The Inner Circle and the Outsiders

Small-sized, non-professional, coterie-managed organizations can get on to the nerves of any professional who commits the grave mistake of joining them (even by mistake).

The top man in such organizations forms and cunningly nurtures an inner circle (coterie) of stooges around him which can be an amusing sight but can cause a lot of professional pain to the outsiders.

They would belittle you, play dirty games behind your back, do secret talks behind closed doors, and would come across as idiots with "holier than thou" attitude.

The top man will meet his stooges and issue them commands which are taken by the stooges as a decree. The stooges will not loose a moment and lie all prostrate at the feet of their master!

Once in a while the master will throw bones at the stooges and the stooges will be more than happy to grab it and then lick the bone all over. And they will lick the feet of their master too.

Some of the stooges are hard-core assh***s. For them their master is supreme and they have no brain of their own. They are thoroughly incompetent to the core but fiercely loyal to the master.

The master does love his stooges. And distributes goodies to them to keep them loyal and keep on licking his feet whenever he commands them to.

And what about the Outsiders?

Well they are treated by the inner circle with an approach that is grossly immature and unprofessional. The poor outsiders are put into messy situations by the stooges.

The outsiders should not stay in such an organization and should try to leave at the earliest possible. The outsiders should be prepared to be in for a rough time.

For the outsiders the experience of working in such an organization can be a harrowing experience.

They should not die fighting and must prepare to move on!

It is a wise idea not to loose your life while fighting with the inner circle. The top man and his stooges are all powerful in such an organization and fighting them is foolish.

So if you and outsider, tighten your belt and run for dear life. Run away from the inner circle as soon as possible and as far as possible.

Run!

Key Financial Terms and Ratios that are Useful for Evaluating Stocks - Part 2

Read Part 1 here:
Key Financial Terms and Ratios that are Useful for Evaluating Stocks - Part 1

Here are some more financial terms and ratios that can be further analyzed to determine the long-term prospects of the stock:

• ROS (Return On Sales) - is the earnings of the company as against the sales/revenues done by the company.
• ATO (Asset Turn Over) - is the sales/revenue generated by the company as against the assets it has. Higher ATO means an efficient business model where assets are effectively utilized to generate higher sales/revenues.
• OCF (Operating Cash Flow) - is the cash generated from the operations. It is important that the company's cash comes from operations and not "other sources".
• CAPEX (Capital Expenditure) - is the cash invested to create new assets or replace old and obsolete assets. Assets are utilized by the company to conduct its business operations that generate revenues and profits.
• FCF (Free Cash Flow) - is the hard cash that is generated by the company. This is derived from the Cash Flow Statement and is calculated as OCF minus CAPEX.
• TDB (Total Debt Burden) - is a measure of the total debt on the company and includes both interest and principal component. Too much of debt is a risky proposition for any company. In bad times, too much debt can result in bankruptcy and the company eventually going out of business. 
• TIB (Total Interest Burden) - is a measure of the total interest on debt on the company. Not being in a position to pay even the interest on debt is a serious issue for any company and indicates that the company is on its way to bankruptcy.
• DBR (Debt Burden Ratio) - is a measure of whether the company is earning enough to repay its loans. It is calculated as the ratio of  TDB to the FCF. This number indicates whether enough hard cash is being generated for repaying the interest and principal component that are due for payment.
• DSCR (Debt Service Coverage Ratio) - is a measure of whether the company is generating enough profit to be in a position to take care of its debt liabilities. Debt here means both interest and principal component. It is calculated as the ratio of TDB and NPM.
• ISCR (Interest Service Coverage Ratio) - is a measure of whether the company is generating enough profit to be in a position to take care of its interest on debt liabilities. It is calculated as the ratio of TIB and NPM.

How Would You Look Back at Your Life When You are Just One Week or Two Away from Your Death?

Suppose you are just one week or two away from your death. Now, think about this question - how would you look back at your life?

Would you be in a good mood and willing to die happily because you have no regrets as you lived all through in a way you always wanted to?

Or would you be sad and in a sulky mood and like to be given some more time (weeks, or rather years!) so that you can now live it the way you always wanted to but somehow never did?

Think hard.

This is not just a million dollar question, it is actually an infinite dollar question. In fact, this is the only question that really matters.

For you as an individual, what you did after you were born and till you are not dead is really what really matters at the end of it all.

Nothing else in this world truly matters.

Now suppose, you talk to someone who has seen many deaths, not tens and hundreds but 12000.

Following article culled out the learning of one man who saw 12000 (yes, that's 12000 only) deaths.

http://projectfuel.in/blog/2016/05/15/12-life-lessons-from-a-man-who-has-seen-12000-deaths/

And what did he think of the key life lessons? The above article lists down 12 of them all of which are so very important.

Here are three messages, from the above article, which though very counter-intuitive can be (and perhaps should be) put into practice almost immediately for a "purposeful" life:

Message 1 - Simplicity is the truth of life - A simple life, as he explains, can be attained by spending less. We spend more to accumulate more and thus create more need. To find contentment in less is the secret to having more.

This is really talking about minimalism and couldn't have been said any better.

If you look around, however, you have been told just the exact opposite all this while - you have been told the purpose of life is to get a good job, buy a bigger house, a nicer car and expensive clothes.

This also provides yet another reason for adopting minimalism as explained in an earlier post on this blog on minimalism: What Makes Minimalism a Powerful Way to Live Life?.

Simple, minimalist life will take you away from the tendency to accumulate more and more stuff and consequently increase your happiness. It is useful to become aware of the fact that stuff doesn't make you happy.

You should buy and use only those "stuff" that are essential and bring joy and happiness to your life. In addition, by doing this you will help the environment as well immensely.

Message 2 - Acceptance is liberation - Indifference, avoidance, and denial of a certain truth, Shukla believes, cause anxiety; they develop a fear of that thing in the person. Instead, accept the situation so you are free to think what you want to do about it and how. Acceptance will liberate you and empower you.

Stretching and reaching out is fine but only till a certain extent.

If you look around, however, you have been told just the exact opposite all this while - you have been told nothing is impossible, you should have it here and now and that you should never, ever give up.

This is another powerful message. It is important to always remember this - Don't Try Too Hard. You shouldn't keep on trying for the greed of the outcome and should focus only on taking the actions that are possible without killing yourself.

As Oliver Goldsmith, the famous Irish novelist, playwright and poet, so rightly said:

“He who fights and runs away, May live to fight another day;
But he who is battle slain, Can never rise to fight again”

One way to avoid falling into the outcome trap is to dilute your outcome orientation by being aware of the message from Bhagvad Geeta: Karmanya Vadhikaraste Maa Phaleshu Kadachan.

Focus on actions and forget about the outcome.

Message 3 - If/When you find your purpose, do something about it - To have awareness about one’s calling is great, but only if you do something about it. A lot of people, Shukla says, know their purpose but don’t do anything about realising it, making it come to life.

You should live your life in a way you really want to so that if you have to die today you will embrace your death happily.

If you look around, however, you have been told just the exact opposite all this while - you have been told to live your life as per the standard template that means go to school, get a job, buy lot of stuff to have a comfortable life.

This is yet another powerful message. Consider this - Your Life is Lucky If You are Getting to Live It as You Would Want to Live It. So are you lucky?

Knowing your true calling in life is a great revelation. Knowing what you would want to do in life and then trying to do that is such a wonderful thing.

