Tuesday, December 29, 2009

Cricket's Caliph

Sachin Tendulkar comes to the ground in headphones. He might make a racket in the privacy of the bus, who knows, but when he steps out he is behind headphones. Waiting to bat he is behind his helmet. The arena is swinging already to the chant, "Sachin, Sachin", the first long and pleading, the second urgent and demanding, but Tendulkar is oblivious, behind his helmet.

At the fall of the second wicket, that familiar traitorous roar goes round the stadium, at which point Tendulkar walks his slow walk out,golden in the sun, bat tucked under the elbow. The gloves he will only begin to wear when he approaches the infield, to busy himself against distraction from the opposition. Before Tendulkar has even taken
guard, you know that his quest is equilibrium.

As he bats his effort is compared in real time with earlier ones. Tendulkar provides his own context. The conditions, the bowling attack, his tempo, his very vibe, is assessed against an innings played before. Today he reminds me of the time when … Why isn't he ….What's wrong with him!

If the strokes are flowing, spectators feel something beyond pleasure.They feel something like gratitude. The silence that greets his dismissal is about the loudest sound in sport. With Tendulkar the discussion is not how he got out, but why. Susceptible to left-arm spin? To the inswinger? To the big occasion? The issue is not about whether it was good or not, but where does it rank? A Tendulkar innings is never over when it is over. It is simply a basis for
negotiation. He might be behind headphones or helmet, but outside people are talking, shouting, fighting, conceding, bargaining, waiting. He is a national habit.

But Tendulkar goes on. This is his achievement, to live the life of Tendulkar. To occupy the space where fame and accomplishment intersect, akin to the concentrated spot under a magnifying glass trained in the sun, and remain unburnt.

"Sachin is God" is the popular analogy. Yet god may smile as disease, fire, flood and Sreesanth visit the earth, and expect no fall in stock. For Tendulkar the margin for error is rather less. The late Naren Tamhane was merely setting out the expectation for a career when he remarked as selector, "Gentlemen, Tendulkar never fails." The question was whether to pick the boy to face Imran, Wasim, Waqar and Qadir in Pakistan. Tendulkar was then 16.

Sixteen and so ready that precocity is too mild a word. He made refinements, of course, but the marvel of Tendulkar is that he was a finished thing almost as soon as began playing.

The maidans of Bombay are dotted with tots six or seven years old turning out for their coaching classes. But till the age of 11, Tendulkar had not played with a cricket ball. It had been tennis- or rubber-ball games at Sahitya Sahwas, the writers' co-operative housing society where he grew up, the youngest of four cricket-mad siblings by a distance. The circumstances were helpful. In his colony friends he had playmates, and from his siblings, Ajit in particular, one above Sachin but older by 11 years, he had mentorship.

It was Ajit who took him to Ramakant Achrekar, and the venerable coach inquired if the boy was accustomed to playing with a "season ball" as it is known in India. The answer did not matter. Once he had a look at him, Achrekar slotted him at No. 4, a position he would occupy almost unbroken through his first-class career. In his first two matches under Achrekar Sir, he made zero and zero.

Memory obscures telling details in the dizzying rise thereafter.Everybody remembers the 326 not out in the 664-run gig with Kambli.Few remember the 346 not out in the following game, the trophy final.Everyone knows the centuries on debut in the Ranji Trophy and Irani Trophy at 15 and 16. Few know that he got them in the face of a collapse in the first instance and virtually out of partners in the second. Everyone knows his nose was bloodied by Waqar Younis in that first Test series, upon which he waved away assistance. Few remember that he struck the next ball for four.

This was Tendulkar five years after he'd first handled a cricket ball.

Genius, they say, is infinite patience. But it is first of all an intuitive grasp of something beyond the scope of will - or, for that matter, skill. In sportspersons it is a freakishness of the motor senses, even a kind of ESP.

The wonder is that in the years between he has done nothing to sully his innocence, nothing to deaden the impish joy, nothing to disrupt the infinite patience or damage the immaculate equilibrium through the riot of his life and career

Tendulkar's genius can be glimpsed without him actually holding a bat.Not Garry Sobers' equal with the ball, he is nevertheless possessed of a similar versatility. He swings it both ways, a talent that eludes several specialists. He not only rips big legbreaks but also lands his googlies right, a task beyond some wrist spinners. Naturally he also
bowls offspin, usually to left-handers and sometimes during a spell of wrist spin. In the field he mans the slips as capably as he does deep third man, and does both in a single one-dayer. Playing table tennis he is ambidextrous. By all accounts he is a brilliant, if hair-raising, driver. He is a champion Snake player on the cellphone, according to Harbhajan Singh, whom he also taught a spin variation.

His batting is of a sophistication that defies generalisation. He can be destroyer or preserver. Observers have tried to graph these phases into a career progression. But it is ultimately a futile quest for Tendulkar's calibrations are too minute and too many to obey compartmentalisation. Given conditions, given his fitness, his state of mind, he might put away a certain shot altogether, and one thinks it is a part of his game that has died, till he pulls it out again when the time is right, sometimes years afterwards. Let alone a career, in the space of a single session he can, according to the state of the rough or the wind or the rhythm of a particular bowler,go from predatorial to dead bat or vice versa.

Nothing frustrates Indians as much as quiet periods from Tendulkar, and indeed often they are self-defeating. But outsiders have no access to his thoughts. However eccentric, they are based on a heightened cricket logic rather than mood. Moods are irrelevant to Tendulkar. Brian Lara or Mohammad Azharuddin might be stirred into artistic rage.
Tendulkar is a servant of the game. He does not play out of indignation nor for indulgence. His aim is not domination but runs. It is the nature of his genius.

