Psychology in times of crime

From time to time, professionals are expected to take time off and regroup / retain and reinvent the strategy to engage their customer in a better / friendlier way. It is part of growth for a professional in a sales job or a customer care job or several such professions where there is daily interaction with humans. One evening, my girlfriend who is a doctor at the reputed local hospital was asked to attend a seminar for a week on how to be friendly towards her patients. I could sense she was cribbing about the waste of time this seminar was going to be. A week later, she had this new found appreciation for what psychologists do and how helpful they are to professionals caught in the grind of daily routine. Turns out the week long seminar helped my girl cope with her job in a better way and with a positive outlook. It also helped me as she would be in a good mood on her return and our regular arguments had become rare.



If you think about it, having a human interaction as part of your job can be both invigorating as well as frustrating. Invigorating becasue you get an active feedback of a job well done and it motivates you to do better and work harder plus there is a satisfaction of making a difference to society. Frustrating because human beings do not always think logically and often act emotionally and when it comes to their health they are a victim of their habits. Doctors often find it frustrating that the solution of problem is right there and yet the patients choose to do the opposite. This will be true of other professions too, let us assume a tech support guy is trying to help an middle aged man fix his computer and the guy is being unnecessarily hassled by the owner of the computer asking him unnecessary questions and often implying the tech support is is a waste of time even though he needs their help. People working in tech support / customer care are often an unappreciated lot and hence always need to be trained to not allow such interactions to escalate into war of words because customers can be mean often times.


The police department takes the cherry and the cake when it comes to underappreciated jobs. Plenty times they do a good and stop impending crimes but they cannot brag about it as it is “their job”, but should anything go wrong, the police department bears the brunt of it and rightly so. In essence it’s the thankless job of a sentry. Nobody remembers 1000 good judgment calls but everyone remembers the one bad call. Police department also has an additional burden of being kicked around by the politicians for not being there at their beck and call. There is nobody who has it worse than a police officer. One can only imagine the daily stress these men in uniform go through. The army clearly has its target defined as enemy but often, police have to act against one citizen to protect the rights of another citizen and there are obvious mistakes made and personal equations and prejudices that come in play. I am not justifying the incident at Ferguson or many such incidents that happen far too often, I am merely trying to suggest solutions.


I am sure police are trained fairly well at using arms and dealing with hostile situations. However, am not sure enough is being done to have regular sanitization trainings for the police to deal with women / minorities (religious / racial) and to actively fight the unconscious bias in their minds. The problem is that police officers are so exposed to crime and criminals that they forget that a large portion of their job is dealing with citizen and helping the regular Joe feel safe and secure. It’s always in the last category that the police are found wanting. They are loud / brash and often ill-mannered while interacting with citizen and an extreme manifestation of this are the tragic incidents where young boys / girls are killed in police encounters simply because the police officer in question was not adept at handling citizen and only trained to handle criminals. This mindset needs to change and police department should be open to seek help rather than defend an indefensible behavior on their part. When Officer Wilson says on TV “I did my job and I would do it exactly the same way should it happen again...” I feel sorry for him and sorry for the citizens who have to interface with officers like him who have for so long been so insensitive that they have lost touch with the large portion of their job which requires empathy.


Lastly, my heart goes out to Michael Brown and other such stupid kids who faced a bullet where a severe reprimand was due. Rest in peace! May their family and friends have the strength to bear the loss. Amen!


So long…

India's own Ferguson

It was a typical night of Aug 9 2014 at Ferguson (St Louis, Missouri) when an 18 year old teenager Michael Brown was shot dead by Officer Wilson. Ever since, Ferguson has not been the same. Initial few days witnessed incessant protests from the locals who found the police action unacceptable. Well, Officer Wilson and others from the police department were hard pressed for a justification for the killing. It could have been a bad neighborhood; it could have also been that Michael fit nicely into the description of “usual suspect” but shooting to kill an unarmed teenage student cannot be justified by any stretch of imagination. The least the police department could do is suspend the officer concerned for long duration for colossal lack of judgment or discharge him from the police duty and let him face the prosecution for his act. Instead, the police strong armed the demonstrations and for almost 3 weeks Ferguson burned and faced the brunt of irate locals going berserk. “It could have been me” said one of them when asked why he was protesting; Point taken. Do any of us still feel this was over reaction? (A grand jury subsequently decided that Officer Wilson is innocent and is let off)


President Obama addressed the nation on Monday morning (24th Nov 2014) and appealed to the people of Ferguson to maintain calm and respect the rule of law. I have nothing to add to the President’s soothing words except, Mr. President! Justice seems to evade Ferguson! Rule of law is fine but the law has a letter and a spirit; while the judgment of the jury is perfectly adhering to the letter of law, it seems to be lacking in the spirit. It is not enough if justice is done; it should seem to have done too. Nobody is asking the officer face death sentence, but am sure the people will say “A mistake was done and a life is lost. Surely someone must take responsibility”. It is here I agree with the residents of Ferguson when they protest the decision of Grand jury. Please understand, I do not condone the violence but when the state fails to react to citizen’s concerns protests get out of hand.


