" You remember the PITTIE drafters company? the drafters we used in college, are selling their factory land and are moving out to a new location to make a killing on the real estate prices, they would have made more money in this deal than in running the company till date. Hence, always invest in the real estate". so said a friend of mine who studied engineering with me.
That sentence is making me think. Is it important to be a real estate businessman before being a normal one? I was wondering, either they ran the company very poorly, or invested in the real estate too much to not invest in the company, in which case they ran PITTIE drafting company as a real estate company. Take another case, HLL sold their prime real estate, the office in south Mumbai for Rs 425 cr (pardon if my nos are wrong), it was touted as a major decision they took 40 years back. Look at the financials, even if they would have bought this prime real estate for a cr and waited 40 years to get to Rs 425 cr, can it be termed as an important decision to make? purely from the financial point of view, ROCE for this decision will be less than 14% without adjusting for the inflation. Hence, why do companies particularly in India, like to make big investments in real estate than in the companies they wish to run? My gut is, real estate in India is a bit murky business and if someone wants to invest an undeclared income, real estate could be a primary driver.
Actually, in any country, if real estate is growing more than the GDP growth, my guess is, its a wrong signal since real estate should be growing on the back of economic growth. The land is valuable only if it can generate more wealth by using it than selling.
Why do people buy flats? my thinking is, its a pure emotional driver than a financial one. One more reason can be, money is easily available in the form of a loan for the real estate, hence to push ourselves in regular savings mode, this can be a good investment. Purely, if one was to make a financial decision and not get driven by the loan availability, you will choose to never invest in a flat as that money can fetch better returns in any other business that delivers ROCE in excess of 30%. The added benefit of not staying in your flat, others buy, decorate and rent better flats to you at much lower rentals and no sweat of getting tagged to a location.
Think about it....
Friday, April 19, 2013
conversations
How we think is an outcome of our conversations was not something i understood till I read an article about relationships and its impact on us as human beings. This article was not so much about the conversations, it basically was about being in a relationship which meant most no of conversations with that person and those conversations driving the shaping of the brain.
And it started dawning on me, every conversation is like a pair of hands of a potter, a curve here and there alters the very shape of the outcome. Just think about it, you are in a conversation with your colleague, you are passionately articulating about something and this colleague is cutting it all the time indicating the flaws in the thinking. What will that do to you, make you feel so drained, and what does draining do, releases toxins in the body and in the process killing some cells. I am exaggerating a bit but thats what happens as we do talking/listening/arguing for atleast 4-5 hours every day or more. Imagine, every interaction can potentially add or take away a part of us and we indulge in them as if we think thats the only way to make our presence felt in this world.
The method of vipashyana is talked a lot about for cleansing of our minds, why does vipashyana help us in cleansing? My thinking is, Vipashyana is about making our mind still and not letting it get affected by our thoughts. Infact, an instructor of mine used to advocate that during vipashyana, you should be able to screen your thoughts and not indulge in any of those, in a way, be aware of those but do not get affected. I feel conversations are exactly opposite of vipashyana. As we should do vipashyana occasionally, we should indulge in conversations occasionally and only those which will add to us. Its not about doing only those that suit our thinking, post every conversation we should feel energised and those are achieved irrespective of the tilt towards a particular way of thinking. Ofcourse, the ownership of making them energising is not only on others.
And it started dawning on me, every conversation is like a pair of hands of a potter, a curve here and there alters the very shape of the outcome. Just think about it, you are in a conversation with your colleague, you are passionately articulating about something and this colleague is cutting it all the time indicating the flaws in the thinking. What will that do to you, make you feel so drained, and what does draining do, releases toxins in the body and in the process killing some cells. I am exaggerating a bit but thats what happens as we do talking/listening/arguing for atleast 4-5 hours every day or more. Imagine, every interaction can potentially add or take away a part of us and we indulge in them as if we think thats the only way to make our presence felt in this world.
