Comcast + NBC Universal merger

Comcast needs to overcome the imminent threats from IPTV based services and services like Hulu, Netflix and iVillage, which deliver content over Internet. With more and more TVs being internet capable the threat of these services eating into the cable business is bigger than before. Comcast also needs to deliver the content to all consumer devices not just to TV.

Will Comcast be able to spread and in turn increase it's revenue stream or will it end up being a miserable merger like AOL and Time Warner? A somewhat optimistic article discusses the merger.

Longer lifespans

Interesting article talks about the possibility of longer lifespans for the future generations and the potential implications. Interesting quote: "20th century was an era of redistribution of income, whereas 21st century would be an era of redistribution of work".

Online Retailer - Amazon

Amazon.com is being mentioned along with the retail behemoth Walmart in the same sentence. Very impressive!

Amazon.com, in the recent past, is making the headlines with all kinds of initiatives ranging from engaging in price wars to Amazon Web Services to Kindle. Its efforts seem to be paying off quite well. The company's free cash flow increased by 98% over the past year. The online retail sales are growing despite the recession.

Amazon.com was the first to make it much easier and comfortable for shoppers to purchase merchandise online. It has decent recommendation engine which sometimes entice shoppers to purchase additional items. It's expertise in delivering the the merchandise to the customers directly is enviable. It doesn't necessarily carry the whole inventory but optimally leverages that of it's partners like Target, Toys R US. Customer service was a big advantage for the brick and mortar stores, but Amazon is stepping up their service by offering free return shipping at times.

The brick and mortar stores are trying to enhance their online stores, but Google seems to be closing in on Amazon's lead. Google recently launched the Commerce Search and made it obvious that it wants to be the ecommerce driver.

Meanwhile, Black Friday is next week. Bring on the deals, yeah!

Haas EWMBA

After mulling over the MBA decision, I am now applying to the UC Berkeley (Haas) part-time; 3-yr Evening and Weekend MBA program. I have decided to stay put in the US, so it's better to join a reputed and preferably a local school. The Haas program is clearly the best choice in the San Francisco area.

The Haas EWMBA program is 3 yr course and costs around 100k. One of my undergrad classmates is currently enrolled in the Haas EWMBA and has extremely good things to say about it. In his opinion, it's better to study the entire program at a slower pace. It gives the student enough time to absorb the material.

From my point of view, I will be able to commit time sufficient only for slow paced MBA program for the next 2-3 years due to work and family commitments. No doubt, an MBA will boost my career but there is no pressing reason for me to get an MBA in the next year or two. Moreover, I want to enjoy the MBA experience. If I over-commit my time, I may find the experience painful.

There are three other programs mentioning:

1. Wharton west executive MBA

2. Berkeley-Columbia executive MBA

3. UCLA executive MBA

All the three executive programs mentioned above are very good, but I would need to spend many nights away from the family even if for a short duration at a time. Moreover, the first two programs are extremely expensive. Wharton runs at around USD 165K, whereas Berkeley-Columbia costs 145K. The UCLA executive program is comparable to the Haas program and costs around 105k - almost the same as Haas EWMBA.

Haas EWMBA, here I come!

Back after a short break!

I had a good reason not to be active on this blog - my wife and I had a new addition to our family. Our second bundle of joy. It's fun with kids around and yes I make weird faces :-)

Maytas Hill County - Membership drive

I am very thankful to the associations EC for their diligent efforts of educating political leaders of our sorry situation. I would not have been able to do anything on my own from US. I became a member of the owner’s association few weeks back. The membership drive is picking up steam. By becoming a member the owners show their support and also get to express opinions. The association will have more leverage if it represents majority of the owners. This is the least anyone can do. It’s a very small amount when compared to our original investment. There may be concerns due to which some people are reluctant in becoming a member. I'll try to argue why everyone should still become a member. Concern 1: Thinking of canceling the purchase If I understand the sale agreement, there is a clause somewhere which says that you’ll get your money back after six months and that too only if your unit is resold. Otherwise your money is stuck. Reality check - Maytas don’t have funds, how do you expect them to pay? Therefore, in order to get your money back, you still want this project to fructify. Actually, owners may be in a better position to sell their own units than Maytas. Why would Maytas sell a unit up for resale when there have unsold inventory? In any case, would anyone buy if there’s no construction progress? Would you buy in such a situation? Concern 2: Unit is complete (or almost) Your villa or bungalow may be close to completion. However, each unit will reach its deserved value only if the whole township is built as promised. A strong reason, besides Satyam nexus, for purchasing a unit for most owners was the township concept. Wasn't it? Concern 3. I can do a better job than the association can That’s great. You have an excellent clout. Again, your interest aligns very well with those of the other owners. Everyone wants the township to be complete to get real value out of their units. It’s in our own interest to share our connections and reach our ultimate goal. Even after becoming a member, you may still continue with your own efforts. Concern 4: I want to wait before becoming a member Time is of utmost essence and we need to act now. This is not a movie show or a gambling table where you can just wait before making a bet. You are not legally bound in anyway after becoming a member. Concern 4: This is a lost cause No, this is not a lost cause. It may be a long haul but we will SUCCEED. We will get our units. We need to be persistent. Now is the time to show your support.