India does not have a good record on the likes of Michael Brown’s either. However, India goes one step ahead when such incidents occur. Police immediately brands them terrorists and politicians brand them Pakistanis. Consequently, nobody dares to question the state’s overreach in the fear to be labeled “traitor” for siding with the enemy or worse, being next in line for similar action by police. Don’t get me wrong, it may sound like I am suggesting that police are generally the bad guy, am not. However, too many officers get involved with politicians and execute “extra judicial killings” at their behest in the name of fighting crime. Anyone who questions them in Parliament is shouted down as anti-national and nobody takes to the streets fearing police backlash. The police derive their power not by rule of law but by political patronage and this is where it gets all messed up. India has a long list of Michael Browns and will continue to have until its citizen realize one thing – “It could be me next time”. We often complain people don’t stand up for the right cause but we forget we never stand up for other’s rights too. If we had stood up and fought against the police overreach the first time, irrespective of the fact the person they shot and killed was a gangster or terrorist or whatever, things would not have been so grim. Today, police can literally “pick-up” inconvenient individuals and eliminate them by staging an encounter because they are sure nobody will protest nor will the courts take cognizance.


With the death of Michael Brown (may rest in peace) a town arose and stood by him and fought for him despite not being related to him. Even though we do not need the incidents like Michael Brown in India, we desperately need the spirit of “I am my brother’s keeper”. Until then, India will continue to see cases like Michael Brown.


So long…..

Vanishing age lines

Declaration: I am attempting to write about a subject I have not studied in depth nor have any inclination to research and hence to a mind trained in theoretical physics this attempt might seem focusing on the trivial and missing the point. I am merely using information readily available on the internet and basic knowledge of human metabolism to base my premise. I am open to criticism and willing to debate any point of view contrary to mine.


It was 4 am on 24th November 2014 and I was still awake reading through articles of Wikipedia as well as other sources on the 5 dimensional world. Interstellar – the movie had intrigued me and bowled me over. I wanted to read up on certain aspects of it and the actual science on which certain facts of the movie were based. Now, I do understand that movie script writers use cinematic liberty to build a premise of their choice and I am not planning to step on their toes; however, despite loving the film and the stellar performances by the lead actors a few aspects somehow didn’t hit me right. I am merely attempting to put things in perspective so that anyone who had queries similar to mine could find a few answers here and possibly appreciate the movie better.


For starters, I did not know of a worm hole or the 5 dimensional world – as depicted in the movie. Let me try and elaborate on these terms so that the story can be appreciated better. Worm hole is basically used for time travel (along the same lines as on earth). Assume 2 people are travelling from point A to Point B on earth. One is travelling by foot while other travels by an airplane. The person travelling by airplane is actually using accelerated velocity mouth of a worm hole to get to the other point quicker than the normal travel and by expending lesser energy. Even though the example is rudimentary, it makes a limited point of time travel. Worm holes never take you back in time because we are still operating in 4 dimensional spaces where time moves only in forward direction. The distance in space is measured in light years (distance travelling by light in one year @ 300,000 km /sec) and worm hole simply saves us a few light years of travel exactly like an airplane travel as compared to travel by foot. In the movie, Interstellar, the actors go into the accelerated mouth of a worm hole to travel to a galaxy far far away in a few hours.


The second bit that intrigued me was the 5 dimensional world. Unlike anything we know in the four dimensional world, a 5 dimensional world allows you to go back in time. Basically, it is not an actual world but a theoretical concept (or spiritual) that makes it possible to travel back and forth in time rendering the time like a physical dimension. Theoretically, this means that people living in 5 dimensional world can go back in time and face the same events again and use their retrospective knowledge (or hind sight) to deal with it better because they have already dealt with it before. Like let us suppose we could go back in time and avoid the world wars by not allowing the triggers to escalate because now we know that it would result in devastation. 5 dimensional world has a spiritual side as well. If you meditate on your problems had enough, your mind activates energy centers within your brain which helps you identify any unresolved issues of your past hidden in your subconscious mind and resolve them therein alleviating your problems. In essence you have literally travelled back in time to change events of your life. It is also said that a fully active mind can even recall events of past life and help resolve any unresolved issues. In practicality however, we continue to live in a four dimensional world where we cannot go back in time. The point to remember is 5 dimensional world do not reverse the physical state of body, it merely allows you to travel in your present form to revisit events of the past. In the movie Interstellar, Coop uses 5 dimensional world to travel back in time to send a message to his daughter, Murphy on the solution to the problem she was facing to execute what the film terms as “Plan A”. You will observe that Coop does not become younger; he has merely travelled back in time to send a message.


