3rd Oct 2011

Pleasantly surprised that wordpress works from here. It’s been an incredibly warm week of summer although it is likely to turn unforgivingly cold soon. My neck is so stiff from headbanging to My Sleeping Karma, but I enjoyed myself (heck, for the first time I went up on stage and headbanged while the lead finished up his solo between my legs!).

And life moves on.  Nine months have gone by fairly quickly; the next couple of months will be tough at work post which I’m back home for a break!!

Intelligence misplaced?

Part I

I first chanced upon the Milgram Experiment a few months ago (makes  it a little late actually) while listening to a German post-rock band ‘Long Distance Calling’. One of the songs from their album was called I Know You, Stanley Milgram. The song by itself is pretty good, so I’d encourage anyone who likes atmospheric metal to definitely check it out. Basically – Stanley Milgram, a Yale professor during the 1960s, conducted these sets of experiments called the Milgram Experiments as an attempt to establish some sort of relation between obedience and authority. Please feel free to read the wiki article, but roughly, he aimed to establish that people behaving obediently (or under Obedience) may not be acting out of their own accord. And consequently, they may fail to take responsibility for their actions if they feel they’re just following orders. The experiments were a result of a specific interest in the Holocaust, where many Nazi officials who might have genuinely intended no harm were forced to follow orders and carry out the killings. The experiment was somewhat successful.

Part II

Black Metal is considered an extreme form of heavy metal for more than one reason – The music is extremely harsh (If you think Death Metal is not giving you enough, this is what you’re looking for), the topics covered are mostly Anti-Christ in nature (Satanism, Paganism etc) and the evolution of the genre has been more controversial than most other genres. For instance, the earliest pioneers of Black Metal were involved in various church burnings. Mayhem, one of the first influential Norwegian bands, had its vocalist committing suicide and its guitarist Euronymous, considered to be a founder of Black Metal, being murdered by a fellow Black Metal musician Varg Vikernes, who was behind the other influential one man project Burzum.

Vikernes was convicted in 1994 for the murder of Euronymous, and was sentenced to 21 years in prison. He has a website which contains his history as written by him, the history of Burzum, and a few other philosophical thoughts. The second section of it (Burzum Story Part II) has this paragraph, the last line of which caught my eye.

A lot people has claimed that I overreacted, because Euronymous was such a wimp anyhow, and he didn’t have the guts to even try to kill me. Sure, he was a wimp, but this time he didn’t tell everybody about his plans, like he usually did. I took this serious because he only told a very few people he trusted, his closest friends – or those he believed were his closest friends anyhow. Also, in August 1993 he was about to go to prison for four months, after being convicted for injuring two people with a broken bottle, because they had “looked at his girlfriend” at a bus-stop. He was not a very sympathetic guy, and when he felt that he had his back against the wall he was capable of executing his plans. If scared enough even the biggest cowards become dangerous

That’s just exactly what Milgram set out to prove, and I’m assuming that Vikernes, an Anti-Christ, Satan supporting extreme rightist and a murderer, would not have read him. It’s scary, when you think about it. Reminds me of the Dark Knight and how Batman and the Joker are exactly opposite in their thoughts, but also exactly the same.

O Nine to O Ten

2009 for me was pretty much this: Began with Opeth in January and ended with Porcupine Tree in December. It will remain, for reasons more than one and some of which only known to me, one of the most memorable years of my life.

The key highlights of 2009 were the three insanely trippy grassy months in Deccan House and Powai Park, the discoveries of Isis and Russian Circles (Wtf was I doing all this while!) and sometimes hectic work.

2010 as of now is a bowl of spaghetti – looks messy but is tempting, and I’m going for it; and I will most likely be moving out of this trippy city.

Write soon.

Playing:  Russian Circles – Youngblood

Change

December 2007 – A dear friend and senior of mine and I met at Bikes, with our girlfriends – Four of us, with beer.

Today I’m meeting him again. The two of us, with beer.

Says a lot, what changes and what doesn’t.

