Save lives on the I's

On Fox News this evening, I saw news item that I found somewhat ridculous. It was about a "Save lives on the I's" campaign being run by some government authority in Illinois (my dearest home state). The objectives and the intention is great. They want to prevent accidents and save lives on the highways during the labor day long weekend. Great! But whats the point in coming out a giving a needless press release about a campaign? The guy on the press release said that we want to keep the roads safe. It sounded to me like, "let me tell you how bad I want to keep my job and hence how bad I want to create a hype around this". Can't they just do their job (and do it better on labor day)? Whats the point in raising an unnecessary scare just to make oneself important. That is like George Bush & Mike Chertoff creating the 5 threat levels and having TV channels trumpet about it everyday on news...

Anyway, governments are governments. Most of the things they do are needless.

corporate valuation models

Yesterday, a couple of my friends came home while they were on their way to Austin, TX to see family. The common factor between all of us was that we had all studied Management at the Indian Institute of Management (IIM). IIM is one of the best educational institutes for business studies in the eastern hemisphere of this planet. On the short road-trip from my home to the O'Hare airport, there were 4 b-school graduates in my car. Naturally, the discussions veered towards current events, investments, financial markets and such. At one point, I stated that the US financial markets, especially equity, are complex compared to the Indian markets. I added that it is hard to derive revenue/profitability predictions and hence stock price predictions due to that complexity. I stated that the number and complexity of brands in India is very low. That is, there are fewer brands in India and the value of those brands for marketeers, shareholders and customers can be established easily. The response I got from my fellow travelers was a count of famous brands from India. Hamam, Dabur, Reliance, Airtel, etc. The discussion was not towards establishing any point or for proving any technical fact and was casual banter. No one really delved deeper beyond stating names, counts etc. However, the counts and the names prove the point that, traditionally, brands in India have not been complex or many. One can count national and some local brands on a small trip to the airport. Almost every brand has a single value proposition and large mass appeal. Compare that to United States. A brand like Sara Lee is made up of range of other brands. Each brand has equity amongst diverse set of customers. Fidelity means different things to different people and customer groups. Fidelity's markets are amongst individuals, institutions, other financial institutions and it provides a range of products to every customer group. In such a case, what is the process to confidently propose a relation between broad market factors such as trade balance, credit environment, job market and individual corporate performance? For less complicated corporate structures where the corporation has few brands, markets are not diverse, sales (revenues) can be easily attributed to corporate efforts. However, in the developed markets such as United States and now increasingly so in India, it is not straightforward to link performance to market factors. Analysis gets complicated. The confidence of decisions (i.e. probability of accuracy) is lower. To get better quality decisions, one has to have better tools. One of my companions did mention that one needs to outsource some of the decision making inputs to outsiders. That is, it is important to bank on high quality institutional research done outside your realm to make your decisions about investments. Now lets include commodities, fixed income and other trade-able things (complex things such as catastrophe bonds, weather futures), then investment decision making becomes even more complicated. Thats the reason why the financial analysis industry even exists. Really, if you take a look at the details of a firm dealing with investments, you will notice the level of analysis and research that goes into every decision support activity they undertake. Recently, a business associate demonstrated a cutting edge corporate valuation model for the middle market that deals with the exact same challenge of complexity. This model is based on a number of parameters of current corporate performance and economic environment factors. With great confidence, we executed back tests after back tests of market events from the recent past and simulated possible scenarios for a clutch of middle market companies that Saven works with. It was thrilling to see how a quantitative model accurately predicts potential corporate performance changes due to functional actions such as new product launches or operational efficiency improvement or due to economic factors such as overnight interest rates (set by the Fed). As I understood, this valuation model not only models known and broadly understood factors I mentioned but also has the ability to model newly conceptualized factors. This is of most interest to our customers at Saven. Most of our customers have their custom valuation models - some quantitative and others driven by proprietary qualitative processes. However, no one has a framework of modeling performance in a dark alley. This is especially pertinent in the online, Internet driven business models that abound. In this scenario, where companies engage with their customers through the online media, business models change often. Especially, middle market companies have to deal with a lot of ambiguity. Would it not be nice to have a model that can predict the future value of functional actions and economic environment today. I am betting on it. To my peers and customers, I have made the case for including this valuation tool into FundAide, our online platform for the asset management industry. It works like a charm! FundAide is online; users (subscribers) of this platform can easily use this application much like they can choose to use iLike in Facebook. I cannot wait to bring our first beta customers online with this and other tools. More on this later.

