What is more Important; Return on Investment or Absolute Investment

Posted on 1 CommentPosted in Investment

Investment :

The time of the year, when every one at least looks at the Investment either mandatory under 80-C or future planning, child education or any other objective based investment. Secondly, the only thought comes to our mind, while choosing investment is return that we expect to earn.

My question : Do we really think amount how much should be saved, and thus invested?

The answer could be very simple, I know how much I need to invest, I have my personal financial goals, I am conscious of my Savings etc.

May be true….I think, our decision is mostly driven by surplus available with us or more aptly money available in Bank Account, else, why we do not swap the investment or shift the mutual fund scheme, since its also money available to us for reinvestment, mostly, money that is already invested is never considered as part of our formal kitty of investment and mostly all of us have Status quo bias, whereby we can not force ourselves to review our past decisions. In nut shell, we hardly think about Saving Rate.

Coming back, though, its difficult to anticipate returns on investment unless one is considering fixed maturity/tenure or government investment, still we grapple with all important idea of return. The return in my views, depends upon




Depending upon which order, you look at it. Still, the moot point of the post is not so much about how to maximise the return but is it really important?

All our investment decisions are purely based on rate of return, in the process, we forget the base rate of investment. Every one tries to maximise the wealth, you may also call the ROI or Savings or Net Worth..But, how could we do it…Its very simple.

Wealth = Saving X No of years of investment.

In the process, we forget the amount of Saving. Since, its not the return of investment alone that determines your future Wealth but, the Base Amount and Longevity. If you save additionally, say Rs. 50000/- a year, and assuming your return on investment is say lower by 2%, still in Long Run you would end up making far more substantial money.


(a) the power of compounding..

(b) Base rate i.e. amount of investment.

I strongly believe that though one must try and maximise return, and it is relevant, (no doubt about it)…but in all the clamour, one should also focus on amount of investment, even if you can increase your saving by say 5% additionally every year, in long run, it would turn out to be substantial amount…And since the actual return would only be known in future, little more focus on amount of investment/ surplus generated by additional saving is equally important, unfortunately, our mind is not trained to think this way…

Now how to increase savings by 5%…thats another question, and answer depends upon myriad factors from Life Style or Philosophy to Actually making that decision..

Here’s What I learned About Leadership, while bumping into legendary Adman.

Posted on Leave a commentPosted in Leadereship

This article, I stumbled upon while reading businessinsider.com. If you are not aware, Mr. David Oglivy, the great adman is considered to be legend in advertising, still, his profound leadership qualities have influenced millions.  If you have time, read thru the entire article, certainly…it would make you think…in day to day humdrum, we nearly loose connect with our people, and leadership can not be practiced but for our people.


It was 1986 and I was on the fast track: 28 years old and a newly minted corporate officer, Vice President/Director Financial Analysis at The Ogilvy Group, Inc. (“TOG” – then the NASDAQ and London Stock Exchange listed parent company of the most renown advertising agency in the world, Ogilvy & Mather, and several other advertising agency networks, as well as a few sizeable enterprises specializing in alternate marketing disciplines). With 321 offices, in 49 countries and a blue-chip client roster to die for (Unilever, American Express, Shell, Seagram, Boeing, etc.) there was billions of dollars annually running through TOG’s bank accounts.

My main job responsibilities were to plan and manage TOG’s global cash position, bank relationships, and credit facilities, as well as perform and coherently distill in-depth analysis of our competitors; not to gloss over special projects frequently tossed my way by mentor, Chairman/CEO, Bill Phillips.

A typical workday, by choice, was 7 a.m. to 7 p.m., in a cramped, windowless, and roughly 12-by-12-foot office, located in TOG’s World HQ, at 2 East 48 St. in New York City.

One evening, a bit past 7 p.m., I had just put the final touches on a report promised to John Gill for the next morning. John was TOG’s CFO, the boss who hired me into the company two years earlier and about as fine a gentleman as you will ever meet. I knew he had long since headed home to his family, and I’d likely beat him in the next morning but just in case this was going into his in-tray right now.

