Book Review – Black Swan by Nassim Nicholas Taleb

Academic, Irreverent but very Relevant

Well, this one blew me away. Non fictions generally don’t do that to me. Since they state facts,  or at max hypothesis, they can at best be beautiful, such as Freakonomics, or inspirational, such as Seth Godin’s books. But this is in your face, intensely academic (but not in a pejorative way), very irreverent (rather insulting, to economists, historians, bankers and anyone who ‘theorizes’ on historical data) and bold enough to say – here is the black swan problem, but I don’t know the solution.

I thoroughly enjoyed the book over solitary lunches, dinners and coffee sessions. This one took a long time to read. Last time I recall spending so much time finishing a book was Atlas Shrugged, because digesting Ayan Rand’s thoughts took a while. This one, because Nassim Nicholas Taleb just compels you to believe that most of the professions that involve theorizing on historical data, are fraud. He bashes economists (especially the Nobel laureates), historians, finance professionals (not the traders though). His strongest tirade is against the philosophers, who NNT believe should stand most scrutiny since their only job is to think and help society through their though. His attack is mild against people who hold ‘real’ jobs – doctors, engineers, factory workers.

Basic Premise

Book’s basic premise is – there are very few but fiercely strong incidents that shape our future (of economy, evolution, behaviour, any profession) and we can’t predict them. NNT calls them Black Swan and these could be negative (wars, market crash, epidemic) or positive (accidental invention/discoveries, book sales). Even though we can’t predict them, we should cushion ourselves against them (in case of – Black Swan) or take speculative bets to benefit from them (in case of + Black Swan).

What I learnt from the book

I couldn’t have predicted that Jiju will die suddenly in March. But I definitely could have ensured that his Life insurance, Mediclaim and other paperwork is in order. My personal learning from the book is:

1. I can’t predict strong events in my life, but I should insure my risks
2. 80% of my portfolio in safe investments – FD, real estate and gold. Rest 20% in intensely speculative bets – options trading, lending start-up capital in lieu of shareholding and others that I have to figure out
3. Past behaviour is not an indicator of future performance (even though every MF document says it, very few actually understands it, and even fewer take corresponding action)
4. Competition theory – the race to the top slot only needs a little difference in ability over your competitors. Try a little harder, and you may get it.
5. No Evidence of Disease doesn’t equate to Evidence of no Disease.
6.  A data point that disconfirms your assertion/theory is way more important than 100s of data points that confirm it

Overall, a highly recommended read. But beware of the strong language. It is a necessary evil.

Book Review – Dork by Sidin Vadukut

How I got hold of the book

Once in a while I used to be amused by the Office Humor column Cubiclenama at the business newspaper Mint. Then I stopped reading mint. Maybe a year later, a friend recommended following Sidin on twitter and reading his Cubiclenama. But that’s not how took up this book.

Some time back, I prepared a reading list of Indian Novels based on genres. One of these genres is lightweight reading published recently (say last 3 years). Dork was in it, Sidin was recommended and luckily, it was present in my office library too. So, borrowed it and voila! Finished reading in two straight sittings. You can actually finish in one but I didn’t want to read it beyond midnight.

The Good Stuff

• Office humor – especially consulting humor
• Writing style – as diary entries. I haven’t read any novel in this format earlier. Update (a little online search later): The genre is called epistolary novel i.e. a novel written as a series of documents, in the form of a journal entry, letters etc. That said, I remember Nehru’s Letters of a Daughter being of such format. Never read it though.
• Light read

Some funny stuff

• Kart(h)ik called Yetch and Kartik called Rajni
• Youtube video of Einstein flying – 300k hits in a  few days
• Flip flop between Megha and Gouri when Megha wears short skirts
• Ball bearing episode
• The ‘testimonials’ from William Dalrymple’s biggest fan’s youngest sister and the likes
• Malayali brotherhood – there was no code of ethics when it comes to two Malayalis (Babykutty)

Didn’t understand

• Getting proposed for a threesome from a girl who saw Dork pissed drunk thrice

Could have been better

• Sudden ending
• Work at JHA was too long

Quotes:

1. She is hot. In a Nandita Das sort of way.
2. Yogita. Idiot. Cow.
3. 5 is awesome and 1 is deep shit
4. None of the phones in the Corporate Communications department is working
5. Only Principals and Partners could create information
6. Amelie has a flashback. Only I had a flashforward.