The final bit of the movie and the only bit I could not agree with was the climax where Coop meets his daughter Murphy who is on death bed aged 90 odd years while Coop himself is still young and dashing even at his 124 years age. This is a false notion that is shown perpetually in most sci-fi movies attempting to depict time-space relativity. The time – space relativity governs the relative time elapse on earth vis-a-vis any other place in space. Due to variance of effect of Sun’s gravity and relative speed on rotation of planet, each planet has differing cycles of day (sunlight) and night (dark) ; likewise due to varying distance from sun there is difference in time taken to revolve around the sun (number of days in a year). These effects of time-space relativity can be used to depict that we will have longer days and night and each year may have many more days (when compared to earth) but this does not mean the elapse of time is slower. Imagine having 2 watches, one faulty that moves the second hand every 10 seconds while the other normal. For every 10 hours on the normal watch, the faulty watch would show only one hour, but the time elapsed would be same in both cases. Meaning a day on Jupiter maybe 5 hours as compared to 12 hours on Earth but that does not mean 5 hours is equal to 12 hours, it just means Jupiter rotates many more times than earth in any given time duration. Likewise, because Jupiter takes 12 years (earth time) to complete one revolution around the sun, it does not mean that an astronaut who has landed on Jupiter ages by one year after every 12 years. This is a fallacy because the time elapse is the same and time elapse is not measured by solar clock or seasons (refer atomic clock). The movie Interstellar, on more than one occasion shows Coop telling his daughter Murphy that they would be of same age when he return from his space trip and in the climax a 124 year old Coop has not aged physically while his daughter is old and frail seems more fantasy than reality. Time elapse and human metabolism are linked and human beings age due to metabolism and time elapse and not due to time-space relativity. I assume the writer has used this false notion liberally in the movie to help average viewer appreciate time-space relativity by means of human aging.

Please go watch the movie Interstellar. Amazing screenplay, good performance and the relative slow pace helps viewers grasp the concepts of theoretical physics and adapting to the science jargon. Highly recommended.


So long…

Its gonna be OK

Indian parents have a larger than life presence in their children’s lives. Especially the Father; not only is he the daddy, he is also the person the family counts on at all times, especially the tougher times. Abhilasha’s dad was no exception. He was a tough nut to crack. The only two times anyone had seen him smile were on the day Abhilasha was born and yesterday when she got engaged. It was a grand ceremony attended by the near and dear ones along with the two families. Abhilasha could not help but see her dad smiling from ear to ear while attending to the guests. She was secretly feeling happy that she has in some way contributed to that elusive smile. Abhilasha remembered her dad for always making her smile as a child by saying four simple words – “Its gonna be OK”. These words had a charm in them. It made seem to Abhilasha that her father was always there to hold her in case she stumbles??. It built that protective net around her for all times.


Abhilasha is many persons in one. She is the qualified financial analyst at a leading bank; she is the loving daughter to a doting mother and the pride of her father. She is also the fiancée of Shekhar and a bowl of instant laughter for her many, many friends. Abhilasha excelled in all her roles, especially the ones with her friends. It could have been her soft heartedness but Abhilasha was always there for her friends in both good and bad times, irrespective of whether they would ever stand up for her. Abhilasha could never hold grudges and had an infectious smile; this endeared her to everyone. Her philosophy was never based on “what is in it for me”, it was “I will receive help from some place the day I need it”. In fact meeting Shekhar was also a co-incidence, which she had accepted whole-heartedly. Shekhar loved her and that is what mattered, not how they met and got to know each other.

The wedding was in a month and Abhilasha was busy with her last minute shopping for the special day. The invites were to be sent out next week and mom had asked her to finalize the guest list, she also had a bachelorette party to attend which her friends had planned for her. “Too many things to be done before the wedding. Sigh”. There were times when she wondered if she had done the right thing and chosen the right man. What if he was not the one for her? Then she shrugged off those thoughts thinking if he were not the one, he would not have lasted thus far. She smiled to herself and congratulated herself on her maturity and got back to her to-do list. It was mid night and suddenly, Abhilasha started getting chills. This was peak summer and it seemed odd to have sudden fever. Abhilasha’s mother asked to relax and take it easy as she was obviously stressed out. As she lay down with her head on her mother’s lap, she told her mom that she has been getting these chills on and off for a while. She had also complained of chest pains but it was brushed aside as stress acting out. Abhilasha told her mom to take her to the doctor as she didn’t want to take a chance of falling sick so close to the wedding.

At her gynecologist’s appointment the next day, she informed the doctor of her symptoms and was advised to do a few blood tests to check for viral fever or infection. “It’s probably just the stress, but why take a chance,” said the doctor. The next morning, her mother drove her back to the doctor who asked her to take further physical tests. She felt like a specimen who was being turfed to every possible department for every possible test. A couple of times, she asked her mother who was silently nodding but not responding. But it was a welcome break from the hectic wedding schedule and Abhilasha even chose to relax although the doctors were not allowing her to enjoy it. By evening, she was seated in front of the doctor’s chamber with her parents inside chatting with the doctor. Abhilasha was busy on her phone texting her friends about her off day. Suddenly, the doors open and her parents walk out. Abhilasha walked to her dad, for the first time he didn’t say “Its gonna be OK” ; he merely glanced away not meeting her eye. Mother was silently weeping and the doctor asked her to come inside. Abhilasha blanked out for the next 30 minutes while she was inside the doctor’s chambers.

