Work is not just something you do for money. Yes, what you do working from seven (in the morning) to eleven in the night counts as work. But that is not the only thing that counts as work.

Broadly defined, work is anything that you need to do at a particular given time. It doesn’t need to necessarily be unpleasant. It doesn’t need to reward you financially or otherwise. It is just something that needs to be done. It is a responsibility. It is something that you have taken ownership of. And by definition, it is unpleasant.

For example, if I have promised my mother that I’ll go out an buy vegetables this evening, that is work. If I have promised a friend that I’ll meet her for tea this evening between six and seven, that is ALSO work. Because now you know what you are going to do between six and seven in the evening today, and you can’t do anything else at that time. That part of your schedule is effectively fixed, and everything else needs to work around that.

The importance of uncertainty in life, I think, is grossly underestimated. When uncertainty is in the hands of others, it is uncertainty for you. It is inherently unpleasant. Suppose you have committted that you will do something “immediately after someone does something else”, then absolute jai. You not only have “work” to do, you are also uncertain as to when you’ll have to do that work. You will need to block a large part of your time for that, and that is inherently NED-causing.

On the other hand, when the uncertainty is in your hands, it results in “flexibility”. Suddenly, when you have a set of things to do that only need to be “collectively done” before a certain time, and the time window in question is large enough, it is not so much of work anymore. Some of the tasks maybe unpleasant, but given that you now have the choice of WHEN to do it, it is so much more pleasant.

A few takeaways from this theory:

  • Occasionally, when I crib to people that life has become boring and predictable, their immediate response is to ask me to take up a new hobby. Typically this is something where I’ll need to interact wit h other people – such as music classes, or dramatics, or whatever. And when you take up something where you need to coordinate with others, it becomes work.

    If you make a mental decision to play cricket between six and seven in the evening every day, soon it’ll become work, irrespective of how exciting it might be. Because it gets entrenched into your (already tight) schedule. If you have the option of playing cricket every evening between six and seven, then it is fine, since it doesn’t impose a schedule

  • The more important thing is about work at work. All management gurus you talk to talk about team dynamics, and team play, and coordination, and focus. What they dont’ realize is that all these increases the quantum of work at work. When the interaction between team members is large, and frequent, then you have several, and frequent, “deliverables”. Which creates more “work” on top of the work that you need to do.

    On the other hand, if it is a loosely held team, that interacts infrequently, and which is structured such that each person has a clearly defined piece of work and inputs and outputs, then each member of the team has so much more flexibility. It is so much less “work”.

  • Coming to focus, when people say you need to show focus and you need to concentrate on the one thing that you are doing, they are once again increasing your “work”. Since you need to focus on that one thing, you have zero flexibility. And that is again more “work”. A better situation is where you are balancing several things at the same time, and that gives you so much more flexibility. And when you have several things on your plate, you can put structured procrastination.
  • So the important thing to remember while designing a team project is to keep things flexible, and reduce frequency of interaction. Give uncerrtainty into the hands of the workers; I’m sure they’ll enjoy it. The amount of work that is there to be done cannot be reduced, but the amount of “work” that needs to be done can, and should be.

Uncertainty, flexibility, option value are all things that are in general underestimated. People assume that we live in a deterministic world. They assume that everyone else needs to do things in a deterministic fashion. And this assumption has a serious negative impact on all our lives. Yes, you might recall that the ongoing financial crisis has been caused to to understimation of uncertainty. That is just the tip of the iceberg.

Rafa and the Ranatunga Principle

Today seems to be a massive theory session. In the morning, I introduced you to the Mata Amrita Index. Now, as I write this watching the third set of (ok it’s the third set now – when I’m starting to write. for all you know, by the time I finish this, the match might be over) the Australian Open, I think it is a good time for me to introduce to you the Ranatunga Principle of energy management.

The Ranatunga principle states that:

When you don’t need to run, walk.

Yes, it is that simple. And if played an instrumental part in Sri Lanka’s victory in the 1996 Cricket world cup. Arjuna Ranatunga, the captain, was a massive guy. Yet, he was an excellent finisher, converting the ones into twos, and the twos into threes, running them hard, making everyone wonder where he managed to get so much energy and stamina from. The key to his performance was what this terriffic energy management.

