Re: [silk] Silkmeet on June 28 - bangalore

[Deepak Shenoy]

Cool stuff - I will try and make it so I'm a maybe, will confirm on Tue.

Deepak Shenoy
Capitalmind: Active Investing
http://capitalmind.in
Twitter: @deepakshenoy

Wizemarkets Analytics Pvt Ltd.

On 24 June 2017 at 10:30, Deepa Mohan <mohande...@gmail.com> wrote:

> Probably Derek Shaffer and I will be coming along, too. Attending a
> silk meet after approximately 400 years.
>
> Deepa.
>
> On Sat, Jun 24, 2017 at 7:31 AM, Udhay Shankar N <ud...@pobox.com> wrote:
> > Here's the show of hands thus far (not counting maybes and +1s)
> >
> > Vinit Bhansali
> > Surabhi Tomar
> > Suresh Ramasubramanian
> > Jayadevan PK
> > Samanth Subramanian
> > Sharat Satyanarayana
> > Shyam Sunder
> > Kavita Chaudhry
> > Naresh Narasimhan
> > Advaith Mohan
> > Rajesh Mehar
> > Venkat Mangudi
> > Amitha Singh
> > Thejaswi Udupa
> > Rashmi V
> > Raj Subramanian
> > Zeenath Hassan
> > Mekin Maheshwari
> > Kingsley Joseph
> > Sree Sivanandan
> > Saritha Rai
>
>

Re: [silk] The Need for Guaranteed Basic Income or why Kiran is worried sick

[Deepak Shenoy]

>
> In the absence of a democratized deep learning-driven fund open to consumer
> investors, I think low cost, index funds are still the best option in most
> parts of the world. I've heard it said that this is not the case in India,
> and I don't know enough about the markets in India. We may disagree on the
> value of Indexed funds. But I hope we don't disagree on the low cost part
> (especially when investing for 20-30 year time horizons).
>


Cost can only be justified by superior returns. In most of the developed
world, managers don'tmake enough alpha to justify their existence, and
index funds win. In India, Indexes suck in terms of construction, reach and
capability, and fund managers are able to beat them easily.

The time will come when India will have a decent ETF on NSE 200 or
something, which is broad enough. Then, if the funds underperform that, I
might change my mind :)

Note that India has some of the lowest mutual funds charges in the world.
Even actively managed funds, when used in "direct" mode, charge you about
1% a year or so, with no entry loads. The US Equivalent is between 4% to 6%
for the first year and about 3% thereafter. Indian funds therefore have teh
ability to beat benchmarks better - all they have get is 1% alpha.

Re: [silk] The Need for Guaranteed Basic Income or why Kiran is worried sick

[Deepak Shenoy]

>
>
> ​Tying this thread with a previous one on retirement financial planning, by
> silklister Josey John:​
>
> http://factordaily.com/ai-big-data-machine-learning-funds-fintech/
>
> ​I'd be interested in thoughts from folks like Shyam Sunder and Deepak
> Shenoy (and others too, of course)​
>
> ​Udhay​
>


Sorry, saw this late. In that article:
1) medallion is only open to Rentech current and ex employees. They hare 5
and 45 (5% mgmt fee and 45% of profits) and are insanely profitable.
2) Accura's growth of 185% in four years on small caps is not a big deal.
Reliacne Small cap fund - one of the funds that does only small cap
investing - has made a ludicrous 216% in the same time. (
https://www.valueresearchonline.com/funds/fundperformance.asp?schemecode=16182)
So has DSP Micro and Small cap fund, which is also a very famous one in the
space. Effectively, if this fund was AI, it has been beat by two non-algo
fund managers by a fairly large margin.
3) REntech and Accura couldn't be more different. Medallion works on ultra
short term trades for the most part. Their other fund - which is open to
external investors - has lower performance and that might have a few stocks
held. But Accura essentially holds for the longish term and deals with
illiquid stuff.
4) I think much of what Accura does is not AI at all. You just can't get
enough info about smallcaps.
5) Gupta and Nagpal must be from seriously rich families. And they seem to
have 400 cr. iunder "advisory" for this money, and only the rest is in
portfolio management (about 350 cr.)

Yes of course fund managers can be replaced by an algo...I have personally
built stuff like this :) WE deployed stuff that I think continues to make
money...on Indian markets. Most of the forex trading that happens worldwide
is between computers. I can guarantee that most trades will be
algo-executed at some point in the future.

I also think that fund management will be an excellent money making
opportunity because of the ludicrous amount of information that's not easy
for computers to figure out - and they'll never figure it out, IMHO.
Markets have forever been inefficient and while they are, there will be
ways to beat them consistently.

But this Accura thing is not anywhere close to this kind of algo, IMHO.
There's more to this story but you can't refute what the founders say,
though I think their "success" is not phenomenal and isn't reallly related
to AI. I think they're very smart folks.

Cheers,
Deepak

Re: [silk] Things that are worth the money

[Deepak Shenoy]

On 29 November 2016 at 08:26, Udhay Shankar N  wrote:

> I saw a post by Ramit Sethi [1] that got me thinking.
>
> What, to you, are the things that are worth the extra that you might pay?
>
>
Holidays at one upgrade level higher than you would otherwise do

Business class in long haul flights

Sushi (there are cheap places but typically the good stuff is expensive)

Lego toys. They are unbelievably good.

Speakers and sound systems.

Shower heads.

Re: [silk] Bump in the road, or end of the road?

[Deepak Shenoy]

Apologies for the plug but I wrote a piece a year back:
http://capitalmind.in/2015/01/the-inflexion-point-
for-the-it-service-industry-long/

So my point is that the problem isn't with IT companies - they will survive
as IBM and HP etc have, and perhaps grow in single digit percentages and
generally get a lot lower price to earnings multiples. They do stuff no one
currently wants to do and overhauling a system to use stuff that other
smart people want to use is too expensive. (Like COBOL - it may be outdated
and all that but it still forms the basis for an irrationally large part of
banking) This work will continue until you have removed the very need for
the basis that the older software has been required, so there will always
be business for the Infy/TCS/Cognizant types from this kind of maintenance
work.

But things can change very fast. 10 years ago I couldn't imagine that BigCo
would be able to manage something like 5000 servers using less than 5
people including bringing more up when required, at run time, with complete
reporting/control available even on a mobile phone app. It's possible now.
It's routine now. And as more companies are discovering it is, the on-site
and off-site infrastructure work that was handled by the IT cos has seen
dwindling business. SAP now offers a cloud based pre-setup solution, where
you need none of the server infrastructure - only the initialization pieces
which the IT cos still do; but at some point SAP will create modules that
are one-click installs for the kind of industry you are in.

Automation isn't robotics - you don't need machine learning or AI for most
of the work required. For instance much of the testing work that is done
tends to be checklist driven, and some of that has already been automated
at multiple levels using tools. What these IT cos should have been doing is
buying the product companies that build these tools, but they simply don't
have the DNA. (I would even say buy minority stakes in them with a board
seat) Their own products are absolutely crap; see the quality of the stuff
TCS and Infy have built for say the MCA, versus teh quality of design that
seems to be in teh new Modi camp (vidyutpravah.in for instance or such).

I heard of a bigco - a friend works there - where an insurance company was
being pitched by various vendors for a certain solution. The big Indian
names went in with the powerpoint smoke and mirrors thing and offered
things like 6 months to a year to finish with X headcount etc. A russian
company with the founders as programmers pitched a working prototype that
they said would take a couple more weeks to finalize and they'd get it live
in amonth at a cost that was not even in the same area code forget the
ballpark. They actually won the project and BigCo guys had multiple
meetings to "create risk mitigation techniques" and such things. It's kinda
funny.

I think if IT cos react, they will get lean. If they get lean, many many
people - and I'm speaking thousands in bangalore alone - will find out that
their skills are drastically short of the real world requirement of jobs.
This is the problem - not that the IT cos won't survive. IMHO.

Deepak Shenoy
Capital Mind: Financial Macro and Market Analytics
http://capitalmind.in
Twitter: @deepakshenoy

On 16 October 2016 at 15:34, Bhaskar Dasgupta <bdasgu...@gmail.com> wrote:

> i was interviewing for one of the IT corporates some time back for their
> COO position and once i managed to dig a bit into their financials, i
> backed out. the majority of their revenue streams are from processing in
> advanced stuff, processing code, processing transactions, processing
> quality control. They do this very well. Very very well. standardise the
> process, six sigma the shit out of it, hire the great unwashed herd of
> graduates pouring out of the universities - retrain them to be great
> processors and great business model. But this kind of model is very
> susceptible to dis-intermediation from further advances in technology. When
> I asked if can have some serious seed funding to develop products rather
> than just provide services, there was a bit of a hoo ha. I think a product
> plus service model is the best option, create great products and then have
> a long tail in services and maintenance contracts. we have some of these
> products but not enough. not easy to develop products - the eco-system
> isn’t there yet.
>
> so whilst i don’t think its the end of the road, but for example, every 2
> months I am in a conference where vendors pitch up talking about robotic
> process improvement or AI and how they are showing 20–50% reduction in warm
> bodies in agency/outsourced/offshored units. Where will these 20-50% of
> highly trained processors go when the infosys or TCS lets them go?
> Thankfully the economy is ginormous and we are well accustomed to poverty
> and pain and still have the joint / extende

Re: [silk] The IYIs, according to Taleb

[Deepak Shenoy]

>
>
> I thought Taleb’s essay was a boring destruction of the flimsiest of straw
> men.


I agree. Taleb is more focussed on telling us who he thinks are idiots - at
least that's what dominates his discourse recently - rather than on
constructive things. It's kind of the twitter being - you are defined as
who you are not, or what you are against, rather than who you are.

Re: [silk] To retire or not - that is the Q.

[Deepak Shenoy]

On 18 September 2016 at 23:28, Sandhya aka Sandy 
wrote:

> Hi Folks
>
> Thanks for all the responses! You can't imagine how curiously comforting it
> is to talk about retirement while preparing for a Monday morn.
>
> Now Deepak, those were some great tips and links. Thanks so much. I guess
> I'm partially there in terms of a corpus, and I sometimes get anxious that
> I'm not further down the road, but I feel reassured with your explanation
> of how to steadily build it up over the years. I was wondering what you
> meant by buffers in your statement:
>
>
Buffers are basically the idea that you don't know exactly how much you'll
spend, because your assumptions could be wrong.For example we think of the
rupee as 68 or so - it could be 100 in 20 years or more. Then the kids
schooling at 150,000 dollars suddenly costs 1.5 crores, about 30% more than
we thought about right now.

You may have an expensive hobby, or you may stumble on to something that
needs a significant personal financial commitment - i mean we aren't brain
dead on retirement, and many ideas take money to pursue even if they are
dead ends. (And that's what retirement really means - freedom for things,
and freedom from the fear of failure)

And because you don't know, you have to target for a little more. 1.28
crore = 1.4 crore. Kids education = X in an excel sheet, you try to do 1.5x
or something. Exactness in predictions is folly.



> Yes, I do need to factor in a child's expenses. As for travel, I'll try and
> do that while I'm still earning and shoestring it later. That was a sound
> portfolio plan you laid out.
>

True. You can still shoestring it but I would say you might not need to.
Can you save Rs. 300 a day without even feeling it's gone? I mean this
seriously. Take it out every single day and put it into a separate bank
account. You won't feel it and and in a year you have 1 lakh rupees more.
If you're retiring after 5 years, put on a little interest and this is like
6.27 lakh rupees. Nothing fancy, but this is what makes a few trips
non-shoestring if you so desire - and you didn't even notice that the money
was gone because it's like an extra coffee with a friend every day. (it is,
really - you're having coffee with yourself a few years later) Do this for
10 years, and it's like 15 lakh rupees.