Breast cancer. The two words were left hanging to her as she blankly left the doctors chamber. Abhilasha had many questions to ask, some to God, some to her parents and a few to the doctor but something had muted her. It took her a couple of days to get out of that daze. At times, she thought this was a nightmare, which will end soon. Other times she wondered what would happen to her now that she has cancer. Would she die? Why would she die so young? She had so many plans. What about her wedding? Of all the questions, the one that stuck the most was why didn’t her dad say “It’s gonna be OK”? Every time she was alone with her father, she would look into his eyes hoping somewhere there would be that reassuring look which acted as her safety net throughout her life. Abhilasha’s dad is her super hero and when everything failed she always counted on him to rescue her. Today, as he was avoiding eye contact, she slowly started realizing that her father could not rescue her this time. She felt abandoned for the first time in her life. The cancer did not get to her, but the helplessness did.

She spent the next couple of days thinking of talking to Shekhar and discussing the treatment options. The cancer was treatable but she would lose some flesh in her left breast and would probably need light chemotherapy. It reassured her that things were not as serious as she assumed and probably in a years’ time she would forget it ever happened and get on with her life. Shekhar was supportive and told her he was with her always and she would not worry about anything and take the problem head on. So long as her family and Shekhar were with her, Abhilasha could muster the strength to face all the problems. In the week before her operation, the doctor explained to the family as well as her prospective in-laws about the nature of treatment and explained to them about the disease. In India, we have a lot of misconceptions about cancer and treat it as a killer disease; however the killer was not the disease but the avoidance by the women to get examined. The treatment was simple but many women do not to get treated early due to social and personal inhibitions and the fear of losing their breasts. Somehow, it makes them seem less womanly and the age old subconscious fear of family and spouse not accepting her as a normal woman causes them to delay treatment and which in turn ends up killing them.

Abhilasha got to know what she was facing, although she would not be losing her entire breast, she would need counseling to accept the change to her body. She spent the rest of the week in counseling and was mentally ready to face the operation on the day it happened. The procedure went of successfully and one could barely know the difference in her except for the scar on her left breast. After the chemotherapy when she returned home, her father was at the door to receive her with a big hug. After a long time, Abhilasha saw the same old “It’s gonna be OK” look in his eyes and she felt she had successfully defeated cancer. Abhilasha was well and fine. During this time Shekhar was a big source of support to her and stood by her all the time. She had not expected him to understand her problems but he played the role of a life partner excellently. The next six months went by and Abhilasha grew from strengths to strength almost back to her normal, almost forgetting the ordeal she had been through not so long ago.

In India, the disease may spare you but the society never does. As the families got together to decide on an alternate day for the wedding, several relatives of Shekhar’s raised an issue about her health and if she would be capable of mothering a child in her life. Others wondered aloud if her parents had known all the while that she had cancer and had hoped the disease would be identified only after the marriage is solemnized. Neither of Shekhar’s parents made any effort to kill these stray comments and the entire proceeding went on like a well-rehearsed orchestra where it was decided that the families should wait for another 6 months for the yearly follow up and take a call on the wedding dates based on the doctors report. Abhilasha talked to Shekhar about the events and he convinced her that it was best they wait so that nobody could make an issue of this. “If I ever marry, it’s only going to be you Abhi. Nobody can convince me to do otherwise” he said. She was so proud of him and her decision to choose him as a life partner.

The six months breezed past and luckily for Abhilasha the yearly follow up went well and the doctor told her she was cured completely and was only expected to do routine blood tests once a year for 5 years (mandatory for all cancer survivors). It was a happy event and they celebrated it with a family dinner at a local restaurant. Curiously, Shekhar gave the dinner a miss. He had been busy at work off late. Shekhar had a marketing job and the quarterly targets pushed him to extend the work hours. Although he could not spend same amount of time with Abhilasha, he made up for it with text message and calls. Today, neither he was present at the doctor’s appointment nor was he at the dinner. Abhilasha was uneasy, he never did this before. In fact when she texted him before he said aloud that his prayers had been answered and this was the happiest day of his life. Abhilasha confided in her mom, “I do not see the love in his eyes mom. I see care, maybe sympathy too but the love is missing”. “He is probably busy with work and stressed out. Men are different so don’t expect them to show concern as women do. He loved you and that’s why he stuck with you. Don’t doubt him”, her mother snapped at her.

Abhilasha let it go .Maybe she was over thinking it. The events over the next 15 days made her head spin. A week from her doctors’ appointment she got a call from Shekhar that his parents had decided to not let him marry her as “There was no guarantee of her lifespan”. In fact, he even informed her that he was breaking the engagement and was about to get engaged to this girl his parents chose. The wedding was in a month. Shekhar was saying all this in a matter of fact way. As if this was the expected outcome. Abhilasha broke down. It was long overdue. The last year was overwhelming in itself and the only reason she pulled through was with the support of her family. Today Shekhar’s words struck a blow to the dam and it collapsed. Abhilasha went into depression and started hating herself. She blamed herself for everything. She hated her body, every time she looked into the mirror she saw an image of an unwanted person who could not be loved by anyone. The next few months were spent in depression. The stress and pain of seeing his daughter suffer had an impact on her fathers’ health too.

