IPL 2009 - path to semifinals

The points table reads like this just after the end of CSK v RCB match today.

(please scroll down)

Team	Mat	Won	Lost	Tied	N/R	Pts	Net RR	For	Against
Delhi Daredevils	10	8	2	0	0	16	+0.362	1408/177.5	1394/184.3
Chennai	11	6	4	0	1	13	+1.070	1631/196.2	1427/197.1
Deccan Chargers	11	6	5	0	0	12	+0.292	1654/212.4	1633/218.1
Bangalore	12	6	6	0	0	12	-0.309	1689/237.0	1735/233.2
Mumbai Indians	11	5	5	0	1	11	+0.543	1442/196.2	1340/197.0
Rajasthan Royals	11	5	5	0	1	11	-0.373	1306/193.1	1415/198.2
Kings XI Punjab	11	5	6	0	0	10	-0.570	1438/192.1	1518/188.3
Kolkata	11	1	9	0	1	3	-1.042	1306/189.2	1412/177.5

Only 12 more matches are remaining including the ongoing MI v RR match which decide who get to the semi-finals. In the mean time, I tried to predict who get to the semi-finals using simulation.

My assumptions:
1. Each match has equally likely outcome of win and loss for both teams. In others words, both teams have 50% chance of winning the match. (though that may not be the real case)
2. The relative position of NRR of all teams remain same at the end of the tournament.
3. No no-result matches.

The 12 matches generate 4096 possibilities and each combination decides 4 teams which enter into semi-finals. In case of a tie between 4th and 5th positions, NRR as on today is used to resolve the same.

This is the result I got.

(please scroll down)

Team	Chance of Entry to Semi-finals
Delhi	100.00
Chennai	86.96
Deccan	71.53
Bangalore	38.96
Mumbai	47.31
Rajasthan	38.28
Punjab	16.94
Kolkata	0.00

Pune Mumbai Express Highway

Today, I travelled in Pune-Mumbai express highway in a Volvo. Very good experience; I was sitting in the seat which is just next to the driver. So, I had the best view that can be possible. Clicked on arbit stuff all along.

It is really a thrilling experience to sit there with no seat belts on. எப்போ bus நம்மல கீழ சாயக்கும்னு தெரியாம உட்கார வேண்டியதா இருந்துது. Sudden brake அடிச்சான்னா, வடிவேலு மாதிரி முன்னாடி இருக்கற கண்ணாடிய ஒடச்சு கீழ போய், பாக்கிட்ல இருக்கற glass piece எடுத்து ஒதர வேண்டி இருக்கும்.

The surprising thing is that even the driver does not wear the seat belt. Whenever he wants to make a turn, he tends to get shifted from his comfort position and tries to hold the bottom of his seat in one hand and makes the turn. One moment if he misses - God knows what happens!

I asked him why does not he wear a seat belt (there is a provision and I suppose wearing seatbelt is compulsory) - that would make his life comfortable. He replied, "I do not have that habit."

Random clicks are here.

Ponniyin Selvan

I just finished reading Ponniyin Selvan for the second time. I read it for the first time 6 or 7 years before when I was at my engineering college. Now, once again, amazed at the plot, characterisation and the way the author connects various characters and events. At no point of time, I felt the story is being elongated just for the sake of it. Often there are repetitions, but it helps one to remember what happened and helps to connect with the present.

One should remember that this is a historic novel and cannot take things as granted. Where there is a clear proof of character and incident, the author needs to adhere to it and when the picture is not so clear, he is free to ignite the imagination - this is a tight rope walk. Amarar Kalki says the same sentence in the conclusive part. I guess the conclusive essay must have come a few weeks after the story ended. Author addresses the concerns of the readers and answers their queries.