>
> Rajesh: I'm guessing Deepak's company also does financial management. I've
> been working with Credence Family Office based on Bangalore.
>

Unfortunately, we don't just yet. We will, but that's going to take 3 more
months at least. We do stock market stuff, primarily. I don't have personal
experience, but have heard good things about Credence and about Hexagon in
Bangalore.


>
>

Re: [silk] To retire or not - that is the Q.

[Deepak Shenoy]

Here's one:
http://capitalmind.in/2016/06/video-park-money-save-80-tax-also-generate-cash-flow/

(This is a way to keep your money in a money market mutual fund and beacuse
of the way Indian tax laws work, you save about 80% compared to an FD, if
you only take out what you need)

Another is to use "dividend yield" stock portfolios for a 5 year or more
horizon (you could even use a div-yield index ETF but none exist in India).
In the longer term you might see this giving you a much higher return than
an FD. IN which case you'll have some money in a liquid fund for say 5
years, and some money in a dividend yield portfolio. Initially you drain
out from the liquid fund and later the kicker comes from the equity where
the dividend yield will probably be of the order of 10% per year or such.

You can use equity funds too or ETFs for longer term, but it's usually
difficult to convince someone to put their retirement kitty into stocks.

Another way is to buy rental income type of assets, like a house. But in
India this is a PAIN. You get yields of 2% and then they kill you with all
sorts of nightmares like someone forcibly occupying your house etc. Better
to buy a house abroad, in the west I think.

And then there are bonds - there are bonds that give you 10% over the next
10 years, with some good companies. (Hey even an SBI bond is currently at
8.5% till 2026) These may add additional income especially if you are in
the lower tax brackets.

There's other stuff as well depending on how complex you want it to get -
using options to generate income for the really math oriented, or low
priced plantation real estate or so on.

But obviously the simplest is to do a liquid fund, and then a standardized
stock portfolio....


Deepak Shenoy
Capital Mind: Financial Macro and Market Analytics
http://capitalmind.in
Twitter: @deepakshenoy

On 16 September 2016 at 16:23, Vinayak Hegde <vinay...@gmail.com> wrote:

> On Fri, Sep 16, 2016 at 4:07 PM, Deepak Shenoy
> <deepakshe...@capitalmind.in> wrote:
> > Now, here's the other thing. If you're planning to build cash flow, don't
> > use FDs. They create taxable income and at large corpuses become very
> > unwieldy. THere are other instruments - I can give you more details if
> you
> > want to explore. These will both save you tax and perhaps create a
> "kicker"
> > income if rates continue to fall (a key risk here - imagine the person
> who
> > did this calculation in 1980 in the US - interest rates of 12% - and
> today
> > the FD rates are like 0.5%)
>
> Yes. Would be interested to know what are the different alternatives.
> I am guessing bonds
> and Equity mutual funds are one avenue. But I am guessing you have a
> lot more options.
>
> Thanks
> Vinayak
>
>

Re: [silk] To retire or not - that is the Q.

[Deepak Shenoy]

>
>
>
> Hypothetically, say that translates into 25K + 5K + 5K + 5K= 40K per month.
> Need to have a corpus that gives you this monthly amount with even
> conservative investments such as FDs. We're talking about a 8-10% ROI per
> annum. So, in this example, you need to have a corpus of 50 - 55 lakhs. If
> you have a good financial planner and a higher risk appetite, your returns
> can be higher. Hope this helps.
>
>
You will need a lot more. So I have this post: how much FY money do you
need?
http://capitalmind.in/2014/09/how-much-is-enough-to-say-fy/

and then I have this thingy:
http://capitalmind.in/2016/08/saving-retirement-much-enough/

What you need is a lot more because
a) inflation is much bigger than 5K
b) you need to plan to live to age 90. Just because.

Now I assume you're the only person in your household with revenue, so you
 may have to plan cash flow for say 50 years.

You need money that gets you this 8% return and yet, lasts you all the way
for 50 years. How much do you need?

The Answer is about Rs. 1.22 crores. (Assumptions: you get 8% on your
money, you spend 40K a month now, inflation is 5% a year).

The way it works is

Year 1 you have 1.22 cr. on which you make, at 8%, about 9.75 lakh, or
which you spend 4.8 lakh, and the rest stays in your capital which goes up
to 1.27 cr.
Year 2 you have 1.27 cr. on which you make, 10.16 lakh, you spend 5.04 lakh
(remember, 6% inflation) and your capital goes up to 1.32 cr
and so on

your capital keeps going up for 35 years, till you have about 3.2 cr. and
in the last 15 years, it will plummet to zero (in the 50th year from now)
This capital also acts as an emergency buffer.

I know there are variables, so you can calculate different ways to get
there - perhaps you sell your house when your daughter's 18 and then move
to a smaller place. Maybe you reverse mortgage the house when you're 60 to
get some money from a bank. Etc. I had a calculator on how much you need,
it's at http://capitalmind.in/2006/10/how-much-do-you-need-in-order-to/.

Now, here's the other thing. If you're planning to build cash flow, don't
use FDs. They create taxable income and at large corpuses become very
unwieldy. THere are other instruments - I can give you more details if you
want to explore. These will both save you tax and perhaps create a "kicker"
income if rates continue to fall (a key risk here - imagine the person who
did this calculation in 1980 in the US - interest rates of 12% - and today
the FD rates are like 0.5%)

Don't worry if you don't have this kind of money right now - there are
not-so-difficult ways to get there if you plan it a little more. You don't
want a precise plan - you need lots of buffers - but you need an idea that
this takes me to age 90. The big thing I would imagine you haven't
considered is that your child will need a lot more money as she grows up
and that you will need a lot more money for travel which I'm thinking is a
good part of your bucket list.

Re: [silk] Financial planning

[Deepak Shenoy]

On 6 October 2014 16:39, Shyam Sunder shyam.sun...@peakalpha.com wrote:

  Good advisors too don't know what will happen, and tend to get into the
 herd mentality, the crowd, the loss aversion and all those little
 behavioural biases that  screw up our investments.

 This is a bit like saying good surgeons will leave their scalpels in your
 chest and stitch you up.

 You are describing terrible advisors here, not good ones.

 A good advisor should not only NOT be subject to the crowd and herd
 mentality, but also help you protect yourself from these as well as the
 greed vs. fear pendulum swings that cause behavioural biases. An asset
 allocation driven approach to portfolio management will easily achieve this.


Should.

But behavioural biases happen to everyone, even the best among us. I say
you can't avoid it - at best, you figure out when it hits you. In the
trading world, there's a whole area of psychological awareness of how to
understand these biases and how they manifest in other circumstances. The
fable that Soros gets out of a bad trade when his back starts hurting is
partly true. I could go on but that would be digressing.

Asset allocation is useful for most people but many advisors get it very
wrong - for instance advising that all those at retirement or close to it
must have only a small allocation to equity. Generic advice based on risk
assessment, age and social profile can be robotized - automated advice is
starting to change the world anyhow, with sites like wealthfront.  (For
full disclosure I'm working on something like this so I'm biased) Even the
Bogle folks have found a simple asset allocation method that's fully
automated - like target year funds (so if you are retiring in 2042, you
just buy a 2042 fund, which auto allocates between debt and equity and what
not)

However, robotic advice isn't useful for many people. My dad passed away in
1997 and left mom a house and shares of about 20 companies Only about 8 of
them survive today. Most robo advice would have looked at her age, her risk
profile etc. and told her to sell those shares and put money into an FD.
Today what she gets as dividend is about the value of the shares in 1997.
So advisors can do a good job here by looking into the situation in a more
detailed manner and not use templatized assessments. Unfortunately this is
not very scalable as a business, or I haven't found the right way, because
I've been looking at it closely.

Back into gyan mode - The biggest thing that individuals who aren't clued
into the market have, is diversification. But, and to paraphrase a saying,
there is such a thing as di-worse-ification. Meaning, you buy different
things but they give you the same result as buying one thing. I know people
with 15 mutual funds. Fifteen. This is insane because most of those mutual
funds are buying the same underlying stocks! (I go like buy two. If you
can't be happy with two funds you'll probably want to buy the stocks
yourself) And you should probably not buy more than 15 anyhow; I nearly
die tracking more than 12.

The problem with going with advisors is that you have to spend a lot of
time (and many times, money) finding the right advisor, especially when
most of their track records are only reference based. Biggies like Citi
Wealth are just terrible (I have not seen a single person who has had a
satisfactory return from their practice), and within the small guys there
is no way to easily measure performance or get independent assessments. And
if you don't have enough money, you can't afford the really good advisors
who will prefer to only have a limited number of clients.

So if you have a small amount of money (less than 5-10 lakh of investible
capital) you might find it better to just skip the whole advisor thing and
go generic/direct. And it does seem that a large set of people fall into
that metric...

Re: [silk] moving past the religious straw man

[Deepak Shenoy]

 It turns out that there's a big God-shaped spot in the human psyche. I am 
 happier, more centered, and more stable when that spot is filled, even though 
 I firmly believe that most of the effects are psychological.

This was absolutely beautiful, thanks Heather.

The concept of god, to me, is an private, personal thing. The problem
is only when some people attempt to make other people believe that
their imaginary thing should be everyone's imaginary thing. Or if not
having an imaginary thing is somehow irrational. I know most of us
here would not attempt to do this, but the concept of collective
belief has far more downsides than upsides.

My view: In effect the difference between religion and god is just
that. It's the difference between a multi-person imaginary thing and a
private imaginary thing. A religion defines god as one thing (or like
in Hinduism, many incarnations of that one thing) and how to live to a
god's expectations and all of that stuff. A religion attempts to help
you understand what should really have been the realm of science - so
there was a god of thunder and a god of rain and a god of tangled
shoelaces  and all that. Maybe it was a makeshift thing, like the
stuff I tell my son when he asks me where do babies come from? after
a long exhausting day about 3 seconds before in he's finally asleep. I
lie, and I make it sound good, and he believes in the god of rockets
that drop babies to deserving parents. For a couple days until I
invent something else.

I love the concept of God, even though I might not believe in one. But
I don't love the concept of religion.

Science can also be strange, but like Heather said it's mostly fact.
Not fully, because you can invent fact, by using terms such as
proxies for data that doesn't exist (like temperatures in 1000 AD).
In many cases, science is religion too (like in Climate Change where
scientific people who change their views are called disgusting things)
And of course, religion has some scientific background like it's
possible that ash on the forehead was designed to stop sweat from
dropping into your eyes or something. The clashes come when one fellow
is inflexible even if the other fellows case is better.

Re: [silk] Financial planning

[Deepak Shenoy]

I'm late to this discussion :) Thanks Lahar for pointing out my post!

I've changed on one thing since that post. Index funds may not be the best
option in India - and this is due to:
- bad construction of indexes (we use a free float market cap weighted
index largely, like the Sensex or Nifty, which have stock and sectoral
biases. The broad indexes have little acceptance, and we don't have stuff
like equal weighted indexes yet)
- dividends are a good source of income but don't reflect in the index
values. There's something called total returns index, but no one mentions
that for comparisons (it shoudl be the only thing compared)
- non index stocks do well because the indexes of choice like Sensex or
Nifty aren't broad enough.

I wrote a post about the data:
http://capitalmind.in/2014/08/in-india-mutual-funds-have-beaten-the-nifty-no-survivor-bias-edition/

The point was - let's take the TOP funds as they were in 2005, and assume
you invested in the top 5 or 6 of them. Nearly all of them have beaten the
Nifty (total returns, assuming reinvestment of dividends). THere's no
survivor bias - I took the top 5 or 6 and all have survived, and I took
only the top ones because they are the ones you would have bought.

