Why Kannadigas are Inherently Lazy

There is something about the weather in Bangalore. There is something about the weather in Bangalore that perks you up. There is something about the weather in Bangalore that most of the time you really want to do something, to be active, to go out, walk around, lead an active life and all such. The first few days I spent in Bangalore after my return from Gurgaon in June I spent literally jumping around. The weather was so uplifting. It filled me with so much enthu for everything in life!

So I was wondering why people usually classify Kannadigas as being inherently lazy. As one of the professors in my JEE coaching factory used to say “naavu Kannadigarige aambode mosaranna koTTbiTTre khushhyaagiddbiDtivi” (if someone gives us Kannadigas dal vada and curd rice, we’ll live happily forever, and we will forget about working hard). Basically implying that we are inherently not too ambitious, and that we are generally laidback about stuff.

Thinking about it, I was wondering if the wonderful climate of South Interior Karnataka has to do with this (people from North Karnataka and the coast are supposed to be fairly hardworking, and are not known for their laidbackness unlike us Old Mysore people). I wonder if this laidbackness is because our wonderful weather has spoilt us. Spoilt us to an extent that we don’t really need to normally fight against the odds.

So I was thinking about Gurgaon, the other place where I’ve recently lived in. Gurgaon has horrible climate. Maybe a total of one month in the year can be desccribed as “pleasant”. Most of the time it’s either too hot or too cold. Temperatures are extreme. When it rains the whole place floods up. If people in Gurgaon are happy it is in spite of the weather and because of it. And therein lies the reason why people from there are traditionally more hardworking than us people from Old Mysore.

Blessed with such wonderful climate, we don’t really need to fight the odds. If today is too hot, we can put off the job for another day when we’re sure it’ll be cooler. If it rains too much today, we know that it’s likely to be dry tomorrow and can thus postpone it. Essentially we don’t need to put too much fight. When the weather is good, we are all jumpy and enthu and do our work. Which allows us to wait and sit when the weather is bad.

The man in Gurgaon, or in Chennai, or even in Raichur, however, can’t afford that. The likelihood of him having a good day weatherwise sometime in the near future is so thin that there exists just no point for him to postpone his work thinking he’ll do it when he feels better. This means that he is culturally (rather, climatically) conditioned to work against the odds. To do stuff even when he doesn’t want to do it. To essentially put more fight. And so he avoids that “inherently lazy” tag which people like us have unfortunately got.

I’m reminded of the second case that we did in our Corporate Strategy course at IIMB, from which the main learning was that sometimes your biggest strengths can turn out to be your biggest weaknesses.

nODi swami, naaviruvudu heege.

A View From the Other Side

For the first time ever, a few days bck, I was involved in looking at resumes for campus recruitment, and helping people in coming up with a shortlist. These were resumes from IIMB and we were looking to recruit for the summer internship. Feeling slightly jobless, I ended up taking more than my fair share of CVs to evaluate. Some pertinent observations

  • There was simply way too much information on peoples’ CVs. I found it stressful trying to hunt down pieces of information that would be relevant for the job that I was recruiting for. IIMB restricts CVs to one page, but even that, I felt, was too much. Considering I was doing some 30 CVs at a page a minute, I suppose you know how tough things can be!
  • The CVs were too boring. The standard format certainly didn’t help. And the same order that people followed -undergrad scores followed by workex followed by “positions of responsibility” etc. Gave me a headache!
  • People simply didn’t put in enough effort to make things stand out. IIMB people overdo the bolding thing (I’m also guilty of that), thus devaluing it. And these guys used no other methods to make things stand out. Even if they’d done something outstanding in their lives, one had to dig through the CV to find it..
  • There was way too much irrelevant info. In their effort to fill a page and fill some standard columns, people ended up writing really lame stuff. Like how they had led their wing football team in the intra-hostel tournament. Immense wtfness. Most times this ended up devaluing the CV
  • Most CVs were “standard”. It was clear that people didn’t make an effort to apply to us! Most people had sent us their “finance CV” but would you send the same CV for an accounting job as you will for a quant job? Ok yeah I understand this is summers, but if I see a CV with priorities elsewhere, I won’t shortlist them!
  • By putting in several rounds of resume checking and resume workshops, IIMB is doing a major disservice to recruiters. What we see are some average potential corporate whores, not the idiosyncracies of the candidates. Recruiting was so much more fun when I’d gone to IITM three years back. Such free-spirited CVs and all that! This one is too sanitised for comfort. Give me naughtyboy123@yahoo.com any day
  • People should realize that campus recruitment is different from applying laterally. In the latter, yours is one of the few CVs that the recruiter is looking at and can hence devote much more time going through the details. Unfortunately this luxury is not there when one has to shortlist 20 out of 180 or so, so you need to tailor your CVs better. You need to be more crisp and to the point, and really highlight your best stuff. And if possible, to try and break out of standard formatI admit my CV doesn’t look drastically different from the time it did when I was in campus (apart from half a page of workex that got added), but I think even there I would make sure I put a couple of strongly differentiating points right on top, and hopefully save the recruiter the trouble of going through the whole thing.
  • I think I’m repeating myself on this but people need to realize that recruiters don’t care at all about your extra-currics unless you’ve done something absolutely spectacular, or if there is some really strong thread running  through that section. So you don’t need to write about all the certificates that you have in your file

