Saturday, May 02, 2015

2015-05-01 Travel Itinerary NA USA HI Oahu

@TeresaJLo & I are traveling to Oahu. Itinerary Link. Would welcome any suggestions.

Right now, we have a fairly full itinerary at a pace that works for us. We are really looking forward to underwater/snorkeling activities and beach time. Also looking to hit up “local” restaurants where we can get food that we would not be able to get in San Francisco or New York. We have most of the mornings carved out for hikes. Any insider tips would be appreciated.

Also looking forward to hanging out with our old friends Bobby and Jenn and their new son (hat tip to Bobby … thanks for your service in the Navy).


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Monday, January 13, 2014

VC Presentation Tips

VC Presentation Tips

I have been spending quite a bit of time the last few days working with a young, strong engineering team thinking about launching a new business. One of the things I have had to help them with is how to communicate with prospective investors. After the conversations we have had the last few days, I thought it might be useful for others if I shared what is an effective way to present to me and the other venture capitalists.


3/6/10/20/30 Rule of Powerpoint

Your presentation should have ten slides that covers ten different topics at most, last no more than twenty minutes, and contain no font smaller than thirty point. Each slide should have no more than 3 bullet points and each bullet point should be no more than 6 words.

Note: These are rules of thumb, so do not worry about slight deviations from them.


Ten Topics to Cover in Presentation

1. What is the Problem? How big is the market and how fast is it growing?

2. What is your Solution? Why will people buy your solution?

3. What is your business model? What are the revenue streams, revenue drivers, and cost drivers? What is your pricing? What are your margins/CAPEX/OPEX/CAC (customer acquisition cost)?

4. What is your underlying magic or secret sauce? Do you have any technology advantage (IP)? Are those things sustainable?

5. Marketing and Sales. How will people buy your product (direct, indirect)?

6. Who is your competition? How do you compare/contrast against them? Who are potential competitiors? What is your sustainable competitive advantage?

7. Team and their ability to deliver. Why is your team better than the next company I meet pursuing the same opportunity? Who is missing from the team? How do you plan to build a world-class team? How can you attract world-class talent?

8. Projections and Milestones

9. How much money do you need, how are you going to spend that money, and how can I/ the VC control that? When will I get paid back, how much will I get back? Other pertinent financials for a first meeting (other critical financial metrics you believe I/the VC should be aware of)?

10. Risks and Risk Mitigation. Make sure you cover what you are going to do if you get less money than you anticipate, things take longer than you anticipate, and the markets turn dramatically down sometime in the next 3 years for a period of at least 1 year.


Success Factors

If you can do the following things, your chance of success increases greatly

1. Wow and Surprise us. Show us that you are going to do something bold or crazy but at the same time demonstrate that you have execution skills and smarts to actually pull it off.

2. Do not tell us your idea is unique. 99% of the time we have heard that someone is already doing it. In my opinion, being unique actually does not matter much because success comes down to execution and agility not ideas.




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VC Presentation Tips

VC Presentation Tips

I have been spending quite a bit of time the last few days working with a young, strong engineering team thinking about launching a new business. One of the things I have had to help them with is how to communicate with prospective investors. After the conversations we have had the last few days, I thought it might be useful for others if I shared what is an effective way to present to me and the other venture capitalists.


3/6/10/20/30 Rule of Powerpoint

Your presentation should have ten slides that covers ten different topics at most, last no more than twenty minutes, and contain no font smaller than thirty point. Each slide should have no more than 3 bullet points and each bullet point should be no more than 6 words.

Note: These are rules of thumb, so do not worry about slight deviations from them.


Ten Topics to Cover in Presentation

1. What is the Problem? How big is the market and how fast is it growing?

2. What is your Solution? Why will people buy your solution?

3. What is your business model? What are the revenue streams, revenue drivers, and cost drivers? What is your pricing? What are your margins/CAPEX/OPEX/CAC (customer acquisition cost)?

4. What is your underlying magic or secret sauce? Do you have any technology advantage (IP)? Are those things sustainable?

5. Marketing and Sales. How will people buy your product (direct, indirect)?

6. Who is your competition? How do you compare/contrast against them? Who are potential competitiors? What is your sustainable competitive advantage?

7. Team and their ability to deliver. Why is your team better than the next company I meet pursuing the same opportunity? Who is missing from the team? How do you plan to build a world-class team? How can you attract world-class talent?

8. Projections and Milestones

9. How much money do you need, how are you going to spend that money, and how can I/ the VC control that? When will I get paid back, how much will I get back? Other pertinent financials for a first meeting (other critical financial metrics you believe I/the VC should be aware of)?

10. Risks and Risk Mitigation. Make sure you cover what you are going to do if you get less money than you anticipate, things take longer than you anticipate, and the markets turn dramatically down sometime in the next 3 years for a period of at least 1 year.


Success Factors

If you can do the following things, your chance of success increases greatly

1. Wow and Surprise us. Show us that you are going to do something bold or crazy but at the same time demonstrate that you have execution skills and smarts to actually pull it off.

2. Do not tell us your idea is unique. 99% of the time we have heard that someone is already doing it. In my opinion, being unique actually does not matter much because success comes down to execution and agility not ideas.