The fact remains that they aren't the top funds today, and some nowhere
near the top, but they have still beaten the indexes, after accounting for
fees. This I cannot ignore, so I should say I'm probably wrong about index
funds.

On the point about should investing be left to the professionals I'm with
Mahesh that this is more like hubris. I think of investing like the great
Chef Gusteau said about cooking in Ratatouille, that anyone can cook. This
doesn't mean cooking is so easy that anyone can do it, but that it's a
thing that anyone can excel at if they put their mind to it (and probably
aren't even professionals). You can be a phenomenal investor and yet, have
a day job.

DIRECT mode - I've spent way too much time rescuing people from shitty
advice from silly intermediaries who have ruined very solid portfolios -
timing stocks I understand, and I do it, and I tell people that if they
don't have the time, they should just use a fund to invest. But timing and
rejigging investments in mutual funds is by and large a waste of time, and
for every such rejig I have NEVER met a manager who has evaluated how much
worse (or better) the investor would have been, had those rejigs not been
done at all.

The DIRECT mode gives you an edge of about 1% a year on equities. This,
plus any fees you pay an advisor, add up to a layer of outperformance that
the advisor has to provide just to break even with the direct mode.

Good advisors too don't know what will happen, and tend to get into the
herd mentality, the crowd, the loss aversion and all those little
behavioural biases that screw up our investments. This happens with
professional fund managers too...and the only real edge that professionals
used to have was insider trading knowledge, which has become a little
harder to come by. Advisors have almost no edge in fund selection; at best,
they can use some data, which is just driving with your eyes in the rear
view mirror.

(Advisors though can help with things like setting up HUFs, creating
inheritance structures, doing goal oriented investments etc. )





Deepak Shenoy
http://www.capitalmind.in
Twitter: @deepakshenoy

On 2 October 2014 10:04, Deepak Misra yahoogro...@deepakmisra.com wrote:

 Jumping into this  a bit late, but will try to avoid repititions


 1) Open a PPF account in every member in the houses name. This is an
 absolute must and try to put as much as possible there. The high tax
 free return with compounding at zero risk  is something that is
 difficult to match

 2) The first house/real estate is not an investment. The subsequent
 ones are. While the ROI in terms of rent maybe low, the caital
 appreciation is what counts. As some earlier pointed out, the tax
 breaks on loans makes effective interest low.

 3) An approximate cash flow statement needs to be prepared to plan for
 big ticket expenses. The savings/retirement strategy and allocation
 depends a lot on this.

 4) Assume that good fund managers know more than you and have much
 better data. If you treat mutual funds as investing then this holds
 true over investing directly in stocks. Many peeople do make money on
 stocks but lots more do loose. In case you have the time, expertize
 and drive, then it make sense to research stocks and buy directly.

 5) Allocate an ideal percent of cash to debt, small cap, balanced and
 large cap depending on risk profile and adjust investment accordingly.
 Even if the amount per month is miniscule, it all adds up

 6) Regular SIP is a must. That is the key 

 7) For equity keep long term in view. If Mukesh Ambani sneezes, the
 stock market crashes, but that does not mean that all  business are
 going to sink. ONce he starts smiling the market may boom. Over a 10+
 year horizon this hardly matters

Re: [silk] introductions

[Deepak Shenoy]

On Mon, Jun 9, 2014 at 9:25 AM, Venkat Mangudi - Silk
s...@venkatmangudi.com wrote:
 Which team, if I may ask?

Sacrilege! :)

Joy-da, welcome and glad to see you join!

And about the facebook posts. Phenomenal. That stuff can go in a book
as is. Heck I'll preorder it if you did :)

Re: [silk] Meet up.

[Deepak Shenoy]

I'm a Maybe...

Re: [silk] PFRDA and Security

[Deepak Shenoy]

On Tue, Jun 18, 2013 at 2:45 PM,  thew...@gmail.com wrote:
 I'd have signed up for a pension plan, but the ones that are on the market 
 lock in a major part of the capital and compulsorily give me an annuity (at 
 negligible returns/ rates of interest). While some will argue that this is 
 the whole point of a pension plan, I'd rather have the flexibility to take a 
 lump sum and do whatever I want with it.


Am with you on this. For NPS though the good way is to do the minimums
in Tier 1 and do the real investments in Tier 2. Then you can exit all
of your Tier 2 money at the age of 59 years and 364 days without
having any lock in :)  (Or so I think) But if you stay till 60, then
part of it gets converted to an annuity and the rest is paid to you.

Can check more on this - it's been a while since I checked the rules.

Re: [silk] PFRDA and Security

[Deepak Shenoy]

 The only annuity there is the EPS- given that you contribute barely 541/- a 
 month, it would still grow to 12 lakhs after 35 years- against which you get 
 a maximum of 3250/- per month as pension. That's a 3% rate of return on 
 capital. Why would the NPS be any different?


The NPS managers have done like 12%+ returns per year since 2008, I
think. (Most of them, IIRC)

Re: [silk] PFRDA and Security

[Deepak Shenoy]

On Tue, Jun 18, 2013 at 5:42 PM,  thew...@gmail.com wrote:
 I meant the annuity returns on your corpus.

Ah, I agree. The Annuity return is crap, and NPS doesn't provide an
annuity (you're supposed to buy it from an insurance company).

Re: [silk] India Considers Banning Pornography as Reported Sexual Assault Rises - NYTimes.com

[Deepak Shenoy]

On Fri, Apr 26, 2013 at 11:57 AM, Surabhi Tomar surabhi.to...@gmail.com wrote:
 Isn't rape nearly all about power and very little about the sexual

 act? Stopping or showing of porn is unlikely to deter a rapist.

 http://www.d.umn.edu/cla/faculty/jhamlin/3925/myths.html


 The link says nothing about porn.

What I mean is - if rape is about power, then the problem isn't in
showing porn or not showing it. We might as well allow it - because
the rapist isn't going to stop for lack of porn, he will want the
power that his act does.

It's in the desire for power, which probably has much more to do with
our violent TV/movies, our violent cartoons (Chota Bheem! and also Tom
and Jerry) our violent Arnabs, our cops slapping people, parents
beating kids, people getting away despite their obvious violence (like
that phenomenal Hindu ad about parliamentary behaviour) etc.

 Also, I don't think reasons for rape are the same in a country where there
 is too much pressure to have sex vs a country there is a lot of pressure
 not to have sex. Will be interesting to compare the actual statistics (not
 just the ones that are reported) of rape per 1000 men from US and India.

How can you compare statistics of something that hasn't been reported?
Or do you mean reported as in FIR'ed? I would love to see the results
or methodology of such a study. From my anecdotal surveys, nearly all
women I've met (except a generation up, where I'm scared to ask) women
in India have faced molestation by both strangers and people they
knew. And it was much scarier when it was people they knew. But I
don't know about formal surveys here.

 Will also be interesting to see if the incidence of rape has gone up in the
 last few decades, now that there are SO few women  per 1000 men. Sex trade
 has definitely gone up. Buying and selling of brides is now commonplace in
 Haryana, UP etc.

This is interesting. From 1991 the gender ratio has gone up from 927
to 940 (per 1000 males). Rape instances have gone from 10K to 22K in
the same time. Yes, more reporting at play perhaps.

Kerala is at 1084 or such. Haryana is 877. The rate of Rape
(according to NCRB) is 2.9 for Haryana and a much higher 3.4 for
Kerala (I think the numbers are per lakh population).

If you assume they don't report rapes in Haryana, then Gujarat where
presumably they do, the gender ratio is 961 but rape rate is 0.7.

I don't know if it's just gender ratio at play.



But a Dan Ariely  study showed that people tend to make bad judgements
 when sexually
aroused.

 And, porn is a sexual release for an aroused man. So, I'd say it should
 theoretically bring down the incidence of rape in a repressed society (as
 opposed to an overtly sexual one)

I suppose I'd agree with that. But the question then becomes more
granular. If a woman says stop in the middle of the act, and the man
doesn't (Assange case?) because he's aroused, it is still rape.

(And to be honest, a situation where 5 year olds are not getting
raped, and the element of discussion is something like the Assange
case is a step up from our current state, I agree, though it still
remains an issue )

Re: [silk] India Considers Banning Pornography as Reported Sexual Assault Rises - NYTimes.com

[Deepak Shenoy]

 For the record, I do not advocate a ban.

 With the internet around, banning anything is like trying to hold on to a
 fist full of sand.

Speaking purely economically - it's cheaper when they ban the darn
thing. If they make it legal, they'll charge a bloody license fee and
have auctions for licenses and some random minister will fraud the
taxpayers and all that. I'd have put in a smiley but I think it's
real!

Re: [silk] India Considers Banning Pornography as Reported Sexual Assault Rises - NYTimes.com

[Deepak Shenoy]

 That would be my guess too. IMO, rape is a two part problem- power play and
 sexual-inactivity.
 Imagine a place where hormones start raging at 13 years of age BUT then you
 have to wait another 15 years (when you get married) to be able to do
 anything about it.  We live in that world.

Isn't rape nearly all about power and very little about the sexual
act? Stopping or showing of porn is unlikely to deter a rapist.

http://www.d.umn.edu/cla/faculty/jhamlin/3925/myths.html

 Pornography is a healthy outlet for a repressed society. Banning it will
 only entail illegal 'blue films' which will further exacerbate the problem
 (Because what we see on tv highly influences how we act.)

IMHO, porn is healthy - as sex is - and we should actually not just
un-ban porn, we should un-ban prostitution as well. But a Dan Ariely
study showed that people tend to make bad judgements when sexually
aroused. (http://www.econ.brown.edu/econ/sthesis/AnnePapers/Anne25.html
has a summary) Such as When aroused, participants were more likely to
take a women to a fancy restaurant, say he loves her when he does not,
get his date drunk, keep trying after she says no and use a drug in
order to procure sex..

There are no easy answers...

Re: [silk] Migrant workers and bank accounts

[Deepak Shenoy]

Few things from my side:

 We are trying to understand financial needs of migrant workers:

 Do they have bank accounts?

Many do, now. Those that are hired as security guards by an agency
typically get paid (in urban areas) by the agency through bank
accounts - the guards in two complexes I lived in were paid this way.
Workers at construction sites get paid in cash, but in large
constructions they might choose to pay by cheque - because of
robberies that happen on pay day. I have heard (anecdotally) of
someone who paid wages part in cash and part into a village account of
the family of the worker, but this was many many years ago.

 Problems faced by them in opening bank accounts esp on KYC front

RBI has mandated a lower KYC requirement for accounts whose average
balances are likely to be less than 50,000. This lower requirement can
even mean no PAN and an address proof signed by even part-time
employers (including for household help) which can be used to open a
no-frills account.

However KYC is a major pain - both ID proof and address proof are
difficult to get. In this context aadhar helps but getting an aadhar
card could be difficult too.

 How do they send money home?

Lots of ways. The standard is for people to send money through someone
else travelling back. Once in Gurgaon, a huge truck was hired to send
back goods home to a village in Bengal, by bengali migrant workers,
and there was this guy collecting cash also to give back home and
writing stuff in a register. I was fascinated - all of them had split
the cost of hte truck and there was a 10% fee for the cash transfer.

Another common thing is prepaid currency. You buy a prepaid scratch
card, call up a shopkeeper in a village and he uses the currency for
his use (or sells it to people coming to his shop) and gives the
family there the money minus his cut.

There's also money orders from the post office. But the bank system is
by far the best - if the folks in the village have an account.