Conclusion

Would recommend this for a light reading, if you can get the book for free (or minimal cost) – a library, a friend, a gift. Or at max from a roadside pirated bookseller. Not otherwise. INR 200 is too costly for this.

Book Review – The Art of Yoga by BKS Iyengar

How I got hold of it?

I have a Kwench membership (through my office, and you can get it here) and while browsing their store online I bumped across this book. Since I’m practicing Yoga these days anyways, I thought of giving the book a try. Free stuff doesn’t hurt

The Good Stuff

The book is huge repository of Yoga poses. It has pictures, of each pose which makes it a pretty good watch. The poses are inspiring, as they are challenging.

The Poor Stuff

But the book looked more like a self-publicity for Mr. Iyengar rather than being useful. Primarily because:

1. There are no thoughts on categorizing the Asanas as being in basic,  advanced or expert category. I wanted to use the book so that it helped me practiced Yoga, not just look at the various postures of Mr. Iyengar
2. No thoughts on what posture has what benefits, or prohibitions. A Diabetic person shouldn’t do these Asanas, or this Asana will tone your abs, or a combination of this and this Asana is beneficial for ……

Conclusion

If you are a beginner and want to get started with Yoga, DONT pick this book. Even if you are at an advanced level, you would find plenty of Asanas very difficult.

If you want to look at the various poses, you may pick the book though, and marvel at how BKS Iyengar could have such flexibility.

Procrastination

I kept on postponing buying a laptop since last 3 years.

2006 1st half – I’m still in college, will buy one when I’ll start earning a salary

2006 2nd half – No money left after giving advance to landlord, setting up a livable rental accomodation and a couple of fligh trips

2007 1st half – Taxes, 80C investments sucked up all the money

2007 2nd half – Moved to Bangalore. Oh, that friend went to US – will ask him to bring a laptop with him when he comes back 2 months later. He was already bringing his own.

2008 1st half - will ask me CEO to receive the shipping and bring back. He was stuffed already. Anuway I can use my room mates’ laptop.

2008 2nd half – Ok, will check if someone is in US during Thanksgiving-Christams holidays. Discounts are pretty huge at that time.

2008 Dec – Huge discount from e-Zone – extremely good config in 33k plus, 2k cask back, one electric rice cooker and one flight ticket. Bought it without any hesitation. From Bangalore.

2009 Jan – Came to US. Couldn’t use the new laptop for even 2 weeks.

Procrastination never worked for me!

Mr and Mrs Iyer: Not a regular Bollywood fare

When I watched this movie, I felt an impulsive desire to talk about it, instantly. Unable to find someone who would listen, I wrote my first movie review. I posted it a long time back at mouthshut. Here goes the post:
Guess what. I have watched the movie just now in my computer since I didn’t do what I was supposed to in Friday noon, and so, was feeling like killing time. Thats why I watched this movie. But did I kill my time? Far from it. I just saw a movie which I should have seen long back. It has been two years since its release.

The film isnt your regular Bollywood fare – no nachna gana and purposeless rona dhona or dishoom dishoom. Rather, it churns usual emotions in some unsual times and is set at unsual backdrop. The simultaneity of sighs and groans presents the most effective picture. The scenes range from lyrical(in the abandoned forest guest house) to rioteering savagery. The most haunting scene is when Raja (Rahul Bose)finds the dentures of a slaughtered old man by the riverbed where others are brushing their teeth.

Konkona’s eyes tell a thousand stories and so does Rahul Bose’s face. Meenakshi’s (Konkona Sensharma) coming of age from an orthodox Tamil Brahmin to a normal being is pictured on celluloid. She metamorphoses from a person disliking even the touch of a Muslim to one who ’almost loves’ the Muslim guy. Sequences between a married woman and her companion really touches the softest corner of your heart.

Aparna Sen(Writer-Director) mocks at our educated people when they believe in the caste system. Meenakshi, a PG in Physics, and her Father-in-Law, and endocrinologist, are firm believers in the evil of caste. The Director takes her two protagonists only as far as they can go. They take each others leave, reluctantly, when Meenakshi’s husband comes to the station to receive her. The scene lefts us feeling bereft, yet somehow wiser human beings.

