Should you follow tips on shares?

You are bombarded with tips and advices everyday on which stock to buy and sell. What should you do?

“In March 2001, financial astrologer Christeen Skinner, professional investor Mark Goodson, and one other participant took part in a week-long investing experiment hosted by the British Association for the Advancement of Science to mark National Science Week. Each contestant was given a fictional £5,000 to spend on any four FTSE stocks.

Skinner, using planetary movements to select her stocks, lost £266.46. Goodson, using more traditional metrics, lost £130.32. The winner? Tia Laverne Roberts - a four-year-old girl from south-east London who chose her stocks by throwing numbers papers into the air.[Tia's shares included the Bank of Scotland, Sainsbury's, Diageo and Old Mutual; Skinner chose BOC Group, BAE Systems, Unilever and Pearson, which she said had "a good planetary wind behind them"; Goodson chose Vodafone, Marconi, Cable & Wireless and Prudential.]”


Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly (Zurich Axiom 4). Don't go blindly on other’s advice. Research on your own and trust your own judgement.

Nobody has the foggiest notion of what will happen in the future.

“On October 20th, 1929, the noted Yale University economist Irving Fisher declared that "stock prices have reached what looks like a permanently high plateau." Nine days later (October 29th, 1929) "Black Tuesday" arrived; the stock market crashed and America and the world were plunged into the worst recession in history”

Remember, the easiest thing in the world is to give advice. It doesn’t cost anything.

The more things change, the more they remain the same

The essence of Customer Relationship Management is to segment your customers as high value customers and low value customers, develop systems and procedures to take good care of the high value customers. The belief is that 20% of the customers give 80% of the business and hence need to be nurtured.

Now where have I seen this philosophy being applied?

Let me roll the years back. I lived in a rural area. My father, being the local Executive Engineer in Electricity Board, was considered to be a mini VIP and in turn a high value customer.

We had near us a tailor, by the name Aruchami. This guy had a small tailoring shop with a single sewing machine. He will make personal visit to 10 or 15 important clients in the area, take measurements at our houses, collect the materials and deliver the finished dresses in person. A kind of customized personal service. Our work used to get precedence over the other relatively non affluent working class people, whom he used to run around in circles to the extend of positively discouraging them. When asked, he will say, "they take so much of my time, are never satisfied and don't pay on time"...............

Next in the line was our family jeweller Chakkappan. Managed a core clientele list comprising of around 10 families who were totally dependant on him as a solution provider to their Gold needs. Remember, those days it was rare for someone to do retail shopping for gold. I remember him coming to the house, setting up his workplace, melting the old gold in front of our eyes, weighing it, showing the box containing the designs, taking the order and delivering the finished ornaments after a fortnight. Again highly personalized service. He didn't even have a shop till much later in his career. And he was essentially a service provider, the actual work being done by goldsmiths to whom he outsourced the work. Again, note that he was concentrating only on high value customers.

The same was true of Ramachandran mama, who ran a modest car workshop, Bhargavi - our washerwoman and Dr.Sudevan - the family doctor. There were many others.

All of them were very focused on their high value customers, ensured that they developed a personal rapport with them and the ensuing relationship was a lifelong one. They were the first to be invited for any family function and we in turn joined them in their moments of happiness and sorrow. The relationship was built on quality service, understanding the needs and absolute trust. Ultimate in relationship building and customer satisfaction, wont you say.

Most of them are no more. But their spirit and philosophy has survived, and has made a comeback as CRM.

"The more things change, the more they remain the same"

Education System - Innovate or Perish

Continuing the series of posts on Education system, it is my strong opinion that this business has done the cardinal sin of not identifying the Customer.The customer has to be the Child, not the parents.

Let us look at the whole system of Education from a Management perspective.

The objective of any Education system should be to develop the necessary skills of the student, hard and soft, so essential to make him/her a success in his/her life and in his/her job. Hard skills pertain to the subject knowledge and the soft skills are those behavioural skills required by the student to be productive in his/her job.

Our current education system does take care of the hard skills aspect to some extent (this also is debatable), but has totally ignored the soft skills, which any Employer worth his salt will say is much more important. The popular saying is that ‘ you can always fine tune the technical skills of an employee, but if his/her attitude is bad, then nothing can be done’.

