Uncategorized | Portfolio Yoga

Where are the Yachts

We human being are always in a state of flux. Many of us are what George Soros once said about opinions – Strong opinions, weakly held and some of us are also those who have Weak opinions but strongly held. We constantly keep changing our view of the outside world depending not on the signals that came from outside but from noise that diverts our attention from the core to the crust where we really wonder as to how we got here in the first place. Many a time, we do not even wonder since we believe that we have held this view from so long. Of course evidences are strongly to the contrary with there being heaps of material available on how we believe in something that we may not have believed in just the other day not due to any major change in the approach but due to the fact that we were convinced that our path was wrong and their logic was superior.

Unlike most of the lower animal kingdom, we do not like to live in an island of our own with our own thoughts making up for all we know and care. We like to hook up with persons who seem to have similar interests to us and that one reason in itself has led to a resounding amount of new innovations in the world of academics and laboratories. This did not happen because they believed in what the books wrote but happened because they were able to rise above the ordinary and showcase how things can be done differently or maybe even how the process that is followed is lousy and is not worth the effort that has been put into it.

Before the advent of the Internet, socializing with similar likes was tough since one does not carry a board placing on record all that interests him. Clubs were born of the need for such socializing among people who believed or liked or were involved in some activity. So, a Golf club was the place to go if you wanted to meet Golfers and a Stock Exchange was a place where you went to meet other folks who invested in markets and with whom you could have lively interactions to understand their process and their list of likes and dislikes.

But that was still a very small world with a huge limitation on how many you knew and how many cared to share their views / thoughts with the rest of the folks. But the Internet in one swipe has changed all that with one being able to converse and communicate with persons in countries which one may never have known existed before. After all, Internet is a world without boundaries where freedom of the speech is evident in the very real sense as to what that freedom means. It’s hence no wonder that autocratic countries try every trick in the book to limit the ability of their citizens to freely communicate. How the hell are they supposed to govern if citizens became enlightened and started posing questions for which answers were either difficult or worse, they had no answer to shield themselves from.

The arrival of web based groups / forums have given a lot of people the ability to interact and learn from the knowledge and experience of others. Unfortunately it also has meant that many a self styled guru has taken advantage of the ability to convince others of his logic at the cost of the alternative even if the alternative had a better foundation or way of approach.

While the most hotly debated topics remain to be Religion / Politics and Nationalism, they also have the advantage of the fact that there is no damage – physically or mentally or financially to those who participate in such discussions. But there are huge numbers of groups that are devoted to markets and unlike elsewhere, a wrong decision due to wrong guidance can lead to actual damage to those who follow.

Markets operate on the very basis of a conflict of opinions (my belief that the price I am buying the share is cheap as compared to the seller who believes he got a good price for his holding). Without there being such a convergence, there can never be a trade since if everyone believed the same, everyone will either be a buyer or the seller.

A very long time back, there was this article about a young guy who operated in penny stocks in US. This was during the time of the Dot com boom when every stock that had any name with .com or Infotech was instantly valued higher than what it was just before. Since most of these companies never had any volume so as to calculate a Price Earnings Ratio or any real fundamentals backing it up, the measure many looked up was the number of visitors rather the revenue it could derive out of those visitors. It was during this madness that this young chap identified small illiquid stocks, bought a good quantity and harped on it on every yahoo chat forums he could find. If I remember right, he made a lot of money before he got caught by SEC which fined him a bit but compared to the profits, it was a slap on the wrist so as to say.

With the advent of twitter and groups, this phenomenon can be easily seen in India as well. I see quite a lot of persons claiming stocks they having bought getting doubled /tripled in no time. The stocks they choose are mostly in the mid cap and small cap category and hence both illiquid and very volatile. Having followed a few of them for quite some time, all I can say if that if you buy everything they recommend, you shall end up with a very big portfolio if not for a big profit.

It’s easy to get swayed by others screaming about making big money but the reality as far as I am concerned is that the guys who really make big money are unheard off by a majority of the population. They corner all the money and let others take all the glory. After all, real humbleness is to share with others what you have achieved.