By my calculation, I had about 20 minutes to race the mile from 48 Street and Fifth Avenue to the Port Authority (42 Street and Eighth Avenue), to catch the next bus heading toward my New Jersey apartment. If I missed that one, I‘d have to wait another 40 minutes or so for the next, exploding my evening ritual of a quick five-mile run, late meal, 11 p.m. TV news, sleep, repeat. An outdoor period of solitude and endorphins would be forfeited to an indoor one of masses and impatience.

I threw on my overcoat, grabbed the report, picked up my briefcase and darted out of my office in the direction of the in-tray on the desk of John’s secretary, to be followed by a sprint to the elevator. Three steps into a full head of steam and WHAM!!! I collided, chest-to-chest, with another human being.

Remorse and athletic reflex were set off immediately. Simultaneous to thoughts of  “oh no, I’m an idiot, hope I didn’t hurt this person,” I dropped both the report and briefcase, seized fistfuls of shirt and yanked. Fortunately, I prevented the final descent to the floor but in view of the body slam, violent levitation, and replanting, I was not expecting gratitude.

Winded, disheveled and six inches from my nose, the victim’s face came into focus. Panic joined contrition. Standing in front of me, tucking in his shirt and giving me the “are you insane” stare, was our founder, the name the office doors around the globe, David Ogilvy. Gulp!

I’m thinking, “This cannot be happening … man lives in a castle in France … he hates to fly … never met him and this is howdy-do … oh good lord, pack up Jim, you’re done…” At the same time I’m trying to apologize. An initial bout of the “um, er, ums” was mercifully replaced by a chorus of  “I’m so sorry.” To my amazement, equilibrium regained, he smiled, stuck his right hand out and said “I’m David Ogilvy. Pleased to run into you.”

I took his hand and shook it, not too firmly, and said something like, “I know who you are…I’m really sorry…wasn’t expecting anyone to be coming around the corner…you all right…” He kept smiling and responded that he was fine and glad to see such vigor late in the day.  Then asked my name. I replied, “Jim Treacy.”

Then the most amazing thing happened. His response even more unexpected than his incredible graciousness, “The remarkable young fellow who authors those excellent cash papers … let’s sit in your office and chat a bit, if you have time.” I’ll never forget it and happily complied.

For roughly 45 minutes, David Ogilvy and I sat in my tiny office chewing the fat. He insisted I sit in my desk chair. He sat in a guest chair, wedged in the four, or so, feet of space between the front of my desk and an office wall. Here are some of the topics we discussed:

  • He demonstrated that he knew my career background and asked about my upbringing, education, personal life, etc. Warned me that the quest for work-life balance is challenging.
  • The importance of cash flow in a business: I commented that it is the lifeblood of a company, know it and know the state of the business. He retorted something like, “let’s see if this board director knows what he needs to.” He peppered me with questions on some issues from my most recent papers for the board. He’d read them, closely!
  • He saw my surprise and said I should return the favor by reading his book “Ogilvy On Advertising.” Feeling comfortable, I told him I had read all three of his books (“Blood, Brains & Beer” and “Confessions of an Advertising Man”). The quiz began, and thankfully I passed. “Well done. You know, not enough of our account and creative people have read those, and if they did you’ve outscored most of them,” he said. My chest swelled. Aside: “Ogilvy On Advertising” is one of the great business books of all time, particularly Chapter Four on leadership and hiring.
  • Then he told me in his heyday running the company he would occasionally roam the halls in the evening, to see who was still around, what they were working on, sit and talk with them a bit, etc. He said it helped him keep a pulse on the business and in fact that was what he was doing this evening “when you nearly killed me.”

With that he looked at his watch and said, “This was fun but I must be going. I’m due for late supper at Bill’s (CEO, Phillips) place and am afraid you’ve put me a bit behind. Do you know where he lives? If not too inconvenient, perhaps you could walk me there? I get all jumbled up sometimes and it’s been a while since I’ve been in New York…”

Happy compliance continued. Bill lived in Museum Tower (15 West 53 St., just off Fifth Avenue), a short walk, no matter; at that point I’d have accompanied David Ogilvy to the ends of the earth if he needed a guide.