He knew that the effort involved in each run wasn’t the same. There were a few that were “obvious singles” or “obvious twos” and he correctly realized that there was no point in running them faster than was necessary. And he simply walked them, saving up his precious energy and stamina for the runs that required more energy. In fact, if you recollect, the defining picture of Ranatunga in the 1996 world cup was his nudging a ball to third man and lazily walking a single.

Similarly, in tennis, due to the unique game-set-match scoring system, not all points are of the same value. Some points are more equal than others. For example, it doesnt’ matter if you lose a game at love, or if you lose it after making 30. However, certain points (break points, especially) can make a tremendous difference to the game, and it is important that you win those.

Tennis, especially of the non-grass court variety, is a highly energy-consuming game. We saw on Friday the Nadal-Verdasco game being played for almost five hours. The final also promises to go on for a similar length of time. Even on grass, as we saw in the last Wimbledon, tennis can become an endurance game. To remind you, Rafa Nadal beat Roger Federer in the final back then, taking the fifth set 9-7 (Wimbledon has no tie-breakers in the last set). It was his superior energy-management and stamina-management that saw him through that day.

It had been a long time since I had seen Rafa play, and looking at him play today, it is clear that he has understood the Ranatunga principle well. In fact, he seems to be an excellent exponent of the same. A while back, Federer was leading 40-0, and Rafa just gave up and allowed Federer to take the game, choosing to preserve his energies for more important point. I’m not saying that Rafa has been completely giving up. What I’m saying is that he seems to be doing some kind of a “value analysis” for each point, and then deciding how much energy he is willing to spend on it.

I don’t know if he is a math stud, but you don’t need to be one in order to do simple Ranatunga analysis. You can get a computer to work out the relative values of points for you depending upon the match score, and broadly remember that when you are playing. And once you have done that a few times, you will automatically be able to figure out how much effort to put into each point (remember that you don’t need to know complicated projectile physics in order to catch a ball).

A lot of managers, especially fighters, don’t like the Ranatunga principle. Their management philosophy is that you always need to be f resh, and be prepared, and if you don’t dive on a regular basis, you won’t be able to dive when you actually need to. However, the Ranatunga reply to this is that as long as you know how to dive, and have general practice in diving, you will instinctively dive when you need to, and you should make sure that you have enough energy to dive.

Extending the analogy to work, there are some managers who like to push their subordinates to meet deadlines even when it isn’t important in the larger scheme of things. Their argument here is that their subordinates should have enough experience in diving so that they can use it when they need it. The Ranatunga response to that is for the subordinate to be smart, and to see the larger picture, and to call the manager’s bluff about the criticality of the project whenever it turns out to be not critical.

Ok, so Rafa has won the third set and leads the match 2 sets to 1. If this ends up being a pure endurance 5-setter, I would put my money on Rafa. He seems to be showing superior implementation of the Ranatunga principle.

Meeting Sickness

Ok here is another reason I can think of as to why I didn’t do well in my consulting career. This is based on something I’ve been observing at office over the last week or two. I suffer from what I call as “meeting sickness”. The inability to work immediately after a meeting.

Rough empirical analysis tells me that for every meeting of N minutes that I sit through, I need another N minuts of downtime following it before I can get back to work. I don’t know why this happens to me. I don’t know if I’m having to spend too much willpower inside the meeting. Or if it is just that at meetings i get into high-intensity mode and that drains me out.

Whatever it is, in a typical consulting environment, you are expected to attend lots of meetings. If you work for a company that believes in the philosophy that all work is to be done at the client’s location (such as AT Kearney) then you have meetings throughout the day. it is only in between meetings that you get time to work, and usually the way the projects have been sold means that you can’t afford any downtime.

So that explains it. The other big reasons I’ve come up with for my failure in consulting environment are it requires a high degree of willpower which I dont’ have; and that it is an essentially fighter job. Maybe these are inter-related. Need to think on these lines and come up with something.

And if you didn’t like this post, my apologies. I had an extra-long meeting at work this evening from 4 to 7 (and had sat through three other meetings since morning). I fled immediately after, but I’m yet to recover.