So, the next time someone shouts on top of the voice about making big money, do check, verify and finally ask…Where is your Yacht

Why India needs Creative Destruction

When Infosys brought back NRN who tagged his son along, there was a lot of hue and cry about how he had abandoned his own principles. I for one thought otherwise and felt that he being the guy who gave up so much of his time and energy to create the company was attempting to save the company and there was nothing wrong in doing the same.

But having seen the affects of how companies which disrespect meritocracy gets nowhere over a period of time, I now believe that this was the biggest error made not by NRN but by the shareholders of the company who approved the said resolution.

Unlike America, our Institutions generally do not interfere with the running of the company and most of the times sides with the management and hence it’s difficult if not actually impossible to launch a hostile takeover on any company.

In case of Infosys, promoters hold just 16.04% of the stake while FII’s and DII’s combined hold the majority – 58% of the company shares. For them, jointly, it would have been as easy as 1-2-3 to overrule the Board of Directors who took the decision. But based on reactions coming from them, it looked like they actually welcomed the move.

But then again, most of them are concerned with their investments and if they feel that it’s the right step, so be it. But the question is, is it the right step? In India we repeatedly complain of how one family is able to rule us but do not question as to why majority of the big companies have no one other their own ilk to run the company. Is India so short of talent?

While a hue and cry was raised in case of Infosys, the pass over is seen as a normal occurrence in majority of the cases. Reliance got split and passed over to his sons, Birla is a family run enterprise and even Tata after making news about a global search finally settled down for the son of its largest shareholder.

There have been numerous case studies on Family run business and Professional run business and depending on how you arrive at the final set of data, you end up seeing one better than the other.

If we were to look at our own lives and the things we use, majority of the cheap items we use today seem to come from China (as also nearly everything in electronics) or is the handwork of a company whose parent company is a MNC situated outside of India. And in the very few where its Indian companies that dominate, it has more to do with the laws than the ability to overcome competition.

The thing we seem to be missing and the key factor that has ensured that not many big companies have emerged from India is called “Creative Destruction”. It’s in a way amazing that while the whole thought behind Creative Destruction is said to be taken from Hinduism “Shiva in the form of Nataraja”, we ourselves have decided that application of it is not something that is worthwhile.

The absence of competition has meant that many a company enjoy unbridled margins at the cost of the newcomer who is not allowed to compete against him with barriers placed at every corner. Of course, where we have loosened the rules and let fair play, the results have been seen as vastly beneficial to the end customer.

Two industries / sectors come to the top of the mind – Telecom and Stock Exchange. While the telecom story is well known, the story of the stock exchange is not. Prior to 1996, there were around 27 active stock exchanges across the length and breadth of the country. Each stock exchange was limited to the state boundaries beyond which they were not allowed to operate so as to ensure that there was no overlapping. This meant that arbitrage opportunities were plenty in number what with exchanges having their own settlement periods. And despite that number, the depth was low owing to lack of transparency, high charges and outright frauds.

But things started to change when NSE came into the picture. Within 4 years, it ensured that all localized exchanges were more or less on the verge of shutting down with only BSE being able to survive the onslaught.

But that was 1996 and its now 2013 and as anyone connected with the financial markets saw when MCX tried to launch its own Equity exchange, it faced hurdles that would have stumped any other player but due to the fact that it already ran an exchange, it could wait the time.

One of the biggest complaints against Creative Destruction has been about how it will kill existing jobs. But as studies after studies show, in the long term, it improves the overall economic climate of the country as well as ensuing one constantly upgrades his skill sets to ensure that he is not left behind. Till that happens, it’s difficult to see companies emerge from India that is seen as dominators like many of the US / European companies have. There is only so much that cheap labour and a weak currency can provide for as China and India are fast finding out.

