Entries in the ‘General’ Category:

Insure Unborn Babies

Pregnant women will be able to insure their unborn babies against birth defects and death under a new policy, a report said today.

The insurance company ING has devised a baby policy for women aged 16 to 40 which will deliver payouts of up to $50,000 for babies born with down’s syndrome, spina bifida or a cleft palate, the Sun-Herald said.

A stillborn baby could get a $10,000 payout while women who suffered complications during pregnancy or birth could also be awarded a payout, it said.

ING spokesman Mark Vilo said the new policy allowed the company to match up with “social trends and advances in medical technology,” the paper said.

“Every woman in the process of having a child knows the risks,” Vilo said. “We don’t make people undergo genetic testing to find out things they don’t want to.”

“With the median age of new mums now nearly 31, (up from 27 in 1985), the risk of pregnancy complications and birth defects increases dramatically.

For a woman aged 35 or more  the risk of stillborn is one in 440, as opposed to one in 1,000 for younger women,” ING said on its website.

The policy drew criticism from the New South Wales Midwives Association, which said it played on the fears of pregnant women.

“It is making women think about the terrible things that can happen when the reality is there are very few mothers who suffer from complications during pregnancy,” secretary Dr Hannah Dahlen told the Sun-Herald.

But Investment and Financial Services Association head Richard Gilbert said it made sense to have appropriate insurance

Fed cuts rates

Fed cuts rates by 75 basis points

Cashing in on pollution

(Fortune) — When General Motors closed down a manufacturing plant in Boisbrand, Quebec, a private investment company called Cherokee Investment Partners bought the tainted industrial site.

After Burlington Mills shuttered a textile factory in Mooresville, N.C., Cherokee acquired the property even though it was contaminated by asbestos and toxic chemicals known as PCBs.

And just across the Hudson River from Manhattan, Cherokee and developer Donald Trump are tackling another dirty job. They intend to build homes, apartments, stores and a world-class golf course atop four garbage dumps in the New Jersey Meadowlands.

Like a value investor who buys out-of-favor stocks, Cherokee is a real estate investor company that sees opportunity in assets that others don’t want. Based in Raleigh, N. C., Cherokee buys properties known as “brownfields” that have been polluted and abandoned, cleans them up and either sells or redevelops them.

Cherokee launched its first private equity fund in 1996, raising money from institutional investors and high net worth individuals; the company takes about a 1.5% management fee and 20% of the profits. Since then, Cherokee has raised more than $2.1 billion and cleaned up more than 500 sites in the United States, Canada and Europe. It has acquired hollowed-out Kmart stores in Canada, a General Mills (GIS, Fortune 500) flour mill in Vallejo, Ca., industrial properties formerly owned by United Technologies (UTX, Fortune 500) and Halliburton (HAL, Fortune 500), and an abandoned Shell Oil (RDSA) refinery in Trieste, Italy.

“It’s a contrarian strategy,” says Tom Darden, Cherokee’s chief executive. “We try to find value in something that’s unpopular.”

But there’s more to Cherokee than cleaning up pollution, as I learned last week when I met Darden in Washington, D.C. The soft-spoken 52-year-old executive has had a passion for the environment since his days as a Morehead Scholar at the University of North Carolina, where he wrote his senior thesis about impact of globalization on the environment in the developing world. He earned a masters in environmental planning, and went on to Yale Law School, intending to be an environmental lawyer.

Instead, Darden spent several years as a consultant at Bain & Co. before returning home to Carolina to take over his father-in-law’s brick business. He helped revive the business with a “green to gold” strategy, using waste sawdust instead of costlier fossil fuels to power the firm’s brick plants. He also learned how to clean up pollution after acquiring brick factories on contaminated sites.

Darden soon saw that the environmental benefits of redeveloping brownfields go beyond the process of removing, sealing or neutralizing contaminants. Because brownfields are often located in or near urban areas, the new homes, stores or offices built on the sites are centrally located close to public transport.

“It’s density versus sprawl,” says Darden. “One of our goals is always to fill in the holes, rather than build out at the edges.”

So, for example, in Boisbriand, Cherokee and its partners have begun to build energy-efficient homes and apartments, retail, and either office or light industrial buildings on the site north of Montreal. They want to get an old transit line working again, and plan to build three miles of pedestrian paths to connect homes, schools and stores. One goal is to meet a new standard called Leadership in Energy and Environmental Design for Neighborhood Development (LEED-ND), which is being drafted by the U.S. Green Building Council, the nonprofit that sets standards for green buildings.

In Mooresville, Cherokee and its partners will preserve five historic mills and add stores, offices and homes to create what will look like “a turn of the 20th-century industrial village.” The $150-million project is still in the planning stages, but local officials hope it will revitalize a tired downtown.

The New Jersey landfill redevelopment deal has been more problematic. Plans stalled as Cherokee, state officials and politicians wrangled over who should fund the cleanup costs. New Jersey’s inspector general is now investigating a Cherokee partner called EnCap Golf Holdings, and the state’s Sierra Club branch says putting housing atop unstable landfills is a bad idea. “It’s been an interesting learning experience,” says Darden, who brought Trump into the deal last fall in hope of moving the project along.

