Greedy Monkey, Thrifty Squirrel, Hungry Hound or the Astute Dolphin? ……What Kind of an Investor are you?

Human beings have a distinct superiority complex. They tend to look down on other animals as they consider themselves to be more intelligent and capable of doing complex activities. They possess a vast array of skill sets. No other creature can talk, read, write, solve complex mathematical problems, create space ships, explore the vast expanse of the universe, and invent computers and internet amongst others.

Human beings are in the 800th life time, as per Alvin Toffler. They have evolved from the time they were in the caves, with behaviour resembling that of wild animals to their predominant position as the numero uno species of the planet earth. The evolution has been astounding; especially during the past couple of centuries. Humans are the only species to create money and invest it.

There is many a time when human behaviour tends to resemble those of animals. At times he shows the savagery of a wild lion, the cunning of a fox or the tomfoolery of a monkey.

However, in the area of investing money, there is a reversal of the process of evolution. The tendency to revert to animal behaviour is manifest in the way we conduct our personal financial affairs.

In the context of investment behaviour, Human beings can be classified into four archetypes: greedy monkey, thrifty squirrel, hungry hound and astute dolphin.

Monkeys are gamblers. They take high risks. They are eternally restless and just can’t resist playing the market. They are highly intelligent. However, there is only one major fault line. They completely disregard the fact that every win is followed, sooner or later, by losses.

“Isaac Newton came into a substantial inheritance. Typical of the man, he immediately put his wealth into work.

At the time, the South Sea company was the talk of town when it came to trading in shares. Newton, after thinking long and hard, purchased some stock of the company and was thrilled to see his investment doubling in a few months.

Being the wise man that he is, he sold his stock in the company and made a tidy profit. What followed was utterly inexplicable and bizarre. The share price of the South Sea company shot up northward and in a span of eight months grew 8-fold. Newton, to his dismay saw his friends’ wealth soaring and regretted his decision to book profits early.

The greedy monkey in him showed up. He reinvested his entire capital in the Company again when the prices were at an all time high. The bubble burst immediately afterwards. Newton lost all his wealth in a single stroke of fate.

Remember, it was Newton who taught us,
‘What goes up must come down’, and
‘For every action there is an equal and opposite reaction’
For once, he didn’t pay heed to his own laws.”

So beware! One’s IQ provides no guarantee of success in the investment game. Even, arguably the greatest brain in the history of mankind couldn’t resist monkey behaviour and failed miserably.

The Monkey Investment Strategy – attempting to outsmart the market – has as little chance of succeeding as hitting the jackpot in a lottery.

Squirrels are apprehensive about the world. They are accumulators and are at ease only when they have a well-stocked larder. This is their only strategy for the future. There is however a downside to this. The squirrels’ buried reserves often rot or disappear altogether before they can be reclaimed.

“Mr. and Mrs. Whitefield got married in 1930’s. They were prudent, thrifty and lived modestly. They were very good at savings as were a large number of middle class families of that time. By 1950’s, they have accumulated a tidy fortune.

Being old fashioned, and influenced by the great depression of the 1929 when the financial institutions collapsed leaving many bankrupt, Mr.Whitefield had no faith in any financial institutions and left to himself would have kept the money under his bed, in a cash chest. However, he bowed to the wishes of his more practical wife, who convinced him that it was more prudent to open a savings account with the biggest bank in the town. The money will generate a small interest, liquidity was not a problem and the banks credentials were rock solid.

Years rolled by, the money was safe in the savings account of the biggest bank. The Whitefield’s were stress free.

Then, Mr.Whitefield died in his sleep one day in late 1990’s. His wife soon followed. She left her savings to, Carol, her niece.

Carol, knowing the prudent living style of her Uncle and Aunt and expecting that the savings would have grown substantially in the decades passed, walked across to the bank and asked for the entire money.

She was shocked to find out that there was no fortune there. The ravages of inflation had depleted her inheritance to a pittance. Back in 1950, her money would have bought a spacious three bed room family home in a decent suburb; fifty years later, it wasn’t enough for a deposit.”

Inflation is devastating over a long period of time. It has a terrifying capacity to consume capital. Yet, most people neither are aware of its implications nor have equipped themselves to handle it properly.