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Wednesday, November 20, 2013

Sunday: Book of the Week – The Audacity of Hope by Barack Obama

I am making a resolution to read 1 book a week.

I enjoy reading and have not been doing enough of it.

There are way too many titles sitting in iBooks and Kindle on my iPad mini.


My book for this week is Barack Obama’s – The Audacity of Hope.




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Friday, September 10, 2010

Lessons from Geese via Srini Potukuchi

Fact 1:
As each goose flaps its wings it creates an “uplift” for the birds that follow. By flying in “V” formation, the whole flock adds 71 percent greater flying range than if each bird flew alone.

Lesson:
People who share a common direction and a sense of community can get where they are going quicker and easier because they are traveling on the thrust of one another.

Fact 2:
When a goose falls out of formation, it suddenly feels the drag and resistance of flying alone. It quickly moves back up into formation to take advantage of the lifting power of the bird immediately ahead of it.

Lesson:
If we have as much sense as a goose, we will stay in formation with those headed where we want to go. We are willing to accept their help and give our help to others.

Fact 3:
When the lead goose tires, it rotates back into formation and another goose flies to the point position.

Lesson:
It pays to take turns doing the hard tasks and sharing leadership. As with geese, people are interdependent on each other’s skills, capabilities and unique arrangements of gifts, talents, or resources.

Fact 4:
The geese flying in formation honk to encourage each of those up front to keep up their speed.

Lesson:
We need to make sure our honking is encouraging. In groups where there is encouragement, the production is much greater. The power of encouragement (to stand by one’s heart or core values and encourage the heat and core of others) is the quality of honking we seek.

Fact 5:
When a goose gets sick, wounded or shot down, two geese drop out of formation and follow it down to help and protect it. They stay with it until it dies or is able to fly again. Then, they launch out with another formation, or catch up with the flock.

Lesson:
If we have as much sense as geese, we will stand by each other in difficult times as well as when we are strong.

Fact 6:
Geese fly South for the winter in the Northern Hemisphere.

Lesson:
It is a reminder to take a break from the cold of winter and take a vacation to some place warm & sunny to rejuvenate ourselves.

Fact 7:
The larger flocks of geese usually inhabit areas where geese eating for humans is more popular or in demand, and where there are smaller flocks of geese flying, there is usually smaller demand for geese, to be used for human food. * This fact according to the Oklahoma State University Board of Regents study on geese.

Lesson:
Larger flocks of humans together may not always be as effective as smaller flocks who are able to maneuver much more quickly in life and business without being eaten up by the competition…so to speak. (yes, this was a stretch, but relevant, no?);-)

Friday, February 12, 2010

Good Summary of VAT Debate

I absolutely believe the US needs to implement a VAT as soon as possible to stave off fiscal issues.
Here is a link to a good article on the VAT debate
http://money.cnn.com/2010/02/05/news/economy/vat_deficit.fortune/index.htm

Tuesday, February 02, 2010

US Needs a New Tax Source to Resolve Fiscal Issues

Don't see how any budget proposals in the next few years are really going to resolve fiscal deficit/debt issues. The country is going to need a new source for taxes. For my two cents, I would like to see a progressive value added tax in combination with a rework of the tax code. Otherwise, don't see how the US is going to get fiscal issues in check. If that does not happen, I don't even want to think about where the country and global economy are going to be within 5 to 10 years. Pretty scary stuff. We are starting to see the consequences of unchecked deficits via Japan and their sovereign debt downgrades. Time is quickly running out to do something about the US debt.

Sunday, January 31, 2010

The Top Moments of the Decade in Social Entrepreneurship | Social Entrepreneurship | Change.org

Don't Give Money to Haiti Just Yet

Stanford Social Innovation Review : Opinion Blog : Don’t Give Money To Haiti Now (January 18, 2010): "If there is any lesson to be learned about how to donate to international disasters, it is this: don’t give your money when you first see the disaster splashed across TV.

To ensure the rebuilding effort survives over the long term, donors need to stagger their funding and guarantee it over many years, instead of sending the money all at once.

Yes, as hard as it may be to watch the dying and pain on our news, realize that money is not the impediment to getting aid to Haiti right now. They need military and security forces to help organize rescue, logistics and transport and security operations.

What your money can do is help the long-term food and medical aid necessary while rebuilding takes place. It will be a rebuilding that will take years, if not decades.

Case in point: the Balkan war left some 150,000 dead and half of the country homeless. Responding to the shocking situation, donors around the world poured an astounding amount of money into it. More than $5 billion was injected into Bosnia alone—almost $1000 for each of the country’s 4.5 million people.

“No central coordinating body recorded, kept track of, or disbursed the aid. Donors did not communicate with one another, and sometimes double-funded projects or funded similar projects in the same town. In some instances, donors turned a blind eye to financial abuses,” it was later reported. (Stanford Social Innovation Review, “Balkan Boom to Bust,” Beth Kampschror, Summer 2006)

Ten years later, look at Bosnia, when most of the aid money was dried up and the donors were engaged by other causes, there are few agencies left to continue the rebuilding.

For Haiti, my advice is this: set aside money now for what you would give Haiti this year and for at least the next 3 years. Give money when aid can logistically get there, when efforts get coordinated, when you can get reports on which nonprofits are doing what and which ones are actually on the ground making an impact."

