Guru

Nothing Has Changed !

2007-11-14T17:26:00.000-08:00

So many entries have been made for this blog into my personal jotter. Entries from the hundreds of pages I read, from articles across the world, and observations, predictions, stories, analysis, and anecdotes from the world of finance, management and investing all shall remain in the pages of my jotter.

in the mean time, here is something which caught my attention, and I think its pretty AWESOME !

EQ

2007-11-07T19:29:00.000-08:00

People wont remember what you said, or what you made them do... but they will remember... How you made them feel !

Core Businesses

2007-10-10T19:04:00.000-07:00

Once you own a process or system, even though above mediocre, why let it go ?Genereate a cash flow, while trying to master the process. e.g. once you handle financial records of your own small company, why not expand upon it and open up a new financial sector of your business, and provide services to external , non-competitive clients?
Also, you need to have a way of stopping other people do the same thing that you do.
Managers paid as a % of sales, & weekly meetingsat different locations
Internal audits should be stronger than governmental , and other external audits.
Always have a personal overview of the finance.

Torn between various career choices

2007-09-18T21:04:00.001-07:00

Torn between various career choices
Tired of hearing these different voices;
Every move comes with its prices,
Chess game, checkers and a lot of dices!

Follow the corporate dream and be
A deadline meeting exec at P & G;
Coffee, useless talk and not so great pay,
While my biz major friends are raking in the hay!

Follow the great American dream and be
The CEO of your own startup company;
Desi parents, lawsuits and stupid workforce,
While my art major friends have their own racing horse!

Follow a director’s lenses and be
A model, an actor, a music company;
Politics, old age instability
While my finance major friends drive
A BMW with German reliability!

Follow the Vinod Khosla life and be
Yet another venture capitalist with great pedigree;
Few successes, lots of risk, many failures,
In this many optioned world of capitalist tenures.

Torn between various career choices
Tired of hearing these different voices;
Every move comes with its prices,
Chess game, checkers and a lot of dices!

Warren Buffett gems and peter lynch

2007-08-12T23:48:00.001-07:00

Warren Buffett's secrets of success

August 10, 2007

Warren Buffett, Chairman of Berkshire Hathaway, is arguably the world's greatest investor and the third richest man with a net worth exceeding $52 billion (Rs 213,200 crore). He is also a great philanthropist: last year he declared plans to give away over $37 billion (Rs 151,700 crore) in charity, to the Bill & Melinda Gates Foundation.

But he is not just a man with a large heart and a matching wallet. Also known as The Sage of Omaha, he is also full of wisdom and wit.

Here are some of his gems of advice for investors who look at the stock market to make a fortune, culled from various publications, his speeches and writings:

• 'Never invest in a business you cannot understand.'

• 'Always invest for the long term.'

• 'Remember that the stock market is manic-depressive.'

• 'Buy a business, don't rent stocks.'

• 'Price is what you pay. Value is what you get.'

• 'Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.'

• 'I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.'

• 'Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway.'

• 'Buy companies with strong histories of profitability and with a dominant business franchise.'

• 'It is optimism that is the enemy of the rational buyer.'

• 'As far as you are concerned, the stock market does not exist. Ignore it.'

• 'The ability to say 'no' is a tremendous advantage for an investor.'

• 'If you're doing something you love, you're more likely to put your all into it, and that generally equates to making money.'

My idea of a group decision is to look in the mirror.'

• 'Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.'

• 'The smarter the journalists are, the better off society is.'

• 'Success in investing doesn't correlate with IQ once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.'

• 'Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing.'

• 'You're neither right nor wrong because other people agree with you. You're right because your facts are right and your reasoning is right - that's the only thing that makes you right. And if your facts and reasoning are right, you don't have to worry about anybody else.'

• 'There seems to be some perverse human characteristic that likes to make easy things difficult.'

• 'In the short run, the market is a voting machine but in the long run it is a weighing machine.'

• 'It's only when the tide goes out that you learn who's been swimming naked.'

• 'Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you. You think about it; it's true. If you hire somebody without the first, you really want them to be dumb and lazy.'

• 'There are three kinds of people in the world: those who can count, and those who can't.'

• 'It takes 20 years to build a reputation and five minutes to lose it.'

• 'The first rule is not to lose. The second rule is not to forget the first rule.'

• 'Wide diversification is only required when investors do not understand what they are doing.'