classic jokes

Why, after all, did the blonde write her exam sitting right by the door of the examination room? That's because, she was told it was an "entrance" exam. Oh boy! This was told to me in the classic Indian way. It went like this: "Why did the Sardar sitting by the door when he was writing his exam?". I put in a genuine effort to think of the answer (really!). After racking my brains for a few minutes I gave up. Immediately, the gap was filled up. Unimaginably funny! The Sardar was sitting by the door because it was an entrance exam! I split my sides with laughter.

Here are two more classics:

Q. What do you call a Mallu who is very handsome?
A. Debo Nair.

Q. What do you call a genious Mallu?
A. Pheno Menon.

To my readers who don't know what is a mallu: Mallus or Malayalis is the plural term for singular Indian folks who belong to Kerela and speak Malayalam as their main language. I've many Mallus amongst my friends, just as I have many blonde friends. "Nair" and "Menon" are common last names amongst this regional, Malayali speaking gems of persons.

workout thoughts - body building

There once was a time when I was really proud of what I had done with my body. I was just finished with high school (what is known as Junior College in India) and was 18. I had decided that the best way to be good looking and also do something good with life was to build a great body; somewhat like Sylvester Stallone or Milind Soman (a fashion model in India). I was really hooked on it as much as I could have been. I was never a person to put up wall posters or otherwise show signs of being a big fan, but inside, I always dreamed of winning championships or perhaps landing a ramp walking career. I never came close to either of goals, but as they say, I aimed high and got to a pretty good shape. I was proud of myself for that. The other really good thing that happened was I really absorbed a lot of knowledge and experience about body building as an exercise and till date believe that body building is one of the best exercises to do. This is especially true for those who are starting late (in their 30s) and have not done much exercise in their life except for a little sporadic running, gym or swimming. That actually might cover more than 3/4ths of the 30+ population. (Please comment if you know of any study indicating numbers).
Anyway, the trigger to write this post is that a few of my very good friends and my dear wife who fit the generalization above have recently taken to body building. I don't think any of them has the goal of winning championship or looking big, they are modest and would be happy if they could lose extra pounds, gain some muscular strength, gain good metabolism (so they stay awake through the day) and promote general health. Indeed, body building can give one all these benefits and a lot more. I was pleased to read somewhere that body building promotes bone health too. This is especially good for women above 30 and who have gone through childbirth. (Childbirth can be excruciating to calcium and other good reserves in the body). Then of course, there is the great benefit of muscular strength. Isolated on its own, the term "muscular strength" creates a picture like Arnold Schwarzenegger in one's mind. What really matters though is that even a little muscular strength gives your body the elasticity and bounce in your every day activities such as walking. Muscular strength allows body structure to pass along some of the jerks and shakes for the muscular system to absorb. This means your joints could be saved from injury from simple things of life. Further, physiologically, body building is essentially the process of breaking and rebuilding muscular tissue over and over again. This means that as you are doing your exercise, you are actually working your physio functions. There are quite a few benefits. One could find a lot of info at http://www.bodybuilding.com.
The main objective of this article was to list out a few do's and don'ts for readers. So let me not digress any further. Here are a few things one should actively try to keep in mind when working out with weights with the intention of building lean muscle mass and gain some strength.