The bottom line is that recruitment is a hard job, especially when you have to bring down a list of 200 to 20 in very quick time. So do what you can to make the recruiter’s job easy. Else he’ll just end up putting NED and pack you.

Gyaan From a Former All India Topper

CAT is less than a month away. Or more, depending on when you’re writing it. If any aspirants are reading this, I have just one piece of advice for you – which no one in any CAT Factory will give you. It’s about going for it. About batting like Sehwag. About reaching out far outside the off stump and playing every ball. I just want to assure you that percentages are in favour of this kind of a game.

In my zamaana, every correct answer in CAT gave you one mark, and every incorrect answer took away a third of a mark. Every question had four possible answers of which exactly one was correct. This negative marking had a completely psyching out effect on most takers, and people are afraid to go for it. And six years back, I liked it. For it made my own risk-taking strategy much easier – since I could now afford a larger number of errors.

The arithmetic is simple. Even if you have no clue about the question, and just put inky-pinky-ponky (or even better mark ‘C’, since years of research has proven that it’s the statistically most probable answer in CAT) you have one-fourth chance of getting it right – which gives a three-fourth probability of getting it wrong. And given the payoffs for correct and incorrect answers (1; -1/3) you can clearly see that the expected payoff of taking a completely random guess is ZERO!

So while this obviously rules out insane inky-pinky-ponkying, what it does tell you is that if you can eliminate at least one of the four choices, you are in the money! If you have to pick one of three possible answers, the expected payoff is 1/9 which is greater than zero. Yeah it doesn’t look very high but then the expected payoff is positive! So you need to go for it.

Back when I was in my 3rd year, there was some free mock CAT at IITM. And some of us 3rd years went just for the heck of it. I attemped 130 out of 150 questions, getting 90 right and 40 wrong. It still gave me a significantly higher score than any of my seniors (who were writing CAT that year) – most of whom attemped not more than seventy. Later that day a senior called me aside and told me that the art of CAT was about leaving questions. And that it was all about the questions that you left.

Leaving the ball makes sense in cricket where one mistake ends your innings. What if instead of ending your innings you were just deducted 2 runs everytime you got out? Would you still leave the balls outside off and play the waiting game? How on earth would you score runs if you were to leave every ball? It’s all about scoring, and you can score only if you attempt a shot.

I understand that CAT format has changed now and you have 5 possible correct answers for every question while the negatives are still at 1/3. Even then, if you can eliminate two out of the five answers (shouldn’t be too gouth), you have a positive payoff. And you must go for it. Keep in mind that you can’t score if you don’t play the ball.

I leave you with a video. The message is in the name of the song. Idu One Day Matchu Kano. This is a one day match dude. So you must go for every ball. And look to score.

A Balance Sheet View of Life

The basic idea of this post is that interpersonal relationships (not necessarily romantic) need to be treated as balance sheets and not as P&L statements, i.e. one should always judge based on the overall all-time aggregate rather than the last incremental change in situation.