The genius still doesn't explain the cricket world's enchantment with Tendulkar. Ricky Ponting and Jacques Kallis are arguably not lesser cricketers than he, but have nothing like his following or presence. Among contemporaries only Shane Warne could draw an entire stadium's energy towards himself, but then Warne worked elaborately towards this
end. Tendulkar on the pitch is as uncalculated as Warne was deliberate. Warne worked the moments before each delivery like an emcee at a title fight. Tendulkar goes through a series of ungainly nods and crotch adjustments. Batting, his movements are neither flamboyant nor languid; they are contained, efficient. Utility is his
concern. Having hit the crispest shot between the fielders he can still be found scurrying down the wicket, just in case.

Likewise, outside the pitch nothing he does calls up attention. In this he is not unusual for the times. It has been, proved by exceptions of course, the era of the undemonstrative champion. Ali,Connors, McEnroe, Maradona have given way to Sampras, Woods, Zidane,Federer, who must contend with the madness of modern media and
sanitisation of corporate obligation.

Maybe Tendulkar the superstar, like Tendulkar the cricketer, was formed at inception. Then, as now, he is darling. He wears the big McEnroe-inspired curls of his youth in a short crop, but still possesses the cherub's smile and twinkle. Perhaps uniquely, he is granted not the sportstar's indulgence of perma-adolescence but that of perma-childhood. A man-child on the field: maybe it is the dichotomy that is winning. The wonder is that in the years between he
has done nothing to sully his innocence, nothing to deaden the impish joy, nothing to disrupt the infinite patience or damage the immaculate equilibrium through the riot of his life and career.

An awesome tribute written by Rahul B of Cricinfo.com

Monday, December 28, 2009

What it takes to be great?

What makes Tiger Woods great? What made Chairman Warren Buffett the world's premier investor? We think we know: Each was a natural who came into the world with a gift for doing exactly what he ended up doing. As Buffett told Fortune not long ago, he was "wired at birth to allocate capital." It's a one-in-a-million thing. You've got it - or you don't.

Well, folks, it's not so simple. For one thing, you do not possess a natural gift for a certain job, because targeted natural gifts don't exist. (Sorry, Warren.) You are not a born CEO or investor or chess grandmaster. You will achieve greatness only through an enormous amount of hard work over many years. And not just any hard work, but work of a particular type that's demanding and painful.

Buffett, for instance, is famed for his discipline and the hours he spends studying financial statements of potential investment targets. The good news is that your lack of a natural gift is irrelevant - talent has little or nothing to do with greatness. You can make yourself into any number of things, and you can even make yourself great.

Scientific experts are producing remarkably consistent findings across a wide array of fields. Understand that talent doesn't mean intelligence, motivation or personality traits. It's an innate ability to do some specific activity especially well. British-based researchers Michael J. Howe, Jane W. Davidson and John A. Sluboda conclude in an extensive study, "The evidence we have surveyed ... does not support the [notion that] excelling is a consequence of possessing innate gifts."

To see how the researchers could reach such a conclusion, consider the problem they were trying to solve. In virtually every field of endeavor, most people learn quickly at first, then more slowly and then stop developing completely. Yet a few do improve for years and even decades, and go on to greatness.

The irresistible question - the "fundamental challenge" for researchers in this field, says the most prominent of them, professor K. Anders Ericsson of Florida State University - is, Why? How are certain people able to go on improving? The answers begin with consistent observations about great performers in many fields.

Scientists worldwide have conducted scores of studies since the 1993 publication of a landmark paper by Ericsson and two colleagues, many focusing on sports, music and chess, in which performance is relatively easy to measure and plot over time. But plenty of additional studies have also examined other fields, including business.

No substitute for hard work

The first major conclusion is that nobody is great without work. It's nice to believe that if you find the field where you're naturally gifted, you'll be great from day one, but it doesn't happen. There's no evidence of high-level performance without experience or practice.Reinforcing that no-free-lunch finding is vast evidence that even the most accomplished people need around ten years of hard work before becoming world-class, a pattern so well established researchers call it the ten-year rule.

What about Bobby Fischer, who became a chess grandmaster at 16? Turns out the rule holds: He'd had nine years of intensive study. And as John Horn of the University of Southern California and Hiromi Masunaga of California State University observe, "The ten-year rule represents a very rough estimate, and most researchers regard it as a minimum, not an average." In many fields (music, literature) elite performers need 20 or 30 years' experience before hitting their zenith.

So greatness isn't handed to anyone; it requires a lot of hard work. Yet that isn't enough, since many people work hard for decades without approaching greatness or even getting significantly better. What's missing?

Practice makes perfect

The best people in any field are those who devote the most hours to what the researchers call "deliberate practice." It's activity that's explicitly intended to improve performance, that reaches for objectives just beyond one's level of competence, provides feedback on results and involves high levels of repetition.

For example: Simply hitting a bucket of balls is not deliberate practice, which is why most golfers don't get better. Hitting an eight-iron 300 times with a goal of leaving the ball within 20 feet of the pin 80 percent of the time, continually observing results and making appropriate adjustments, and doing that for hours every day - that's deliberate practice.

Consistency is crucial. As Ericsson notes, "Elite performers in many diverse domains have been found to practice, on the average, roughly the same amount every day, including weekends."

Evidence crosses a remarkable range of fields. In a study of 20-year-old violinists by Ericsson and colleagues, the best group (judged by conservatory teachers) averaged 10,000 hours of deliberate practice over their lives; the next-best averaged 7,500 hours; and the next, 5,000. It's the same story in surgery, insurance sales, and virtually every sport. More deliberate practice equals better performance. Tons of it equals great performance.

The skeptics

Not all researchers are totally onboard with the myth-of-talent hypothesis, though their objections go to its edges rather than its center. For one thing, there are the intangibles. Two athletes might work equally hard, but what explains the ability of New England Patriots quarterback Tom Brady to perform at a higher level in the last two minutes of a game?

Researchers also note, for example, child prodigies who could speak, read or play music at an unusually early age. But on investigation those cases generally include highly involved parents. And many prodigies do not go on to greatness in their early field, while great performers include many who showed no special early aptitude.