A thought on the Longterm prospects of the market

By nature, I am a pretty optimistic person and that has meant that in the markets, I am more willing to take a bullish bet than a bearish one. In fact, if I were to go back to all my postings I have made here since the start of the group, the tone is one of bullish with markets ready to be bought or the time just about to come. In that sense, I think this will be a bearish post written after a real long time.

My last long post I wrote here was about how India story was not dead and one should buy at current levels and add if markets drop down to 5100 or 4600. I wrote that on April 16 and in the coming weeks, markets rose by over 10%. But with bearishness enveloping much of the world, we are now back to where we started from.

But during the time in between, I have had a major change of heart. For the first time in my trading career, I sold out my portfolio completely (save for those physical shares for whom there are no bidders 🙂 ). The reason for the action was that One, I did not seem to have the time or the inclination to follow up on my portfolio and the stocks to be added / sold on a regular basis and Two, I felt that the net risks I took there did not match to the net reward I could gain (unless I got lucky and invested a big amount in one company which then took off vertically – but then again, I know Luck has never favored me and I don’t see why it will change now 🙂 was wroth the risks I took

But the bigger change in me has been to question as to whether we are dreaming as to the rise of India once again and one that would give us absolutely great returns of the kind that say United States had back in the 1980’s.

Much of the growth in the world has been due to the policies and the actions of one country and one country alone – The United States of America. And the de-growth which I am anticipating is also because of that one country.

After the World War II, only one country escaped unscathed – United States. Europe was devastated while much of Asia and Africa were still under colonization and had very little industrial infrastructure of knowledge to speak off. Japan lost not just much of its young population to the war but also its Industrial cities which were thoroughly destroyed by the US.

This left US as the key to future growth of the entire world and US Dollar the one and only safe haven among the plethora of currencies (though it did not happen till a couple of decades later)

While Europe did recover from WW-II, it never has been able to regain its prescience in the world economy. While the US economy continued to dominate, we saw the emergence of 3 countries from Asia who have come to dominate in the last 40 – 50 years.

The first country to rise was Japan – aided extensively by a weak yen, Second came South Korea – again a weak currency helped and third China – well once again a weak currency helped here too. Other than weak currency, all three had one more thing in common – they all focused on manufacturing led exports and for all three countries the biggest country for their products was US.

While we talk about our Current Account Deficits, the US too has followed a similar path with ever growing negative trade balance. But what tilted the favor for them was that unlike India or for that matter, any other country, US paid by its own currency which meant that in the worst case basis, all they needed to do was print more and print they have been doing – more extensively than ever before after the 2008 crash.

For a long time (in the heady days of the bull market of 2003 – 2008) it was felt that even if US slowed down, it would not affect the growth of the world economy since China and India will be able to replace the demand and hence sustain the net growth.

But the events past 2008 showed that absent US growth, there was not much anywhere else with almost all countries going with one or the other kind of stimulus. But stimulus is like a drug, it boosts the performance in the short term but costly in the long term (as India is currently finding with high inflation which has resulted in higher interest rates).

Both the initial recovery post 2008 and the recent recovery in markets (developed markets) has been due to the quantitative easing in US. Almost all countries enjoyed the flow of money which came from US due to the attractive arbitrage that was available.

The broader opinion was that with US economy getting back on its rails, world economy will be good once again. This seems to have been proven right to an extent going by the falling unemployment and rising housing prices. But somewhere,something has gone wrong.

One, while US housing prices are going up, one saw a reversal in May after falling for the last 5 months. Second, the assumption was that once growth came back in the US, it will result in growth for all export oriented countries and we will be back to where we were prior to the crash. But the recent carnage in developing markets seem to have put a spanner in such views.

While US markets seem to be booming, economies which are dependent on commodities for a large part are seeing massive problems (Brazil / Russia / Nigeria / Australia among others). Now, growth without commodity growth is something that cannot be visualized.

India had not been affected since we export services rather than commodities but we seem to be facing another problem. Since we run a large CAD, we require continuous inflow of US Dollar. Other than exports, major source of Dollars is via FII investment in Debt (much larger than equities) as well as investments by NRI’s.

