Visiting Faculty in SJCBA-Teaching Financial accounting

Started teaching Financial accounting in SJCBA (St Joseph's college of Business administration ) from Jun 13. People at the helm very dignified and good to deal with. It takes some time to understand the level of the students and tailor the teaching to a way that they understand.Endeavour has been to make concepts as simple as possible ,starting with the simplest examples. Initial 5-8 sessions , might have been a bit fast for the class. Based on feedback have also increased the no solved examples in the class. Students appear to be warming up to that. The first assessment test was a bit tough but the correction was liberal. After initial complaints , that is after the test, the students quietened after seeing that the evaluation was liberal.

A chance for me to go back and relearn concepts. In trying to simplify the methods to teach concepts, one gets a good and new perspective oneself.

I have communicated to the management  that I can teach Corporate Finance, Financial management and costing . The remuneration is quite ordinary. As a visiting faculty, one can take this kind of assignment up if one is genuinely interested in teaching and is okay with some remuneration. Teaching a subject for the first time, takes a lot from one in terms of making ppt . working out some examples etc, repeat of the same subject  should be simpler. Let me see how things shape up. Have sent across application, resume to a few more institutes but for a sector which finds it difficult to get good quality people to teach, the lack of response has been very surprising. May be I am wrong in thinking that it does not attract good people. Another thought, may be a bit naughty and nasty is that there could be a vested interest in terms of the existing faculty  may not be comfortable with some one who they could find a challenge and could feel insecure.It could also be a case of that the  current faculty that is the full time faculty being available to teach , asking  visiting faculty to teach means hour based pay and additional cost.For the second trimester , they have asked me to frame a tax course involving direct and indirect taxes.

Trip to Wayanad May 14-17 ,2013

Around 300 Kms from Bangalore. Took a hired Innova. Could have done with a better driver. Arrogant , glum fellow who when told that he needs to follow signals explained no one in Bangalore follows rules , in fact he challenged me to show one driver who follows rules.

Apart from that the trip was great. Only when we go to a place, you do a bit of research and the confusions and our own wrong notions about the place get cleared. To start with Wayand is not a town, it is a district which has a few towns. When we go from Bangalore, the first place in Wayanad that you cross is Sulthan Bathery, nest Kalpetta and then Lakkidi . We stayed in Upavan resort in Lakkidi. Kind of hill station or shoud we say hill district, picturesque , beautiful. Lakkidi is at a good elevation, should have been around 1500 Mtrs , we realised it only when we got down the other side down to some town in  Kozhikode district going down a 9 hair pin bends through ghats and hill sides 

The resort is located very well, bang on the main road but tucked in slightly to ensure that the traffic does not affect the occupants.The first day, we had the resort almost all to ourselves. Spent time in the games room located at a good height within the resort , close to the cottages . 

Next day  (15 May ), we made a trip to the Pookkote lak , located very close to the resort ( just a couple of kilometers ) , went for boating , from there proceeded to Thushargiri falls ( about 30 kms ) down the ghat secton and through some rough terrain also. With some effort got to the place. Hardly any water. Falls or false ? not sure. There was some pretense of falls. Should be good after the monsoon.

Really enjpoyed the baoting. Taken around by Surendra, the boatman.

Vishaal spent time on the small swimming pool, Enjoyed himslef

Later went up to the recreation room , played TT etc. Very enjoyable. 

My impression was that in this kind of a place ( height above sea level was around the same as Yercaud or could be a bit lower also) ,one thought , coffee and pepper only are grown

Was told and in fact the next day (16 May ), also saw , on the way to Banasura sagar dam, few tea gardens of Harrisons Malayalam ( Achoor estate) and in fact on the earlier day (on way to Thushargiri falls) saw several rubber trees with pots tied to collect rubber fluid.

Banasura sagar dam was quite hot, ( around 20 kms from the resort) , pretense of water and some boating (speed boats unlike Pookoote lake which has only row and pedal boats )

Wayand has Tea, coffee and rubber and some pepper also.

Cool in Lakkidi. Came to know and partly we ourselves realised that , staying in Lakkidi was the best thing since that appears to be the coolest.

Stay was excellent, well maintained and reasonably large rooms , food was average , not bad at all

On our way back had food in Kamath Madhuwan. I recall that we had one earlier in the same place. They serve North Karnataka food. Place best avoided. We would have been better off eating inside the city in a place like Siddharth or President.

Takes aorund 6 hrs and add the break of 30-60 mts , total could be around 7 Hrs

Drive through the forests was great. You pass through some parts of Bandipur, Moole hole and Muthangi wild life sanctuary.