There are many characters in the novel. Some characters are given good characterisation and some are given only build ups. The brilliance of characters comes out in Vandhiyadevan, Adiyan, Anirudhha Brahmarayar. Poonkuzhali and Manimegalai will stay on in the mind of the readers for ever. Both have many similar qualities, the striking difference being Manimegalai is so innocent whereas Poonkuzhali is not. The greatest built up is given for Kundavai. But there are not enough incidents or decision making circumstances which validate the build-ups. Though Anirudha Bramharayar comes relatively only in a few scenes, the character's intelligence is clearly portrayed in almost all the scenes.

I heard that the original hero of the novel was supposed to be Arul Mozhi Varmar himself, but Vandhiyadevan is so interwoven with the story that the author could not dethrone him from the hero's pedastal even after the introduction of Arul Mozhi Varmar early in the story. The incidents that happen after Arul Mozhi jumps into the sea to save Vandhiyadevan get a supersonic speed. I feel that is the point when Vandhiyadevan becomes the hero of the novel.

One character which gets you stumped is Nandini. One never knows when she speaks the truth and when she does not. She displays cunningness with a "cool attitude". She is very determined and does not get tensed whatever the situation be.

I read the entire story this time on my laptop - the pdfs from Project Madurai. The pdf of the fifth part contained many missing lines. So, I had to go to wikisource for reading whole of the 5th part. While I was reading, I made a pdf of the 5th part and uploaded under GDL.

CFA this June

It has been a long time since I updated my blog. I am currently posted at Mumbai for my summer internship; will be here for the next two months.

I give CFA Level I, offered by the CFA Institute in June. Because of the legal tussle with ICFAI, the exam center was originally not in India. So, I chose my test center as Kathmandu as did some of my other friends too. I planned to start the internship as early as possible, finish and go home, spend a week and then proceed to Kathmandu for the exam and come back to Lucknow.

On Apr 2nd, Delhi high court ruled that June 2009 CFA exams can be held in India. In one way it is good that I do not need to travel a lot of distance. But, had I known this would happen, I would have joined the internship late so that I can finish the internship and give exam in Mumbai and proceed directly to Lucknow. I need not have incurred loss on cancellation of the flight tickets to Kathmandu. But even with cancellation charges, writing in Mumbai works out to be better both economically and logistically.

More about the legal battle:
Wikipedia on Indian CFA
What ICFAI had to say?
What CFA Institute had to say?

Both of them provide a picture as if they are correct and the other party is outright wrong.

Convocation or Commencement

This post has been a long overdue- but better late than never.

Our institute’s 23rd Convocation was on this Tuesday.



Coincidentally, on the same day, I read the following short story in The Hindu’s YoungWorld which I thought is worth sharing.

A martial artist, who had spent years mastering karate, was waiting to receive the Black Belt from his master, when he was told that he had to pass one more test. "What’s the significance of the Black Belt", asked the master. "If you can answer this question correctly, I shall give you the Black Belt." The student smiled confidently and replied, "It’s the reward for my hard work!" To his surprise, the master shook his head disapprovingly and said, "You are not ready for the Black Belt. You may return in one year."
A year later, the student went to his master. Once again the master asked him the true meaning of the Black Belt. The student was bewildered and answered, "It’s a symbol of distinction... the highest achievement in our art!" The master once again shook his head in disapproval and told the student to return the next year with the answer.
The following year, the student went to his master, looking very humble. "Have you understood the importance of the Black Belt?" the master asked him. "Yes, Master," relied the student. "I’ve realized that it is not the end but the beginning of a never-ending journey of discipline, work and the pursuit of excellence."
"Here’s your Black Belt," said the master, smiling happily. "You have finally understood its true significance."

Probably, that's why they refer the graduation day as "Commencement" in some universities.

All the best to the IIML class of 2009.

Car Lease

From many of my co-students here, I learnt that various software companies are following a unique incentive scheme - owning car through company lease. It works something like this. The company leases out to the employee the car of his choice. The car will be in the name of the company and the lease payments are cut from his salary. At the end of say 3 or 4 years, the employee has to pay the salvage value at that point of time and get the car transferred into his name.