The problem we are facing is that since Interest rates are rising in US, FII’s are finding it not as attractive as before to invest in India. This pullout has led to a massive fall in Rupee with the Rupee touching 60 against the US Dollar. While a depreciated currency is beneficial for an export led economy, we having a Current Account Deficit will see whatever advantage lower commodity prices give being washed away due to the weak rupee.

The recent US rise has been once again led by housing but with interest rates firming up there as well, it remains to be seen as to how long they sustain since its one thing to borrow at 3.75% and yet another to borrow at 5.0% especially when the economy itself is growing at less than 2%. Another reason for the housing boom was due to a large number of big players entering the market (Blackrock for example). But as price goes up, they will be willing to sell and hence one should or may not see the rise in price to continue.

Then there is the Japanese Syndrome. Way back, in the heady bull makets of 70’s, Japanese were pretty big spenders but after the economy went into doldrums, life has never been the same again. Japanese are happy to keep the money in bank deposits at virtually no return rather than take risks or spend the amount. In fact, this attitude is not just of individuals but also banks who prefer to buy Japanese Government Bonds than try to lend it out side.

While Americans may not just yet stop buying, I believe this is a concern that should not be overlooked. After all, the damage to American families of the fall of 2008 has been severe and one cannot expect them to make merry even though their savings are absolutely nil.

One major expectation in India is that once Modi becomes the Prime Minister, the worst maybe over and India will tread the golden path. But how true is that. Vajpayee was one of the best Prime Ministers one could have expected but the markets didn’t budge much other than the brief rise in 2000 due to the global IT boom. MMS arrived in 2004 and while he did nothing much, markets more than tripled. The reason for the difference – International Markets once again.

Indonesia became the first country to raise interest rates to try and stabilize the Ruppiah. With Rupee now closing in on 61, its no wonder than Bond markets in India seem to feel the same. If and if that happens, that should be the final nail in the coffin of the growth story of India.

My own sense is that markets may not go anywhere in the forseeable future and in that I mean for the next 2 – 3 years. While that does not mean there would not be opportunities for the trader, for an investor, it could continue to be a painful time ahead.

Disclaimer: I am not an Economist or have even studied much of Economy and hence I can be very well wrong with my hypothesis (and I will be happy to be wrong). But I believe that if my logic is right, the best place for investment in the current climate will be Banks and Inflation Indexed Bonds via Mutual Funds. On a Risk Adjusted basis, there will be no other asset class that can come close to it in terms of Risk Adjusted Return.

Is the India Growth Story Dead

Had been wanting to write on this topic for some time now though the immediate trigger was my friend Abhijit Patak’s assertion that I had no right to comment on the failures of others when I did not give my own view before hand. Both here and on Twitter, I have tried to not give trades since my belief is that

1. My trades may be randomly right or wrong, but that in itself shall not make me a good or bad analyst.

2. A risk of 5K may be small for some big for others, I am no one to judge the same and hence any advise without knowing the risk appetite of the reader is clear bunkum

3. Prediction is something I do not think forms the core of Technical analysis. The only two ways to be able to predict a future number in terms of the market as well as stocks is by either doing Elliot Wave analysis or Gann. I am neither a fan of either despite seeing Nitin being absolutely right in his Analysis using Elliot or my Boss being able to predict the market using Gann. Its always difficult to throw away your cherished beliefs and I for one am not going to throw the towel right now.

4. Its always good to teach one to fish than provide the fish.

But Prediction is something we love and want to talk about. Few years back, Elliot Wave International gave a target of 1,00,000 for the Sensex. I am not sure how they came up with the nice round figure, but it was the talk of the town. With India growth story still being talked about, that was seen as a non brainer.

But today, the view is anything but bullish. People have lot all hope and I am seeing a lot of guys talking about targets way down (even as Big Institutions stick to their big targets – 7000 by Goldman for instance). But as of now, the retail has been dead right with markets falling quite a bit and that in itself driving more people out – a vicious confirmation cycle of its own.

