IT industry and politicians

Deve Gouda is talking rubbish about narayana murthy of infosys. the communists in kolkatta want to have a say about workers rights in the IT industry.

they may seem like isolated incidents but i firmly believe that are not.

The IT industry has become big enough to attract the attention of politicians. the want to have a stake in it in some form of the other. i believe that the coming months are going to see more action on this front.

ps: the amount of publicity given to deve gowdas remarks was stupid, to say the least.
i was pretty suprised by how low the editorial levels at new indian express could stoop when all they had was a story on what deve gowda had said in the sunday edition's front page. this makes the editorial standards of papers which put off pictures of scantily clad women on the cover much higher.

why ICICI ventures shouldnt buy into Scandent

decent people dont buy stolen goods. decent people dont buy stolen goods even if its paper wrapped to mask it identity.

but what does this have to do with Scandent and icici ventures.
well, Scandent has a sordid past to put it mildly. the company was formed by buying sticky assets from the promoters of companies like DSQ Software and SSI Ltd, at the expense of minority shareholders. The transaction between dsq and the company is supposed to be under investigation.

so, why is icici ventures buying this company? may be, it is available cheap and yield good profits.
but then how different are the people at ICICI ventures from the mason building my house who wants to buy some stolen sand at less than half the price? may be, only the pocket being filled is larger.

i know that the following line could be considered irresponsible and in bad taste.
but i have an awful feeling that the folks who put through this deal at ICICI ventures may not be squeaky clean.

some links on ramesh vangal and dsq

http://www.suchetadalal.com/articles/display/479/625.article

http://www.suchetadalal.com/articles/display/80/701.article

importance of serendipity

the markets are heading south but not southward enough to engage my complete attention. so, my tryst with home building continues. building materials is a facinating subject with plently of listed companies. it is difficult to appreciate pidilites product range or snowcem's brand equity without speaking to those involved in the industry.

and there are so many differnt materials available - from pvc windows to cpvc prices that can carry hot water. to latest clamps that can easily hold a ton of weight.

there is ablsolutely no requirement for metal anywhere in the plumbing process - quite revolutionary if u can see old GI pipes running all over your old bathroom.

anyways, was reading about vinyl flooring can came across this interesting webpage. it highlights how much we owe to serendipitous discoveries. more than we can ever imagine. perhaps, we are all just errors in a DNA duplication process!

importance of spelling!

"nobody can see more than two quarters ahead"

nobody can see more than two quaters ahead, said Kumar Mahadeva, chairman of Cognizant
technology solutions, referring to unpredictable nature of the IT industry. this was about three years ago. today, things seem very different.
i have never seen TCS offcials so bullish about the prospects of the industry or in such good humour. infy folks were extremely positive and narayana murthy thinks it is the best time to walk into the evening sun and its azure rays. the industry is at its peak and seems everready to scale greater hieghts.
but i hope the time does not come too soon when one has to remind everyone about Mr Mahadeva's words.

consumption and investment led booms and price distortions

Citibank: : see, the rate of interest is 7.5 % and you can easily invest it elsewhere at 8%.

(from my previous post based on a conversation with Citi)

This i belive is the crux of the current boom in equities and real estate. it is driven by investments hoping to get a higher rate of return than the costs. and these are often leveraged.

the issue with investment led booms is that largely amounts of capital - theoratically infinite can flow in seeking a rent higher than the cost.

to explain further, think of a middle class individual. if he believes that his investnments can fetch a high rate of return, he can leverage and deploy large amounts of capital. and when he invests is such a manner he causes price distortion because his need is not backed "true demand" but percieved returns. such investments is now being practiced by all class of investors and the price distortions can be very severe. also, when such investment led boom come to an end the pain levels can be very extremely high.

consumption led booms such as one in the US is a far better option in my view. a person can consume only a finite amount - a house , car, another car, fancy clothing and food on the credit card. but the incentive to practice this is no so widespread or large in financial terms. this also causes less distortions in asset prices.

to me the US-led consumption boom looks less riskier than India and China led investment boom.

tailpiece: if i act on Citis generous offer to loan 4.5 lakhs to my mom and leverage further on it, i can easily raise rs 12-15 lakhs with it!