Suresh Shanmugam

I am not going to stand here and tell you that failure is fun. That period of my life was a dark...

Wed, 23 Jun 2010 15:30:06 +0530

I am not going to stand here and tell you that failure is fun. That period of my life was a dark one, and I had no idea that there was going to be what the press has since represented as a kind of fairy tale resolution. I had no idea then how far the tunnel extended, and for a long time, any light at the end of it was a hope rather than a reality.

So why do I talk about the benefits of failure? Simply because failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me. Had I really succeeded at anything else, I might never have found the determination to succeed in the one arena I believed I truly belonged. I was set free, because my greatest fear had been realised, and I was still alive, and I still had a daughter whom I adored, and I had an old typewriter and a big idea. And so rock bottom became the solid foundation on which I rebuilt my life.

via J K Rowling

How to make engineers write concisely with sentences? By combining journalism with the technical...

Wed, 23 Jun 2010 15:29:04 +0530

How to make engineers write concisely with sentences? By combining journalism with the technical report format. In a newspaper article, the paragraphs are ordered by importance, so that the reader can stop reading the article at whatever point they lose interest, knowing that the part they have read was more important than the part left unread. State your message in one sentence. That is your title. Write one paragraph justifying the message. That is your abstract. Circle each phrase in the abstract that needs clarification or more context. Write a paragraph or two for each such phrase. That is the body of your report. Identify each sentence in the body that needs clarification and write a paragraph or two in the appendix. Include your contact information for readers who require further detail. — William A. Wood, September 8, 2005 (source)

Best Writing Advice for Engineers I’ve Ever Seen. Period.: Home

Returns model using book value method

Mon, 12 Apr 2010 19:20:42 +0530

Returns model using book value method

Photo

Wed, 24 Feb 2010 13:43:55 +0530

Notes on India's default risk

Wed, 10 Feb 2010 11:12:44 +0530

Rating agencies models have come under severe scrutiny in the recent years after their track record on issues related to the sub-prime crisis.

In Financial Express column, Vaidyanathan argues that “When Greece gets a higher credit rating than India, there is a problem”. He observers that current rating of India at BBB- has a greater likelihood of default than Greece at BBB+. While the credit ratings believe that default risk is quiet high for India, despite its economic run in the recent years.

I believe the above argument gets off-track from economics and is far more of ‘playing to the gallery’ than real contribution to understanding of the mechanics of sovereign credit ratings.

A country’s credit rating is determined by these set of factors, as research suggests [1]: per capita income, GDP growth, inflation, external debt, level of economic development, and default history. Given that India has been seen impressive performance on certain factors like GDP growth in the recent times, the amount of economic development as measured by various agencies like World Bank or IMF, continues to group us in the bottom quartile along with sub-saharan Africa or South east Asia. This is the primary reason for a poor rating for India’s paper. While, Indian economists seem to look away is the fact of equitable social and economic development as they are clearly writing what people want to hear in Urban India, ‘India’s relentless march towards economic superpower status’.

Greece on the other hand would far well on the qualitative factors such as default history and economic development. If we look at a specific factor like fiscal deficit, Greece is on par with US in their deficit at about 10%. While US has been rated the safest rating, and recent comments from US Treasury that they would never face a downgrade. That statement is quite true given that they are free to print as much currency to pay back their obligations, without a direct material impact on their economy.

[1] Cantor, Richard Martin and Packer , Frank, Determinants and Impact of Sovereign Credit Ratings (October 1996). Economic Policy Review, Vol. 2, No. 2, October 1996. Available at SSRN: http://ssrn.com/abstract=1028774

Why Private Equity in India?

Mon, 08 Feb 2010 21:21:22 +0530

Ajay Shah makes a great point in the context of family run businesses that effective management is one of the best reasons for thriving PE industry in India.

To quote him:

This evidence encourages a style of private equity investing: where the investor takes a controlling stake in the firm and brings in the necessary knowledge and human resources to achieve business transformation. This is a lot of work when compared with an investor who only puts in capital. But if the core impediment to progress is the stasis of a family-run company, then this could be of essence.

Read the entire article here.

As an hedge fund analyst

Sun, 07 Feb 2010 21:59:08 +0530

What does your job entail?

I am an analyst for a long short equity hedge fund. My main responsibility is to advise my portfolio manager on investment decisions. This involves forecasting earnings and valuing companies based on my primary research.

Do you have any specific areas of focus?

My sector focus is industrials (Capital Goods), which is extremely broad. Within industrials, I am currently focused on aerospace, defense and diversified engineering companies. On my personal interest, I also track technology sector especially internet companies.

Did anything draw you specifically to industrials/tech as a sector?

