A Visitor's Guide to the Lobos

Today is Christmas and we were having a family lunch at my sisters place. My brother Frank is getting married next week, and so the whole family including Don, my other brother had flown in with his family. It was a special occasion, with the complete Lobo family getting together in 1 place after several years.

Freia wanted to make it special and wanted to give everyone a gift. She recollected that 7 years earlier when the entire family had gone to Thailand and Singapore, she had presented a collection of poems titled “9” to each family and it was a hit. She thought of creating something similar. And came up with an idea of writing a small description for each of the family members.

And came up with her version of “A Visitor’s Guide to the Lobo’s”. It made extremely interesting reading and I must admit it was a pretty accurate description of each family member. The only exception of course being mine. And every family member agreed. That it was a pretty accurate description of each family member except one. Themselves.

Read for yourself and decide

What a Change - Passport in 3 days

Traditionally all of us Indians are used to criticizing the authorities and blaming the Government for the lack of infrastructure, inefficiency, incompetence and so on and so forth.

Earlier this week, on Friday, I had occasion to experience the awesome changes that have taken place not once, but twice. I think that it’s high time we learnt to appreciate the good things that are happening all around us. This is my attempt.

The Passport application required to be filled online and you had to take an appointment.
https://passport.gov.in/pms/Information.jsp

I took an appointment for Friday at 10.30. I reached the passport office around 15 minutes early. There was a waiting line for the 10.30 appointments and at exactly 10.30 we were allowed to go in. There was an option for getting a Tatkal (Speedy) passport in a few days or the regular process that would take around 8 to 12 weeks. I had opted for the Tatkal scheme, which required you to pay Rs. 1500 extra.

There was just 1 person ahead of me. She completed her process in a few minutes and mine too was completed in a few minutes. Payment took another couple of minutes.

Earlier the Tatkal application form needed a Letter of Verification from a Senior Officer in the Government. This was a difficult task, as most of us do not know Senior Officials in the Government. Now all you require is 3 documents, from a list of 14 documents. I had my Election ID, my PAN card, and a Bank Passbook. You also need to have a simple affidavit, a format of which is given on the site. Basically, all you need to do is follow the simple instructions on the website, and you should be able o get a passport easily and without any hassles.
http://passport.gov.in/cpv/TatkalScheme.htm

Since I wanted to apply for my daughters passport (who was not eligible for Tatkal), I then stood in the line for the regular passport. Here there were around 15 persons ahead of me. In around an hour, it was my turn and here too, the officer at the counter was quick and efficient. She checked the papers which seemed to be in order, and had completed the formalities in a few minutes. The payment needed to be made in another line, which too was short and did not take much time. Before 12, I had successfully completed the application process and was to receive my passport, 4 business days later, on Wednesday.

Whilst the experience with the passport authorities and officials was very pleasant, the experience with my fellow applicants was far from good. Many were trying several things to bypass the lines and rules, even though they were so well organized. A very fashionably dressed lady with an appointment for 12.00 was trying to bully her way in. A school teacher and her husband were standing in two different lines together and jumping from one to the other, delaying everybody and creating a nuisance. A fat, rich couple were elbowing their way ahead, breaking the lines, using their children. Interestingly, in all of these cases, where the passport office staff were present, they handled them politely but firmly and got them back to where they belonged.

The authorities have done their bit and made the process multiple times better than before. They’ve changed. When will we ?

p.s.: I received my passport on Tuesday, 1 day before the promised delivery date.

Tit for Tat

I recently read V. Raghunathans "Games Indians Play - why we are the way we are". Interestingly the cover has, "Foreword by N.R. Narayana Murthy", confirming the author's Indianness, in flaunting famous personality endorsements.

It’s a book that is absorbing and I agree with most of the authors views. The only view I completely disagree with is actually the basic premise of the book. He attributes a large part of the ills in Indian society to the way we are, and considers lack of effective implementation or enforcement. I believe that Indians, replicate most of the characteristics of global citizens and the primary reason for the ills is a lack of effective implementation and enforcement of laws.