Certainly some important traits are partly inherited, such as physical size and particular measures of intelligence, but those influence what a person doesn't do more than what he does; a five-footer will never be an NFL lineman, and a seven-footer will never be an Olympic gymnast. Even those restrictions are less severe than you'd expect: Ericsson notes, "Some international chess masters have IQs in the 90s." The more research that's done, the more solid the deliberate-practice model becomes.

Real-world examples

All this scholarly research is simply evidence for what great performers have been showing us for years. To take a handful of examples: Winston Churchill, one of the 20th century's greatest orators, practiced his speeches compulsively. Vladimir Horowitz supposedly said, "If I don't practice for a day, I know it. If I don't practice for two days, my wife knows it. If I don't practice for three days, the world knows it." He was certainly a demon practicer, but the same quote has been attributed to world-class musicians like Ignace Paderewski and Luciano Pavarotti.

Many great athletes are legendary for the brutal discipline of their practice routines. In basketball, Michael Jordan practiced intensely beyond the already punishing team practices. (Had Jordan possessed some mammoth natural gift specifically for basketball, it seems unlikely he'd have been cut from his high school team.)

In football, all-time-great receiver Jerry Rice - passed up by 15 teams because they considered him too slow - practiced so hard that other players would get sick trying to keep up.

Tiger Woods is a textbook example of what the research shows. Because his father introduced him to golf at an extremely early age - 18 months - and encouraged him to practice intensively, Woods had racked up at least 15 years of practice by the time he became the youngest-ever winner of the U.S. Amateur Championship, at age 18. Also in line with the findings, he has never stopped trying to improve, devoting many hours a day to conditioning and practice, even remaking his swing twice because that's what it took to get even better.

The business side

The evidence, scientific as well as anecdotal, seems overwhelmingly in favor of deliberate practice as the source of great performance. Just one problem: How do you practice business? Many elements of business, in fact, are directly practicable. Presenting, negotiating, delivering evaluations, deciphering financial statements - you can practice them all.

Still, they aren't the essence of great managerial performance. That requires making judgments and decisions with imperfect information in an uncertain environment, interacting with people, seeking information - can you practice those things too? You can, though not in the way you would practice a Chopinetude.

Instead, it's all about how you do what you're already doing - you create the practice in your work, which requires a few critical changes. The first is going at any task with a new goal: Instead of merely trying to get it done, you aim to get better at it. Report writing involves finding information, analyzing it and presenting it - each an improvable skill. Chairing a board meeting requires understanding the company's strategy in the deepest way, forming a coherent view of coming market changes and setting a tone for the discussion. Anything that anyone does at work, from the most basic task to the most exalted, is an improvable skill.

Adopting a new mindset

Armed with that mindset, people go at a job in a new way. Research shows they process information more deeply and retain it longer. They want more information on what they're doing and seek other perspectives. They adopt a longer-term point of view. In the activity itself, the mindset persists. You aren't just doing the job, you're explicitly trying to get better at it in the larger sense.

Again, research shows that this difference in mental approach is vital. For example, when amateur singers take a singing lesson, they experience it as fun, a release of tension. But for professional singers, it's the opposite: They increase their concentration and focus on improving their performance during the lesson. Same activity, different mindset.

Feedback is crucial, and getting it should be no problem in business. Yet most people don't seek it; they just wait for it, half hoping it won't come. Without it, as Goldman Sachs leadership-development chief Steve Kerr says, "it's as if you're bowling through a curtain that comes down to knee level. If you don't know how successful you are, two things happen: One, you don't get any better, and two, you stop caring." In some companies, like General Electric, frequent feedback is part of the culture. If you aren't lucky enough to get that, seek it out.

Be the ball

Through the whole process, one of your goals is to build what the researchers call "mental models of your business" - pictures of how the elements fit together and influence one another. The more you work on it, the larger your mental models will become and the better your performance will grow.

Andy Grove could keep a model of a whole world-changing technology industry in his head and adapt Intel as needed. Bill Gates, Microsoft's founder, had the same knack: He could see at the dawn of the PC that his goal of a computer on every desk was realistic and would create an unimaginably large market. John D. Rockefeller, too, saw ahead when the world-changing new industry was oil. Napoleon was perhaps the greatest ever. He could not only hold all the elements of a vast battle in his mind but, more important, could also respond quickly when they shifted in unexpected ways.

That's a lot to focus on for the benefits of deliberate practice - and worthless without one more requirement: Do it regularly, not sporadically.


For most people, work is hard enough without pushing even harder. Those extra steps are so difficult and painful they almost never get done. That's the way it must be. If great performance were easy, it wouldn't be rare. Which leads to possibly the deepest question about greatness? While experts understand an enormous amount about the behavior that produces great performance, they understand very little about where that behavior comes from.

The authors of one study conclude, "We still do not know which factors encourage individuals to engage in deliberate practice." Or as University of Michigan business school professor Noel Tichy puts it after 30 years of working with managers, "Some people are much more motivated than others, and that's the existential question I cannot answer - why."

The critical reality is that we are not hostage to some naturally granted level of talent. We can make ourselves what we will. Strangely, that idea is not popular. People hate abandoning the notion that they would coast to fame and riches if they found their talent. But that view is tragically constraining, because when they hit life's inevitable bumps in the road, they conclude that they just aren't gifted and give up.

Maybe we can't expect most people to achieve greatness. It's just too demanding. But the striking, liberating news is that greatness isn't reserved for a preordained few. It is available to you and to everyone

Excepts from an article from Fortune Magazine

Wednesday, December 16, 2009

Novel initiative to check bogus voting during TN by Election

Naresh Gupta

CHENNAI: For the first time in the State, images of all voters, captured on web cameras at the time of polling, will be compared with their images available in the central server’s database of electoral photo rolls.