You never know, but it is possible that you fail to live your life the way you would want to but that's alright. Even trying in that direction is wonderful.

It is better to have tried and failed than not to have tried at all.

As Mark Twain, the famous American author and humorist, so rightly said:

"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did so. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."

So in summary, here are the three messages explained above:

• Live a simple, minimalist life
• Focus on action, not outcome
• Find your true calling in life and go after it!

How to Retire Really Quick? And How Quick is Really Quick?

Retiring really quick is worth it, whichever way one looks at it. So how quick is really quick?

Assuming you start earning at the age of 22, in that case how fast can you manage to retire? By age 50? Or 40? Or 30? Or still better, 27?

There are many people who have managed to attain financial freedom which means they have accumulated enough capital to last more than a life-time and that has essentially given them the golden choice to retire should they want to.

They now live life from the level of f**k you!

One of the inspirational stories for anyone wanting to become financially independent is the story of Jacob.

Here's what the "About me" page on his blog (http://earlyretirementextreme.com/about) says:

"Current networth (2016) : 117 years worth of annual expenses.

My name is Jacob. My greatest claim to fame and overall impact on the world is probably this blog and the concept of ERE.

Before that I used to be a nuclear astrophysicist, but in reality I’ve done many other different and (to me) interesting things and my aim is to continue this way of life for the rest of my life. Never getting bored.

ERE is much much more than just “retiring extremely early” by “sacrificing travel and expensive restaurants”. It is effectively a philosophy of life." 

Read the above again, more carefully this time - this guy has managed to accumulate 117 years worth of annual expenses.

That's phenomenal, especially given most of the working folks are barely able to survive and are living paycheck to paycheck to paycheck.

Living paycheck to paycheck to paycheck is like playing musical chairs where you are in trouble when the music stops and you don't get to sit on one of the chairs.

You are out.

Elsewhere in the blog, Jacob also talks about how he manged to become financially independent in 5 years. That's nothing short of pure magic. 5 years is unimaginable.

Lot of people who have worked for 10-15 years are still not in a position to  become financially independent in next 5 years. They need another 10-15 years or maybe more.

This story is truly inspirational.

For understanding how this was done and learning from this real experience, read this amazing story at: http://earlyretirementextreme.com/how-i-became-financially-independent-in-5-years-part-i.html.

Here's what the above blog post says:

"My journey towards financial independence was not always with financial independence in mind per se.

Had that been my sole goal all a long I would have done things differently and probably faster e.g. 3-4 years instead of 5.

If I had a six figure income, which I never had, I would be able to do it in 2 or 3 years."

Read that again, it says it is possible to attain financial freedom in 2 or 3 years.

That means if you start working when you are 22, you are done when you become 25.

That's seemingly crazy but certainly possible as it looks like, provided you understand and follow the ERE principles.

How Handling an Assh*** Can Make You a Better Person?

When you handle an assh***, be it at your workplace (where they are most commonly found and in large numbers at that), in your neighborhood, in a public place like a bus stop or in your family it should be seen as a blessing in disguise.

An assh*** can make you into one yourself if you let it. Or it can make you a better person if you strive for that.

Assh***s at workplace are extremely hard to tackle. Their toxicity is so hard to avoid.

How do you recognize an assh*** when you meet one at your workplace?

• They would write needless emails with deliberate and malicious agenda
• They are part of the coterie and a stooge of the top man
• They would meet people on the sly to collect information to discredit and demean you
• They go on lunch with other ass***s (so now you know when it's easy to count them all)
• They would suck the toes, lick the boots and lie prostrate in front of the king of the stooges
• They would cut others down so that they can grow
• They carry an artificial and fake smile like a Cheshire cat
• They ooze toxicity and negativity in their emails
• They would create more assh***s in their own teams

So how can handling an assh*** at workplace make you a better person? In several ways in fact and here are some of those:

• You develop a lot of patience. The irrational tantrums and the toxicity of an assh*** slowly starts amusing you rather than causing you any concern
• You realize that the world is a nasty place full of poisonous snakes (read assh***s) and accept the world as it is rather than as it should be
• You start analyzing life in a much wider sense and with a deeper appreciation and understand fully well how small things make the big things
• You become increasingly positive to fight the negativity caused by the assh*** and maintain complete balance in your mind
• You don't say anything at all when you know you would say something nasty to the assh*** and rightly so (it is better to say nothing when you would want to say something bad only)
• You acquire philosophical outlook in life and look at things from an altogether different but very positive perspective
• You never reply to bullshit emails from an assh***s in kind and make sure you retain positivism and professionalism come what may

Remember an assh*** is an assh*** is an assh*** and will remain that way forever. You should never be one or become one. Life is too short for you to live it as an asshole.

There are better ways to spend the 80-100 odd years you have been gifted by God. Don't live it like an assh*** would. Live it in a nice an positive way. That's the only way that's worth it.

Why Educating Kids in India is Economically a Bad Idea and How is it Ruining their Parent's Retirement Plan?

India is a poor country.

The GNI (Gross National Income) per capita using Atlas method (used by the World Bank to estimate the size of economies) in terms of current US$ in 2014 for India was USD 1570.

(Source: http://data.worldbank.org/indicator/NY.GNP.PCAP.CD/countries/IN-8S-XN?display=graph)

That roughly translates to INR 102050 (assuming 1 USD = 65 INR at current rates).

Note - the above numbers haven't been adjusted for the same time period and for this post that is not really that relevant.

So an average Indian family of 4 members will be having an annual income of INR 408200. Ignoring the taxes altogether, this would mean the monthly income comes to around INR 34017.

Is that good enough to educate your kids and then be in a position where you will still have enough left to spend money on the essential stuff?

Looking at the abnormal school fees, the above would be a herculean task.

How much money is needed to educate a kid in a school in India in a city like Delhi and Gurgaon?

Assuming an average monthly fee of INR 10000 (which includes fees, annual charges, books, stationary, uniform, charges for events like annual day, school bus) for two kids the yearly expenses will come to be INR 240000. Or around 59% of yearly income!

Which mean for the 15 years of school education (Play Group, LKG, UKG and then from class I to class XII) the total cost for one kid would come to an astounding amount of  INR 18 lacs.

So how will the family eat? how will they pay home rent or home loan EMI or both, in some cases? how will they pay water and electricity bills? how will they pay for doctor's fees and medicine? how will they pay bus and auto fares?

The list of even the essential stuff is really too long. And the costs would be much higher than what a comfortable number should like.

This shows something is clearly wrong. When 59% of an average Indian family's income is needed for kid's education it has a drastically adverse on their overall standard of living.

The other problem is as severe as the one above. This has a direct, negative impact on the parent's retirement plan also.

Given the lack of social security in India, the problem gets compounded many times for  an average Indian parent. They find life tough now and will find it perhaps even tougher in the future!

Where is the money to save and invest for retirement?

Saving and investing for retirement is slowly becoming a dream that may alas remain a dream for many of the parents in India.

There was a song in movie which had the following lines:

Where is the time to hate, when there is so little time to love
Come on let' s sing sing sing
Come on let' s dance dance dance
Come on have fun fun fun 

(Source - http://www.hindilyrics.net/lyrics/of-Where%20Is%20The%20Time%20To%20Hate.html)

For parents in India this could be written as:

Where is the money for retirement, when there is so little money for living now
Come on let' s cry cry cry (what else is there to do?)
Come on let' s pray pray pray (to God, who else?)
Come on have fun fun fun (this part shouldn't change!)

