Monday, November 19, 2012

A Public Apology to Devendra Sarda of ApneAreaMein

This blog had written an article about ApneAreaMein, a website which is being used daily many users in Pune and Mumbai for their daily needs.

The article had different intentions, but the contributor to the same had used language that was not acceptable at all. Upon investigation on the article, it was found that

i) The contributor had never used ApneAreaMein's services or was never associated with its parent company, thus loosing ground to make any credible comment
ii) The contributor went overboard to use language that was not acceptable
iii) The contributor made absolutely false claims about the website that result to libel/defamation
iv) Personal attacks on the CEO of a business were made which are absolutely unacceptable
v) Reading about Devendra Sarda, CEO of ApneAreaMein on his website, it is clear that he is a knowledgeable  respectable and wise person with noble values that are close to his heart. It is clearly written about his noble intentions to inspire young generation. An attack on a person of this stature is absolutely beyond tolerance.
vi) The business model is not at all understood by the contributor but has gone overboard to irrationally criticize on a novel initiative that is helping the lives of many local enterprises.
vii) For any initiative that has unique social and commercial objectives, meaningless discouragement in any form is not acceptable.
viii) The article lacked any constructive criticism and even lacked factual accuracy.

Without making any excuses what so ever, we convey public apology to Devendra Sarda of ApneAreaMein and all the stakeholders of the business (i.e.daily users, enterprises listed on the website and employees).

The article has been removed immediately.

Considering the noble initiatives the founder is involved in, we felt that a personal apology was just not enough but a public apology was required. Hence, this post has been exclusively published. A personal attack on a wise person who is into unique novel initiatives that are coupled with social objectives is beyond the principles of humanity.

We wish the team behind ApneAreaMein all the best for their future endeavors and our best wishes to them to meet their objectives.

Friday, September 21, 2012

Strategy for Shares and Stocks Investment

To any regular trader, a question often comes up in mind, ‘how to invest?’ Please do not confuse it with the novice asking this same question.  I am talking of all those people who are regular traders/investors, the question that actually troubles them is, ‘how to invest to maximize gains?’

That’s what I am talking about. As much as risk and return are supposed to go hand in hand (though I personally do not believe much in this adage), it is time and money that start showing a negative correlation at times. Let me illustrate this with an example.
Paresh buys Hindustan Unilever stock sometime in 2009 for Rs. 270. Paresh’s thought at the time buying is to go for a stock which will give maximum returns. He even sees the stock rising in price. One fine day after a month, it reaches 320 Rs. He earns an 18% absolute return within 1 month, which would mean 18*12. i.e. 216% hypothetically. But, still he keeps his hopes high and waits for the stock to rise up. Speculating that the share price would go up further, he waits and watches. He finally sells it for Rs. 370 sometime in 2011. He is against short term trading and believes in sticking to one company’s stock for a long time. He gets a return of 37% in 2 years which comes to 18.5%per annum. Compare 18.5% to 216%!!
The effect of compounding has been neglected in both the cases.

Now, what was better? If you sell in short time, there is uncertainty that the stock might do good in future. If you trade short term with profits of 1% or 3% over a 2/3 days or weeks’ time, the effort required is high. Also, to continually trade in different stocks, one has to understand that one needs to research a lot beforehand. How much time can you put in searching for better companies or scrips, especially if you are someone can’t devote time to this in office timings?

Now, consider another scenario like that of Paresh. He was lucky enough to get a good company but what if it did not go beyond a certain point? How long can one hold a stock? There is opportunity cost involved here, i.e. the money could have been invested in some other stock yielding a better return. There needs to be some time constraint. It doesn’t make sense to stick to one stock for such a long time especially when it refuses to move.

This time vs money battle confuses Paresh and he wants an optimum way out. Also, his job does not allow him enough free time to research new stocks and trading every day.  So, he has to invest in only a good company after researching in minimum time possible.

There is one single simple thing that would work for him or anyone else.

Set a short term target and sell it quickly.

