is good, they will weather the storm; stay with such companies.
  • No business can have a stable valuation. Business cycles and fundamentals can turn with time. So you should know when to sell.
  • You need to control your fear and your greed. (Easier said than done!)

Read this magazine for further insight.

Simple Tough Questions – for an Entrepreneur

asking-questions As a Management Consultant/ Virtual CFO / Board Adviser, I am often compelled to ask some simple tough questions in my client interaction:

  1. How and why did you choose the business?
  2. Are you aware of the demand and supply pattern in your business?
  3. Who is your competitor?
  4. Who is your customer?
  5. Why should the customer buy your product- design/cost/relationship/convenience/habit?
  6. What is your business model- B2B or B2C?
  7. Are you selling a product, a solution or a service?
  8. As an entrepreneur, what are your core functions?
  9. How much time you spend on non-core functions?
  10. How well do you know your customer?
  11. What are the threats that can disrupt your business?
  12. Have you ever done a SWOT analysis?
  13. Who shows you the mirror- an Advisory Board, a Mentor, a Business Coach, a family member?
  14. What is the long term vision of your business?
  15. Why should talented people join your company?
  16. Do you have a proper system of Corporate Planning and Control?

Simple, but tough questions- Set you thinking, don’t they?

That is the intention.

Do write in to share your thoughts on aipichai@gmail.com

Who moved my cheese?

image07Traditional business are losing money, they are not as profitable as they used to be. I’m from a family of traders in automobile spare parts. This used to be a very profitable business. In our community marriages happened based on the goodwill of the business of the family. However, gradually these traditional businesses have been on a steeply sliding slope. The situation is the same in textile business or in electronic trading business. The traditional business model is no longer working as it used to work in the past.

What happened? I remember reading a book “Who moved my cheese?” by Spencer Johnson about 12 years ago. The book tells the story of a rat who would go to a fixed place where he would get cheese every day. Gradually the cheese started dwindling and they would complain “Who moved my cheese?” instead of going elsewhere to find the cheese.

Business has become too dynamic; the pace of change has increased multi-fold. What used to work earlier, no longer applies.

Tomorrow if the Income tax rules become friendly and audit of private companies is made optional, many of my fraternity will complain, “Who Moved my Cheese!”

Interesting take on Ai, Pi & Chai by Dr Adizes

I was told by a friend of mine that in a book: The Coming Jobs War, by Jim Clifton, Gallup Press, 2011, Clifton claims that Gallup research shows that there are five billion people looking for a full time job on this little globe of ours, but there are only 1.5 billion full time jobs.

Not strange unemployment is high in many countries.  And it is going to get worse as automation and robots increasingly take away jobs that humans perform today…

What is the solution?

Riots? Fight for jobs or what the author called a “Jobs War”?

Unfortunately that is already happening, but it is not the solution. It is merely the reaction to the present situation.

What is needed is job creation.  And every politician today finds himself pressed to develop a workable plan to create jobs.

The media has become part of the cycle as well, though not part of the solution. It seems as if every other day there is a press account detailing how many jobs have been created since the last report, as if our life depended upon it. For some probably that is true, their life does depend on it.

I suggest to you that job creation is only a band aid. It is not a sustainable solution.

Why?

Because the more jobs we create, the more resources we use (or destroy) and as we create jobs we deplete our globe of necessary resources.

We are probably the most wasteful civilization that ever lived.

I believe we will destroy the planet with pollution and exploitation of natural resources all in the name of providing full time jobs for everyone.

The alternative is what I call a strategic, disruptive cultural change. We must change from the idea that more is better to better is more.

Recognize that more possessions do not determine our quality of life. It is how we spend our time that determines quality of life.

Ironically, it was the hippie movement that gave us a hint of what life can be.

I was driving along the California coast recently from San Diego to Los Angeles and noted how civilization was progressing.

First I saw agricultural fields, then chimneys of some factories, and when I arrived at Laguna Beach I found a colony of artists.

Apparently a number of people in Laguna Beach made their money early in life. Enough to live not lavishly, but comfortably. And now some of them have settled in Laguna Beach where they live modestly and paint, or write novels, or play music…

They no longer work to have more. Instead they work to have a better life.

Come to think of it, that change in life style has been occurring in many places without us paying real attention to it.

Check any leading University in the United States. Go to the school of engineering or science and notice: most of the students are Asian. Mostly Chinese, in fact.

Where are the American kids?  Schools of art, film, music.

It seems to me that this represents a conscious change in our values. Perhaps only the beginning of a change in what we expect.

We are not living in a time of scarcity anymore (I am speaking of developed countries only). We live rather in a time of abundance.

In a time of scarcity, if there is abundance, you need to accumulate for rainy days. But when there is constant abundance, accumulating more and more makes us obese.

The wake up call has long since sounded. Our behavior has to change.  Like legitimize early retirement. Applaud those who live modestly.

If we change what we expect from life, the pressure for job creation will not be so acute. And the destructive exploitation of our limited resources will not lead us to live quite so precariously.

Just thinking.
Ichak Kalderon Adizes