May the force be with the parents in India. May they get more money. May they be in a position to save some for retirement as well.

It is Very Crude to Flaunt that You are a Part of the Coterie

Have you come across an ass blatantly flaunting that he belongs to an exclusive group?

It is rude. It is crude too. And it is abominable and highly obnoxious as well.

This happens in organizations that are run by a coterie. Not all, but some of those who are a part of the coterie seem to take things too seriously. That is funny at the best and toxic at the worst.

And for all you know, this group of coterie is given a nice name - management committee!

Howsoever crass and absurd it may be, the others generally have no choice but to tolerate and bear the stupid antics, superior but loathsome attitude and toxic actions of the coterie.

The real problem may actually be with the head of the coterie. She is the one who forms and nurtures the coterie, creates an unprofessional set-up where loyalty is everything and merit has no place.

She is also the one who creates artificial reporting structures to ensure the comfort zone around her remains unchallenged and unchanged.

Others may not have respect for the coterie but then have no choice. And the mantra they ought to follow is very simple - lick the coterie's boots or run away in their own boots.

If you have self-respect and you are professional, you should run away in your own boots. And if you are good for nothing and a loyalist then you must lick the coterie's boots so that they don't fire you and you get to keep your boots!

However, if you don't like it but are not able to move out then you are seriously stuck.

You may hate every time you have to interact with the coterie and their head but unless you have an option in hand you will remain a wage slave.

It is undoubtedly very hard to survive when you are stuck in a toxic workplace infested with coterie culture. It is very hard but then you must wait it out till you have an option.

That's a smart choice but yes the going till then is going to be a tough one!

And yes, it's true: it is very crude to flaunt that you are a part of the coterie. That makes others loose respect for you and makes them leave as well.

9 Nuggets from the Ted Talk by Nigel Marsh on Work Life Balance

The human civilization is currently passing through an age which is dominated by huge business corporations that create wealth majorly for the capitalists and a little bit for the "workers".

The idea behind paying decent wages to the workers is to sustain and augment the middle class which is the pivot on which consumerism runs.

In addition, the current education system has perhaps been designed to serve as an assembly line for continuously producing "corporate rats" to keep the huge business corporations running.

Work life balance is perhaps the biggest dilemma the corporate rats have to always contend with. In this context, there is this Ted Talk by Nigel Marsh on work life balance which is an excellent take on this subject.

The term "work life" seems to give an impression that work and life are disjoint sets. However, it is more appropriate to view work as a sub-set of life!

Here are 9 nuggets from Ted Talk by Nigel Marsh:

• I'd like all of you to pause for a moment, you wretched weaklings, and take stock of your miserable existence. Now that was the advice that St. Benedict gave his rather startled followers in the fifth century. It was the advice that I decided to follow myself when I turned 40.
• So I stepped back from the workforce, and I spent a year at home with my wife and four young children. But all I learned about work-life balance from that year was that I found it quite easy to balance work and life when I didn't have any work.
• And the reality of the society that we're in is there are thousands and thousands of people out there leading lives of quiet, screaming desperation, where they work long, hard hours at jobs they hate to enable them to buy things they don't need to impress people they don't like.
• We should stop looking outside. It's up to us as individuals to take control and responsibility for the type of lives that we want to lead. If you don't design your life, someone else will design it for you, and you may just not like their idea of balance.
• We need to elongate the time frame upon which we judge the balance in our life, but we need to elongate it without falling into the trap of the "I'll have a life when I retire, when my kids have left home, when my wife has divorced me, my health is failing, I've got no mates or interests left." A day is too short; "after I retire" is too long. There's got to be a middle way.
• Now I don't mean to mock, but being a fit 10-hour-a-day office rat isn't more balanced; it's more fit. Lovely though physical exercise may be, there are other parts to life - there's the intellectual side; there's the emotional side; there's the spiritual side.
• As I was walking out of his bedroom, he said, "Dad?" I went, "Yes, mate?" He went, "Dad, this has been the best day of my life, ever." I hadn't done anything, hadn't taken him to Disney World or bought him a Playstation. 
• Now my point is the small things matter. Being more balanced doesn't mean dramatic upheaval in your life. With the smallest investment in the right places, you can radically transform the quality of your relationships and the quality of your life.
• Because if enough people do it, we can change society's definition of success away from the moronically simplistic notion that the person with the most money when he dies wins, to a more thoughtful and balanced definition of what a life well lived looks like.

Source -  https://www.ted.com/talks/nigel_marsh_how_to_make_work_life_balance_work/transcript?language=en

Science On Sphere (SOS) Show at National Science Museum, New Delhi

The Science On Sphere (SOS) Show at National Science Museum, New Delhi was inaugurated in June month of year 2016.

It shows various facets of earth and the solar system. It also beautifully explains what makes life possible on earth and helps sustain it.

It also provides a grim reminder that unless human beings conserve planet earth it is slowly hurtling towards extinction like what happened to Dinosaurs ages ago!

How to Start Worrying Less or Better Stop Worrying At All?

This is a very important question: why do we worry in general?

And here's another equally important question: why do we worry so much on certain occasions?

The real reason is the fear of loss.

It could be the fear of loss of one or more of the following:

• Loss of your job which may be lousy but which you desperately need to cling on to so as to be able to pay for your living expenses (this pertains to the money you need to buy food, pay home rent/EMI and sundry bills like water, electricity, gas).
• Loss of someone you like and love temporarily or even worse permanently maybe because of death (the someone can include your family, friends and other social connects).
• Loss of time that you could have spent in a better way (the time here pertains to time spent waiting in a queue, meeting someone you hate at the core but can't avoid, time working at a job with ass-like colleagues you can't stand even for a second).
• Loss of stuff that you bought to make your life better (washing machine, refrigerator, some gadget to connect to Internet but no TV).
• Loss of health leading to not only unnecessary expenses but also physical and mental discomfort (this pertains to being in a position to lead life independently both in a physical and mental sense which means you are not either in and out of a hospital or a mental asylum).
• Loss of spiritual, emotional, physical and sexual relation with your life partner (it is painful to be in a relation with your life-partner which is merely social, economic and legal in nature).
• Loss of ability to pay for the big expenses in life (this would include the big ticket items that cost a truck-load of cash like retirement pool, kid's education, kid's marriage, medical emergencies, accidents, legal cases slapped on you).
• Loss of social and economic status owing to macro-economic forces, major goof-ups made by you, unethical practices you or someone else indulged in, or plain bad luck.

It is essentially your assessment of one of more of the above losses having high likelihood that causes fear and hence makes you worry.

So how to start worrying less or better stop worrying at all?

One of the ways to do that is to understand what types of losses are in your control and what are not.

And then focus on the losses where you have some level of control on and forget about the rest.

Wherever you have control you should take the right action but leave the final outcome to itself.

Remember there's really nothing that is under your full control!

Outcome is determined by your action, factors beyond your control and some kind of an "X factor" that you may not even know is there in the first place.

A very helpful approach to use is Karmanya Vadhikaraste Maa Phaleshu Kadachan.

The essence of this approach is not to lust after a favorable outcome but to focus on the right action, come what may.

Just think of it, only your action is in your control. The final outcome is never!

Merit of Fairness to Everyone and Demerit of Coterie Culture

Tulsidas was a Hindu poet-saint, reformer and philosopher.