 Do they have banks in their villages?

I've heard of 5-10km walks for branches in the outer rural areas, and
I've seen the bank mapping data for branches in India and there are
HUGE HUGE gaps. So I suppose some will have banks, some won't.

 Do they get any loans there?

I honestly doubt it. If you see the credit/deposit ratio of the
underbanked districts in the country, it skews  on the side of
deposits. However my view isn't by a statistical average - it's by
eyeballing the data.

 Do they need micro insurance?

Yes. Most such jobs are dangerous. The need is greater for health and
disability rather than death. ALl insurers are supposed to carry a
micro (life) insurance product. Typically Rs. 100 for Rs. 10,000 worth
of insurance. But it's not sold hard. In large construction sites they
carry some layer of protection through ESI but no one gets proper care
at an ESI hospital it seems.

 Do they need any micro saving products?

They do, but nearly every bank has one. Saving wise they have post
office deposits which might make the most sense. Now the better-off
have the National Pension Scheme where the government has promised to
deposit Rs. 1,000 per year for three years (this current one is the
last) if people open accounts. (but this is aretirement scheme)

Even mutual funds are supposed to have accounts for contributions in
multiples of Rs. 100. However they don't give this kind of scheme too
much focus.

Cheers,
Deepak

Re: [silk] Bangalore Meet, Food Drinks

[Deepak Shenoy]

 FYI, by my count we've got a turnout 12 and perhaps =20 people.
 Some good meats will be marinating shortly, and many cold beers will
 be on ice.  So make the most of Bangalore while we can still[1] live
 here, and show those hands!


Showing 1 more :) I'll be there, looking forward to meeting everyone.

Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com

[Deepak Shenoy]

On Wed, Apr 10, 2013 at 12:19 PM, Ingrid Srinath
ingrid.srin...@gmail.com wrote:

 The only issue I have with that logic is that it prevents any organisation 
 from achieving sufficient scale to have significant impact. The charity 
 sector may be the only one I know where success in terms of growth/size is 
 penalised by those who support the sector.

Is there a need for a charity to grow to that scale if it weren't
actually trying to cut costs substantially? Yes, some costs are cut by
scale but I've yet to find a charity in India who has an aggressive
goal to keep costs at 20% or less even in the next five years.

Scale in this sector hardly seems to have the kind of impact one
thinks of - even the biggest charities struggle to do the
on-the-ground things (and usually outsource to more efficient, smaller
charities). If all they're doing is being middlemen, then everyone
will question the need for them to exist.

With the advent of the net and the ability for the smaller folks to
highlight what they do, like a Project Why, I believe the
large-charity model will have to be done by the
large-businessman-who-donates like the Buffetts and the Gates'. (also
the private charity uses a tax loophole to pretty good effect).

Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com

[Deepak Shenoy]

On Thu, Apr 4, 2013 at 3:28 AM, ashok _ listmans...@gmail.com wrote:
 On Tue, Apr 2, 2013 at 9:03 PM, Deepak Shenoy deepakshe...@gmail.comwrote:

 appropriate comparisions. When I complained (and continue to complain)
 of acquisition costs - not overhead, but just the costs of acquiring
 donations - of around 50%, I am told this is the industry average. If
 it is, it is obvious why people don't donate...


 Isnt acquisition cost a skewed metric to be evaluating charities on ?

 lets say you bought a brand of Soap after watching some adverts about it -
 you don't think about the advertising cost that inflated the cost of the
 Soap when you buy it.  Also the impact of every person who did not donate
 raises the acquisition cost which then impacts the person who donated -
 i.e. they think the cost of acquisition is too high. (i.e. the cost of the
 Soap is higher because of all those people who didnt buy the Soap after
 watching the advert, so they had to publish more adverts ) .

This is not so in the case of a charity. Let's divide the distribution
of money into three categories:

a) Investments
b) Consumption (expenditure)
c) Charity

In b) (where soaps are) I don't care about the end use of my money. I
care about the product I get - this is a barter, so I don't expect the
manufacturer to tell me to use the soap in a certain way, and I don't
get to tell him where he should use his money.

In a) I care about the cost of making hte investment. The more that's
taken by a middleman (say 2% entry load into a mutual fund or
commissions when I buy a property) the less the money that goes into
whatever I've invested in. A 2% entry and exit load or commission
means what I invest has to grow 4% just for me to break even. Beyond
that, I can't dictate too much. The acquisition cost usually figures
in entry or exit loads, or annual management fees, so I will try to
minimize those (unless the intermediary can substantially raise
investment values)

In c) I care about the end use of my money, because the only reason
I'm donating to charity is for it to make me feel good. All altruism
is about making one feel good about doing good to someone else. If I
get the whiff that half my money is going to pay for acquisition, then
I'm thinking: forget it, I'll find an orphanage or old age home and
donate direct. Yes, there are other causes that need attention. But
the 50% load just puts me off. I think I'll only be happy with 10%
and other overheads of another 10%.

 I think an equation which takes into account - total raised monies, cost of
 raising monies, total %age of annual turnover that goes towards the actual
 purpose of the charity may be better ?

yes, of course. But as I've said, I might excuse overhead as payment
for good quality people. They are part of the cause. For instance you
can't achieve proper child education without sanitation, food and
stable homes. So if a child education charity were to say they'll give
some money to parents for rent/sundry expenses, or build a common
toilet, I don't have a problem even if it isn't the main cause. So
paying a plumber is ok. Paying people industry level salaries is ok.
These might actually appear as overheads in many cases, and therefore
I wish to make a distinction between the actual purpose % and the
cost of acquisition.

However these other factors are also important. If industry level
salaries means that 80% of the money raises is overheads, then I think
we have a problem back again. I'm not going to feel good paying
someone industry level salaries to deploy 1/4th their salary on a good
cause. And the feel good factor is important.

Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com

[Deepak Shenoy]

On Wed, Apr 10, 2013 at 10:09 AM, Ingrid Srinath
ingrid.srin...@gmail.com wrote:
 Deepak,

 Here are a couple of devil's advocate scenarios:

 Charity J: Spends virtually nothing on donor acquisition, brand building, 
 policy advocacy, professional staff, technology or monitoring and evaluation. 
 Deploys virtually the entirety of the small sums they collect to feed 
 starving children. Saves their lives but does nothing to expand the number of 
 lives they can save or to prevent more children from being reduced to 
 starvation.

 Charity Q: Spends about 50% of their revenues on expanding their donor base, 
 auditing programmes to improve effectiveness/efficiency, building knowledge 
 on causes of and remedies to poverty. Consequently, reaches greater numbers 
 of children with greater effectiveness each year, changes policies that cause 
 poverty or prevent its reduction, develops programme innovations that are 
 widely replicated by other charities and governments.

 Which would you choose to support? Would it be the latter subject to say, a 
 30% cap on 'overheads'?

But that's what I call the problem with overheads per se. You have to
get more detailed. I have seen brochures from large NGOs and annual
reports printed on very expensive paper. I've seen NGO seniors travel
J class on flights, billed to the NGO (non international, in the
late 90s). One of the building knowledge pieces involved a sojourn
to Goa for a large number of people in Fort Aguada or some such
resort. This is not great ways to spend money; you might actually
reach more people this way, but it is at a substantially higher cost,
and it might be more efficient forme to find 10s of Charity J's to
spend on.

I would say that Charity Q is doing a disservice by not substantially
optimizing costs to stay under 20%/30% ranges, or plan to do so in the
near term. I would like to see more efficient spending by them,
instead of just attempting to make the programs they sponsor more
effective. I mean that if you have 10 people in Fort Aguada for a week
at 10K per person per night, to make a program that costs Rs. 50 lakh
more efficient by 10%, you might as well ditch the Aguada trip and
give them the Rs. 6 lakh extra.

 By the way, one simple way to help a charity lower its fundraising costs is 
 to pledge long-term support.

Agreed. Thats why Payroll giving works so well (in the west at least).
There's also a theory that instead of doign the spray and pray you
should find one cause and give enough to do it justice. Like building
one school, funding one old age home etc.

Re: [silk] Novartis denied cancer drug patent in landmark Indian case

[Deepak Shenoy]

The case is about evergreening and in a way, about proving that an
innovation is useful enough for patent protection or extension. This I
think is fair and Novartis got what they deserved. Their posturing is
pointless, because India also does compulsory licensing, meaning if
Novartis says we won't bring a drug to India, the Indian govt can
simply say screw you, we're going to make it anyway. India did it to
Bayer last year, and started it on two more cancer drugs by Roche and
BMY a couple months back. This is not sustainable if adopted by all
countries, but if it is, even then Novartis will have to play ball.
The game might escalate to countries threatening each other and I'd
like to see that play out.

I also think the patent system is horribly broken. From drug patents
which are ludicrously complex, to patents such as apple's slide to
unlock (which I believe shouldn't have been granted at all, not only
because it's obvious, but because it existed in touch products
earlier). The problem is that patents have become a way to keep
innovators out rather than foster new innovation - so if you do
something earthshattering today you have to check thousands and
thousands of patents to be sure you haven't infringed on anything,
since it'll cost you a huge amount if you did, even inadvertently.

The last point is that many of these drugs are tested through publicly
funded trials or use publicly funded research. Tough to defend the
capitalism vigorously there.

Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com

[Deepak Shenoy]

Ingrid,

What parts of the DTC are the worst for the NGO sector? Would like to
hear also of some alternatives, or at least to address whatever has
caused the IT department to believe that a change from current rules
was necessary?

 OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' 
 is, I believe, as much a consequence of the sector's failure to provide 
 plausible alternatives, and its willingness to play the ratio game, as it is 
 of the need for a one-size-fits-all comparator.

I agree, and in India at least, there is very little effort at
transparency. When I wrote about Oxfam's heavily skewed ratio, Oxfam
management did get in touch, and the one thing they mentioned was that
at least we reveal these numbers. It's horrendously difficult to get
appropriate comparisions. When I complained (and continue to complain)
of acquisition costs - not overhead, but just the costs of acquiring
donations - of around 50%, I am told this is the industry average. If
it is, it is obvious why people don't donate...


On Sat, Mar 23, 2013 at 1:31 PM, Ingrid Srinath
ingrid.srin...@gmail.com wrote:
 On 22 Mar 2013, at 17:46, Pranesh Prakash the.solips...@gmail.com wrote:

 On Thu, Mar 21, 2013 at 6:56 AM, Ingrid Srinath
 ingrid.srin...@gmail.com wrote:
 This TED Talk touches on some of the perverse disincentives non-profits 
 face that hamper scale, innovation, sustainability and impact. They are 
 issues I've grappled with, sometimes successfully, sometimes not, for 15 
 years. Aspects have featured on silk previously. The proposed Indian Direct 
 Tax Code exacerbates the problem considerably: 
 http://www.cafindia.org/DTC-NGO.pdf

 I would love to know what folks here think on this subject.

 http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html


 I haven't seen this yet, but you might be interested in this:
 http://www.economist.com/node/21556570

 Thanks, Pranesh.

 Tax exemption aside, the expectation that an organisation can be viable and 
 grow to scale when it's not permitted to:

 accumulate reserves
 incur debt
 invest in people, technology, marketing
 or take risks

 especially when these organisations exist to tackle the nasty, intractable 
 problems that both state and market have failed at, seems to me unreasonable.

 OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' 
 is, I believe, as much a consequence of the sector's failure to provide 
 plausible alternatives, and its willingness to play the ratio game, as it is 
 of the need for a one-size-fits-all comparator.