• 'Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.'

• 'We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.'

• 'Our favourite holding period is forever.'

• 'If past history was all there was to the game, the richest people would be librarians.'

• 'Why not invest your assets in the companies you really like? As Mae West said, 'Too much of a good thing can be wonderful.''

• 'Your premium brand had better be delivering something special, or it's not going to get the business.'

• 'You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.'

• 'We do not view the company itself as the ultimate owner of our business assets but instead view the company as a conduit through which our shareholders own assets.'

• 'Accounting consequences do not influence our operating or capital-allocation decisions. When acquisition costs are similar, we much prefer to purchase $2 of earnings that is not reportable by us under standard accounting principles than to purchase $1 of earnings that is reportable.'

• 'Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.'

• 'The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.'

• 'Risk can be greatly reduced by concentrating on only a few holdings.'

• 'Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell.'

• 'Lethargy, bordering on sloth should remain the cornerstone of an investment style.'

• 'An investor should act as though he had a lifetime decision card with just twenty punches on it.'

• 'An investor needs to do very few things right as long as he or she avoids big mistakes.'

• 'Turnarounds' seldom turn.'

• 'The advice 'you never go broke taking a profit' is foolish.'

• 'It is more important to say 'no' to an opportunity, than to say 'yes.'

• 'It is not necessary to do extraordinary things to get extraordinary results.'

• 'An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.'

• 'It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.'

• 'In the business world, the rearview mirror is always clearer than the windshield.'

• 'A public-opinion poll is no substitute for thought.'

• 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.'

• 'The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.'

• 'Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.'

• 'The investor of today does not profit from yesterday's growth.'

• 'Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.'

• 'I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.'

• 'I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.'

• 'I always knew I was going to be rich. I don't think I ever doubted it for a minute.'

• 'We enjoy the process far more than the proceeds.'

• 'You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing.'

• 'I buy expensive suits. They just look cheap on me.'

• 'Let blockheads read what blockheads wrote.'

• 'I do not like debt and do not like to invest in companies that have too much debt, particularly long-term debt. With long-term debt, increases in interest rates can drastically affect company profits and make future cash flows less predictable.'

• 'My grandfather would sell me Wrigley's chewing gum and I would go door to door around my neighbourhood selling it. He also sold me a Coca-Cola for a quarter and I would sell it for a nickel each in the neighbourhood, so I made a small profit. I was always trying to do something like this.'

• 'A public-opinion poll is no substitute for thought.'

Peter Lynch

Every country has its famous mutual fund managers. The United States of America has had its fair share of them, but probably none more famous than Peter Lynch.

Lynch started managing the Fidelity Magellan Fund, in 1977, and was at the helm of things for the next 13 years. In 11 out of the 13 years, the Magellan fund gave more returns than the S&P 500 index, delivering an astonishing return of 29% per year.

One dollar invested in the scheme in 1977 would have amounted to around $27 by the time Lynch retired from active fund management in 1990.

Since 1990, Lynch has gotten around to writing various books on investing along with journalist John Rothschild. The first of the series being One Up on the Wall Street.

In this book he shares his thought process and the steps he followed that made him such a successful fund manager.

Here are five investing gems from this book:

1. Don't listen to stock market experts

The first and foremost advice that Lynch gives is to stop listening to experts. He writes, "But the rule number one, in my book, is: Stop listening to professionals! Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert."

Having said that Lynch feels that investing on their own for investors is a difficult exercise. He further writes, "That means ignoring the hot tips, the recommendations from brokerage houses, and the latest 'can't miss' suggestions from your favourite newsletter -- in favour of your own research. It means ignoring the stocks that you hear Peter Lynch, or some similar authority, is buying."

2. Invest in mutual funds

If an investor feels that he has the expertise to invest on his own, then he should be trying to outperform the market, i.e. generate a return that is greater than that of the market. If he cannot, the simple thing to do is to just invest in mutual funds.

Lynch writes, "Moreover, when you pick up your own stocks, you ought to outperform the experts. Otherwise, why bother?"

If the investor does not have the capability to outperform the market, then it doesn't make much sense for him to go about investing in stocks. Investing in mutual funds is a much better bet. "The mutual fund is a wonderful invention for people who have neither the time nor the inclination to test their wits against the stock market, as well as for people with small amount of money to invest who seek diversification," he writes further.