Here are two famous couplets (doha - दोहा) from him that dwell beautifully on the merit of fairness to everyone and demerit of coterie culture.

Merit of Fairness to Everyone

मुखिया मुख सों चाहिये, खान पान को एक |
पाले पोसे सकल अंग, तुलसी सहित विवेक | |

अर्थ : तुलसीदास जी कहते हैं कि मुखिया मुख के समान होना चाहिए जो खाता-पिता तो अकेला है, लेकिन सब अंगों का पालन-पोषण विवेकपूर्वक करता है | 

Meaning:

The head of a family or an organization should be like the mouth. Though the mouth indulges in drinking and feeding only by itself it takes cares of the other parts of the body in a fair and judicious manner so that the body as a whole functions properly.

The idea is that the head of a family or an organization should know fully well that every member or employee needs to be taken care of in a fair and judicious manner for the whole system to function effectively.

Demerit of Coterie Culture

मंत्री गुरु अरु वैद जो, प्रिय बोलहिं भय आस |
राज धरम तन तीनि कर होहिं वेगि हो नास ||

अर्थ : गोस्वामीजी कहते हैं कि मंत्री, गुरु और वैद्य यदि भय या लाभ की आशा से हित की बात न कहकर प्रिय बोलते हैं तो क्रमशः राज्य, धर्म एवं शरीर का शीघ्र ही नाश हो जाता है | 

Meaning:

If a king's advisor, a spiritual guru or a medical doctor suggests something nice (but not really right and appropriate) due to either fear or greed then it leads to decline of the state, religion and body respectively.

Everyone should use their expertise in an unbiased manner and based on the facts and not indulge in flattery due to either fear or freed.

The idea is that in an organization where the top man promotes coterie culture and his stooges indulge in flattery due to either fear or freed then the organization will stop growing and stagnate, gradually decline and eventually close down.

It's All in the Family - Do You Feel So About Your Place of Work?

Well, if you do so, welcome to the real world.

A world where some people at your place of work literally get on to your nerves.

A world where you find asses having a great time.

A world where you see Cheshire cats showing their smartness.

And a world where some people get something which they don't really deserve.

The "All in the Family" kind of culture at your place of work will throw following strange situations at you:

•     Some people are more like college friends than colleagues
•     Some people do just one thing - scratch each others' back
•     Some people are no more than a a bloody club of mutual admirers
•     Some people are like stooges of the top dog
•     Some people operate as a close-knit coterie

It's all in the family means:

• The coterie of the top man and his stooges are more like a family of asses than professional colleagues
• The coterie gets a royal treatment
• The coterie is a like an extended family on the weekends
• The coterie protects each others' backs
• The coterie stays quiet when one of the members is found wanting
• The coterie spews venom against an outsider when they sense an opportunity and if they don't get an opportunity they create one
• The coterie goes for lunch together like a family does!
• The coterie maintains secrecy and holds lot of information close to their chest
• The coterie talks behind the back of outsiders and creates wrong impressions and perceptions
• The coterie is disconnected from the ground reality
• The coterie takes decisions with utmost secrecy and with a hidden, evil agenda

Key Financial Terms and Ratios that are Useful for Evaluating Stocks - Part 1

For analyzing the stocks that look promising and then selecting the ones in which you can invest your hard-earned money it is helpful to be aware of and clearly understand some of the key financial terms and ratios.

Here are some such key financial terms and ratios that are useful for evaluating stocks:

• CMP or P (Current Market Price) - as the name also suggests, is the price at which the stock is currently trading. P keeps on fluctuating from one second to another (when the stock market is open, of course!).
• BV or B (Book Value) - is the value of the assets held by the company and indicates the cash that will get freed up in case the company goes bankrupt and its assets are liquidated.
• EPS or E (Earning Per Share) - is the net income post-tax the company has earned and indicates the cash generating power of the stock.
• DPS or D (Dividend Per Share) - is the dividend earned by the shareholder for every share held and can be viewed as regular cash inflow from stock investment.
• P/E (Price to Earnings ratio) - indicates the premium or discount at which the stock is trading. P/E should be less than 20 (which implies a 5% rate of return on capital invested by you to buy the stock).
• P/B (Price to Book ratio) - indicates how much you are paying for the stock as against the value of its assets in the books. P/B should be less than 5 (which implies if you buy a stock at Rs. 100/- and the company goes bankrupt you can expect to get Rs. 20/- back). 
• ROCE (Return On Capital Employed) - is the cash generating ability of the capital employed by the company in the form of both equity and debt. ROCE should be more than 10%.
• ROE / RONW (Return On Equity or Return On Net Worth) - is the cash generating ability of company for its owners or shareholders. It indicates  the return that can be expected by the owners for assuming the investment risk. ROE should be more than 15%.
• D/E (Debt to Equity ratio) - is the composition of the capital employed by the company and indicates its financial leverage position. Higher leverage would generally translate into higher risk for the business. D/E ratio should be less than 2 (which implies if the capital of a company is Rs. 100/-, debt should not be more than Rs. 66.67)
• DY (Dividend Yield) - is the dividend paid by the stock as against its market price. It indicates the return from the stock in the form of dividends. It indicates how much "hard" cash is shared by the company with its shareholders. DY should be more than 2%.
• DPR (Dividend Payout Ratio) -  indicates the ratio of earnings the company distributes to its shareholders as dividend (or DPS/EPS). DPR should be within 20% to 40%.
• NPM (Net Profit Margin) - is the profit post-tax or the net earnings generated by the company. Annualized growth in NPM during the last 5 years should be more than 10%.
• OPM (Operating Profit Margin) - is the NPM from business operations. It is the net earnings from operations and not from the management of the company's finances. Average OPM during the last 5 years should not be negative.

Read Part 2 here:
Key Financial Terms and Ratios that are Useful for Evaluating Stocks - Part 2

Why Investing is an Extremely Hard Game to Play?

Think about any game.

In most of the games following aspects will generally hold good:

• Past records are known and are a good predictor of future performance.
• Rules of game are well defined.
• Skill is more important than luck (other than in some cases like chance-based card games).
• Rules of game do not change all of a sudden due to any unexpected event occurring suddenly.
• Every player knows how many players and who all are playing the game.
• Duration for which a game is played is known.
• Played in open so what any player does is visible immediately or after a short time lag to all the other players.
• Kind of homework and preparation that needs to be done is known to all players.
• Involves use of both physical and mental faculties (degree of usage varies).
• Uncertainty about future does not have a large bearing on the final outcome of the game.
• Risks that may materialize are limited in number and mostly known to all players.

Investing can also be viewed as a game!