As per the tax laws, the company provides conveyance to the employees which can be treated as expenses in the profit-loss account. Instead of charging it to expenses under wages & salaries, the company charges the expenses to the conveyance account. Or if someone wants to treat it differently, the car can be capitalized to fixed assets and can be depreciated every year over its useful life. Now, instead of the wages & salaries, the expenses are under depreciation.

This is just one part of the story. The other part of the story is that the income of the employee is reduced, because the lease payments are not made out of his pocket. So, the employee will be paying less income tax.

We shall come back to the company’s side now. Since the company is providing car with fuel, maintenance etc (that’s what the scenario as per the accounts), the company is liable to pay the FBT at the rate of 20% over 20% of the expenses which works out to be a net of 4% on the total expenses. If this option is not provided by the company, the company would not have needed to pay this 4%. So, logically this has to be passed on to the employee. Also, if this option is not provided, the employee has to take a loan for his car at the market rate or pay out of his pocket. Adding to that, he will not be able to save the income tax. So, naturally the lease rent payable will be greater than the market rate. That is because the company is under no obligation to provide this option. Since it has designed such an exotic option, it wants to have its pie too.

I have made a simple calculation taking car’s price to be INR 400,000 and recurring expenses of INR 2,500. If someone decides to use the car for a 4 year period, one can save around 18% of total expenses under the lease option. The company also earns a 10% in the present value terms. This calculation is based on some assumptions which are also clearly stated in the calculation.

Excel sheet is uploaded.

Money behind IPL

I stuck upon an interesting and informative article regarding IPL in the BusinessLine. It is quite old (published: May 2008), but worth reading.

The author talks in detail about the financial model of the IPL. Who owns what? Who owes whom what? etc. There is so much of money involved at different levels in the IPL: team franchise, broadcast rights, player contracts, official sponsorship, team and player sponsorships, stadium rents, tickets, to name a few. This is the direct money which is at play when the Kings, Challengers, Riders and the like are at play. Apart from this, IPL creates a lot of indirect money in the form of travel, promotion, advertisements etc.

Understanding IPL’s financial levers

In the previous of IPL (2008), only 2 teams saw profits. We shall see what happens this year and the years to come.

With the busy schedule of the international players participating in the IPL, the timing is the most critical factor. If IPL misses to hold the event due to some externalities, there are several parties waiting to get a hole burnt in their pockets. Let us hope for some good entertainment this season.

Jogging

I have been jogging / cycling regularly for a while now. This is not a new year resolution, in fact I started jogging 3 days ahead of the new year. No need to have some special day to start something new. It has been around 2 and half months now in which I missed to jog only on 2 days. I started with a small stretch initially with just over 1 km which has now improved to one full round on the ring road of the IIML campus (2.7 km). I have never believed I could run such a distance non-stop. The secret of jogging lies in controlling the breath. If you do not feel that you are making extraordinary efforts to breathe while jogging, you are well in control and can jog comfortably. One of the most important things I realised in this jogging exercise is that, if one believes he can. Remember KungFu Panda? It may sound like a cliched message, but truth sounds like that always.

One of the shots on the course of my track:




More Photos. All of these photos are taken inside the campus.

Intelligent Ad!

I received an ad from a cinema multiplex. The message is quite interesting!

Don't miss to read the conditions. Very Clever!




The offer is open for children till class 8 only, which means they will most probably be accompanied by parents and contribute to increased sales. Offer is valid only in the weekdays as the cinema house does not want to lose the premium seats on weekends. Offer closes on April 15th which is probably just the start of the vacation - again it does not want to offer free seats during vacation peak time.

Th overall objective is to attract the future potential movie goers, with the side benefit of increased sales on the slump weekdays. (or vice versa)

If you peruse carefully, you know who's ad is this.

ARR wins Oscar

People say "Slumdog" is definitely not his best for which he should win an Oscar. Agreed, but one should remember that Oscar is not awarded to "the best music or the best song" produced in the given year. There are certain eligibility criteria set by the Academy (AMPAS) and the best score or the song is chosen (or rather voted) from the entries which make it to the eligibility list. Slumdog happened to meet the eligibility criteria and subsequently voted as the best for original background score and the song.