 Is there a good norm, for instance, on remuneration or incentives? 
 Benchmarking to private or public sector equivalents, seems to me to, at 
 best, set limits. Current practice limits entry to those who can afford it, 
 either because they have other sources of income/support or are willing to 
 make some stark lifestyle choices for themselves and their families.

 The perverse donor logic that success must be penalised by favouring 
 organisations that are smaller, less 'savvy' is another bugbear.

 Most critically, as regular citizens, how do we propose to sustain an 
 independent public sphere - media, civil society, regulation - free from the 
 control of state and market and/or dependence on the whims of big 
 philanthropy? Especially when it is clear that poor governance is at the root 
 of most, if not all, our current crises?

 The growing trend towards crowdfunding privileges the short-term, easily 
 measured, simply communicated, emotional appeal over the boring, unsexy, 
 long-term work that yields systemic or structural change.

 Recent developments - media regulation in the UK, the new constraints of 
 India's proposed direct tax code, the debate around mandatory CSR, and the 
 ongoing battle for freedoms of expression, assembly and association around 
 the world - make these questions more urgent than ever.

 - Ingrid

Re: [silk] Top-posting

[Deepak Shenoy]

I'm all for it.

 I suspect this is largely due to it being the same people in all the
 conversations. I'd politely suggest that we should stop pandering to a
 few old timers like Udhay, Eugen and I and soften the rule to Bottom
 posting is preferred but not required on this list if that gets a few
 of the lurkers posting.

But it can get awfully confusing sometimes.

Re: [silk] Fifteen (Udhay Shankar N)

[Deepak Shenoy]

Unfortunately have to drop out, as something's come up. Mighty sorry
and sad I can't make it.

Thanks
Deepak
Deepak Shenoy
Company: http://www.marketvision.in
Blog: http://www.capitalmind.in
Twitter: @deepakshenoy



On Fri, Dec 21, 2012 at 9:51 AM, Deepa Mohan mohande...@gmail.com wrote:
 Udhay, and everyone on this list, lurkers or not...I do want to say a
 big thank you .I've enjoyed being on this list and I do hope Udhay
 will not place a well-aimed Udhay (kick) and get me off it any time
 soon.

 I've met some great people, had debates (which catch de fish),
 differences of opinion, and agreement, too. I've not understood many
 of the threads (esp the technical ones) but never failed to dig in my
 oar when it's a subject I have the least knowledge about (and there
 are plenty of subjects I have the least knowledge of!).

 I could go on gushing...but all I really want to say isThank You!

 Cheers, Deepa.

 On Fri, Dec 21, 2012 at 9:23 AM, Udhay Shankar N ud...@pobox.com wrote:
 On 20-Dec-12 2:19 PM, Udhay Shankar N wrote:

 Excellent. See you all tomorrow.

 I should be there around 7pm.

 Udhay
 --
 ((Udhay Shankar N)) ((udhay @ pobox.com)) ((www.digeratus.com))

Re: [silk] Probability for kids

[Deepak Shenoy]

 No, I am not able to treat it as a series of occurrences. Each is one
 event...that may or may not occur. It's very difficult to explain
 something that is patently nonsensical to everyone else, but which I
 am unable to shake myself out of.


There's an interesting thing about probabilities that I read
somewhere. If you have a coin that has been flipped twenty times and
you have only gotten heads, then how much would you bet on getting
heads on the next flip?

Answer 1: Chances are 50%. The history doesn't matter.

Answer 2: Won't bet much. Tails is much more likely since it's not
come for a while, and it's supposed to. (This is the thought process
of many people in casino slot machines, and I've been a victim :))

Answer 3: Bet big. Twenty times heads? Dude, the coin is loaded.

Re: [silk] perfios.com

[Deepak Shenoy]

On Sun, Sep 16, 2012 at 9:27 PM, Deepak Misra dee...@deepakmisra.com wrote:
 I was having at a look at this site and it looks quite interesting for
 Indian users. The only scary issue here is the sharing of passwords for bank
 accounts etc. HOwever without the automatic refresh of accounts the tools is
 not that all powerful.

 Has anyone had an experience with this site ? The security policies say all
 the rigth things but there is hardly any information throuigh google on
 actual users that too with security bacgrounds.

I was an early user until they had to have my passwords and all that,
which I'm too paranoid to provide. While they state that passwords are
only stored at the client, not transferred to server etc, I have the
fear that a rogue user or app will be able to transmit this data out.
Plus, all the brokerage/banks require a password change every few
days/months - which I then have to reset back into Perfios etc. I wish
all banks/creditcards/investment web sites had a read only access
password (same user id, multiple passwords) where you couldn't do
anything like an NEFT or changing a service or something.

This probably is just my paranoia and may not be justified.

Re: [silk] [CCM-L] Shortage of medicines and control of regulatory?authorities.

[Deepak Shenoy]

 This is a self created problem. The short supply is local to Pakistan. There
 is no short supply or brand monopoly for a distance of 2000 km, starting 100
 km east of Islamabad. If those local controlling bodies do not exist in
 Pakistan, they must be set up in Pakistan to break monopolies and control
 prices. Or else allow free import from India.


If the medicines are so much in demand and so ridiculously cheap in
India, isn't there already a flourishing black market in Pakistan for
them?

Re: [silk] [CCM-L] Shortage of medicines and control of regulatory?authorities.

[Deepak Shenoy]

On Thu, Aug 9, 2012 at 9:40 AM, ss cybers...@gmail.com wrote:
 On Thursday 09 Aug 2012 8:58:18 am Deepak Shenoy wrote:

 If the medicines are so much in demand and so ridiculously cheap in
 India, isn't there already a flourishing black market in Pakistan for
 them?

 The smuggling of drugs and automobile tyres from India to Pakistan occurs via
 Dubai. The kingpin for all that smuggling is Dawood Ibrahim who lives in
 Karachi, protected by the ISI

Wow. Looking at Indian export data it was strange that we exported
*that* much to Dubai. Perhaps Dawood does more than just Pak.

And I suppose, since the Pak authorities are not responsive, the
person Dr. Bashir could appeal to is Dawood himself.

Re: [silk] outdated words in Indian English

[Deepak Shenoy]

On Fri, Jul 13, 2012 at 10:56 PM, Nikhil Mehra
nikhil.mehra...@gmail.com wrote:
 Sure but language also has aesthetic effect. There's a tone to words, quite
 separate from the meaning of the words, that enhances the meaning because of
 the intonation.

Oh but we as humans derive meaning from whatever being exposed to
something long enough, like playing solitaire :)

Or Like this http://xkcd.com/915/

Re: [silk] outdated words in Indian English

[Deepak Shenoy]

On Fri, Jul 13, 2012 at 11:02 PM, Nikhil Mehra
nikhil.mehra...@gmail.com wrote:
 Possibly. But the entry of informal contractions in formal situations causes 
 loss of effect, i feel.


Strangely I've gotten involved in corp life recently (consulting
contract) and it seems like formal conversations are even more shady,
with terms like PFA and FYI and top posting and truncated sentences,
and I'm speaking of bankers here, a species that takes a long time to
evolve...

Re: [silk] On Facebook? So Are Your Future In-laws

[Deepak Shenoy]

On Fri, Jun 15, 2012 at 7:41 PM, Thaths tha...@gmail.com wrote:
 Fascinating how countries add a twist, in India's case one would say a
 sprinkling of masala, to technology that they adapt.

I had a weird encounter with this. When we moved to BLR, the owner of
a house we were looking to rent, wanted only vegetarian tenants. By
the time we found out I'd nearly printed the agreement. Since the
owner lived in HK/Singapore, the broker said we could just pretend we
were veg.

Except the owner's son who I'd spoken to had already begun following
me on twitter and just that morning I was raving about a beef burger.
Even if I wanted to pretend (who does?) I couldn't. Social media
eventually helps enforce social norms :)

Re: [silk] Michael Lewis on luck

[Deepak Shenoy]

On Thu, Jun 7, 2012 at 10:27 PM, Udhay Shankar N ud...@pobox.com wrote:
 This is one of my hotbuttons. I know several people who have made
 significant amounts of money, and have convinced themselves it was
 because they are smart. (They *are* smart, it's just that correlation
 doesn't equal causation)


It's also the theory that Taleb spews, no? As insufferable as he is,
that's the one place I agree entirely; much about success of any kind
depends on luck. You just have to be in a situation that maximizes
your chances of being lucky. In a way it rains cats, dogs and
occasionally gold coins, so the way to get gold is to be out there
avoiding the cats and dogs and looking for the gold, not sitting in a
cave wondering why people should want to get thulped by a falling
animal.

Re: [silk] Michael Lewis on luck

[Deepak Shenoy]

 I think the main point of Taleb about limiting impact of worst-case.
 He never said anything about not playing at all, to my best knowledge.

No, that was a segue :) My bad.

His point (not his main one) was that success was largely based on
luck. My point is that it means you try to maximise your
opportunities, Taleb actually says there are two ways - one is to get
into a skill which has a near-definite chance of  success, like being
a super speciality doctor, and the other is to ensure you don't die
from bad luck and that you profit most from the good variety.

 His first point is that worst-case is much more frequent than your models say.

True, the fat tail concept. Or that the turkey gets better and
better food until Thanksgiving etc.

Re: [silk] silklist Digest, Vol 31, Issue 8

[Deepak Shenoy]

 Success also depends upon what game you are playing.

 For instance, take card games: many people might define success as winning
 the most hands, whereas a poker player would prefer maximizing his stake
 over winning hands, and from what I've observed of bridge players, they seem
 to define success as being able to know how the remainder of the hand will
 play out having only seen a minimum of cards...

Games in general are different because tail risk may not exist at all
(like in tic-tac-toe) for a certain strategy. The range of all
outcomes if well known, can reduce the chances that you ever lose once
you get to a certain point. There is no fat tail in tic-tac-toe
unless you're playing with my son who is very likely to say, Okay now
I'm O in the second last move.

Sometimes there is way too much uncertainty, like in cricket or
basketball or baseball, where the luck factor can make a substantial
difference.

But interesting you bring up bridge. Duplicate bridge is a game of
skill where luck plays only a tiny role. Rubber bridge is much more a
game of chance. A winner in duplicate may not be a pair that won most
games, or even any game. They just have to beat other pairs who played
the same hands.

In bridge too, there's a lot of tail risk on a per-game level (like
massive artificial bidding could screw up a simple game to a tough
slam because they littered the early bids with cues), especially early
on. I've seen the lead make or break a game - and you hope and hope
and hope that this fellow doesn't lead a spade, and 9 out of 10 people
wouldn't, but he turns out to be that 10th guy and boom, you're down
1.

Poker though is a game of luck but the skilled people play it so they
don't lose all their money on one table (i.e. buy in only a small
percentage of your outlay, and then work the odds on each hand)
Blackjack can be won if you count cards, and hike your bets when the
odds are in your favour...



Bridge is also a huge game of probabilities - from an unknown hand,
you can narrow down the range of distributions from the bidding, then
from the lead, the dummy drop and so on. The skillful player could
tell you to a large degree about what his partner has during the
bidding,

Re: [silk] Help!--linguistic brain-tapping needed, please

[Deepak Shenoy]

 (I have posted this before on Silk)
 http://www.youtube.com/watch?feature=player_detailpagev=5Ud2rsMT5ng#t=202s


 The song is an old classic and can never sound so good in the new Hindi.

