Archive for June 11th, 2007

A great tennis match & Aussie fielding

June 11, 2007

I witnessed one of the finest tennis matches in a long time. Most would say it was Federer Vs Nadal Final at 2007 French open. Well in that case, they didn’t see the semi-final between Nadal and Djokovic. (Apurv does a nice commentary on the same)

The score-line does not suggest how tough and well-fought the match was but then statistics do lie. The Serbian is perhaps the most improved player in a year and was seeded 6th in the tournament. He simply gave Nadal a run for money and every shot was matched and there were long powerful rallies. I have never seen Nadal under so much pressure and on him winning this match, I knew he is the only winner.

Federer was struggling right through and I would say was lucky to make it to the finals (I know most people would call me insane for saying this) . Federer has set tall standards and he was playing no where near his tall standards and hence

Federer has developed such a reputation that most players loose their natural game when playing against him. Davydenko played so well in quarters to defeat Canas (he has defeated Federer twice this year and people were expecting a clash between Canas and Fed in Semis) and was never himself in semis against Fed. And this is what Nadal does the best against Fed, he plays his natural self.

Here is another interesting piece on Aussies cricket. Mike Young, the Australia fielding consultant has an interesting story in Cricinfo:

When I was appointed fielding consultant in 2000, Australia were the reigning world champions, and everyone was asking me, “How are you going to make these guys better?” I didn’t know much about cricket then, but I’ll tell you what: I was quite shocked at what I saw.

I don’t know about him, but I was definitely shocked as he goes on:

No one had any idea about fielding balance. They were diving around with flawed techniques, and wasting energy that they should have been conserving. There was so much diving and sliding going on, with people saying, “It’s a great fielding side”, and so on, but I’m thinking, “If you have to dive so much, it either means you aren’t quick enough to reach the ball, or you’re standing in the wrong position.”

And then one of his ideas:

Also, I saw fielders in the ring take five to 10 steps towards the batsman, which meant they were not at all balanced when the ball was played. Both feet weren’t together and steady; one foot was always in front of the other. It’s the worst way to be ready for a ball. So we worked on that. Now I see across the world, everybody is into the split step, and they’re more balanced when they face the ball. I’m very proud of that – we started it.

Read about what he suggests to Buchanan. But this omne takes the cake:

Overall, we’ve come a long way from 2000 but there’s still plenty that can be done.

I am not sure what to expect in future?But then this is true of all great sides. People associated with them always believe they still have a long way to go.  


Alumni network helps in higher returns

June 11, 2007

Greg Mankiw gives a reference to a NYT article that summarises this superb-looking research paper which is being discussed quite a bit ion the industry and acaemia. (which is aptly titled as “The Small world of investing”) The article says:

Mutual fund managers invest more money in companies that are run by people with whom they went to college or graduate school than in companies where they have no such connections, the study found. The investments involving school ties, on average, also do significantly better than other investments.

So old school ties do help. The numbers are:

On average, investments in companies where there was no connection returned 11.7 percent a year before fees, according to the economists’ estimates. Investments in companies with the closest level of connection — when a fund manager attended school with an executive — returned 20.1 percent a year.


Investing based on school ties seems to have become less popular recently, which could suggest that financial regulations passed after the demise of Enron cut down on the exchange of inside information. Last year, 7.1 percent of fund managers invested in at least one company that had a top executive with whom they had gone to school, down from 15 percent in 2002. The average during the 1990s was 11 percent.

Looks like a very good read. When would we get such research for Indian markets where all top executives in both Mutual Funds and in most of the companies in various sectors are from the same brand of Business and Engineering Schools.

However, there is another spin-off to the paper. I always had a view on why the so-called prestigious colleges get 1 crore (10 million) plus rupees as salaries. Apart from their intellectual knowhow, I have a very strong view that it often boils down to the alumni network.

I could never understand how can one pay such high salaries when the way you work is seldom dependent on what you learn in B-Schools. Despite numerous case studies and exercises that model the real world etc., it is a different thing altogether to do the work in a real situation and moreover, most people learn many things on the job.

So, you get paid not just for your talent but also may be because:

  • you would be a part of the growing network and hence get the company you work for more revenues as most of your alumni/peer-group would be employed in top positions in top companies elsewhere and it would be easier for you to get business for your company via your alumni network. For e.g. one can get more insitutional/corporate accounts for the bank he works for and so on (similar to the investment tips MF managers receive as shown above).
  • Once the alumni is strong, it pushes your candidature in their companies as then it helps them as well getting better reviews and promotions and so on and so forth.

I know I am being too cynical but I keep hearing such stories and you can see them happening everywhere. Most top companies invite resumes only from “Selected Schools”(and say rest need not apply) and this is a dangerous trend catching up with most companies. You keep hearing about record breaking salaries of only selected few and rest do not even get basic jobs.

So it is too much of a mixed bag really. The criteria for selection should only be merit and nothing else.

Assorted Links

June 11, 2007

1. Interesting profile of Lant Pritchett and Larry Summers. Both are superb economists. I have heard a lot about former’s work on my favorite topic growth and development and his work more often than not stirrs a healthy debate for his unorthodox views.

2. More on inequality in US.

3. An interesting comparison of Indian Small & Medium Enterprises and Chinese ones. The summary is (as expected), Chinese SMEs have a much larger role to play in the economy than their Indian counterparts.

4. I had blogged about this earlier that RBI is looking at liberalisation of foreign ownership in commodoty exchanges. I could have guessed the outcome. ET says RBI is not in favour of the move because of “sensitive nature of the market”.

5. Jaideep Mishra in ET points out to a study on infrastructure that does a analysis on how each of the Indian state fare vis-a-vis infrastructure policies. The study is here.

6. Interesting commentary on recent exchange rate movements from AV Rajwade, Crisil and Abheek Barua.

7. RBI points out a latest trend of external financing by Indian corporates in its latest press relaease:

“It has come to the notice of the RBI that some Indian companies have been raising funds under the FDI route, from overseas markets in the form of Optionally or Partially Convertible Debentures and other hybrid instruments which are intrinsically debt-like in nature. Issuance of such instruments is against both the letter and spirit of the FDI policy which is aimed essentially to attract investments in the nature of equity capital and not surrogate debt instruments. Routing of debt flows through the FDI route circumvents the framework in place for regulating debt flows into the country, whether through overseas foreign currency borrowings (ECB) or through foreign investment in rupee denominated debt. Further, it is also contrary to the stipulation under the ECB policy that foreign currency convertible bonds are to be treated as debt till converted.

Accordingly, the RBI has issued a Circular clarifying that only those instruments which are fully and mandatorily convertible into equity, within a specified time would be reckoned as part of equity under the FDI Policy. However, companies which have already received funds from outside India for issue of partially/optionally convertible instruments on or before June 7, 2007 can issue such instruments. Further, the existing investments in instruments which are not fully and mandatorily convertible into equity can continue till their current maturity.
FIIs are permitted to invest as hitherto, in listed non-convertible debentures/ bonds issued by Indian companies in terms of RBI/SEBI norms on investment in rupee debt instruments, including the ceilings prescribed from time to time. “

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