Majority of the people, especially the middle class, adopt the Thrifty Squirrel Investment Strategy. They are fearful of the complex world of investment and tend to take the ‘safest’ route: big bank, low interest. Little knowing that it’s the safest route to ruin the long run.

Hounds are compulsive animals. Conspicuous spenders, they are driven by a need to constantly display their superiority in the pack. They are unaware of the futility of chasing their own tail and there is no known cure for their chronic hunger condition.

“David Brenson was born with a silver spoon in his mouth. He was destined to be at the top. He did not disappoint.

Topper in the law college, he was given the pick of the best firms in the town to practice corporate law. He put in long hours at work, but then you have to make the sacrifice to reach the top. And it had its compensations - a large villa, the most expensive car, and expensive paid holidays in the Alps. The parties thrown by he and his wife were legendary and they were a constant presence in the most fashionable social events in the town.
Money was never a problem. He found ways and means to spend money to minimise tax, without regard to long-term goals or quality of investments. With banks ready to extend him unlimited credit, he appeared to be on cloud nine.

Then one day, the pack of cards collapsed. His debts had mounted to uncontrollable proportions and his investments plummeted.

Left with no option, David filed for bankruptcy. He became a liability and embarrassment to his firm. His friends gave him the cold shoulder.

At the age of forty five, David was back to square one, unemployed, with nothing to show for his life time achievements.”

It’s seductive to believe that you’re invincible when you are on a roll. But ask yourself: are you really as much worth as you or others think you are?

The Hounds Strategy of splurging without a care for the future, is more common during the last decade than ever before. Easy credit, high paying initial jobs and a tendency to live for the day are certain to lead you to the path of doom.

Dolphins possess an almost human-like intelligence. If they were investors, they’d be the astute kind – certain of their direction, they’d manage the occasional market storm with resolve, skill and grace.

“Warren Buffet, perhaps the most successful investor of all time, started off humbly. He bought his first stock for $ 38 at the age of eleven.

Today, he is worth $ 38 billion.

He is not a magician. Neither does he have a crystal ball. Warren Buffet’s approach to investment is simple and old fashioned. He has steadfastly avoided all the trends and fads of the Wall Street. His major holdings show a tinge of conservatism. Coca-Cola, American Express, Gillette …. He has not touched a single internet stock nor has he gone after anything exotic.

He has a long-term strategy. He looks at the stock’s inherent value, quality of the management and its prospects. Once he takes a decision to buy, he hangs on to the stock, irrespective of the ups and downs of the share price movements.

His philosophy “ is to invest successfully over a lifetime. It does not require stratospheric IQ, unusual business insights or inside information. What is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. It is better to be sure of a good result than hopeful of a great one”

Sounds rather simple and basic?

If you had invested $ 10,000 in Warren Buffet’s company in 1965, your net worth will be over $ 50 million today, a hundred times more than if you’d invested in Wall Street’s S&P index.

Since you have not done that, at least follow his Dolphin Investment Approach: set long- term goals, develop your own sound plan and most important stick to it.

Even if you’re astute, prudent and disciplined, you still need to fully understand the risks. In the world of stock markets, the adage of “better safe than sorry” is particularly apt.

So reflect now and decide, what are you: Greedy Monkey, Thrifty Squirrel, Hungry Hound or the Astute Dolphin?……………

P.S: The idea was taken from an article read long ago. I do wish to acknowledge the source but can't remember.

Tackling Violence in the Society

In a civil society nothing justifies violence - whether it be by the minority or the majority or the state. The root cause for people resorting to violence to settle perceived injustices lies with the law and order situation and the snail pace at which the judiciary works. True, the developed countries are not perfect.But their ranking on the above two criteria are far ahead of us.

A crime is a crime is a crime.There are no political crimes or crimes of passion or crimes related to terror. In India, people do not have the confidence in approaching the Police to even register a complaint for fear of being harassed. Even if the complaint is registered, the police will not investigate properly. Even if they investigate, the culprits will not be brought to book. By some miracle, if the culprit is brought to the court, either he will be let of scot free or the case will take such a long time that people would have forgotten about it by the time a verdict is passed. The need of the hour is revamping of the law and order and expediting the judicial process. It is not easy. The rot has set in deeply. But if we start now, at least in a decade we would have made some solid progress.