Every year we are churning out people who are technically adequate but attitudinally handicapped. This results in a mismatch between the requirements of the employer and the skills of the employee.The current system hence has failed in meeting its primary objective. The objective should be to provide the necessary soft and hard skills to the student so as to increase his employability.

What should constitute the core product in any educational system?

Relevant Course Content (both hard and soft skills related)
Teaching Methodology
Batch Strength
Quality of Teachers
Evaluation System
It is interesting to note that Listening(45%) and Speaking(30%) is used most in work place but taught the least in the Schools and Colleges, while Reading(16%) and Writing(9%) is used least in the work place, but taught the most. This anomaly has to be corrected.

There are no arguments even from the die-hard fans of the education system that the current syllabus (the core product) at all levels has lost its relevance. This is especially true of the higher education.

For example let us take the parameters – teaching methodology and the Evaluation system together. The most prevalent teaching methodology is the Lecturing mode. Researches have shown that only 20 % of the lecture is retained even by the most attentive of listeners. This is assuming that the lecture is of the highest quality. It is astounding that our teachers are not prepared to use technology. Is'nt it time that we switched over to Computers, Internet, Over Head Projectors,Multimedia Projectors and Interactive visual media tools. Why can’t we use them extensively in teaching? Whenever I mention this I hear howls of protests and excuses saying that Schools and Colleges don’t have the necessary funds. I don’t believe this. Schools and Colleges are always finding it easy to raise funds for building more classrooms, but how come they are unable to find resources for upgrading their teaching aids. Most of the schools and colleges take hefty sums as donations and fees. Even the smallest computer centre in your neighbourhood has these teaching aids. So the protest does not hold water. Teaching methodology has to undergo a sea change.

Our current methodology does not encourage the student to explore. The focus is on learning things from an examination viewpoint. The current evaluation system checks the memory of the student and not his analytical skills or the student’s ability to apply what he has learned. All a smart student has to do is to learn by heart and spit it out at the examination hall. I have always told my students that they have to be downright stupid to fail in an Indian University Examination. With the advent of Internet, the student should be allowed to explore.

I am not sure how many of our teachers or parents have understood the importance using the World Wide Web to turn your child into a wonderful person. It is the ultimate source for obtaining knowledge. The objective of the education should be to acquire long term knowledge that will stand the student in good stead through his life.

The student currently is focused only on individual goals represented by his marks and his rank. There is immense pressure on the student from his parents to perform well in an individual capacity and he is driven by the parents to believe that unless he gets a first rank, he is worthless. The student, over a period of time, starts viewing his classmates as adversaries rather than friends who would supplement his knowledge. This attitude is carried forward to his job, where he finds to his dismay that it just does not pay to have only individual goals. More often than not, being the only child, the student has to contend with parents who are very possessive and over bearing. This makes the student very dependant on his parents. How often have we seen a student doing well academically but found to be incapable of making even the smallest decision in life on his own. The parents have to take the blame for this. In their eagerness to make their Child's life smooth and hassle free, they are inadvertently turning the child into someone who gets everything easily in life and who is inept at handling any sort of problems.

An often looked aspect of our education is the batch strength which is currently in the region of 40-60. The Batch Strength should not be more than 15. It is proven through researches that the ideal student: teacher ratio is 15:1. This will ensure that the teacher will be in a position to pay individual attention to the each of his student.

The Final Parameter is the Quality of Teachers. Our system does not encourage the best talent to become the teachers. The Teaching profession has lost its sheen. A person takes up teaching as a last resort. Most of them take up the assignment for the wrong reasons. Many become teachers because they can’t get any other job, some because their husbands are working in the same area and they have nothing else to do, for some this is a time pass. Very few become teachers because they love teaching. I have interviewed so many people who have applied for the post of teachers and can count on my fingers the number of people who said that they want the job because they like teaching. The teaching job is not lucrative and in a vast majority of the cases, the teacher has to pay a hefty sum as Donation to get the job. The first priority of the teacher is to take back the money he/she has invested. The end result is the ultimate curse of today’s education system – Tuition. Parents too become an active party to this by forcing their wards to take tuition whether the student requires it or not. I had a Professor in Physics whom I admired a lot. He used to steadfastly refuse to take tuition. He says with lot of feeling “ If it is found that my student has to take a tuition to do well in his examination, I will resign that day. I take this as the ultimate insult and it is a reflection of the quality of my teaching” – Need I say more?