I myself have become a skeptic of the markets seeing the kind of rigging that happens day in and day out. I can give hundreds of examples of stocks that were pumped and dumped on the exchanges and as far as I can see, there has been no causalities in terms of people being caught and brought to justice. As far as the markets are, it seems, we are still part of the wild west (or should we say East).

But as I wrote in an earlier posting here, if one had a system using which one traded, the probability of getting caught was slightly lower (assuming that one did not over-ride the signals but instead adhered to it). So, in a way, not all is lost. Also a observation of such stocks shall say that they are mostly (80% of the time), listed only on BSE and generally have low volumes. So, if one filters out such stocks (no matter how good their supposed fundamentals are – For example: Ashriya was supposed to be a Goldcoin in terms of great funda, but then again, who knows what is there inside.), the risk of ruin reduces by a great extent.

Let me come back to the topic I choose as the Subject Line. Is the India story done and dead. If not, how should one play the markets now.

While I am not a perma bull, I do have a greater bias to the bullish side than bearish (not that it affects my trade in any way since my trades are purely signal driven, but the bias does make it difficult to exit in terms of investments – something to work on).

A lot of commentators have been calling for a break below 5000 and many looking for a break below even 4000. The question is, how feasible are such large targets. Honestly, your guess is as good as mine. I really do not have the foresight to say with any degree of confidence as to how the global economy will move in the coming months but one thing I am sure of is that if any such fall comes, the markets will be the least of your bother.

The markets are a sentiment of the future economy not the past. Markets generally tend to move before the world starts to know something is good and falls (generally) before people see something amiss. This is well documented by the broad definition of technical analysis as well. Hence lets once more go back to the basic assumptions of technical analysis. They are

1. The market discounts everything.
2. Price moves in trends.
3. History tends to repeat itself.

Currently, our GDP data is falling, IIP is not showing any moves, Inflation remains on the higher side and Interest rates aren’t dipping either. But this is already news that every one knows. For markets to fall, we need a real big trigger – a downgrade to junk status by credit rating agencies can be one, but knowing the way the agencies have done in the past, I give their weights or ratings the least amount of weight. But that will for a short time do impact the markets since a lot of funds may have to withdraw their investments and with the kind of liquidity we have, the fall can be pretty severe.

While the 2008 crack was a sudden fall off the cliff, any fall now will have more ramifications than 2008. India was not affected to the extent in 2008 as a lot of other countries were due to the sole reason that we still had quite a cushion and it worked as a parachute to slow our fall by which time the global economy or rather the markets took off and hence gave us a pretty fast exit option.

But any serious fall now will be due to a real change in economy or perception of the future – a future that would be bleak by all accounts. Assume for a moment that market starts to fall from the current levels, what we will see is that fund raising for primary markets will just not be possible. Banks will fear to lend since a slowing economy and a raising NPA will spark them to restrict lending even further. If anyone checks out the history of Japan, we can see how the deflation in Japanese economy started and how that has become a self fulfilling cycle which has become very difficult to break. While Japan has survived due to a lot of reasons, any such road in India will result in we going back to the dark ages.

On the other hand, lets look at the positives. Interest rates are high due to high inflation. Leaving aside food inflation, inflation elsewhere is dramatically coming down. In last few days, we have seen a slide in Gold / Silver and other commodities. We being a big importer, this fall should have a direct impact on the CAD which hopefully shall contract a bit.

Markets generally move ahead of the improvements that are visible in the business cycle. In 2003, business cycle was down and out but at that point of time we started one of the biggest bull rallies we have had for a long time. Of course, that was helped by the global rally as well which fed more fuel to the system.

Its not more than 5 years since our top of 2008 which has not been breached even as valuations are more attractive than before. As I have said previously, I cannot predict where the markets will go to, but unless we hit a massive sinkhole with rampant unemployment, we are unlikely to go anywhere below 4600 though I do feel that breaking 5180 which is the 200 Weekly EMA will prove to be a tough nut to crack.

