Wednesday, December 12, 2012

IT BUBBLE: THE DOOM OF 2000


The IT bubble burst long back, and with it, did many fortunes...

The idea of these companies was to work towards monopolising the sector that they functioned in, with the help of network effects and rope-in as many subscribers as possible, rather than think about ways to earn revenues from the same. What added to their miseries were the increased spending in the technology that would enable Y2K switchover. The companies soon realised that all these investments were of no use for them. Whatever be the case, this bubble is recalled as the worst that the Silicon Valley has seen till date. It wiped off almost 50% of IT-based companies across the world... rough patch indeed! Some of the prominent names that were shaven off were: Webvan, Pets.com, Kozmo.com and Floorz.com. The online grocer Webvan was based on a good idea, but its main problem was that in the midst of all the euphoria, it felt that it could mushroom quickly but it died-out in just 18 months. Webvan had raised $375 million through an IPO, expanded to 8 US cities, and had ordered $1 billion to build high-tech warehouses. During its short life time, could boast of an Mcap of $1.2 billion, but then reality struck and all was gone. Another name that faced the music was America Online (AOL) that acquired Time Warner on January 11, 2000. This merger is said to be the beginning of the doom for this company (refer to story titled ‘Atleast, we spared their pants!’; page 48). 

Though this crash is now a thing of the past, it has taught a valuable lesson to many investors – never forget to question the fundamentals of the business you are investing in... And if you still don’t believe us, ask those who were stripped to the bone during the crash that was!


 Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Sunday, December 9, 2012

Yo! Barack can’t get it up!

History shows Dutch have been more successful than Americans

The Brits couldn’t do it, Soviets got it premature, the US couldn’t even get it up, while the Dutch seem to be having a field run. We mean the Afghan strategy! Our suggestive innuendos aside, US led allied forces in the inhospitable terrain of Afghanistan can’t seem to get their counter terrorism strategy up and running.

Being the hub of Osama Bin Laden and epicenter of world terror, the sheer unfamiliarity of the land despite years of yankee presence in Afghan is hitting the Obama administration too hard. While Hameed Karzai wants Obama out of Afghanistan, now Obama is returning the sentiment, giving hints for him to be nudged out. But wait, all is not lost. There is a ray of hope, specifically in the central province of Uruzgan, vindicated by the Dutch Army controlling the region.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Friday, December 7, 2012

Can Obama ‘barrack’ racism?

Believe it or not, the world will witness the resurgence of a new era of racism than the end of it...

Obama’s win in the US Presidential election and his swearing in as the first African-American President was predicted to be a case study on the beginning of a new era But perhaps history doesn’t want it to happen that way. And thus even before the euphoria over his historic swearing in has settled down, the dark side of the American racism has started raising its dirty head. And for some it was not absolutely unexpected either. And the more unfortunate thing is that even Obama’s charisma and his incredible campaign for nearly one and a half years could not bridge much of the deep divide that run deep between the Whites and the Blacks of the US.

President elect Barack Obama himself was skeptical about it. His confession at a civil rights group’s convention stating – ‘our work is not over, mere electing me President doesn’t mean our work is over, we got more work to do’ to the NAACP bears testimony to it. In fact, the ugly aspect of racism was blatantly evident in the presidential election result itself. The voting pattern between two presidential candidates- John McCain and Barack Obama was biased and discriminatory. A closer scrutiny at the voting pattern reveals that McCain won greater support in white dominated counties of states like Arkansas, Oklahoma, Tennessee and Northern Texas. For example, about 80% of the voters in Arkansas are Whites and 70% of them unanimously voted for McCain. The same was witnessed in case of Obama who equally gained greater support from Blacks and minority groups. Research reveals that 67% of Latinos and 62% of Asian voters voted in favour of Obama. It wasn’t a surprise that 88-95% of Black voters who comprise 13% of total the US population unhesitatingly supported him. Well, even the most die hard optimist who would love to find a silver lining in it would accept rather grudgingly that if this does not exemplify racism then nothing else perhaps does. However, moving further, what was a little more horrifying than this was the fissures among the Democrat leaders. Reports state that when Obama was to take oath, Senate Majority Leader Harry Reid was busy convincing Illinois Governor Rod Blagojevich and other Democract leaders to replace Obama’s vacancy at the Senate by any of the two White women (Veteran Affairs Chief Tammy Duckworth or Illinois Attorney General Lisa Madigan) and rejecting the three potential Black candidates namely Jesse Jackson, Jr. Danny Davis and Emil Jones.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Thursday, December 6, 2012

Cape Grace hotel

Cape Grace is a refreshingly different luxury hotel that is situated in the centre of Cape Town’s Victoria and Alfred Waterfront that is famous for shopping. Apart from 121 guest room and suites, the hotel also has a privately owned luxury yacht called ‘Spirit of the Cape’ which is exclusive for the Cape Grace guests and would take you to the famous beaches like Camps, Bay and Clifton. The hotel has also appeared in the 2009 Gold List.