In the book, the author refers extensively to the Game Theory and its variations. The one I want to touch upon is the "Tit for Tat" algorithm. This has been found to be the most effective solution in solving "The Prisoner's Dilemma". You can read more about the Tit for Tat theory and its application in "The Prisoner's Dilemma" at:
http://en.wikipedia.org/wiki/Tit_for_tat

Let me briefly touch upon what exactly does the Tit for Tat algorithm entail. Its actually as simple as the 3 words used. It responds in the same way as the competitor. However, it has a few rules. It by itself will not be the first to defect. But, if provoked by a defection, it will retaliate by defecting. It in a sense is a smart variation of Gandhiji's "Show the other cheek" theory. Here, you show one cheek and continue to interact in a fair manner. However the moment you are slapped, you withdraw both cheeks, and slap back at the first opportunity.

This has major implications in the way we do business, as well as conduct our activities. It has implications for both, the persons who are fair minded and conduct business or their lives in an ethical manner, as well as those who are selfish and would like to maximize profits. And that's what makes this strategy so amazing. It’s not only ethically and morally correct, it’s also the one that's likely to maximize profits over the long term.

Let’s examine its veracity and the expected behavior. There are 2 scenarios as mentioned above. Lets first take the case of the honest business person, which is considered as an oxymoron by most Indians. In any of their business dealings they would like to be fair. Hence they follow the first rule of not defecting first. They will continue to keep their end of the deal, as long as the counterpart keeps their part of the deal. As soon as the counter party defects, the theory suggests that so should they. This will give a message that a defection will be retaliated with a defection.

The defecting party has an option to no longer deal or try and deal once again without defecting. The Tit for Tat, will respond positively when the counter party initiates a positive interaction. Hence the ethical business person will have a maximum of any one losing transaction with any counter party. What makes this effective for the business is that ethical counter parties will love to deal with the "Tit for Tat" follower, since they always keep their end of the bargain. Interestingly, even the crooks’ will love to deal with them, since they never are the first to defect, and so they can never lose.

And now let’s take the case of the profiteers. They would like to maximize their profits. They are likely to deal with either opportunists like themselves or with ethical people. In the first case, they run the risk of the opportunist defecting and them losing before they have a chance to defect. Even if they manage to defect first, the opportunist having lost is unlikely to deal with them again. And so the dealing will last for a short time. When the opportunist deals with the ethical person, he will have 1 hugely profitable transaction. But then will lose an opportunity of dealing with the same party. Quickly their reputation will precede them, and they will have no one left willing to deal with them.

Hence to me it seems like behaving in an ethical manner is not only the right thing to do, it’s also the smart thing to do. In addition to being good for the soul, it’s going to be good for business.

Handling people - Lessons from a novice

Amongst my many weaknesses, 1 of the major ones is social skills and handling people. I tend to get very judgmental and put most things in black and white. So someone is Right or Wrong. Hence I end up, calling Idiots, (or those I believe to be Idiots), Idiots. As is rather obvious, it ends up me alienating a lot of people. My new mature self, refrains from saying so, but I've been told that my demeanor and body language leave little for the imagination, and so I guess I'm not much better off.

Recently, Ivy became the Secretary of our housing Society. She's always hated administrative work and for 12 long years, she had diplomatically avoided becoming part of the Managing Committee or assuming any formal role. Several months ago, a grave injustice was done to a resident, and at that point she was outraged enough to gather support and reduce the injustice. (Read More)

Nevertheless, she wasn't able to bring about a change, since the member in question was part of the Managing Committee, was dictatorial in nature and the other members of the Committee were either too scared or just wanted to avoid hassles.

With the motivation of not being a mute witness to such gross injustice, she managed to motivate a few other like minded members to contest the elections and were elected. The members wanted her to become the Secretary and she reluctantly agreed, with a caveat of "Just 1 year". The Society was facing multiple issues, including, no money, no security willing to be posted here, no manager willing to work here, poor to nonexistent housekeeping, and so all. I was rather skeptical whether she and the other members would be able to do much, considering the mess that the Society was in.

They managed to surprise everyone. For starters, the Chairperson, and the Treasurer along with the other members were string in their resolve and willing to work hard. They managed to change the security and housekeeping, and improve the basic atmosphere. All this with major resistance and hurdles from 1 disgruntled but very powerful member and a few of her friends.

The part that was most impressive was the tackling of the defaulters. Several members had not paid outstanding for very long, several for years together. Personal calls made to them resulted in many of them clearing their dues within a few days.