Extending the studs and fighters theory

In a seminal post written over a year back, I had classified people into two, based on their working styles. I had called them “studs” and “fighters”. Studs, I had argued were people who had the knack of finding the easy way out. Who liked to work around corners, and find short cuts. And who would try to do things in as efficient a manner as possible.

Fighters, on the other hand, were supposed to be extremely meticulous, and process-oriented, and extremely hardworking. They would make up for their lack of natural talent by way of sheer hard work, and would be extremely determined in order to achieve their goals.

Today, thanks to a shared item on Google Reader by JP, I came across this article in The New Yorker. It talks about how humans get insights. The article talks about the process, or the lack of it, that leads to people getting insights. A large part of the article is a bit technical, and talks about a lot of biology. But if you can navigate through that, it offers a lot of insights on what goes into insights, and what might be needed in order to think in this sort of manner.

One major idea that is presented in this article is that insights are usually developed by the right half of the brain (for right-handed people), while most process-oriented stuff and calculation takes place in the left half. The article argues that in order to leave ourselves open to more insight, we need to take care not to focus too much of the problem. It also explains that you are likely to get your insights when you are least expecting them, such as when you are playing table tennis.

Ok, so going forward on these two lines of thought, I argue that “studs” and “fighters” can be extended to learning styles rather than as just working styles. It is the way in which the two categories of people understand things. Studs, I believe, are the people who tend to get most of their understanding by way of insights. People who are unable to put a finger on the process by which they learn a particular thing. Because of this, their thought is so unstructured that it is difficult for them to precisely and correctly follow processes.

Fighters, on the other hand, get their understanding incrementally, by following a process. They build up their understanding bit by bit. Slowly but surely. They are inherently left-brained people, and because their learning style is so processed and orderly, they thrive in orderly environments. Where all you need to do is to come together and go through a process. They are willing to work hard. They don’t mind if what they are doing is not insightful (partly because they experience insights so rarely). And thus lead low-volatility lives.

One other important insight from this article is that you are not consigned to a career in liberal arts or related fields if you are a right-brained person, as a number of people would like to convince you. Popular belief is that people who are good at math are inherently left-brained, and those good at languages are inherently right-brained. And that the paths for these people are disjoint. And they should stick to what they are good at.

However, what you might want to infer from this article is that all that it means by being right-brained is that you survive on insights. And that you are more likely to be a stud than being a fighter. The old school used to say that engineering is for the left-brained because they saw engineering as being process-oriented. And they saw the liberal arts as being insight-oriented. However, there are enough instances to show that the complementary skill is also important in both kinds of fields. You need studs in engineering, for if everyone would just follow the processes, there wouldn’t be anyone to think out of the box and come up with new stuff. You do need fighters in the arts, for on many occasions it’s a sheer execution game.

In any case, I would advise you to go read the article. It’s longish, but offers important insights. And if you think you are an insight-driven person, as I think I am, it might help to show this article to your bosses, and explain to them that making you focus may not exactly be the best thing to do in the interest of the firm.

On Being a Geek

I’ve always been a “topper types”. I started topping class when I was in first standard (and no, they didn’t announce ranks before that), and as if that wasn’t enough, my parents made sure that all relatives, and all teachers in school knew about my superhuman arithmetic skills. And as if even this wasn’t enough, I became the first guy in my class to wear spectacles. In a few years’ time, I went on to represent my school in supposedly intellectual pursuits such as quizzing and chess. I had been consigned to living life as a geek.

There were several occasions when I wasn’t really the topper; wasn’t even close to being a topper. However, something or the other ensured that I managed to maintain that geeky aura. In school, and at IIMB, I was supposed to be really good at math, and that made me geeky. Things were differnet at IIT – since a number of my classmates who trumped me in acads were also better than me at other geeky things. However, I think the fact that I was studying CompSci made me feel geeky, and I never lost any opportunity to show off my geekiness.

In this context, the last two years were quire awkward, as I was in a couple of non-geeky jobs. For the first time in almost twenty years, I had to go out of my way to demonstrate my geekiness, and given that those jobs didn’t need me to be a geek, things didn’t go quite well. I used to try and shove in lines into my conversation such as “we used to play chess in the classroom at IIT. since we couldn’t carry in chessboards, we used to imagine a board and play on that”.