3. Believe in the power of compounding

Lynch narrates a small story to illustrate the power of compounding and drive home the fact that the earlier you start investing the better it is.

"Consider the Indians of Manhattan, who in 1625 sold all their real estate to a group of immigrants for $24 in trinkets and beads. For 362 years, the Indians have been the subjects of cruel jokes because of it -- but it turns out that they may have made a better deal than the buyers who got the island. At 8% interest on $24 (Note: Let's suspend our disbelief and assume they converted the trinkets to cash) compounded over all those years, the Indians would have built up a net worth just short $30 trillion, while the latest tax records from the Borough of Manhattan show the real estate to be worth only $28.1 billion. Give Manhattan the benefit of doubt: that $28.1 billion is the assessed value, and for all anybody knows, it may be worth twice that on the open market. So Manhattan's worth $56.2 billion. Either way, the Indians could be ahead by $29 trillion and change."

4. You don't need an education in business subjects to pick up stocks

Peter Lynch did not study accounting, neither did he get around to doing an MBA, the subjects considered most necessary to pick up the right stocks.

As he writes, "In college, except for obligatory courses, I avoided science, math, and accounting -- all normal preparation for business."

"Investing in stocks is an art, not a science, and people who've been trained to rigidly quantify everything have a big disadvantage. If stockpicking could be quantified, you could rent time on the nearest Cray computer and make a fortune. But it doesn't work that way. All the math you need in the stock market (Chrysler's got $1 billion in cash, $500 million in long term debt, etc) you get in the fourth grade."

So what is it that made him so successful in picking up the right kind of stocks.

"Logic is the subject that's helped me the most in picking stocks, if only because it taught me to identify the peculiar illogic of Wall Street. Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out by just sitting there, instead of checking the horse. A lot of investors sit around and debate, whether a stock is going up, as if the financial muse will give them the answer, instead of checking the company."

5. Learn to trust your gut feeling

Since investing is more an art than a science. Things are never very clear in the stock market. "Things are never clear on Wall Street, or when they are, then it's too late to profit from them. The scientific mind that needs to know all the data will be thwarted here," pens Lynch.

Hence, the most important thing in such a situation is to trust your gut feel. As Lynch says, "It is the rare investor who doesn't secretly harbour the conviction that he or she has a knack for divining stock prices or gold prices or interest rates. Inspite of the fact that most of us have been proven wrong again and again, it's uncanny how often people feel most strongly that stocks are going to go up or the economy is going to improve just when the opposite occurs."

"When it comes to predicting the market, the important skill here is not listening, it's snoring. The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them. Stand by your stocks as long as the fundamental story of the company hasn't changed."

A true vacation since detroit 2006 !

2007-08-10T22:13:00.000-07:00

· Chevy HHR – silver
· Music collection :
o Kaante songs,
o Fiza songs
o Gentleman songs
o Oceans 12 OST
o Pyaar tune kya kiya
o Maine Pyaar Kiya
o Bombay Dreams
· Country side fields
· Constant DJ driving ( its where u DJ while driving )
· Lodging in a paid for hotel
· Sleep...Lots of it!
· Dinner with friends at this uber-expensive Chinese restaurant ( of course paid for )
· The Simpsons
· Sleep…Lots of it!
· Breakfast
· Sleep…Lots of it!
· A very positive physical reading during the drug test
· Exercise…Lots of it!
· Sleep…lots of it!
· Out with friends again… small kid of 21 months
· Realization that my friends from hometown will be soon gone to different places, and our group will be kind of disintegrated
· Lots of phone calls
· Starbucks Coffee at midnight
· The Black Swan
· Charlie Rose and Kofi Annan
· Jim Cramer and Donny Duetsch’s “The big idea “
· Fast money MBA Challenge ( I knew more answers than the MBAs from top 10 in USA )
· Sleep…Lots of it!
· Drive back with the awesome music collection
· Come back home
· Sleep…Lots of it!
· Macaroni Grill and lots of good times with younger brother and his friend
· Sleep…Lots of it!

Value Investing Part 1

2007-08-03T10:55:00.001-07:00

www.yardeni.com

Value opportunities lie in < $1 billion in market cap and mid-cap companies

How many of the food chains are public? Is their model reliable, dependable, and do you see that company in business after 20 years? 10 years?