Friday, December 25, 2009

20091224 Snow Melt

Pics of the snow melting and water run-off at my parents house in NJ

 
 
 
 
Posted by Picasa

Sunday, October 04, 2009

New quote for favorite quote list

Maggie Thatcher: The Problem with socialism is that eventually you run out of everyone else's money

Wednesday, September 02, 2009

MicroFinance in India - Just a Giant Ponzi Scheme

Friends know that I think Microfinance will be India's subprime; the only difference is there is no way any institution is going to repossess any assets from the demographics and geographies where microfinance is prevalent in India. They can try, but they will fail.

In India, microfinance has become a giant ponzi scheme. The asset values are supported by appreciating expectations. As more investors and liquidity are sucked into the scheme, the resulting surging values validate high expectations, which prompt more foolish investors to join the party. This sort of bubble ends when there isn't enough liquidity left to feed the beast.

I feel sorry for whoever is left holding the bag at the end of this ride.

The secret of the MFI "miracle" in India is that default rates are a direct product of the issuance rates. It appears that borrowers are not defaulting because of the pervasive rolling over and maturity extension of debt as they fall due. If any financial institution is able to grow its loan portfolio, roll over old debt, and extend maturity of debt, that institution can hide bad loans and defaults from foolish investors. MFI leaders will not do so because they benefit as much as any other party during the bubble and won't be holding that bag at the end of the ride ... I guess it takes too much courage to get off the tiger once it starts running.

Thursday, August 20, 2009

Confronting Reality Book Summary

Success in business comes down to being able to properly adjust one's internal operations and strategy in order to meet one's financial targets within the realities and texture of one's current environment--over and over again. It all starts with being able to clearly see what's so about one's situation--to "get real" about the landscape, challenges, and opportunities one finds oneself in. There are six main reasons people can't confront reality:

Filtered information
Selective hearing
Wishful thinking
Fear
Emotional over-investment
Unrealistic expectations of capital markets

The Tipping Point Summary

Law of Few - before widespread popularity can be attained, a few key types of people must champion the idea before it can reach the tipping point
Connectors - individuals who have ties in many different realms and act as conduits between them, helping to engender connection that otherwise might not have evr occurred
Mavens - people who have a strong compulsion to help other consumers by helping them make informed decisions
Salesmen - people whose unusual charisma allows them to be extremely persuasive in inducing others' buying decisions and behaviors

Stickiness Factor - quality that compels people to pay close, sustained attention

Power of Context - environment or historical moment must be right for the trend to reach a tipping point, groups of less than 150 members usually display a level of intimacy & interdependency & efficiency that begins to dissipate markedly as soon as the group's size increases over 150

Thursday, August 06, 2009

Opportunity Areas for Mobile Startups

Below is a list of opportunity areas for mobile startups that interest me and I am spending time working on:
Mobile Commerce
Mobile to Real World
Healthcare for Developing World
Local Search

Wednesday, November 26, 2008

Is Venture Capital in Trouble?

Is Venture Capital in Trouble?: "But the real reason, as I discovered at the time, was that the high capital-gains rate was keeping investors out of VC funds, which, in turn, made venture capitalists more conservative with their investments. When President Reagan cut the cap-gains rate, we had the greatest new business boom in history.

I believe we are seeing the same thing now. We are looking at the current crisis in Venture Capital and assuming that it is self-inflicted. But the more likely reason is that the industry has taken so many external shocks in the past seven years -- Sarbanes-Oxley (which has killed new IPOs because of its onerous costs to young companies), full disclosure laws (which have driven smart people away from serving on corporate boards), and options expensing (which has all but erased the prime motive for people to join new start-ups) -- that it can't help but be in bad shape, a once-robust industry reduced to a sick, shrunken shell. [And now, of course, there's talk of raising the capital-gains tax rate again, which will be the final nail in the coffin of venture capital.]

In their blind frenzy to punish perceived evil-doers of the dot.com bubble seven years ago, government regulators and boards have taken the most efficient new company and wealth-creation process ever devised and set up roadblocks all along its path.

And the biggest roadblock of all is that they h"

Tuesday, November 25, 2008

India Calling - NYTimes.com

The World - India Calling - NYTimes.com: "My love for the country of my birth has never flickered. But these new times piqued interest in my ancestral land. Many of us, the stepchildren of India, felt its change of spirit, felt the gravitational force of condensed hope. And we came."

Wednesday, November 12, 2008

Sinking island's nationals seek new home - CNN.com

Sinking island's nationals seek new home - CNN.com: "Foremost among them: The very likely possibility that the Maldives will sink under water if the current pace of climate change keeps raising sea levels.

The Maldives is an archipelago of almost 1,200 coral islands located south-southwest of India. Most of the islands lie just 4.9 feet (1.5 meters) above sea level.

The United Nations' Intergovernmental Panel on Climate Change has forecast a rise in sea levels of at least 7.1 inches (18 cm) by the end of the century."

Friday, October 31, 2008

Peak oil within five years, report warns | Environment | guardian.co.uk

Peak oil within five years, report warns | Environment | guardian.co.uk: "The risk to the UK from falling oil production in coming years is greater than the threat posed by terrorism, according to an industry taskforce report published today.