Yes, that is what works. By short term target, I mean a defined return percentage or share value. For most people who are not daily investors, getting a return higher than inflation or a fixed deposit does the job. So, consider you decide to earn a per annum return of minimum 25%. In reality, it might seem difficult to many but by buying and selling fast, one can easily achieve this.

Buy a share of your choice (irrespective of what others say), say share of company X and sell it the moment of it gives a 6% to 8% return. No looking beyond that. 6 months down the line, you might see it would have given a 20% return, but no point regretting this. As you sell this, buy another with company Y and sell it with a return of 6 to 8% immediately. Just 4 such deals a year and you have a earned a minimum 24% return!!

Believe me, you will get more than 4 deals like these throughout a year. It looks all complicated but by not speculating and being content with seemingly smaller returns, one can easily earn decent amount despite playing it safe.

It is important to understand the upward or downward rally which could give high returns in less time. Do not ever underestimate time. 

A stock that has gone up by 4% today is very likely to go up tomorrow. It slowly reaches an almost stable level of say, only 1% up and then starts falling down. It is important to understand this generally found empirical observations which help in getting maximum returns!

Best of luck with your investing!

Thursday, September 20, 2012

Tripalong - MakeMyTrip's Attempt at 'Social Travel! Would It Work?

Keeping with its tradition of innovative services, MakeMyTrip has come up with Tripalong, a fun way to travel as claimed by them. It is also called as 'social travel' and is a silent revolution which might turn out to be a big boom in future. Just imagine, how travel has only increased over time, be it due to relocation, study abroad and other reasons. In fact, data shows that travel is the most shopped item online globally, standing at 65% in India. The number of transactions or volume might be low, but the value is high. What was the value of you last air ticket as compared to your online spend on books or apparels?!? :) And NASDAQ listed MakeMyTrip being the leader gets tremendous advantage of the same.

At the same time, imagine the number of people on Facebook and Twitter during their travel. In fact, all social networking websites are all into geosocial networking as well (Like Foursquare, Google Latitude, Facebook Places, Twiiter location checkin, etc.) What if we connect the dots? That's where social travel comes and MakeMyTrip is truly a pioneer in this space with the help of Tripalong. 

Tripalong simply tells you who all from your Facebook or Linkedin might be with you or at the city/airport at the time of your travel. More interestingly, Tripalong also gives you info on people who are going to be in your flight and shows their profile. This also means, your profile would be visible to others who are travelling at the same time.

If interested, you may meet them or sit together! That's great for anyone willing to network or date. YouTube and Yahoo! Answers were criticized for being more of a social networking and dating website than adhering to their purpose. I foresee an unintended consequence like that in case of Tripalong, it might turn out to be a dating site!

It is subjective whether a person would like to meet new people or not. Access to services like Tripalong would be more welcome by those who are social and have active presence on Facebook. So, we can expect a chunk of youngsters coming on this. 

Image Credit: Laughing Squid

However, imagine a single girl getting requests from a complete stranger on the service to sit together with a boy. The boy knows the flight time and name of the girl... It is like exposing yourself to strangers completely. Considering the hullabaloo about privacy these days (criticism surprisingly comes from most people who have never read a privacy policy of any website), Tripalong is not very likely to take off. 

As a matter of fact, I wonder why do people add unknown people or untrustworthy people on Facebook and LinkedIn? Life would be so much more fun if you felt free in meeting any of your FB or LinkedIn connections. But, most people who have become vary of privacy lately (the fad of privacy) would not give this a try at all. There is an option to sync your own MakeMyTrip account as well, which will automatically update your flight schedule in Tripalong profile, of course with your permission. And please note that anyone can update their flight schedule, it is not necessary to have booked from MakeMyTrip.

On the contrary, Twitter is not connected to the account. I guess, celebrities would face a huge problem if their travel plans all became public. Also, Twitter does not have a two way interaction like FB and LinkedIn. Somebody may follow you, but you may not follow them back.

A positive side which I see to social travel (assuming it would be adopted by people) is for the sales and marketing folks. The business development executives can know when a CXO person is travelling and try to get into that flight. Just for the meeting, they might make the trip which would have lesser cost than arranging a meeting at another city with 2/3 days of stay. But, something like this is not going to work for long.