I have always believed that secularism means the individual has the right to practice a religion of his choice. The question of special privileges for the minority doesnt arise at all. Take the case of special status for educational institutions run by minorities. It has become a cancer in many parts of India and especially in my home state Kerala. The intentions of all these privileges are good but in reality it becomes counterproductive. Same with the case of lack of Uniform Civil Code. Nation should come ahead of religion. Somewhere it is written in panchatantra that ‘You can sacrifice an individual for a family, family for a village, village for the welfare of a nation'.

Nation comes first, second and last. Today unfortunately people purporting to support their religion are taking law on their hands because they know that nothing will happen to them. We have the ridiculous situation of religious leaders issuing fatwas, moral policing, intolerence of others opinions and finally religious terrorism with the State being a silent spectactor.
Unless and until this is taken care of our country will go from bad to worse.


My recommendations;

1. Implement Uniform civil code with immediate effect
2. Government should have the right to implement without being questioned issues that matter to the nation - like immunization, healthcare, education, family planning
3. Revamping the entire law and order machinery. It is impossible to set right the existing system. Better to start another system manned by professionals parallaly with a view to them taking over in the long run
4. Filling up of all judicial vacancies, increasing the number of courts, fixing a time span for disposing of a case, simplifying the judical process ( why there should be so much paper work, motions, adjournments in an era where all information is available at the click of a button is something I cannot understand)
5. Focus on preventive justice than wasting time after the incident has occured.
6. Moving away from symbolism. Dont see any reason why we have to abide by symobolism. When we work in an organization, we work with people from different region and religion.We dont deem it fit to be symbolic with respect to anything related to the above. There is a common purpose. Likewise the society should have a common purpose. I should not be asked to prove my secularism every single time. I can be a religious fanatic but that should be inside my home. When I come out I should be the citizen of india first and foremost, like I am the employee of the company where I work.

None of the above are unworkable and definitely not utopian. Will someone listen to this voice in wilderness?

Where have the Gurus gone?

The concept of the GURU- SISHYA PARAMPARA in Indian Culture has always been an important aspect of education or learning in India from times immemorial. In ancient India, when a child reached the seventh year, he was put under the tutelage of a suitable GURU. He moved into the GURU'S ashram or house and stayed with him for the next few years acquiring in-depth knowledge. In the Indian tradition, any disciple paying respect to his elders through Abhivandan introduced himself not as his father's son, but as belonging to so and so GURUKULA house or tradition.

The Guru's duty was not only to teach the student a specific subject, but also to develop the overall personality of the student. The Guru tried to develop the student's character, versatility, confidence, strength and overall vision of life. The ideal Guru was supposed to be a friend, philosopher and guide! In the Guru-Shishya parampara, the relationship was unconditional - nothing was asked for in return as a pre-condition other than the acceptance of the shishya as a student and the student whole heartedly submitting himself to the Guru. Acquisition of knowledge was helped in a value-rich environment with focus on the development of the entire self.

The process of learning, as we understand from the Upanishads, was a journey in which the teacher took the disciple, from the familiar to the unfamiliar, from the known to the unknown and from the concrete to the abstract ( Asathoma Sath gamaya, Thamasoma Jyothir gamaya.........). The Guru adopted encouraged the students to question, allowed them to use reasoning to arrive at theories that were validated, corroborated or rejected and then encouraged the disciple to search for answers by steering him in the right direction.

The Guru's mission appears to have been two-fold. The first and most important concern of the Guru was to awaken, elevate and transform the Sishya (seeker). The second and final purpose of the Guru was paradoxically to help the Sishya to transcend this state of complete dependence on the Guru, which dependence the Guru himself had taken such pains to foster. The final leap of realizing his true identity with God was exclusively the Sishya's job. ( in this context it is required to give an explanation to the popular saying 'matha, pitha, guru, deivam'...the popular explanation is that mother comes ahead of everyone else......this is not true.........what it means is that a child learns the initial lessons from mother while in womb and during the toddler years, then from the father, then he goes in search of a guru for knowledge and finally the God completes his education........god meaning experience).

In the guru-sishya parampara, the learning process determines the Guru-Shishya relationship. Acquisition of knowledge in a value-rich environment was undertaken in a formal framework under the Gurukula system, where the Shishya surrendered himself to the Guru. All learners, irrespective of their background, were equal under the constant supervision and tutelage of the guru. Rabindranath Tagore attempted to emulate the Gurukula system in his experiment at SHANTINIKETAN. It is still prevalent in India especially in the areas of learning traditional arts, though this has not been extended to the modern education.