The report, from the Peak Oil group, warns that the problem of declining availability of oil will hit the UK earlier than generally expected - possibly within the next five years and as early as 2011.

Oil supply could then rapidly decline, or even collapse, the report warns, with potentially devastating implications for the UK economy.

The report was issued today by the recently established UK industry taskforce on peak oil and energy security, a group of eight companies including transport firms Virgin, Stagecoach and FirstGroup, engineers Arup, architects Foster and Partners, and energy giant Scottish and Southern.

Entitled The Oil Crunch, the report argues that the risk of an early peak in oil production poses a bigger threat to UK society than tightening gas supplies, terrorism or the short-term impacts of climate change."

Monday, October 27, 2008

Kashmir's vanishing glaciers | How green was my valley? | The Economist

Kashmir's vanishing glaciers | How green was my valley? | The Economist: "AFTER a hard climb up the eastern flank of the Kolahoi glacier, Ghulam Jeelani, a geo-hydrologist from the University of Kashmir, catches his breath. This is the Kashmir valley’s only year-round source of water. But it is melting at an alarming rate. The glacier is a dirty brown colour, wrinkled with crevasses. It looks more like an enormous mudslide than a frozen reservoir of fresh water. Mr Jeelani says that the glacier is in “ablation”—shrinking through melting. If present trends, which are blamed on climate change, continue, he concludes with a shrug, “In ten years there will be no Kolahoi glacier.”

This threatens the livelihoods of millions, and the Kashmir valley’s reputation as one of the world’s most beautiful places, made ugly only by decades of human conflict. The region, disputed by India and Pakistan, is riven by a bloody insurgency. The reopening this week of lorry trade across the “line of control” dividing Indian- and Pakistani-controlled Kashmir was a rare moment of optimism. It followed months of anti-Indian protests that have reinvigorated the valley’s secessionists."

Pakistan's economic meltdown | The last resort | The Economist

Pakistan's economic meltdown | The last resort | The Economist: "A NUCLEAR-ARMED front-line state in the “war on terror”, Pakistan faces economic meltdown. On October 22nd the head of the IMF, Dominique Strauss-Kahn, said discussions would begin within the next few days on emergency financial support. How much was still to be determined. Pakistan needs a lot, urgently.

The economy is close to freefall. Inflation is running at about 30%. The rupee has devalued by about 25% in just three months. The fiscal deficit is a whopping 10% of GDP. Foreign-exchange reserves cover just six weeks of imports. A $500m Eurobond matures next February, but the market has already decided it is junk. The country needs at least $3 billion in short order, and a further $10 billion over the next two years to plug a balance-of-payments gap. Without it, default abroad might well coincide with political anarchy at home.

Pakistan’s new president, Asif Zardari, has made desperate begging trips to Saudi Arabia, America and China. To no avail. The Saudis are dragging their feet on a Pakistani request for $5.9 billion-worth of finance in the form of deferred oil payments. The Chinese seem to have done their due diligence and concluded that they cannot blithely advance billions to an increasingly dysfunctional state."

Friday, October 24, 2008

Kids less likely to graduate than parents, report shows - CNN.com

Kids less likely to graduate than parents, report shows - CNN.com: "Your child is less likely to graduate from high school than you were, and most states are doing little to hold schools accountable, according to a study by a children's advocacy group.

The numbers are dismal: One in four kids is dropping out of school, a rate that hasn't budged for at least five years.

'The U.S. is stagnating while other industrialized countries are surpassing us,' said Anna Habash, author of the report by Education Trust, which advocates on behalf of minority and poor children. 'And that is going to have a dramatic impact on our ability to compete,' she said.

In fact, the United States is now the only industrialized country where young people are less likely than their parents to earn a diploma, the report said, citing data compiled by the international Organisation for Economic Cooperation and Development."

Wednesday, October 22, 2008

Pakistan Will Require Up to $15 Billion in Aid - WSJ.com

Pakistan Will Require Up to $15 Billion in Aid - WSJ.com: "Pakistan will need as much as $15 billion over the next two or three years to extricate themselves from a severe financial crisis and will require up to $4 billion of that in the next month, senior officials from Pakistan and the International Monetary Fund said Tuesday."

Argentina Makes Grab for Pensions Amid Crisis - WSJ.com

Argentina Makes Grab for Pensions Amid Crisis - WSJ.com: "The government proposed to nationalize the private pensions, which would provide it with much of the cash it needs to meet debt payments and avoid a second default this decade."

Glory Days Fade for U.S. Farmers - WSJ.com

Glory Days Fade for U.S. Farmers - WSJ.com: "Many Midwest farmers worry that the combination of lower crop prices and high costs will usher to an end, by next year, one of the most flush periods in American farm history. This year, the U.S. Agriculture Department is predicting that U.S. net farm income will hit $95.7 billion, up 10.3% from last year's $86.8 billion and nearly double the $58 billion of two years ago."

Monday, October 20, 2008

Triage Time

A fine line between panic, swift action - The Boston Globe: "Triage time. Furqan Nazeeri, a serial entrepreneur who runs an Arlington start-up focused on environmental issues, posited that there are three kinds of companies in times like these.

Venture capitalists are going through their portfolios and categorizing their investments into three buckets:

Expectant: So badly wounded that it is not worth expending resources to attempt to save them. On the battlefield, these casualties get morphine.