Abhilasha cut down on her friends and other social activities and became an introvert. A girl who used to be bubbly and full of life and spread cheer to the family was so quiet these days that it was impossible to sense she is in the same room. The thing that had hurt Abhilasha the most was Shekhar’s betrayal. After stringing her along for a year he tossed her in a day. Not just that, he even made her realize that he stood by her in bad times when he could very well have left her long ago. The feeling of being recipient of his sympathy was insulting to her. She probably will never be able to reconcile that. Abhilasha started feeling that the only emotion she could receive was sympathy and there was nothing more she was worth of.

Six years have passed. Abhilasha has done well for herself. She met a nice guy couple of years ago and has married him. They have a 1 year old daughter. Today, the ordeal she went through all those years ago seems distant and forgotten. Memories of Shekhar and his family are also fading away fast. The only question that remains is, whether the society acted fairly towards Abhilasha. Is treating as a woman as a machine to produce children fair? Is it fair to make a woman fight social barriers especially when she is fighting a disease too? Are we losing women to breast cancer because they are unwilling to seek the necessary help in time for the fear of being a social pariah? Today, as we plan to raise awareness on breast cancer, let us all take a vow to not pile on the misery of social obligations onto the women who are potentially fighting a physical and emotional battle.

So long….

Double or nothing

Investments are subject to market risk….. …So goes the red herring. Do we take the time to understand this?  My guess is, No. The first question that follows is, “how can I double my money quickly”. I do not understand the fetish with doubling the money but this has been a long selling line to attract novice investors. “Sir, your money doubles in 5 years………” most of us don’t pay attention to the rest of the sentence and get stuck to the ringing words of double in 5 years. Many start making plans of how they could purchase that new house, car with the money generated from their investment. So, I ask again, do we actually listen to the red herring?

There is a huge difference between investing and speculating and very often we confuse one with the other. While the former is based on hard facts and financial numbers, the latter is mostly on market sentiments and could be a whipped up euphoria that would soon die down. So a speculative investor plays the short game of whipping up hysteria and realizes the earning by reversing the position before the hysteria dies down. The rest of us “long time investors” who should have relied on numbers before investing lose out money as we cannot time the reversal of position in a speculative market. The novice investor always loses money in the “double or nothing game”. However, there are a few ways a novice investor can double the investment too provided they do the necessary ground work.

1.     Rule of 72:  This is the rule of thumb that helps us rate comparable investment portfolios. The rule is simple – if you divide the ROI (annualized) into 72, you get the number of years it would take for your investment to double. E.g. for a 10% ROI, the investment doubles every 7.2 years (or 7 years). Ideally an investment portfolio is termed decent if it can double in value between 7-9 years. If the time period is over 9, then it’s considered as a “safe investment”- low risk and low yield. If the time period is less than 7, the portfolio is loaded with speculative stocks and is definitely high risk and high return. While neither one is good nor bad, investors should use this rule to know the risk they are taking up. Investment is about being informed and not being caught blind sighted.

2.     Buy on margin: While this is not actually depending on the stock market to double your investment, buying on margin certainly accentuates your earnings. Buying on margin essentially means trading on borrowed money. E.g. If you borrowed money from market (Banks no longer lend money for stock purchase) for say 10% interest and you invest in a portfolio with 14%ROI, you make a cool 4% of the value of the portfolio after paying the margin money and interest. This is money you have earned without investing any money, so out of thin air. However, it’s not advisable to trade entirely on margin; you need to find a proper balance that gets you a good ROI while not exposing you to adverse risk. Good indicator is to trade up to 70% margin and not further. 

3.     Blood bath: In the depression of 1929, Keynes lost ¾th of his investment to the stock market crash but was one of few people to earn back most of his investment. The golden rule he followed was – “Always buy in a blood bath”. There are times, when stock markets crash and people lose large portions of investment portfolio. The best way to double your investment (even if your own portfolio lost value) is to go on buying spree. The amazing thing about a blood bath is that it triggers a selling sentiment and most good stock is offloaded and loses value. However, the stock market quickly corrects itself and the stocks rebound in short term and reach to almost the values they held before the blood bath began. This would ensure you more than double your investment over 2-3 months. The investor needs to have a keen eye for stocks and always go for buy during a blood bath. It’s a risk free way to surely double your investment. Investing in the same stock over long period is not recommended, this is just a means to win back most of your losses in the blood bath.

4.     Retirement funds: In almost every country, there are laws that encourage you to build a retirement nesting. In India, employers are bound by law to match the additional investment made by the employee into Employee provident fund which over and above the minimum required by law. Similar law is present in the United States as well. Even though, you may not realize the benefits immediately, this is the most sure shot way to double your investment from day 1.

I would like to end on a cautious note by saying; the red herring is there for a reason. Never ignore the fine print while investing especially if you are trading using your savings. Wish you all the luck.

So long..