This will be done in the Tiruchendur and Vandavasi Assembly constituencies, where by-elections will be held on Saturday.

The comparison will be carried out by the control room set up at the office of the Chief Electoral Officer, Naresh Gupta, CEO, said, adding that any discrepancies found would be immediately acted upon.

The entire poll proceedings at polling stations of the two constituencies would be recorded live. Tiruchendur and Vandavasi accounted for 196 stations and 217 stations respectively.

After conducting a video-conferencing session with the District Election Officers of Tiruvannamalai and Tuticorin districts, Mr. Gupta told reporters that polling officials concerned should ensure entries in registers regarding production of documents for identification.

Apart from the Electors’ Photo Identity Cards, 13 documents such as passport, driving licence, Permanent Account Number card, issued by the Income Tax department, and Health Insurance Scheme Smart Card, issued by the Union Labour Ministry up to October 31, 2009, would be accepted.

Asked why family cards issued by the State Food and Civil Supplies department were not accepted for identification, Mr. Gupta replied that the Minister concerned had gone on record in the Assembly that surplus cards were in circulation.

The State had a high degree of coverage of EPIC, he said, wondering why there should be insistence on family cards.

In August, when the by-elections were held in five constituencies, there were no problems on this count.

Regarding complaints of distribution of money to voters, Mr. Gupta acknowledged that it was difficult to pursue such cases.

He had been getting a number of complaints such as distribution of dhotis or saris, exchange of tokens for liquor and recharge of mobile phone connections.

As for the distribution of money or materials, those who were indulging in such activities disappeared from the scene as soon as government officials went to the spot.

Security arrangements

Totally, 11 companies, five from the Central Reserve Police Force and six from the Karnataka State Reserve Police, had been ordered for deployment.

Already, six and a half companies had arrived in Tiruchendur and four companies in Vandavasi, he said.

Saturday, July 18, 2009

Jai Maha-Pav

The Shivaji Flavour

The Shiv Sena has launched its own brand of Mumbai’s favourite street food, under the brand name Shiv Vada Pav, after the Bombay HC on Friday disposed of a petition challenging the Sena’s plan.

They will be sold through 125 special carts all over the city.

An estimated 2,00,000 vada pavs are sold every day in Mumbai, by 7,000 vada pav sellers
The Congress, having lost this culinary battle, is now contemplating appropriating another popular Maharashtrian snack, and selling it as ‘Congress Kanda Pohe’.

Take a mound of boiled potato sexed up with green chillies, coriander, garlic, turmeric and curry powder. Knead it well, dip a palm-sized ball in the standard besan-bhajiya coating, and slide it into bubbling hot oil. Then, flatten this humble vada ever so lightly to let out the steam, layer both the inner sides of the equally humble pav with butter, green chutney and perhaps tamarind chutney too, and slip the vada in between. That’s the vada pav, that’s all there is to it...honestly!

Now, there’s an added ingredient; it goes by the colour saffron. The vada pav, under the command of the Shiv Sena-run Brihanmumbai Municipal Corporation (BMC), has been endowed with select ingredients from history, culture and politics.

Indisputably Maharashtrian by birth, but happily cosmopolitan by acceptance, the vada pav is now Shiv vada pav. At least, that’s how the Shiv Sena has rechristened it, in the process appropriating a tiny portion of culture. The BMC, where a bitter battle ensued for months between Sena corporators—who bulldozed their way through meetings—and the Congress which tried every trick in the book to stall the politically branded vada pav, is now preparing to issue 125 licenses for Shiv vada pav handcarts.

The licensing process was held up by a PIL in the Bombay High Court last year that challenged the Shiv Sena’s dream on grounds of hygiene, occupation of pavement space, and Supreme Court orders on street food and no-hawking zones. But with the HC having disposed of the petition last Friday, a couple of Shiv vada pav stall prototypes have already appeared at Shivaji Park, not far from Sena Bhavan. The vada and pav are handled with gloves, the oil looks less rancid than at streetcorner stalls, and the vada pav-wala is strictly Maharashtrian.

Actually, a Shiv Sainik. Through the latter half of 2008, the party, through its Vada Pav Vikreta Sangh, held a festival inviting 27 sellers to woo Mumbaikars with their individual recipes. One was chosen as the ideal vada pav, in taste, aroma and satisfaction. That recipe will now be the standard one for all the 125 handcarts.

Sena executive president Uddhav Thackeray believes “this is a step towards globalisation of Maharashtrian food and employment of Maharashtrian youth”. The NCP state president R.R. Patil, on the other hand, was offended—branding vada pav after Chhatrapati Shivaji would be “an insult to the great emperor”, he declared. He obviously overlooked the fact that Shivaji beedi and Sambhaji beedi are the most popular beedi brands in the state. And, the Congress, having lost the culinary battle, hit upon the idea of branding kanda pohe, an onion and puffed rice snack that’s as Maharashtrian and popular as the vada pav, after itself. “We are not against the vada pav, we are against the Sena making it theirs,” commented a veteran Congress leader.

Over some eight decades, the vada pav has been the staple, affordable, calorie-unconscious, grab-it-and-go streetcorner meal across Mumbai. Last known, an estimated 2,00,000 vada pavs are served daily to Mumbaikars—from suited executives in business districts to rickshaw drivers. Some 7,000 vada pav-walas prepare them on the spot, at mobile kiosks that often spill over to pavements and roads. And yes, Mumbaikars across education, income and class have their own favourite vada pav-wala.

You could say vada pav is something of a religion in Mumbai, an intensely personal one at that. That’s why branding was a question mark until the Jumbo King chain challenged the traditional vada pav-wala eight years ago. Says Dheeraj Gupta, Jumbo King co-owner, “Shiv vada pav is welcome, there’s enough place in the market for three more branded players”. The chain, through pricing policies, caters to the higher end of the vada pav worshippers.