[Playing: Anathema: A Natural Disaster]

A sober update

I’m back from Pan IIT – held at IITM this year. I would prefer to call it a holiday though, as I ended up tripping with friends on Dead Baby Jokes more than attending any of the talks/panel discussions. Met up with a few batch mates, seniors [Gillette, Carlos, Bulby et al] and juniors. The talks I attended were average – I missed Amartya Sen and Raghuram Rajan’s talks [I’d have preferred Fama to Rajan].  One of the two panel discussions I attended had the CEO s of the Tata group of companies in the panel. The head of Tata Motors spoke confidently without marking to market both his content and his confidence while talking – as a result he sounded over optimistic without facing hostility as much as indifference from the audience. The brief time I spent watching the discussion with Vijay Arbitrage Amritraj, Anil Kumble and the others was well spent. [Vijay had quite a few wisecracks going – After introducing all the panelists but Kumble, he started talking when he stopped and said ‘Oh, I didn’t introduce Anil. Should I?‘].

Most senior seniors [old ones] were in suits I figured, and I didn’t hear much about any of them, apart from this person from the 83 batch [I think] who approached Bulby asking for Stuff. We went to the Cocktail party hoping they’d have signature drinks only to be disappointed as they had Signature for drinks.

It looks like most of the world [at least Investment banks] goes into hibernation during the last week of December, and I can proudly claim that I have never put as much peace in life as currently. I keep myself occupied with quite a few thoughts and questions – Many of which I hope to figure out the answer to with time; like [at the risk of sounding stupid] the fundamental difference between Economics and Physics, how big a genius [read Keynes] one would have to be to develop a theory that draws the opposing faction and the non believers to the same side.

Finance is trippy, and I think derivatives are the trippiest.

Next month, I’m off to Chennai again to watch Opeth play at Saarang – I can’t wait to watch Ackerfeldt standing a few feet in front of me as he goes on with The Drapery Falls and Deliverance. I think Opeth would rank second in my list of bands to watch live [Probably next to Anathema and tied second with Draconian], and considering I’m going to get to see them right at the OAT back at IITM – I think it’s a privilege – Well, its insanity really. One normally does NOT expect this.

Happy New Year everyone! 2009 is a year to watch out for, eagerly.

South Indian Equity

Somewhere in South India, it’s another morning and a new kid comes in [to this world, that is, if its any confusing]. The kid, unaware of its surroundings and ignorant of its journey ahead, cries and cries. As the bored and exhausted but acting-happy doc places the baby on to the father’s hands, the dad takes a shy peek and figures out it’s a guy [Ok, boy – I define a boy as someone whose net present value cannot be calculated at birth]. Grandparents who are present at the place of birth quickly jot down the date and time to make the kid’s horoscope. Talks start happening about how the kid is going to grow up and make parents proud, in effect bring happiness and prosperity to this family. And most of it is believed to be dictated by the horoscope.  The horoscope is supposed to reveal how exactly the kid’s life would turn out to be, how rich he’d be, how educated, bad times, good times, etc. As this piece of highly valued and identity-providing document gets excitingly prepared, there’s another document that most people ignore – The kid’s balance sheet. The horoscope that’s ready is just a piece of paper, much like a Zimbabwean dollar note.

The kid is delivered in this world of intense competition, where one tries to outsmart the other(s), and where one lives for happiness [I’d still like to think of parents getting the kid as some sort of a physical settlement on an investment/trade, but it sounds very corny] The kid is born with almost no assets on its balance sheet, regardless of the kid being a boy or a girl. A human life is created to be a part of this world and its economy, operate with reasonable efficiency, and do well for himself/herself by being happy [more precisely, accumulate happiness] and in turn help in distributing happiness in the best way possible. Happiness is the biggest attribute to a human life, and accumulating it is the key. The boy is helpless when he’s born, doesn’t know what to do with his hands, so flaps it around (and also plays with a few other things that seem odd to him); doesn’t know what to do with his voice, so cries, etc. You get my point. He does not have any domain knowledge or experience that encourages parents that he’s going to achieve happiness in the future. It is then, that the parents decide to invest in the kid, [South Indian parents claim straight equity on the kid – more of preferred stock actually]- Take care of him, groom him, help him be rich and happy which in turn trickles down to their share of equity. Parents act as an angel investor, a venture capitalist who takes a majority stake in the child, has controlling rights, etc, pump in money, invest in time, money, and education for the kid, and reap returns along the way. Most parents do this, as a duty, This is when the kid is truly born as a privately held entity, its balance sheet created with a certain equity promised.

