July 2010

Octopus Outshines Investment Bank Experts….

Opaul_the_octopusctopus Paul , has been making headlines world over in this years FIFA world cup. It’s predictions on winner of football (soccer) matches is hitting Bull’s eye. Specially after the German defeat in Semis to Spain, the popularity of Octopus Paul has soared to new heights. It is a superstar. Although Germans are now demanding death threats. PETA is demanding the octopus be let free.

Well, almost anyone who is someone (except human ‘Pauls’) has an opinion on Paul …….

At least my children now know a little more about the octopus species. OK So much for that……

Now, I knew the following would come comparing the Octopus to Investment/Bank experts …And here we go at a cnbc story…  UBS, for example, gave Spain just a 4 percent chance of winning the trophy with their past performance model. The Netherlands, who meet Spain in the final Sunday, had just an 8 percent chance, the bank said. And our dear expert – Paul has nearly been flawless – o to say – ….. More at the following cnbc report

Somehow , Brought to my mind the famous orangutan coin flipping competition.

In 1984 Columbia Business School hosted a celebration of the fiftieth anniversary of Graham and Dodd’s book Security Analysis. The two principal speakers were Rochester’s Michael Jensen, an academic who had come out strongly in favour of the Efficient Market Hypothesis and Warren Buffett. Jensen stated that it was hard to tell if any of the followers of Graham and Dodd were really superior investors. He argued:

If I survey a field of untalented analysts all of whom are doing nothing but Flipping coins, I expect to see some who have tossed two heads in a row and even some who have tossed ten heads in a row.

This was a perfect entry for Buffett who envisaged a national coin-tossing contest. Each day, everyone in the United Sates flipped a coin with only those who continually flipped heads staying in the contest. After twenty days only around 215 flippers would remain. Buffett continued (Buffett, 1984):

But then some business school professor will probably be rude enough to bring up the fact that if 225 million orangutans had engaged in a similar exercise, the results would be much the same—215 egotistical orangutans with 20 straight winning flips.

Buffett then argued that there were important differences. What if, for example, all the orangutans came from the same zoo? When you replace head-flippers with “superinvestors”, he argued that this is precisely what happened. Buffett declared that there was an unusually high concentration of successful coin flippers, that is, “superinvestors”, in the investment world that “came from a very small intellectual village that could be called Graham-and-Doddsville”.

So coming back to Octopus Paul and the few super analysts in the investment world who get it right.
The big question to ponder is : Is it chance or is there something more to it….

“Free Lunch” Seminars—Avoiding the Heartburn of a Hard Sell

"Free Lunch" Seminars,Avoiding the Heartburn of a Hard Sell , Retirement Planning, Investment Planning, Tax Planning, Life insurance selling malpractices.

BEWARE —-Investors frequently get invited to free seminars. These seminars make tall promises. To educate  about investing, or profit from home trading strategies or about managing money in retirement. They also provide VIP treatment , sometimes provide an expensive meal at no cost.

Please remember that , just because someone buys you breakfast, lunch or dinner does not mean you that you have to buy into whatever these guys they are saying. And definitely you need not buy into all what they are selling. Believe me , you will avoid some serious heartburns……… Use your judgment to arrive at a decision later point in time.

The same holds true when specially you go to buy a car. Most people spend a good time looking at the car and take a test drive. Now just because the salesman spent his 30mins — does not mean that you need to buy the car.

The same holds for when you are being sold — Life Insurance, General Insurance, Boutique stores, Electronics etc.

Be careful – If you do not wish to purchase and are being forced into a deal , Use your judgement and Learn to say No – firmly. We live in an age where it is still a buyer’s market – do not forget this.

Indian Rupee to get a New Symbol

rupee-symbol

The Indian Rupee is all set to get a New Symbol. The above designs have been shortlisted. Great to know that we are going to get our Currency Symbol. Just like Dollar has $, Pound has £, Euro has € etc.

All above symbols represent R of Devnagri (Hindi) Language means  ” र ” (Ra)… Option 1 is so childish. How did it make to the final 5 is amazing.

There is no regulation for Currency Symbol selection. It should be compatible as per all views like Language, International presentation and uniformity.

My view is that instead of promoting the letter “R” for Rupee , we could have tried to promote / represent the country as a concept. (Eg: the letter “I” for India , or “R” for Republic of India etc.)  By looking at Dollar has $ — like “S” for States, Pound has £ — like “L” for London , Euro has € — ‘E’ for European Countries….

And lastly none of the above symbols appeal to me…..