Its prices range from Rs 6 to Rs 25, while a street stall will give you the most delicious one for around Rs 7. More recently, the poor man’s meal was elevated to an exotic culinary experience during the annual Mumbai festival. The maida pav was replaced by a diet-friendly wholewheat bun, the potato was ‘carbed down’ with millet powder, spices were adjusted to sophisticated palates, and of course the gloves were in place. But a vada pav junkie would have scoffed at this five-star version.

The Shiv vada pav marks yet another attempt by the Sena to play food politics. Veteran ad-man Prahlad Kakkar observes, “The Shiv Sena started zunka bhakar stalls to offer wholesome food to poor Mumbaikars ten years ago, but zunka bhakar and poor man were soon forgotten. The Sena’s attempts fizzle out because they are insincere about it, and they are goons”. He has a point there. The zunka bhakar stalls, occupying prime space on pavements, quietly transformed into “Chineez” food stalls, many run by Shiv Sainiks.

The vada pav certainly did not need the Shiv Sena’s patronage to boost its popularity; it’s another matter that the Sena, having added its chauvinistic flavour to this typically Maharashtrian snack, is now counting on it to boost its political fortunes.


Article written by Smruthi Koppikar - Outlook India Magazine.

Monday, May 11, 2009

Berkshire Hathway- 2009 Annual Meeting Questions

I attended the Berkshire Hathaway Annual shareholder meeting last Saturday and had a chance to listen to the master investor for the second time. The discourse was not just entertaining but superlatively educative.

Probably sensing the mood of the crowd and the number of questions directed at few of his all time great investments Mr. Buffett turned Socratic and offered a firsthand view of the fundamental theses he employs while picking stocks. I would like to share with you some of the best questions that came across during the meet and the master’s responses for those.

-- - - - - -
You have often commented about the ineffectiveness of curriculums that impart financial knowledge, Can you elaborate?

In my opinion- “The Efficient Market Theory” doctrine has become highly fashionable, almost like a holy scripture in academic circles. Since the 70’s the theory has been propagating that analyzing stocks is useless because all public information about them was appropriately reflected in their prices. In other words the market always knew everything.

As a corollary, the professors who taught EMT said that someone who threw dart at the stock table could select a stock portfolio having prospects just as good as once selected by the brightest, most hard working security analyst. Amazingly, EMT was embraced not only academics, but by many investment professionals and corporate managers as well.

Observing correctly that the market was frequently efficient, they went on to conclude incorrectly that it was always efficient. The difference between these propositions is night and day.

In a way we at Berkshire are enormously indebted to those academics: what could be more advantageous in an intellectual contest – whether it be chess, bridge or stock selection- than to have opponents who have been taught than thinking is a waste of energy?

In the last few months we saw one of the worst crashes and in the last few weeks we saw one of the smartest recoveries in the equity market, how do we predict it?

Occasional outbreaks of those two super contagious diseases fear and greed will forever occur in the investment community. The timing though would be un-predictable. And the market aberrations produced by them will be equally unpredictable, both as to duration and degree. Therefore, it is futile to anticipate the arrival departure of either of the aforementioned disease. Our goal at Berkshire is modest; we simply attempt to be greedy when others are fearful and fearful when others are greedy.

Berkshire owns 80 odd firms ranging from GEICO to Dairy Queen to Benjamin Moore paint, what is the main mantra at Berkshire to acquire a firm?

Nothing as such. Of all the activities at Berkshire, the most exhilarating for Charlie and me is the acquisition of a business with excellent economic characteristics and a management that we like trust and admire. Such acquisitions are not easy to make but we look for them constantly. In the search we adopt the same attitude one might find appropriate in looking for a spouse. It pays to be active, interested, and open minded, but it does not pay to be in a hurry.

In the past, I’ve observed that many acquisition hungry managers were apparently mesmerized by their childhood reading of the story about the frog kissing princess. Remembering her success, they pay dearly for the right to kiss corporate toads, expecting wondrous transfigurations. In my early days as a manager, I too dated a few toads. They were cheap dates, I kissed and they croaked.

Since then we have adopted a strategy to seldom buy into companies that are turn around players, because turnarounds seldom turn. Unless until there is a very compelling reason that the market had overlooked. We try not to fall into the generally accepted conventions of acquisitions or mergers and do not practice the same rules that other acquirers do to buy into a firm.
When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact. You should invest in a business that even a fool can run, because someday a fool will. Never invest in a business you cannot understand. I learnt it the hard way.

What is the way out- How can the real estate crisis be resolved?

Well, unfortunately there is no silver bullet to quickly get out of something that took us years to get into. With conservative estimates the US market still has 3 years worth of the real estate still unsold. Without that moving it is tough to estimate and predict the upward swing.

Are you satisfied with the government’s actions to jumpstart the economy?

Yes and No. The government has realized the gravity of the situation and has done all the necessary things. But serious situations demand seriously unified response. And there has not been any unified response from our elected officials. What’s happening in the financial world right now is nothing less than an Economic Pearl Harbor. And in 1941 after the Pearl Harbor attack we did not create 4000 odd ear marks on the declaration of war.

Moody’s the Credit rating agency recently downgraded your Aaa rating to Aa2? As a major shareholder of Moody’s, did Berkshire try to present its case?

No we did not. Even as a major shareholder or as part of the Board in some firms we do not have a decisive say in the firm’s major decisions. If we did had a say many of the Derivatives would not have got a high rating from Moody’s in the first place.

Berkshire is the holding company for nearly 80 firms and many of the firms might be valued far more if they were spun off, would you ever decide to spinoff any of the firms to generate extra cash? In fact Berkshire does not even have contracts with the previous owners that should make things easier.

We would never do that. There might not be any visible synergies between the firms Berkshire holds, but all the firms were built brick upon brick by its owners with lot of passion. There is lot of history, and personal relationship attached with each of our firms and we are very proud of the tradition each of the firms bring to Berkshire.