From now on, the tamil film producers would be tempted to put the film credits as "ஆஸ்கார் A. R. ரஹ்மான்"

CAT Result

Even the big names make some silly mistakes. If the same mistake had been done by a candidate in CAT, he would have lost his marks for the question and attracted penalty too!

(Click on the picture for a better resolution)

Educational Loan

I am studying a course on Financial Management as a part of our third term here at IIM Lucknow. In that, we get acquainted to concepts like present value, discount rates, cash flows etc. I just thought about applying these principles to an educational loan.

Below, I make a comparison of paying out now v taking an educational loan.

Assume that you have taken an educational of Rs 2,00,000 on 1st Jan 2009. The interest on educational loan is calculated assuming simple interest till the course gets over and after that the interest is compounded. Lets us assume that the course gets over in March 2010. So, the interest accrued at the end of March 2010 is Rs 25,000 (S.I @ 10% for 15 months). From April 2010, the principal and interest = Rs. 225000 has to be repaid in EMI. Suppose, if the tenure of repayment is 5 years, the EMI (compounded monthly) comes to be Rs 4780.59

As per the existing Income Tax rules in India, the interest on educational loan is tax exempted. Taking that into account, the present value of cash outflows from our hand is Rs 184862.6. If it has to be paid out now, one has to pay Rs 200000. This means, one saves a little over Rs 15000 as on today’s value by taking an educational loan of Rs 200000

I have made a simple model of the same in google spreadsheet.

Views, comments and criticisms are invited.

Monster - You need to read news!

This ad is featured in my homepage of orkut!

Play Safe

FBI to let India prosecute Mumbai attackers

This is a clear strategy of playing safe and escapism by U. S. It does not want to take the issue head-on with Pakistan. So, it says, "It is a major tragedy for you. So, you take charge of the situation. I will provide you support." It is to be read as "This is your problem, you do whatever you want and we do not want to get our hands dirty on this." Pakistan will interpret the statement as, "U. S. has come out of the issue. Now the deal is only between Pak and India", which is what U. S. also wants to tell to them.

Dead Cat Bounce

Thought of blogging about some interesting or new words and phrases that I encounter.

I heard of this term "dead cat bounce" from John Authers' Short View on 8th Jan 2008. The actual phrase used is "Even a dead cat will bounce if it is dropped from a great height".

Seems like this phrase is commonly used in market's parlance when some stock or index temporarily rise in the course of its fall. There are examples given by John Authers and he fears rise now could be a deadcat bounce.

One typical example in the recent period would be Satyam's stock decline.

Satyam - Troubled Story

It is so unfortunate to see a company which commanded high stature till a few weeks ago to go down. It is not a single day aberration, but a series of accounting fraud committed over years which have come to public, just because there is no more opportunities to hide them now. This is clearly evident from Raju’s letter. It is a classic case of broken-window concept.

The fact that is both surprising and shocking is that this fraud has been continued for years now without the notice of the audit firm, PwC and the independent directors. With that being said, either the (un)ethics or the incompetency of these parties would have been the accomplice. Or, Mr. Raju is very clever to keep both of them blind. How can a company survive for years with imaginary cash balance? There are two scenarios here. 1. The cash were not generated at the first place or 2. The cash which got generated suddenly disappeared. With media highly speculating on Raju’s obsession with the real estate, scenario 2 above cannot be eliminated. In fact, the authors in one of the livemint’s columns say that one should take Raju’s letter with a pinch of salt. And, we know the truth only when the results of the investigations are out. Till then, Wait and Watch.

Bad Debts

This is rather an interesting imagination, but there is a possibility. In the past, I had irritating experiences with some telecom providers and banks during closing of accounts. One of my friends has also shared a similar experience. Even after giving the request for disconnection, the connection or the account has not been closed. In the case of a mobile phone service, the monthly rental and the late charges have been charged every month for a connection which is supposed to have been closed months earlier as per the request.