WIIFM – What Is In It For Me? Every customer asks this question and unless he is assured that there is some benefit for him, he will never buy a product. There is no WIIFM for the child and to go to the school. The child goes to the school because he has to, not because he sees a benefit. He does not enjoy going to school. This in the long run will spell doom for our Schools and Colleges.

The Educational Institutions are complacent. But they have to wake up. Otherwise they, in their present form, will cease to exist. Don’t tell me they wont. Who thought that our countryside would be full of private schools? They sprang up like mushrooms because the Government Schools refused to innovate. Our Schools and Colleges have already lost out on a big opportunity – the IT revolution. The phenomenal success of the IT Training Institutes should serve as a warning to the Formal Educational Institutions. Our higher education system is in a mess. We do not have a single university in the amongst the world's top 200 and the best young brains migrate to western countries that offer a chance for them to pursue a mentally stimulating higher order academic degrees. This needs to be seriously addressed.

The Formal Educational System has to innovate or perish, else posterity will not forgive us

Consumers - Kings or Idiots?

The year was 1990. I was just a few years into a marketing career. The place was Coimbatore in South India, where I was working as a Sales Officer for the oil giant, Hindustan Petroleum Corporation Limited. Remember, this was before the ubiquitous Internet and e-mail. I had to depend on snail mail to correspond with the office and people around the world. I went to one of the main post offices in Coimbatore, in R S Puram, to post some letters. Instead of the familiar single red letter box, I was confronted with five boxes in different colours - one for overseas letters, one for letters to other states of India, one for letters within the state, one for greeting cards and one for local posts. There was a written request to put the letters in the appropriate box to ensure speedy delivery. As a young professional, I was thrilled at the innovation and painstakingly did as was required.

Next day, I visited an old relative of mine who was a retired post master and told him excitedly about this innovation, thinking that he will be interested as he had worked 35 years in the postal department. He dismissed the idea with a curt remark, "What is so great about it? Now you are doing the job of sorting which was hitherto being done by the postal department". It dawned on me, a rookie management professional, how I have been now asked to take additional workload for no additional benefit. Postal department has quietly shifted a major part of their job to the customer.

Since then, I have noticed with concern the increasing number of instances where the burden of work has been quietly shifted to the customer.

In earlier days, petrol delivery boys took the key from you, opened the petrol tank, filled the petrol, collected the money and gave you the receipt. Now!!! in the name of self service WE have to do all these. More work for the hapless customer.

We were welcomed with open hands in the banks. With the advent of ATM, the work pertaining to withdrawal of cash has fallen on us. Now WE have to check the balance, insert the card, punch in numbers, take the card and cash out, wait for the receipt and to boot, the bank charges us extra for this. Some of the banks in Kuwait positively discourages us to do personal banking by charging 1KD for any transactions done in person up to 300KD. Now we have ATM machines accepting cheques. What next?

Another classic case is the way we purchase provisions for the house. Again, we used to make a list, hand it over to the Mom and Pop shop where we buy regularly and we can either wait or attend to other work till he packs all the items as per the list and loads it in the car. All we had to do was to make the payment. Today? WE go to a supermarket, WE walk around picking things, WE go to the counter, WE make the payment, WE push the trolley, WE load it to our car,and WE pay extra.

Consumers the kings!! or Consumers the idiots!!.......you judge for yourself

Branding Yourself

Branding, in olden days, was associated with hot iron, burnt flesh and cattle. Though we tend to brand everything under the sun, when it comes to branding oneself, people find the concept nauseating and unpleasant. The idea that one can be construed as a product does not sit comfortably for many, and thus the idea that people should be treated as “brands” seems too commercial a way of thinking to be relevant to most individuals.