Just to give you a quick overview of accounting, the annual statement typically has two major components – the P&L statement which reflects what happened between the last release of the statement and the currrent point, and the balance sheet which reflects the position of the company at the point of time of release of the statement.

I think Bryan Caplan had made this point in one of his posts, but I’m not able to find it and hence not able to link it. The point is that you should look at relationships on a wholesome basis, and not just judge it based on the last action. The whole point is that there is volatility (what we refer to in my office as “the dW term”) and so there are obviously going to be time periods during which you record a loss. And if on each of these occasions you were to take your next course of action based on this loss alone, you are likely to be the loser.

I’m not saying that you should ignore the loss-making periods and just move on. You do need to introspect and figure out what you need to do in the next accounting period in order to prevent this kind of a loss from repeating. You will need to “work the loss”, not make a judgment to break the relationship based on it. I think a large part of the problems in this world (yeah, here goes another grand plan) stems from people using one-period losses in order to take judgments on relationships.

Another thing is not to generate the accounting statements on a shorter time period. This is similar to one funda I’d put long ago about how you shouldn’t review your investments at extremely short intervals since that will lead to a domination of the volatility term (dW) and thus cause unnecessary headache. You might notice that corporates rarely release their accounts statements more frequently than once a quarter – this has more to do with volatility than with the difficulty in generating these statements.It is similar in the case of interpersonal relationships. Don’t judge too often – the noise term will end up dominating.

One caveat though – very occasionally the last loss may be so bad that it more than wipes out the balance sheet and takes to zero (or even less) the value of the firm. In that kind of a situation, there is no option but to shut down the firm (or break the relationship) and move on. Once again, however, the clincher in the decision to break up has to be the balance sheet which has gone to zero (or negative) and not just simply the magnitude of the last loss.

Life based on a balance sheet view is a balanced life.

Relationships and IIT

So the basic premise of this post is that being in a romantic relationship is like studying at IIT.

Everyone wants to get into IIT. They do thipparlaaga to try and get in. They join expensive coaching classes. Some of them even move cities. They wait for several years giving multiple attempts. People work extremely hard. Still, success is not guaranteed. There is that luck factor. There is the day’s performance that matters. Some days are important than others. Cracking the JEE is a “discrete” job.

While preparing for JEE, everyone thinks that if they clear the exam, their life is made. They come under the impression that after JEE, life will become smooth. That they won’t need to put any fight for the rest of their lives. That all that matters for their future is their cracking the JEE. And so forth.

It’s only after people come to IIT that they realize that life is not the cakewalk they assumed it to be. It is only after they get there that they realize that life after JEE is quite hard. That it is necessary to work hard. That if they don’t work hard, they will do very badly, and might flunk. It is only when they get to IIT that it hits them. Some learn quickly but others get disillusioned and give up in life. Several people do badly. Some even drop out.

So it’s similar with a romantic relationship. Everyone wants to get into a romantic relationship. Everyone looks only about the “entrance examination”. Everyone believes (before they get in) that life ban jaayegi after they get into a relationship. And getting into a relationship is a “discrete” job. It’s about how you “perform” during those blading sessions. It takes that bit of luck. It takes those set of fateful events to happen together in that precise coincidence.

And it is only when you get into a relationship that you realize how hard it is (provided you haven’t been there before). It is like being in IIT all over again. You know that you will need to work really hard to keep it going (applies to both parties). It is a continuous job, and you need to continuously “perform”. The randomness is much smaller than it is during the “relationship acquisition” phase.  However, you necessarily need to work hard. There is no “stud way out”. Some people give up when they find this out and break up (drop out). Others understand and put in the requisite effort and sustain the relationship. And continue to work hard.

The thing with arranged marriages is that you are typically forced to commit as soon as you’re done with “evaluating” the other person. You don’t get to test the counterparty on their ability to work hard and keep things going. It is like offering someone a job as soon as he has cleared the JEE.

And I wonder if one can draw an analogy between marriage and (academic) tenure.

Pashchimavaahini – Part Deux

I’ve twice written here about Pashchimavaahini – that part of the river Kaveri near Seringapatnam where it flows west. I had once written about it immediately following my first visit there. And I had written about it once again last year when I had disccussed the economics of the place. So over the weekeend I had to go there again, for the second time in two and a half years. In order to do the ritual that is associated with the place – which is to immerse ashes of the dead.