Find the total assets of a company, Assets/outstanding share should be equal to the stock price.

(Current Assets –current liabilities-long term debts)/shares outstanding should be equal to share price

Bargain stocks have lower P/E ratio than past P/E for that stock at an average of 5 years. Avoid P/E > 20

Intrinsic Value: E (2r +8.5) * (4.4/Y)

E = annual earnings per share

R = annual growth rate

8.5 = P/E for a no-growth stock

Y = interest rate on corporate bonds

1	E/P is 2(Corporate bond yield)	Risk
2	P/E = 0.4 (highest P/E in 5 years)	Risk
3	Dividend Yield = 2/3 (corporation bond yield )	Risk
4	Stock Price = 2/3 (net Current asset value)	Risk
5	Assets/Liabilities > 2	Financial Strength
6	Total Debt <>	Financial Strength
7	Earnings doubled in 10 years	Earning Stability
8	Earnings declined <>	Earning Stability

Acquire insurance companies, and look at their financials.

The Tao of Buffetology Series !!!

2007-07-02T23:45:00.000-07:00

Never be afraid to ask for to much when selling or offer too little when buying.
Overcome embarrassment. Be in control to walk away from a bad deal.
People with integrity are predisposed to perform; people without are predisposed to not perform.
You cannot make a good deal with a bad person. Reference checks are nifty.
You can never un-sign a contract. Do your thinking before signing anything.
Invest for life – like a catholic.
When Warren bought stocks in the bear market of 73-74, he said it was like a “sex-starved man in the middle of a harem with beautiful women”.
Buy companies with products that don’t have to change; businesses that will stay after 20 years.
Stocks are like pieces of a business. # of stocks * Stock Price = price you would pay if you were to buy the whole business. Would you buy it?
Invest in a business that a fool can run… because eventually a fool will.
If a business needs lots of capital to grow, it will not make you rich, because the business cannot invest efficiently in growth expansion, people or processes. Neither can it buy back its stocks. Such a company rotates money for a long time.
In a difficult business there is never just one cockroach in the kitchen. Warren avoids them even if the stock market is handing them out!
All man’s miseries derive from not being able to sit quietly in a room alone.
Coke, Wrigley, Gillette, Snickers, GE are companies that have gone on and on for a really long time. There is little that can go wrong with them. Where will their business be in 20 years from now?
Wall Street is the only place where people in Rolls Royce get off to seek advice from someone who rode the Subway.
Look for Integrity, Intelligence and Energy in your managers.

Human Society and the Financial Markets

2007-06-03T18:44:00.000-07:00

A closer look at the social relations and the financial markets will reveal an interesting similarity.Everything happens for a benefitand the deal is either overvalued or undervalued. People and stocks;both are either over or under priced.
Person A invests time and emotions in a relationship with person B solely based on the net worth of person B. The net worth can be thought of in terms of wealth, fame, happiness or EQ.Most people will judge person B on basis of CURRENT net worth.
Networking gurus, politicians, etc., will invest in person B based on the POTENTIAL worth and CURRENT worth.
Now, how is this different from the financial world ?

I say, that a person can be overpriced or under priced because if a person is overpriced in one group of people he/she may not be thought of highly in another group of people.
Think of this on a larger scale in terms of international and emerging economies' markets.

-------------
I had actually set out to write a very emotional sputter about who is to say if a person is wrong or right, when some people think a certain thing is right, while someone else thinks that the same thing is wrong.
But, emotions got thrown away, and the result is what u just read above the dotted lines.

India Inc.

2007-05-01T12:27:00.000-07:00

http://money.cnn.com/magazines/fortune/india/index.html

Housing Sector

2007-04-26T12:10:00.000-07:00

Shiller: Mr. Worst-case scenario

Robert Shiller called the tech-stock crash just as the Nasdaq peaked. But he is also the expert on the real estate market. And where does he think it's headed now? Uh-oh.

By Jason Zweig, Money Magazine senior writer/columnist

April 12 2007: 6:06 PM EDT

(Money Magaine) -- Robert Shiller is worried about your home's value, and that's not good. A finance and economics professor at Yale, Shiller proved he could see a crash coming with his book "Irrational Exuberance," which forecast the end of the 1990s stock bubble and hit bookstores in March 2000 - almost to the day the Nasdaq started to collapse.