Priority: Badly injured, but rapid and focused attention can save them. These casualties get almost all of the scarce time and medical resources.

Routine: Walking wounded. These casualties are lightly wounded and there is little cost in delaying treatment until after the battle is over. On the battlefield, these casualties get left alone in a position of cover."

Monday, September 15, 2008

BBC NEWS | Business | Lehman set to go into insolvency

Could this be the beginning of people losing confidence in the financial system and a run on banks not like the world has seen since the Great Depression?

BBC NEWS | Business | Lehman set to go into insolvency: "BBC business editor Robert Peston says Barclays' decision to walk away from a Lehman deal was a huge setback for the effort to rescue the fourth-largest investment bank in the United States.

A source close to the talks told the BBC that Barclays was unlikely to change its mind.

Barclays terminated the negotiations because it was unable to obtain guarantees in relation to financial commitments faced by Lehman when markets open on Monday.

Unless the US government does a U-turn and puts taxpayers' money into Lehman, the bank will have to file for bankruptcy protection."

Friday, September 12, 2008

U.S. companies are rethinking manufacturing in China - Sep. 11, 2008

I think manufacturing is going to go through a major renaissance in the US. All those jobs that went to China and India over the last decade are going to come back in a major way as the cost of doing business in those countries and delivering those goods/services to the US have shot up. Great time to be a buyer of those assets.

U.S. companies are rethinking manufacturing in China - Sep. 11, 2008: "The rising cost of labor and shipping abroad are driving manufacturing back to the U.S. So are the logistics of dealing with far-flung suppliers"

Wednesday, August 27, 2008

Indian property | Lights on, nobody home | Economist.com

Indian property | Lights on, nobody home | Economist.com: "In a recent report, HSBC predicted that house prices across most Indian cities could fall by 25-30%.

Less than a year ago India’s property market was smouldering with excitement fuelled by unprecedented economic growth."

Thursday, August 07, 2008

The Indian Economy and Gold Imports - Seeking Alpha

Last night, I caught up with a HBS 08 classmate, Sini Jacob, for dinner. Amongst a wide variety of topics, one that we touched upon was the notion of India being another China. In light of that conversation, I found the article below very interesting.

The Indian Economy and Gold Imports - Seeking Alpha: "India was a big beneficiary of that flow, simply because of the misguided notion that India is another China, which it is not."

The alternative-energy bubble | Steve Tobak's views on dysfunctional corporate behavior - CNET News.com

The alternative-energy bubble | Steve Tobak's views on dysfunctional corporate behavior - CNET News.com: "The magnitude of the shakeout will be proportional to the gap between market demand and supply. In the case of the dot-com bubble--which also included Internet and telecommunications infrastructure, fiber optics, and communications chips--the shakeout was huge, affecting the public markets by almost a trillion dollars. The nanotech bubble, on the other hand, has been largely localized to the VC community.

As for the nature of this particular bubble, I'm not sure if my crystal ball is better than anybody else's, but my gut tells me that we're already getting way out ahead of ourselves.

As bubbles go, I think this one's going to be big. How big? You got me. But I think that global warming, alternative energy--and solar energy in particular--like Al Gore are all overblown. The energy crisis, on the other hand, is real, but nuclear energy's the answer. And that's all I'm going to say about that here.

What does all this mean to you? It depends on your risk profile. If you're young, I say you need to take risks. Should a great opportunity arise with one of these companies, by all means, go for it. But if you have a good job with a good company, or you don't have enough working years left in you to take significant risks, I wouldn't jump ship for a hot solar st"

India Inflation Woes May Continue - Seeking Alpha

India Inflation Woes May Continue - Seeking Alpha: "So one should not read too much into this recent stabilization in inflation. This euphoria may turn out to be a short-lived. Until then, pray for a divine intervention in the form of a good monsoon. It’s a shame on our policymakers that Indian agriculture has yet to witness a Promethean growth. The entire nation’s economic and monetary policy is held ransom to the performance of the south-west monsoon. Everyone in this emerging economic superpower, from the ordinary farmer to the RBI Governor, looks up to the skies for relief!"

Tuesday, August 05, 2008

Global Investing, BRIC by BRIC: Part II - Seeking Alpha

Global Investing, BRIC by BRIC: Part II - Seeking Alpha: "The budget for the current fiscal year (ending next March) proposes an 18% spending increase, and that’s after spending rose 24% last year. The state budget deficit (federal plus local) is around 7% of gross domestic product; in any kind of recession, that could easily spike to the 10% of GDP level at which deficits become difficult to finance.

There is hope on the horizon: An election is due in May 2009, at latest, and the center-right opposition is currently leading in the opinion polls. But wise investors know better than to base their investment plan on something as uncertain as that.

India’s other big problem is inflation, currently running at 8% per annum, which is higher than short-term interest rates. Higher commodity and energy prices have affected India as they have other countries; India’s position is made more difficult by the poverty of much of the population.

The Indian government has restricted exports of rice and has subsidized other foods and gasoline (the latter makes no sense socially since automobiles are largely owned by the middle classes).

Needless to say, these subsidies and restrictions make the budget deficit worse, and will pose an additional problem when they are lifted and newly unfettered consumer prices soar in response."