The very fact that Japan has decided to expand its money supply drastically in the same way US and Europe are doing means that there shall be a flush of cheap money and that cheap money shall go to places where some semblance of growth still exists. All said and done, India is one of the few big nations to still have a nice growth story and one which can easily accommodate huge supply of funds. Right now, much of the funds are going to South East Nations, but these markets are tiny and its easy for them to become expensive very fast. With China just starting to show signs of slowdown (only god knows when it will slow down, but when it does, the crash will be similar to Gold), the biggest bet will be India.

Both Russia and Brazil are commodity driven and a crash in commodity prices shall hit them hard making it even tougher too allocate big capital to those countries.

I believe that a lot of macro factors are also showing signs of bullish bias, but I shall keep that for a separate day. Right now, one should be ready to invest with the intention to add if stocks drop down to levels of 5100 or 4600.

A look at the history of markets worldwide has shown that when the economy is expanding, the growth given by markets is huge and extends for a long period of time. In a way, we are still way down in the initial stages.

Of course, a world of caution. The whole thesis may come crashing down and I may look like a fool. But what is life without some risk 🙂

Cheers & Happy Investing

SEBI – Call Auction on Illiquid Securities

BSE and NSE combined have one of the largest number of listed companies in comparison to any other country but that number hides the fact that a lot many of them are very inactive and highly illiquid. This illiquidity is used by unscrupulous brokers / traders to actively manipulate the stock. Much of this is done via round tripping where a set of individuals buy and sell among themselves while at the same time ensuing that the price is on a continuous bullish path. Once the stock reaches a certain level, positive news start to flow about the company and volumes become higher as retail folks enter into the stock. The stock generally does trade higher even as the early entrants make a quick exit and when its finally in the hands of the retail (read weak hands), the stock starts to plummet not due to selling but lack of buying. The concept is known as Pump & Dump and is active and visible in many a stock.

Let me take the example of one company – Starcom Information Technology Ltd earlier known as Jatia Finance Limited. The data I have is from 2008 onwards when the stock was relisted though its original listing happened in 1996. The stock traded in single digits till 2000 when it got suspended (most probably, not sure). It came back in a new avatar in 2008 and got relisted at twice the price of delisting. The stock has no financials backing up but still is currently trading at 344 commanding a market cap of 172 crores. The last results available for December seem to show it having Zero revenue and a loss on account.

More interesting than the fact that it has gone up so much is the way it went up. From last April when it was trading at 87 it has reached the figure of today with an average trade per day of 8.40. Even this average is reached due to a few days of higher number of trades. Of the 195 days it has traded in the above period, it has had 1 or two trades on 52 occasions. It would have been virtually impossible for a retail trader to Buy or Sell such shares.

Such shares are dime a dozen on BSE and in a attempt to ensure liquidity is available, SEBI has now come out with a concept of Call Auction. The Call Auction is not entirely new since markets have been using Call Auction to determine the opening price (this after the lack of time and orders on the day after UPA won the 2^nd time resulted in a upper freeze).

What is Call Auction.

From Investopedia: At a call auction, participants place orders to buy or sell units at certain buying or selling prices. Orders collected during a call auction are matched to form a contract. Call auction rules vary by auction.

Here is what happens in the Indian scenario;

The call auction will be done at every hour starting from 09:30 hours. Following are the steps

Step 1: Clients will be able to place Orders / Modify the same or Cancel the same for the first 45 minutes of the hour. So, from 9:30 to 10:14 to 10: 15, such action will be allowed (the last minute is not known to ensure that its random in nature).

Step 2: Once 45 minutes are up, the entry options are closed and the orders matched. This will last for 8 minutes and end at 10:23.

Step 3: The next 7 minutes are buffer time to purge all existing orders that were not executed as well as closing out the current session and getting the price ready for the next session.

SEBI said stocks having an average daily trading volume of less than 10,000 shares with the average daily number of trades of less than 50 and classified as illiquid by all stock exchanges (where the scrip had been listed) as criteria for illiquidity.