THE VIEW: The hotel enjoys one of the best locations in Cape Town, set against the backdrop of sea and mountain. It is situated on the Victoria and Alfred Waterfront and has a stunning view of the Table Mountain and the harbor. Cape Grace’s fourth-floor terrace suites and spa have the best views of the sea; so when you go there, you know which rooms to ask for!

ARCHI TYPE: Cape Grace has a classic straight line look with all the windows, walls and ceilings having linear dimensions. The rooms and suites are custom designed suiting the guests’ need. Each room gives a tribute to the local artisans with hand-painted fabrics and leather and glass items adorning the rooms.

BON APPETIT: Signal Restaurant in Cape Grace offers a variety of cuisines to choose from as it is influenced by various cultures and regions that have at some point in history invaded the city. One can go to the restaurant at any time of the day. Bascule Vinothèque gives an outlook of a coffee shop during the day, and, by night, changes into a happening bar.

AROUND THE CORNER: Having the best location in the city, some of the best places see are V&A Waterfront, which is a popular tourist attraction. Table Mountain is just a 10-minute drive from the hotel. ‘Spirit of the Cape’ can take you to some of the other popular tourist destinations that you could choose.

FROM UNDER THE CARPET: Though the hotel has one of the best locations, it doesn’t score much on the architectural front.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Wednesday, December 5, 2012

ELECTIONS: PM CANDIDATES

Not a single seat won yet, but the PM candidates are ready

It was refused on the grounds that it will not set a good precedent. However, the Advani lobby believes that being senior to Advani, Shekhawat can make a dent into his prospects. As if that wasn't enough, during the Vibrant Gujarat Summit, the name of Narendra Modi cropped up suddenly. However, Digvijay Singh, Congress General Secretary, says to B&E, “Narendra Modi is accused of the Gujarat riots. How can he become PM?”

Meanwhile, on the Congress front, Rahul Gandhi is being projected by many senior party leaders like Pranab Mukherjee and Arjun Singh. Manmohan Singh, meanwhile has been assured by 10 Janpath that he will be the first choice. With names of so many wannabe PMs already doing the rounds, don't be surprised if you get an entirely unexpected candidate leading the country eventually. Our farcical coalition politics has a habit of doing that.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Monday, December 3, 2012

US OFFICIAL LIST OF TERRORISTS: AND AN ANALYSIS OF WHY YOUR NAME COULD FEATURE THERE

January 20, 2009, Bush leaves the White House; but before that, he ‘updates’ the ‘official’ US terrorists list.

Corporation being preferentially allocated to China by the Chinese government.” That then “would weaken the ability of the US to influence the oil and gas supplies of the Nation through companies that must adhere to United States laws.” The CNOOC deal therefore threatens “to impair the national security,” and “the President should initiate immediately a thorough review of the proposed acquisition, merger, or takeover.” From Dubai Ports to Singapore’s Temasek, all investments by foreign countries have faced similar opposition in the US.

Clearly, when the US drains out oil from Iraq, then it’s not a problem the Pope should worry about, but if some other country goes in for a legal acquisition of a powerful US company, then Nostradamus inferences are redrawn to ensure that such moves are nipped even before the bud is born. If Iran is the latest to face the brunt of Mr.Bush’s rottweiler-like attitude – who wants the world to stop trading with Iran completely – what is not often told is the fact that there are several Israeli companies, like Medent [quoting Steve Rodan, Jerusalem Post Service] who do brisk business running up to hundreds of millions of dollars at the same time with Iran.

Bush might be leaving on January 20, 2009; but has ensured that NCTC stays in absolutely safe hands. The current NCTC Director, Michael E. Leiter, is pretty well qualified. One hears that just a few handful of years back, Mr. ‘well qualified’ Leiter served as the Dy General Counsel and Assistant Director of the US President’s Commission on “US Intelligence Capabilities Regarding Weapons of Mass Destruction!” Gotcha Elvis!!! Rock on!!!


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Sunday, December 2, 2012

Invaluable advice, incredible truth and inspirational guide

Invaluable advice, incredible truth and inspirational guide from a dyslexic

The announcement made headlines around the world and had dozens of blog sites buzzing with activity. Was Virgle joking? Of course they were joking. Fifteen years before Apple started selling iPods, Sir Richard used to joke about portable digital music players. In fact Virgle brand is now registered.