There are many reasons for branding yourself, 1) you set yourself apart from the crowd, 2)you can position your focused message in the hearts and minds of your family, society and workplace, 3) you will ensure top of the mind recall in your audience's minds, 4) it creases your authority and will result in better acceptance of your decisions, 5) places you in a leadership role, 6) it enhances your standing amongst peers and friends, 7) attracts the right people and right opportunities, 8) adds perceived value to what you are selling, mostly ideas and 9) earns you recognition.

The goal of personal branding is to take the best aspects of branding theory and apply them to the marketing of individuals. The idea is simply to ensure a match between the goals of the individual and the market place needs. Personal branding deals with how the individual is represented in the marketplace, the level of awareness held and the things (feelings, images, perceptions, expectations) people associate with that individual. You have to constantly monitor awareness levels and control the way in which you are perceived by the marketplace, and maintain strong associations with desirable aspects and other events. It also calls for you to be consistent in the way you present yourself to the public and family.

Like any successful brand, you, as an individual, should possess a clear differentiator, the absence of which will result in you being treated as a commodity.

A personal brand can be defined as “a personal identity that stimulates precise, meaningful perceptions in its audience about the values and qualities that person stands for”

There are some crucial elements to creating a successful brand 'you'

1. Specialisation – Concentrating on a core strength. One thing that sets you apart from others and not replicable.
2. Leadership – Desirable. You need to be perceived as a leader by others. But remember, if you do not possess leadership qualities, but are a good number 2, ensure that you have the leadership status in the number 2 slot - in short, you are a damn good number 2
3. Personality – You have a unique personality with flaws. Leverage it.
4. Visibility – repetition is the key to developing a broad number of associations in the mind of the audience, and making yourself memorable. Seeing a brand continuously reinforces that the brand is good or powerful. For many people awareness equates to perceived quality, that is, they think it is good because they know it.
5. Consistency– The person must adhere to the brand at all times. People look for consistency that in turn leads to reliability
6. Nurturing – Any brand takes time to grow and must be nurtured. Developing a personal brand will take time, nurturing and consistency. Don’t change the brand abruptly
but be patient.
7.Augmentation - The brand needs to be augmented over a period of time and this has to be consistent with the original brand as otherwise repositioning will cause an erosion of brand equity. Upgrade your skill sets, behavioural patters over time.
8. Positive Energy - Ensure that you are being viewed as a positive person

You as a brand must be distinctive, consistent, based on strengths which are not easy to
copy, visible, unique, and seen positively.

Go on and brand yourself.

More on Investment

“Give a man a fish and he’ll have a meal. Teach him to fish and he’ll never go hungry” – This ancient Chinese proverb, like all wise sayings, is timeless, just as valid today as it was a thousand year ago.

Ask anyone who has gone fishing. He will tell you that it is very complex. It is an art as well as a science. Learning to do it well does not happen overnight. A top fisherman draws on his technique, experience and more important on patience. An amateur meanwhile relies on luck alone. He may be successful once in a while, but in the long run the top fisherman always succeeds.

Fishing closely mirrors the business of investment.

For many, investing is shrouded in mystery and fraught with danger. A hard nut to crack. They feel it is the preserve of a gifted few.

It is not. Like everything else, sound investing can also be taught and learned. It is a myth that only financial professionals can understand the nuances of the stock market. You too can do it. All it requires is sound fundamentals, common sense and perseverance. Experience helps, but that will come automatically. What is more important is the willingness to learn from the mistakes. Remember when you were a child. What did you do when you fell down as a toddler while attempting to walk? You just got up and tried again making minor adjustments. So it is in the stock market.

I shall elaborate on a FAQ mode:

Q: What if I get hurt?
A: Play for meaningful stakes. Do not expect to invest a few dollars and hope for a fortune in return. It happens only in lottery and gambling. But then you know the odds in favour of it. Million to one?

If an amount is so small that its loss won't make any significant difference, then it isn't likely to bring any significant gains either.

Put your money at risk. The degree of risk you will be taking will not normally make your insurance company run for cover. Do not be afraid to get hurt a little.