Maytas Hill County - Media coverage of the owner's protest

There was a decent media coverage for the owner's protest on June 7th. Here are a few links:

Hindu

Business Standard

Economic Times

Deccan Chronicle

Sakshi

Mail Today

YouTube

Efforts of Maytas Hill County Owner's association

The owner's association made some great efforts to garner media attention. On June 7th, hundreds of owners attended a meeting organized by the Owners Association. Invitations were sent out to quite a few journalists, who later published articles in major Indian news papers.

Gathering attention is just one step. The next major milestone would be to gather political support from local leaders. The legal option is not ruled out yet - but legal battle drags on for years.

Maytas collected most of the money from customers and has stopped construction for the past 6 months. There is no progress whatsoever on Maytas hill county project from the management. A weekly newsletter is sent out to all the owners with no 'real' updates.

As a team, the owners are trying to make the responsible parties aware of the current situation. No one know who can save the owners from such a situation.

Maytas Hill county - future in limbo

I bought an apartment in the Maytas Hill County development in Hyderabad. The features of the project included a self-contained gated community comprised of professionals, a whole new 'walk to work' lifestyle and an IT related SEZ, schools, hospitals, clubhouse, community centre, etc. I invested in this development due to Satyam name and I ended investing my lifetime savings.

The MHC management diverted most of the funds into other real-estate projects. They claim that they don’t have any money. There has been no worthwhile progress since the Satyam scam broke in January 2009. The promoters have virtually closed down operations, sacked most of their employees, disposed of assets and are lying low. FYI, the project was supposed to be completed in Sep 2008.

Moreover, instead of showing some remorse and earnestly restarting construction, the Maytas management is playing hard to get and keep giving vague and evasive responses to the queries raised by home owners. This was supposed to be a one-of-a-kind of project. Now, I guess it is!

I can’t explain how painful it is to even imagine the prospect of your lifetime savings evaporating in front of your eyes. There are just over thousand other investors just like me. Close to 400 owners have formed an owner’s association and are trying to confront the Maytas management. The association has been doing a tremendous job and I hope the association can successfully apply just enough pressure on the Maytas management to finish the project. I’m still optimistic as I have always been.

Cheers!

Impact of oil prices

Many a times over the last couple of years, I noticed the crude oil prices being given a lot importance when talking about the economy. What is evident is that the increase in oil prices drives the fuel prices up at the gas pump for consumers. Therefore, reducing the money available to spend. But I wondered whether this was the only impact to the economy. It turns out that there are more.

When consumers see such a sudden increase in the gas prices, a supply shock, then they sense an economic calamity coming and tighten their spending further. For an economy such as US, in which consumer spending is a large portion of the GDP, the effects are compounded.

The prices of lot of goods, produced and ready to purchase, depend on the oil directly and/or indirectly. In some cases directly because oil is used in the manufacturing prices. Indirectly, when the goods or produce need to be transported. The result is inflation -- the prices of the produce and the good increases. The increase in prices cause the consumers to cut back on the discretionary spending. The demand for goods goes down, which results in job losses. Thus, an increase in unemployment. This is called stagflation -- an economic situation in which inflation and economic stagnation occur simultaneously and remain unchecked for a period of time.

Do you ask the right questions?

Well, apparently I don't. I recently read an article which emphasizes the importance of asking the right questions. The article suggests that you can increase the workforce productivity by asking the right questions at the right time. 'Right' questions should be open-ended and framed to encourage the audience to ponder. Examples: 

To get a better picture:

"Can you explain more about this situation?"