So what does the game of investing involve? Here are some key aspects:

• Past records are known but are not a good predictor of future performance and can only be used to make hypothesized projection of the future performance.
• Rules of game are well defined only in terms of the transactions that need to be made and not the strategy that gets deployed (there are legal considerations as well which need to be adhered to otherwise the penalty incurred may wipe out the entire gains).
• Skill is more important than luck but role of luck is also huge in terms of the uncertainty about the future. Skill is used to analyze past performance and hypothesized projection of the future performance to arrive at an investment decision but a "black swan" event in the future can tilt the final outcome in either direction. Luck or the lack of it can play the role of an angel or a devil respectively.
• Rules of game do not change all of a sudden due to any unexpected event occurring suddenly but since they do not apply to the strategy part of the investing process, the way many of these rules get applied by a player can have a significant material impact on the other players.
• The choice of investment portfolios and the investments within each any player can hold is infinite. The players playing the game of investing would not know how many and who all are playing the game. Not only that, players may be independently playing a game of their own individual choice with multiple intersections though with games being played by the other players simultaneously.
• The duration and the time to enter and exit an investment is not specified and, in fact, forms a crucial part of the strategy to improve the final investment outcome (a player can actually enter and exit multiple number of times).
• Played mostly privately (the first few critical moves are always private) so what any player does is either not visible at all or only after a long time lag to all the other players.
• Kind of homework and preparation that needs to be done is known to all players but is very wide ranging from subjects such as Economic History, Macro Economics, Micro Economics, Behavioral Economics, World History, Politics, Finance & Accounting, Capital Markets, Human Psychology, Mathematics, Statistics. With such a wide range of subjects a player ought to understand, the homework and preparation required is indeed a tough one and since things are ever evolving it always remains in a work in progress state.
• Involves use of mental faculties primarily (analysis and due deliberation performed at times are very comprehensive and highly complex).
• Uncertainty about future has a large bearing on the final outcome of the game (both on the negative as well as the positive side).
• Risks that may materialize are large in number (including geo-political and macro-economic factors across the world) and not known to all players in equal measure and at the same time.

So it is evident that investing is like any other game.

However, investing, is unlike other games in many ways. The nature, scope and complexity of the game of investing makes it extremely hard.

I Want To Become Rich And I Don't Want To Do Any Bloody Job

That's what you might think at times.

"I Want To Become Rich And I Don't Want To Do Any Bloody Job"

There's really nothing wrong if you think this way.

When you are rich you are not a wage slave. You get to live life from the level of f**k you.

If someone pisses you off, you don't need to explain anything. You can just say f**k you!

Here are more things that happen then:

• If you meet someone who is incompetent, you can just say f**k you!
• If you meet someone who is an ass with a stinky hole, you can just say f**k you!
• If you meet someone who is short but carries a big ego, you can just say f**k you!

Professional Colleagues or College Friends?

What happens to an organization where those working for it act like college friends and not professional colleagues?

The first question you may want to ask would be - what's the difference?

Heck, there is a lot of difference. In fact, there are only differences.

Someone who is a professional will generally stay away from the following:

• Go below a a certain level of decorum even if they meet the colleagues outside office
• Interact in a manner which is too informal and using unpolished language
• Watch funny videos with others in the office
• Crack certain types of jokes with others
• Spend the entire working day (almost) in small talk with others
• Share too many personal and trivial details with others
• Get drunk in office parties and talk non-sense with one another

Identifying and Handling Your Anxieties

Identifying and handling your anxieties is a very powerful way to understand your true drivers in life and what makes you feel energetic and what makes you dull.

Here are some of things that can cause you anxiety:

• Staying late at work for too many days in a row
• Dealing with the corporate asses at your workplace
• Negotiating with someone unreasonable and unfair to deal with
• Dealing with long-time stooges of the management
• Being forced to report into an incompetent ass who is a scheming lunatic and a hard-core stooge as well
• Having someone incompetent sit in judgment of your work
• Coming across people who carry a big ego and superiority complex
• Dealing with people at work who are more like college friends than professional colleagues

Why I Don't Want to be a Worker Anymore?

Have you ever had this thought cross your mind?

I don't want to be a worker anymore.

And it shouldn't be this way because you are lazy, or you are not competent, or you want an easy life. No. Not really.

The answer should actually lie somewhere else.

In the modern society the key to having a good life is money, having enough of it.

Of course, it is not just money, but money is the primary and the first ingredient for a good life.

Money in current system is controlled and moved by those who own it.

Who are these people?

They are the capitalists (this term, broadly speaking, includes investors too). They own money and hence own the system in some sense.

Everybody else is a worker.

And if you are not a capitalist then you are a worker.

Why Investors Shouldn't be Fooled by The Success Mantras of Super-Investors?

One of the inferences that can be drawn from the the book "Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets" by Nassim Nicholas Taleb is this:

If there are N investors who put their money in the market at a given period in time, n1 of them (n1 = x1 * N, where x1 is very close to 0) would end up as great investors in that period.

Also n2 of n1 (n2 = x2 * n1, where x2 is ever further closer to 0 as compared to x1) would end up as great investors across multiple periods and hence turn out to be super-investors eventually.

The n1 who end up as great investors and the n2 who turn out to be super-investors eventually may be as a result of not merely their skill but probably in equal measure as a result of the law of probability.

The above would mean that there has to be some people who will eventually become a Warren Buffet or a Philip Fisher or a Peter Lynch or a Bill Ackman.

The success of above people shouldn't be seen as anything unusual and surprising. Some n2 people had to turn out to be super-investors eventually and the above happens to be their names.

Once names are attached to those who are part of the n2, then their success is dissected and analyzed and codified into success mantras - rules, theories and concepts - that supposedly helped these investors turn out to be super-investors.

However, the success mantras of the n2 super-investors will probably be different from one another.

Not only that the success mantra of a super-investor will also perhaps be different across multiple time periods.

What that would mean is that there is no single success mantra that worked for all super-investors through all periods with same level of success consistently.

And hence, the success mantras that have worked in the past may not necessarily work even in the next period with 100% certainty.

Forget about the period next to that and the one after that!

Here's something worth taking a closer look at:

"This year's top-performing mutual funds aren't necessarily going to be next year's best performers.

It’s not uncommon for a fund to have better-than-average performance one year and mediocre or below-average performance the following year.

That's why the SEC requires funds to tell investors that a fund's past performance does not necessarily predict future results."

(Source: https://www.sec.gov/answers/mperf.htm)

The statement "past performance does not necessarily predict future results" or something similar is a common but very important statement which is often used as a legal disclaimer by investment firms and yet generally ignored by most who invest money with such firms.

What applies to mutual funds and investment firms applies equally well to the n2 and even the n1 investors - past performance does not necessarily predict future results.

So for any investor it is important not to be fooled by the success mantras of the super-investors (as also the great investors) and hence not to try to directly emulate them.

It is certainly a good idea to study and analyze the various success mantras that have worked in the past but not be blinded by them.

It is definitely very useful to learn key lessons from all this study and analysis.

In the end, however, every investor has to find her own success mantra.

If an investor follows her tried and tested success mantras and turns out to be a super-investor it would be great.

However, it should not be forgotten that this could again be a result of not merely the skill but probably in equal measure as a result of the law of probability.

It is easy to be fooled by randomness and ignore the hidden role of chance in life and in the market!

How is Health and Happiness Related to Wealth?

Does having more wealth make you healthier and happier?

This is a question which needs deeper probing as it can help understand the psychology behind why most people stuck in their daily rut try to acquire more and more wealth.

The underlying assumption is that if you are wealthy, then you would be healthy and happy too!

Some people defer their happiness to a certain point in the future.

Their driving motivation is - "I will be happy when I have got X amount of money".

Having that X amount of money can give you financial freedom but not necessarily health and happiness.

Whichever life situation you may be, you can and should strive to remain healthy and happy.

Being healthy is about living a simple life, eating simple and wholesome food and doing some exercises regularly.

It is also important to avoid smoking and too much drinking and taking proper rest.

And finally, it is crucial for being healthy not to get overly stressed about anything at work or elsewhere.