Q: Should I worry?
A: Of course. Worry is not a sickness while investing. It is rather a sign of health. If you are not worried, you are not risking enough. (Zurich Axiom 1)

Q: Should I invest spread my investments?
A:Do not put your eggs in many baskets. Ever seen the juggler in the circus who performs with balls. He has with him few balls. If he increases the number of balls, he loses control and his entire act falls flat.

Same is true of investment. Remember KISS, an acronym for Keep It Short and Simple. KISS your portfolio. Have a limited number of companies in your portfolio. Do not subject to the allurement of extensive diversification. If you have a wide portfolio, the losses and gains tend to cancel each other. It is best to put all the eggs in 3-4 baskets and watch them closely.

Q: When should I sell ?
A:Sell too soon. Don’t hope for winning streaks to go on and on. Don’t stretch your luck. Expect winning streaks to be short. When you reach a previously decided-upon ending position, cash out and walk away. Do this even when everything looks rosy, when everyone else is saying the boom will keep roaring along. (Zurich Axiom 2)

The only reason for not doing it would be that some new situation has arisen, and this situation makes you all but certain that you can go on winning for a while. Except in such usual circumstances, get in the habit of selling too soon. And when you have sold, don’t torment yourself if the winning continues without you. It is better to take your profit too soon. Decide in advance what gain you want from a venture, and when you get it, get out. Do not be a greedy monkey. Remember what happened to Isaac Newton.

Q: When the ship starts sinking, do I hold on?
A: For heaven’s sake don’t become a martyr. You are not the captain of the ship. So jump. Don’t pray. (Zurich Axiom 3).

Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain. Learning to take losses is an essential speculative technique. MOST never learn it. Take losses at once and move on. Take small losses to protect yourself from the big ones.


Beware of the three common demons,
Post bail out dissonance – fear that the stock might turn around once you quit.
Unwillingness to divorce - you have emotional attachment to certain stocks. You may not want to relinquish them.
Vanity – bailing out most often means that admitting you have made a mistake in the first place in acquiring them. Do not be obstinate. You are in the business of investing to make money, not to assuage your ego.

Conversational Marketing

With advertising costs spiralling, customer loyalty becoming fickle, reduction in attention spans and product life cycle getting shorter, Organizations are scurrying to find out cost effective methods of communicating. And they are resorting to something from the past -Conversational Marketing. Believe me, in olden days people used this to great effect. In fact this was the only tool that was available before the advent of newspapers, radio and the ubiquitous television. In a sense the wheel has come the full circle.

In the years to come, Conversational Marketing is likely to be used as a major tool in changing the negative perception of the customers or more importantly in developing a lasting brand image. Organizations will strive to engineer brand interventions and create new products that generate controllable, predictable, positive third party endorsement and word-of-mouth marketing.

Consumers are getting more powerful. With the advent of Internet and the consequent information explosion, there has been a perceptible shift from a sellers market to a buyers market. To remain competitive Organizations are forced to offer quality, inexpensive and innovative products which has a negative influence on their bottom line. With the world moving away from a services economy to an experience economy, the race is on to create value by transforming the mere consumption of products and services to meaningful consumer experiences.

Storytelling is a powerful currency that transforms the relationship between brand experiences and the consumers. Satisfied customers are requested to talk about their consumption experience in return for incentives, both monetary and non-monetary. This, called Conversational Capital, shall ensure enhanced brand equity.

Let us have a look at how Conversational Capital can be generated and maintained in the long run. There are numerous avenues available,

Icons: Since Consumers notice icons, products that exemplify the Corporate identity should be highlighted as icons

Rituals: Encourage active involvement of prospective customers and stakeholders in select events, organized periodically, to develop a sense of ownership

Endorsement: Celebrity endorsement acts as a risk reducer for the consumer and aids in associating products with an image. This helps in the positioning of products in the minds of the customer

Myths: Over a period of time, create and circulate traditional narratives or myths regarding the organization's products, services and customer experiences. Allow the legends to grow.

Personal Testimonials: Testimonials should be obtained from satisfied customers that shall serve as a marketing tool to generate word of mouth and to reassure new customers or fence sitters.

Creating conversational capital is a tedious process with hardly any tangible returns in the short term. But in the long run it will be well worth it.