Today, Shiller believes homes are roughly as overvalued as stocks were then and, once again, he's worth listening to.

Robert Shiller

Code of Business Conduct

2007-04-08T18:48:00.000-07:00

Always conduct business at your place of comfort. A familiarity with the place/surroundings/people gives an upper hand in any business dealing.
Never hire dumb people. Nor only will they under-perform, neither will they let you climb up.
Always hire smart, good-looking people, and know what exactly you have hired them for. Allot a work ownership to those people, and make sure that they do their job. 99 cases out of 100, they will. Why? Because they are smart and they look good. They have a reputation to live up to.
Have your materials, inventory, and resources in place before you make promises. A promise not kept is a promise broken. A promise broken is customer lost, and that is something that should be kept under rigid control.
Turn liabilities into assets. Never let something which can make money, sit idle gathering dust.
Train your speech to be polite, firm and honest. Train your employees to be thus also.
Avoid selling land unless absolutely necessary. Land is something that has to be bought, not sold. Trading of land is acceptable.
Read, discuss and learn about corporate mergers, acquisitions, and historical monarchial imperialism.

---

2007-03-24T15:51:00.001-07:00

Men are haunted by the vastness of eternity. And so we ask ourselves: will our actions echo across the centuries? Will strangers hear our names long after we are gone, and wonder who we were, how bravely we fought, how fiercely we loved?

Management Consultancies.

2007-03-18T14:05:00.000-07:00

A one stop shopping solution for all business services - legal help, marketing, business plan writeup, training new hires and also employing them.
That is the future of business outsourcing.
Under this model, a person has an idea for e.g. starting a website which allows the end user to swap and share videos. The model one stop business shopping solution company would then help them write a business plan,fund it,market it and also provide legal help and guidance so that they would not be in trouble like the Viacomm lawsuit against Gootube.
A lot of small /home businesses have brilliant ideas, diligent entrepreneurs, but fail due to a lack of resources. They can be helped - that is a true business potential.
This is a lot in line with what major management consultancies do !

listen to this guy talk !

2007-03-12T20:49:00.001-07:00

Toyota and Greedy Genius Ad

2007-03-07T19:41:00.001-08:00

Education future in India

2007-03-06T20:03:00.000-08:00

How can we make educational systems adapt to address the needs of tomorrow?

How do we make it more inclusive, accessible & attract the right minds for the right disciplines?
The educational system in any country is both a social and economic necessity. However it is also a system that is not easy to change. The impact of any changes takes a long time to realize. The current economic growth, both at local and global levels, has created a huge demand for resources with various skills and capabilities. But the question remains - are we doing enough, are we doing the right things?

This question has two probable answers. One is a short term, and the other is long term.

Let's start with the short term answer.

The immediate tomorrow needs to sustain the economic growth that India has achieved in the past 3 years. For that, we need a highly skilled population- not only in terms of IT education, but also other disciplines( ranging from entrepreneurship to lawmakers, and doctors to salespeople ).While a huge number of people graduate from engineering, business or any other school every year, these masses lack in an "all round development " through the college years. When it comes to specific technical knowledge, Indian undergrads leave their western counterpart in the dust; however, they are not trained to have the "vision" per se to take India to the next level, or to think out of box in many cases. For such decisions, they rely on MBA certified managers or other leaders.

So I guess, a better balanced and kind of an all encompassing undergraduate academic tenure will assure that India continues its stupendous economic growth and can come up to speed with other nations at a faster rate, and stay there!

The long term answer definitely lies in increasing literacy in India. For any country to achieve sustained economic growth, the population has to be able to read and write and calculate!

The government school system of India is not the best in Asia (to say the least)

This is when the privatization of not for profit schools can come in. How many millions does an MNC spend in advertising???

What if that company, sets up a trust fund for an "x" amount of dollars, uses that money for setting up a school, and operating it? This charity work will not only ensure that the company gets media coverage, but will also work for the benefit of children who want to go to school, but have no economic means of doing so !

One plaguing issue that India has is that people want their children to work, and not go to school. Let’s look at one hypothetical situation to solve this problem.

Let’s say that the Ambanis decide to set up a plant in a village in Gujarat. The simultaneous opening of a huge school with the bare necessities (with the money that would have been otherwise spent in musical advertisements on all major TV channels) will ensure that they get a LOT of media coverage. The local laborers get employment, and their children (if any) get to go to school for free (this is of course assuming that the Ambanis want to put some money aside for philanthropy.)!