Feeling happy is purely a state of mind.

If you love yourself, have self-esteem and self-confidence and think and do good, you can easily be happy.

It is true that the above is tough given that you are generally surrounded by a lot of negative people and a lot of negativity.

However, remaining positive at all times, especially the turbulent ones, is easier if you are healthy and happy.

It is even far easier if you are wealthy as well.

Being healthy and feeling happy is certainly correlated with being wealthy.

When your net worth is negative (means you are in debt) it will surely have adverse impact on your health and happiness.

As you wealth grows and moves above the zero level, so would your health and happiness also grow.

The marginal increase in your wealth will keep on declining as your wealth grows further and further.

After that point, increase in wealth will have zero impact on your health and happiness.

Here's how the curve of health and happiness versus wealth would typically look like:



It is important to always remember that being healthy and happy is certainly correlated with being wealthy.

Till a point of course.

And after that wealth doesn't really matter!

I Was Not Born Rich But I Would Want To Die Rich For Sure

The world is inevitably moving towards a state where your economic well-being and status is increasingly going to decide how your life experience is going to be like - from the time you are born till you die.

You can't choose to be born rich. When you are born is the first instance, and perhaps the most significant of them all, when lady luck can play a make or break role in how you would live your life.

If your are lucky, you would be born as the son and daughter of a wealthy parents. You would be as they say born with the proverbial "silver spoon in the mouth".

You are guaranteed a comfortable and secure childhood in most likelihood. You would have access to most of the basic necessities and some more.

You would get an opportunity to go to a decent school, get educated, maintain reasonable health and may be inherit some wealth.

In case you are born in a poor family, the dice is loaded against you right from the start.

Playing the game of cards after you have been dealt "not so good" set of cards can be a tough act for even the best of the players.

The worst thing about being poor is that you may not even get the opportunity to go to a decent school, get educated, maintain reasonable health (things which are taken for granted by most of us).

So what you are born as - rich or poor - is a matter of luck!

However, once you grow up into an independent and mature adult, what happens in you life would start depending more on your abilities and how things play out in your life.

At this point in your life, you and others like you would be at par in a certain sense. What happens from this point onward would bear upon whether you die rich or not.

It is important for every person to strive to become rich and wealthy in their life-time in case they were not born rich.

As is accepted as a universal truth, in life you must strive only for three things - character, health and wealth.

Among these three wealth takes the third place in the order of importance and rightly so.

So as long as you take care of the first two - character and health, you are set for life.

Then focus on wealth.

When it comes to wealth, you should strive to accumulate as much as is possible without becoming sick or killing yourself through work stress.

Also stay totally away from using unfair and unethical means, which, at times, can lead you to spend the last part of your life in prison - think of Enron and Bernie Madoff!

For a happy and successful life, being wealthy certainly helps.

Hence, you should always think of the following and strive to become rich:

"I was not born rich but would want to die rich for sure"

Why Some People Always Piss You Off, No Matter What?

It is a fact that there are some people you come across in your life who you would never like.

No matter what.

Some people just piss you off.

And there are strong reasons for the same, some of which may have to do with your outlook in life which may be deeply embedded in your sub-conscious mind.

So why some people always piss you off, no matter what?

• They try to demean and belittle you
• They try to act smart
• They request you for something but don't approach you in a nice way
• They maintain stoic silence as if they are superior to you
• They pounce on you like a vulture in case you make a mistake
• They play dirty politics behind your back
• They are frustrated with their personal affairs
• They have huge jumbo-sized egos
• They want others to pump up their fat ego 
• They are part of the coterie of the top dog
• They are stooges of the top dog and don't stand for what is right
• They are "yes sir" henchmen of the top dog
• They are part of the inner circle
• They are dead-woods who are allowed to hang on
• They are narcissistic who love troubling others
• They focus on what's wrong
• They focus on finding faullts
• They oppose change
• They oppose being challenged
• They like others to respect their authority and power

In case you are unfortunate to come across such people either in your neighborhood or at your workplace good luck to you!

You have signed up for some really bad times.

Fasten your seat belt as your life is going to pass through turbulence!

What is Making You Sick These Days?

The question - what is making you sick these days? - is a wonderful question that you should keep on asking yourself once in a while, preferably couple of days every week.

If you are feeling sick and uncomfortable, it is a clear indication for you to try to fix something that's currently not going well in your life and if that's not possible, just move away from it.

You get one life to live. And living it in a way that makes you sick and uncomfortable constantly and not just occasionally is no way to live your life. You deserve better.

So what is making you sick these days?

• You are stuck in a bad, toxic company. The people around you are unprofessional, immature and create negatives vibes in you.
• You are not able to sleep properly as you find yourself stuck in a bad, toxic company. Random thoughts related to toxicity you have been experiencing keeps haunting you.
• You see the stooges and their top dog going for lunch together everyday. The back-room dealings of this group pisses you off completely but there's nothing you can do.
• You see the coterie and extended coterie working in a tandem and making your position weak and untenable.
• Your life is going smooth other than this one thing - you are stuck in a bad, toxic company. Finding another job has become the sole purpose of your life at this point.
• You see a lot of second guessing and irritating, unprofessional emails coming from the stooges and their top dog.
• You have been trying to get out of the toxic company you currently work at but have failed so far. You are desperate to get an offer so that you can quit and move on.
• You don't want to work at the toxic company, have not been able to get another job and can't even quit as you have got bills to pay.
• Your spouse doesn't know about how much toxicity you are handling at your workplace. Of course, you haven't told her any of the nonsense you are experiencing.
• You get irritated easily on small things at your home and with your family members. And then you feel bad immediately when you realize the need to control this tendency of yours.

It is useful to write down the above in the situation you may be currently experiencing in your life.

The good thing is some things would be making you happy as well. Do note the good things also and feel gratitude that so many things are going well for you.

And yes, it is extremely important to fix whatever is making you sick currently or find a way to move away from it.

You don't need to tolerate toxic and negative people. You owe this to yourself.

And if you decide to quit, just quit without any malice and anger.

Also remember, you don't owe the toxic and negative people any explanation whatsoever. They don't deserve even an ounce of it!

Yesterday, Today and Tomorrow

Life is just about these three things - Yesterday, Today and Tomorrow.

Yesterday is history.

Yesterday is gone.

You can't do anything about it. Nothing.

Today is a gift.

Today is with you. Grab it. Use it nicely and judiciously.

In fact, only this very moment as you read this (only this) is with you.

The last moment is actually a part of yesterday. Similarly the very next moment is a part of tomorrow.

Tomorrow is mystery.

Tomorrow is yet to come. And it will be there tomorrow, obviously. Plan to use it well and do that for sure when it becomes "today".

Tomorrow brings with it hopes of things that will bring you joy and happiness or at times fears of things that will bring you misery and sadness.

You would love to hear only about good things and you would be eager for them to happen soon or at the right time (like the arrival of a new-born in the family).

However, life is not always good. It brings with it a lot of bad and ugly as well.

Sometimes you would anticipate bad things to happen though you may not want that (like someone terminally-ill in your family is about to die).

So always remember the following about Yesterday, Today and Tomorrow.

Do not regret about yesterday but do learn from it.

Do live in today and do enjoy the time which is here and now. This time will be gone in no time!

Do no worry about tomorrow but do plan for it.

How a Toxic Workplace Can Make You Sick?