Song Recommendation: 6

Here’s my 6th set of recommendations:

Battle of Evermore: Led Zeppelin

The song is reminiscent of the Tolkien brand of portrayal. The song, interestingly, also mentions Sauron, the greatest enemy of the middle-earth people. Also worth a mention is the line ‘Bring it back’ which may be interpreted as a call to recall your past.

Lemon Tree: Fool’s Garden

This is an English song by the German band. The opening lines – “I’m sitting here in the boring room,It’s just another rainy Sunday afternoon” reminds those innumerable Sundays when you had absolutely nothing to do. The lyrics is simple and hence easy to be remembered by bathroom-singers.

Wind of Change: Scorpions

The song celebrates change – beginning of the fall of USSR, and end of Cold War era. The opening lines mention Moskva (a river in Moscow) and Gorky Park – a pointer to the effect Moscow tour had on the band.

Take it Easy: Eagles

It was the band’s first and immensely popular song. The popularity can be gauged by the fact that there is a park in Arizona by the name – Standin’ on the Corner (a phrase in the song) . The park has an interesting history. You may read it here.

Whatta Dialogue

Yesterday, while surfing channels, I came across a funny scene where Amisha Patel was looking at Aftab Shivdasani with a rather stern looking face. She looked so funny I had to stay and watch the scene. So, here goes the dialogues.

Background: AP and AS are married couple. Apparently, AP was away for sometime and when she returned, she found her dear hubby to be some ‘Badla Badla’. So, she sits in an arm-chair and interrogates her hubby.

AP: Did you sleep with her? [Who her?]
AS: Silent. [His mobile rings and viewers find that Isha Deol is calling]
ID: Come on, pick up the phone Dammit
AS: Presses the red button
AP: Batao, did you sleep with her?
AS: Nods in yes
AP: Kitni Baar?
AS: [What the Fuck?] Kya?
AP: Batao, kitni baar. Ek baar, do baar, char baar, panch baar? Ya phir ginti bhul gaye?
AS: Nod in disbelief. AP interprets as ‘A zillion times’
AP: [Throwing her 'disgusting' look, which is actually very funny to see]
AS: [comes closer to her 'disgruntled' wife] Dekho, shuru se aisa nahi thaa. Pehle hum ‘friends’ ki tarah hi mile. Phir.. Phir…
AP: [Internally: My God, main aage nain sun sakti] Kya tum usse pyar karte ho?
AS: [WTF?] Kya?
AP: Do you love her?
[Pissed off Kalyan: Abe bol de 'NAHIN, woh to main behak gaya tha tumhari absense mein. Warna main to tumhi se pyar karta hun']
AS: Yes
AP: slaps AS, and leaves the place.

The scene highlighted some points:

• Acting prowess of Amisha Patel (with the ‘stern’ look on her face, which may be alternatively interpreted as queer)  and Aftab Shivdasani (The guy shows the power of silence. Without even speaking a full sentence in the scene, the actor manages to extract ‘disgusting’ look from her loving wife)
• Levels to which hindi cinema dialogue-writing has stooped.
• Wives like AP really amaze me. I mean she allows me to fuck around, as long as I do not ‘love’ that ‘other woman’. I wonder if such wives really exist. Because if they do, bachelors – Go, and Get’em.

And oh. BTW movie was ‘Ankahee’ .

Comments invited.

Song Recommendation: 5

Song Recommendations are back, after a hiatus. And here’re the songs you must listen to:

• You know you’re right – Nirvana
  • It is the last released song of the band. The death of Kurt Cobain put the ownership of the song in jeopardy, sparking a tussle between his widow and his bandmates. The song was finally realsed 8 years after its recording.
• Lay down Sally – Eric Clapton
  • Eric asks the girl not to ‘leave so soon’, rather ‘rest in’ his arms. A sweet song that reminds you of late 60s music in Hindi cinema as well (remember those Shammi Kapoor, Joy Mukherjee, Shashi Kappor songs ?). Oh BTW, the song’s title is grammatically incorrect.
• Lay Lady Lay – Bob Dylan
  • Its interesting how so many great songs aren’t recognised at the first instant. When Dylan submitted this song to a studio, it failed to make the cut with the director. Dylan released it as a single and it went on to become a great hit. If you listen the song carefully you would find a marked difference in Dylan’s voice, which he owed to his quitting smoking.
• Glory Days – Bruce Springsteen
  • An achiever looks back at his ‘glory days’ in the song.
• Crazy little thing called LOVE – Queen
  • The beauty of the song is – it was composed withinh 10 minutes. Also, you wouldn’t find too many songs that mention any name of its creators. This song does. Try to find out who is that.