A few pertinent observations from the trip:

  • The place has lost the economics of the food. They probably didn’t want “casual travelers” to come and eat there, or maybe they overestimated their own monopoly power, but the lunch is priced at Rs 70 now. Quality has also dropped – sambar was watery and vada not fried properly. (I’d recommend you to read the death markets post I’ve linked to above before reading on).
  • To put this pricing in perspective, I must mention Kamat Upachar, a restaurant between Channapatna and Maddur. They have a breakfast buffet for the same price! And the buffet includes a choice of juices, bread, idli, vada and dosa, and you can eat as much as you want.
  • This time the shastri we engaged was peaceful. We included an “all-inclusive” price and told him we’ll give only small change as daana
  • I told the shastri to do the minimum possible rituals and told him that I’m doing these things becasue they “need to be done” and not due to some special religious intent. He agreed and kept his word, as he quickly took me through the most basic rituals.
  • When I was away and in the river taking bath, the shastri told one of my uncles that I’m the types that would’ve dunked ashes online if that were an option.
  • I had made it clear to my relatives that I find most of the post-death rituals extremely depressing and so I didn’t wnat to engage in anything beyond the most basic stuff. This meant that at the end of yesterday’s rituals I’d to discard my procedural “tools”. The “paatrams” were given as a gift to the shaastri. The sacred stone was thrown backward in the river. And when I was bathing after the rituals, I let the river wash away the highly starched procedural dhoti

    Once that was done, I uttered a silent apology to the river for polluting it

  • Having been through all this once before, I knew what to expect and so was completely in control of the situation. This helped me manage my relatives better and have my way.
  • Having my way meant occupying the relatively comfortable front seat in the sumo while my senior citizen uncles struggled in the back due to lack of leg space. “This is even worse than an aircraft”, a former-HAL-employed granduncle told the driver
  • To help ease the situation for myself and distract myself, I live-tweeted the journey. And to further distract myself, I tried to tweet like Tharoor.
  • There was a fair bit of pollution involved in the ceremonies. A fair bit of plastic was used, and all got dunked into the river. Extremely sad stuff but I couldn’t really do anything.
  • I wonder why the urn of ashes is thrown backwards into the river. You stand on some rocks facing away and then chuck the thing backwards. I wonder what the significance of this is.
  • Looking at the general crowd there, I was wondering if death is a profitable business.

Collateralized Death Obligations

When my mother died last Friday, the doctors at the hospital where she had been for three weeks didn’t have a diagnosis. When my father died two and a half years back, the hospital where he’d spent three months didn’t have a diagnosis. In both cases, there were several hypotheses, but none of them were even remotely confirmed. In both cases, there have been a large number of relatives who have brought up the topic of medical negligence. In my father’s case, some people wanted me to go to consumer court. This time round, I had signed several agreements with the hospital absolving them of all possible complications, etc.

The relationship between the doctor and the patient is extremely asymmetric. It is to do with the number of counterparties, and with the diversification. If you take a “medical case”, it represents only a small proportion of the doctor’s total responsibility – it is likely that at any given point of time he is seeing about a hundred patients, and each case takes only a small part of his mind space. On the other hand, the same case represents 100% for the patient, and his/her family. So say 1% on one side and 100% on the other, and you know where the problem is.

The medical profession works on averages. They usually give a treatment with “95% confidence”. I don’t know how they come up with such confidence limits, and whether they explicitly state it out, but it is a fact that no disease has a 100% sure shot cure. From the doctor’s point of view, if he is administering a 95% confidence treatment, he will be happy as long as his success rate is over that. The people for whom the treatment was unsuccessful are just “statistics”. After all, given the large number of patients a doctor sees, there is nothing better he can do.

The problem on the patient’s side is that it’s like Schrodinger’s measurement. Once a case has been handled, from the patient’s perspective it collapses to either 1 or 0. There is no concept of probabilistic success in his case. The process has either succeeded or it has failed. If it is the latter, it is simply due to his own bad luck. Of ending up on the wrong side of the doctor’s coin. On the other hand, given the laws of aggregation and large numbers, doctors can come up with a “success rate” (ok now I don’t kn0w why this suddenly reminds me of CDOs (collateralized debt obligations)).

