“Thought Leadership” & “Agents of Change”

Today we have a healthy debate upon which qualities are important to bring the disruptive evolution that can change the future of tomorrow.

We have many influential people that brought “Thought Leadership”. Leaders like Galileo who was responsible for the birth of modern science. He met with bitter opposition from philosophers and clerics but still he kept on following his ideas which were later acknowledge by science community.

We also have other example as Apple and Google. These companies brought the “Thought Leadership” by launching products that are not only simple but also provide ultimate user experience to users.

On other hand we have leaders like Sachin Tendulkar who may not have brought “Thought Leadership” but act as “Agents of change”. He brought change in game of cricket. He change the way games are played today. He may not have brought a new technique of shot but refined many shot to elegance that can put the opposite team in pressure.

But the question that come in mind is that can there two qualities be there in a single human being? Leaders like Mahatma Gandhi not only provided the “Thought Leadership” by giving the principle of “Satya” and “Ahinsa” but also act as “Agents of change” by using these principles and bringing the revolution in Indian masses.

Both the qualities “Thought Leadership” & “Agents of change” are important and can bring about the revolution. But when these qualities are blessed in a single mankind then it increases the effect hundred fold.

Chennai.....

I thought I have forgotten this place, Nooooo!!

This weekend I got chance to visit this place again.. and the place bought out some of the memorable moments.. splashing tides hitting the shore.. mad rush to shop for sarees and gold at T-nagar… crowd of spencer plaza.. the famous Punjabi dhaba and its baigan ka bharta…

It also brought some memories of Auto driver asking 100 bucks for 2 kM.. Sweating shirt just after bath…

It has not changed much except central station grown bigger.. a few more malls coming up..

I thought I have forgotten this place, Nooooo!!.. It’s still fresh in my memories..

A nice weekend experience…

1st day at Bangalore

With a short break at home I had to rush to join at MindTree. I was really excited to be back at city through which I started my carrier. At hotel reception I asked for keys to my room and I heard another voice of Chandra “Hey you too are joining MindTree”. Later I meet other guys who are joining as MBA campus batch. Batch is like the bunch, made from selected students from across top B school, IIM A, B, L, K, MDI and XLRI.

I have already heard a lot about the culture and values of MindTree. 1st day boosted this image. The core value of CLASS: Caring, Learning, Achieving, Sharing, and Social Responsibility really made me think if this can be true. One of founder of MindTree, KK from XLRI has really brought the values of XL to Mindtree.

My journey as consultant has just begun and there is long path ahead to travel to achieve the goal.

Harsha Bhogle at IIMA- What is luck

Truly Inspirational

Path through excellence is through runs and not rupees.
Excellence is to run at 100%.

What is Excellence, Luck ?

"Attitude Matter and not Talent".

"Raise yourself to such of level that before any decision god asks you your wish."

Country risk

POLITICAL RISK
The stability, predictability, and transparency of a country's political institutions are important considerations in analyzing the parameters for economic policymaking, including how quickly policy errors are identified and corrected. It is the degree to which politics is contrary to interest and welfare, the frequency of changes in government and any public security concerns. Relations with neighbouring countries are studied. Military threats place a significant burden on fiscal policy.

INCOME AND ECONOMIC STRUCTURE
Lower scores are given to countries with relatively narrow economies, weak or less-developed financial systems, and wide income disparities. Lower rankings may also echo highly leveraged or undeveloped private sectors and large and relatively inefficient public sectors.

Higher scores to countries which are working for economic reforms like the reduction of fiscal imbalances in order to strengthen macroeconomic stability, labour market flexibility, to strengthen the domestic financial sector, and to open trade and services globally generally follow.

ECONOMIC GROWTH PROSPECTS
Important consideration are that a government in a country with a poor or stagnant economy can less readily support public sector debt and withstand unexpected economic and political shocks than government in a country with a growing standard of living and income distribution can more readily.

FISCAL FLEXIBILITY
It is measured by an assessment of government revenue, expenditure, and trade balance. Fiscal trends, along with methods of deficit financing and their inflationary impact are important indicators of country credit quality.

GENERAL GOVERNMENT DEBT BURDEN
A sovereign with an untarnished track record of honouring debt obligations and a strong domestic capital market receive a better score than country with lower debt-to-GDP ratios but higher and more variable debt-servicing burdens.

EXTERNAL LIQUIDITY
Balance-of-payments pressures generally can be traced back to flawed economic policies. A key quantitative measure in this criteria category is gross external financing needs as a percent of current account receipts (CAR) plus usable foreign exchange reserves.

EXTERNAL DEBT BURDEN
The main focus is on trends in the public sector external debt position, the size of the government's contingent liabilities, and the adequacy of foreign-exchange reserves to service both public and private sector foreign currency debt.

Reflection on the World of Finance

World has seen many financial sector turmoil in past, be it Black Friday (September 24, 1869), Wall Street Crash of 1929, Japanese asset price bubble, 1997 Asian Financial Crisis, 2008 Financial Crisis, or the latest Dubai debt crisis. Always financial sector turmoil has triggered a re-examination of the existing theories and metrics about the financial sector developments of the past. Questions are being asked and answers being sought to some of the key issues regarding leverage, transparency, and liquidity underlying at the heart of the crisis.

What the current crisis has done is to question the very fundamentals of the entire financial framework. Instead of looking at the long term perspective markets are driven more by the myopic behaviour such as greed and fear. There seems to be a high correlation in all assets class during the crash. Each crash has seen the herd behaviour driven by sentiments.

We live in age of turbulence and it is becoming a routine today. Today changes are accelerating and surprises are increasing, both unpleasant and pleasant ones. There are many risk which are causes of these turbulences and together they multi fold to become even large. One has to move fast with these changes by trying to understand them. One has to understand the risk like

* Country Risk: A collection of risk associated with investing in foreign countries.
* Systemic risk: Risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system.
* Credit Risk: A Risk of counter party failure.
* Market risk: A small possibility of losing large.
* Liquidity risk: A risk growing from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.
* Risk due to lack of transparency.
* Concentration risk: Risk of loss arising from heavy exposure of one asset class.

Due to all these the importance of containing risk which is under the control has been underlined. There is need for some reforms in financial sector to prevent such turmoil.

* Financial market reform measure must be headed by an assessment of the resultant leverage for the system in quantifiable terms.
* It is also necessary to understand the substance of a product and not merely the nomenclature.
* People should take risk on the basis of risk of unknown probability rather than known probability.
* There is a need for strengthening of capital adequacy norms.
* Avoid creating moral hazards which give speculators no incentive to avoid excessive risk.
* There is critical role of governments to provide good governance of banking institutions and a reliable legal and judicial environment