"How is project coming along?"

Encourage analytical thinking:

"What are the consequences of going this route?"

"Can that be done in a different way?"

"Based on your experience, what do you suggest we do here?"

Challenge:

"What do you think you will lose if you start sharing responsibility for that role?"

By asking your direct reports the right questions, you:

• help the development of your reports
  
• empowered your reports
  
• respect their ideas
  
• build a better rapport
  
• encourage them to ask their direct reports the right questions
  

It's equally important to avoid questions which have negative effect. For example: "Why is your project behind schedule?" or "Who is to blame for this problem?"

There are several success stories where the companies revamped themselves or created new thriving business groups based on the answers. 

These are some valuable insights. Personally, I feel I could benefit from these tips. Only, if I can remember these valuable tips at the 'right' time :-)

The Great Depression

I am taking a Macroeconomics class primarily to understand how the economy works. Here is my understanding of the economic calamity during the Great Depression.

There was a lot of uncertainity during the Great Depression primarily due to:

1. contraction in personal wealth: value of stocks fell more than 90%, causing the personal wealth to fall. Reduction in the personal wealth causes people to cut back or postpone purchases.

2. failure of banking system: Households withdrew their money from the banks, causing banks to increase the their banking reserves. Thus the money available for investment decreased drastically -- because each dollar saved in the banks has multiplier effect on the investment in the economy. Money supply fell by 28%. The lack of investments caused a lot of firms to close down -- fuelling the unemployment further.

Economists attribute the biggest reason for the calamity to decreased aggregate demand for the good and services.  As the demand falls, firms tend to decrease production costs by reducing workforce. Unemployment rose from 3% to 25%, thus resulting in a severe recession also called depression. Many other countries experienced similar declines during this period.

Many economists blame the Fed's failure to act during the Great Depression. The Fed can craft nifty policies which can mitigate the severity and the duration of such recessions. 

There are striking similarities between the current economic conditions and the Great Depression.  The economy is uncertain, personal wealth is decreasing and the unemployment is rising. I am happy that the current policymakers are utilizing multiple economic tools to tackle the current recession. I am still  hopeful that these policies will result in a better economy in the near future.

Play hard or not

is a dilemna I face everytime (or almost) I play table tennis. I have played competitive table tennis over a few years and am quite an advanced player. My game is not as polished and consistent as it used to be, but it is still good. Lot of my friends, colleagues, family claim that they are quite good and want to play a game. Sure, why not! The problem is that I know I can crush them, but by doing so I will also quell their interest in the game. Generally, I adjust my game to make the game more competitive -- by playing with the other hand, or give a handicap, or restraining my game by not smashing. This results in an exciting game fun for both the players. Some players realize that I am just playing with them. 

But, there are a few who don't realize that. I once played easy with a friend of mine, who now claims that he can beat me because he's been practicing. I would like to set the record straight by beating the shit out of him. However, the problem is that'll have to wait because of our different geographic locations.

Because of this experience I face this dilemna everytime I pick up my racquet.

Recession: what can you learn?

Economic times such as the current one bring a lot of pain along. It's no fun to go through such hard times. However, experience makes a person wiser. A first-hand experience, even more so. I am putting together the lessons I learned during these times. I hope these lessons will help me endure future economic recession(s) with less pain.

• Invest, but diversify. You want to invest because you want your money to grow. But diversify to minimize risk. Diversification would spread your gains, but on the other hand it would spread your losses as well. Base your diversification plan on your risk taking situation.
  

1.  Spread the portfolio among multiple investment vehicles, such as stocks, mutual funds, bonds, and cash.
   
2.  Vary your securities by industry, and/or by geography.
   
3.  Even the best companies can crumble in a matter of days. Think Enron, Worldcom, recent Satyam fiasco.
   

• Sell when everyone is buying. Conversly, DON’T BUY when everyone's buying (or when the demand is too high). I understand that it's hard to time the market, but there are certain obvious signs. This is easier said than done. It needs a lot of patience and courage. I made wrong investments exactly at the peak. At that time, I just couldn't wait because I was afraid that I’d miss the boat. 
  
• Markets, be it financial or real estate or services, have a temperament of their own. They don't care or follow the path most analysts predict. The analysts who predict correctly won't be heard in the media, until their predictions have come true.
  