There is a fair bit of randomness in the medical profession. Every visit to the doctor, every process, every course of treatment is like a toin coss. Probabilities vary from one process to another but nothing is risk-free. Some people might define high-confidence procedures as “risk-free” but they are essentially making the same mistakes as the people in investment banks who relied too much on VaR (value at risk). And when things go wrong, the doctor is the easiest to blame.

It is unfortunate that a number of coins have fallen wrong side up when I’ve tossed them. The consequences of this have been huge, and it is chilling to try and understand what a few toin cosses can do to you. The non-linearity of the whole situation is overwhelming, and depressing. But then this random aspect of the medical profession won’t go away too easily, and all you can hope for when someone close to you goes to the doctor is that the coin falls the right way.

Sweetie

I wrote this post last evening. Since I didn’t have broadband access then, I’m posting it only now. This was written on my blackberry, so excuse the typos. Also, blackberry meant that I was typing much slower than usual so this post will probably lack the sudden rush of thought that can be noticed in my other posts.

For the first time in my life I really ezperienced and enjoyed a sugar high today. I must say it was almost like being drunk, except for that it’s unlikely to scr3w my health and that I managed to drive fairly peacefully. It was a really wonderful feeling and though it’s unlikely to last as long as an alcohol high, I think it’s really worth it.

Now I was wondering about the reasons for my high today since the quantity of sweet I consumed today was nowhere close to peak consumption. Thinking about it, however, I realized it had everything to do with relative value and by that metric I’d eaten a lot today.

For the last three month, for health reasons, I’ve been competely off sweets. I don’t take sugar in my coffee. No sugar in fruit juice. Diet coke. No tea, since I can’t stomach it without sugar. Hardly any biscuits. Strictly no desserts, etc

Biologically speaking, the human body is favourably disposed towards sweets since sweets are extremely high in energy and in times when food was scarce (till 200 yrs back) it was a mechanism to make sure of getting the maximum possible energy. It can be argued that our instinctive love for sweets is a darwinian advantage. Since 200 yrs is too short for natural selection to act for humans, we still like sweets despite them not being good for us.

So the whole point of eating sweets on special occasions, I guess, is to give you that sugar high. And in times of less abundance when calorie consumption was low, eating the sweet would’ve been worth it for the sugar high alone, with taste being incidental.

So when you’re normally not used to consuming too muxh energy, as was the case with most people until 200 yrs ago, eating a sweet results in a sudden rush of energy to the brain. And this sudden extra rush, which is usually not accounted for by the body, gives the brain extra energy to do stuff. And hence you get what is called as ‘sugar high’. You suddenly become high energy. All the ned goes away. You want to do something to spend the energy stimulus. You get sudden enthu. You get high.

Unfortunately, given our high energy lifestyles, normal quantities of sweets are hardly enough to provide any sort of spike in energy flow to the brain, and hence don’t cause any high.  And thus the only thing we can enjoy from the sweets is the taste. The main advantage of sweets seems to have been lost, maybe forever.

I’m glad I’m on this diet. Apart from helping me in terms of general fitness and causing significant weight loss, it has also helped me appreciate sweets better. And experience the real high.

Here’s wishing all my blog readers a happy and prosperous deepAvaLi.

Hospital Issues

There is one thing that I haven’t managed to understand about Indian hospitals – it is the dependence on patients’ attendants. Every patient is required to have an attendant next to him/her all the time. In case the attendant is going out, he/she has  to literally take permission from the nurses. Full time, it is the attendant’s job to monitor the patient and alert hte doctors/nurses in case something goes wrong. And the main job of the attendant is to bring medicines.

Yeah, you heard that right. Most hospitals here have attached pharmacies, and the usual practice is for the doctor/nurse to scribble down a prescription which the attendant has to fulfil from the hospital’s own pharmacy. I find this practice weird and ridiculous, and wonder why the hospital cannot short-circuit the attendant’s role and then finally bill the medicines to the patient along with the rest of the bill.