It was very awkward. Thinking back, maybe that was one of the major contributing reasons to my not being too happy in the jobs. I wasn’t able to play my natural game. I had to invent a new me that would go to work daily. And it wasn’t just about the geekiness factor, but this was one of the important reasons, I believe.

Now, working as a strategy guy in a quant hedge fund, I feel I have every right to be geeky, and am well and truly back in form. I lose no opportunity to crack geeky jokes. I try to bring in analogies from various geeky fields I’ve been acquainted with – math, computer science, finance, and even physics. And I don’t mind making things complicated just so that I can slip in that geeky analogy that I think is “beautiful” and “elegant”.

Two days back, i was talking to Baada on the phone, and I smelt an opportunity to crack a geeky joke. We were discussing football while watching Liverpool play Chelski. And then suddenly I asked him if he knew the concept of inversion in geometry. When he replied in the negative, I spetn the next ten minutes explaining the concept to him, all so that I could slip in that one little geeky joke.

Beware of me, I would say.

Bloomberg Watching

Two weeks back we were all given dual screens at office. A couple of days after that, those of us that had joined recently got Bloomberg logins. It’s a very restricted version of Bloomberg, with most of the strong features having been disabled. One feature that is enabled, though, is to get the graph of the daily price movement of a security, or an index.

It is necessary to have hobbies at work. It is humanly impossible to concentrate solely on the work for all the eight or ten hours that you spend at office. You need distractions. However, in order to prevent yourself from being too distracted, it helps having one or two very strong distractions. Distractions which can crowd out all other distractions. They can be called “office hobbies”.

In the past, my office hobbies haven’t really been constructive. In my first job, I was part of a PJ Club, and we would exchange horrible jokes. By the time I got to my next job, I had been addicted to Orkut, and kept refreshing it to check if I’d gotten any new scraps. Of course, when there is a cricket match on, the Cricinfo screen makes for a good office hobby. In the last ten days, the World Chess Championship has served my evenings well. However, it is important to have a sustainable hobby which could also be constructive. One which might have a small chance of making impact on your work. And most importantly, it would be ideal if the boss doesn’t really disapprove of your office hobby.

For the last week and half at work, my right screen (remember that I have two screens) has been reserved for Bloomberg Watching. A Bloomberg window is open there in full size, and I would’ve usually put the daily movement graph of the Nifty there. And it updates real-time. It’s like a video game. I just sit and watch. And get fascinated by the kind of twists and turns that the markets take.

Twenty years back, I would spend my evenings in the courtyard of my grandfather’s house in Jayanagar watching ants move about. I would be fascinated by their random, yet orderly movements. I would spend hours together watching them.

Around the same time, I used to play another game. I used to splash water on the (red-oxide coated) walls of my loo, and watch the different streams of water flow down as i crapped. I would get fascinated by the patterns that the water droplets would form, the paths that they would take, the way they would suddenly change speed when they intersected, and so forth. I would end up squatting there long after I’d been done with my crap.

So what I’m doing now is not exactly new. I just watch a point move. Orderly from left to right. Wildly fluctuating in the up-down direction. I look at the patterns and try to guess which animal they look like, or which country they look like. I get fascinated by the sudden twists and turns that the curve takes, and wonder about the collective wisdom of all market participants who are faciliating such movement. I occasionally scream out to my colleagues saying stuff like “nifty below 2600!” and they respond with a “behenchod…” or some equivalent of it.

As the day wears on, I realized that some animals I had recognized earlier in the day are hardly visible now. They are but specks in the larger graph that is the day. And then I realize that unless there was something truly special, the movement of the day will also soon be lost. It will be available for download from the same Bloomberg terminal but that will be about it. And so forth.

Occasionally I catch some unsuspecting soul on my GTalk list and spout such philosophy. I tell them about how after a while everything becomes insignificant. About how we will always be just small players in the larger system. The smarter among them will add their own philosophy to mine, and sometimes we come up with a new theory. The not so smart among them – they will ask me about my views on the market. And what would be good picks (this has been a regular question I’ve been asked ever since I got back into the finance industry but more about that later). And then they say something like how terrorists are the reason the stock markets are plunging, and how the government should protect investors’ money and stuff.

