Pertinent Observations

had my year-end performance review late last week. surprisingly for me, it turned out to be pretty good. my bosses seem to be happy with whatever I’ve been doing and have asked me to “keep up the good work”.

given the A T Kearney fiasco, which had (among other things) totally shattered my confidence and had led me to ask myself if i am fit at all for the corporate world, this provides for some relief. the review may not be as good as the one I had got at J P Morgan during my internship, but good enough to let me know that I am doing decently enough to carry on, and hopefully get a decent bonus.

right now though, I’m waiting for tomorrow evening. My vacation starts tomorrow evening and will go on till the 1st of January. Don’t have any concrete plans yet, apart from making up for all those lost hours of sleep, and catching up with school buddies, many of whom will be flying in from different parts of the world during the next ten days.

I always used to wonder about the concept of “playing for lunch” – you might have observed that when there are only a couple of overs left for lunch, the batsmen give up on their efforts to score and just try make sure they don’t get out. I never understood the logic behind that.

Now I do. Two days to go for my vacation, and “no enthu da” is happening. Just spending eight hours in the office, making a deck out of whatever i have worked on in the last couple of months. That’s it. I’m not attempting to score. Just making sure i’m at the wicket and not doing anything silly!

And while on the topic, I’m really thrilled by India’s victory in the first test. And also, i’m damn happy to see dada back in form. And I know the secret behind his success – have you noticed that red bandana under his helmet?

Red bandana ki jai!

Yes, it’s official now. Sabre Holdings has been bought by two Private Equity firms – Texas Pacific Group and Silver Lake partners. The deal has been valued at over USD 5 billion and as a consequence of it, Sabre (ticker symbol TSG) will be taken off the New York Stock Exchange coming quarter 2 of next year.

The move to take the company private has set off a sort of panic in our office here, with a number of people fearing for their jobs. Reports have been heard about employees saying “our company has been sold out, we’ll lose our jobs”. Thankfully, yesterday the top management of the Bangalore office called for an all employee meeting where they formally communicated to us the deal and tried to assure us that nothing is going to change.

For a start, with most of Sabre’s competitors in the ticket booking business (Worldspan, which has been recently taken over by another private competitor Travelport, etc.) being private, probably top management felt that we might be disclosing too much by being a listed firm and in that sense, a delisting was imminent. However, given Sabre’s holding structure, with a large number of owners holding small portions of the firm (in other words, without a “promoter”), the process of delisting would require that someone takes on temporary ownership. And this is where, I think, the PE firms step in.

From my personal point of view, the fact that PE firms have taken over signals that they expect our cash flows to improve significantly over the next 2-3 years, and that Sabre’s valuation in this period will grow at a rate much higher than the market rate. From the entire firm’s point of view, it sounds really good. What is not so good from my point of view is that I belong to this company called Sabre Airline Solutions (Sabre Holdings, as the name suggests, is a holding firm and has three firms – Travelocity, Travel Network and Sabre Airline Solutions under it), which is not exactly the cash cow of the group. In fact, a number of products of Airline Solutions are loss-making, and TPG has explicitly said in some news reports that they are interested in Travelocity. Given that PE firms typically will want to go in for some kind of reorganization, there is a possibility that we (Airline Solutions) might get spun off. Still, in the short term (next year or so), I don’t think there will be significant impact.

However, this is the first time I am seeing PE firms buying up 100% stake in a firm, so it is going to be interesting to see how it goes. Hopefully it will all be for the better. And I won’t lose my job!

The views expressed here are personal and do not in any way reflect the views of my firm. Also, I am nowhere near the top managemnt of my firm, so I have had no part to play in the takeover.

Arsenal’s goalless draw with Porto reminded me of chess. In chess, you have this concept of “grandmaster draws”, where players agree to a draw after just a couple of moves, or in some cases after just one move. This usually happens during the end stages of the tournament. For example, white might need only a draw to win the tournament while the result of the game has absolutely no bearing on Black’s position.