Over the last couple of weeks when my mother has been in ho0spital, I’ve found myself being woken up at all times – including 1 am and 5am to go get stuff from the pharmacy. Sometimes it’s been as trivial as a syringe. Usually it’s a much longer list. Such a long list that given the crowd at the pharmacy, it’s impossible to check if the pharmacist has given you everything he’s billed you for. And in the wee hours of Tuesday morning when there was an emergency and my mother had to be shifted to intensive care, the first thing the people there did was to give me an extra-long list of stuff to get from the pharmacy. This was at 3am.

I wonder why this practice came about, and why it still exists. Is it to facilitate easy transfer pricing for the hospital? Is it t give some sort of transparency to the patient about the medicines being given to him? If the latter, can’t the patient just sign on the prescription authorizing the hospital to procure the stuff from the pharmacy? And given the monopoly power that the hospital’s pharmacy has, service is usually slow and inefficient, thus leading to long queues. And in such scenarios, it’s not easy to actually check if you’ve received everything you’ve paid for. And on top of this, you have the hospital giving multiple prescriptions for the same non-consumable thing, maybe just hoping you don’t notice.

And then there is this thing about the attendants. Thankfully we have enough extended family here in Bangalore that it isn’t hard to find volunteers to do vigil at  the hospital when I’m away at work or other things. But what if we were in a place with no relatives around? Or if the patient were living alone in the particular city? How would the hospital handle this? Would they make the patient himself run around to get medicines?

Whenever I think about these things I tend to get extremely pissed off. The hospital has been otherwise good. The nursing staff are all very nice and never crib. The hospital is maintained extremely well and is clean in most places. There are enough duty doctors at all times. And then they expect an attendant to be with the patient. And the expect the attendant to run around all the time to fetch stuff from the hospital’s own pharmacy.

Pricing My Best Friend’s Wedding

Any of you remember this movie called “My Best Friend’s Wedding”? If you don’t, here is a brief description of the plot. Julia Roberts and Dermot Mulroney (had to look up imdb to remember his name) have this agreement that if they are both single as of her 28th birthday, they will get married to each other. As it happens, 3 weeks before that, the hero announces that he’s found a woomaan and is going to get married to her, much to the dismay of the heroine, who now puts fight to somehow spoil this new relationship.

I was thinking of this kind of arrangement as a financial product. Actually, the movie has what I call as the “European version”. More complicated is the “American version” which I describe here. Basically I give you the OPTION to marry me on any day before my 28th birthday (6th Dec 2010). That would be simple enough to “price” (or “value”, to put it in layman’s terms) – it is a standard American option. However, let me add this twist into it. I also reserve the right to withdraw this option on any day before expiry or exercise.

So basically some day before my 28th birthday I can wake up and cancel this option that I’ve given you. Now the challenge is to price this. One thing that is obvious is that the value of this is now less than the value of the pure American option. But pricing it is a challenge (though, thinking about it carefully, it shouldn’t be too hard to solve. I think we can use option-on-option fundaes in order to price it, but still it’s nontrvial).

The European option, of course (as it is done in My Best Friend’s Wedding) easier to price. Basically, there are two events that need to happen on the day of expiry for the option (ok technically it isn’t an option since if these two events happen, then the parties are forced to execute the contract) and so it can be easily modeled using a two-factor model. The American, as we discussed, is tougher (though I’m sure that if I were to present this problem to my colleagues, they’d solve it in a jiffy).

So the reason I’m writing this is that I’m planning to enter this kind of a deal with someone. And I’m wondering if it’s better to enter into a European deal or into an American. Remember that if it is the “American” deal, I’ll be giving away the option (to marry me before either my 28th birthday or I withdraw the option) for free. Considering this, under what conditions should I try to sign the European contract, and under what conditions should I give away the American?

Also, how does the pricing of the American option change if I’m allowed to give it away to more than one person (with the understanding that as soon as one person exercises the option, I withdraw the option from all the other people I’ve given it to). And typically, will I be able to get more benefit in total by giving away this American option to a number of people than if I give it away to one person (assuming I’m indiffernet between all these people with respect to marriage).

Ok it’s late in the night and it’ s my third post in the last 1 hour, so it might be a bit muddled up. Also, you might find it a bit too technical (remember that I’m a quant). Nevertheless, I hope I’ve been able to communicate what I wanted to communicate. And am looking forward to your advice on this.