In that vein, Gulaal has a very powerful song, Aarambh hai Prachand,
which is very correct Hindi sounding but has many urdu words hai.
Words like aarambh, prachand, dhanush, bhaav, daya, jis
kavi ki kalpana mein etc are present but you have the urdu forms like
zindagi, prem, jaan, jung etc. The song comes across as being
very BJP hindi but it's not really - the song though builds a great
picture.

http://www.youtube.com/watch?v=_Jzl5uICMXY

Re: [silk] On Saverin (was: Re: India's dangerous capitalism)

[Deepak Shenoy]

 I have friends who have renounced USian citizenship because they could not
 abide what they perceived as fascism at home and/or imperialism (or worse)
 abroad. I also have a niece who recently renounced her USian citizenship --
 she was born in the USA to American parents, but has lived since the age of
 1 month in Switzerland, and has always considered herself more Swiss than
 American, and so she recently became a Swiss citizen. Thus it is possible
 and probably quite common for people to renounce US citizenship for reasons
 other than avoiding taxes. I don't find any of those reasons plausible in
 the case of Mr. Saverin.

I don't either - and he became a US citizen in 1998. I don't honestly
get the outrage - people give up Indian citizenship all the time once
they become resident elsewhere; I know people who gave up their green
card for tax purposes (Gurcharan Das is a famous Indian person for
having done so).  People move states for tax purposes too (In one
instance I've seen, people used to live across the border in Missouri
and work in Kansas city to save some taxes) It's just another
transaction, another day - if he moved back to Brazil one might have
even called him a patriot that returned. Motives are fungible
nowadays.

Re: [silk] On Saverin (was: Re: India's dangerous capitalism)

[Deepak Shenoy]

 if he moved back to Brazil one might have
 even called him a patriot that returned.

 Maybe. Maybe he'll re-apply for Brazillian citizenship, and then we'll find 
 out. I could become quite the soap opera!

He does have a brazilian passport - you can't be a citizen of
no-country, so when you renounce one you have to have another
citizenship. See, he didn't choose to take up a Sing passport, so the
tax purpose may not altoghether be false.


 Well, I think you've put your finger on where some of the anti-Saverin 
 outrage is coming from. I expect that the logic goes something like this: 
 Mr. Saverin made his fortune in America, and that was only possible because 
 of the American system -- its laws, its infrastructure, its culture. But 
 those laws, infrastructure and culture did not come cheap. They were 
 purchased by the proverbial blood of patriots, from Lexington and Concord to 
 Gettysburg and Omaha Beach. To regard the privilege of US citizenship as a 
 merely mercantile arrangement is to disdain something precious that he got 
 for free; it's an insult to every American who has served his or her 
 country.  I confess that I see some validity to that point of view, although 
 I'm not outraged myself. But I'm a silly little naif who suffered dysentery, 
 worms, homesickness and a knife assault while serving my country as a Peace 
 Corps Volunteer, with that old John F. Kennedy soundbite ringing in my ears 
 ask not what your country can do for you, ask etc.  Yes, I know how 
 sentimental that makes me sound, especially on this list.

 Mr. Saverin is evidently somebody who asks what his country can do for him, 
 not the other way around; citizenship is fungible. Well, hooray for him. I 
 know some people who feel the same way about marriage; hooray for them too. 
 Myself, I'm a sentimentalist about my marriage, but I don't think I'm 
 superior to anybody on account of it. I don't pass judgement on people who 
 marry, for example, for money. But neither do I particularly care if they get 
 taken to the cleaners when the divorce happens.


In this case, you only care that he isn't getting taken to the
cleaners? :) Just yanking your chain, sorry

The patriotism argument works in every nation - the IITian that used
my father's taxes to go contribute his life's taxes abroad (and I am
no less, I studied in a govt funded college, but I have the tiny
excuse that I stayed willingly). Or those that made their fortunes in
India and became NRIs. And so on. There's the ungrateful wretch in
each of us - to our parents, to our society, to our country, and in
some sad cases, to their spouses and children. I don't ever intend to
ditch my citizenship - it's a weird loyalty I have to a nation that
despite its failings, its ridiculous laws, its insensitivity...holds
me dear. I adore my wife and kids. But that doesn't mean I offer
others no choices when their situation is different.

Having said that I would love to have 2.8 billion dollars and no
chances of a US visa :)

Re: [silk] On Saverin (was: Re: India's dangerous capitalism)

[Deepak Shenoy]

On Tue, May 22, 2012 at 9:47 AM, John Sundman j...@wetmachine.com wrote:
 Re: Supposed:

 Hmm. . .

 Amusing and intriguing.

 Is there anybody besides Severin and his lawyer who asserts with a straight
 face that his renunciation of USian citizenship wasn't a tax dodge?

Is there a problem with his doing so as a tax dodge? He lives in
Singapore. From people who know him, his primary grouse was not the
facebook thingy, but the fact that the IRS wanted to closely follow
and tax even his Asian investments (the US taxes citizens even on
their income earned if they are not resident in the US). So if he
bought into an Asian company, he'd have to pay US taxes on the gains
he makes, despite his living in Asia and investing here. Singapore
charges no capital gains taxes. IMHO if it was a tax dodge, it wasn't
about Facebook. And dodging taxes - legally - is fine according to the
whole world and Vodafone, isn't it?

On Facebook: If the US wants, it can charge Saverin capital gains when
he exits. Except the US does not charge foreign (non US Citizen)
residents any capital gains taxes. Therefore Saverin, as a non-US
national non-resident will get charged no US taxes for this facebook
gains, and I wouldn't either if I bought and sold FB shares.

But he does get taxed on the day of renouncement of citizenship; The
US assumes he sold all his assets on the day of renouncement and the
market value on the renouncement day is assumed to be the price
obtained (even if Saverin did not actually sell on that day) That
means he paid capital gains upto that price. Now that price was lower
than the Facebook price on its IPO, so some people are outraged that
Saverin didn't wait till the IPO to pay the HIGHER capital gains tax
he would have paid. Which is ridiculous as an argument, even if you
consider that Facebook shares have now fallen more than 10% from the
IPO price anyhow.

In any case, the US can change cap gains laws to charge any
non-resident non-citizen also, on any gains made in the US markets.
It's strange to do (countries like India charge it, but provide
exceptions like Mauritius) but then the rule would apply to everyone,
not just Saverin. Strange that no one is asking for it. Hey it could
even be retrospective (like India did).

The tax dodge argument: consider that corporations do it all the time,
moving their income into other subsidiaries abroad when it suits them.
Relinquishing citizenship is done often, even by Indians who were
benefited by the low cost IITs that were subsidized from the taxes of
the many, and there can be no shame in it.

Re: [silk] Whose morality is being protected?

[Deepak Shenoy]

On Wed, May 2, 2012 at 11:49 AM, Heather Madrone heat...@madrone.com wrote:
 On 4/30/12 9:05 PM April 30, 2012, Deepak Shenoy wrote:

 An immortal quote by Joy-da - Angels can fly because they take themselves
 lightly.


 G.K. Chesterton from “Orthodoxy,” perhaps?


That probably precedes Joy by a few decades :) Thanks, and yes, that's the one.

Re: [silk] Whose morality is being protected?

[Deepak Shenoy]

On Tue, May 1, 2012 at 9:05 AM, ss cybers...@gmail.com wrote:
 Indians who understand English are way wy beyond the Dirty Picture level
 of sleaze - to the extent that they are Americanized enough to enjoy Brother
 mouse *** sister mouse as a joke. But the powers that be don't seem to
 realise this. It is OK and safe to have idiotic and vulgar American serials
 as humor but an Indian work of art is vulgar

 In fact I think the fundamental problem is the Indian education system but
 that is another story.

We take ourselves too seriously. And now, the law will protect anyone
who takes offence. Until we remove that you can't offend
sensibilities law, our authorities will resort to doing silly things
like this.

An immortal quote by Joy-da - Angels can fly because they take
themselves lightly.

Re: [silk] English expressions that irritate me

[Deepak Shenoy]

How's 'synergy'? The very mention strikes fear into my heart.

Also there was this thing about 'customer delight'. As compared to good old
customer satisfaction. I still cringe.
On Apr 23, 2012 10:09 PM, Venkat Mangudi - Silk s...@venkatmangudi.com
wrote:

 PFA ... um, nothing. :) Oh, and this is for mostly the Indian crowd.
 Please revert back at the earliest.

 --Venkat

 On Mon, Apr 23, 2012 at 10:05 PM, thew...@gmail.com wrote:

 By EOD, please.

 Thanks.

 (Sent from Blackberry)

 Sent on my BlackBerry® from Vodafone
 --
 *From: * John Sundman j...@wetmachine.com
 *Sender: * silklist-bounces+thewall=gmail@lists.hserus.net
 *Date: *Mon, 23 Apr 2012 12:34:01 -0400
 *To: *silklist@lists.hserus.net
 *ReplyTo: * silklist@lists.hserus.net
 *Subject: *Re: [silk] English expressions that irritate me

 Deepa,

 Can we task you with an action item to delineate what you mean by this
 criterion?

 Furthermore, (going forward, arguably)  I think we need to reach out to
 all silklist stakeholders.

 jrs



 On Apr 23, 2012, at 12:30 PM, Deepa Mohan wrote:



 On Mon, Apr 23, 2012 at 9:58 PM, Jon Cox j...@experiments.com wrote:


 This is *arguably* the most chalk-screeching-on-the-board thread.
 VenkatI almost physically shut my ears as I read your excellent
 compilation

Re: [silk] India: global mobility

[Deepak Shenoy]

 Making the process more efficient does not increase the level of
 injustice or inequality in society.

The process isn't more efficient for everybody. It's for a few. And
that's inequality by itself?

 How is turning up at $rich-nation-embassy and standing in line for
 half a day or paying someone to hold your spot from 4AM in the morning
 and getting frisked before getting interrogated by a bored white guy
 any more equal? No smelly non-English speaking poor bastard of an
 Indian will even stand a chance of clearing the embassy gate anyway,
 so where is the equality?

Well, everyone in India is equal. We may not be equal in the eyes of
non-Indians (to other foreign nationals), but we don't treat them as
equal either. (I just heard that a flat owner rejected a tenant
because he was korean. In an expensive flat in Bangalore.)

I've seen smelly non-English speaking fellows get visas, and nonsmelly
English speaking poor bastards get rejected. If the visa process needs
to be more efficient, the Europeans/Americans/Anyone else should weed
out who they don't want, or give a preference to someone with an
education. Why ask India to differentiate? Already America does it
with H1-Bs where a four year college degree is a major plus or
something. Other countries do it in their own evil ways. They have
that prerogative, even if offensive.

\ India might as well drop the hypocrisy and come clean that the
 population is unequal and having wealth makes one the new upper caste
 Brahmin in the capitalistic age.

But we don't want no upper caste brahmin differentiations. I suppose
if we thought that upper caste brahmins were necessary, we would have
class differentiated in 1950. We didn't, and in fact went quite a bit
the other way. Not saying that was good, but we rooted for the
underdog then, why would we that change now?

 The former is a fig leaf, since as I said our society is unequal,
 let's get over it.

This doesn't quite work, does it? I don't like reservation (because
it's class warfare in another way) but the best people come out of the
strangest backgrounds. The best programmers aren't from IITs, the best
businessmen aren't from IIMs, and if there was class separation there,
we'd not have some of the best in town (including Reliance!). Just
because there is temporary inequality doesn't mean you stamp it in
law.

 And the latter is merely an implementation problem;
 there are definitely ways around this. More job opportunities for the
 private sector to own and administer this problem surely - after all
 the private sector solves everything better and faster, yes?

For the most part :) I assume now that you're just playing devil's
advocate, but why the private sector should come into this is a little
beyond me. They can be more efficient if they want to, but if the need
really is that people want the better visa, they'll get it. Bajaj
manufactured more scooters than his licence allowed him to, flouting
the law and openly challenging the government to arrest him for
providing to the people what they needed when they were willing to pay
for it.