But the part that was most memorable for me, was the way they handled people. They were sweet and polite, even in the face of ridiculous and ride responses. As an example a Member called and demanded to see the accounts, "Right Now". She went to the office, called the Member and said, "We appreciate your interest, and we'll be happy to share the accounts. Please come down". The member chickened out, realizing that the nuisance value that was being sought to be created was back firing. They were firm, and refused to be cowed down by rabble rousers and noise makers.

But what stands out is "How ?". They managed to handle all of the negativity with a smile, politeness and firmness. if only I can learn to handle people half as well as this team has, I shall consider it a major milestone.

The more important learning for me is that whilst we all know ‘All that is necessary for the triumph of evil is that good men (or women) do nothing’, it’s high time, we stood up and did our bit, instead of sitting back and waiting for others to clear our mess. Whether its in our society, our city and especially our country.

Fooled by Randomness

Fooled by Randomness is a book by Nassim Nicholas Taleb on The Hidden Role of Chance in the Markets and in Life. Until I read this book I believed that Luck contributed 99% in determining success. Now I've revised that to 100%.

The primary premise of the book is that we commonly mistake luck for skill. And the author has in his engaging style, used the financial markets to illustrate his point very effectively. There are quite a few outstanding examples he has used that seem obvious and most people, including professionals like traders and even doctors would take decisions based on their understanding of the obvious. Yet, simple mathematics would show them how wrong they are. Let me give a couple of these examples to illustrate the point.

An example of a mistake cited in the book is one that most of us make in handling our financial investments. It revolves around probability, outcome and expectations. Lets say we engage in an investment strategy that has 999 chances in 1000 of making $1 and 1 (Event A) and a chance in 1000 of losing $10,000. The expectation is a loss of $9.

Event -  A
Probability - 999/1000 
Outcome -  $1      
Expectation - $0.999

Event -  B
Probability - 1/1000
Outcome -   (-$10,000)      
Expectation - (-$10)

Total - (-$9.001)

Whilst we are quick to spot the problem and hence not take this strategy in a normal bet. Yet we do it all the time in the financial markets. One of the probable reasons could be that the negative outcome is something which we don't anticipate and hence end up ignoring. We focus on the frequency and probability of a profit. The mathematical truth is that "frequency or probability if the loss, in and by itself is totally irrelevant; it needs to be judged by the magnitude of the outcome.

According to Mr. Taleb, one of the major issues that results in us making gross errors is our understanding or rather lack of it in probability and our inherent biases.

"Below is an account of a well-known test. A test of a disease presents a rate of 5% false positives. The disease strikes 1/1,000 of the population. People are tested at random, regardless of whether they are suspected of having the disease. A patient's test is positive. What's the probability of the patient being stricken by the disease.
Most doctors answered 95%, simply taking into account the fact that the test has a 95% accuracy rate. The answer is the conditional probability that the patient is sick and the test shows it - close to 2%. Less than 1 in 5 professionals got it right."

Are you too wondering how is it 2% ?

"Consider that out of 1,000 patients who are administered the test, 1 will be expected to be afflicted with the disease. Out of the population of the remaining 999 healthy patients, the test will identify about 50 with the disease, since its 95% accurate. The correct answer should be the probability of being afflicted with the disease for someone selected at random who presented a positive test is the following ratio:

No. of afflicted persons/No. of true and false positives = 1 / 51

Think of the number of times you'll be given medication that carries damaging side effects for a given disease you were told you had, when you may only have a 2% probability of being afflicted"

The takeaway for me is that in most aspects, especially the financial aspects, most individuals especially experts don't really understand the fundamentals. If you realize this, along with the realization that neither do you, you could become very rich, relatively quickly. I plan to try in 2012, and will let you know in Dec. of 2012 how it al worked out. Until then, happy trading.

US - Response to a slowdown

I just flew from San Francisco and the airport was busy, very busy. It seemed like most flights were full and overall it seemed like it was business as usual. Every single leg of mine in the US I have travelled and this is at odd times on weekdays, every single seat was taken up. The flights are so full that on my SFO - NWK flight, there were 45 standby passengers for upgrade to business. And this is after all business class seats were full. All 16 of them.