Businessworld - The Price Of Growth

Businessworld - The Price Of Growth: "That may sound preposterous in these nascent years of India’s economic renaissance, but there is evidence to suggest that Tata’s fears aren’t unfounded. The unprecedented growth in the economy has led to a spectacular rise in the costs. Corporate India’s interest expenses have risen 28.74 per cent in the Jan-March 2008 quarter — the fastest in the past 10 quarters, according to the Centre for Monitoring Indian Economy (CMIE) (see graph ‘Rising Costs’ on page 31). The West’s average is 2-7 per cent. Profit after tax as a percentage of income was among the lowest in the past 10 quarters, indicating a squeeze on margins. Salaries and wages have risen 22.44 per cent, the second highest in the past 10 quarters, while power and fuel costs are growing at a fast clip of 14 per cent. “India’s cost-competitiveness has eroded,” says Sanjay Verma, managing director of real estate consulting firm Cushman & Wakefield India. “India will lose out if it doesn’t offer anything other than a cost advantage.”

Citi’s India Equity Strategy report of May 2008 says an analysis of the rising costs of setting up business over the past three years — asset, capital and services based — suggests ‘business inflation’ could be as high as 10-35 per cent a year, well ahead of 7-8 per cent headline inflation. “It has become expensive to live in India but probably even more expensive to do business in India,” says the report.

Monday, August 04, 2008

Meredith Whitney: The credit crunch is far from over - Aug. 4, 2008

Meredith Whitney: The credit crunch is far from over - Aug. 4, 2008: "Whitney's current concern is that banks aren't slashing costs and cutting losses in their loan portfolios fast enough. On the cost side, she says, banks have yet to come to terms with the disappearance of the securitization market, which she believes will stay in hibernation for the next three years.

Why does this matter? From 2001 through 2005, for every dollar of bank capital used to make mortgage loans, 10 were supplied via investors in mortgage securities. All that secondary-market capital is now sidelined, but the staffing levels of bank lending departments don't yet reflect it.

By Whitney's reckoning, banks have laid off about 7% of their employees; she thinks the cuts need to reach 25%.
Time to get real

She also argues that banks need to 'get real' about how they're valuing their problem mortgage-related debt, much as Merrill Lynch has now done. Merrill recently sold a large package of toxic mortgage debt for just 22 cents on the dollar.

Whitney's idea of 'real' is pretty drastic. Whereas most banks are estimating 20% to 25% peak-to-trough declines in housing prices, the Case-Shiller housing futures traded on the Chicago Mercantile Exchange portend a much steeper 33% decline, she points out.

In fact, Whitney thinks the actual declines will be worse - closer to 40% - because of the loss of the securitization market and the paucity of mortgage credit available. And that means more defaults: "The consumer's ability to refinance his way out of trouble has diminished greatly."

Whitney's critics, and there are many among bankers and analysts, contend her bearishness at this point shows she simply doesn't now how to measure the remaining downside risk.

Her response: If she has no idea how to properly value bank stocks now, it's because the metrics don't work. Price-to-earnings ratios are useless when earnings are nonexistent. And valuing banks on price-to-book ratios is just as futile. Those book values - which reflect underlying assets and liabilities - are moving targets.

Thursday, July 17, 2008

Uncle Sam Adopts Fannie and Freddie - Barrons.com

Uncle Sam Adopts Fannie and Freddie - Barrons.com: "Even so, the descent down the slippery slope of socialization of the financial system is gathering speed.

'Capitalism without failure is like religion without sin,' Allan Meltzer, the distinguished economic theorist and historian once wrote.

Yet, like it or not, we don't want to deal with such harsh verities, either in religion or the marketplace. Traditional churches are losing out to TV evangelists who promise material rewards now rather than later.

For the markets, pushing the limits with ever greater risk brings enormous rewards -- until the bust comes. Nobody has to give back bull-market bonuses when the bear arrives, so why worry about the downside?

It's too late to worry about high-minded concepts of moral hazard. The price of these bailouts will be borne by the taxpayers. And the financial markets will be subject to greater supervision and regulation, reversing the tide toward deregulation.

Ideologues of the right and the left can argue whether this is a good thing. Investors should just deal with it."

Monday, July 14, 2008

The end of the great global economic boom - Jul. 14, 2008

The end of the great global economic boom - Jul. 14, 2008: "But double-digit growth is also creating double-digit inflation. Americans whine about $4 gasoline and $5 Cheerios, but elsewhere in the world the reaction is much more serious. Truckers in South Korea, France, and Spain have blocked highways to protest high fuel prices, and angry Egyptians barricaded roads after a cut in flour subsidies. In India inflation rose to above 8% in May from below 4% last August. Chinese inflation was 7.7% in May, up from 1% in early 2006.

It's worse in the smaller markets: Inflation now exceeds 30% in Ukraine and Venezuela and 25% in Vietnam. This translates into some pretty jaw-dropping price increases: Rents are up 82% in Dubai in 12 months, and rice prices in India have nearly tripled since January. Such rapid inflation can stifle growing economies, and many analysts think the great global boom eventually will flame out - or at least dramatically slow.

And let's not forget that many of the countries experiencing strong growth today depend on exports to the U.S. to keep their economies humming; a slowdown in U.S. spending surely will have ripple effects in places like India, China, Vietnam, and Mexico.