How do we hedge inflation

Inflation is termed as the taxation that we all have to bear. I will not get into the details of inflation and what causes it as that would take a detail explanation and shift focus off the topic at hand. Inflation is paying more for the same services than you were paying for, a month / 6 months / a year ago. If you pay 10% more for the same amount of goods than last year, effectively you have been taxed 10% extra this year by the Government. Hence inflation can also be seen as an unwritten tax. So the question arises, how do we hedge against inflation? How can we protect our savings from losing value?



An obvious advice would be to invest in assets that would appreciate at a rate higher than the rate at which inflation rises so would make your investment inflation proof – in essence hedge against inflation. There are several such investments I would like to comment on 3 specific assets - land / property, gold and treasury bonds. Now each of these assets has positive and negative aspects which make them useful in specific scenarios. I will try and touch upon each of these aspects. Firstly, let me discuss about land/property. This is an asset that never loses value and always appreciates so there is no downside to investing in land. The rate of appreciation is decent from measly 5% to 500% percent depending on the timing and location of investment. A rule of thumb in this regard would the value of property doubles every 3-5 years irrespective of the timing of investment. So this must be a terrific investment? Well, not quite. Land and property is a large investment and not affordable for everyone. If you are among those who cannot directly invest in the property market, try purchasing on margin or purchase a portfolio that invests in land and infrastructure, it is all the same. The only downside of active investment in land/ property would be the lack of liquidity and irrational market behavior. Land/ property is not easily liquefiable – meaning offloading it is a tedious legal process with too many commissions involved which might discourage frequent purchase and sale. However, there is not an asset that appreciates as quickly as land /property.


The next best asset in terms of appreciation would be gold. Gold is the precious metal that has always appreciated in value due to the limited quantity and unquenchable thirst of the buyers. In fact until a few decades ago, the value of a currency was derived by the amount of gold held by the country’s Federal Reserve. Gold / oil securities are still the most valued means of alternative investment in the face of global uncertainty. The uniqueness of gold/ oil securities is that irrespective if the global financial scenario or political scenario the demand for these never flag and hence their value always keeps growing. This is the most ideal investment for parking your money while you are not sure of a long term investment. It gives very high returns but is very volatile as well. The problem gold / oil are that you cannot have it as a long term investment option. Investors use gold to park the funds until the actual avenue opens up for investment. E.g. after the 2011 global debt crisis, investors all around the world pulled out investments from Euro Zone and invested in Gold and oil securities which continued till late 2013.


The last of the options is treasury bills. Treasury bills are the most secure form of investment as they have the sovereign country’s backing. Most of the long term treasury bills provide a decent return with zero risk –unless the sovereign country files for bankruptcy (E.g. Greece) which is a rare phenomenon. Most of these treasury bills are rated by independent rating agencies like Standard & Poor or Moody’s and they are based on the the yield and risk involved with the treasury bills. While US treasury is zero risk and low yield, maybe a Zimbabwe treasury bill is high yield and slightly higher at risk. All said and done, treasury is the least opted investment avenue mainly because it has the least ROI as compared to other investment options even though it is a good hedge against inflation. Investors who are risk averse mostly opt for treasury bills.


So long..

When to retire?

The question is more a factor of your financial status than anything else. Although retirement comes with many spending checks and “living within means”, if you play your cards right it could be the best years of your life. At the offset let me say, waiting for 60 -65 years to retire (legal jurisdictions differ) is a complete no-no. A few people continue working well into their seventies – E.g. Doctors, Actors etc. but that is more a function of your passion rather than a necessity. So, to back to the original question, when should we retire?



There are several factors in play when we answer this question:

1. Where is the money: In our 20s and early 30s there are hardly any responsibilities on us so this is the right time to start saving and start building a retirement fund (over and above the gratuity or social security). We should start a savings deposit account and each month put in some money – could be fixed amount, could vary only thing important is we remind ourselves to add to this fund every month and never withdraw. This works like a piggy bank, you will be surprised how much you would have saved in 20 years. This money can be a major cushion should you decide to retire early. Many of us postpone retirement as we don’t have enough funds to sustain, this fund would let you retire on a time of your choosing.

2. Psychological issues: Several people cannot cope with retirement blues. Some cannot imagine they have nothing to do anymore while the rest simply miss the routine. Mostly, it’s a case of withdrawal syndrome where your mind cannot accept a decision that was made by someone else on your behalf. The best way could be to initiate the decision on your own terms.

3. Hobbies: We must develop a hobby during our younger days. This would be most useful should we plan to retire early and enjoy life. Nobody can bear an entire idle day and this is where your hobbies will keep you engaged while enjoying your free time resting and travelling. Hobbies could be anything like teaching (unless you are a teacher), writing, reading or sports (depending on your health condition) etc. Can’t hurt to have a hobby or two.

4. Social circle: Retiring will set you free from a fixed routine but it’s always best to employ your mind in alternative routines by developing a social circle with whom you could have a good time. It’s better if you have a social group of same age and interests.

