Another Bubble of Our Own Making

The sojourn of Sensex from 8000+ levels to 16000+ levels in a short span of 6 months is remarkable by even the most conservative estimates. While this is still (thankfully) well below the 20,870 peak the index closed at on September 1 2008, it is high enough to cheer the traders and rapid enough to encourage a speculative rush. Those having a bullish countenance would of course argue that investors, expecting a robust recovery, are implicitly factoring a possible torrent of future earnings rather than relying on earnings figures that are the legacy of a recession.

That would be stretching the case a bit too far. With the deficit on the government’s budget expected to reach extremely high levels this fiscal, a cutback of government expenditure is likely. Further, exports are still doing badly and the global recovery is widely expected to be gradual and limited. That would limit the stimulus provided by India’s foreign trade. And, finally, a bad monsoon threatens to limit agricultural growth and accelerate inflation which in turn would dampen the recovery in multiple ways.

Given these circumstances, the change in perception from one in which India was a country that weathered the crisis well to one that sees India as set to boom once again is not grounded in fundamentals of any kind. There are two noteworthy features of the close to one hundred per cent increase the index has registered in recent months. First, it occurs when the aftermath of the global crisis is still with us and the search for “green shoots and leaves” of recovery in the real economy is still on. Real fundamentals do not seem to warrant this remarkable recovery. Second, the speed with which this 100-percent rise has been delivered is dramatic even when compared with the boom years that preceded the 2008-09 crises.

This implies that the current bull run can be explained only as the result of a speculative surge that recreates the very conditions that led to the collapse of the Sensex from its close to 21,000 peak of around two years ago. This surge appears to have followed a two stage process. In the first, investors who had held back or withdrawn from the market during the slump appear to have seen India as a good bet once expectations of a global recovery had set in. This triggered a flow of capital that set the Sensex rising. Second, given the search for investment avenues in a world once again awash with liquidity, this initial spurt in the index appears to have attracted more capital, triggering the current speculative boom in the market.

It can be safely concluded therefore that using liquidity injection and credit expansion as the principal instrument to combat a downturn or recession amounts to creating a new bubble to replace the one that went bust. This is an error which is being made the world over, where the so-called stimulus involves injecting liquidity and cheap credit into the system rather than public spending to revive demand and alleviate distress. So entailed with this verve, optimism and Bull Run comes a real risk of another bubble which might explode in your face any moment. The crisis, clearly, has not taught us any lessons.

Rendezvous '09 @ Bangalore!

Last saturday, I attended the IIM Indore Freshers Alum meet at Bangalore. The event was held at Gateway Hotel on the Residency Road. I attended the same event last year at Delhi. This year , not many people turned up for the event. Even the freshers were verh few. Anyway, we had our first meet post degree ! Though , the gathering was small , still we did enjoy sharing our experiences of life at IIM Indore. The life we were used to and which got over just a month and half back. Everyone was missing the campus and the events inside and outside the class we witnessed for the last 2 years. The best part of the meet was the video show. It showcased the life at IIM I to the new entrants. The video was brain child of PGP 2010 student Shashank Jha. Its a very nicely made video and I am uploading here for all those who want to have a sneek peek at life @ Hillock , which never sleeps!

Day We Earned Our Knighthood !

Today was my last day at IIM Indore and also the day I got my much coveted degree. The day started with myself and Riddhi jogging/walking down and up the Serpentine. Its was a difficult feeling today. I knew, today was my last day jogging on this road as there will be no tomorrow ! We took couple of snaps at the main gate and walked back. Sat for sometimes at the sunset point and tried to assimilate as much as we can in one hour we were there ! We tried to recall our past 1.5 year here. How Anupam studied Macreconomics under the tree at the sunset point and recited whatever he studied while we were busy doing exercises and alas! we got the same questions in the exam and we all passed ! That was Term 1, so close but yet gone so far ! Once back at hostel we got ready for our rehearsals ! The day was very hot and it was very difficult to sit /stand in the sun. Our teachers also participated in the rehearsal today. I could see them uncomfortable walking under the sun ! I believe this had some good effect as our actual program got postponed by one hour ! The time we wore our robs was also very exicting. As each one of us wore that black gown and red scarf, we tried out best to get that correct ! The procession started bang on time and soon we were sitting at our specially designed places and waiting for our turn to come ! With all that lectures and blahs blahs, the time came when our chair presented our batch to the board of governors for the degree ! Soon we were walking up and bowing and receiving our degrees ! It took each of one us not more than a minute to walk up the stage, bow, collect our degree and walk back down ! While walking up, I remembered the first time I landed at the gates of IIM Indore. I felt my throat sour and chill down my spine! It was a very different feeling of joy and saddnnes, both overwhelming ! Once the degree was done we met our parents and friends at the reception. The dinner this year was much better then last year. However, in my case I could not enjoy the entire evening, as I had to rush back home with my mom, bro and aunty at 9.00 PM. My bro works US timings and today was Monday, so he was supposed to be in office. So, I had to really rush through things and packed quickly and spearheaded home , so that the poor chap could be in office in time ! While driving back from the campus, I could feel my heart crying and I spoke to my bro that I am feeling very nervous driving out of the gate of the campus, as this is the last time I am here as a student and from tomorrow I will just an alumni ! He nodded his head and smiled and within a minute I was out of the campus of my beloved school and was transformed from a student to an alumni instantenously!