The GURU is both light and fire. He shows the way out of darkness ( thamasoma jyothir gamaya) and is himself the fire that destroys ignorance and falsehood.

In the modern context, there is less emphasis on acquiring knowledge and the focus is on accumulating Degrees. The teaching profession is not attracting talent it used to and the commitment is sadly lacking. Average teachers produce below average students and therein lies the tragedy of modern India

Leadership and Gita

Bhagawat Gita talks about different types of leaderships. For an organization to succeed (this is applicable to nations also), you need a combination of people who have these leadership skills. An overdose of any one of the following will result in an imbalance leading to a drop in performance.

It is rare to find all the leadership roles in one person. You need to identify which is the role that fits you well and take up responsibilities and organization roles based on that.

Let us look at the different leadership roles as defined in Bhagawat Gita;

There are four primary leadership roles:
Strategic Leadership
Directive Leadership
Team-building Leadership
Operational Leadership

You have a unique character, with particular strengths and weaknesses.When you understand and play to your strengths you can develop your natural leadership ability,
and you'll find that you are suited to a particular leadership role.

As I mentioned before it is not ordinarily possible for one person to embody all types, and especially not to be good at all of them, because they have contradictory psychological characteristics. Such a personality is exceedingly rare. A person is generally strong in a primary leadership role, accompanied by a weaker predominant secondary role. Very rarely will a person be strong in three.Wherever there are strengths, there are corresponding weaknesses. These weaknesses can become strengths when they are acknowledged and understood, and a team is built around them. "Know Yourself", and your area of contribution, is the beginning of individual effectiveness, leading to team effectiveness.

Persons who are suited to Strategic Leadership are thinkers. They are normally right brained and are good at creating the vision and building a wholistic strategy. Their primary concern is why to do things. They love the challenge of understanding and planning. They value knowing over doing. This gives them a detachment which enables them to more accurately and objectively analyze the situation. They value knowledge and wisdom, and admire perceptive and wise people.

Persons who are suited to Directive Leadership, also known as Executive Leadership, are initiators. In the think of the battle, while others are stumbling around in shock and confusion, looking for guidance, the Directive Leader is the one who takes charge and inspires others to follow them. They love to direct, and are able to initiate action, and to sustain action. They value doing over knowing. A person with a reduced strength in this area may be able to intiate, but unable to sustain action.

The Directive Leader is about engagement – engaging himself or herself, and engaging others in the task at hand. The Visionary Leader is about detachment – stepping back and looking at the bigger picture. The two are generally complementary roles, and a person is generally better at one or the other. The Strategic Leader enables the Directive Leader by providing him or her with strategic vision and direction. This is very valuable to the Directive leader as it ultimately makes him or her more effective.


The Team Building Leader is all about people. They are natural people persons, and generate cohesion in any group that they are part of.

The Operational Leader is the final leadership role. This is a very practical, on-the ground leadership role.

In an Organizational context, ideally the Board of Directors should take the role of Strategic leadership, the CEO and his first team the Executive Leadership, the Business Unit Heads the Team Building Leadership and the Sales/Production Managers the Operational Leadership.

The trick to success is to identify these skills at various levels of management and groom the individual to make use of his natural leadership skills in the long run

The Ant, Grasshopper and Investment

I am sure you have heard this story as a child,

“In a field one summer's day a Grasshopper was hopping about, chirping and singing to its heart's content. An Ant passed by, bearing along with great toil an ear of corn he was taking to the nest.

“Why not come and chat with me," said the Grasshopper, "instead of toiling and moiling in that way?"

I am helping to lay up food for the winter," said the Ant, "and recommend you to do the same."

“Why bother about winter?" said the Grasshopper; we have got plenty of food at present." But the Ant went on its way and continued its toil.

When the winter came the Grasshopper had no food and found itself dying of hunger, while it saw the ants distributing, every day, corn from the stores they had collected in the summer.

Then the Grasshopper knew: It is best to prepare for the days of necessity”

As children, we have been brought up on stories like the Ant and the Grasshopper, Aesop’s Fables. We have been taught that each penny counts and thriftiness pays in the long run.