Some black players will be hesitant to offer grandmaster draws in such positions and give “ethics” or “want to try win every match” as the reasons. A lot will want a draw against the winner on his CV so will give it. But yeah, if Black is clearly better off with a draw than with a loss, he will clearly take it. Game theory prevails.

Given the position in group G, it was clear that a draw was the ideal result for both teams – unless Porto wanted to top teh group badly. Unfortunately for them, the rules of football don’t permit you to “agree draws” and you have to play 90 minutes. The only good thing about yesterday’s match is that there were no injuries!

On an unrelated note, I remember some chess tournament I played in some 10-12 years ago where I agreed to a “grandmaster draw” after 15 moves. I had got blasted by the organizers for that, their reasoning being “youngsters should not do such things”. Anyways, two of the organizers decided to continue the game where I had left it and they concluded no other result could’ve been possible. Actually now i’m wondering if it was actually a grandmaster draw, given that 15 moves were already played!

Liverpool FC is being bought over by a group called DIC (dubai international capital).

At least it’s better than Democratic Indira Congress (Karunakaran)!!

Adelaide seems to be seeing a re-run three years down the line

For the last few days, every day the Business Standard publishes a new statistic from the Sachar Report and talks about how screwed up the Muslim commmunity in India is. Most of these seem to have one basic root cause – the education among Muslims sucks. The proportion of school graduates, college graduates, etc. among Muslims is much worse than that for most other communities and that I think underlies most of their misery.

Comparing Muslims to other backward groups like say Dalits, one important thing where DAlits are far ahead is in terms of leadership. Dalit leaders seem (or at least appear to seem) “progressive”. Apart from the usual reservation bullshit (which the Dalits enjoy anyway), the demand english education and the like and at least seem to want the dalit community to improve.

The important difference between Dalit and Muslim leaders is that the former have to face elections. They stand for elections in the reserved constituencies and have to win in order to maintain their base. So they are in a way incentivized to work for their community.

Thing with Muslim leaders is that they are mostly religious and self-appointed. They don’t need to face any elections and the way they can cling to their position is to keep their own community backward. Muslim community in general being backward is actually good for them! And hence they do what they can to keep them backward!!

For a start, there was a report about the syllabus in the Madrasas. “Islamic education” is mostly religiuous and scripture-based and science is not taught. The thing in Deoband apparently still teaches that the sun revolves round the earth! Fantastic. After this kind of education where will the Muslim youth find jobs? Some of them (the lucky few) become clerics. The rest don’t have much of a future. Some of them do get really frustrated and end up joining various terrorist groups which are ever ready to welcome them.

So in a way, even if they don’t teach hatred, the madrasas contribute to terrorism!

What needs to be done is to get the Muslim kids to secular English medium schools which will give them access to decent jobs. it is not an easy task to do, given the stranglehold the clerics have on the community but I don’t think it should be too tough also. Anohter (not very good politically) thing to do would be to derecognize madarsas and force them to offer the syllabus taught in secular schools in return for recognition.

Another couple of related thoughts. When the Christian missionaries opened schools in India, they made sure a certain proportion of the intake was from other communities. While the original intention MIGHT have been (no one knows the actual reason) for conversion, what it did was to integrate the Christian community with the mainstream.

Another thing is that IMHO shias seem much better off than the sunnis. I’m talkign about Bohras/Kutchi memons here. They seem to have developed as a “business community” and because of that realized the value of education and except for unfairly getting mothered in the Gujarat riots are doing pretty well in life.

*AHINDA is a term coined by Peddaramaiah, oops Siddaramaiah (whose political future would’ve been sealed by now). It stands for “alpasankhyaatakaru, hinduLidavaru, dalitaru” which means “minorities, backwards and dalits”. Interesting to note that the bugger doesn’t consider Dalits and Minorities to be backward.