The butterfly flaps its wings in a distant land. The screen on the monitor blinks. the roof falls off. An old man is stumbling in the wind. A young man is trying to fight the wind. Gravity makes its presence felt. Some crazy new stories are written. A few tears are shed. A baby crying. A home sold. Purchases delayed. Gold stops shining. The sun looks dimmer.
Its amazing how a small crack in the dam can bring the structure down.
Sit back and let Equity flutter.
Monday, October 27, 2008
Friday, October 17, 2008
Fired or not, Decide!!
Tuesday: Jet Airways and Kingfisher Airlines enter into a ‘strategic alliance’.
Wednesday: Jet Airways announces it will lay off 1800 employees who were on probation.
Thursday: Naresh Goyal, chairman of Jet Airways, reverses the decision saying it’s a ‘conscience call’.
This was the sequence of events that panned out in the last few days. There are some very important aspects which I felt compelled to discuss.
Given the general economic slowdown and the specific problems that the aviation industry is facing, cost cutting measures are inevitable. Hence the management would have spent considerable amount of time to deliberate this decision. Given the recent alliance this step indicates a well thought out plan to save the airline from going bust. Now the sudden change in decision is a complete shocker.
Let’s consider Naresh Goyal’s statement that he felt guilty after sacking his employees purely on face value. A seasoned businessman like him would not confront logic with emotion. As a manager you would have to take tough decisions to solve problems. I understand the pain of firing employees but I am sure it would have been done after considering all other options. The company is at stake, creditors are waiting for their payments, revenues are dropping and thus you need to cut the flab. From a managerial perspective this event is a sham. You take a decision after due consideration of all factors (moral and conscience as well) and then let things play out. It would be interesting to observe Jet’s future now.
Another possibility could be political pressure. We had one minister go on air and claim he had a ‘chat’ with Mr. Goyal. Another extreme right wing politician was seen ‘listening’ to the fired staff’s woes. There was more than a hint of potential trouble. The dilemma remains, should politicians interfere in business????
Naresh Goyal made it clear that he was not party to the original decision. It was a rather naïve statement, come on, we are in India, the promoter (and chairman in this case) has to have a say in such a critical decision. Imagine how red faced the CEO will be when he read the statement.
Wednesday: Jet Airways announces it will lay off 1800 employees who were on probation.
Thursday: Naresh Goyal, chairman of Jet Airways, reverses the decision saying it’s a ‘conscience call’.
This was the sequence of events that panned out in the last few days. There are some very important aspects which I felt compelled to discuss.
Given the general economic slowdown and the specific problems that the aviation industry is facing, cost cutting measures are inevitable. Hence the management would have spent considerable amount of time to deliberate this decision. Given the recent alliance this step indicates a well thought out plan to save the airline from going bust. Now the sudden change in decision is a complete shocker.
Let’s consider Naresh Goyal’s statement that he felt guilty after sacking his employees purely on face value. A seasoned businessman like him would not confront logic with emotion. As a manager you would have to take tough decisions to solve problems. I understand the pain of firing employees but I am sure it would have been done after considering all other options. The company is at stake, creditors are waiting for their payments, revenues are dropping and thus you need to cut the flab. From a managerial perspective this event is a sham. You take a decision after due consideration of all factors (moral and conscience as well) and then let things play out. It would be interesting to observe Jet’s future now.
Another possibility could be political pressure. We had one minister go on air and claim he had a ‘chat’ with Mr. Goyal. Another extreme right wing politician was seen ‘listening’ to the fired staff’s woes. There was more than a hint of potential trouble. The dilemma remains, should politicians interfere in business????
Naresh Goyal made it clear that he was not party to the original decision. It was a rather naïve statement, come on, we are in India, the promoter (and chairman in this case) has to have a say in such a critical decision. Imagine how red faced the CEO will be when he read the statement.
Sunday, October 12, 2008
Signs
I am a great believer in signs, indicators, signals, pointers or whatever you want to call them. By signs I mean bits of data which help us infer or conclude something. These cryptic messages are linked to the event but do not have a direct bearing on the course of the event. The stock markets have been in turmoil for the last few weeks and I have been struggling to search for signs which would indicate some sort of a bottom to the market.
The first sign was a newspaper report about some investor who had bought stocks recently with money he had saved for his sister’s wedding but lost more than 70% of his capital. This loss means he has to postpone his sister’s wedding. It is truly sad story, but highly clichéd as well. Don’t want to criticize the media, as it is not the intent of this article, but they need some imagination. Over the last week I read three similar articles in different newspapers. This leads me to conclude that some sort of bottom is being formed. The greater fool theory states that the value of an asset appreciates till you can find someone else who will buy it at a price higher than yours. In January we ran out of buyers, hence the great run came to a halt. The more I read articles of this nature, the more convinced I will be about my conclusion.
The second sign is the irrationality displayed during this week when stock markets across the globe tumbled 15-20%. The great panic and unprecedented has to be equalized by an equal and opposite force, albeit for a shorter duration. This leads me to believe some sort of a bounce in the markets. Once the irrationality is out of the way we can hope for some stability.
While I continue searching for more signs, would hope you (reading this) look out for some as well, and if you do stumble upon any, inform me.
The first sign was a newspaper report about some investor who had bought stocks recently with money he had saved for his sister’s wedding but lost more than 70% of his capital. This loss means he has to postpone his sister’s wedding. It is truly sad story, but highly clichéd as well. Don’t want to criticize the media, as it is not the intent of this article, but they need some imagination. Over the last week I read three similar articles in different newspapers. This leads me to conclude that some sort of bottom is being formed. The greater fool theory states that the value of an asset appreciates till you can find someone else who will buy it at a price higher than yours. In January we ran out of buyers, hence the great run came to a halt. The more I read articles of this nature, the more convinced I will be about my conclusion.
The second sign is the irrationality displayed during this week when stock markets across the globe tumbled 15-20%. The great panic and unprecedented has to be equalized by an equal and opposite force, albeit for a shorter duration. This leads me to believe some sort of a bounce in the markets. Once the irrationality is out of the way we can hope for some stability.
While I continue searching for more signs, would hope you (reading this) look out for some as well, and if you do stumble upon any, inform me.
Sunday, October 5, 2008
Kites
The biggest test of life lies ahead, i ponder,
Hoping it will soon be over.
Some kites will take off, some go up and then come down and maybe a few wont take off at all.
They say the future lies in your own hands,
but all life is written by same hand.
As these thoughts fill my mind and I miss the point
Life itself is an unending test.
Hoping it will soon be over.
Some kites will take off, some go up and then come down and maybe a few wont take off at all.
They say the future lies in your own hands,
but all life is written by same hand.
As these thoughts fill my mind and I miss the point
Life itself is an unending test.
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