The problem is how to fix it. Most experts believe that to break the back of double-digit inflation, central bankers have"

Moneycontrol India :: News :: Oil to stay at $110-120/bbl this yr: Merrill Lynch :: :: FII View :: Mark Mathew ,Merriyll Lynch

Moneycontrol India :: News :: Oil to stay at $110-120/bbl this yr: Merrill Lynch :: :: FII View :: Mark Mathew ,Merriyll Lynch: "Yes, it would be one of the least preferred markets in Asia if the oil prices stay high. We did an Oil Sensitivity Analysis two weeks ago using seven variables to measure the impact of high oil price on economies and stock markets across Asia and I am afraid that India did not square very well."

Drought hurts vital Australian wheat - CNN.com

Drought hurts vital Australian wheat - CNN.com: "One of Australia's worst droughts on record is hurting wheat farming just as the world needs it most. Australia is usually the world's third or fourth-largest exporter of wheat. But exports dropped 46 percent from 2005 to 2006 then fell 24 percent last year.

Most of its exports go to the Middle East and Southeast Asia to make bread and cereals, but the fall in supply has led to a spike in prices. A ton of Australian wheat now costs $367, compared with $258 in early 2007, an increase poor countries can ill afford.

'When they pay high prices, they pass on an increase to their poorest people, who can no longer afford it,' says Kunhamboo Kannan, director of agriculture, environment and natural resources at the Asian Development Bank. 'Just look at Egypt.' Riots over rising bread prices and shortages have led to at least 10 deaths in Egypt this year."

The "I" Is Being Incinerated

Beware of Crumbling BRICs - Seeking Alpha: "The 'I' Is Being Incinerated

The 'I' in BRIC, India has been one of the emerging world's most popular markets in the last few years. But now the country faces a big reversal of its recent fortune.

For starters, the Indian stock market, bond market, and currency are all getting incinerated as inflation soars, and investors lose confidence in the economy.

Wholesale price inflation is running at 11% in India - the highest level in 13 years and climbing. The Reserve Bank of India responded by raising interest rates, but it may be too little too late.

Investors are scared that a combination of accelerating inflation and more rate hikes could derail India's record 8.8% annual growth.

Overseas investors are pulling money out of India at a record pace now. Investors sold a net US$6.2 billion worth of Indian shares so far this year, sending its benchmark stock index plunging 30% in value.

Bond prices and India's currency, the rupee, have also come under intense selling pressure. The rupee, which had been one of the world's strongest currencies, retreated 8% in value this year. That's its worst performance since 1993."

China and India's Growth Just Currency Related Illusions? - Seeking Alpha

China and India's Growth Just Currency Related Illusions? - Seeking Alpha: "Let’s explore an interesting development: the different inflation experiences of emerging countries and developed countries. In case you haven’t noticed, inflation in emerging countries is higher, demand-pull in nature, and advanced to the stage of a wage-price spiral; in developed countries, it is lower, cost-push in nature, and not advanced to a wage-price spiral.

Does this have any significance? One ramification could possibly be the unwinding of the secular growth stories of the emerging countries and a return to economic supremacy of the developed countries. It could also mean the stock markets of the developed countries will be more rewarding places over the next decade or so compared to the stock markets of emerging countries.

The cost-push inflation of developed countries is easier to resolve, I believe. It should ebb as long as central bankers refrain from overly stimulative monetary policy -- thereby letting the deflationary forces of the stagflation slow the economy to a non-inflationary path. And this is the course of action that the central banks appear to be following (e.g. a rate hike by the European Central Bank, little increase in the narrowly defined U.S. money supply in 2008, etc).

Demand-pull inflation and wage-price spirals tend to be more stubborn."

Saudi Oil: A Crude Awakening on Supply?


Saudi Oil: A Crude Awakening on Supply?: "However, it appears that for at least the next five years, and possibly longer, the Saudis are likely to produce less crude than promised, according to fresh data on the kingdom's oil fields obtained July 9 by BusinessWeek. Saudi officials have said they would increase production capacity to 12.5 million barrels a day next year, from the current 10 million barrels a day, and could even ramp up to as much as 15 million barrels a day if the market demanded it. As proof to a skeptical audience, the normally highly secretive Saudis were a bit more more open, escorting journalists on a visit to their new Al Khurais field (BusinessWeek.com, 6/23/08), east of Riyadh, and disclosing some field data.



Oil companies want in
But the detailed document, obtained from a person with access to Saudi oil officials, suggests that Saudi Aramco will be limited to sustained production of just 12 million barrels a day in 2010, and will be able to maintain that volume only for short, temporary periods such as emergencies. Then it will scale back to a sustainable production level of about 10.4 million barrels a day, according to the data. BusinessWeek obtained a field-by-field breakdown of estimated Saudi oil production from 2009 through 2013. It was provided by an oil industry executive who said he had confirmed"

Chess-Boxing Hits it Big - TIME

I can't believe they have combined boxing w/ chess

Chess-Boxing Hits it Big - TIME: "The matches work like this: competitors alternate between three-minute rounds of boxing and four-minute rounds of speed chess with one-minute breaks in between to get the gloves off and hunker down at the chess table. The winner is determined by knockout, checkmate, or referee decision."

