Author: SK

The journey back home

It was almost 945 when I started back from the MG Road area this evening. The day travel card I had bought earlier was in my right knee pocket. I heard some people at the Chinnaswamy Stadium bus stop complain that there hadn’t been a bus that way for a very long time. Bus number 20 presently arrived, but couldn’t reach the stop due to the pile-up of traffic from the signal at the Mahatma Gandhi circle. I ran back towards the bus and was lucky to find the doors open.

The new BMTC bus stand in Shantinagar seems to be a major churning point. More than half the people in the bus got down over there (thus ensuring I had a place to sit) and a similar number quickly got in. I think more bus interchanges should be encouraged at this stop. In fact, this is better than Majestic or Market as a hub, since it will be a dedicated hub without being an origin or destination.

I got off at Lalbagh main gate, hoping to catch either 12B which would drop me at Deve Gowda petrol bunk, or some bus that would deposit me at the Ramakrishna Ashram. I found neither. I ended up in a Janapriya Vahini no. 2 which I planned to take till fifth block. By observing the crowd at the bus stop in fourth block, I learned that there hadn’t been a bus towards my area for a long time. And I started wondering why none of them practised bus hopping.

Yet another bus later, I was at the Banashankari bus station, which is something like a black hole for buses late in the night. Buses arrived, unloaded all their passengers and parked for the night. Nothing was leaving the bus stand. Nothing in the general direction of Kathriguppe at least. Road works at the Kadirenahalli cross also meant that I didn’t really know where to stand. It wouldn’t have mattered since no bus was leaving the stand.

It was the first time in ages that I saw auto drivers competing to ferry me home. Some three of them seemed keen, and all of them offered to ferry me at 1.5 times the meter – which is the regulated late night rate. They resolved the fight quickly and I was soon in an autorickshaw. Rupees forty from Banashankari Bus Station to Kathriguppe. Earlier in the day it had been rupees thirty from Kathriguppe to M G Road and back to Banashankari Bus Station. As i keep saying, choice of mode of transport is made keeping in mind cost, time and convenience.

Asking for help

Sometimes I’m a bit hesitant to get back in touch with old acquaintances when I need a favour from them. I begin to wonder if they’ll think of me as one of those “duhkh mein sumiran sab karein… ” types. And sometimes I think ten times before mailing or calling them.

But then, I remember that I too keep getting lots of similar calls or emails. From old acquaintances who I haven’t kept in touch with for ages. And every time, if I’m in a position to help out the other person, I do so. When I think about this, just like it is supposed to happen with Gandhiji’s talisman, my doubts and myself melt away.

This reminds me of this batchmate at IIMB. Occasionally, you would get letters from her. Stuff like

Hi Wimpy!
How are you? How are you doing?
Hope you did yesterday’s exam well.
What did you have for dinner?

Regards,
@#$*!%

And it is an indication that she wants some help from you. For I had noticed that otherwise she would be very direct and to the point!

And in my experience so far, if you are trying to get in touch with someone after a long time (to ask for a favour of course), you shouldn’t apologize for not keeping touch or any such naatak. Just get to the point. Actually a subject line of “need help” is even better.

Let me know what you think of this.

Conflicting signals

Yesterday, my gym installed a TV set in front of each treadmill. Nice looking LG flatscreen TVs. One in front of each treadmill. Each treadmill now has a remote control which is supposed to control the TV in front of it. Now, the thing is all TVs are of the same brand, and space constraints mean that the treadmills (and consequently the TVs) are very close to each other.

Which means that each remote not only controls your own TV, but your neighbors’ TVs also! Much hilarity happens due to this. Say your neighbour will want to go ahead by two channels. Your TV will end up going forward too by the same amount. And you could face the prospect of say watching Aastha while working out on the treadmill.

Something like that happened yesterday and I decided to switch off my TV – it was too distracting. And off went both my neighbours’ TVs! I’m sure this concept of TVs in front of treadmills is going to improve the fun factor at the gym, and also make sure people in adjacent treadmills start talking to each other, etc.

All this aside, another issue is that it’s a 20 inch TV three feet in front of you. It’s like watching a movie from Gandhi Class.

What were the odds of an India-Pakistan final?

After the IPL, I’ve had an overdose of limited overs cricket and haven’t been watching much of it. Not even following it on Cricinfo – haven’t even found it that interesting.

Anyways I got just a little bit of enthu for following it thanks to India’s qualification for the finals. And that led me to the tournament rules, which I find ridiculous. I mean, I don’t know what organizers of tournaments are smoking nowadays – first you had the Euro where teams from the same group ended up in the same half of the draw and now this. In fact (though this must be a coincidence), the recently concluded Euro had a number of groups where two teams which had qualified from the same qualification group ended up in the same group (Italy-France; Holland-Romania; spain-sweden;). however, the last bit can be forgiven considering that it has a reasonable statistical probability.