Referring about entrepreneurial failures, bailouts and payouts, Sir Richard believes that many elements of leadership can be prepared in advance, planned and rehearsed. One doesn’t have to be Winston Churchill to be a good leader. The higher up you go in a company, the more perilous your job position is if you don’t perform. Often chief executives, managing directors and large company bosses are told to resign from their high-profile companies by investors because they have made a hash due to poor business decisions. In the United States, for example, Angelo Mozilo, the CEO of Countrywide Financial, Citigroup’s boss Chuck Prince and Merrill Lynch’s Stan O’Neal, all departed with $100-million-plus compensation packages despite their business being caught in the sub-prime mortgage meltdown. Too many top executives are given massive payouts and allowed to merrily walk away, leaving others to sort things out. The author feels that the opposite should ideally happen. In most cases, leaders should stay on until problems are sorted out – or a solution found – and then they can go with a fraction of the money that they would earn if successful.

In this book, Business Stripped Bare, Sir Richard also provides one of the basic but important business messages, which resulted in the success of Virgin mobile, which at one stage had appeared deep in troubled waters soon after the signing of the launch deal on 1st August 1999. This piece he wrote in his notebook: ‘Let people know exactly what they are paying for – and reward those who stay with us. James said think tins of beans! (The more beans they buy the more cheaper the price)’.


Source : IIPM Editorial, 2012.An Initiative of IIPM, Malay Chaudhuri

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Friday, November 30, 2012

Destitution to development

From Wealth of Nations to Common Wealth of Nations

With the recent publication by Forbes magazine of the ranking of the world’s richest people, a new prospect comes into focus. According to Forbes, there are now around 950 billionaires in the world, with an estimated combined wealth of $3.5 trillion. That’s up an amazing $900 billion in just one year. Even after all the yachts, mansions and luxury living that money can buy, have been funded many times over, these billionaires will still have nearly $3.5 trillion to change the world. Suppose they pooled their wealth, as Buffett has done with Bill and Melinda Gates. By standard and conservative principles of foundation management, a $3.5 trillion endowment would have a 5 percent payout of around $175 billion, an amount sufficient to extend basic health care to all the poorest of the world; end massive pandemics of AIDS, TB, and malaria; jump-start an African Green Revolution; end the digital divide; and address the crying need for safe drinking water for one billion people. The group of fewer than one thousand people would outstrip the entire $105 billion development aid of the twenty-two donor governments that represent a combined population of nearly one billion people. In short, this billionaires’ foundation would be enough to end extreme poverty.

Similarly, companies can play a huge role not only as providers of technology but also as customers of local output from impoverished regions. When companies like Starbucks, Nike, or Gap source from low-income communities, they are not creating poverty (as is sometimes alleged) but reducing it. Of course, this is only true if these companies appease dedicated NGOs like Global Witness, Oxfam, the Interfaith Centre on Corporate Responsibility, Amnesty International and CERES and abide by internationally recognised labour standards and human rights principles related to community rights, workers’ health, and so on.


Source : IIPM Editorial, 2012.

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Thursday, November 29, 2012

UN on how member states must work together

Ban Ki-moon, Secy. General, UN on how member states must work together. A B&E exclusive...

The Millennium Development Goals are part of the solution. But progress here has been uneven. Pledges have not been honored. Yet we have achieved enough to know that the goals are within reach. The United Nations is the champion of the most vulnerable. When disaster strikes, we act. We did so this year in Haiti and other Caribbean nations hit by hurricanes. We did so after Cyclone Nargis in Myanmar, where the challenge now is to push for political progress, including credible steps on human rights and democracy.

We have helped people affected by severe flooding in Southeast Asia, and by drought in the Horn of Africa, where 14 million need emergency help. Since taking office, I have called for more strenuous action in Somalia. Must we wait – and see more children die in the sand? The global food crisis will not go away by itself. It may now have faded from the headlines. Last year at this time, rice cost $330 a ton. Today it is $730. People who used to buy rice by the bag now do so by the handful. Those who ate two meals a day now get by on one. The UN has focused on getting seeds and fertilizers into the hands of small farmers. We seek a new “green revolution” in Africa. But we lack new resources. The international community has not matched words with deeds.

In Burundi and Sierra Leone, Liberia and Timor Leste, our resources are under strain because UN peacekeepers are helping nations turn the corner to peace. Yet the UN’s preventive diplomacy is often critical. We see the fruits in Nepal, Kenya and, we hope, Zimbabwe. Likewise, there is a real chance to reunify Cyprus. In Georgia, the UN can help ease the tensions resulting from the recent conflict. In Cote d’Ivoire, we will help organize elections before year’s end – a major stride toward recovery and democracy.