Cherokee and Darden are also working to help rebuild New Orleans’ Lower Ninth Ward with the actor Brad Pitt and the “green” architect William McDonough. Their joint project, called Make It Right, calls for building 150 affordable, environmentally-friendly homes.

Like all real estate firms, Cherokee has been affected by the subprime mortgage crisis, the resulting credit crunch and declining home prices. But because the firm is both a buyer and seller of real estate, the impact has been mixed. “It’s a fabulous time to be a buyer, and not a good time to have assets on the market,” Darden says. “I’m like the guy with his head in the oven and his feet in the freezer. I feel about average.”

You are being watched!

From CCTV cameras to mobile jammers and perimeter protection equipment, the Indian electronic security market is worth over Rs 1,000 crore.

Last week, when Ram Swarup — owner of a mid-sized auto components firm in Pune — was in a meeting with senior members of his team in the conference room, a cellphone rang and broke the rhythm of a very serious discussion.

This week, a livid Swarup decided to take action when calling for a meeting. Instead of banning mobiles in the conference room, which he felt was not practical, unknown to his team, he used a small device which jammed incoming and outgoing calls within a distance of 10 feet.

Called a ‘personal mobile jammer’, and sold by Zicom Electronic Security Systems in India, it costs around Rs 13,000. When activated, it gives cellphone users in the vicinity a “No service” messages. Cellphone jammers can be used to good effect during board meetings, conferences, and seminars.

“It is not illegal to own a mobile cellular blocker for personal use. But if you are found blocking other peoples cellphones, you may risk prosecution,” clarifies Pramoud V Rao, Managing Director, Zicom.

Personal mobile jammers are only a case in point. Both citizens and firms treasure privacy and want to be secure. Cashing in on this need, electronic security vendors have introduced a host of contraptions which include access controls (like readers and cards), burglar alarm systems for homes and shops, video door phones, closed circuit TV (CCTV) surveillance systems, biometric systems, fingerprint and electronic locks, besides electronic road blockers, automatic licence plate reading system, under-vehicle surveillance systems, tyre killers, automatic sliding gates, and taut wires which can replace electrical fences.

The prices range anywhere between Rs 1,000 for a simple door camera to Rs 5 crore for perimeter protection equipment.

Electronic surveillance systems find their place in state assemblies, Parliament houses, defense and R&D labs, temples, railway stations, airports and nationally-sensitive locations.

The Thane rural police, for instance, decided to install high-resolution cameras at five toll nakas on two national highways leading out of Mumbai, to track highway dacoits, record pictures of drivers and vehicle number-plates.

The police also plan to install biometric systems to capture the fingerprints of the drivers of all vehicles that pass through these nakas.

The Indian electronic security market in 2007 was estimated to be around $287 million (around Rs 1,150 crore), according to Frost & Sullivan.

Moreover, all the product segments are growing over 20 per cent annually which means big business for firms like Zicom, Siemens, Honeywell, Godrej and Aftek (majority of the other players are in the unorganised sector) which are enhancing their range of electronic contraptions, besides their business plans.

For instance, Zicom expects its turnover to increase to around Rs 250 crore from last financial year’s figure of Rs 155 crore. It recently entered into a 51:49 joint venture (JV) with a Singapore-listed firm CNA to introduce intelligent business management systems in the Indian market.

The JV will either be headed by a Singaporean or Canadian, according to Rao. Zicom has also made an initial investment of Rs 20 crore to manufacture burglar alarm systems in China (Shenzen). Towards this end, it has bought a production line of a Shenzen-based company with which it has a JV agreement.

Godrej & Boyce, too, has big plans in the security arena. The Security Equipment Business group is the largest supplier of security products to the banking industry and public institutions which include the Reserve Bank of India and various nationalised, private, co-operative and multinational banks.

“Our vision is to be ‘The First Choice for Total Security Solutions’,” says Mehernosh B Pithawalla, General Manager, Security Equipment Division, Godrej & Boyce.

He adds: “Though we traditionally have physical security offerings like safes and locks which are doing good business — both in domestic and international markets — our electronic offerings are growing at a rapid pace too. In fact, we expect this division grow to Rs 1,000 crore by 2012 from its current Rs 300 crore turnover. “

DigiHome Solutions, the home automation service arm of Aftek, is in talks with Intel Capital for fund infusion. Aftek has a 25 per cent stake in DigiHome which it plans to jack up to 51 per cent.

DigiHome is expected to provide digital solutions to almost 4,000 flats in financial year 2009, based on its current order book of around Rs 40-50 crore, according to company sources. It currently provides solutions to around 240 homes in Pune and Bangalore.

The future lies in installing internet protocol (IP) cameras, says Rao. Zicom has already implemented a Rs 10-crore project for Mumbai-based IT firm i-flex. Delhi has installed India’s first end-to-end IP solution in an initial implementation that meets all demands of the city surveillance project.

The system allows for archiving and viewing and storage of all video; and the ability to generate alarms for a number of pre-configured events, including illegal lane changes, red-light violations, illegal parking and other traffic events.

