Who is More Powerful? Finance or Marketing Guys?

Before i write anything, i would like to make it clear that i am doing my majors In Banking & Finance. Now that should not make me bias towards a particular side.I strongly believe we as human beings do selling continuously in some way or the other sell, weather its HR manager selling a company to employee, or CEO selling it to investor, a top notch Investment banker pricing the issue and selling it to the Public.Selling may sound sad or to some of you harsh but then its an integral part of marketing. Now some of you may say, hey i want to get into Equity Research,i want to do Financial Modeling, why should i sell,if not that question then what should i sell; interesting my friend Abhishek Arora once said, Equity Research is of two types Buy side and sell side, one that you sell to management for proprietary trades executed by brokerage house and other either sold to your clients (generally Institutional)for the fees, and the other one which is made open to public through analyst upgrades/downgrades, bottom line is if you are an excellent analyst but you dont know how to put it in words and present it to clients,and pitch the report properly there will be no takers and all that excellence ,brilliance and exuberance with which you make the report goes in vain. See if you have good analytical skills you can have a nice job travel first class have a stiff life,but can u reach to the Top, my readers would have seen the 1985 flick WALLSTREET , Gordon Geckko was not an analyst but a great street smart marketer.we all know the Success story which Apple Inc. has crafted the person responsible for making Apple Steve Wozniac (hey who's this Guy a typing error ) no sir no typing error the Brain Behind apple was of Wozniac,still we say it was a brain child of Steve Jobs.Who took Wipro from $250 million Co. to a $1 billion Enterprise, it was Vivek Paul the most charismatic CEO. You might feel why this guy is writing this article many of you reading this feel that Marketing is for wimps no its not the case the most infuential and sucessful people born who have made History were /are good marketers .Another reason i am of this view point is that God is a smart kid sitting out there, we can improve our soft /negotiation skills to a large extent but not our analytical. And i belive the key to sucess in life is identify your weakness and play to your strengths !

Financial Turmoil

A school boy doing his Physics assignment due to his curiosity and over influence of news Channels asked his father, “Dad what do you mean by Sensex ?” , father being aware of financial crisis replied , “ Son something that falls faster than 9.81 m/s2 “. This may sound dramatic, but in past few weeks we have seen this some chain of events in which big and Historic names from the Wall Street are getting wiped out, Investment banks are falling like Domino’s.
The Big American Investment Banks are changing their models, and turning into commercial banks, and as we sit on the couch and sip our cup of coffee, we tend to feel is this the failure of the Big American Capitalist Model?, or just the greed on side of Investment Banker’s, who for sake of few basis point profit took exposure in products having fancy names but high risk. As time passes by the speed of Write-off’s and big names going belly- up would stem. And then the ‘subprime crisis’ might spread its wings into the Real Economy.
But we are safe and sound 12,000 miles away in our living rooms watching Saas-Bahu Soaps, are we? The Decoupling theory was put to bin by the screen as, Dow had a great Bow to four digit figures and Sensex tested the 10K levels, which were seen two years ago. Initially when we saw a correction in the markets it was due to capital flight on behalf of FII’s due to high risk formation in Emerging Markets, and now the same FII’s are pulling back the capital employed in EM’s just to meet there obligations abroad.
So the big question here is that can Corporate India sustain is growth and help provide the fuel for India to keep shining? I have my reservations on this issue, and got reasons for the same. The Recent IIP (Industrial Index for Production) numbers don’t quite reflect it. Services Sector is major contributor to India’s growth, and IT & ITES sector has a lion’s share of it, major revenue for this Industry comes from the BFSI in USA and Europe, which has been hit badly, yes we can argue Rupee has depreciated a lot , boosting the bottom-line of IT companies, but there top-line will be affected as the IT spending( by the existing players who still survive) will reduce eventually. If we talk about manufacturing industries, they need fuel of capital to fire them, which they are finding it difficult to raise from the Equity markets as of now, and the cost of borrowing has also gone high , so debt funding goes out of the Window. The worst hit is real-estate and Infrastructure which are abandoned by all investor, once a darling of all had turned orphan. Textiles could have benefited, from the lows of the rupee but again the weak consumer spending in USA and Europe may not let that dream suffice.
The Analyst on D-Street are screaming about cheap valuations, we use PE multiples which in a way is a technique of Relative valuation, and we compare PE ratio of our scrip with Industry PE and that of market leader, but one thing we should take into the picture is the interest rate in the system.Historically PE ratio had a negative co-relation with the Interest rates in the system*. The ability of a firm to generate earnings is a function of interest rates. So when the interest rates in the system go high the earning expectations tend to go low, and on those expectations the share price, so investor should keep in mind as he PE falls the futuristic earning will also not grow at the same rate.
There are some positives to take as the Global cut in the Interest rates, and reduction in CRR by the Central bank, but these measures are temporary & inflatory in nature. The Big Bail out and provision of liquidity for banks in USA and Europe is a good news, but now after this subprime saga the banks would be very cautious (for lack of a better word) in lending, which again might be a roadblock on track to happy days.

*The following Study at NYU exibiting a strong negative co-relation between the two. http://pages.stern.nyu.edu/~adamodar/pdfiles/pe.pdf

Love Your Work!

Real motivation comes from within, real drive comes from within we always try to derive inspiration from others, we read success stories, all of us love a story of an outright underdog who pushes himself to glory.
The key for success actually lies within you, and it’s the journey and not the destination that is more important. “We all are looser in some way or the other”, is what one friend of mine use to say always, he was of the belief the coolest guy in the college is a looser at something or the other and that’s what pushes him to be cool. A nerd pushes himself towards books because he believes , books are the only thing that will make him successful, so is it fear what helps us to push ourselves, fear , fear of failure , fear of not being popular, fear plays a crucial role in motivating us.
Wait a minute is it right, should fear motivate me? Or passion motivates me?
I leave this question to you, but if one thing for sure if fear does motivate you, you don’t enjoy things, you don’t enjoy the journey called life, whatever you are is just because of that two letter word ‘what if?’
Man is a social animal, and trusts me you hate it or love it, deny it or accept it we have herd mentality, if someone says something is good and you just accept it “ hey is that good, good for me?” this is a question we seldom ask. To cite an example I don’t have to go too far away in my b-school every Tom Dick, Harry and Sally wants to be either an Investment Banker or wants to be an Equity Analyst. Without even knowing what it is all about?
It’s Innovation that liberates and not imitation, I came across another sect of people, who sincerely believe success is a function of GPA, and there is this elite class of people who walks with their head held high and are immortals in the campus. If we have to run a regression equation its simple one depended variable is their academics, on which their life depends. And these immortals also include list of people who have worked over the years in corporate, but I don’t blame them since they have been groomed in the similar environment. Then there is a breed of people like me who totally believe that formal education and set patterns can upset you, as you are caught up in Shackles’ which you can never really break, and stops you indulging in innovation. By saying that I am not advocating my beliefs and saying there should be no diligence and there should exist complete chaos. No method to the madness is must, but let’s has madness at the first place; I always say that there is a pleasure in being mad, pleasure which few big mad men know. And Madness stems from passion, passion to learn perform and innovate.
Coming back to drive and motivation I believe that one should do whatever he or she loves to do,” it’s easy to say that, stakes are high, I got liabilities up my sleeves and for me money is the key”, I totally agree but I propose a hypothesis that , hey if you are not good at something and if you don’t do something with passion you will never outperform in that field, in that job, rather you join a field which you love and are passionate about, your success probability increases. Myopia is a shortcut to disaster.

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