Route from Bangalore to Chennapatna to Ramnagar. Mandya, Srirangapatna, Mysore, Nanjangode, Gundipetla,Sulthan Bathery,Kalpetta, Lakkidi.

Cricketer of the Century - Sachin Tendulkar by Vimal Kumar and Warne by Gideon Haigh

The book on Tendulkar by Vimal Kumar is just a rehash of so many things already written or said about him. Vimal Kumar has made the effort of getting some write up from people who either have not said much about him or where he wanted elaboration. Obviously he is a big fan and admirer of Sachin Tendulkar. Most of such books including the one I read a few months back by Mani Krishnaswamy are more a chronicle of events , Tendulkar's innings or rehash of what has been already said.

Not that the books are bad, they are readable but do they bring in the man behind .his struggles, his emotions, pressures, critical nature of some of his innings, etc no is the answer  . Tendulkar as a person has always been what they call an enigma wrapped in a riddle. People know that he had conquered odds and made a terrific comeback after injuries. People also know, as one of the Physios mentioned, was it John Gloster ?, that the whole nation got down to learning what a tennis elbow meant , what kind of stress can cause back or shoulder problems. Sachin Tendulkar's injury is prime time discussion. In our ordinary and relatively pressureless life , where we are not under national scrutiny , we have our own personal problems and are trying to cope with the same. There is always desire to know the champion's mind or someone to tell us what went through his mind during his best years and worst years, how he planned , whether he targeted some bowlers, (recall Olonga) , how he coped with failures, why he is still playing inspite of the fact that he is way past his best, who advises him ?????.Not saying for a moment that all these have to be dealt with, but some of it atleast should have been dealt with. It is quite possible that , Tendulkar is so well protected or has insulated himself that journos can never be privy to such information. These days reading a book on Tendulkar is like a re reading a newsreport , nothing more nothing less.

As against these, book by Gideon Haigh on Warne, though  not an authorised biography, has dealt with the champion, his cricketing ability, his personal struggles, weaknesses, his mentoring etc.Of course one has to concede that Warne's life has been like one of those TV serials , always in public glare/eye, with great on field achievements, spicy off field conquests etc. Haigh has dealt with and analysed  the physical , that is the purely cricketing aspects of the success, how he kept the art simple with few variations but being on top of such variations, how competitive he had been. The author also brings out how Warne was genuinely appreciative of great performers like Tendulkar and Lara and generous with even his so called bunnies like Darryl Cullinan.He also talks of the rivalry for captaincy between Warne and Waugh , literally making Warne declare that Waugh was a much lesser batsman than many, in fact the author delcares that at some stage, Warne thought that Waugh was even better than Tendulkar and Lara.This was a turnaround which the author  substantially attributes to their personal rivalry . Warne's captaincy ambitions are put paid by his off field advetures including a hobnobbing with an Indian bookie through Saleem Mallik.

Good book.Better than a racy TV serial, which was how Warne led his life. The author also talks of how Warne has kept himself relevant even after retirement.

Freefall By Joseph Stiglitz

The author is a nobel laureate and regarded well as a balanced and sensible economist. One of those economists who keeps looking at the right  economics model  which can shape up a good and equitable social order without being a complete  leftist.Argues about the need not to be blinded by the self correcting mechanism of markets. Opponent of the highly theoretical perfect market group.

1. Making of a crisis
2. Freefall and its aftermath
3. A flawed response
4. The Mortgage scam
5. The great american robbery
6. Avarice triumphs over prudence
7. A New Capitalist order
8. From Global recovery to Global prosperity

Just a few random points to be put in order

MBO s- Mortgage backed securities. Bankers lending to a local community would know great details about the client. Securitisation takes out the personal element. Securitisation is nothing but packaging loans in to certficates , making an assessment of the overall risk ( by a rating agency with use of mathematical tools ) and selling the same. In fact the derivatives were several layers removed. 

Sub prime- Lending to below par credit  based on capital values rather than based on repaying capability

CDO- Collateralised debt Obligation which is nothing but packaged loans bundled and sold.

CDS- Credit default  swaps

Slioced and diced and sold in packages with varying "risk". Further repackaged etc, knowledge of the real risk not known at all.

Insurance for such securities

Moral hazard of bailing banks out. Deposit Insurance does extend risk insurance to deposit holders

Banks" incentive system front ended and lopsided, profit , share of the same goes to top bosses , losses borne by tax payers. The reward system was suhc that there was incentive for risks and with no downside since deposit also insured and employees not required to share losses. Case of, heads I win, tails you lose.