Fannie Mae, Freddie Mac: The $5 trillion mess - Jul. 11, 2008

Fannie Mae, Freddie Mac: The $5 trillion mess - Jul. 11, 2008: "Fannie Mae and Freddie Mac are struggling with an investor loss of confidence so great that, while they're unlikely to go under, they could conceivably see their ability to function impaired. That would wreak yet more havoc on an already wrecked housing market - making loans tougher to come by and possibly pushing hundreds of billions of dollars in cost onto U.S. taxpayers."

Thursday, July 10, 2008

The Fannie and Freddie doomsday scenario - Jul. 9, 2008

The Fannie and Freddie doomsday scenario - Jul. 9, 2008: "Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie Mae and Freddie Mac, and how would a rescue affect you, the taxpayer?"

Tuesday, July 08, 2008

High energy prices seriously threaten Asia's economic prospects - Barclays - Forbes.com

High energy prices seriously threaten Asia's economic prospects - Barclays - Forbes.com: "The continued surge in oil prices will start eroding the external payments position of Asian countries, with South Korea and India deemed as particularly vulnerable, and strongly undermines the growth potential of the region, a Barclays official said on Monday.
'Energy prices are driving a lot of what's going on,' he said.
If oil prices were to pull back below $100 a barrel, then 'all will feel like a bad dream,' Barclays (nyse: BCS - news - people ) Capital head of emerging markets research Peter Redward told reporters at a briefing.
Barclays has a bearish outlook on Asia, with an 'underweight' rating on all its asset classes, from equities to fixed-income and currencies.
With oil prices above $100 a barrel, the only countries in Asia that will likely post trade deficits are Korea and India and this will exert pressure on the won and the rupee, said Redward.
The U.S. dollar-won may hit 1,200 this year and the dollar-rupee may hit 46, he said."

India's Economy Hits the Wall

India's Economy Hits the Wall: "The big hope for a return to the course of reform in India, businessmen hope, will be a new government in New Delhi next year. The gravest danger is that India's messy coalition politics will bring into power another indecisive alliance that will keep the country in policy limbo for another five years. If so, says S&P's Gokarn, it's a meltdown scenario: growth slipping below 6.5%, accelerating the chances of India reverting to its 1991 status when it was plunged into a balance-of-payments crisis."

Monday, July 07, 2008

Secret report: biofuel caused food crisis | Environment | The Guardian

Secret report: biofuel caused food crisis | Environment | The Guardian: "Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.
The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.
Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.
'It would put the World Bank in a political hot-spot with the White House,' said one yesterday."

Tuesday, July 01, 2008

Suminter's Sameer Mehra is Welcomed as Endeavor India's First High-Impact Entrepreneur

Suminter's Sameer Mehra is Welcomed as Endeavor India's First High-Impact Entrepreneur: "Endeavor India (www.endeavorindia.org), a non-profit organization supporting “high-impact” entrepreneurs, selected its first high-impact entrepreneur Sameer Mehra, CEO of Suminter India Organics, to join Endeavor’s global network at an International Selection Panel held in Istanbul, Turkey.

Suminter (www.suminterindiaorganics.com) converts small-scale farms to organic standards, and then buys the produce at a premium for export to the global market. Certified by Fair Trade, Suminter currently works with over 4,000 Indian farmers, whose farms are certified by global agencies like SKAL to meet US and European organic standards.

“Entrepreneurs like Sameer represent the high-impact potential necessary to jumpstart economic growth in developing markets worldwide and transform their cultures” said Endeavor Co-founder & CEO Linda Rottenberg. “Sameer bridges the gap between small-scale farmers and would-be consumers to bring healthy and socially-responsible goods to market.”

Endeavor identifies and supports innovative emerging-market entrepreneurs with high-impact potential to help grow their enterprises, create high-value jobs and become role models. The International Selection Panel is the culmination of a rigorous multi-step search and selection process where top business leaders interview and"

Friday, June 20, 2008

Lighting Up Rural India - Forbes.com

Below is an article Forbes published about D.Light Design. I had the good fortune of finding Sam and Ned last year. D.Light goes to show that, with a strong management team and a sound business model, businesses can simultaneously unlock social and financial value at the BoP.

Lighting Up Rural India - Forbes.com: "Some 1.6 billion people around the world live without access to regular electricity. A start-up company founded by some ambitious recent graduates of Stanford Business School aims to ease that problem--and make a profit at the same time.

The company, d.light design based in New Delhi, India, has developed a trio of lights created for a market it calls the 'base of the pyramid'--including people who live on the equivalent of $1 a day. Its portable Nova light, which it is debuting on Monday, has a high-powered LED that d.light claims can run for 40 hours on a full charge. It comes with a solar panel, so recharging costs nothing. The Nova also works on an AC charger. D.light plans to sell the light for $15 to $30; the higher price includes both the solar charging panel and the AC charger.

Many people in India and Africa without electricity currently use kerosene lanterns as a light source. But kerosene emits unhealthy fumes, is an extremely dim light and far too often ends up burning people or homes in accidents.

'People leave the kerosene lantern on low all night long as a kind of night light, and they wake up and cough black soot,' explains d.light design President Ned Tozun. 'Our mission is to eradicate the use of kerosene.'

This isn't the only project to try to bring alternative power to"