Source : IIPM Editorial, 2012.

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Wednesday, November 28, 2012

POLICY:INDIA-US RELATIONS

Sans Bush, the nuclear pact would not have happened; it marks a paradigm shift in US's India policy

The Chinese in this case worked very closely with Pakistan in approaching members of the NSG over the past three years with the hope of persuading members to oppose this deal. The strategy was to delay the process till there was a valid criteria an for vindicating a similar exemption for Pakistan. The failure of these attempts were a slap on the face of Chinese in their efforts to contain India.

It is now evident that given India’s growing economic strength & its developing military potential, the world is not going to join them in trying to contain a rising power. This agreement makes a material difference to the strategic nuclear programme. In any case, the eight reactors that we were going to use to manufacture nuclear weapons remain outside the scope of international statements. I would not say this deal has given us any military leverage, but what it has done is to get 45 countries to tacitly acknowledge that India will essentially remain a nuclear power. The end of the sanctions came about primarily because George Bush has turned out to be the most India-friendly President we have seen. Unlike past US Presidents, who had focused their attention on forcing India to “cap, roll back and eliminate its nuclear weapons programme”, Bush has turned out to be the first US President who finds that the complementaries of interest are so much with India that India’s nuclear weapons programme should not come in the way.

In some ways it could be an asset to US’s interests. On our West, Afghanistan and Pakistan have become epicentres of global terrorism. To our east, countries like Bangladesh and Myanmar are hardly stable. And in the Indian Ocean region, where Somalia is becoming dysfunctional and Ethiopia is unstable, India is seen as constituting an essential partner for stability and economic growth.


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Monday, November 26, 2012

Shrewd, crude, definitely Russian

Post SCO's move on Georgia, it is a mere cakewalk for Russia to build support in other regional groups

Diplomatic lingo and lexicons used in international diplomacy leave enough space for warring parties to manoeuver and interpret declarations and claim tactical ‘wins’. Last week’s meeting of Shanghai Corporation Organisation (SCO) was no different. Whatever the decision was, both Russia and the West claimed tactical victory.

China and four Central Asian nations – members of erstwhile Soviet Republic – inked an avowal supporting Russia's position in the Caucasus, however, also putting across “deep concern” over the Georgia conflict and calling for a negotiated resolution. In a joint communiqué, the leaders of China, Russia, Kyrgyzstan, Tajikistan, Kazakhstan and Uzbekistan declared that they “support the active role of Russia in assisting peace and cooperation in the region.” In a clear rebuttal to Russia’s recognition to the Georgian breakaway province of South Ossetia and Abkhazia, the SCO also “express(ed) its deep concern over the recent tensions surrounding the South Ossetia question and call for the sides to peacefully resolve existing problems through dialogue." However, it is also true that the communiqué stopped short of an explicit citing of Russia's pronouncement to recognise the rebel provinces.

Russian President Dmitry Medvedev said the statement showed a “united position” on the Georgia conflict, and Kremlin officials specified they were happy with its phrasing. “The SCO statement is a great victory by Russia, which has so far been in a vacuum.


Source : IIPM Editorial, 2012.

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Sunday, November 25, 2012

Rising demand would ensure future oil price rise!

If you thought oil would run out, take a walk (no pun!). Oil isn’t running out, but your money would, given the fact that despite current oil price falls (!!!), rising demand would ensure future oil price rise! And worse, alternative fuel also sucks! virat bahri of B&E confounds [us too!]...

Let’s take the instance of hybrids firstly (combination of electricity and gasoline). They have seen the greatest success in developed world markets in particular due to the fact that they require no disruption of the existing oil infrastructure. In the US, some 347,102 hybrids were sold in 2007 (source: Green Car Congress), dominated by Toyota, with over 70% share of the market. Quite interestingly though, hybrids account for around 2.15% of the total new vehicle sales in the US that year. But considering the first hybrid to enter India, the Honda Civic, costs a whopping Rs.18-22 lakhs, one can’t see it moving into the common man’s realm very soon. Honda has in fact contemplated developing a hybrid hatchback, which will be smaller and cheaper than the Civic hybrid. Dick Colliver, Executive VP, Honda US, did admit to international media, “Our goal for this new hybrid model (is) to make it affordable to a new generation of car buyers.” Toyota has reportedly set up a stiff target for bringing in hybrid versions into all its models, and that target is... hold your breath... 2020!