And when 3G and WiMax services start in India, security can be enhanced with live streams of video. Bandwidth, however, currently presents one of the main challenges for IP video

Fed rate cut help Wall St cut losses

The US stocks recovered sharply from the day’s low following an emergency rate cut by the Fed. The US Federal Reserve cut benchmark rates by 75 basis points to 3.5% an hour before the market opened. The Dow Jones industrial average shed 128 points at 11,972. The Nasdaq dropped 48 points to 2,292.

Indian ADRs ended mostly in red. MNTL plunged over 17% to $7.02, and VSNL slumped 12% to $27. Patni Computers dropped 7.5% to $12.60, and Sterlite shed 5.8% at $21.10. HDFC Bank slipped 4.6% to $113.15, and Dr.Reddy’s decliend over 3% to $16.35. ICICI Bank was down over 1% at $61.68. Satyam, howeve, surged 3.5% to $23.35, and Wipro gained 1.3% at $12.26.

Sensex crashes again, Markets shut for 1 hour

Trading was suspended for one hour at the Bombay Stock Exchange after the benchmark Sensex fell to the low of 15,576.30 within minutes of opening, crossing the circuit limit of 10 per cent.

Yesterday, the 30-share barometer tumbled by 1,408 points on concerns regarding the American economy going into recession.

The market opened at 16,884.09 points. At the time suspension, the Sensex was quoted at 15,576.30 points, plunging 11.53 per cent from Monday’s close.

A similar trend was witnessed at the National Stock Exchange, whose barometer Nifty opened at 5,203.35, and later spiralled downward to a low of 4,569.50, a slide of 12.1 per cent. It was last trading at 4,578.35 points.

If the Nifty falls another 306.93 points and the Sensex another 1,326.63 after the market opens at 10.55AM, then trading will be halted for another two hours, reported NDTV Profit.

This is the fourth instance that the market has hit 10% lower circuit, said a CNBC-TV18 report. The first time was during the Harshad Mehta scam in 1992, then in 2004, when the NDA lost to the Congress and in October 2007, when the P-Note issue was on. The Sensex is down 25%, Nifty, down 28% and CNX Midcap is down 31% from its life-time highs

BENAZIR BHUTTO : BENAZIR BHUTTO Dead

BENAZIR BHUTTO : BENAZIR BHUTTO Dead 

Pakistan’s charismatic leader Benazir Bhutto was assassinated today as gunmen opened fire at her vehicle just before a suicide attack at an election rally addressed by her in Rawalpindi.

The attack killed more than 20 people and left several others injured.

Following Bhutto’s death, a high alert has been sounded in Pakistan. President Musharraf has convened an emergency meeting of top advisors. Shops and petrol pumps have closed in many cities fearing violence.

According to preliminary reports, Benazir finished the rally at 5:30 pm and was on her way back to Ralwal. She got into the car and was soon after attacked by two people with AK 47s. A suicide bomber blew himself up next to car.

Nawaz Sharif described Benazir Bhutto’s assassination as the most tragic incident in the history of Pakistan.

”I myself feel threatened,” says Sharif, whose party temporarily suspended the electioneering in the wake of the assassination.

We need to work 14 hours a day to get a life: Kamath

For Kundapur Vaman Kamath, there is no such thing as work-life balance. “Given the amount of catching up the economy has to do, we need to work 14 hours a day before we can get a life and then think about balancing work and life,” said Mr Kamath, ET’s Business Leader of the Year. In his acceptance speech, he thanked his wife Rajalakshmi and their children.

Mr Kamath saw the award as a recognition of what ICICI Bank has done and what his colleagues have achieved. “Our story is really the India story. We are a small subscript in what India is doing,” he said. Mr Kamath, an F1 racing enthusiast, was pretty happy to hear Harvard Business School professor Krishna G Palepu paraphrase his own observations of doing business in India: It’s like an F1 race.

“It’s good to get reassurance from a business teacher. Given the growth we have, it is like being in an F1 race where you have to learn all the skills. This includes driving at a fast neck, keeping in control, making sure the pit stops work and making sure your car behaves,” he said.

Mr Kamath is one of the biggest believers in the India story. According to him, if the economy were to expand at 10%, the financial sector would have to grow at 30%. He said, of the top 10 global banks in terms of market cap, three are Chinese. His conviction flows from the belief that if we get the India story right, three of the top 20 banks in the next 10 years will be from India.

Christmas miracle: The sinister side of curry powder

The other day I was in a Fabindia store near their food counter, trying to resist the temptation to buy their excellent strawberry jam, when a couple of tourists who were browsing their organic grains and spices, turned to me and asked with heavy French accent: “Why iz zere no curry powder?” I told them to try Crawford Market, where they might find stuff made for the export market, since Indians almost never use it.

Neither do the British these days, having had it dinned into them that curry powder was a perversion of the Raj for which they are still atoning (those searing-hot vindaloos they eat are certainly good punishment). But with no colonial curry guilt, the French seem happy to keep using it.