So, in a nutshell, for the long term improvement in education sector, the private firms , the big elephants must come together and devise a process that improves the quality of education at grass root levels in country, thereby improving their standing in the community, thereby improving their profits, thereby being able to spend more money on philanthropy, thereby creating a generation of well educated youngsters with smart brains, thereby being able to hire better Indians, thereby again improving their company profits !

Of course, neither of the two answers is as simple as I laid them out here, but the theory can work if further thought upon and then crystallized!

Reinventing Bollywood

2007-03-06T18:40:00.000-08:00

Reinventing Bollywood

India's film industry is cranking out movies, but has yet to hit the box office jackpot. But that's about to change - and entrepreneurs are seizing the opportunity.

By Jason Overdorf, Business 2.0 Magazine

March 6 2007: 11:42 AM EST

(Business 2.0 Magazine) -- Ronnie Screwvala walked the red carpet at the glitzy Dubai International Film Festival in December with Oliver Stone and Richard Gere. Westerners might have wondered who he was and why he deserved the company of two Hollywood luminaries, but anyone familiar with the Indian film industry would have understood.

Screwvala, one of the leading movie producers in India, is bringing Hollywood-style filmmaking to the subcontinent. And U.S. moviemakers, desperate for new opportunities, want a piece of the action.

India's teeming film industry, known as Bollywood, is extraordinarily prolific. Indian filmmakers churn out 1,000 movies each year. Yet the industry grossed just $1.5 billion in 2005, and only a handful of movies made it to first-run theaters overseas. Compare that with Hollywood, which pumped out 563 movies that year and made more than $18 billion at the box office, including $9.6 billion from international distribution.

Why isn't Bollywood making more money?

That question is the driving force behind Screwvala's company, UTV Software Communications. "Broadcasting [in multiple channels] started here in 1992, and it's already a $4 billion business," says the 49-year-old entrepreneur. "Yet this 100-year-old industry is still less than $2 billion. We have to grow."

His solution is to revolutionize Bollywood - blow up the business model and replace it with traditional studio rules.

It's a huge job. Bollywood has always been a haphazard affair. Half a dozen prominent families controlled it, but they weren't very businesslike. Movies started shooting with no scripts and little money. Stars disappeared midshoot for weeks at a time to vacation, go home, or work on another movie. Theater owners underreported ticket sales to avoid sharing revenue with producers. It was nearly impossible to figure out whether a movie had made money and, if so, how much.

In addition, Indian story lines did not appeal to many outside the country. To the Western eye, Bollywood movies were chaotic, a surreal combination of Sylvester Stallone and Busby Berkeley musicals. In a typical plot, the hero sang, danced, fought bad guys, got the girl, found his long lost brother, and wept on his mother's deathbed - for at least three hours.

Screwvala broke into Bollywood in the late '90s, teaming up with anyone willing to work by his rules. UTV has produced a dozen movies with all the earmarks of professional filmmaking: budgets, marketing and distribution plans, real preproduction, and three-month shoots.

The company distributes them worldwide and milks Hollywood-style ancillary revenue, from product placement to soundtrack rights and video-on-demand. Screwvala has also cut the running times and dumped the disorganized and stale story lines. His hit Rang de Basanti (The Colors of Spring) tells the story of India's disaffected urban youth; it also made more than $2 million in the United States.

"We're breaking the mold," Screwvala says, comparing his experience to the days when Star Wars and other independent films paved the way for new genres in Hollywood.

Screwvala likes pioneering. The former game show host started his business career walking around Mumbai, asking apartment dwellers to try a newfangled gadget called a remote control. He got Indians to give up their single-channel, government-run television and brought cable to the country in the 1980s. He used the money from that to get into television production, making a steady stream of animated cartoons that attracted U.S. producers looking to outsource their own animation.

But all the while, he had movies on the brain. "Indians have always been voracious movie viewers," he says. "That's in our DNA. But we're as strong in commerce as we are in creative. It seemed to me that there was a huge opportunity here."

He was right. Now U.S. filmmakers, their revenue streams threatened by videogames, the Internet, and video-on-demand, knock on his door. This year, along with his Indian films, he's partnering with Sony Pic (Charts)tures and Fox Searchlight on movies starring Chris Rock and Will Smith, as well as an adaptation of Jhumpa Lahiri's novel The Namesake. News Corp (Charts). and Disney (Charts) bought stakes in UTV last year.