The method of vipashyana is talked a lot about for cleansing of our minds, why does vipashyana help us in cleansing? My thinking is, Vipashyana is about making our mind still and not letting it get affected by our thoughts. Infact, an instructor of mine used to advocate that during vipashyana, you should be able to screen your thoughts and not indulge in any of those, in a way, be aware of those but do not get affected. I feel conversations are exactly opposite of vipashyana. As we should do vipashyana occasionally, we should indulge in conversations occasionally and only those which will add to us. Its not about doing only those that suit our thinking, post every conversation we should feel energised and those are achieved irrespective of the tilt towards a particular way of thinking. Ofcourse, the ownership of making them energising is not only on others.
Saturday, March 30, 2013
Sustainability
A friend of mine doing a consultancy stint in sustainability was talking about how large organisations can do a lot if they choose to be sustainable. The issue, as per him is, they pay lip service to sustainability and are interested only to the extent of publishing annual reports that has a page on sustainability.
I understand his frustration. I was sharing with him, Its the same when it comes to large countries talking about global warming, they feel its more for others than themselves and that nothing is going to happen immediately so why bother. The day it starts hurting them, they will wake up and get serious about it.
On the flip side, I was thinking, what is sustainability - maintaining the current lifestyle for the future generations. And, how have we come to this lifestyle, by our own choice, by doing a lot of innovations and inventions. So why this effort of preserving this lifestyle? if 17th century or 18th century people would have thought about sustainability, would we have achieved the current lifestyle? Don't get me wrong, I am more of a preserving type, I still drive around a 10 year old car, but I do get these questions, what am i pushing to sustain?
There are two examples I have which can trip sustainability paradigm. First is about eating. Do we know how much quantity of food in the world is had everyday per person? its highest in USSR at 1.01 kgs per day to lowest in India at .567 kgs per day from amongst the surveyed countries. Most of the developed world is around 900 gms to 1000 gms per day, developing world is around 600 gms per day. Within this consumption, the affluent in the developing world consume close to the averages of developed world taking the average for the poor far lower. Over a period of time, the consumption of calories per day has gone up from sub 2000 to in excess of 3200 in the developed world and 2600 in developing world. The question I have is, if we have improved on the comfort and in the process have reduced the calorie consumption, shouldn't we be staying at the 2000 levels than taking it to 160% and more. We all know the disadvantages of over eating, that itself leads to high medical costs. Is this the sustainability we are looking to preserve? the best that can happen is, we all go down to even food consumption and to 500 to 600 gms per day reducing the pressure on the resources that get used up. And through invention, if we can improve the photo synthesis efficiency from close to 1% to even 2%, we may see abundance of food energy with the least amount of resources.
The second is about energy. With the evolution we have seen in extracting energy of the past, we have become the highest consumers of energy and in the process making life far comfortable than that has ever been thought on this planet. If we add up the nos, the earth has received abundant energy for the last 4.2 billion years from the sun and it has been preserved through plant and animal life. Except in cases where the energy has already been utilised by burning the CH, most of it is still preserved and we will need different methods of extracting the same. Utilising the same will mean release of CO2 and in the process heating of the planet but that is more due to the energy utilisation than the abundance or scarcity of available sources. In that sense, its not so much of sustaining of the available resources but reducing the consumption of the same. By innovating, we should become energy efficient than just the conservers.
In both the cases, we need to change, we need to invent the next stages of evolution so that we prolong our comforts and our experience of the planet.
I understand his frustration. I was sharing with him, Its the same when it comes to large countries talking about global warming, they feel its more for others than themselves and that nothing is going to happen immediately so why bother. The day it starts hurting them, they will wake up and get serious about it.