Coming back to the Asia Cup, let us define Hong Kong and UAE as minnows and Bangladesh as mini-minnows. I know some of you will contest the latter bit, but what were the odds that Bangladesh was going to cause another upset? Let’s leave that debate aside and continue the analysis.

The tournament had a strange format. Six teams were in two pools, with the bottom team from each pool (basically the minnows) going out. Now, the top four teams played a super league; and the points gathered by teams from their original pools were also added. So basically, if you are going to forget about the minnows, the tournament was like a one-and-a-half round robin, with two pairs of teams playing each other twice, while there was one each of the other four matches. I have a feeling they came up with this design in order to have at least two India-Pakistan matches, which was the main source of revenue.

Ok I digress again. Coming back, assume that the mini-minnow loses to all non-minnow teams (in hindsight, it has duly done this duty. Though there was a small but un-ignorable probability that this might not have happened). So, if you take Bangladesh out of the tournament, that leaves Sri Lanka with four points (two wins over BD) while India and Pakistan have two each.

So you have SL -4; Ind -2; Pak -2. And you have India and Pakistan playing each other twice and taking on Sri Lanka once each. Assuming there are no draws/ties/no results, there is only one way that Sri Lanka would have gone out of the tournament – had they lost to both India and Pakistan, and the latter had won one bilateral game each. One win for Sri Lanka and they would go through to the final. Even if SL lost both their games, and say India beat Pakistan twice, it would come down to net run rate between SL and Pak, and with the former having had more games against the mini-minnows, they would in all probability have the better net run rate!

Ok let us bring in some numbers. Let us assume that even if SL were to lose both their “major” matches, the probability that they would have a “bad” net run rate (one that would be lower than that of the loser of the two indo-pak matches) is ridiculously small. And can be ignored. Hence, the only way in which Sri Lanka can go out is for them to lose to both India and Pakistan, who beat each other once each. Assuming that a priori the three teams are evenly matched, the probability of this happening would be 1/2 (india beat SL ) * 1/2 (pak beat SL ) * 2 * 1/2 * 1/2 (india and pak beat each other once each) = 1/8.

One of three things would have happened – either the organizers over-estimated the probability of Bangladesh causing an upset (yes, it’s still an upset if they beat ind/pak/SL) or they would have just wanted to guarantee two India Pakistan games or they wanted to virtually seed Sri Lanka into the final. The most probable reason, in my opinion, is the second one. And by their greed to guarantee at least two India-Pakistan games, the organizers ensured that the chances of an India-Pakistan final would be remote.

Choosing my SIP Dates

Having decided that I’m exceptionally poor at picking stocks, for the last year or so I’ve been investing mostly in Mutual Funds. I invest a total of Rs. 12000 every month in three different mutual funds. The three SIPs take the money out on 2nd, 9th and 27th of each month, I think.

On a number occasions in the recent past, to my bad luck, the stock markets have chosen to move up heavily on the day that my SIP is due. For example, the markets hit a trough two days back, and chose to go up by 700 odd points yesterday – when my SIP was due. Of course, I understand that the concept of investing on a fixed day each month is to average out these daily movements and ensure that I buy on an average at the average market rate. Nevertheless, so far the luck has mostly gone against me.

I’m wondering if it would be a good idea for me to lock in the previous day’s prices in case I get the feeling that the market may go against me on the deduction day. For example, two days back I had a good idea that there was a good chance that the markets might shoot up yesterday, and I would’ve been quite happy investing at the July 1st levels. I wonder if it would’ve been a good idea to go short long on a market index “stock” such as Nifty Bees on July 1st evening. I would clear out this position on the evening of the 2nd which was when the level at which my SIP investment would be made would be decided.

Most of the MFs I invest in invest mostly in blue chip stocks, so I don’t think there’s too much of a basis risk by hedging using a market index. The only problem i have is that Nifty Bees aren’t very liquid, and don’t get traded too much. Also, I don’t know if short selling is allowed in this (can someone let me know?) “stock”. If not, can you suggest some kind of an alternative investment that I can make one day before my SIP day (I mean I need to sell short) which is more liquid? ( actually the short position thing in nifty bees doesn’t matter. I own a significant amount of that stock so I can sell some of it and buy it back without actually being short)

Let me know if this kind of a strategy is sound.

(if you aren’t able to leave a comment here, mail me at skthewimp [at] yahoo [dot] com)

Update

Oops. What I meant was I go long in the market on the eve of my SIP and clear out the position when my SIP actually kicks in. I don’t know how but I got confused between long and short. It reminds me of this story in Hull where he talks about a trader who wanted to close out a long position in cattle and instead went longer, and had to go somewhere in the rural US to actually take delivery of cattle.