Either ways, the problem is of countries not giving visas for the
educated, then the better thing is to appeal to those countries, no?
Since they are so much more developed, it must be easier to create a
campaign to tell those consulates that if Indians have these
qualifications or income, we should get a visa faster? These countries
are so much more reasonable that they will listen and in a few months,
change their visa laws appropriately.

Re: [silk] India: global mobility

[Deepak Shenoy]

On Wed, Apr 18, 2012 at 8:16 PM, Srini RamaKrishnan che...@gmail.com wrote:
 Traveling anywhere today on an Indian passport is guaranteed to be
 exciting - navigating visa appointments, embassy interviews, credit
 worthiness tests and other required hurdles will keep anyone from
 boredom. The reluctance of countries rich and poor, large and small to
 open their doors to Indians is quite understandable. The numbers are
 simply against India; with 1.2 billion people when an Indian is let
 into one's country it's hard to be sure who exactly is being let in.
 Is it someone with a college education and a stable income living in
 the cities, or is it one of the vast majority of the wretchedly poor.

I've heard this is often quid-pro-quo as well. We make life fairly
miserable for foreigners that want to work here, what with
limited-term-visas, requirements of getting police stamps every so
many months, etc. We supposedly have made life tough for visitors as
well.

I wouldn't go with this special passport business. First, it will
create incentives to easily override whatever rules are created for
the purpose, if indeed the passport gives easier entry abroad. (And if
the rules are made really tight, most valid people will not get in,
only those that pay or bribe will). This will eventually result in
foreign countries refusing to grant easier visas to such passports as
well.

Second, it's a class segregation I don't agree with. We are what we
are, collectively, and sadly, some of us will suffer for the deeds of
the other few, but we are just as Indian, and I see no reason we
should give anyone a jew stamp.

 The population of Uttar Pradesh, sadly one of the least literate and
 poorer Indian states is larger than Brazil; making it the fifth most
 populous country in the world if it were an independent nation. Or for
 that matter Bihar would be in the poorest 10% of countries if it were
 an independent nation and there's more such examples to add to what
 will surely be an unflattering list. [0]

Yet, biharis and UP-ites seem to do very well everywhere, and Bihar is
starting to turn economically better.

 For a country which counts people as its largest bankable asset India
 should see a lot of economic merit in enabling the free global
 movement of its talented people.

This I agree with. We should do away with ECNR (which is supposed to
protect us from ourselves) and allow people to defect, leave, return
etc. at will. We shouldn't though make it possible for those branded
talented to be better mobile than others. What applies to one must
apply to all. (Except those with parole violations etc. of course)

Re: [silk] India: global mobility

[Deepak Shenoy]

On Apr 19, 2012 7:05 AM, Ramakrishnan Sundaram r.sunda...@gmail.com
wrote:

 On 18 April 2012 23:23, Deepak Shenoy deepakshe...@gmail.com wrote:

  apply to all. (Except those with parole violations etc. of course)

 Does India even have parole to violate?

Good pt, I don't know if the term is called parole, but I think you can be
out earlier than an assigned jail term, sometimes for short periods (which
manu sharma had abused). But I used the term in general, like those that
are on bail against a criminal charge etc.

I thought the poor and
 unconnected are guilty till proven otherwise, and the rich and
 connected are innocent as you can't prove otherwise.

Having just been through a lengthy court case (civil, as a plaintiff) I can
say that you dont need too much money to escape legal retribution for a
long long time :) I think they'll convict headley befor we convict kasab.

 On a related note, it's very jarring when Indians use American legal
 terms as if they're applicable globally.

I have that problem when people usebillions or millions of rupees, rather
than lakhs and crores. But I've been told its all about your audience. :)

Re: [silk] Sociolinguistic query

[Deepak Shenoy]

 Can people here provide examples of strong curse/swear words in any
 language (i.e, these mean something beyond just punctuation or verbal
 tics) that DO NOT involve female relatives? Extra bonus point if they
 also DO NOT involve sexual acts of varying degrees of improbability.

A common one in Konkani pronounced muh-dya means dead body. Many
of the konkani ones I know are benign - meaning mad fellow, your
head has dried up, burnt fellow etc.

Re: [silk] Fwd: Life and Love in Bangalore

[Deepak Shenoy]

 The exception does not make the rule. Soceity has never been at risk
 of being over run by society shunning monks and thinkers. For most
 people personal choice is a way of acting out their desires away from
 the glare of social censure.

An exception usually attempts to disprove the rule, and in this case
there was just one example given. Gazillions others exist, from the
Socrateses to those that argued against blood-letting, to prove that
ignoring individual choices or thinking can be hugely harmful to
society as a whole. Society has always been at risk by not allowing
personal decisions to flourish.

I also disagree on the last sentence - every choice, whether social or
personal, will invite some censure, personal or social. Either party
doesn't care. The social element is far more dangerous which is why we
loathe collateral damage. Often collateral damage is written away as a
tradeoff, but like a white lie, it is always wrong.

Re: [silk] Fwd: Life and Love in Bangalore

[Deepak Shenoy]

 Wealth is a moving target of course, and leaves one very open to the
 vagaries of economics and there's no generational stability like one
 used to have with reputation and family heritage.

On the other hand, reputation inheritance has had substantially higher
problems with slotting, caste system and all which comes with it. A
system that ignores the merits and choices of the individual, in an
age where communication across geographical boundaries is not an
issue, is bound to collapse, unless bound by totalitarian force. The

 Chasing the personal sphere is risky - it is the way of the world
 today - but it is risky - and worst of all this risk isn't obvious at
 first.

Nor is the risk with a totalitarian or family imposed system, at
first, if you are within that system. It's very different to look at
personal choice from the vantage point that gives you the freedom to
choose, and very different to be in the inside of where a personal
choice was always inferior to the whims, fancies, orders of a
patriarch, a military ruler or a religious leader. The risk of a
system is not apparent to those that it envelops, especially when
basic needs are satisfied. Kind of like having all the toys in the
world inside a room but killer dobermans walking outside. The question
of why can't we go out isn't evident on the inside.

 To balance the personal with the social and familial is a tough thing
 to do in the modern world where choices are increasingly personal
 because the personal has a short-termist appeal to the curious.

I can't agree with this; personal choices make for brilliant long term
thinking. Which to me explains why, in those olden ages, people went
off to the mountains to meditate. If you wanted to think longer term,
you needed to get out of society which always bound you to the short
term.

Re: [silk] Netiquette / Top posting (was: Re: aqvavit)

[Deepak Shenoy]

Apropos to nothing but the subject of this thread, I rarely ever top
post (unless from the mobile) because I used to be a techie and (also)
am used to very long, disconnected conversations within the same email
or post. Which is silly if you think about it but I'm too lazy to
start different threads for each segue. Now I hardly even care what I
receive, top posted, interleaved or top quoted, even SMS lingo is fine
as long as I get it. It's sad, perhaps, but spelling, punctuation and
grammar don't bother me much anymore; my posts on my blog reflect that
as well. Maybe it's the move to non-techie-ness?

Re: [silk] Netiquette / Top posting (was: Re: aqvavit)

[Deepak Shenoy]

 If you include the parts of the message you are replying to, and
 interleave your responses, I find the GMail model works pretty well. I
 hated it when I first encountered it (and hated that I couldn't
 delete messages) but now I find it natural.

But you can, no? I suspect you already know but if I pull down that
little down arrow on the top right hand corner of an individual
message inside a thread I get a delete option for only that message
(not the whole conversation)

Re: [silk] aqvavit

[Deepak Shenoy]

 The data collection process for reported suicides would be fairly stable
 and consistent. A suicide is a subset of all unnatural death (UD) cases.
 These are difficult to manipulate, unlike some other crime statistics, due
 to the requirement to dispose of a dead body after following the legal
 process. All UD cases routinely go for autopsy and suicide as a mode of
 death gets established at the end of the inquest.

I'd read a report (sadly, can't find it) that much of the suicide or
household accident cases went unreported earlier and suicides were
reported as illnesses to avoid autopsy which is slowly being fixed. I
remember in 2001 when someone I know tried to slit his wrist (largely
for show I think, he used a car key and managed only get seriously
scratched) - when we went to the hospital they told us not to admit
because the cops had become stringent and required registration for
every attempted suicide case etc.

But the quantum some psychiatrists think it really is 95 per lakh
rather than the reported 9 to 11 -
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2913651/) which, if true,
means that my argument that data collection is better has yielded only
marginally better data :)

Either ways - I concede that the suicide rate has increased - we are
at 11.4 officially versus, 5.8 per lakh in 1981. More than doubled in
thirty years!

Re: [silk] aqvavit

[Deepak Shenoy]

 GDP is useful to point out the scale of money in the economy, and the
 tiny amount that NREGA/S is adding to the pool.

It adds much more than that as the money rotates through the system.
That's not the point, the reason it's a big cost is that it's a big
part of govt spend, that's all.

 # Mukesh Ambani with a known personal wealth of $22.6 Billion could
 run the NREGA for 3-4 years on savings
 - i.e. he has 2-3 times more money than 42 million Indian households
 put together earn in a year.

I'm not sure how this matters, but more power to him, and more power
to make people earn more money and pay taxes. We need more
billionaires not less.

 Even if one believes that merely adding $5 Billion to the rural
 economy can cause a 13% jump in food inflation, which I don't then it
 is a scathing criticism of the income inequalities in India - the
 money is going directly towards food - these are people who are
 otherwise starving.

I think we'll find it's the other way - people continue to starve, teh
marginal guy gets some extra money which he ends up paying extra for
food so he hardly benefits. Either ways it's not the $8 billion (not
$5B) that causes food inflation, it's how it's done.

 These 42 million households are not at all like the gentlemen of
 Aurangabad (and it was gentlemen, not a single woman was present), who
 ordered 148 Mercedes Benz automobiles together at a reduced 7%
 (instead of the usual 14% for tractors) interest rate courtesy SBI.

Not to say this is a good thing of course, but I'm not sure why this
is considered less bad than NREGA? I'd argue against both. I haev no
problem with someone ordering 148 benz cars, but the lower rate of
interest is necessarily bad if there was corruption involved.

 I don't see any mention in the constitution of a duty to create more
 Billionaires, or luxury car owners.

There is no such duty - like there is no duty in the constitution to
provide air for you to breathe. But it happens.

 If there aren't enough laborers in the villages during harvest season
 that is truly good, NREGA is pushing up the local wages, and helping
 the poor to fight established brokers and middle men who keep wages
 low and exploitative.

In the context of inflation it's bad. It may be a better in the short
term, but we create a bad bad long term hazard. You increase wages
through proper competition, like Ford who paid his labourers more and
got his productivity. The short term impact of NREGA is higher local
wages, but teh important part is: higher local wages because the
competition is, largely, earning money for no work. The very rich do
that, now the very poor do it, and us middle class fellows get shafted
for it.

 How many of the Aurangabad brigade will pay back their subsidized
 loans do you think? These are politically connected crooks who will
 likely walk out of the loan the same way they got the half price loans
 in the first place.

 Our banking system needs to be fixed. The problem isn't NREGA.

NREGA needs quite as much to go as our banking system needs fixing.
Both have become necessary evils politically now. Though if you asked
me I would privatize all public sector banks and cut off government
lifelines first.

 I don't have a problem with improving NREGA to make it more
 accountable, manageable and all that. It is important to give it a
 chance to succeed.