On the way he baited me, asking my view on an issue I fortunately was aware he and Bill disagreed on. I told him, “No dice…I know you disagree with Bill on that one. If I agree with you he’ll hear about it at dinner and I’ll be in big trouble, and if I agree with him you’ll be more likely to tell him about the dolt who nearly pancaked you.” He belly laughed, “Good for you, well played.”

With that we were in front of Museum Tower. He thanked me and I him, adding a “Good night, Mr. Ogilvy.” He said I could call him “David,” but I was never able to do that.

The next morning, sometime around 8 a.m., Bill stuck his head into my office and told me, “David, enjoyed his time with you last evening. Thanks for that and for walking him over to my place.” The CEO came out of his way to thank me for something that was 100% my pleasure, amazing! The Ogilvy company culture of civility was inspiring.


HBR – Professor Recommends Books

Posted on Leave a commentPosted in Books, Idea, Self Improvement

Disclaimer : Three out of seven books, I have read and thus tempted to share the list with you…in some time, I plan to read all of them…

Mostly, we do not finish books, but I have come to realise that buy as many books as one can, and try and read them as many as possible…some time, best insights, motivation, thoughts, refreshing ideas come from these reading.


Max Bazerman, a business psychology professor at Harvard Business School and the author of the best book on general decision making that I’ve ever read, “Judgment in Managerial Decision Making,” came out with 7 book recommendations.

I hadn’t heard of two of these, which I picked up.

1. “Thinking, Fast and Slow” by Daniel Kahneman

I think we’ve all heard of this one. Bazerman says:

The development of decision research is the most pronounced influence of the social sciences on professional education and societal change that we have witness in the last half century. Kahneman is the greatest social scientist of our time, and” Thinking, Fast and Slow” provides an integrated history of the fields of behavioral decision research and behavioral economics, the role of our two different systems for processing information (System 1 vs. System 2), and the wonderful story of Kahneman’s relationship with Amos Tversky (Tversky would have shared Kahneman’s Nobel Prize had he not passed away at an early age).

2. “Nudge: Improving Decisions About Health, Wealth and Happiness” by Richard Thaler & Cass Sunstein

This is another one I think most of you have heard of but it’s a classic. I once used this book as the foundation to make the case to a management team for hiring a group of behavioral psychologists. Along with “Thinking, Fast and Slow” it is part of the ultimate behavioral economics reading list.

Nudge takes the study of how humans depart from rational decision making and turns this work into a prescriptive strategy for action. Over the last 40 years, we have learned a great deal about the systematic and predictable ways in which the human mind departs from rational action. Yet, we have observed dozens of studies that show the limits of trying to de-bias the human mind. Nudge highlights that we do not need to de-bias humans, we simply need to understand humans, and create decision architectures with a realistic understanding of the human to guide humans to wise decisions. Nudge has emerged as the bible of behavioral insight teams that are transforming the ways countries help to devise wise policies.

3. “The Big Short: Inside the Doomsday Machine” by Michael Lewis

Lewis is an amazing writer, with the talent to capture amazing features of how humans have the capacity to overcome common limitations. Moneyball (that would have been on the list, but I imposed a one book per author limit) was a fascinating look about how overcoming common human limits allowed baseball leaders to develop unique and effective leadership strategies. In The Big Short, Lewis shows how people can notice, even when most of us are failing to do so. Lewis shows that it was possible to notice vast problems with our economy by 2007, and tells the amazing account of those who did.

4. “Eyewitness To Power: The Essence of Leadership Nixon to Clinton” by David Gergen

This one looks fascinating.

David Gergen is an amazingly insightful intellect about so many things, including the nature of Presidential leadership. His writing is wonderful, and his ability to pull out the nuggets of effective leadership in his closing chapter is a lasting contribution. You will learn about four Presidents that have escaped you in the past, and in the process, learn some insights about leadership in your organization.

5. “Moral Tribes: Emotion, Reason, and the Gap Between Us and Them” by Joshua Greene

This book has been recommended to me by so many smart people that there must be something to it.

Joshua Greene is a wonderful mix of insightful philosopher, careful psychologist, and keen observer of human morality. If you have ever been confronted with the famous “trolley problem”, and want to learn more, Moral Tribes is the place to go. Whether you are a philosopher looking for a new path, a psychologist looking for insight from a new direction, or simply a human who wants to understand your own morality, this book is terrific.