Classic French haute cuisine, with its refinement and restraint may seem far removed from the insistent warmth of curry powder, yet as Elizabeth David notes in French Provincial Cooking, one of her best books, it often crops up unexpectedly in French recipes. Never very much, just a teaspoonful and usually devoid of chillies, so it plays only a background note of mild warmth and colour, yet le curry is called for.

The French even attempted what the Brits never did, and Indians would think incomprehensible: they tried to regulate by law the proportions of curry powder. According to Larousse Gastronomique, the ultimate authority on French cooking, “In 1884, at the Universal Paris Exhibition the composition of curry powder was set by decree: 34 gms tamarind; 44 gms onions; 20 gms coriander; 5 gms chilli pepper; 3 gms turmeric; 2 gms cumin; 3 gms fenugreek; 2 gms pepper; 2 gms mustard.” There is something so typically French in this passion for precise measurement and order!

David suggests curry powder is typically used in dishes derived from the French colonies. I was rather dubious of their existence after reading about a London restaurant called La Porte des Indes, which claimed to offer Franco-Indian food from Pondicherry. I am reasonably familiar with Pondicherry and I’ve never found anything particularly Franco-Indian about food there.

Decent approximations of French food, certainly (especially the baguettes, mysteriously better than most bread in India), and good Indian, but little evidence of fusion. Perhaps there are private recipes, but the claims made by La Porte des Indes, in articles and in a cookbook they produced, rather reeked of Regular Restaurant Hype.

Then I found David Burton’s Colonial French Cooking, and I realised that French fusion exists. The New Zealand-based Burton is an excellent food writer with a particular interest in how historical interactions between imposed Western cuisines and existing native ones created new cuisines.

His The Raj at Table is the best study of Indian food during the Raj, while a major theme in his Savouring the East is the extended influence of Portuguese food across Asia. French Colonial Cooking takes up Gallo-global gastronomy, and it is a fascinating story, not least because it shows French food itself to be far more flexible and assimilative than the French want to admit.

Contrary to the image of a fixed-in-aspic classical cuisine, the French have readily taken on new ingredients and recipes, but always with a firm French twist. So out go the strongest Indian spices, but mild ones like turmeric and coriander are retained, and given new partnerships with classic French flavours like thyme, bay leaves and parsley.

Like in the Indian Ocean island of Réunion, for example, where chilli is dropped, but instead, “turmeric, onions, garlic, salt, pepper, thyme, and sometimes the leaf of the allspice bush go into the curries of meat and poultry, while fish and crustacean curries incorporate plenty of tomato and a little grated fresh ginger.”

Such French-style fusion is the same as our often disparaged tendency to Indianise dishes; far from being a corruption, Burton suggests, these are signs of a confident cuisine that isn’t afraid to evolve, but on its own terms.

It’s interesting to note though that the maximum fusion doesn’t seem to happen on mainlands, like Pondicherry. Burton says that a small number of “unique hybrid dishes” survives there, but the recipes he gives, for lamb or green beans, seem fairly standard Tamilian to me. As with biological evolution, the real culinary leaps seem to happen when communities are cut off from their roots and crammed together on islands like Mauritius or Reunion.

That’s where you’ll find dishes like achards, or pickles (from achar), rougails, or spicy accompaniments (apparently derived from a Tamil term ouroukaille) and rasson, or rasams, which Burton notes in Mauritius were sometimes spiked with rum! That’s a thought to make a Madrasi mami faint, but it could be a good idea for winter nights.

Apart from colonial linkages though, there’s a far more practical reason for the French use of curry: to use up leftovers. The French passion for fine food has always gone hand in hand with a passion for fine value, and French housewives are known for their frugality and marketing ability, as much as their kitchen skills.

A lot of regular French food is about the skilful use of leftovers – all those sauces can cover up many things – and commercially minded chefs can make this an obsession. Curry powder, they discovered with delight, confused French tastebuds enough to allow them to pass off all kinds of leftovers, especially when presented with enough style.

The most vivid description of this is from Nicholas Freeling, the great crime novelist who passed away this year. In his youth Freeling worked in restaurant kitchens and wrote The Kitchen, a magnificently mad book about his time there, which Anthony Bourdain has credited as inspiration for his own berserk and best-selling Kitchen Confidential.

Freeling was working in a grand hotel in a fading French seaside resort where he met a particularly cost-cutting chef: “Curry was a great favourite of Monsieur Bonvalet, who had elevated leftovers into a great art… on the day it was announced we would peel many “button” onions, separate cauliflowers into nice bunches of bloom, and steal large potatoes from the roast-cook, to shape into little balls with a cutter, the size of a marble. We then made a great deal of curry sauce with more onions, apples, a little coconut, thickening it slightly with flour.”

This concoction was then presented with style on three big silver dishes, with the meat, with vegetables cooked in the same way, but kept slightly crisper, and with rice made to seem grander with raisins and almonds. One can be sure that any link with anything really Indian tasting was remote, although Freeling’s technique of sloshing in most of a bottle of gin into the curry must have helped deaden sensations (his hotel guests loved it).