Written: 3oth March 2009. 11:15 PM, Indore.

Second Last Day...............

Today was the pneultimate day of our student life at IIM Indore. Early part of the day was spent in visiting the temple town of Omkareshwar about 70 Km from here. I went with my mom, aunt and bro.Drove all the way and drive was through Mahadev hills, very scenic and beautiful.Town was small and quite. A typical religious town in central India, but the Narmada was at its best. Since, its summer one can see the rock formation through which the river flows and it looks awesome. Very grand and heavenly!
After noon, came back to the institute, one final time as a student. Tomorrow evening, when I get my degree I will get transformed into an alumni. If you ask me the transformation is not going to be pleasant! We are so used to being a student that the mere thought of becoming an alum is getting most of us nervous. We went through couple of rounds of dress rehersals for tomorrow's convocation. How the procession will start and will move forward. How we have to accept the degree and then what to do next and blah blah! We enjoyed these moments as they are going to get etched in our memories for life. The institute is as its best, dressed in sparkling lights and the make up is too tempting. Last year when I wrote about the convocation,the scene was similar.
We had a grand party today and a grander party is awaiting us tomorrow evening! After dinner, there was a very famous skit of Charan Das chor by Habib Tanvir. It was simply awesome! The grand old man was himself there and it was good to see him, sitting and watching the entire show till late in the night. Myself and Riddhi, decided to go for a walk down the "Serpentine". I have named the winding road from the main gate up the hill as the Serpentine, for obvious reasons.

Trip to Tincha Falls!

We have been hearing about this place since the time we landed here. It is said to be the nearest to the campus ,about 15 KM in all. But as life would have it ,during the entire last 1.5 years or so we kept on planning a trip to Tincha falls, but the rigour of the course did not gave us any time to translate our wish into action. Two monsoons have passed, since we came at IIM Indore but our wish still remained a wish. But not this time ! We decided to visit the falls or our wish would have remained on the paper. So on a lazy sunday on 8th March, Anupam and myself drove out in my bros car searching for Tincha falls. I had read on the blogs and travelouge that the falls is non existent during this time of the year . We drove to MHOW and then searched for a road to Khandwa . We drove about 12 Km till we hit the Khandwa Road coming straight from Indore. From there we turned back towards Indore on the highway, till we hit a village called Simrol. We turned right from the road and took a single carriageway road to Tincha. We kept asking for the way and local guys were good enough to show us the way. One thing we noticed while driving towards the falls, the terrain was pretty flat and we was infact cultivated. There was nothing to suggest ,that there would be a grand water fall nearby. We had assumed that terrain would be hilly if not mountanious with a winding road taking us up and down, but it was not like that at all. The road was pretty straight and terrain flat or rather undulating. We came across few streams but on our way but that was nothing extraordinary. After driving 10 Kms on the road, we reached a villaged called Tincha. A herdsmen was quick to point out that the falls our a KM ahead and on the right hand side of the road. As we drove forward we came across a board by the tourist department indicating the location of the falls. We turned right and came acorss a rift valley. There were couple of huts for the tourists and the entire valley baricaded by wires, so that people wont fall down. We came out the car and started searching for the falls and as soon as I climbed one the mounds, I came across a spectacular view. It was simply awesome! The entire river bed sank into the earth forming a rift valley which was as long as eyes could see and the place where the rived bed sank, was the water fall. Obviouly, there was no water falling down there, but the view was spectaular and awesome. We could make out how beautiful it would look during the monsoons. The valley was quite deep and I could see a pool at place where the water falls down from 200 m above the valley. We decided to cross the river and go to otherside to have a look at the falls from other angles. There was no water in the river only rock formations in different colours. The view from the other side of the valley was as great as the earlier view. The pool looked deep and surprisingly there was a temple just along one of walls of the valley on the other side. We were extremely surprised as to how one reaches there. We tried to find the way to the bottom of the falls. Locals showed us the way but advised not to go down as the path was very steep and with a hefty fellow like Anupam with me it would have been impossible to climb back. So we decided not to go down for the sake of a baby elephant with me. We took couple of photos of the valley and the falls without any water. We spent about 45 mins there and it was worth a visit. While coming back we decided to follow the other route and rather then going back to Mhow , drove straight towards Indore, turned left on the by pass towwards Rau and came back. This route was better then the Mhow one, as the road was much better and straight forward but yes, it was longer.It took us about 2.5 to 3 hours to finish the entire trip. A piece of advise to all IIMIans planning a trip to Tincha:

1. Take the route via the by pass and then to Khandwa road to Simrol rather then the MHOW SIMROL road. The road is better, driving time is less .

2. Best time to visit is obviously the monsoons but the place is very beautiful even without the fall.

3.You need only 3 hours max to visit that place and be back at the campus. Its worth a visit.

4. Please do not let the monsoons pass by as we did, if you really want to enjoy the place.

From Good To Better!

Today is the last day of our academic program. The term 6 officially comes to close today! There would not be any class, assignments, tests or quizzes after today! After tormenting 6 terms ,spanning 2 years, life comes a full circle.
Its been a wonderful experience for all of us here at IIMI. If you ask me what is the biggest take home from here ; I would say it is time management and ability to work on multiple tasks.However hard and tough the deadlines are , we have learnt how to win ! All due to famed IIM quality of teaching and the academic rigor, insomnia is now a skill for most of us.
One autum afternoon in the year 2007, when I landed here ,I expected to master finance, marketing ,operations etc etc. However, I did not expect that I will be a completely transformed person. I have discovered my love for writing and also have experience of running the B school magazine. The take home from running this magazine is not less, if not more then what I have learnt in the classes.I was already an aggressive personality , now I have become overtly aggressive. I am sure no one can take me for a ride. I think quickly and from N different angles before I take any decision.The best part is that the changes are very subtle in nature.It takes a while to recognise them and I am sure there are many which will still go unrecognised, but they have become part and parcel of the personality.I remember the prof telling me in the first term that once the course gets over you will be altogether a different person.The best part of my MBA has been the much needed change it brought for me , a change from the old rut, from a life which witnessed people pulling each other legs and making scapegoats out of innocents taking advantage of somebody's circumstances! Its not that the world would have changed, when I go back to work, but at least I got a break and my mind got a fresh lease of life to tackle all that crap once again ! But the difference is this time I will work on my own terms; on my own i repeat! There is saying which is popular at IIMs, either I will be the boss or I will do my own thing! I can now understand what does it mean.I could try and explain but you really have to be here at IIM to understand.
Anupam just reminded me that, I need to send the report of our global business project today, as there will be no tomorrow!
So, here I go and finish off the report and send it to prof before its tool late! Time to work now!.

O Lord! Its getting over !

The last term is currently on. Coming to end on next weekend! This will pull the curtain down on our course atleast the classroom part! Last one and half years have simply swept by, the word swept may be in appropriate ,but this is closest to what I really mean to say. Its been a journey of journeys, full of hard work, sleep less nights , lectures, presentations and case discussions. Its very hard to believe that its getting over finally ! I am already feeling an errie silence ;a vaccum in my life even before this course gets over.For the last 1.5 years this was our priority rest everything else became secondary, everything ! While I was not doing the course work , I was planning for trips back home and then back again! The train journeys, the journeys by plane all will be etched in memories for ever! I am really going to miss the puri bhaji and kachoris of Nagda! Also travelling in a group in a plane was very exiciting. Most of my classmates are feeling very nostalgic about this place; although we will finally bid good bye only on 30th March 2008; our convocation day!There is a certain magic in this place. Everything here at the campus seems so unique and refreshing. The winding road on which I have travelled un countable times looks different every time I walk or jog on that. I still cannot remember the different shades that the sun set point witnessees in the day. I have tried to capture the moods of the campus and the sorroundings in more than 1000 photographs but every time I go out, it seems that I have missed out on something. This place is amazing, the energy here is amazing , the vibes extremely positive. Infact, the moment you get inside the gate of the campus you can feel the energy flowing across your marrow! IIM Indore rocks and is rightly called "On top of the Hill, which never sleeps"!