How to manage your Finance

The much dreaded F word. No, not THAT word dear, I mean F for FINANCE. Passing out of college, you started earning some real good bucks. After a year of working, and hectic spending, you compare your finances with another guy and find yourself in a mess. Danny earned more or less the same like you, yet after 3 years he has a decent portfolio and you’re still struggling to understand words like ELSS, 80c, PPF, SIP, Term plan. Several of young turks face a similar situation. Situation, that could’ve been averted by careful and easy planning right from the day you get your first salary. Start right now, if not already yet. Here’re some quick tips on how you can manage your finance and start building a balanced portfolio. The list below is no way exhaustive, but definitely tries to summarize the need and the way to build a balanced portfolio.

Life InsuranceIf you don’t have any dependents (parents, spouse, children etc who depend on you financially), don’t go for life insurance . In case you have dependents, insuring your life should be your top priority. It will take care of financial needs of your dependents even when you aren’t around anymore. Ideally, death benefit of your insurance policy should be 3 times your annual take-home. Life Insurance plans come in three forms – Term Plans, Endowment Plans and ULIPs. You agent will pester you for ULIPs all the time, but a Term Plan is suggested. Why, later in another article. Further, you also get tax benefits under section 80c of Indian IT Act.

Savings Account

Have some liquidity. Keeping a target to build a fund of 45 days of your salary, start building this fund with 10% of your monthly take-home. This will ensure that at the end of15 months, you would have enough liquidity to take care of any emergency like medical exigency, no-job period etc.

Mediclaim/Health Insurance

OK, you’re young. But that doesn’t mean you’ll never have medical emergencies. Mediclaim takes care of your hospital bills (of course subject to some conditions) while Health Insurance by several agencies insure you against critical illness like cance, diabetes etc. Further, you also get a tax benefit (currently, max INR 10000) on this.

ELSS

It means Equity Linked Savings Scheme, and is the only equity-based tax saving instrument. It offers twin benefits of tax benefits and capital gains. Considering the projected growth in Indian economy in the next few years coupled with strong corporate performances, ELSS  is the most lucrative of all tax saving schemes. It has a mandatory lock-in of 3 years, which is beneficial since you are saved from short-term volatility. Best way to go for it is through a SIP (Systematic Investment Plan) route. Essentially, it means you invest a fixed amount in ELSS every month. This will average your costs in the long run (i.e. when market are low, you get more units. And when market is high, you get more units. Thus, the total cost you incur is averaged).

Debt Repayment

Pay your debts on a regular basis. At the very onset, deciding the timeframe in which you want to repay the debt helps. Educational Loan interest repayment is tax-free (section 80d). For home-loans, principal (section 80c, limit: 1 lakh) as well as interest (section 24b, limit 1.5 lakh) can be claimed tax-free.

PPF

People with low-risk appetite can opt for Public Provident Fund. It gives annual returns of 8% (compound interest), is a tax-saving scheme and the returns are tax-free as well. This means, when you invest in PPF you get tax rebate, and when you withdraw your profits are again tax-free. The only rider – you cannot withdraw your invested money before 15 years. But in a sense its good, since you have something as forced-savings. Also, this is exempt from wealth tax. This means that  if you declare bankruptcy and are not able repay your debt, this money cannot be taken way from you by any court. My suggestion would be invest 5% of monthly take-home in PPF per month.

Rest

The rest of money you can put in one or more of these asset classes – Gold, Mutual Funds, Equity, Realty etc. It depends on your risk appetite and of course, quantum of money available. I would talk about these in some later article.

Summary

Here is my suggestion of an ideal mix, as a percentage of total take-home.

Insurance -5 (lesser, if term plan taken)

Mediclaim -2 to 5

Debt Repayment – 10

Saving Account -10

ELSS -15 (lesser, if take-home more than 40K pm)

PPF – 5

Rest – 25 to 50 depending on your expenses

I would discuss each of the above heads in separate articles in due course of time.