But the apotheosis for this French curry was reached at the end of one year when the chef decided to go all out and make it a Curry Christmas. Putting curry on the menu, he reasoned, would use up the inevitable leftover meat from the usual roast turkeys and geese, and would be relatively easy for the holiday minded cooks to dish up.

Came the day, and they were all prepared: “We had curry for a hundred, plenty of onions and were pleasantly relaxed.” But then a Christmas miracle happened – everyone started ordering the curry: “we sold two hundred and thirty helpings of curry… I bellowed at him [the chef] that there was no more.” “You going to cut it off?” “No no – I make more – I help.” Might have known – when would come another day so golden for making a profit from scraps?”

The larder was scored for every scrap, bones, anything even remotely edible, as the chef screamed: “Give more colly, va!” and made even more rice to fill up the diners. “Curry was served on flat dishes, in soup bowls, in cloche covers; it was war, it was splendid. At three in the afternoon there was rice all over the floor.” The chef was so overjoyed that despite his miserliness, he even bought all his staff a beer.

It was a Curry Christmas to remember, and while we hope, from a strict taste point of view, never to encounter one like it, we can still toast the transformative powers of curry on palates as fixed as those of the French. This Christmas that’s a toast worth raising to – perhaps with rasam spiked with rum!

Why workers in China laugh when you point out mistakes

“Can you increase my salary?” This is a question which is almost a taboo at workplaces in India. However, in China, this is something which one hears often. And it comes from those employees who want to stick around with a company, make a career with it and contribute to its growth. Another example is at the time of recruitment. Having gone through the entire process, it is quite possible that the candidate will come back and ask for a higher salary, because “the job requires much more work than what I thought before.” Chinese employees have a practical approach towards reciprocity – what they give to the company and what they get in return.

This is usually preceded by a high degree of commitment towards work, done in a manner which is not showy at all. Chinese personnel go about their work in a methodical manner. While it is common to see employees put in long hours in India, the key difference in China is that the long hours are put in with the sole intent of getting the job completed, rather than make a show of work, or staying in the office till the boss is there.

Normally, sub-ordinates do not badger superiors too much and will try and finish the tasks assigned to them clinically. However, once in a while, it is essential to listen to sub-ordinates – and not give them advice, unless asked. When they talk, one must have a willing ear (and open mind) for a whole lot of stuff, which might seem like a confused state of mind. Quite infrequently, they will ask the superior for a solution to a problem. It is essential to give a specific answer rather than present them with options. If they could decide among a given set of alternatives, they would not have approached the superior.

A significant difference between China and India, especially at middle and senior management levels, is to bring the issue to closure. With great language and analytical skills, one often sees an Indian manager spend inordinate time in scoring an “intellectual victory”; the tactic employed in China is to cut to the chase and reach a solution as quickly as possible. Intellectual victories do not count for much in this scheme of things.

Multi-tasking is an alien concept in a typical Chinese workplace, in as much as taking a horse to the water, but being unable to force it to drink (these being two separate tasks). This is something which unnerves most expatriate bosses in China, especially those from India, who are used to intelligent young men and women handling a plethora of tasks deftly and without any qualms.

Chinese employees will not undertake a task unless they are confident of doing it well and without mistakes. They will also spend a fair bit of time in understanding what is required – much more than their Indian counterparts. This philosophy is quite different from what exists in India, where we hardly say “no” to our bosses. However, Multi-tasking can be developed in a Chinese employee by giving them a situation to handle and letting them complete it to fruition. There is a strong need to build upon small successes.

Training takes on a special meaning in the Chinese work environment. It is highly coveted among the work-force, more so at junior and middle levels. Being nominated for training is interpreted as a strong affirmation of the value that the company is placing on the particular employee and hence generates a disproportionately high airtime in conversations around the water coolers. If the training is being conducted overseas, or is being conducted locally but by “foreign” trainers, it makes for excellent bragging rights. That is why it is not uncommon for employees to be constantly discussing “training-needs” with their superiors.

There is an interesting example of some behavioural aspects of Chinese people. In XYZ Limited, a senior manager, Mr Mathur, had come from India on a short assignment in technology. One day, he was quite upset with one of his Chinese sub-ordinates, Wang Ling. On further enquiry, it was revealed that the aforesaid Chinese employee had made a mistake and when Mathur has asked him an explanation, Wang just stood in front of him and kept smiling. Slowly, Mathur’s temperature went up, as the smile turned into laughter (the fact that Mathur did not know any Chinese didn’t help matters much either).

When Mathur could not take it anymore, he took this matter to the CEO, Mr Sharma. The latter, having relatively more experience in China, decided to tread the path carefully and talked to some other senior Chinese employees to find out the reason for this apparently bizarre behaviour of Wang. It so emerged that when Chinese employees makes a mistake, they are so embarrassed that they would like to laugh the matter away and try to lighten up the environment. You can rest assured that they will never commit that mistake again, by being absolutely focused on the job thereafter.

Do not ask them and they will not tell you: this is an almost Universal dictum which is prevalent across all kinds of organisations – more so in stateowned enterprises. Even if there is a serious problem which can bring down a company, the information is given to the superior only at the last minute; at which time, the sinking ship can be saved only at a high cost. No wonder this can leave many a manager pulling his hair in exasperation. The plausible reasons for this lie much deeper.