• Prepare for rainy days – keep some funds in easily accessible accounts. Keep funds sufficient for at least 6 months. I just found out that my home equity line of credit was shut down. That account had been my source for emergency funds. Thank god, I still have my job and can build up my reserves. I hate to imagine the what-if scenarios.
  
• Plan for retirement - it's never too early. Keep building your nest egg. Put aside whatever funds you can aside for your retirement; it can only help. It’s hard to put funds aside in these tough economic times, but it's even more important.
  
• Go easy on your retirement funds: Many about-to-retire employees had their entire retirement savings invested in stocks. Their investments lost more than half the value. Now, they have to work a few more years to make up for this loss. Remember, jobs are not easy to find anymore.
  

The returns during the first year post-recession is typically quite high: Historically, it's been more than 30%. I hope you and I will enjoy the fruits and that too very soon. Cheers :-)

Obama - the first 100 days

The popular notion is that a President's effectiveness can be assessed based on the first 100 days of taking office. So how did Obama do?

Well, I think he's been pretty darn good. His approval ratings are pretty high - even more people like his personality. Not everyone agrees with his policies but, IMO, he's done a great job so far. 

He's avoided big losses, while securing some big wins.  His presendential campaign was built around the word "change" - he has definitely brought changes after taking office. I am one of those optimistic ones who think these changes will bear worthy fruits in the long-term. At the time of this writing, there are a few indications which point towards economic recovery - a slow one though. Only time will tell the exact effects of these change, but for now I would like to congratulate him for sticking to his campaign promise - "change".

Timing Strategic Moves

The McKinsey article about strategy and it's timing is worth a mention. The article is nicely put together with sufficient data to back the arguments. 

One of the ten pronciples of economics is "People face trade-offs" - this is so true. At this critical stage in the economy, companies with cash face even bigger trade-offs: whether to acquire companies at discounts, invest in new projects or to save cash to weather this turmoil. Well, it's a nice problem to have, isn't it?

Is management a true profession?

I enjoyed reading the article "It’s Time to Make Management a True Profession" written by Harvard professors Rakesh Khurana and Nitin Nohria. The original article can be found here. 

In brief:

* When compared to other 'true' professions such as those of Doctors or Lawyers, the management profession lacks a way to enforce code of conduct. 

* A management degree is not necessary to become a manager. However, professions like Doctors and lawyers require formal education. Even if they didn't, you would not trust an uneducated so-called doctor, would you?

* Managers with an MBA degree are less likey to invest in continuing education.

* Because of the above points, the authors propose a governing body to oversee the members' compliance and enfore code of conduct.

The other mentioned professions have a textbook/formal way to approach typical situations - like while treating a patient or while handling a legal case etc. The situations facing decision making managers are typically subjective and circumstantial. While it may be tempting to fault a manager after the fact, but it's not easy to devise a handbook approach to such situations - because every situation is typically different. The only real knowledge that can be imparted with an MBA education is the decision making framework. 

Ethics is more of a moral issue. Whether a governing body can really enforce code of conduct is again a debatable issue.  Professionals are aware of the morally right choice, when making fraudulent moves, hoping that nobody would find out. The well-known accountants are members of a governing body which enforces certain code of conduct. How many accountants have not been found guilty of unethical behavior?

PGPX offer

My apologies for not being active on this blog. 

PGPX @ IIM-Ahd

I applied to the PGPX course offered by Indian Institute of Management - Ahmedabad in Aug 2007. I was offered an admission to join the 2008-09 batch (PGPX III). For those not familiar with PGPX - it's a one year, full-time, residential executive MBA course offered by IIM-A.

Due to personal commitments, I couldn't join the 2008-09 batch and requested for admission deferral. IIM-A is pretty accommodative and approved my request. 

In Nov 08, when the time arrived to decide for the next batch starting Apr 09, I found myself again in a situation in which I have to stay put in US. So, for the time being I'll remain in the US and forego my admission. IIM-A doesn't let you defer your admission twice. Too bad. 

Not sure how badly I'll regret the circumstances, but the decision (actually it's not even a decision) is clear when there is no choice and I had no choice. I was so prepared and looking forward to join the course but in my case the choice was clear. I have waited so many years, one more isn't too bad. I may try again next year.

Meanwhile, I have been exploring other options, but haven't found the one which fits the bill.

BTW, the third PGPX batch grduated in March 09. The placements have not been spectacular, as expected in this economy. It's clearly not the best time to graduate.