On the flip side, I was thinking, what is sustainability - maintaining the current lifestyle for the future generations. And, how have we come to this lifestyle, by our own choice, by doing a lot of innovations and inventions. So why this effort of preserving this lifestyle? if 17th century or 18th century people would have thought about sustainability, would we have achieved the current lifestyle? Don't get me wrong, I am more of a preserving type, I still drive around a 10 year old car, but I do get these questions, what am i pushing to sustain?
There are two examples I have which can trip sustainability paradigm. First is about eating. Do we know how much quantity of food in the world is had everyday per person? its highest in USSR at 1.01 kgs per day to lowest in India at .567 kgs per day from amongst the surveyed countries. Most of the developed world is around 900 gms to 1000 gms per day, developing world is around 600 gms per day. Within this consumption, the affluent in the developing world consume close to the averages of developed world taking the average for the poor far lower. Over a period of time, the consumption of calories per day has gone up from sub 2000 to in excess of 3200 in the developed world and 2600 in developing world. The question I have is, if we have improved on the comfort and in the process have reduced the calorie consumption, shouldn't we be staying at the 2000 levels than taking it to 160% and more. We all know the disadvantages of over eating, that itself leads to high medical costs. Is this the sustainability we are looking to preserve? the best that can happen is, we all go down to even food consumption and to 500 to 600 gms per day reducing the pressure on the resources that get used up. And through invention, if we can improve the photo synthesis efficiency from close to 1% to even 2%, we may see abundance of food energy with the least amount of resources.
The second is about energy. With the evolution we have seen in extracting energy of the past, we have become the highest consumers of energy and in the process making life far comfortable than that has ever been thought on this planet. If we add up the nos, the earth has received abundant energy for the last 4.2 billion years from the sun and it has been preserved through plant and animal life. Except in cases where the energy has already been utilised by burning the CH, most of it is still preserved and we will need different methods of extracting the same. Utilising the same will mean release of CO2 and in the process heating of the planet but that is more due to the energy utilisation than the abundance or scarcity of available sources. In that sense, its not so much of sustaining of the available resources but reducing the consumption of the same. By innovating, we should become energy efficient than just the conservers.
In both the cases, we need to change, we need to invent the next stages of evolution so that we prolong our comforts and our experience of the planet.
Friday, March 22, 2013
Peer pressure and entrepreneurship
"How can you leave such a good job that pays for your car, a house and promises phoren postings?" asked a friend of mine when I had almost made up my mind to move on and plunge in the darkness called entrepreneurship. It was a very important question for me to answer. Infact, one of the blogs I wrote in those days was, what will it take for me to continue with the daily life without compromising the basic necessities.
This probably is one of the most important things one needs to consider while thinking of entrepreneurship. How long can you live in a world of your own that does not need external validation. Its the toughest time as you have not proved anything, you are burning cash for the business and hence not in a spending mode, are trying to leverage your personal equations than positional ones. Many of the highly intelligent people I meet in the corporate world and doing wonderfully well have this urge of doing something on their own. I definitely ask them to consider this question before even thinking of entrepreneurship.
Entrepreneurship is madness at one level. It will take you out of your social circle, sometimes owing to the change in lifestyle or simply your inability to compete on objects of desire. That can lead to low self esteem and inturn an indirect impact on the business.
Hence, for you to succeed, you will need nerves of steel and huge self confidence, an ability to believe in self to the extent of ridicule. If peer acceptance is an important criteria for your existence, I am not sure you will find joy in entrepreneurship.
This probably is one of the most important things one needs to consider while thinking of entrepreneurship. How long can you live in a world of your own that does not need external validation. Its the toughest time as you have not proved anything, you are burning cash for the business and hence not in a spending mode, are trying to leverage your personal equations than positional ones. Many of the highly intelligent people I meet in the corporate world and doing wonderfully well have this urge of doing something on their own. I definitely ask them to consider this question before even thinking of entrepreneurship.
Entrepreneurship is madness at one level. It will take you out of your social circle, sometimes owing to the change in lifestyle or simply your inability to compete on objects of desire. That can lead to low self esteem and inturn an indirect impact on the business.