1. This exercise creed is all about elegance. There is nothing to be gained from sudden jerking movements or high speed. Do all your motions with simple, rhythmic, slow motions. Focus on being slow. Unlike running where high speed leads to better cardio results, there is nothing to be gained from speed. If anything, speed kills. Speedy movements could lead to joint injuries, or massive muscle tear, tendon pulls etc. Stay slow.
2. Always keep a reserve available towards the two ends of your movements. For example, if you are doing curls, ensure that the elbow is always at an angle even when the dumbbells are at the lowest point of your motion. When squatting, never stand straight on the knees or sit all the way down when sitting. Keep the knees bent slightly and muscles tense. This ensures that the weight is always carried by muscles and not your bone structure.
   
3. Keep it steady. This goes sort of hand in hand with point 1. Slow AND steady wins the race. When doing arms, there is no need of making any movements on the knees. Do not try to help your main movement with an unnecessary motion from some other part.
   
4. While it is true that more the weight you lift the better it gets, it is important to find the right balance in weight and ability. If you are making more than 12 repetitions in your exercise, then you probably have too little to lift. If you cannot do even 6 repetitions, then you probably are carrying too much. If you can manage 8 repetitions easily and cannot do the 10th or 12th without having someone spot you, that perhaps is the most ideal weight/strength balance. Remember, if you do too many repetitions, you are no longer doing muscle building, you are actually doing aerobic exercise and that is a totally different creed of exercise.
   
5. Try to keep the number of sets you do in a single workout close to 27. There is nothing magical about that number, but somehow, from most text and what my mentors told me, 25 to 30 sets a workout sounds optimal. Even with 15 to 20 sets a workout, you will achieve a lot (from the datum that we are all at), but when you get serious, 27 is a good number.
6. Focus on major muscle groups. Towards the beginning of your body building life, try to work on the large muscle groups and perhaps even do two or more groups in the same day. For example, the legs are a large muscle group. Do squats, extensions, hamstring, calf all in the same workout. Next day, do the flat/incline/decline bench, pulleys, rowing all in one workout. As you become stronger/larger, start spreading your weekly routine around specific muscles.
   
7. Work to failure. Your focus on each set should be to workout till failure. if you were not able to push the weight on the last repetition and needed someone to spot you to go on, then you have probably made it. The point is that your muscles should be stretched to the very end. They have to break. Only when muscles break will new muscles be made. This new muscle is the lean muscle. This lean muscle mass is a factory of breaking food down into good things (i.e. metabolism). Eventually, even when you are sitting and watching a movie, your lean muscle mass will be consuming more calories than others in the theaters. Go get that buttered popcorn!
8. When doing heavy weights, use a belt around your stomach. That will keep the back straight and prevent injury. When assembling barbells from weights lying on the floor, never use a single hand or bend sideways to pick up weight. Use both hands. If you have to bend, bend forward. Ideally, squat and pick up weights.
9. Keep a dairy of workouts. Write the date, start and end times of work out on the top right corner of the page. Fill up five columns: 1) Exercise Name, 2) Set number (1,2,3...), 3) Number of repetitions done 4) Weights carried (25x2 means 25 pounds in each hand). 5) Rating or feeling about how you did in that set. When rating, rate yourself from 1 to 5. 1 being a broken or incomplete set to 5 being a workout to failure after 10 or so repetitions (ideal!).
10. This sport is all about self motivation and individual achievement. So, ensure that you are in the best of your moods when you start workouts. If you workout at home (like me), take a boom-box to the gym. If you are in the health club and don't like the music, take your mp3 player. Wear comfy clothes, be happy and push yourself. If you don't push yourself, the weights are not going anywhere. Look at yourself in the mirror and reward yourself if something looks better than last time. In any case, a few sets into the workout, the natural endorphins will take over and you will be at the top of the world.

Thats what I can think of. Of course, this sport, like any other is good when shared with friends and other fellow sportsmen. So find a partner to do exercise with. (At the minimum, write to me about how it goes for you!!!).

Hope you enjoyed reading this and enjoy your exercises a lot.