6. “Happy Money: The Science of Smarter Spending” by Elizabeth Dunn & Michael Norton

For decades, the study of consumer behavior has been dominated by the question of how marketers can understand consumers to sell their products and services. Dunn and Norton use contemporary social science to provide insight into what consumers can do to make themselves, rather than marketers, happy.

7. “The Art and Science of Negotiation” by Howard Raiffa

The Art and Science of Negotiation is where it all began from an intellectual standpoint, where Raiffa provides insight into how to think systematically in a world where you cannot count on the other side to do so.


Posted on Leave a commentPosted in Interesting Idea

Little inventions have profound impact on the way we live. Hardly, we care to know about the origins.

In India, we have only One Standard Time Zone, whereas most of the developed countries have multiple time zone. In this fascinating short movie on TED, you can explore the origin of time zone, and how it has gain the prominence in last several decades.

In India, looking at geography, we should have at least 2 or 3 time zine, which would help us save millions in terms of productivity and more particularly Day Light Saving Time. People in Kolkata and Mumbai have same time zone, but in terms of working cycle, they have completely different time zone, keeping Kolkata at least 1 hours ahead of India would make huge difference. By the way, even Bangladesh is some 35 minutes ahead of India, though, geographically we are on same axis.

There are merits and demerits, however as concept, we must debate the need for multiple time zone.  Again, it could be a step in direction of public debate..

To know how the standard time was invented in USA, watch a very short file on TED.


Nate Silver Blog

Posted on Leave a commentPosted in Idea, Interesting

As we all know, forecasting is a bad science. Mostly, all long term forecast by leading experts in the various field have not done better job than you and me. Mostly, we remember only those prediction which turn correct and conveniently ignore the bad ones. Its said that  predict for so long term, that people will never realise, whether you are right or wrong..My Prediction is : By 2025, we will be using Mobile to Control our Cars. Sounds Interesting…You can know, I am right or wrong not until 2025.

But there is some difference between, prediction by guesswork and prediction based on data analysis.

Nate Silve is author of various books, important being “The Signal and Noise”. He is a journalist and have specialised in using Big Data for Forecasting. If you have read about him, during 2009 Presidential Election, he predicted state by state result and his prediction was right in all state (50/50). His blog was published in New York Times known as Five Thirty Eight.

Now, he has started independent website of the same name. Fivethirtyeight.com and expanding his prediction/forecasting methodology to Science, Economics, Sports and Life.

If you are interested in grappling with interesting Idea, its worth read. Just for fun read the interesting thoughts on his methodology.


High Beta Indstrutries to Change

Posted on Leave a commentPosted in Interesting Idea

Today, I was reading about changes that have happened in various discipline over last 25 years. Marketing, Technology, Retail Trade, Music & Entertainment Industry have changed at much rapid pace. In India, Mobile, Insurance, Banking etc. have undergone the tremendous transformation, whereas Accounting, Customer Service, Medical, Pharma and some other industries have all most remained constant.

People’s skills and abilities have high correlation with nature of industry. People in fast changing businesses are more adapt to changes, are likely to reinvent and above all have capabilities to shape with the changing trend.

The question is, are you in a business that requires you to constantly learn, adapt to new rules of the game, forces you to think beyond obvious in the circumstances, you are lucky. The value is created for Industry or Individual only when new ways of doing things are adopted, when constantly fresh blood is infused in Industry to keep people wanting more. Those are the industry expected to have better investment and employment opportunities resulting into higher valuation for Industry and Individual.


This app to get you out of awkward situations isn’t real, but it should be

Posted on Leave a commentPosted in Funny

Tickle is a fake smartphone app. The slick product video above is a spoof. But the idea is compelling enough that it feels like it’s about to exist anyway. It’s the latest provocation from designer Alex Cornell, and his concept is simple: If you’re in an awkward situation, you just “tickle” the back of your smartphone, activating its motion-detecting accelerometer and alerting the app to take action. Tickle then calls you in order to get you out of whatever awkward situation you’re in at the moment. Haven’t we all needed that at some point?

Not to be missed: Tickle’s pitch-perfect “beta” page.

Source : Quartz.com