Besides, before integrating the firms with Berkshire, we always try to also bring in the owners as Executives as they are the best people to lead the firms they nurtured. We only buy to keep. We like to think of Berkshire as the New York Metropolitan Museum, we don’t throw away things just because they are old, or sell things because they would fetch us lot of money from a private collector.

It is true that we don’t create contracts when we buy a firm. We do not want relationships based on contracts. Just imagine, if we buy and they don’t deliver, no contract can save us. Our contracts are based on seamless web of trust, the Hollywood model wont work.

Our country is witnessing one of the worst economic slumps, how optimistic are you about the future?

United States took its first census in the year 1790; we were a little over 3.5 million people then. Someone told me earlier today that in this stadium right now there are 35,000 odd people. So we as a group are 1 % of the 1st census. Just 100 such groups fought, created and shaped a democratic, economic and social powerhouse called the United States. Just imagine, they did not have the technology, defense, imagination that we today have at our disposal but only had vision about how their country needs to be.

In the last century alone, we fought 2 major wars, had a crippling depression, oil shock, had lots of social and political unrest and still managed to increase the standard of living by 7:1 of an average American. The ingredients that have sculpted this country always unleash a human potential within us that generates superlative results especially when we are down. Take it from me; we will be better off 10 years from now than we are now, we will much better off 20 years from now than we would be 10 years from now.

You have always invested in firms that have a sustainable business advantage. Berkshire’s major advantage over competition is the leadership- you and Mr.Munger provide and you are not sustainable. Would you invest in Berkshire if you were an outsider?

However complimentary it might sound, unfortunately we are not the competitive advantage of Berkshire or any of its subsidiaries. We do provide guidance’s and help shape the vision but we don’t keep our managers on a tight leash to extract results. We do not endorse the quarter to quarter stupidity employed in many other firms that always expect better results each quarter irrespective of ground reality.

I have tried to quiz a few CEO’s in the past about the list of things they might do if the firm they lead, is owned by them. They have always managed to come up with a laundry list of things they would like to do.

We at Berkshire have always made sure that our executives never need to have a laundry list of things to do if they own the firm. We have encouraged our leaders to not allow themselves to be weighed down by the difficulties of the present but to be rather focused on the possibilities of the future.

We rather always encourage them to behave like owners and to motivate them to do so we have designed compensations according to their ambitions and capabilities. We realized pretty early that Managers eager to bet heavily on their abilities usually have plenty of ability to bet on.

The market has seen some huge changes in terms of valuation in the last few weeks; do you think the macroeconomic factors or the Fed’s policies might have signaled the bottom of this slump in March?

We do not know. We never make predictions about the market’s lows or highs nor do we care about the macroeconomic factors. We would buy a stock or business if it is trading at a discount to its intrinsic value and if the business model is predictable and simple. We just try to buy a stable, steady business that makes products, people never stop needing, recession or otherwise. There is no point in deploying high end valuation methods that takes into consideration interest rates and inflationary predictions if the business we are interested in is extremely overpriced.
Picking bottom is not our game, pricing and valuing is our game.

You have always been a critic of waste, how do you view the value of advertisement and brand building?

I think it was Joseph A. Campbell when asked about the huge expenditure on advertisement commented that- “On advertisements, we waste half of what we spend, Iam not sure which half”.

Advertisement is important and effective only when there is sync between the product’s potential and what the company thinks that products potential is. It took decades for Coca-Cola to develop an ad strategy and a brand exercise to take Coke to where it is now. I do not think that RC Cola can ever help a customer visualize an image of happiness or fun at a beach with a can of RC Cola!

I understand Brand building is a promise; we invest millions every year at GEICO advertising its core competence, which is low cost. And this year during a recession time our customer base has swelled at never before levels, mainly due to the brand recall of GEICO with low cost.

Iam a PHD candidate in Economics and over the years I have tried to develop an understanding of how most of the industries function apart from studying about the financial aspects of running and investing in businesses. What else do I need to know to be successful?

Investment success is not a matter of how much you know but how realistically you define what you don’t know and avoiding it how much ever irresistible that might be.

Investing is not about IQ it is about temperament. Avoid doing things that land other people in trouble. If you have read financial history, you would have noticed that most the crashes and crises occurred due to un-believable levels of greed and over confidence of people about their abilities. To make money that they dint have and dint need people essentially risked things that they did have and did need. That’s foolish. Today so many banks are on the brink of failure and so many homes are on foreclosure because the owners always thought the upward cycle would never end and risked things that were important to them and leveraged on it.

History has always taught us that if you risk something that is important to you for something that is unimportant to you, it is unwise.

--- ---- ---- -----
Some of his responses to questions were class act, I could not blog many of those questions mainly because I was listening to Mr. Buffett, spell bound.
His sense of timing is exemplary and legendary not just in his witty communique but mainly in his investment style. This year marked a set of historical investments from him when he invested a few billions in GE, Goldman Sachs, companies that he has always admired but never invested in. His sense of patience to wait when everyone was partying and throwing away huge amount of money on in-consequential deals, helped him in gaining huge pounds of flesh both from Goldman and GE in terms of value for his shareholders.
In essence, rather than blowing its ammunition hunting squirrels a few years ago, Berkshire was able to shoot the proverbial elephants walking by. With that he practiced exactly what he preaches-
Never count on making a good sale, have the purchase price to be so attractive that even a mediocre sale would give you great results.
Ravi Bhaskaran

Friday, May 01, 2009


Saw the 100th day press conference of Pres.Obama on TV a couple of days back. No different from any other press briefings by the President so far, quitely impressive with no fanfare or fuss.

One statement that stood out during the conference was:

Upon asked whats humbling about the Presidency, the Presidents response was - "Things are never as bad as they seem nor as good as they are expected to be".