Some day I hope all of this will be useful. Some day I hope my eye for recognizing animals and countries where none exist will enable me to come up with some earthshaking strategy, which can make millions for my fund. However, now that doesn’t matter. All that matters is the unbridled joy of watching the ticker move up and down. Rise and fall. Take baby steps, and the occasional giant leap. It’s surreal.

Dear Lehman Employees

Or should I say ex-Lehman employees? Assuming that most of you haven’t been fired yet, I’ll drop the ex. I know that a couple of days back, I wished for your company’s demise. That had nothing to do with you. I wished for that because I thought that was the right thing to be done. And the right thing has been done.

I know that you are out of a job, or will soon be without one. And that there are millions of Lehman people out on the street now, looking for a job. You may soon be joined by some people from Merrill, so you may not be alone. However, this is not the kind of thing where one appreciates company – after all that would reduce your chances of getting a job early.

I’m told that a number of you are desperate to quickly get into other jobs. I even heard that some of you are willing to take fantastic pay cuts in order to get employed again. I also heard that some of you are planning to apply to jobs that have nothing remotely to do with banking. i would advise you against doing things like this.

I know some of you have mortgages to pay. Some of you have families to take care of. And by embracing the American culture, you don’t have enough stowed away to take care of this. Some of you may not be allowed to legally live where you are currently leaving unless you find another job soon. Yes, if you are in this kind of a situation, you would do well to find a job early. However, keep in mind that whenever you are looking out, all that matters is your last paycheque. I figured out the hard way a few months back that the job market is Markovian. It doesn’t care for what you used to do. So if you end up taking a pay cut now, you might have to live on a different salary scale for the rest of your life.

However, a large number of you may not belong to the above category. You might have some savings stashed away, or you wont’ have mortgages to repay, and you aren’t really desperate to retain your visa. If you fit this category, I would advise you to hold out. I know you are upset now, but don’t panic. Don’t be in a hurry to find a job. Don’t sell out. Unless there are more large-scale layoffs in the near future – with Merrill having been sold, the chances of this aren’t too high – the job situation is going to get better with time.

Remember that once you are in a job, you will never get a break. You might get your statutory three weeks of privileged leave, but you will never find an opportunity to take a longish break. You will never get an opportunity for a sabbatical. To take some time off and do what you want. Yes, personal experience tells me that it’s really tough to chill when you don’t know where your next cash flow will come from. But given your experience in what was considered to be the best bond house in the world, it shouldn’t be that tough to find another job, when the supply in the market isn’t as bad as it is now. I would still advise you to take a short break, and breathe, and introspect, and ask yourself all the  questions you haven’t been able to ask because you didn’t have the time.

You might think I’m crazy to be telling you this, but I think this is what will work best for you. Yes, there is a small chance you might get a good enough job paying well enough soon enough. If you hit upon this, then, you must count yourself lucky, and take it. However, there is a good chance that you may not be able to do this. All I’m saying is that in that situation you shouldn’t panic.

Just one last thing. If you are from Lehman, and are interested in working for a quant-based algorithmic trading hedge fund trading in Indian equity and equity derivatives markets, and based out of in Gurgaon, let me know. Drop in a comment with your email ID. Look up on this page, and you find a tab saying “Contact”. Click on that and you’ll get a form. fill it up including your email id and submit it. You might find someone responding to you in a few days.

Thanks and reegards,


Law of conservation of willpower and other stories

Every time I think about this article in the New York Times, I find myself agreeing more with it. The basic premise of the article is that in the short run, one has a limited “supply” of willpower, and by every activity you do that consumes willpower, you are reducing your ability to do other similar activities. In the longer run, the article goes on to explain, you can increase your willpower over time. This you do by keeping on pushing yourself marginally on the willpower scale.

Back when I first read this article (it was written this April), I used it to justify to myself as to why a normal management consulting job requires heavy amount of willpower. The argument I put forth back then was that in a mgmt consulting job (the kind of stuff done by McKinsey,  A T Kearney, etc) you have to work for long hours, mostly in the presence of members from the client team, and a large amount of work you do is mostly routine, and boring.