Just wondering

Can Country A do something to Country B at the WTO because the latter is not passing on full fuel price to the customer, leading to no decline in supply? demand and consequently high prices of oil for Country A?

How do these kind of things work? Is it possible for one country to destroy market in another by controlling prices within the first country?

(new comment policy stands for now; in case you can’t comment, mail me at skthewimp [at] yahoo [dot] com)

ArthQuake

[info]harithekid

?plays bass for this new HindRock band called Arth. They have just released their first demo. You can find both the demo songs as well as the band’s blog here.

They have released three songs so far and they are all excellent, except for the vocals. Lyrics are awful as is the singing. I was telling Hari that they will get a much better response if only they translate the songs to some slightly more obscure language. Anyways, I urge you to listen the songs

The Third Bangalore Photowalk

Happened this Sunday, between 8 and 1030 am. Eighteen people turned up. The bad news is that there is very little “repeat business”.

[info]harithekid

?is the only person (apart from me) to have appeared in all three photowalks.

[info]aneeta_04

and Shande were the only “repeaters” from walk 2 to walk 3. This low “repeat ratio” kinda worries me, and I wonder if I’ve been doing a bad job of the whole thing.

People who have attende the walk (at least one of the three) please let me know what I can do to improve the experience. One problem I noticed during the second walk was that people just kept running off and soon there was a 500 metre gap between the first and last person in the group. I tried to remedy that this time by insisting that we largely move together, though I didn’t stop people from wandering away. After all, the objective of the walk is to allow everyone to take photos of what they find interesting.

I hope all those who attended this photo walk enjoyed the event, and I hope most of them will come back for the next one, which will happen on the 27th of July. I’ll get back to you people with details about the route soon. And in the meantime, if you wish to participate in further photo walks, I would encourage you to join the bangalore photowalk yahoo group. To join the group, send a mail to blorephotowalk-subscribe [at] yahoogroups [dot ] com .

Then, I request everyone who attended the photowalk to upload the pictures on Flickr and give the tag bangalorephotowalk . The pictures taken so far in all photowalks can be seen here: http://flickr.com/photos/tags/bangalorephotowalk/

Here is a photo of me giving gyaan at the beginning of the photo walk.

And here is a picture of the group at? the end of the photo walk.

Why fine dining costs so much in Bangalore

Blame the Bangarappa government of 1993, which took a decision to stop issuing more liquor licenses, a decision that still continues today.? According to

[info]themadman

?(who runs the excellent Shiok, currently temproarily closed), the only way one can start a restaurant serving liquor in Bangalore is to buy a permit from someone who is shutting shop. In other words, the number of establishments serving liquor in Bangalore has remained constant for some 15 years now, despite the population growing by a large amount.

Apart from the fact that the supply of licenses is scarce, a bigger problem is in matching buyers and sellers. It is reported that officials in the excise department double up as a clearing house for these licenses, charging usurious commissions up to the tune of 25% of the transaction value. Adding to this the official costs of licensing, transferring license and other sundry costs, a liquor license is estimated to cost approximately about Rs. 30 lakh.

What this means is that existing establishments can continue to overcharge on liquor without the fear of a new competitor who might threaten to lower the prices in the industry. However, given that liquor consumption, especially at restaurants, is highly elastic, there is only so much by which the liquor can be marked up. Thus, for the thousands of entrepreneurs who have started thousands of fine dining restaurants in the last few years, the only way in which they can recover their liquor investment, and make a profit would be to mark up the prices of food items.

Another thing with fine dining is that restaurants that serve liquor vastly outnumber the ones that don’t. This is mainly because of the clientile of these? restaurants, who usually prefer a drink to go with their food. This market (fine dining) is highly elastic to the availability of liquor – restaurants stand to lose considerable business if they don’t serve liquor. What this means is that restaurants serving liquor are dominant in this market, and they are the price setters. So when you have the high-cost players in the industry being the price setters, it is clear as to why prices are on the higher side.

On the other hand, when it comes to fast food, south indian food and south indian – north indian food (north indian food made in south indian style), the presence of restaurants that serve liquor is negligible, almsot non-existent. Hence, the price setters in this market are low-cost players, which explains why they are very reasonable.

Then, in Chennai, the? government has a monopoly over liquor distribution, which means that restaurants aren’t allowed to sell liquor. This makes it okay for a fine dining restaurant to run without serving liquor, and hence the price setters in the market are not high-cost. This probably explains why fine dining is much more reasonable in Chennai compared to Bangalore.

The only missing piece in this puzzle is the Andhra style restaurants – most of them serve liquor and are yet extremely reasonable. Or is it that they serve only beer which has a separate license that is available more freely? Can someone tell my why this is the case?

And interestingly, Bangarappa, who put a freeze on further liquor licenses, belongs to the Idiga community whose traditional occupation is to brew/extract and distribute liquor.