HAPPY PLANNING

Update: Keeping the current recession in mind, building a fund that takes care of 6 months of expenses is required. So, save more aggressively than ever before. Accordingly, the figures in this post would change. Thanks Himanshu for the suggestion.

On the wrong side of Law

Disclosure/Prologue: The below entry contains a lot Hindi. So, non-Hindi speaking folks can find it difficult to understand.

1107 hrs
Other side: Namaskar, Kalyan Banerjee ji bol rahe hain?
Me: Jee.
OS: Main Delhi TH Court ka munshi AR bol raha hun. Aapke khilaf aaj dopahar 2 baje is court mein Indian Penal Code ke tahat case dayar kiya ja raha hai.
Me (Fumbling): What the Fuck?
AR: Kya?
Me: Ji, matlab. Aisa kaise, maine kya kiya?
AR : Ji, main yeh to nahin bata sakta magar aap agar 2 baje ke pehle is court mein aa jayen to mamala tal sakta hai.
Me: Aaj? 2 baje ke pehle? Magar main to Bangalore mein hun.
AR: Oh ho. Phir to shayad court apko summon kare Tees Hazari Court dilli mein.
Me: Arre, magar case to bataiye.
AR: Janab, main to munshi hun. Mere paas kewal itni hi jaankari hai.

Try to imagine the scenario. You are working in office to meet an important deadline (couple this with the tension of another impending certification exam) and you get a call saying that 3 hours later you will be charged of some illegal activity and that too 2400 kms away.

Me: To phir main kisse baat karun?
AR: TH court ke advocate DK se baat karen. ( Then he gives the number. I’m not disclosing the number due to confidentiality reasons.)
Me: Jee shukriya AR saab.

1110 hrs:
Me: Namaste, DK ji bol rahe hain?
OS: Nahin woh abhi busy hain, aap thodi der mein baat karen.
5 minutes later
Me: Namaste. DK ji?
OS: Yes. Boliye.
Me: Mere paas court ke munshi AR-ji ka phone aaya thaa ki mere khilaf aaj 2 baje court mein mukadma dayar hone waal hai. Aap bata…
Dinkar: (Snapping midway) Aap mere assistant DB se baat karen. (Gives his phone number and puts down the phone)

In less that 15 minutes, my world seemed topsy-turvy. A few minutes earlier, my Diro was patting my back due to the CUSTOMER DELIGHT i procured in the earlier project. And now, I was on the verge of being the first person in my entire family tree to be on the wrong side of the court.

1120:

Me: Namaste, kya yeh DB ji bol rahe hai?
OS: Jee.
Me: blah blah blah..
DB: Haan. Apke khilaf Telecome Regulatory Authority of India aur BA ne mukadma kiya hai.

Now, at this point I understood everything. Never in my life I have been able to evade in evade-able financial transactions. The only instance when I did, at least I thought I did, failed. I didn’t pay BA’s bill when I shifted from A to B.

The rest part of the story is obvious. I paid the bill ASAP and let the Asst. of the advocate know the bill receipt number. I got a call from him 15 min later that the case will not go to the courts.
Moral of the story

• Your past actions can come back and hit you. Anytime.
• Pay your bills: phone, ration, dudh, grocery, credit card on time. If not on time, at least pay them before you are dragged to court.

I am now going to review my entire non-payment history and outstanding history in the next week. Warna pata nahin, kitni baar dilli court jana pade.

Epilogue

A worried friend of mine -J called me a few min back to know the situation. Now, he tried to show another angle of the story. Here’s it. The entire drama might be scripted and enacted by BA guys. Since they weren’t getting any payment from my side even after months, a little role-play on phone wouldn’t hurt them isn’t it?

Now when I tried to see the phone number of the first call from the so called Munshi of TH court, I see the number doesn’t start with 2 but with 3. A government body (Court I mean) using a private company’s network seems highly improbable. So, was the number of BA guys? I check back the broadband number at my earlier city and see that it starts with 4.

Can you solve the riddle?

P.S. Remember Rajesh Khanna’s line in Anand: ” Jeevan mein kuchh bada paane ki asha mein hum pal pal ki chhoti chhoti khushiyon ko bhul jaate hain.“. This drama is just another attempt to DRAMATIZE MY OWN LIFE. And again, its based on true story. The names of entities (characters, places and business entities) have been changed though.