Huge disparity between CEO salaries and lowest

GDP is a poor measure, median income better measure. US median income in real terms down by 4%

Keynesian - Governmt spend to prime the economy. Bush not Obama went the full hog. Half measures

Too big to fail - Banks and moral hazard of bailing them out. If they are too big to fail they are too big to exists

Criticis of IMF which squeezed economies in bad shape and made them get in to deeper hole case in point Indonesia.

Brings home the point that the bankers made sure that Banks were deregulated . Poor oversight led to this

Govt should have acted well in time and in good measure to bail out Lehman Bros and not let it fail. The crisi could have been restricted in terms of the size of the bubble.

Borrowings by US. How US and a lot of current activites whose cost is in future is ingnored like environmental costs etc

Author talks of the attempt by economics to make Economics get in to realms of equilibrium as is the case in physical and matural sciences.Equilibrium theory of Walras , what is termed as Walrasian equilibrium.

Also lambasts the perfect market hypothesis, which holds that the market prices everything based on need and at correct prices. He debunks the same with the fact that varying information with varying people makes market imperfect and also Author is clear that we can not be always be looking markets to decide the direction of the society.

Harps on the need to revive the market by pumping in money and making sure investments happen. Also cautions on the high consuming US society.

Cries for a economic order which can extend employment possibilities to all starting from the low rung. 

Talks for need for education and healthcare. 

First cricket test match I watched- Eng Vs India Chennai 1972-73

Must have been Pongal of 1973, Kumar (cousin) had a ticket and was generous enough to allow me to watch for a day, the second day of the test match. That ended up being just about the best day of the match, though very slow by today's standards.The joy and excitement of getting in to a crowded stadium , the buzz, one could hear from outside was fantastic.I had gone with Raghu, Nandu and Ravi was also there. It was quite a task finding a seat for yourself. I think the stand was "D" (Wallaja Road sid I think )which  offerred a reasonably good straight view.Saw Chauhan play and miss a few balls of Geoff Arnold and finally nicking one to Alan Knott. Spent most of the time drinking in the atmosphere, watching the players. I was what 11 years and the bowling appeared much faster at that age. Could hardly see the ball when Cjris Old bowled. Sunil Gavasakr also did not make many. Wadekar , I recall played a few nice pull shots but got out in 40 s. Major part of the day, batting was from Pataudi and Durrnai. Very slow but when the crowd got bored and demanded a six, Durrani obliged. Pataudi also cleared the boundary a couple of times off Gifford or Pocock, don's recall.

Tony Greig ( at 6 ft 6 or 7 inch) was towering over almost all, especially the Indians.Saw GR Viswanath briefy. Those days, one could carry food and we did go fully equipped on that front.The stadium was packed. Pre TV days, whover watched at the stadium were the only ones who got to watch. Of course the usual touts who managed to enter the stadium even before the gates opened and try to corner seats and sell the same off at Rs 1/2 each.Guys used to sleep just outside the gates overnight just to get a vantage point and in seat inside the stadium.

The next match I watched was the one against Australia in 1980 ( Allan Border team)

TV cameras capture the game better but the joy of watching in the stadium and getting a full view of the play area and the sound of bat hitting the ball and of course the joy of watching in person is unequallable

Books-Hot,Flat and crowded by Thomas Friedman

  

 The author talks about the importance of greening the earth. 

Talks about the increase in population over the last 50-60 years ( I recall reading that the population of India of 1930 s used to be around 30 Crs)  the population of the world in 1961 was some 3 Bn and that of India    0.44 Bio. World population now is 7 Bn and India's 1.24 Bn    . There is  need for  energy for good quality life, but the increase in energy requirement, the likely increase further of the same with increased requirement by a significant population in China , India etc who at present do not enjoy access to energy plus the increase by the current users of energy would push the overall requirement to very high and unimaginable levels

He concedes that US has been one of the greatest energy guzzlers and also concedes that the other nations have a right to claim that they too have a right to enjoy good quality life , which at this point of time means, great energy consumption. The author talks how  CO2  emission from around 280 ppm sometime at the beginning of Industrial revolution os closer to 400 ppm and showing clear signs of getting to 550 ppm

Author talks of how use of Fossil fuels like Crude oil,coal etc are increasing CO2 emissions dangeously.

The author talks of the impact of increased release of  greehouse  gases like CO 2 ,Nitrogenous oxides etc in to the atmosphere namley increaes in tempretaures across the globe, lower forest cover, increase in extremes , floods ( ice melting),droughts, tempests etc and .

Author may sound grandiose and boastful when he talks of the need for US to show leadership and how it is only US who can bail the world out of this but one has to concede that any author who undertakes to write on a subject like this is expected to think that they know something that others did not know or know but others  have not  cared to ariculate .. and are expected to sound preachy ,pedagogic. One needs to give allowance and get on to gather what the author says. He does quote a lot of experts and draws on their knowledge and experience. His use of statistics and analogies/metaphors sound a bit over the top but let us concede that he has done a good job and take the essence of the book.