And Screwvala's plan is starting to bear fruit. In 2005, UTV took in $52 million -$32 million of it from movies - and turned a modest profit. That made it the second-largest producer in India, counting box office and ancillary revenue, a meteoric rise for an industry newcomer.

And its "new" business practices are spurring changes at competing studios. Contracts, budgets, and balance sheets are more common. So are shooting schedules, bigger marketing budgets, and the exploitation of ancillary revenue. According to PricewaterhouseCoopers, Indian films will generate $2.3 billion by 2010.

UTV has many other ventures, including 15 straight-to-DVD movies, an animated feature co-produced with a U.S. company, and a U.S. television series. But Screwvala has yet to reach his ultimate goal. "We have a good relationship with Disney," he says. "I'm hoping it can help us get some of our films into Wal-Mart."

Spoken like a true Hollywood producer, albeit with a distinct colonial accent.

A Preview of the Internet of Future

2007-03-05T17:45:00.000-08:00

No, Second Life is not overhyped

Is it a game? No. Is it a marketing opportunity? Yes, but who cares? What matters most is that it may point to the future of the Net, says Fortune's David Kirkpatrick.

By David Kirkpatrick, Fortune senior editor

November 10 2006: 4:02 PM EST

NEW YORK (Fortune) -- Second Life, the three-dimensional virtual world, has been getting tons of press lately. In the software, which anyone can download for free, you travel around as an "avatar" representing yourself (with a different name), through a huge range of spaces - beautiful natural environments, shopping malls, museums, clubs, homes, apartments and cities. So far, it's signed up 1.3 million members.

It's not a game, it's just a place you go to do whatever you want to do. It has been on the cover of Business Week, on the front page of the New York Times Escapes section and in the coverage of Reuters, which has now assigned a reporter to operate full-time inside Second Life. The Reuters reporter, Adam Pasnick, told CNET that his assignment has caused so many waves he's been getting interview requests from Poland, Colombia, Brazil and New Zealand.

W Hotels has built a prototype of its new Aloft hotel brand inside Second Life. It was featured in the Times, among many other articles. W President Ross Klein told me that while the company originally just wanted to test out concepts, the PR value from all the stories written about Aloft in Second Life has given the company a "hundred-fold" return on its investment, just in positive PR. Even IBM (Charts) CEO Sam Palmisano can now be seen lurking around Second Life.

Yet Second Life may be more important, longterm, than even this much publicity would suggest. That's because what it really may represent is an alternative vision for how to interact with information and communicate over the Internet.

Yes it's cartoony, but one of the great things about Second LIfe is that whenever you are doing anything, you can see the other people who are nearby as well. This brings a dimension of social life - so elemental to how we live our lives offline - to the Internet in a way that up to now the Web has not. In Second Life everything you do is done in a social space, though you can get privacy if you want.

So far Second Life is way too hard to use. The people who do best there are still techie types. It requires a fairly powerful computer. You have to download a special software application to use it. It can't be used in many corporate offices (like mine at Time Inc., for instance).

But Second Life is important as much for what it represents as for what it concretely offers today. Looking at Second Life makes me realize just how much the Web, wonderful and useful as it is, still mimics a print model.

We are all lathered up about the success of News Corp.'s (Charts) MySpace. But the social networks of the future will probably be much more than merely a bunch of Web-site-like collections of data, as MySpace is today. MySpace beat Friendster, the previous champion social networking site, by allowing its members much more freedom in how they created their pages.

Second Life goes much further. It took a radical approach to design from the beginning. It offered itself as a mere platform for the creations of its occupants. Essentially everything seen inside the software today was created by its users.

All that the company that operates Second Life, Linden Lab, sells is server time and network capacity. The more real estate you own, the more you pay. It costs nothing to enter, so you can go in and explore all you want. It's often worth it to own real estate, because you can make real money by renting it out or developing it to resell.

Users pay in Linden dollars, which can be converted to real dollars. Though Second Life has established codes of behavior, and does enforce them, restrictions are minimal. Second Life really is the creation of its residents.