Our investment behaviour has been formed based on this. Save small, regularly in low risk instruments. And you are trained to hang on to these investments for ever. Classic examples are Fixed Deposits, Gold, Real Estate, Safe but unspectacular stocks, insurance, government bonds.........


Does it work? Most of the time, the returns do not even cover the inflation. By hanging on to the investment for too long and refusing to move away from one's comfort zone, we end up losing a lot.


Let us fast forward and see what happened between the Ant and the Grasshopper in the 21st Century...

“One day, a tiny ant, was seen busily digging up the earth, preparing for her a cosy anthill, for the approaching winter. She toiled through the summer season, selecting a nice little corner for her anthill, where the mud was loose and amenable and big human feet would be far away. She set at her task through night and day, tirelessly.

Near her slowly growing anthill, was a tree on which a grasshopper lived. But, he was a wanderer. He flew to warmer climes when the winter draught creeped in and lived off the blades of grass and berries of whichever land he happened to be.

As he watched the ant, building her home, he felt sorry for her.

He knew that a day would come when the poor ant's anthill would be wiped off. And sure enough, it happened. A few days later, a huge lawn mower came to the park and a heap of grass was flung right atop the ant's anthill! The poor ant was crushed to death along with her anthill.

The grasshopper mourned her for a day and then flew on…

One of the first lessons to be learned in the investment game is to, move here and there. Look for greener pastures to feed on. If you hold on to your stocks for long, the likelihood is that when the crash comes, it will wipe out everything you have built!

Don’t marry your stock and other investments. Avoid putting down roots. They impede motion.

Be ready to jump away from trouble or seize opportunity. You do not have to bounce from one speculation to another like a ping-pong ball. All your moves should be made only after a careful assessment of the odds for and against, and no move should be made for trivial reasons. But when a venture is clearly souring, or when something clearly more promising comes into view, then you must sever those roots and go. Don’t let the roots get too thick to cut.

Mobility is the name of the game when it comes to sound investment

Management Learnings from Alexander the Great

There is much to learn from History. The famous malayalam poet, Kunjunni Mash, had this to say

"ABCD il undoru thathvam, kalathin thathvam
AD kkullil kidappu BC"

loosely translated it means there is a philosophy of time in ABCD, and that is BC (past) is present in AD (current).

Hence the need to dwell into history.

According to Partha Bose, author of "Alexander the Great's Art of Strategy", modern executives can learn from Alexander's campaigns in three key areas.
"It fundamentally boils down to three things: it is where you want to compete, when and how you want to enter or exit that market and how do you want to go about competing when you are in that market," says Bose.

Alexander's ability to link the three, along with his marvellous organizational skills and ability to delegate makes him an interesting case study from a management historian/students perspective.

His approach towards cultural integration of countries that he has conquered with the Greek culture created a new vibrant culture. An example for transnational companies to emulate.

Read the full article here

Harisree Ganapathaye Namaha: Avignamastu

"Harisree Ganapathaye Namaha: Avignamastu"

Let me begin my blogging career by writing the words written by thousands of small children in the age group of two and three when they are initiated to the world of letters on Vidyarambham (Vidya means Knowledge and Arambham means beginning) day. It is a momentous occassion.

Initiation into the world of alphabets for a child usually begins with the writing of the mantra 'Om hari sri ganapataye namah.' 'Hari' refers to the Lord, 'sri,' to prosperity. At first, the mantra would be written on sand or in a tray of rice grains. Then, the guru would write the mantra on the child's tongue with gold. Writing on sand denotes practice. Writing on grains denotes the acquisition of knowledge, which leads to prosperity. Writing on the tongue with gold invokes the grace of the Saraswathi, the Goddess of Learning, by which one attains the wealth of true knowledge.

Another interpretation of the prayer is "Let us bow our head to the master of Hariganam and Sriganam" - Vowels and Consonants -sounds which make up the spoken language. This was told to me by my late father, but I have not been able to confirm it through other sources.

What can you expect in this blog? A wide range of topics ranging from current affairs to management to music to sports - critically analyzed.

Raja's world will make you think and will create a network of people having differing viewpoints. I may not agree with you all the time nor you with me. But we will definitely respect our right to disagree.

This blog is my Gurudakshina to all those who taught me academically, professionally and in real life.

May the Gurushishya parampara endure..............