Kolla's Blog
Sunday, October 9, 2011
Tribute to Steve Jobs
Wednesday, August 31, 2011
The war has begun !
Thursday, July 28, 2011
Is it time for another round of reforms?
Twenty years have passed by since the last set of reforms by Dr Manmohan Singh (the then Finance minister under Shri P V Narasimha Rao's government). The economy we see and read today has transformed in ways many would have not even thought of, thanks to the daringness of the eminent leaders quoted above. But, it is time to contemplate on such a set of reforms again. I have been reading quite a number of articles across various media about the need of another round of reforms – this time in other sectors like infrastructure, education, supply chain and warehousing, land and labour reforms etc. And I presume there are staunch supporters for the same, considering the awful infrastructure facilities we have. In addition to this, I believe that we need some administrative reforms in the way the government (read as bureaucracy) functions. Large/Small projects take months to get the clearances, which has been a deterring factor for large organizations to invest in India.
But, the main point I would like to discuss is whether the government is in a state to at least think of any reforms? Considering the number of issues it is tackling – ranging from corruption charges, handling regional coalition partners, black money issues, terrorism et al, I am afraid there is enough bandwidth for the govt to think of any reforms. Pranab da's populist budgets contain no signs of any major structural changes, barring the implementation of GST, for which the whole nation has been awaiting for more than two years. The top leadership of the Congress is busy in attracting voters rather than giving them anything. Certain exceptions can still be observed, thanks to the dynamic leadership of Kapil Sibal and Jairam Ramesh, who have set a benchmark. But, the task ahead for them is still large and I wish they stay in power to finish the job (bringing structural reforms, bringing efficiency and transparency to work) they have started.
I wait in anticipation to see how the government can pass these tough times and are there any surprises, in the form of reforms, for the nation.
Thursday, June 30, 2011
What lies ahead for Greece?
It is not important to merely get into the best college, but to make the best of your college life
Saturday, June 4, 2011
Tenacity is the keyword!
The most important take away from his lecture was one word: 'tenacity'. Suddently, so many faces came to my mind ranging from Richard Branson (Founder of Virgin group) to Sanjeev Bikhchandani (naukri.com) to Deep Kalra (makemytrip.com). Each one of them had a business idea, sometimes ahead of their times, and stuck to it till success met them, and they were hugely successful. And only Mr Ballmer knows that better as he has his company create technologies and products for the future and wait for their success. Without such persistence a company like Microsoft cant bet their future. They need to invent new products and technologies, forecasting and even foreboding customer requirements. Mr Ballmer and his one word saved that evening.
Baba Ramdev's marketing strategy
Come today, as Ramdev Baba plans for a fasting, crores of money is being spent for ACs, RO water plants, large LCD screens, renting the venue for lakhs of rupees, private flights, water proof tents and costly cars. What an irony dear! Crores of money is being collected, albiet as donations, for this mass gathering. Even a major news site reported that the donations are in the denominations of Rs 1 lakh to 11 lakhs. Baba has some really 'rich' disciples. He has got businesses worth crores of rupees. Some nice publicity surely for Baba at the global level. Thats a wonderful strategy for him and his institutions. Hats off to his marketing strategy.
And finally, I hope he does something for the poverty at grassroot level. And I definitely do not mean Yoga or ayurveda medicine for the poor.
Saturday, May 21, 2011
The return of the bubble
I am not going to question whether we are witnessing another ‘tech bubble’ or not. Because, we certainly are and the recent spate of valuations merely proves this fact. LinkedIn has gone public today morning (May 21’ 11) and its share price shot up by a massive 109%, from $45 to $94.25. What do the calculations tell us – a P/E ratio is 554. Does it command such humungous premium? I seriously doubt it.
There is certainly a difference between the tech bubble of the 1990’s and the one we are witnessing today. Today, the companies have successfully proved their business models and are not just mere start-ups. Let us consider the popular examples of Facebook, Twitter, Groupon (www.groupon.com), Zynga (www.zynga.com), whose premium valuations are under the scanner now. Each one of them has a successful business model for the last couple of years. They have got a subscriber base in hundreds of millions. They have reported positive returns of millions of dollars, in the last year. But the companies in the 90s were either start-ups or in their initial phases, with no proven track record. Some of them were bought out by larger players, and the larger ones absorbed huge losses later – e.g., Yahoo’s purchase of Geocities. And many of them died of bankruptcy.
But, do the companies of contemporary times command these huge premiums? I feel that rather the companies demanding such premiums, it’s the investors who are queuing up madly for such companies. And the interesting question is why these ‘tech companies’? A few reasons are – Firstly, lack of choice. The US is still reeling under the tragedy of the recession and with lacklustre growth. Even though the results of certain sectors like autos, retail are looking optimistic, they are not guaranteed. And the housing sector is yet to rebound and could take its own sweet time to show any signals of coming back to life. Secondly, it is the valuations of these tech companies by some financial majors, without any supporting fundamentals. And it is the classic cycle which starts all over again. HNIs start to buy these stocks privately, followed by hedge funds (or could be vice-versa) and finally the company goes public with unimaginable valuations, only at the loss of the retail investor. Also called the ‘Bandwagon effect ‘by management graduates like me!
And this time I wish a healthy correction happens soon and bring back to meaningful and deserving valuations, rather than waiting for more tech companies to join the bandwagon, only to burst the bubble finally.