Being an analyst requires you to stay on your toes and achieve a very comprehensive understanding of industry players and sector dynamics. It is often learning about these companies’ products and the science behind them, not just their financial statements.

What skills are emphasized in the work that you do?

I think it’s very important to be a patient listener and a fast learner when you are picking up new concepts. You have to be methodical as well - sometimes you will spend quite some time learning the ins and outs of a sector or the particulars of a company before you can really get an edge. Diligence is probably the most important attribute for any analyst. It is very easy to lose the trust of your superior by messing up some minor detail, and once you have lost that trust, it can be hard to move back into a position where you have had the same responsibilities as you had before.

Android development on Samsung Galaxy:

Sun, 31 Jan 2010 15:49:23 +0530

I got a new phone - Samsung i7500 Galaxy. Looks like it is going to be more fun than my older phones.

1. Samsung i7500 Galaxy runs the Android 1.5 platform. So I downloaded the sdk tools from google and then followed their readme to get started with getting the 1.5 platform specific downloads on my mac.

2. I got the Galaxy skin from rexxar, for better looks. Got eclipse and ran couple of examples on the phone.

Now I need to implement couple of ideas for the phone, first the indian real time stock market app in similar lines to google finance app and notes app which is simple enough and syncs with my dropbox account.

Linchpin - Seth Godin - Summary

Sun, 31 Jan 2010 15:46:08 +0530

Quieting the lizard brain

How can I explain the never ending irrationality of human behavior?

We say we want one thing, then we do another. We say we want to be successful but we sabotage the job interview. We say we want a product to come to market, but we sandbag the shipping schedule. We say we want to be thin but we eat too much. We say we want to be smart but we skip class or don’t read the book the boss lent us.

The contradictions never end. When someone shows up and acts without contradictions, we are amazed. When an athlete just does the sport, or when a writer just writes the words, we can’t help but watch, astonished at the purity of their actions. Why is it so difficult to do what we say we are going to do?

The lizard brain. Or as Steven Pressfield describes it, the resistance. The resistance is the voice in the back of our head telling us to back off, be careful, go slow, compromise. The resistance is writer’s block and putting jitters and every project that ever shipped late because people couldn’t stay on the same page long enough to get something out the door.

The resistance grows in strength as we get closer to shipping, as we get closer to an insight, as we get closer to the truth of what we really want. That is because the lizard hates change and achievement and risk.

The lizard is a physical part of your brain, the pre-historic lump near the brain stem that is responsible for fear and rage and reproductive drive. Why did the chicken cross the road? Because her lizard brain told her to.

Want to know why so many companies can’t keep with Apple? It’s because they compromise, have meetings, work to fit in, fear the critics and generally work to appease the lizard. Meetings are just one symptom of an organization run by the lizard brain. Late launches, middle of the road products and the rationalization that goes with them are others.

The amygdala isn’t going away. Your lizard brain is here to stay, and your job is to figure out how to quiet it and ignore it. This is so important, I wanted to put it on the cover of my new book. We realized though, that the lizard brain is freaked out by a picture of itself, and if you want to sell books to someone struggling with the resistance (that would be all of us) best to keep it a little more on the down low.

Now you have seen the icon and you know its name. What are you going to do about it?

Personal development for smart people - summary

Sun, 31 Jan 2010 15:45:08 +0530

Seek truth with open eyes. Courageously accept your discoveries and their consequences. Rid your life of falsehood, denial, and fear of what is. Make truth your ally, not your enemy. This isn’t easy, but it is correct.

Share your love openly. Connect with yourself and others by tuning in to the connection that already exists. The risk of rejection is overshadowed by the rewards of loving connections. Whenever you feel disconnected, reach out and connect with another human being. Remember that you’re always loved.

Fully develop your human abilities, and use your power in honorable service for the highest good of all. False power corrupts, but true power elevates. The more you resonate with truth and love, the greater your ability to wield power wisely. No one is served by your refusal to shine.

Embrace your unique path of growth. Use your intellect and emotions to guide you in the conscious pursuit of truth, love, and power. Invest in creative self-expression, service, and contribution, and you will suffer no scarcity. Your greatest gift to the world is to share who you really are.

Enjoy your incredible human journey. Accept the highs and the lows as equally valuable. Recognize that your deepest sorrows reveal your greatest joys. Share your stories with others, and know that you’re not alone. Be grateful for your time on earth.

Future of artists

Sat, 30 Jan 2010 15:01:15 +0530

Seth Godin talk about artists and their leverage in the new connected world.

Today, I listened to Sophie Madeleine. She is so talented. She chose to sell her own music, instead of going the record route of publishing music. It is now possible for quality content to be distributed more easily than ever before. I think the days of studios and arbiters of any art, are counted.