The two things I will give NREGA full credit for is that it is a cash
transfer, and that the level of accountability and transparency in a
project this large is fabulous. We need more enforcement and
cross-checks, too. But I don't agree with the premise of paying people
to do next to nothing, or of employment as a direct goal (employment
needs to be the result of something, not the something)

 Some of the aspects I've mentioned have generalizations because that's
 what it is - the long term effect of NREGA can only be known in the
 long term, and no amount of data will satisfy an observer.

 Again, I point to Article 47 - India has a duty to do this.

Disagree that Article 47 says NREGA is the duty; of course NREGA is
constitutionally ok, but the duty lies in creating sustainable long
term solutions, and NREGA is not either. I would much rather see the
land reform, the power and road connectivity, the ability for those
that NREGA supposedly benefits to actually become entrepreneurs, and
create employment as a side effect of their growth rather than
anything else.

Re: [silk] aqvavit

[Deepak Shenoy]

 The world is going through a food crisis, heck, the Arab spring is
 being attributed to it, and you blame the NREGA for the high prices?
 Your single cause inflation theory isn't the truth - it is far more
 complicated than that.

This isn't really going well as an argument, because this single
cause thing is new to me. There are many causes to inflation, such as
the rupee depreciating (makes our imports costlier), hoarding, bad
policy, oil prices and local impact. In theend it comes down to supply
and demand, and what NREGA does is to both reduce supply and increase
demand. The increased demand is good. The reduced supply is not. There
are steps necessary to work through the supply issues, and increasing
MSP by 10-15% is a ridiculous way to supplement NREGA. Much of our
food inflation is local.

 Billionaires should happen like air? That is... interesting. Again,
 sorry, not going to attempt to bridge philosophical differences - too
 deep, too wide.

For once, I agree :)

 NREGA needs quite as much to go as our banking system needs fixing.
 Both have become necessary evils politically now. Though if you asked
 me I would privatize all public sector banks and cut off government
 lifelines first.

 Oh look, America did that and see how responsibly the banks acted.

 Indian private banks, like ICICI send goons home to break your knees
 when you miss credit card payments - you want to aspire to that ideal?

America didn't do that. It did the opposite - it quasi-nationalized
banks. Government lifelines ensured the banks didn't die. The reasons
banks got into trouble was that they were deregulated - a concept very
different from de-owned. India's regulators have done a much better
job, even though they have been squeamish in certain areas. (For
example: the onerous needs in KYC are hugely responsible for why the
poor remain unbanked)

Not just is sending goons home illegal, RBI has curbed the practice
and courts have actually fined banks that have even tried without due
process. (ICICI was fined Rs. 55 lakh for one instance by a court
http://articles.timesofindia.indiatimes.com/2007-11-06/india/27953166_1_car-loan-recovery-agents-icici-bank
) In fact, the response to goons or even heavy moral pressure is
the kind of act AP created against Microfinance, which should teach
large organizations that they either work through the legal process
when recovering loans, or they'll get shafted. Moneylenders - who are
the source of finance minus the banks - still send home goons and
break your knees, for what are horrendous rates of interest - do you
want to aspire to THAT ideal instead?

I suppose I would rather trust a private banking system with a strong
regulator than a crappy full of moneylenders who operate outside of
the law, or a public banking system that only benefits the
landed/corrupt. We could go link after link about how banks have been
good or bad, but it's plain to me how a proper banking system helps
everyone especially the lowest layer (formal credit is what rural
India lacks severely; that's also why RBI is screaming financial
inclusion desperately)

Anyhow, huge philosophical differences remain, and my end-point is
that handouts don't help the poor in the long term, the solution lies
in property rights, infrastructure that might need machines (power,
road, water), freeing of the agri markets and so on. The oil subsidy,
fertilizer subsidy and NREGA just distort the picture and keep the
really poor still poor.

Re: [silk] aqvavit

[Deepak Shenoy]

 I found this really weird in NREGA ... the requirement that no
 mechanized equipment can be used. What was the motivation behind it ?



 Limiting NREGA work to back-breaking physical labour at less than minimum
 wage available for a maximum of 100 days a year to only one member of each
 household ensures that only the most desperately poor sign up for it.

That is perhaps the intention - though the stated point is to generate
as much rural employment as possible. Therefore all delays are okay.
So if you start building a canal you over-hire, and then each guy can
quite literally use a spoon to scoop out dirt if they want. Mostly
(anecdotal from farmer-types) you find people chatting away near what
seems to be a canal, because that's how the incentives are - the work
isn't really back breaking other than that you only need to do what
you want to do - the first few years I think people have worked hard,
until they're realized that they don't need to :)

One per household is a good point, though in real life, sadly, it has
come to mean that each man is his own household, and sometimes each
woman as well, and people get paid. To jugaad the system, some get
paid less than the ordained amount. The documents - job cards, muster
rolls, payslips enjoy themselves in terms of providing addresses or
identifying underlying households.

I don't know about the percentages, but I think the number of
desperately poor is probably far lesser than the number of people paid
out by NREGA...just saying.

Re: [silk] aqvavit

[Deepak Shenoy]

 
 a) NREGS is not helping and is leading to inflation: FALSE
 

 a) NREGS is at the outer end a spend of $2.7 billion annually
 (assuming everyone was paid $2 per day) - on India's annual GDP of
 $1.8 trillion is  0.15% and this causes inflation how?

Firstly, inflation isn't dependent on GDP, so let's leave that aside.
NREGA is 40,000 cr. in 2010-11(see:
http://164.100.12.7/Netnrega/mpr_ht/nregampr_dmu.aspx?flag=3page1=Smonth=Latestfin_year=2010-2011)
which is 0.5% of GDP. It is 3-4% of government spend every year, and
about 10% of our fiscal deficit.

The way it causes local inflation is that it raises wages without
appropriate productivity benefits, so they pay more for the stuff
available locally (like food or other goods) and that raises prices.
What would be better is if wages rose and more food was available to
work with the increased buying power, but the productivity benefits
even in the long term are very low so this hasn't happened.  At a
macro level, what NREGA does is deprives farms of labour during
harvest season so produce and sowing is lesser - even the agri
ministry has complained.

http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=ArchiveSource=PageSkin=ETNEWBaseHref=ETBG/2011/07/19PageLabel=1EntityId=Ar00100ViewMode=HTML

It's like Air India getting a taxpayer bailout and then undercutting
prices so now everyone has to fight against a mammoth, inefficient
taxpayer-backed entity. It saves one airline at the cost of the
industry.

Either ways the data shows us this - food inflation (at the primary
articles level) has gone up 13% per year, annualized, since jan 2008.
(Data taken from http://eaindustry.nic.in and put into excel and
calculated) Last year's economic survey

another post on how the metrics work by Atanu Dey, in 2008:
http://www.deeshaa.org/2008/01/11/does-the-nregs-cause-inflation/

NOte: The RBI has, in the last six months or so, printed more than
50,000 cr. to buy government bonds, largely because no one else wanted
them, and that was because the goverment was issuing too many bonds,
to bridge a widening fiscal deficit, of which NREGA is 10%. We
effectively offset our populist measures earlier through selling of
stock in government companies and 3G auctions and better tax
compliance, but today those avenues are gone.

 NREGA is not a failure, in fact it's one of the best things to happen
 to India of late:
 Once dismissed as a reckless fiscal sop, the scheme is now lauded as
 a timely fiscal stimulus. - Economist, Nov 2009

AH yes, like farm loan waivers, oil subsidy, fertilizer subsidy, no
tax on agri income, misaligned incentives for housing etc. Or like the
RBI printing money like there's no tomorrow.

You will always find takers for short term stimulus, the US fed
stimuluses, the Indian cut on excise duty and service tax rate, etc.
Like loan waivers. The problem with the loan waivers at that scale
(75,000 cr?) then was that now, when we havehad a decent monsoon,
there are strategic defaults by those who can pay but don't want to
because darnit there will be a waiver.

http://www.livemint.com/2012/02/16161835/Views--The-farm-loan-waiver-c.html?h=A1

 The Economist is as conservative an establishment source as you can
 get, and even from the money supply point of view the economists then
 agreed that NREGS is a good thing. Now it's another thing that
 Economists of one season cannot agree with the economists of the next.

You can get economists to agree or disagree about anything :)

 b) Farmer suicides are not important, Sainath hypes it up, other
 suicides are more important: FALSE
 

 If bankers and stock brokers were jumping out of their tall office
 buildings in Mumbai, I wonder if you will still make the case that as
 a fraction of annual national suicides they are statistically
 insignificant and therefore don't need to be paid attention to.

I wonder if it'll make a difference if I say I will. I have, in
fact, been very critical of both banking and broking practices,
especially the massive frauds in the banking system. Statistically
insignificant are all these compared to, say, train accidents in
India.

 I can quote sources aplenty to attest to the fact that it isn't merely
 Sainath who talks about farm suicides:

Oh, I didn't mean just PSainath, there are of course enough others. It
is not very emotionally nice to say that 16,000 farmers have committed
suicide but also 15,000 employees of various sectors, 25,000
housewives, 40,000 other self-employed people, and 20,000 others
have as well. http://ncrb.nic.in/ADSI2010/table-2.6.pdf

Or that 134,000 people have died in road accidents, 24,000 in railway
accidents, 20,000 of causes not known.

While it's easy to get outraged about farmer suicides, it seems to me
that the suicide 

Re: [silk] aqvavit

[Deepak Shenoy]

 These days you have QE1  2 and rumors of an impending QE3. China may
 have a trillion dollars worth of debt, but the US would rather
 manipulate its currency to make it worthless rather than pay the debt.
 Does the World Bank intend to step in to play referee when the US
 performs currency manipulation?

Technically everyone's manipulating currency. China's done it for
years, India has been doing it until Subbarao decided in 2010 that
they won't intervene, a strategy that lasted exactly one year: Last
December saw the biggest RBI intervention to strengthen the rupee
since the Lehman disaster. (and the second highest ever)

Europe is doing things far worse than the US now, accepting even
toilet paper as collateral to bail out the peripheral economies. This
is not to defend the WB. WB in fact drove some of the attempts to
manipulate by suggesting, in the asian crisis of the late 90s, that
asian economies should please hoard dollars and euros as forex
reserves which will help them tide over moves later. What that did
was just make the eurozone and America borrow a truckload more at
cheap prices and eventually, we're here.

 That said, to Manmohan's credit, his leadership has seen the
 introduction of NREGA (National Rural Employment Guarantee Act) and
 the RTI (Right to Information)  Act, both of which are hallmark steps
 in advancing the social net and democracy.

RTI is useful, but NREGA? All we're doing is helping people do
nothing. You can't use a single piece of machinery in an NREGA
project, no? How is that useful in any way? Btw, I'm also for removing
tax concessions on housing, exports and fertilizer/oil subsidies. I
think NREGA, like those, are evils and in the context of thinking
beyond five years at a time, retrograde.

 Real wages are falling in India like elsewhere in the world that has
 swallowed the pill of economic progress. That the idli is being
 replaced by the McAlooTikki if of little consolation.

Real wages aren't falling in India at all, no matter how you look? Our
per capita income is up, our wages in general are up and afaik, more
than inflation.  Do you have a source I can look at?

[silk] Introduction

[Deepak Shenoy]

Hi Folks,

A quick mail to say hello and the Myself Deepak Shenoy bit. I'm an
ex-techie who has migrated into thinking about stocks and futures and
options and RBI auction devolvement. I have two young kids, 5 year old
Varun and 5 month old Zubin, and we live in Gurgaon. Moving back to
Bangalore in a couple months.

I write at http://capitalmind.in about money and markets, and I tweet
at @deepakshenoy.

Have heard a lot of good things about Silk and I hope I can contribute!

Cheers,
Deepak