Hence, for you to succeed, you will need nerves of steel and huge self confidence, an ability to believe in self to the extent of ridicule. If peer acceptance is an important criteria for your existence, I am not sure you will find joy in entrepreneurship.
Sunday, February 24, 2013
How we think
I met up with a school friend over lunch. We studied in a village school till 12th and moved on to pursue medicine and engineering. He is doing exceedingly well as a doctor and is empanelled on physicians association of India. He travels to give lectures in places like Boston and cardiff.
While discussing various things, we started talking about his dream of migrating to a developed country, US or UK to be specific. He shared with me that he is happy that he did not pursue that dream and stayed back in India, " the society there does not understand moral values and parenting, I saw pregnant teens staying up in the bars late night and were drunk so much that I am not sure they were aware of their surroundings", lamented my friend. " the economies of these countries are in serious trouble and will need a major overhaul, I like India a lot, I know there is a lot of corruption but thats good in a way, the work happens". I was patiently listening to him but lost him with the last comment, "So you think its good that we have corruption?" I asked him in total disbelief. " Yes, its a good system to reward efficiency", explained my friend.
I dropped him at his place and started for Pune but the question kept haunting me, such an educated guy with good upbringing can think that corruption is a good thing. For a moment I thought, he does not understand what he is saying but then the next thought told me something else, he is so much in sync with his thinking that he does not see anything wrong in paying for the extra service that demand extra effort - be it breaking the law or being at the mercy of a greedy babu. And then I realised, this thinking is a bigger problem we face than the people who take the bribes. Its the same with someone who is driving on the wrong side of the road, jumping a signal or carrying 3 people on a two wheeler.
While discussing various things, we started talking about his dream of migrating to a developed country, US or UK to be specific. He shared with me that he is happy that he did not pursue that dream and stayed back in India, " the society there does not understand moral values and parenting, I saw pregnant teens staying up in the bars late night and were drunk so much that I am not sure they were aware of their surroundings", lamented my friend. " the economies of these countries are in serious trouble and will need a major overhaul, I like India a lot, I know there is a lot of corruption but thats good in a way, the work happens". I was patiently listening to him but lost him with the last comment, "So you think its good that we have corruption?" I asked him in total disbelief. " Yes, its a good system to reward efficiency", explained my friend.
I dropped him at his place and started for Pune but the question kept haunting me, such an educated guy with good upbringing can think that corruption is a good thing. For a moment I thought, he does not understand what he is saying but then the next thought told me something else, he is so much in sync with his thinking that he does not see anything wrong in paying for the extra service that demand extra effort - be it breaking the law or being at the mercy of a greedy babu. And then I realised, this thinking is a bigger problem we face than the people who take the bribes. Its the same with someone who is driving on the wrong side of the road, jumping a signal or carrying 3 people on a two wheeler.
Friday, February 8, 2013
Alarms and locations
I was travelling from Latur to Pune by a train that left Latur 2230 hrs to reach Pune 0430 hrs. Now, thats an awful hour to wake up and alight. I was very sure i was going to miss Pune and thats what happened.
Despite having a sleepless journey, I managed to sleep very well around 330 and was woken by an alarm at 0430 to realise I have crossed Pune and is 15 kms away. I switched 3G on and started searching where I was to find the arrow showing Dehu Road on my phone. Promptly, in five minutes, TC comes with a passenger who is slated to go to Mumbai to be seated where I slept. When I narrated my story, TC retorted, you should have told me at the time of boarding, I would have woken you up.
Actually, I was not hassled with this at all, the next station was Lonavala, I was thinking if I should get down there or travel to Kalyan to take a train back. The TC was not bothered that I was travelling without a ticket, must be the story effect.
I was thinking what is it that i could have done, I was told I will be in Pune at 430 and I had set the alarm accordingly, then It struck me, if someone can design an alarm linked to the location than just the time.