Given that the work is mostly boring, it consumes willpower to keep doing it. The long hours mean that you need to keep doing it for a long time, which means a high rate of willpower consumption for a long time – making your daily consumption of willpower really high. Typical work usually involves your exhausting close to your daily supply of willpower. One option would be to periodically recharge your willpower batteries – by indulging in activities that don’t require any willpower, and will also go into removing your frustration with the depleting willpower.

One of the most high-pressure jobs, one that consumes copious amounts of willpower, is trading. Though the hours aren’t too long, the rate of consumption is so high that you easily come close to the daily limit. However, traders usually manage by frequently recharging their willpower batteries. By indulging in activities such as shouting, screaming, throwing down the phone and breaking pencils. This way, they manage to survive until the time they get paid their bonuses (assuming they get a bonus – which is not the case with most traders this year).

The clincher with consulting is that you are usually based at the client’s location. This means that you must behave. And thus, a major source of recharging willpower batteries is gone! Hence, the only way you can survive in that profession is if you have an extremely large daily supply of willpower.

Every time I think about this NYTimes article, I also realize that my willpower is less than average. Though I must say that it’s been steadily increasing, it’s nowhere close to the average level. Initially, in school and college, I managed to get by because the amount of willpower demanded wasn’t very high, and within my limits. Then, I started working, and got exposed.

There was this guy called Yaso in my class at IIT who on one fine day started writing with his left hand (he is naturally righthanded). He explained that he was doing this to build up his willpower. I don’t know how successful his attempt was, but I clearly remember we’d made a hell of a lot of fun of him for this. Maybe I should check back with him. And start implementing some measures for improving long-run willpower that the article talks about.

Life update

Today I complete four months of joblessness. Time seems to have flown quite quickly. Looking back, I don’t really know how I spent these months. I think I read quite a bit. I chilled out a bit. Slept well. Ate well. Hardly travelled. Hardly got bored. One one hand I’m happy that I didn’t get bored for most of these four months. On the other hand, I believe I’ve wasted these months sitting at home.

I spent a considerable amount of time trying to figure out what I wanted to do in life. Professionally. Unprofessionally. There were no easy answers to this question. Every time I thought I had the answer, something would happen which would make me change my answer. I have spanned the entire spectrum just in a matter of days. Thought about some stuff, only to discard them only a day later. Nothing particularly concrete came of of this time.

My joblessness is going to end next Monday, the 25th. I’m moving to Gurgaon. I’m yet to book my tickets, but will probably go there on Sunday. Once I find a house and settle down there, there is a very good chance that my mother will join me there. Bangalore will continue to be my “hometown” but I’m not sure if it’ll still be home. Yes, I’m getting uprooted.

The popular saying is that most people have two careers – they do, on an average, two kinds of jobs in their entire careers. The saying also goes on to say that “successful” people have an average of four different careers. I don’t know what to make of it, but I’ll be starting my fourth job next week (counting one internship also as a job). The new job is “orthogonal” to my last two jobs, which were mutually orthogonal. The new job is slightly in line with my first job (the internship) but the similarity is slight. So, at the age of twenty five, with a total working life of a little more than two years, I’m entering my fourth career. I don’t know if I’ve “achieved success” because of this.

When I was a kid, I used to read Misha. I still remember one cartoon from that. A hedgehog stands under an apple tree, and wants to get the apple. It shakes the tree. A few leaves fall off. It shakes the tree again. A few more leaves fall. The penultimate panel shows the hedgehog shaking the tree really vigorously. The last panel shows the hedgehog covered with leaves from the tree. The fruit is still up there. Based on this, my father used to “do a hedgehog on” me. This treatment involved him catching me by the shoulders and shaking me vigorously back and fourth, well at a faster rate. It used to be fun. This treatment has since been extended to all kids who have cared to visit our house.

For a large part of my childhood, it was common for me to go up to my father and say “make a hedgehog out of me”. And he used to proceed to give me the “hedgehog treatment” that I’ve mentioned above. Finally it seems like all those requests have come to fruition. In the lingo followed by the financial industry, people who work in hedge funds are called ‘hedgehogs’. And starting next Monday, this set is going to include me.