The above setup which is now being implemented seems to have raised some hassles. But I for one believe, this is a positive step that will go a long way in providing liquidity for a great number of shares as also restricting the rampant manipulation that takes place under the current open market operations.

I am personally of the opinion that genuine investors are better off not investing in stocks which are illiquid since when one wants to exit, there may not be a buyer in sight and the slippage cost will be huge.

It does not matter if a stock has gone up 200% if the liquidity is so low that one cannot exit 100 shares without a major slippage. This will be avoided to a certain extent by the above procedure.

The alternative which is practised in most major developed markets is to have market makers who are and shall provide two way quotes at any given point of time. If India too follows such a policy, that shall ensure a decent spread with any investor being sure of an exit when he wants to instead of exiting when the buyer makes an bid.

The defence of an idea called India

While I have for a very long time encountered guys downright hostile about India, Social Media seems to have accelerated that process somewhat. Twitter seems to host a lot of guys who seem to see nothing positive about India. Of course there is a huge gulf between thsoe who are pro-congress and those against. For the former, everything is a positive and for the later, nothing is. But as they say “The Truth Lies Somewhere in the Middle” which I believe applies equally well for India as well.

History they say is a wonderful teacher. Too bad we don’t listen to it. We take bits and pieces of it that suits our agenda while ignoring the rest. Many for instance seem to suggest that India is what it is (a failure) because of our first Prime Minister, Jawaharlal Nehru was said to be romantically linked to Edwina Mountbatten.

While that information has been in public domain for long, what is interesting is that it now seems to be bigger than his other mistakes including but not limited to his views on Socialism vs Capitalism.

But what interests me more is that, while there are a lot of guys who dislike India for what it is, it has not stopped them from taking advantage, be it the cheap cost of living (by their standards) or the good cheap schooling that is available. In fact, recently one acquaintance of mine went on to suggest that he shall send his son to study outside once he finished his college. While I wondered why then and why not now, I dare not ask him at what to me seemed like pure hypocrisy.

But the key question we should ask ourselves is, Are all things bad here and All things good outside? Is the Glass Half Empty or Half Full? Is there a future for the country despite its failings or are we already doomed?

As the saying goes, The grass is always greener on the other side. We presume to know the positives of other countries while ignoring their failings. We compare their Institutions to ours without thinking for a moment as to how they came out to that level. Comparing Harvard to any Institution in India makes little sense since just like Rome wasn’t build in a day, neither did Harvard. Harvard for instance is the oldest running University with Billions in endowments. Indian Institutions on the other hand aren’t even half that old and many have issues in even running them due to paucity of funds, let alone have funds to invest in other asset classes.

That said, like a lot I do believe that we could have achieved a lot more than what we have, but what we have is what who we are and we have to make do with that. Yes, many of our politicians are nothing less than scoundrels, but a search on Google would show that not many citizens are proud of their politicians, no matter how good we feel about the country from the outside.

India is a country like no other. You can travel a 1000 kilometers in United States and find little difference in terms of either culture or language or customs, in India travelling just a 100 kilometres (especially in South) can show the huge change. I was born and have lived my entire life in the state of Karnataka. While Karnataka has a Official Language of Kannada which is the dominant language used through the state, there is great deal of difference in usage of words and syntax across the region.

Before the British colonized India, India as a entity was never there. While great kings like Ashoka, Akbar and Chandragupta Maurya at different times had control of nearly the whole of India, not many were able to conquer kingdoms south of the Vindhya’s. And of course, Assam and the North East never came under any king of Delhi except for a very brief period when India was ruled by Aurangzeb.

Its this history and the wide difference that made Winston Churchill say “India is just a geographical entity. It is no more a country than the equator”. It was matter of great doubt as to whether India will remain a single geographical entity for even 10 years after Independence or would it disintegrate into small provinces like it was before the coming of the British.