One of the more intriguing aspects of Second Life is that it includes links to content outside. If you go, for instance, to Sony's (Charts) island, you can enter a Christina Aguilera room, and watch her latest video (while your avatar sits in an easy chair, of course). There's no reason why some version of a 3D world couldn't eventually offer as much functionality as we get today on the Web, and more. An interesting corollary - searching with Google (Charts) might be harder. It's completely text-based.

Every day more big companies turn their attention to this new medium, realizing that it really represents something new. I'm now convinced that one day Second Life or something related to it will become a Google/Yahoo/MySpace-scale company.

Maybe Second Life will grow organically to become that company. Or an existing giant striving to stay relevant might buy it. Or maybe somebody will build a different, even better virtual world.

But we're seeing something new and important. If you want to stay abreast of what's happening in tech, you need to get inside Second Life. If you run into David Liveoak, don't hesitate to say hello.

Bernanke: Globalization may boost U.S. inflation

2007-03-05T17:44:00.001-08:00

Bernanke: Globalization may boost U.S. inflation

'Monetary policy actions retain a powerful effect on domestic stock prices,' the Fed chairman said in a speech Friday.

March 3 2007: 9:45 AM EST

PALO ALTO, Calif. (Reuters) -- Global factors may on balance have boosted U.S. inflation, but globalization has not affected the ability of the Federal Reserve to influence U.S. financial conditions, Fed Chairman Ben Bernanke said on Friday.

"When the offsetting effects of globalization on the prices of manufactured imports and on energy and commodity prices are considered together, there seems to be little basis for concluding that globalization overall has significantly reduced inflation in the United States in recent years; indeed the opposite may be true," he said in a speech at Stanford University.

Bernanke did not speak about the outlook for interest rates, economic growth or inflation during his remarks.

Nor did the central bank chairman talk about declines in U.S. stocks, which had their worst week in four years, in his text.

However, Bernanke provided a subtle reminder the Fed is not without tools to influence markets if necessary.

"Empirical studies also find that U.S. monetary policy actions retain a powerful effect on domestic stock prices," he said.

Overstated inflation

Bernanke also told his audience the Fed agrees with studies that say government data overstates inflation data.

"I still think that there's still some overstatement, and Federal Reserve estimates are, depending on the indicator, somewhere between half a percent and a percentage point of overstatement of the inflation rate," he said in response to questions.

The Fed looks closely at the personal consumption expenditure price index to gauge inflation because it allows for the possibility that people purchase different goods as prices rise, he said.

The central bank chief said the Fed finds it difficult to pin down a fixed number for any natural rate of unemployment.

"There are a couple of problems that have emerged with using a fixed number like that for analyzing the macro-economy," he said.

The relationship between slack in the economy and lower inflation is "clearly lower" than it used to be, Bernanke said.

Fed has influence

Bernanke said that globalization has not "materially affected the ability" of the Fed to influence U.S. financial conditions, "nor has it led to significant changes in the process which determines the U.S. inflation rate."

Overall, globalization has probably spurred inflation in the United States rather than lowered it because recent increases in energy and commodity use in developing countries such as China and India have pushed up prices for such goods, Bernanke said.

He noted a study that found that if the share of world trade and economic growth of non-industrial countries remained at its 2000 level, oil prices would have been as much as 40 percent lower in 2005 and metals prices as much as 10 percent lower.

"Accordingly, in the past several years, the effect of growth in developing economies on commodity prices has been a source of upward pressure on inflation in the United States and other industrial economies," he said.

At the same time, increased trade with China and other developing countries has led to slower growth in the prices of imported manufactured goods, Bernanke said.

He cited a study concluding that trade with China alone reduced annual import price inflation in the United States by about 1 percentage point over 1993-2002.

The Fed is devoting more resources and time to trying to understand the effect of increased global integration on inflation and the central bank's ability to maintain price stability and ensure low unemployment, Bernanke said.

It is possible that trade promotes greater productivity and thus lowers costs, or that global demand influences domestic pricing decisions, but those effects remain to be conclusively shown, he added.

source : http://money.cnn.com/2007/03/03/news/economy/bernanke.reut/index.htm?postversion=2007030309

A journey of epic proportions begins here

2007-03-05T17:37:00.000-08:00

The story begins in some mega-city at some MNC with a humble dream - To earn vast amounts of wealth and to use that wealth for the upliftment of society, primarily by providing a top-notch means of education for the economically backward people.