The Chinese try to solve the problem themselves, even if it means going through endless rounds of re-work and mistakes. They just cannot come up to their superior and admit defeat – it is tantamount to losing face. This is an integral part of the centuries old Chinese culture and is an all-pervading phenomenon of the business environment of China.

Do only your job and turn a blind eye to whatever else is happening around you: this is the result of the strictly hierarchical work system in China, which has got further conditioned by a work-to-instruction culture. Tell them what to do in clear and unambiguous terms, and your Chinese employees can perhaps become the best this world can have. That said, investment in people always pays handsomely in the end – and the same is true for China. One has to travel a long and arduous journey towards developing excellent first-line managers, but there is indeed light at the end of the tunnel.

How to build a good equity portfolio?

How to build a good equity portfolio?

In today’s booming stock markets a well-constructed equity portfolio is vital to wealth creation. The equity markets in India are generating double-digit returns. Equity returns seem to dwarf the returns generated by all other asset classes. In this scenario the big question that arises is how to capitalize on this fact to get better returns for your portfolio while keeping in mind that you have to:nSecure the higher return with the least amount of risknProtect both profits and principalnMake sure that investment portfolio will be worth more in the future.

Asset allocation

Successful investing begins by conceding that – to a degree – uncertainty will always be your companion. Hence the first step in building a portfolio will be to determine your risk bearing capacity. On the basis of your risk taking ability you determine the extent of your portfolio you can allocate to equity, a process also called asset allocation. Asset allocation refers to spreading investments among different asset classes, not just different securities or market sectors.

As different asset classes are imperfectly correlated it allows you to boost returns while reducing your portfolio’s volatility. Determining the quantum of assets to be invested in each asset class based on risk profile will help in protecting the portfolio in volatile times. Asset allocation has in the past allowed people to survive, prosper and build wealth during bear markets.

Focus on equity

But investing is not all about portfolio protection; it’s about building wealth. It’s about creating a retirement corpus or a substantial amount to bank upon. The idea is to leverage Indian macro economic situation to assist in wealth creation. This is possible by giving higher focus to equity portion of the portfolio. Equity investments do carry higher risk, but it’s possible to minimize this risk with a judicious approach. Equity investment can be done in different approaches or styles. Investment style or an approach refers to a broad category that displays similar fundamental characteristics. Some of the well-known approaches to equity investing are income investing, growth investing and value investing.

Income investing

This style of investing is best suited for investors with very low risk appetite and retirees who want regular income from their portfolio. The idea here is to invest in good quality dividend paying stocks. The price of these stocks generally does not fluctuate much. Most of the earnings of these companies are distributed as dividends. Companies generally pay dividends on a half yearly basis.

If you purchase several different stocks whose dividend payments are staggered you can structure a regular stream of income from your equity portfolio and additionally give you adequate protection to your portfolio on the downside. A dividend yield higher than the post-tax yields of fixed income securities is definitely a good option for investors who look for income investing. In general, companies with low growth prospects offer a high dividend yield, against those with high growth prospects.

Growth investing

This style of investing is more suitable for investors who can wait for a longer time for their returns and have a higher ability to bear risk. Growth investing is selecting and buying stock in companies that tend to grow substantially faster than others. The idea behind it is that a growth in earnings and/or revenues would directly correlate into an increase in the stock price. The other characteristics of growth stocks include higher than average P/E ratio and poor dividend payout because, fast-growing companies need their capital to finance their expansion. Most companies reinvest a high portion or all of their earnings in their own businesses.

Value investing

Value like growth investing is for a patient investor as it will be a long time before the value of the company is recognized by the stock markets. This term describes the purchase of cheap, unpopular shares that is currently ignored by the markets. Suitable shares for value investing are those with high cash flow, dividends and earnings yields, and high ratios of sales and book value to share price. Over the very long run, value shares appear to outperform growth shares, possibly because of the greater volatility in these companies.

Whether you are income investor or value investor you need a good strategy to pick-up the stocks. You can judge a company by its numbers, management, brand value, competition in the industry and the growth of the future earnings. It’s imperative that your equity portfolio should consist of 10-15 stocks spread across 2-5 sectors to diversify risk. There is no single approach to make you successful in equity investing but the combination of all the approaches in a balanced manner can give you the best returns at the current juncture.

Want to be termed rich? Must have $10 mn

It takes $10 million (Rs 39 crore) to be considered wealthy!

A report published by Barclays Wealth, entitled Insights: The True Value of Wealth, reveals that more than a third (35 per cent) of respondents believe individuals need to have assets worth at least $10 million (?5 million) to be considered wealthy.

The report is a global survey of 790 wealthy individuals, produced in partnership with the EIU that examines how wealthy individuals perceive and value wealth.

Having liquid assets of $10 million (excluding one’s home) also gives people a sense of security and makes them feel protected from the hazards of the world, the report states.