I was unable to see any visible impact of the global slowdown, financial crises, and various other bad news that seems to originate regularly from the US. And I guess that’s what makes this is the greatest country in the world. Wherever I went, I saw happy faces, busy shops, malls that were full. I've observed over a period of time that the best way to determine spending is not to check out the crowds in the shops or malls, but observe the lines at the checkout counters. These were long, with most customers having large shopping carts full.

Wherever I go, the conversation revolves around the current financial crises and the impact on businesses, both globally and worldwide. I guess that a lot of the impact may not be visible. Nevertheless, the feeling I got was that the atmosphere and the energy was far more positive than it was a year ago or even 2 years ago. This is based on simple individual observations, and since I'm neither trained nor an expert, it’s possible I'm imagining or just plain wrong. Nevertheless, I believe that we  are at the beginning of a reversal and that 2012 and 2013 is likely to be good years for the US. This, by extension means I'm predicting happy times ahead for the rest of the world.

I'm a contrarian, not by choice but it seems by virtue of what I think is likely to happen. As I write this the economic crisis seems to deepen not only in the US, but globally. Greece, Ireland, were already in trouble and now most of the other European nations including the UK, France and Germany have issues if their own. These are exactly the reasons I believe a turnaround is round the corner. When you are at the bottom, no matter what you do, chance are you'll end up going up.

All experts are predicting that 2012 and 2013 are likely to be worse years than 2011 and 2012. They were wrong in 2010 when they predicted happy days ahead, and I hope they're wrong this time too. In addition to making me feel good about being right, the bigger picture is that we'll have a happier, financially stable world.

India - US : Nonstop

Just got into Newark after flying nonstop from Mumbai. The journey of 16 hrs. was uneventful, yet interesting. Most people just cannot imagine how anyone can undertake a nonstop flight of 16 hours, which means you're likely to be inside the aircraft for over 17 hours.

I was flying Continental after several years. hadn't used Conti, ever since Air India had introduced a nonstop flight from Mumbai to New York. Now since that flight goes via New Delhi, I was flying Conti from Mumbai to Newark. The flight was scheduled to take 16 hrs and we got in an hour earlier.

My daughter who left for a field trip, a couple of days before put this journey into perspective, when she mentioned how lucky I was to have just a 16 hour trip and would reach the US, when it would take her longer to reach Madhya Pradesh for a field trip. Yes, we have come a long way from the 24+ hours it would take.

The flight takes off on time, just before midnight. By the time the plane levels off, and dinner is served, yet another hour goes by. In seat the personal entertainment system offers, video on demand. The collection of over 100 movies and 100 shows, and games, and ... means you have entertainment choices sufficient for several flights. I watch a movie and by the time, its over, we have just around 14 hours to go. The exact position, time left, height, temperature and the countries we're overflying is available on the Live Map.

The good thing about this night flight is that you're quite tired after a full day of work. And so, you get a good nights  sleep as soon as you try. 6 hours later, I awaken with sounds of movement in the cabin. It’s the breakfast service and we have 8 hours to go. Had breakfast, saw another movie,  a couple of coffees, and by now, we just have 6 hours to go. Time for another nap. And before I know it, I awaken with movement in the cabin. Its time for lunch, although it'll be 7 am in a few hours when we land. I guess they call it lunch, because its served after what they called breakfast.

The flight touched down almost an hour before schedule. The lines at Immigration took 1 hour and 20 minutes. Yes, you read right, 80 minutes in a line awaiting your turn to go through Immigration. It was fascinating to see all the people who keep grumbling about lines in India, criticizing our systems even when they have to wait 5 minutes, patiently and uncomplainingly standing in a line, with no attempts to do the great India line breaking trick. A couple near me had a connecting flight they were getting late for. The wife egged the husband to go check if they could be given priority and jump the queue. The lady supervising the lines firmly told him to get back in line, else he would be sent back to the end of the line.
 
Ironically, for most of us when in the US, officers remarks are firm, in India, the same gets called rude. I love the US, their systems and processes. And I love the way they enforce discipline, without prejudice or bias. If only, we could learn to be as disciplined, and behave the way we do abroad when we are back in India.

Fortunately, the rest of the processes of collecting baggage, customs, checking in again, security, were relatively faster and here I'm sitting at the gate awaiting boarding with around an hour to go. Another 6 hour flight to San Francisco, but relativity kicks in and its 1/3rd of the flying time I just completed. So it can't be too bad.