Imagine you setting alarms for
1. the place you met your first sweetheart first time
2.the nursing home you were born
3. the place where you had the first accident
etc... etc...
Despite having a sleepless journey, I managed to sleep very well around 330 and was woken by an alarm at 0430 to realise I have crossed Pune and is 15 kms away. I switched 3G on and started searching where I was to find the arrow showing Dehu Road on my phone. Promptly, in five minutes, TC comes with a passenger who is slated to go to Mumbai to be seated where I slept. When I narrated my story, TC retorted, you should have told me at the time of boarding, I would have woken you up.
Actually, I was not hassled with this at all, the next station was Lonavala, I was thinking if I should get down there or travel to Kalyan to take a train back. The TC was not bothered that I was travelling without a ticket, must be the story effect.
I was thinking what is it that i could have done, I was told I will be in Pune at 430 and I had set the alarm accordingly, then It struck me, if someone can design an alarm linked to the location than just the time.
Imagine you setting alarms for
1. the place you met your first sweetheart first time
2.the nursing home you were born
3. the place where you had the first accident
etc... etc...
Wednesday, January 9, 2013
Deassetisation
I returned from Bangkok without buying a gadget!!! I was very happy with myself that i stayed with the resolution. Before leaving for Bangkok, I had browsed my cupboard to find how many things that i bought on various trips have been unused/partially used. And there were many - a camcorder bought 5 years back used for 10 minutes of video recording, a GPS system bought in Shanghai is unused as it does not support India maps (but i can see Shanghai roads neatly), there are 4 handsets that were bought during various stages of Nokia's evolution lying idle, 3 cameras bought at the time of announcement of every trip to make it memorable used only during that trip etc etc.
To top it, I ensured that we clicked very limited no of photos during the trip as most of the photos have a shelf life of a month - I am a big fan of the "living in the moment" thinking.
Fundamentally, I am moving towards a deassetised lifestyle. I read a tweet a few days back, "Its no more about how many assets you own, its about how smart you are to not own too many of them". And, I completely get it. During the Bangkok trip, I kept thinking, if there was a shop that leased a canon DSLR for a few baths per day, it would meet my need of checking the ability to photograph and also not carrying a camera. Similarly, if I have a choice of renting various cars as the need arises, there wont be a need for me to buy one ( btw i own a car that is 10 years old and i have no immediate plans to change). I am extending this philosophy even for a home, I do not own a flat and have no plans to buy one for a while, there are enough furnished flats available, as your location preferences change, you move to a new house.
If, this thinking develops an appeal for a large section of people, it will make this world a very different place. We wont run after creating assets and in the process will develop a very positive attitude to sharing. This will make the world far more asset efficient and create a democratic availability of services. By no means I support the idea of giving up, what i support is the idea of consume as you require.
To top it, I ensured that we clicked very limited no of photos during the trip as most of the photos have a shelf life of a month - I am a big fan of the "living in the moment" thinking.
Fundamentally, I am moving towards a deassetised lifestyle. I read a tweet a few days back, "Its no more about how many assets you own, its about how smart you are to not own too many of them". And, I completely get it. During the Bangkok trip, I kept thinking, if there was a shop that leased a canon DSLR for a few baths per day, it would meet my need of checking the ability to photograph and also not carrying a camera. Similarly, if I have a choice of renting various cars as the need arises, there wont be a need for me to buy one ( btw i own a car that is 10 years old and i have no immediate plans to change). I am extending this philosophy even for a home, I do not own a flat and have no plans to buy one for a while, there are enough furnished flats available, as your location preferences change, you move to a new house.
If, this thinking develops an appeal for a large section of people, it will make this world a very different place. We wont run after creating assets and in the process will develop a very positive attitude to sharing. This will make the world far more asset efficient and create a democratic availability of services. By no means I support the idea of giving up, what i support is the idea of consume as you require.
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