Having this buffer means people with assets of at least $10 million enjoy their wealth differently from those whose assets fall below this threshold, the report says. This level of wealth elevates their status so that they behave more like people with assets worth $50 million, than people with $5 million.

“This is the perceived level at which people believe they are truly wealthy as it gives them influence within their community and a greater sense of control over their destinies,” said Satya Bansal, head of Barclays Wealth in India.

“Being wealthy is about more than what you can buy. The research shows that wealthy individuals want to pursue personal goals like philanthropic ones and influence change within their community.”

The research also goes on to show that the term ‘millionaire’ has lost its cachet in a world that is experiencing a wealth boom. In the United Kingdom, there are more than 400,000 households with financial wealth in excess of $1 million and this figure will more than double to 940,000 households by 2016.

India has been amongst those at the vanguard of this growth trend after registering the world’s second fastest wealthy population growth rate, propelling the number of high net worth individuals in the country to cross the 100,000 mark, as per the World Wealth Report 2007.

“Strengthening rupee, robust economic growth, sound financial markets along with gains in income and credit expansion have been the key drivers of growth in India’s wealthy population, the research states.

Even though more people are acquiring wealth, there has been an increase in the cost of goods and services that people want such as concierges, butlers and travel services together with commitments like private school fees and health insurance. This is influencing the level of assets that people think they need to sustain their lifestyles.

The report also shows that wealth is about more than simply money; it is about having a better quality of life. Across the globe, more than half of respondents say that wealth has given them more leisure time. Those in Hong Kong (81 per cent), France and Switzerland (each 79 per cent) are most likely to say that their wealth has allowed them more time for leisure pursuits.

Wealth also has had a positive impact on people’s well-being with the majority of respondents saying it has increased their happiness. Europe scores highest, with 87 per cent of people living in Portugal and Italy, and 85 per cent of those in Spain, reporting a greater sense of happiness as a result of their wealth.

Universally, people tend to think of wealth in terms of assets and monetary value. But being wealthy for people in India is not just about money. Wealth, in India, is a symbol of power and a responsibility to do greater good.

Helping charitable organisations is particularly important to wealthier individuals. Support for charitable causes has long been part and parcel of being wealthy, and the report suggests this is strongest among the most affluent sections of the society.

Asked what proportion of their estate they planned to leave to charitable causes, a quarter (26 per cent) of respondents with assets under $1 million said that they planned to leave more than 10 per cent of their estate to charitable causes.

This rose to more than one-third (37 per cent) for those respondents with wealth in excess of $3 million – each of whom would therefore be leaving a minimum of $300,000 to charity.

Want to be termed rich? Must have $10 mn

It takes $10 million (Rs 39 crore) to be considered wealthy!

A report published by Barclays Wealth, entitled Insights: The True Value of Wealth, reveals that more than a third (35 per cent) of respondents believe individuals need to have assets worth at least $10 million (?5 million) to be considered wealthy.

The report is a global survey of 790 wealthy individuals, produced in partnership with the EIU that examines how wealthy individuals perceive and value wealth.

Having liquid assets of $10 million (excluding one’s home) also gives people a sense of security and makes them feel protected from the hazards of the world, the report states.

Having this buffer means people with assets of at least $10 million enjoy their wealth differently from those whose assets fall below this threshold, the report says. This level of wealth elevates their status so that they behave more like people with assets worth $50 million, than people with $5 million.

“This is the perceived level at which people believe they are truly wealthy as it gives them influence within their community and a greater sense of control over their destinies,” said Satya Bansal, head of Barclays Wealth in India.

“Being wealthy is about more than what you can buy. The research shows that wealthy individuals want to pursue personal goals like philanthropic ones and influence change within their community.”

The research also goes on to show that the term ‘millionaire’ has lost its cachet in a world that is experiencing a wealth boom. In the United Kingdom, there are more than 400,000 households with financial wealth in excess of $1 million and this figure will more than double to 940,000 households by 2016.

India has been amongst those at the vanguard of this growth trend after registering the world’s second fastest wealthy population growth rate, propelling the number of high net worth individuals in the country to cross the 100,000 mark, as per the World Wealth Report 2007.

“Strengthening rupee, robust economic growth, sound financial markets along with gains in income and credit expansion have been the key drivers of growth in India’s wealthy population, the research states.

Even though more people are acquiring wealth, there has been an increase in the cost of goods and services that people want such as concierges, butlers and travel services together with commitments like private school fees and health insurance. This is influencing the level of assets that people think they need to sustain their lifestyles.

The report also shows that wealth is about more than simply money; it is about having a better quality of life. Across the globe, more than half of respondents say that wealth has given them more leisure time. Those in Hong Kong (81 per cent), France and Switzerland (each 79 per cent) are most likely to say that their wealth has allowed them more time for leisure pursuits.

Wealth also has had a positive impact on people’s well-being with the majority of respondents saying it has increased their happiness. Europe scores highest, with 87 per cent of people living in Portugal and Italy, and 85 per cent of those in Spain, reporting a greater sense of happiness as a result of their wealth.

Universally, people tend to think of wealth in terms of assets and monetary value. But being wealthy for people in India is not just about money. Wealth, in India, is a symbol of power and a responsibility to do greater good.