5. Switch jobs: One way to retire from your job is to switch careers. Take up an alternative job in a diametrically opposite field ideally which does not add pressure of coping up. Something like book keeping, tossing burgers at local restaurants or librarian. Something that keeps a cash flow but gives your mind the space to enjoy retirement benefits and does not force you to dig into your retirement savings until 60-65 years.


According to me the idea age to retire from your job would be 45 years:

1. If you have not grown in your organization by then, there is little chance you are going to make sudden headway by sticking on.

2. You have put in enough years of work to have a decent enough retirement fund plus social security benefits.

3. In most cases your health is still with you and problems associated with ageing have not yet set in.

4. You can think of picking an alternate career and do a decent job as you still have the zest to work but you are only retiring to enjoy and experience life.

5. For the people with a risk taking appetite, it would be a right time to start your own venture with your savings or by taking a loan as you have enough working years left to pay off the loan.

6. It would also be a right time to take that mortgage for your dream house and allow you to pay it off over the next 15 years.


So in conclusion, there is no right answer to the primary question. You could use the factors listed above to find your own ideal retirement age.


So long…

Can traders make money without manipulating the market?

During a finance lecture, my professor told a class of 120, “Markets are usually fair and reflect true value of an asset and market have a tendency of correcting the over pricing or underpricing over a period of time. The traders however, hope this time lag is large enough that they can make risk free money”. At that point of time the information was merely an observation of a person who theorized the markets and had little or no exposure to actual trading. Over a period of time, after studying the markets closely, I wondered – unless you are Berkshire Hathaway with a knack of identifying potential value stocks and making money over short terms, could a day trader make real money without manipulating the market? (Real money in trading is half a million dollars or more daily) Is it really possible for traders or hedge funds to bet on market fluctuations with reasonable accuracy to make a real net profit? Can any trader hedge large sums of assets, large enough to make real money if she/he knew the outcome was dicey? These are few issues are would like to talk about. Although I am not equipped with data to make a call one way or the other, I could present a case and let the readers make their own judgment.




The logic behind market correcting itself can be seen in the following case study.

The value of an asset can be term in two ways,

1. Intrinsic value – value of the asset determined by its future cash flows discounted to present value

2. Perceived value – market sentiments and overall performance of the sector that rubs off on the asset thereby adding value to it.

The market value of any asset is a function of the above two values. The trade volumes are mostly determined by the perceived value but the initial investment happens only because of the intrinsic value. The gap between the two is the scope for the trader to make money. The moment the intrinsic value catches up to the perceived value, the undue profit on the trade halts. The notion that markets corrects itself is based on the assumption that its takes a short while (from few hours to a day) for the intrinsic value to catch up the perceived value as the undue demand for the stock pushes its price upwards till the two values match and then stabilizes and trades between a narrow margin.


The trader can make risk free profit if she/he can delay this upward surge of stock price by either getting illegal information (insider trading) or by artificially creating a downward trend to delay the surge. In each case, the trader has to use unethical/illegal practice to manage this and make millions by using this window effectively. Left to it, the stock surges up or down to meet its perceived value and it takes on in a million chances to utilize this natural window. However, this window can be artificially created by traders too. Imagine a company has decided to diversify its business and it knows that once the decision is made public; the stock prices will shoot up by 10% its present value. If a trader gets this information before the press release- she/she could buy these stocks at present value and then make instant profit of 10% or more my selling it once the press release is made and information becomes public. This is risk free return and is hence illegal because it comes at the cost of other honest investors who get a lower return. Similarly, traders are known to collaborate with other traders to simultaneously off load large stock of shares to artificially and temporarily lower the price of a share. The window is then used to buy back the same stocks at a lower rate and make risk free profit at the cost of other investors. This usually works best for currency traders.


I cannot however think of any other way a trader can make real money by trading within the realms of ethical trading practices. I may be wrong, there could be a case where traders actually make good calls consistently and work within the natural window of a stock and make real money. I would however like to know a few of them to correct my perception. Until then….


So long..

You're Perfect

Tarun Gidwani

How far would you go to bring joy to your fellow human beings? Some of us do anonymous charity donations, some others take up political causes, some adopt children’s’ educational causes while some others take up volunteer work as teachers etc. Most of us, however, simply pass by the opportunity as we are “busy” with our life. There is an old adage addressing children – “you find time for all the things you like, else you find excuses”. Me thinks, this is true regarding most of us (me included) when we talk about giving back to the society we live in. If push comes to shove, I am happy to write a cheque for a cause but ask me to give my time and efforts for a cause and out comes the list of excuses – work pressure, spending time with family, enjoying sports etc. You know, 24 hours are never enough if you want to contribute to society only after you have satisfied all your other needs. Time needs to be made by cutting into things we love to contribute for a greater cause, a cause, much greater than you and I.