A toxic workplace is a direct result of and is generally characterized by the following:

• Unbalanced organizational structure - Those heading different areas are at peer-level as far as their roles are concerned but are not at par as far as their grades are concerned. This simply means those who are at the lesser grades have lesser power in the organizational hierarchy.
• Coterie of the top man - The top man in such organizations nurture and promote a close-knit inner circle. This exclusive old boys club is privy to all the key information while others are provided only sketchy information and that too not always.
• Too many emails - Such organizations thrive on too many emails being sent back and forth. The top man and his pet coterie love writing long emails once in a while about issues that ideally should be getting discussed in a face-to-face meeting.
• Holier than thou attitude of the coterie - The coterie in this case acts like a privileged lot. They go for lunch together, act as a bunch of college boys rather than professional colleagues and come across as boorish and biased.
• Negative emails - The coterie is also adept at sending emails laced with venom. They would write any non-sense to defend their position and to pulverize the others. As they are pet stooges and part of the coterie, the top man will choose to ignore their acts.
• Lack of professionalism - The coterie will talk about professionalism but act in an otherwise manner. The way they write emails, the way they speak in meetings, the way they do not respond to meeting invites and the way they act as smart ass show their professionalism or rather the lack of it.

All this can make you sick. Very sick.

• You may start carrying toxicity back to your home
• You may stay awake in night thinking what kind of a deep shit you are into
• You may start experiencing health issues
• You may start loosing your calm and composure
• You may start wondering how come you got into this hell-like workplace
• You may start analyzing your work situation in terms of how to stay positive

Despite all the good theories that glorify what a progressive organization looks and acts like, the fact is that toxic organizations are more common than one would like to have.

If you are one of those unfortunate ones trapped in a toxic workplace, it is important for you to stay positive and professional. Always.

Remember, there is always a dawn waiting at the end of every dark, long night.

Is Your Organization Infested with Extra Terrestrial (ET) Employees?

Many organizations, especially small-sized which do not grow even at a reasonably low rate, are ideal breeding ground for the ET employees.

Such employees are, really speaking, dead-woods for whom special roles and assignments are carved out of nowhere.

They are assigned to special initiatives and groups which may not really be needed otherwise in the very first place in another organization.

And lo and behold since they are pet stooges of the management, they are invited to many meetings. Even such meetings where they are not really needed.

They would throw garbage in the name of sick wisdom. They would question everything with an intent to show how smart they are and how much deep understanding they have as compared to others.

At times they sound impossible and are generally hard asses to crack. They think only they know everything about everything.

The ET employees are generally jerks and would have only one intention at all times - make extra-terrestrial statements to show that they are really needed!

The need to again and again prove that they are really needed is so dominant in their behavior that they spread toxicity all around them.

However, as they are pet stooges of the management, they are put high on the pedestal. After all, who doesn't like having their feet licked by a pet stooge?

And those who nurture and promote the stooges may at times themselves be ET employees.

As the organization growth is stunted, they also need to make extra-terrestrial statements to show to the lowly employees that they are also really needed just like the stooge ETs!

In such an organization there are three distinct group of employees:

• The core or inner part of inner circle - this comprises of those who nurture and promote the ETs. Some of them may be ETs themselves. And yes, they would never leave!
• The outer part of inner circle - this comprises of the ETs. All of them are invariably stooges of those in the core inner circle. And yes, they will also never leave!
• The others or outer circle - this comprises of those who are professionals unlike the ETs above. And yes they are always on a lookout to move on!

If you are in such an organization and are a part of the outer circle you deserve to be congratulated. Despite the ET employee culture around you, you have managed to remain a professional.

Hats off to you. However, you are in grave danger if you stay for too long. You may end up becoming an ET employee. You got to move, fast.

Don't wait to turn into an ET employee. Move. Fast.

Competence is Inversely Related to Lack of Ownership

If competence is low, then lack of ownership is high. And if competence is high, then lack of ownership is low. They are inversely related.

It is not hard to come up with examples of this.

Someone who is not able to get his group managers to comply to the defined processes shifts the ownership of the compliance to the process facilitator for that group and even to the head of the process facilitation team.

The lack of competence in ensuring compliance leads to disowning of and lack of ownership of compliance and its off-loading to someone else in the organization.

When someone is competent he will manage to get things done in the area under his control. After all, those in that area report into him.

However, if despite reporting structure enabling it, if the person fails to get things done then he is totally incompetent.

And how would such a person hide his incompetence?

The simple and easy way is to disown the tasks this person fails to get through.

Lack of ownership and true commitment are the true hallmarks of an incompetent ass. And he uses it to the extent of it getting obnoxious.

You need to be careful when dealing with such persons at your workplace. At times, they may be hiding under imposing titles like VP, SVP, EVP.

This is a serious situation you may find yourself in some organizations.

And if you have to deal with several such persons in an organization who also happen to be at high levels you are as good as dead.

In this case you should start counting your days. No, not to die but to quit such an organization!

Why You Need to Put Up with the Shit at the Place You Currently Work and What to Do About it?

The title uses the phrase "place you currently work" and there's a very solid reason behind it.

If you work with an organization where you experience extreme levels of toxicity then you may be longing for and trying hard getting off the burning ship.

However, until you can move out, it is no more an organization in a real sense, but simply a "place you currently work" or rather a "place you hate to go but still need to go"!

You may be severely disengaged. And you may be in a state of mind where you are ready with the resignation notice and just waiting for a job offer.

But why do you need to put up with the shit at the "place you currently work"?

Here are some of the reasons:

• You have been trying hard but haven't managed to find another job. Again, even if you find one, don't be desperate to take it up before a thorough evaluation. You don't want to move from one toxic place to another
• You can't leave your job because you got to pay your bills - utilities, doctor/medicines, EMI, school fees, groceries, etc.
• You do not have any source of income other than the salary you get from the current job. And you don't have enough investments to  continue with your current standard of living using the returns from your investments.

Basically, you have no choice from a financial perspective.

At such a time, it is very important for you to remember the following points:

• Do not resign in frustration till you get another job
• Visualize what is the worst that will happen in case you get laid off or fired before you can find another job
• Take extreme care of your physical health, sleep well, eat well
• Stay positive and professional at the "place you currently work"
• Remain relaxed, calm and composed so that there is no adverse impact on you mental health
• Make sure you do not carry your frustrations at the "place you currently work" back to your home and your family
• Take stock of your finances to figure out where exactly you stand from a money stand-point
• Assuming you loose your job today, calculate based on the above point, for how many years/months you can survive on your investments at your current standard of living
• Cut down your expenses to what is essential, better still become a minimalist
• Work furiously towards attaining financial freedom so that you can deal with things in your life from the level of f**k you
• Pay off all loans that you may have as early as you can and become 100% debt-free
• Buy a house but do remember the point immediately above
• Ensure you are adequately protected with the right kind of insurance - term, medical, accident and disability, and home insurance
• Keep the lights on as far as your job search efforts are concerned and in fact increase the focus!
• Keep yourself motivated by imagining the day when you will accept an offer letter and send the ever-ready resignation notice
• Lastly, don't bottle up your frustrations and thoughts and do vent them out by writing them down (maintaining a blog for this is a fantastic idea, and it is free as well if you choose the right platform!)

Remember if you are in such a situation, you life may be very miserable. You may be feeling desperate to get out. You may have started to become negative in your outlook.