As observed by Jon Meacham the editor of the Newsweek - "Obama seems to have a firm grasp of the psychological and substantive challenges of the presidency. Case in point, his 2008 campaign proved that he possesses a superior sense of timing about how to balance euphoria and disappointments."

As written in the book- Khrushchev by William Taubman on former USSR President, Leadership in war is mostly about concrete tactical and strategic decisions. Leadership in a peacetime crisis involves making the right calls on policy—but at bottom, it's dependent on a subtle understanding of how to make people feel better so that they invest in the future.

The people need a vision. They need to see that the leader is on their side. And like seriously ill patients, they need a clear yet flexible action plan that takes them beyond blind optimism to well-founded hope.

Mr. Obama seems to have a good understanding of the psychodynamics of World and American politics and he is able to communicate very clearly his vision, atleast so far.

Monday, April 27, 2009

The Omaha Odyssey

Its that time of the year again when financial wizards as well as amateurs like me make their annual piligrimage to Omaha, NE. I plan to make my second trip to the abode of Mr.B later this week and I thought it was worthwhile to dust, read and post a 12 month old writeup I wrote just after hearing to Mr. Warren Buffett last May.

The wisdom and common sense he effaced during the meeting are attributes every investor must imbibe. More so during a "Downturn" year.


I had the good fortune to attend the 2008- Berkshire Hathaway Shareholders meeting at Omaha, Nebraska last week and had a once in a life time oppurtunity to speak to Mr.Buffett.

It was a wonderful experience listening to and learning from the
Master Investor himself and all I can say is that he stands alone as
the reigning deity of financial world's Mt Olympus!

Having read about him, observed him and worshipped him for a few years
now, I think it is reasonable to believe that this guy is exactly what
he seems: a plain-speaking, tee totaling man of uncrackable integrity
who works really, really hard and sticks to his investing and
management principles through boom and bust which makes him a freak of
nature since he is above normal human tendencies.

The questions the shareholders threw at him for 7 continuous hours
ranged from finances, life, religion, career, politics, sports and
several other streams. And he answered everything with a Zen like calm
and confidence.

I tried to take some notes and here are some of the best questions and
answers which came across during the conversation between we mortals
and God.

Even if you are least bothered about investments and finances, I
insist, Pl read on.



What does it take to become a successful investor? Brilliance or Smartness?

Neither, Success in investing doesn't correlate with I.Q. Once you
have ordinary intelligence, what you need is the temperament to
control the urges that gets other people into trouble in investing.

When do you deicide to invest in a firm?

The best thing that happens to us is when a great company gets into
temporary trouble. We want to buy them when they're on the operating
table. (Mr. Buffett bought Coke when it had its biggest fiasco after
launching New Coke; he bought American Express when it went through a
loss making phase in the early 60's)

What do you look for in people when they come to sell their firms to you?

I don't look for the usual credentials such as an MBA, a pedigree
(Harvard, Wharton), or cash reserves or market cap of their firm. What
I look for is just a passion in their eyes; I think that's the key. A
person who is hungry will always do well. I prefer it when people even
after selling stay on and work for the firm; they are people who can't
wait to get off their bed to get to work. Passion is everything; there
is no replacement for innate interest.

Mr. Buffett, you told us that Berkshire Hathaway has $ 45 Billion in
cash. Why aren't you investing?

Up until a few years back I had more ideas than money. Now I have more
money than ideas.

When do you plan to retire?

I love my job; I love it so much that I tap dance to work. Mrs. B, the
founder of Nebraska Furniture Mark worked until she was 104, she died
within 6 months of her retirement, that's a lesson to all my managers,
don't retire!

I personally am going to work 6-7 years after I die, probably that's
what they mean when they say- "Thinking out of the Box"!!

Why do stock market crashes happen?

Because of human nature for greed and insecurity. The 1970s were
unbelievable. The world wasn't going to end, but businesses were being
given away. Human nature has not changed. People will always behave in
a manic-depressive way over time. They will offer great values to

What are the things that are taught wrong in Business school and the
corporate world?

I like such open ended questions, I think Business schools should
refrain from teaching their wards about profit making and profit
making alone, it gives a sense of 1 dimensional outlook to the young
students that loss is a curse. In reality, in the corporate world,
failure and loss making are inevitable. The capital market without
loss is like Christianity without hell.

I think they should teach the student on how to buy a business, how to
value a business? Not just on how to determine the price of a
business. Because price is what you pay, value is what you get.

Do you still hate Technology stocks?

With Coke I can come up with a very rational figure for the cash it
will generate in the future. But with the top 10 Internet companies,
how much cash will they produce over the next 25 years? If you say you
don't know, then you don't know what it is worth and you are
speculating, not investing. All I know is that I don't know, and if I
don't know, I don't invest."

How to think about Investing?

The first investment primer was written by Aesop in 600 B.C. He said,
'A bird in the hand is worth two in the bush.' Aesop forgot to say
when you get the two in the bush and what interest rates are;
investing is simply figuring out your cash outlay (the bird in the
hand) and comparing it to how many birds are in the bush and when you
get them."

How do you feel after donating $ 40 Billion to the Bill and Melinda
Gates foundation? You are a hero to us!

I feel nothing. I haven't sacrificed anything in life. I have had a
good life. I donated only after I turned 75. I think I admire those
people who sacrifice their time, share their food and home, as the
people to be emulated not me. Besides, what is money before a man's

What do you think are the pitfalls in donation?

I have never donated a dime to churches or other such organizations;
I need to believe in something before I end up doing that. I have been
observing the Bill & Melinda Gates foundation for years now and Iam
confident they will do a fantastic job of making use of the money.

Iam a big believer in Outsourcing, others believed in me as an
Investor and gave their hard earned money to invest. I believe in Bill
Gates, he is a better donor than me.

Why do you work from Omaha and not Wall Street, New York?