There might be some customers like me who are bothered about this and keep pestering the company regarding the closing of the account. But, I believe not everyone does so. Once they give instruction they are not further bothered.

I thought this was a sheer lack in the customer service but during one of our discussions, my friend Karthikeyan and I figured out there could be a hidden agenda behind this whole story.

The situation goes like this. The company keeps charging rentals and late charges for a definite period and subsequently closes the account writing off the amount accrued on the same. As per the records, they have provided “service” to a customer who defaults on his payments forcing the company to close the account and write-off the balance on his account. In reality, there is no service provided at all and no loss made by the company.

In curiosity, I just had a look at the annual report of one of the major telecom providers. It had written off an approximate amount of about Rs 2 billion in the FY 2008-09. Well, there could be some real instances where people used up the services and defaulted creating bad debts to be written off. But one cannot eliminate the possibility of intentionally creating bad debts and writing off the same.

Assume that about 10% (some random percentage, as I do not have any basis to come with a closer guess) of the bad debts are created in this fashion which is Rs 200 million. This reduces the taxable income of the company by that amount. For ease of calculation, assume that the income tax is charged at 30%. Let us have a look into what each party gains or losses.

Company: Tax on Rs 200 million = Rs 60 million saved for the company, but has to pay the service tax (say 12%) on Rs 200 million = Rs 24 million. Therefore, a net gain of Rs 36 million.

Government: A tax of Rs 60 million lost, but gains a service tax (say 12%) on Rs 200 million = Rs24 million. Therefore, a net loss of Rs 36 million.

Customers: Lending their names unknowingly in evading the income tax.

Colors of taste

I was in Rasipuram last week. After having an opportunity to taste home food, now back to the mess where Mr. Potato is very prompt in making his attendance every session in his varied appearances. Mr. Gobi and Mr. Paneer have already strongly cemented their places in the menu.

Adade!

One specialty that I like about cartoons is the “brevity”. One need not write a lorry full of words to send the message across. Cartoons facilitate the reader to grasp the opinion that the author wants to convey much quickly. In that sense, cartoons are one of the greatest time-savers.

Adade-1 by Mathi is the first of the six volumes of cartoons compiled and published by the NHM. All the cartoons are based on the then current affairs in one of the following forms: conveying the news, mocking at them, offering opinions and reflecting public’s perceptions. The cartoons originally appeared in the first-page of “Dinamani”.

I would not say all the cartoons are excellent. There are some clichés like mocking the books-bag that children carry to school, jokes about robbery etc. Still, there are many other good cartoons which make me rate the book good in an overall level. It would have been an added value if the date on which the cartoon originally published in the newspapers is also given. The cartoons cover various topics including madras–eye, floods, midnight-arrest, coalition politics, Veerappan, drivers’ strike, elephant–camp, Kannagi issue, inflation and unemployment. In all of these, I liked the Kannagi series and the elephant series most.

I was not able to sync well with the cartoons as I had forgotten some of the news. What would have triggered a lot of laughter when read in the context would not do so if you are out of the context. That’s when, a small hint about the news and the date would help. Though the cartoons are arranged based on various categories, the system is not followed strictly as many cartoons are scattered randomly inside which belonged to no particular category. I feel those could have been put under a separate section. I am not sure how the volumes (total of 6) are categorized, but it would be great if it had been categorized based on the years, as it would offer the diversity of cartoons as well as be related to one another.

One disappointment is that out of the 150 cartoons, there are not many cricket-based ones which would be fun to read any day. If I am not wrong, there is only one which is also very old – about the book fixing controversy. More range of news could have been covered if they had gone for chronological arranging rather than the manual compilation based on different categories.

Another thing which does not go well is the “one-page-one-cartoon” concept in the book. It is definitely a huge space dedicated to a single cartoon. In fact, 4 cartoons a page would have been a very good proposition in many ways: get all the cartoons related to a theme within a few pages, less turning-around of pages and of course less pages (eco-friendly! :-)).

Final Word: Add to your library!

Book Link

Banking

New Videos added on the topic "Banking" by Khan Academy.

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