Competitor GM’s hybrid plans have often been a subject of speculation. When I catch up with Larry Burns, in an exclusive to B&E, this Vice President of GM’s R&D and Strategic Initiatives, reveals, “By the end of the year, we will have eight hybrids on the market, and we will more than double that number by the end of 2011. Along with increased efficiency, hybrid systems give us additional engineering, manufacturing, and market experience with electric motors, power electronics, and advanced batteries – which are all critically important components in our future electric vehicles.” As per his viewpoint, electrically driven vehicles present the most compelling case as future alternative.


Source : IIPM Editorial, 2012.

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Saturday, November 24, 2012

Steel’ing prices

The sector needs more regulation

One fails to understand why has the government decided not to intervene in the decision of the steel companies to change prices. As the agreement between the steel companies and the government culminates on August 7, 2008, experts suggest that the companies would indeed increase prices, which would further increase inflation.

Steel and steel products contribute 21% to inflation and steel prices have already shot up by around 50%. And as Pawan Burde, Metal, Mining and Cement Analyst, Angel Broking, suggests to B&E, “Following the global steel prices’ upward trajectory, the domestic players have already announced a price hike thrice this year taking the price to Rs.40,000 per tonne.” Domestic prices have been suppressed by Rs.10,000-15,000 as compared to international prices by the government and are expected to rise as the demand within the country continues to rise.


Source : IIPM Editorial, 2012.

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Thursday, November 22, 2012

How India can get ahead of the rest...

Prashant Agarwal, Vice President, Technopak Advisors Pvt. Ltd. writes...

Textile manufacturing business is a pioneering activity in the Indian manufacturing sector and has a primordial importance in the economic life of the country. Indian textile industry is globally competitive considering not only cost but factors like vertical integration, raw material availability, manpower skills, product specialisation and service levels provided by the Indian manufacturers.

Global trade of textiles and apparel is increasing at a CAGR of 5-6 %, so competition is not about taking someone else’s share but it is all about creating our own niche and provide better service to be a preferred vendor for long term. India and China are long term competitive players in the Textile and Apparel Industry because of their large population base and also availability of land base. China has taken the headstart in the market from India though due to its impressive production capacities set up at the right time and also infrastructure development by setting up supply chain cities. So India has lot to learn from China, than talking about any competition.


Source : IIPM Editorial, 2012.

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Who SEZ so?

They’re the biggest loss makers

There was quite a lot of apprehension regarding Special Economic Zones (SEZ) since their inception. The recent review on SEZ by Comptroller and Auditor General (CAG) fortifies the same apprehension. CAG review concluded that these SEZ are favouring corporates at the cost of state revenue. The review further proves that there were systemic weaknesses that caused lost revenues to the tune of Rs.246.72 crores and an irrecoverable loss of Rs.1,724.67 crores.

Moreover, due to subsidy and tax holiday, the government had a loss of Rs. 8,842 crores [during the period 2000-01 to 2005-06] against an estimate of Rs.2,146 crores.


Source : IIPM Editorial, 2012.

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Poll khol!

How polls are becoming a national pastime

The voice of a RJ came over the radio, “A list of new seven wonders is being made, would it be right if the Taj Mahal was not on the list? Don’t let that happen, please cast your vote on these numbers right now!” This was the appeal that could be heard across all radio stations in India about a year ago, when Indians were suddenly and explicably gripped by ‘wonder frenzy’. Determined to get their ‘worthy’ contestant in the final list, it became a national mission for all to cast their vote multiple times, and exhort others to do the same. It was as if an international version of Indian Idol was being played, with Indians rallying behind their beleaguered contestant. The efforts paid off, Taj was on the list when the results were declared. Amid enthusiastic back-slapping and bouts of self-congratulations, it was forgotten that the poll was conducted by an obscure ‘for-profit’ organisation from Switzerland, which had no backing from any international body! After receiving a ‘cut’ from more than 100 million votes cast world over, New 7 Wonders Foundation (which had conducted the polls and had pledged to donate 50% of the proceeds to conservation of monuments of the world) quickly declared that it had hardly earned anything from the ‘world’s largest poll on record’ and hence was unable to fulfil its obligation. As for the grand poll, once the voting frenzy subsided, no one remembered the results, save for the fact that ‘Taj made it’!

So goes the story of these polls, conducted over phones or online, to maximise revenues and traffic, with the subject chosen to elicit maximum response. Take for example the recent online poll by FHM India on ‘100 Sexiest Women in the World’, which ended up giving this crown to apni Katrina Kaif, beating out the likes of Angelina Jolie and Gisele Bundchen, leading to a lot of chest thumping by over-excited anchors of news channels in India.


Source : IIPM Editorial, 2012.

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