Wall Street is the only place where people alight from Rolls Royce to
get advised by people who use the Public transportation system. Besides, I have worked in Wall St for a few years and I felt it is a place where hyper-activity is expected and valued but personally I believe to do well with your investments you have to practice inactivity.

You seem to be so well read, tell us how it all started.

My father was a stock broker, so we had all these financial books in
our library. He introduced me to those classics and I got into them.
Iam lucky that my father was not a fan of Playboy!

Reading is the best habit you can get. Well, you can learn from
teachers too, and have mentors but there are so many constraints
attached- they will talk fast, talk slow, they might talk like a pro
or they might be terrible communicators. Books are a different animal
altogether, I love reading!

The beauty about reading and learning is that the more you learn the
more you want to learn.

People who join Berkshire Hathaway seldom leave. How do you get along
well with all your executives?

I try to get quality people. I always say - Hire someone in your
organization who is better than you are. If you do that, you build a
company of giants. If you get people worse than yourself, you build a
company of dwarfs. And do not try to do everything yourself. Delegate
the jobs and look out of the window. The results will come. That's how
you build institutions. It happens only when you empower others,
believe in others. Iam an investor, Iam very secured at that, I have
no clue how to make Coca-Cola or how to dole out credit cards (Mr.
Buffett owns 8% of Coca-Cola and 13 % of American Express).

I understand the wisdom of the aphorism that you cannot please all the
people all the time.

Of Course, you will always find qualities that you don't like in
people around you, but if you observe carefully the love of the work
unites you both. There is no point in being obsessive about a bad
quality in a person, whom you otherwise respect.

Iam a small time businessman from Dallas, Texas, what do I need to do
to hit big time?

Be patient, Achieving your financial goals and dreams will not happen
overnight. As much as we would all really love to accomplish our goals
in a few years, this is an ongoing process. Defining your financial
goals is not a one-time task; you need to keep adding new plans at
different stages in your life.

We all admire the skills of Olympic ice skaters, pro golfers, and
concert pianists. But do we remember that they didn't acquire their
skills overnight? They had to practice hours on end for years to
achieve their dreams. The key to success is to continue learning
throughout your life with a voracious appetite.

I think it is marvelous that you have had a golden run with investing,
how did you do that?

My rule is to be fearful when others are greedy, and be greedy when
others are fearful.

Besides, I call investing the greatest job in the world because you
never have to swing. You stand at the plate; the pitcher throws you
General Motors at 47! U.S. Steel at 39! And nobody calls a strike on
you. There's no penalty except opportunity lost. All day you wait for
the pitch you like; then when the fielders are asleep, you step up and
hit it.

Stay dispassionate and be patient. You're dealing with a lot of silly
people in the marketplace; it's like a great big casino and everyone
else is boozing. If you can stick with drinking Coke, you should be
OK. First the crowd is boozy on optimism and buying every new issue in
sight. The next moment it is boozy on pessimism, buying gold bars and
predicting another Great Depression, most people get interested in
stocks when everyone else is. The time to get interested is when no
one else is. You can't buy what is popular and do well.

Mr. Buffett you have seen so many crashes and recessions, your take on
facing recessions and stock market crashes?

If past history was all there was to the game, the richest people
would be librarians. Every scenario is different. But always remember,
Tough times do not last. Tough people do.

What is the 1 biggest advice you would impart to a young investor like me?

Think for a moment that you are given a car and told this is the only
car you would get for the rest of your life.

Then you would make sure that you car is taken care of well, it is
oiled and detailed every now and then. You would make sure that it
never gets rusted, and you would garage it.

Think of yourself as that car. You just get 1 body, 1 mind and 1 soul.
Take care of it well. Invest in yourself that would be my advice.

You personally know many of the Financial executives who are engineers
of the current turmoil in the financial world, surprisingly even after
record losses, those executives receive astronomical salaries and
bonuses and arrogantly declare that they deserve it, why dint you
advice them from making such decisions and what's your view on their
justification for their pay?

I like sharing my ideas but don't like imposing my ideas on anybody.
It doesn't make sense and is a waste of time. If somebody has decided
that they know everything that is there to know, nobody can help them.
The best way to learn and succeed is to know that we know nothing.
There is an entire universe out there and still some of us think we
can know everything.

In the world of investing a few people after making some money tend to
imagine they are invincible and great. This is the worst thing that
could happen to any investor, because it surely means that the
investor will end up taking unnecessary risks and end up losing
everything – arrogance, ego and overconfidence are very lethal.

Personally I don't feel too comfortable with too much extravagance,
because I always think like an investor. My thought process doesn't
see a lot of value in a fancy car or a designer suit. Thinking like an
investor always is very important to bring in a sense of discipline
and focus. Before reading balance sheets and investing you need to
make sure your outlook and mindset is that of an investor.

Never let ego, arrogance and over-confidence control you - not just as
an investor but also as a human being. You will never have internal
peace if you are unable to look at everybody around you with love,
compassion and understanding. Irrespective of who the person is, he or
she can teach you something you don't know. I have learnt so much from
people all around me and I wouldn't have been able to learn all these
wonderful things if I had not spoken to them with a smile.

To quote Sir Isaac Newton- If I have seen farther than others, it is
because I have stood on the shoulders of giants.

How do you make the Government eat out of your hands? How do you make
them agree to everything you do?

If the strategy of a private enterprise matches the policy of the
government, the government will be compelled to support you even if
they don't like you.


It was a 7 hour conversation and I could just capture some of the best
questions and answers.

As 37,000+ dazed, amazed and grateful shareholders trooped out of the
stadium after the meeting, I found myself recalling one of my favorite
quotes of former President Ronald Reagan-

"A man has to learn that he cannot command things, but that he can
command himself; that he cannot coerce the wills of others, but that
he can mold and master his own will: and things serve him who serves
Truth; people seek guidance of him who is master of himself".

About Me