This may start reflecting on your behavior both a the "place you currently work" and more dangerously at your home and with you spouse, kids and parents.

You should realize that this spiral of negativity is not good for you in whichever way you look at it. And you must immediately stop your descent down the spiral of negativity.

In such a difficult and tumultuous time in your life the key message you should always carry in you mind is this: Stay positive, calm and composed. You owe it yourself and your family!

IT Services Business Model Made Simple

IT services business model is quite easy to comprehend.

The primary "raw material" in this type of business is the human brain. And since brain is inside a human being and put to use for IT services work, the primary cost driver is the employee salary.

The primary "revenue source" in this type of business is payment received from customers for person-hours consumed or milestones achieved.

The good thing about this business when done in an outsourcing mode is that you incur expenses in a certain currency, say currency (E) but bill your customers in another currency, say currency (B).

The key point is that the exchange rate between currency (E) and currency (B) should be such that:

1 unit of currency (B) = N units of currency (E)

For example, if currency (B) is USD and currency (E) is INR, then based on the exchange rate today (13-May-2016) the above equation can be written as:

1 USD = 66.76 INR

The above equation is the backbone of the entire IT services business model.

Just imagine what will happen if  1 INR = 66.76 USD instead?

Catastrophe would be too mild a word to describe what will happen!

Following Google sheet provides a simple template to analyze the revenue and gross margin of an IT services business.

IT Services Business Model

As you can see yourself it is quite simple and easy to comprehend!

A Frog in the Well Doesn't Grow Big but Grows a Big Ego

Those working in small organizations are like frogs in the well.
(Image courtesy: http://cliparts.co/clipart/32574)

They don't grow big but grow big egos!

Someone might be working for 10 years and doing the same thing.

Of course to inflate the ego of such a person, he gets promoted from Grade 5 to Grade 6 to Grade 7. With higher cost to the company of course.

Such long timers get amply rewarded. However, they are no better than toe-sucking stooge of the top man.

Despite promotions there is no real career growth though for such folks.

Such companies lack business growth and hence tend to slowly drift into a situation where their margins start declining gradually.

After all feeding the blood-sucking frogs with big titles and bigger egos is a costly proposition!

But since the top frog and the stooge frogs are "the company" (being the founders and the early joiners forming the close-knot coterie ) and not merely working for it, they tend to get special incentives and perks.

They may be highly incompetent (which is generally the case) and to cover up for that they become adept at blaming others, play dirty politics, write flaming e-mails, show attitude and run vicious campaign to malign others.

They also get bigger rooms which is dwarfed only by their elephant sized egos they carry inside a stunted frog-sized body.

How to Handle a P for Pig?

Handling a pig is so very difficult!

And pigs in the corporate world are even more difficult to handle.



(Image courtesy: http://cliparts.co/clipart/8452)

So how do you handle a pig?

The first important rule to always remember when dealing with a pig is this - Do not become a pig yourself. Never.

As George Bernanrd Shaw, the renowned Irish playwright, critic and polemicist so famously and rightly said:

"I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it."

You can never win over a pig in the dirty tricks department. Never.

Another rule to remember is this - Pigs not only survive but thrive in the middle of garbage. They are cunning and shrewd and can create troubles for you.

What to do when a pig speaks non-sense, silly and immature things in a non-sense, silly and immature manner?

The rule to handle the above is to ignore the pig-shit (whatever the pigs speak is no better than shit) and show your anger and disdain in a composed manner.

Remaining composed when dealing with a pig  is a very critical skill to have.

So that's another important rule to keep in mind - try to remain calm and composed. Remember you can't expect anything other than pig-shit from a pig.

Pigs make pigs as their friends.

Here's another rule to handle pigs - figure out who are the friends of the pig? This would tell you how many pigs you have to deal with, in all?

In case the number of pigs comes out to be too large, you know you are in for big time trouble.

So here's the last but the most important rule. If you have to deal with too many pigs start looking for the exit.

Think about this - if you can never win against one pig what chance do you stand when you have to deal with a large number of pigs?

If you are that unlucky one stuck in a pig-infested organization, you got to be on your toes.

On your mark, get, set, go!

And if you don't do that fast, you will remain in deep pig-shit that longer.

Is Your Company Professional at the Fore but Lala at the Core?

Comparing a professional versus a lala company is a very interesting exercise.

The conventional wisdom is that a professional company is a professional company and a lala company is a lala company and never the twain shall meet.

This, however, is too simple a view.

In India, there are several companies which are "Professional at the Fore but Lala at the Core?"

Surprisingly, many of them call themselves as MNCs.

How to determine whether your company is one?

Well, it's not that hard to figure this out.

The biggest tell-tale sign is that the company's management has Indians both in the India office and in the office abroad (typically in the US).

Those in the management are a close-knit coterie consisting of the loyalists and the stooges. And management in such companies is nothing more than a pack of jokers.

Anyone working in such lala companies must always remember about "Why It's Dangerous To Work For An Organization Led By A Pack Of Jokers?"

Here are some more tell-tale signs:

• The top man has a close circle of trusted lieutenants. The only real qualification of the trusted lieutenants is their loyalty to the top man.
• The top man is not used to anyone challenging his ideas and thoughts. The trusted lieutenants would get the order enforced mostly by hook and crook.
• The top man promotes those who are his stooges and sing paeans in his praise. And if you don't do do,  you stand no chance to go up in such a company.
• The top man and his stooges literally run the show and make all the central decisions. There is no real delegation.
• The stooges force the people under them to remain unsettled by crossing the line and going to those below to gather information to show the people under them their true place.
• The top man starts a new initiative every month but maintains a hands-off approach. He also puts one of the stooges in charge of escalations knowing that it has not worked in the past and will not work going ahead as well.
• The top mean beams with silly pride when praised by the stooges and feels even more elated when others praise him.
• The stooges maintain a close circle withholding crucial information, play behind the scene games to discredit others and use office to sharpen their political skills.

In such companies the top man and and his stooges show as if they are professionals at the fore but can never hide from the smart folks down under of their being a true lala at the core!

Note: Lala is a Hindi word. In case you are wondering what the meaning of the word lala is, read the following: http://sanjaylakhotia.blogspot.in/2011/07/professional-vs-lala-company.html

Stuck in a Rut and Going Totally Nut!

There are times in you life when you would find yourself stuck in a rut. You can't move up, down or sideways and you can't move out.

And you suddenly realize that its been several years in the rut and you have become part of "them" and are no longer "you". You have been trying to get out but have failed so far!

You may see bias, unfairness, partiality all around you, loyalty being paraded in a naked manner, silly stuff being done every day and stooges getting promoted.

You also notice that the stooges have also been stuck for a very long time in a much bigger rut and are doing almost the same thing they used to do 10 years back!

What scares you the most is that very soon you will also hit the 10 year mark. It keeps you awake in the night, it makes you count every second when you are at work.

You are desperate to get out, you are frustrated with your plight, you just want to get rid of the toxicity around yourself.

But you can't.

So stuck in a rut for too long you are going totally nut!

You can't see any lights towards any exit path leading out of the rut you are in.

You also see that the top men and their loyal dogs are not afraid of the rut and that is because they are the ones who created it in the first place.

You are eagerly waiting for that one chance to get going.

And the question that you ask yourself every day is just the same.

When? When? When will you get the chance to escape this sick situation. For how further long will you need to suffer? How long?