We believe that our politicians are the worst creatures in the world while first world politicians are like a baby who would not know what bribes mean. But is that really so? Are we ourselves squeaky clean to be able to point fingers at others? In Tirupati temple, the ability to pay directly corresponds to the amount of time you have to wait in a Queue. More the payment (with a official receipt to boot), lesser the waiting time. And we never complain as to why temple needs to distinguish between those with the ability to pay and those without.

There is a saying in the Indian scriptures which says ‘Yatha Raja Tatha Praja”. We seem to have used it to conveniently hide the fact that we ourselves aren’t angels either. While its true that there is a lot of corruption at the top, it does not codone the small corrupt acts we act upon. Its time I believe we should hold ourselves to account for our Omission and Commissions. After all, its only from the bottom feeder that even the big whale survives. Take that out and the top have nothing to feed upon.

I believe that there is a lot of things for which we should be proud. But most of us seem more interested in pointing and re-pointing to our weakness than our strengths, focus of on our failures than our successes and overall become pessimistic instead of being objective and hence optimistic. When a person is facing bad times, we say “Bad times don’t last forever”. Why should not we accept that things can and will change here too?

Gujarat and what we are missing.

Writing a blog on Narendra Modi is always risky. You tend to get branded one way or the other, there just does not seem to be any middle ground. Its either you love modi (and get called as a fan boy) or hate modi (and get called with many names).

But like it or not, I believe there has been no other politician who instils both fear and hope and neither there is a politician about whom so many have written so much

Riots is defined in Wikipedia as under

“A riot is a form of civil disorder characterized often by what is thought of as disorganized groups lashing out in a sudden and intense rash of violence against authority, property or people. While individuals may attempt to lead or control a riot, riots are thought to be typically chaotic and exhibit herd behaviour, and usually generated by civil unrest.”

Modi was (in his view), was the person at the right place at the right time and he has like it or capitalized it big time. India has seen hundreds of riots, some small, some bigger than 2002. What changed in 2002 was the fact that it was the first that a Electronic Media coming of age was able to document and report live. While most other riots were limited in space and causalities, the Gujarat riots was wide spread and the casualty figure was higher than most.

While most of the focus has been on one man (Modi), what has been missed is more than what is being debated. Its not normal for instance that people suddenly start pelting neighbours with stones or burn them to death. And there are quite a few things that are the characteristics of only India. We just don’t have the infrastructure to deal with the riots when they happen. Most cities for example have policemen with just a lathi to do the duty. While there are reserve police which are called when things start to get out of hand, its usually late in the day. Adding to that is the fact that since the Police department comes under the Home Ministry, its hands are effectively tied.

While Riots generally start off with a simple issue, the underlying reason is usually more than that. Take for instance the Riots in England in 2011. What started off as a simple stray case of police having had to shoot a suspect turned into a full fledged war between the police and protestors over many cities. The reasons ascribed range from massive unemployment among blacks (who are a minority community in UK) to social deprivation to family breakdowns.

But what differentiates Riots in India with elsewhere is not just the speed with which it’s controlled (and with limited human causalities) but also how the law is implemented. While the Riots took place in early August in England, by September much of the sentencing of those convicted was over. Compared to that, we take decades to even start writing a charge-sheet.

For instance Laloo Prasad Yadav has recently been charge-sheeted over a scam that took place in 1996.

“Justice delayed is justice denied” is a legal maxim meaning that if legal redress is available for a party that has suffered some injury, but is not forthcoming in a timely fashion, it is effectively the same as having no redress at all.

By delaying justice, it does 2 things. The person who is on the wrong side of the law is effectively being told that no matter what, its unlikely that he will ever be prosecuted and 2 since the guy who has been wronged would feel that it would have been better for him to take the law in his own hands and meet out the justice.

What we also lack is something like the United States Federal Witness Protection Program. Most high profile cases hence end up having to acquit the alleged victims due to witness turning hostile. Without a dedicated program such as the one run in

US, its faulty to even assume that convictions where the witness testimony is crucial will ever happen since risk of intimidation and other methods of manipulation remain high.

The big question is, Will the government contemplate setting things right or should we wait for another pressure point to activate yet another tragedy?

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