But, India as a music market puzzles me. Where is the money to be made in here? May be live performances, souvenirs or donations. May be I need to think of possibility of Indie India.

Clustering stocks in a sector

Thu, 28 Jan 2010 23:46:38 +0530

Quantitative clustering techniques solely rely on grouping a bunch of stocks based on returns and their correlations, seems to fail while trying to classify a set of stocks in an industry. I ran a test on set of 20 stocks from utilities and couldn’t find meaningful clusters just based on this data analysis alone.

Another technique which helped me though was the fundamental classification method. I created a vector of factors for this sector and rated each stock’s exposure to this factor. Then grouping stocks which had very similar factor weights seemed to show a lot of promise.

I should take examples from Indian stocks and elucidate this more clearly in the next post on this topic.

Getting started with quantmod

Thu, 28 Jan 2010 08:32:31 +0530

I got quantmod installed on R at work and home couple of months ago. Here are the instructions for installing them from the R command line.

install.packages(c('xts','Defaults','quantmod'))

Check out the Quantmod homepage for further information.

To quickly whip up an example to check your installation is alright, use this script:

 # chart AAPL ticker
library(quantmod)
getSymbols("AAPL")
chartSeries(AAPL)

"I’m not a disciplined person. Having bipolar affective disorder doesn’t help but I..."

Sat, 23 Jan 2010 21:32:37 +0530

“I’m not a disciplined person. Having bipolar affective disorder doesn’t help but I suspect that even if I didn’t have it, I’d still find any kind of predictable routine or structure uncomfortable or confining.
In order to be as successful as I have been, I’ve had to resign myself to a relentless internal conflict. I impose on myself an unforgiving regimen that ensures a reasonable amount of work gets done (and not just in the studio) every week. At the same time, I struggle to resist the fast shifts of mood, stray impulses and occasional surrender to lethargy that conspire to erode it.
Most days, I achieve a precarious but productive balance. Some days I don’t. Then, nothing at all gets done. When I fuck up, there are always plenty of good excuses. But I’ve learnt that cutting myself even a little slack makes it harder, not easier.”

- Self Vs. Self: My Law And Disorder

"Live the life you’ve dreamed."

Sat, 23 Jan 2010 15:52:21 +0530

“Live the life you’ve dreamed.”

- Henry David Thoreau (via theimpossiblecool)

"Every day I meet people who have so much to give but have been bullied enough or frightened enough..."

Sat, 23 Jan 2010 13:28:00 +0530

“Every day I meet people who have so much to give but have been bullied enough or frightened enough to hold it back. It’s time to stop complying with the system and draw your own map. You have brilliance in you, your contribution is essential, and the art you create is precious. Only you can do it, and you must.”

- Seth Godin

Selling ebooks on Amazon Kindle

Thu, 21 Jan 2010 19:57:32 +0530

Today, I got really intrigued by the Kindle Digital Text platform for publishing ebooks. Amazon recently announce that it would increase the royalty paid for the books to 70%. But there is fine print to this news, this program comes in effect in June 2010 and is applicable only to the content that gets sold in US.

So, the royalty rates are going to stay at 30% for sometime to come or until Apple does something radical next week. But, this Amazon platform offers quite a new mechanism for ebooks publishing and I believe people are going to consume more books and content than they did earlier. This is turn of book publishing to be democratised.

I have been contemplating on the possibility of launching a ebook for quite a while. I intend to do an ebook on finance topics which could be used as primers/guides for getting an understanding on specific topics.

"Out of the night that covers me, Black as the pit from pole to pole, I thank whatever gods may..."

Mon, 18 Jan 2010 16:33:22 +0530

“Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.
In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.
Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.
It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.”

- Invictus

Apple Tablet

Fri, 15 Jan 2010 13:12:51 +0530

I wish Apple could make a computing device that would make Wacom Cintiq redundant. Cintiq behaves like a hardware peripheral made by elves and not like a computing device by itself.

My ideal product for touch, brush/tool based computer, follows this premise ‘everything is the screen’. No haggling with the cables and all the other nasty bits.

Apple whip out a product for this, please.

"I have no talent. What I do have is a lot of practice. And I am not talking about occasionally..."

Wed, 13 Jan 2010 12:10:04 +0530

“I have no talent. What I do have is a lot of practice. And I am not talking about occasionally dabbling in Ruby on the weekends. I am talking about the kind of practice where I beat code that isn’t working into submission (though often times the code wins). The kind of practice where all of a sudden I realize that it is 2am and I’m exhausted physically so I should go to bed, but mentally I feel on fire so I let the code have me for another hour or two (I imagine this state to be like a marathon runner or ironman near the end of their race).”

- I Have No Talent // RailsTips by John Nunemaker

John, thanks for writing this.