Helping charitable organisations is particularly important to wealthier individuals. Support for charitable causes has long been part and parcel of being wealthy, and the report suggests this is strongest among the most affluent sections of the society.

Asked what proportion of their estate they planned to leave to charitable causes, a quarter (26 per cent) of respondents with assets under $1 million said that they planned to leave more than 10 per cent of their estate to charitable causes.

This rose to more than one-third (37 per cent) for those respondents with wealth in excess of $3 million – each of whom would therefore be leaving a minimum of $300,000 to charity.

8 reasons why stock market traders lose money

8 reasons why stock market traders lose money

Many people think trading is the simplest way of making money in the stock market. Far from it; I believe it is the easiest way of losing money. There is an old Wall Street adage, that “the easiest way of making a small fortune in the markets is having a large fortune.”

I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach.

1. Trading during the first half-hour of the session

The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day’s trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day.

Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts.

2. Failing to hear the market’s message

Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not.

I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market.

This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market’s message is to keep out.

Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples’ expectation. Let us consider two recent Indian events of significance.

One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country’s economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge.

Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case.

The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India and Pakistan. And markets hate war and uncertainty.

In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed.

Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn’t care who you are and it’s certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself.

3. Ignoring which phase the market is in

It is important to know what phase the market is in — whether it’s in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength.

Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick.

You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in.

4. Failing to reduce position size when warranted

Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares.

This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market’s mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken.

5. Failing to treat every trade as just another trade

Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out.

Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they — rarely! — occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk.

6. Over-eagerness in booking profits

Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market.

If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits.

Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target.

Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It’s boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates.

7. Trading for emotional highs

Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress.

8. Failing to realise that trading decisions are not about consensus building

Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do.

Trading is a loner’s job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market.

If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.

Excerpt from: How to Make Money Trading Derivatives by Ashwani Gujral.

Mukesh Ambani is the World’s Richest Man

Billionaire Mukesh Ambani today became the richest person in the world, surpassing American software czar Bill Gates, Mexican business tycoon Carlos Slim Helu and famous investment guru Warren Buffett, courtesy the bull run in the stock market.

Following a strong share price rally on in his three group companies, India’s most valued firm Reliance Industries, Reliance Petroleum and Reliance Industrial Infrastructure, the net worth of Mukesh Ambani rose to $63.2 billion (Rs 2,49,108 crore).

In comparison, the net worth of both Gates and Slim is estimated to be slightly lower at around $62.29 billion each, with Slim leading among the two by a narrow margin.

The five richest people in the world with their net worth

1. Mukesh Ambani ($63.2 billion)

2. Carlos Slim Helu ($62.2993 billion)

3. William (Bill) Gates ($62.29 billion)

4. Warren Buffett ($55.9 billion)

5. Lakshmi Mittal ($50.9 billion)

Warren Buffett, earlier the third richest in the world, also dropped one position with a net worth of about $56 billion.

Ambani’s wealth of about Rs 2,49,000 crore includes about Rs 2,10,000 crore from RIL (50.98% stake), Rs 37,500 crore from RPL (37.5%) and Rs 2,100 crore from RIIL (46.23%).

Slim’s wealth has been calculated on the basis of his stake in companies like America Movil (30%), Carso Global (82%), Grupo Carso (75%), Inbursa (67%), IDEAL (30%) and Saks Inc (10%).

According to information available with the US and Mexican stock exchanges where these companies are listed, Slim currently holds shares worth a total of $62.2993 billion, with more than half coming from Latin American mobile major America Movil. Slim is closely followed by Gates with a net worth of $62.29 billion currently.

Earlier last month, US business magazine Forbes had named Gates as the richest American with a net worth of $59 billion, calculated as on August 30. The magazine had said that a movement of $2 in the share price for Microsoft, the world’s biggest software maker, could “add or subtract $1 billion” from his wealth.

Since August-end, Microsoft’s share price has risen by $6.58 (based on yesterday’s closing on Nasdaq at $35.03), which results into a gain of $3.29 billion in Gates’ wealth based on Forbes assumption.

Besides a stake in Microsoft, Gates’ wealth also includes the commission and license fees earned by him and gains through his shares in an investment holding company that invests across the market.

Gates is followed by Buffett at the fourth place in the league of the world’s richest with a net worth of $55.9 billion through his holding in his investment vehicle Berkshire Hathaway and in other companies. At the end of August, Buffett’s wealth stood at $52 billion, as per the Forbes magazine. Berkshire Hathaway’s share price has gained by about 7.5% since then.

Earlier on September 26, Ambani had overtaken steel czar Lakshmi Mittal to become the richest Indian in the world.

Mittal currently ranks as the fifth richest in the world with a net worth of $50.9 billion through his 44.79% stake in world’s biggest steel maker ArcelorMittal.

While most of Mittal’s wealth comes from his steel empire, though he has also spread his wings into businesses like oil and real estate, those of Ambani and Gates are mostly through petrochemicals and software respectively. However, Buffett and Slim are making money from investments across a host of sectors.