Due to various other reasons, I would say Tripalong is for those people who are travel enthusiasts, for those who are willing to take a risk and keep their travel plan out in the open for the world to see and meet new people. It is good to see that MMT is not spending money on publicizing this but keeping it for the enthusiast to explore. Reminds me of CouchSurfing, which was never intended for the general audience but only the enthusiasts!

Talking about social travel, an interesting info-graphic explains the social travel revolution theoretically using numbers. It does not talk however, on why social travel never took off anywhere in the world!  

Sunday, September 16, 2012

Air India! Can We See You in Air?

The news is quite big. Air India has successfully managed PR and media this time by creating a fuss about its order of Boeing 787s! And what it claims, it could bring the Maharaja days of Air India back!
Seriusly, Air India has been a premier service provider; still has one of the best aircraft with business class amenities. Even flying on economy gives a feel of business class with its navigation information system right in front of you on certain aircraft. But, the fact is, Air India’s maharaja days existed only when there were the only player in the market!! After the onset of Naresh Goel’s Jet Airways, Air India had some competition. It tasted water and had its feet on ground only when the competitive low cost players like Deccan, IndiGo and now, GoAir and Spicejet taking their market away.

From a market share of 100% in the days of License Raj, they have come down to a market share of approximately 16%. The market leaders are IndiGo at 1st position (recently at the first position by a whisker), Jet Airways at 2nd spot (with almost the same as IndiGo at 26%, only a few points lesser) and SpiceJet at 3rd spot with 18%.

Image Courtesy: WittySparks

No doubt, Air India and Kingfisher’s tumultuous times, the tatkal scam in Indian Railways, the growing influence of touts in railway bookings and the inefficient not so sophisticated bus operators have made it compulsory for many a people to travel by air for peace and mind and convenience. No wonder, biggest beneficiaries are Jet and IndiGo with their fleet. GoAir has only 11 aircraft and SpiceJet also with not a very significant number.
No matter how great the Boeing aircraft might be, the point is, it needs to be in the hands of competent organization, or competent management, to be precise. Hand over this same aircraft to Southwest in USA, Jet Airways or IndiGo, you would see some very different results. The babudom , the bureaucracy of being into government control is what keeps Air India in problems, just nothing else.
It is agreed that Air India needs to ply to some unprofitable destinations which private airlines are not willing to go as they are not so lucrative. Routes like say, Porbandar – Mumbai, Jamnagar – Mumbai or Nanded – Mumbai are understood. But, what about all other gifts that it enjoys which could easily balance these problems? 

The aircraft fleet, the scale of operations, the international reach finds no parallel in the industry. In fact, in the international arena, they could easily make money if they wished to. The problem remains, ‘if’. It is a matter of willingness than anything else.

Why this company is so oblivious to some commonly followed best practices in the industry? Are the people at the top deaf and dumb? The organizational culture is the very root cause of all problems, to put it in McKinsey style!

Aren’t the private airlines not earning profit by plying into tier – 2 cities? How many brain cells does it take to understand that a Jamnagar Mumbai flight can also travel further to Bangalore, Trivandrum and Goa and come back the same day to Jamnagar, saving airport parking, keeping the aircraft in air for maximum time and optimum utilisation of million dollar aircraft?

There have been just problems and problems around. Air India's website offers fares lower than what are displayed on MakeMyTrip and other such online travel agents (OTA). Why can't they display the same on all OTAs? Same is the case with Jet. But, look at IndiGo, GoAir and SpiceJet, the smarter ones now. Their fare on the airline website is the same shown on all OTAs. Half of AI's potential customers do not book because their fares as displayed on OTAs are higher and most will look to book the airline with lowest cost.

And wonder what is youth, military, senior citizens, VIP, politicians and what not quotas are present in their booking system! How can it go profitable if it keeps up with these kind of reservations even in case of bookings?

The biggest beneficiary behind government funding Air India despite the operational inefficiency has to be the great American aircraft maker, Boeing!! Sure, they are smiling!