The author somewhere along the line concedes that there may be a small chance that  increase in greenhouse gases may  in fact not cause climatic changes and take the world to a disaster as has been predicted but the probability is high that such an eventualitry is highly likely and argues as to why we should take a chance and also mentions that with or without thye worst consequences that are predicted, "greening" does bring enormous benefits.

One chapter almost fully,m he devotes to the petrol politices and how prices of petrol impacts the policies and behaviour of nations, He takes the example of Iran, Saudi Arabia and traces how increased prices led to increased influence by these nations , increased money in their hands led to increased funding of  terrorism,increased funding if religious schools ( Madrasas) . With increased money , the mneed to be innovative and be connecte to the world to derive technical knoweldge etc gets less and with more time in the hands there is the temptation to spread religious fundamentalism. I think , increased money also gives you an aura on some ordained power.the author also traces how, US and European nations policy of reducing energy in the 80 s by use of fuel efficient vehicles, use of alternative fule etc brought the prices of oil down and almost brought the middle east nations to start behaving better

The author visited parts of Pakistan and gathers that most of the Madrasas there are funded by Saudi. Madrasa attract people since that is one way of escaping poverty , get food , get some education , may be the wrong type but all the same some education and respectaibilty etc. This chapter sounded very logical and sounded atleast to a reader like me who has a basic understanding but not a thorough knowledge of Middle east politics.

The author spoke to a number of experts on Environment and greening experts. Does make a good case for the need to green.He logically sidesteps the doubts cast on the possible ill effects of current emission of green house gases, CO 2 to a large extent by coming out with reasons to green even without the likelhood of those extremes.

Tropical forests just 7% have a disproporionately large  variety of flora and fauna variety

Talks of Indoenisa's tropical forests and how deforestation there means higher emission.
Trees and plants absorb CO 2 (photosynthesis) , lets out Oxygen and also give out CO 2 . But absorption far greater than the CO 2 that is let out. Author talks of how burning of forests could let out all the abosrbed CO 2 , he equates it to 10 years of CO 2 emission in one shot. O f course this also means , we cut out the possbility of future absorption of CO 2 by forests.

He is quite clear that as a class , politicians get attracted not by long term interests of the society but the short term interests of society where immediate benefits can be shown and get votes. He looks at some method of incentive and market mechanics being built in in such a way that greening bEcomes not just the fad of some environmentalists but becomes a commercially sensible option.
He is looking at good initial funding and encouragement by US government and in fact all Governments  to make sure that the interested producers long interest in protected . Also investment in technologoes to reduce the cost of generation of renewal energy sources.

The author also talks of how a gradually gathering people's movement is also necessary to have the change in tide of political and Governmental thinking. Most of revolutionary changes happen on the bedrock of people's movements.

Author's point about hwo the future costs to the society in using fossil fuesl is not factored in.

Author extensively talks of China's energy requirement and how critical it is to make sure that China becomes an early convert (internally ) or the equation could go awry.

Good book, gauthor given to extreme examples , incremental amd marginal examples do not bring out the point forcefully. As long credibility is not lost, it is okay.

Keep away from high debt companies

Conventional finance teaches that leverage is good when the overall return on capital employed is more than the cost of debt plus when you are making profits, interest cost gives you tax cover. Effectively you get the double advantage of additional return on a post tax basis.

Of course conventional finance also teaches that this could work to the Company's disadvantage if the return on capital employed is less than the debt cost and tax cover is a non issue if one does not make profits.

My personal experience even as recent as a couple of years , is that , if you are not a trader or a speculator , it pays to keep away from leveraged companies. If the expectations are 12-15% post tax, one will be surprised how good such a return is when you see the impact of such a return on a compunded basis , especially in the light of actual and empirical data of how the returns have been

Just to give a simple example, Rs 100 invested at 15% compounded in 5 years would be Rs 201 and at 12% the same would be Rs 176, quite a tidy sum.In the Indian market , there are shares where one can invest safely and expect that kind of returns without a perception of any serious risk.

Another caveat , even if one is ivesting in fundamentally good shares with very little downside risk is, do not invest on leveraged funds. Whether corporate or personal , Investment from borrowed funds is dangerous and puts you in a time bind. You may be right in the investment target but the point is you may prove to be right in the long term when in the short term you run out of money. You would be forced to take sub optimal decison on divestments

My favourite quote in this is of the economist Keynes.... " The markets cam remain irrational longer than you can remain solvent"........ 

Have seen shares like Shree Renuka. Geodesic, Subex reeling under debt.