Tarun Gidwani is a 20 something guy and am sure like all other 20 somethings, he has an amazing life filled with friends, colleagues, family (not necessarily in that order) and yet somehow he takes couple of hours every day holding up this board (see pic) for passersby at busy traffic junction to bring a smile on their face. I have been seeing this guy for 2 weeks now and at first I thought this was a message for some female friend who had stipulated him to the task. Call me crazy, but crazier things happen in the real world. One day, I stopped to ask him about the board. He informed me that the he has been doing this for a while now and tries to do this every day for a couple of hours just to make the passersby smile and feel good about themselves. Tarun told me that most people are stressed with their daily routine and are always trying to catch up and achieve that little bit more. He wants to help them relieve stress by reminding each one of them “You are special” – “You’re perfect”, going to such lengths just to give us passersby a reason to smile and for a moment feel good about ourselves. I would have loved to stop and talk to him more about how he came up with this plan and get that message out in any small l way I can. I hope someday, I will have that opportunity to have that chat with him. For now, people passing by Westin Hotel, Starbucks (KP) and FC road – look for this young man holding up this board and make it a point to wave out and smile. After all, he is spending precious time of his life for this very reason. More strength to people like him. Godspeed to you Tarun!

So long….

Keynes - Role of Government in economy

Until John Maynard Keynes came along, the world was spilt vertically between two major economic ideologies; capitalism and communism. Adam Smith (aka the father of modern economics) was the main propounder of capitalism (refer to Wealth of nations) and Karl Marx was the main defender of socialism / communism (refer Das Kapital). The main difference in the thoughts of these two gentlemen was defining the forces at the fore front of an economy. According to Adam Smith, private entrepreneurs were the main force behind job creation and creating meaningful commodities that in turn would create a business cycle of generating revenue through sales; to scaling up the output to meet the demands which in turn generates more employment. This would mean free enterprise is the corner stone of a robust economy and the job of the elected Government is to promote free enterprise by having adequate tax structures that would motivate business rather than impede it. Mr. Smith believed in small Government and a strong stable free enterprise would be best suited to create wealth for nations.


We can think of several developed countries that adopted this free market enterprise style of economy and are doing fairly well for themselves. Karl Marx had contrarian views to Adam Smith and was strong advocate of socialism or communism or Marxism. According to Marx, true wealth of a nation was in its citizen and taking care of this human capital should be the primary focus of the elected Government. The prescription from Marx was that Government should tax the business heavily (sometimes up to 70% of Income) and use the generated revenue to build state run schools / hospitals / social programs which would provide for the citizen at nominal cost and thus help build the human capital. A healthy workforce raring to go would be the ideal indicator of a nation’s wealth. Several powerful nations of the 19th century adopted the Marxist ideology for economy – chief being USSR (erstwhile Russian federation) and People’s Republic of China. The GNP (gross national product) – a generally accepted indicator of how well an economy is performing was slightly higher for countries adopting capitalism while the social indicators like health / nutrition etc. were slightly better for socialist countries. Did we have a winner? Well, not exactly, each one was a prescription for a different illness and both worked very well depending on what target were you trying to achieve.


Socialism was open to abuse by politicians who used tax revenue to fund pet projects and seek votes on them and Capitalism gave the business a free run to hire people based on need and re-trench them when not required. So effectively, the workforce became one of the raw materials for the business. Then we had the work regulations which tried to tie some loose ends so that businesses don’t end up exploiting the workforce. However, since the main focal point was business and not people, capitalism never found much traction in Europe (large parts) and Asia where some or other form of socialism found roots.


Keynes was never formally trained in economics but by far made the biggest contribution to find a middle ground between the extremes of capitalism and communism. Keynes was trained in Mathematics and was an active trader who invested in stocks. He made a lot of money in the 1920s until the great depression – when he lost 3/4th of his earnings only to win back considerable amount by investing in stocks that lost value during the depression but later regained value during the New Deal. Keynes accurately forecast major economic events of the 1920s (except the great depression) and chronicled his experiences in his works. Today, apart from China and Cuba and some smaller countries, almost all economies have adopted Keynesian model of economics. There is no such thing as capitalism anymore and socialism is on its last leg. This is the impact of Keynesian economic model. Keynes concluded from his experiences that capitalism works best only when there is near universal employment. With higher rates of unemployment, the capitalism fails to deliver and simply increases the gulf between the haves and the have not. Hence, Government must play its part in generating demand during an economic downturn to keep the unemployment ratio down and keep the economy healthy despite adverse economic condition.


Government is expected to provide for higher wages and larger number of infrastructure projects to keep the workforce employed during downturns so that it maintains the consumption of goods and the economy does not slide into recession. Due to the peculiar nature of Government borrowings, it can afford to ramp up the spending in the short term despite not having revenues to cover the costs. Private businesses which work on profit basis cannot afford to retain workforce when the economic conditions are bad and it is at this time the Government steps in and provides short term employment. Hence, Government has an important part to play in the GNP of a nation and the exact portion of its contributions would change from time to time based on the domestic/ international economic scenarios. Keynesian economics brought together the good aspects of capitalism and safeguards of socialism (limited way). In the latest instance, major economies are using Keynesian model to overturn the economic recession of 2008 triggered by the subprime mortgage crisis and Greece debt crisis. So far, it seems like Keynesian economics is here to stay.


So long…