At this point, one must pause and observe that this investment, more often than being Angel Investing, arises out of regulatory issues that the society imposes, that once you make up your mind on investing by having a kid, you cannot default on your obligation. The world, thankfully and luckily, has not yet come to a stage where the parents buy credit protection on themselves, and counterparties like adoption agencies are willing to take on this risk by selling credit default swaps on this. You never know, a banker might just get an idea the next time he sees an ad that goes – Use protection.

The boy starts growing older. Parents could give the boy love and affection in a direct or an indirect way. If both parents work, during the day they invest indirectly through a playschool or a housemaid that takes care of the kid. They love the kid when they get back home, and lookat the kid laugh, play with him, and derive pleasure and happiness out of it. The kid’s balance sheet is still small, his belongings – his toys, chocolates, etc in assets and an equivalent amount of happiness derived from them in equity. Every asset the kid owns is financed by parents via equity. At this stage, most of the assets owned are tangible, and only later on in life, the kid would know what it would be to have intangible assets. One fine day the boy’s parents are out and he sees a chocolate lying on the table – He looks at it and asks himself this question – Why shouldn’t I? And grabs it, opens and eats it. On his return, his dad comes home to figure out the chocolates are missing, and at once realises what his boy has done – He has arbitraged. When there is riskless profit (happiness) to be made, why not? Here comes the trick of parenting, when he sits his young boy down and explains to him the concept of effort, and how any profit or happiness needs some effort as arbitrage opportunties in this world rarely exist. The boy is taught that to get anything, effort is necessary; may not be sufficient, but it’s necessary – Otherwise the ‘thing’ would’ve already been taken. The dad constantly sits his son down and explains these concepts in very simple words – The kid learns, and that’s when he discovers one of his biggest assets that has been dormant all this while – His mind. As he would soon discover, this asset could have extraordinary returns. But to realise cash flows from it, one would need education.

Education, a South indian parent and an acting venture capitalist, feels is crucial to succeed, be rich and happy. True. Placing extreme importance to this, parents take sincere steps to make sure their son gets the best education; it is not to be treated as an expense, as it is capitalised in their son’s brain (CapEx). This CapEx could account for huge numbers these days, but it has to be done. It just has to be. So their son goes to school, learns a lot, plays, makes new friends, watches movies – all of which make him happy, and most of these expenses come under CapEx – with parents still owing a majority stake in the happiness of their boy. The boy does well in academics, he is liked socially by many people, and signs are that he is going to be valued very highly later on in life, have good cash flows (happiness) in the form of both money and recognition. As the boy grows older, the parents still retain the majority stake, but things start to change. The parents are no longer the operational In Charges, they give the responsibility to the boy and trust him to invest carefully.

One night, the boy, who is now in high school, takes a walk along the road with cold air blowing across his chest. He looks at the tree and the dog sitting beneath it, and smiles. A sense of happiness engulfs him and he feels a little lost. He thinks of her, who sat next to him in class that day. It brings him happiness. But something seems weird. He stops, thinks for a bit and then the realisation hits him hard – For the first time, he was living on borrowed happiness. For the first time, he has taken on debt – someone else is making him happy, an outsider is helping him make profits. When did he ever borrow? No, he didn’t. But what’s wrong? He’s happy without investing in anything at all. It just cannot be arbitrage, it has to be borrowed, but where? How? When? He ponders for awhile before he gets his answer – His heart.

He goes back home and thinks – He doesn’t seem to own his heart. He realises that he had given bits of it to different people, including this girl. They were all making him happy, and leading a life where he could be happy ; they occupied a part of his heart, it was clearly a liability. He realised the importance of not being emotionally attached to so many people. If he derived his happiness from the people around him, and if one day they were all gone, like FIIs pulling out money, he would just have to break down and liquidate, especially since cash flows from other assets like his mind were tied to this. It was extremely crucial to derive a lot of happiness from one’s own sources – with the mind, from oneself. Equity.

As the boy becomes an adult, 22, he learns the trick of leveraging adequately. Not too much, not too little. And tries to lead his life in happiness. With his work, set of friends, loved ones, colleagues, interests and fantasies – etc. And his parents still own a majority equity stake in him. At which point he begins to think of his current balance sheet, all his assets, potential liabilities, and projected future earnings (happiness), and prospective investments in different asset classes. Hmmm.

Pilot

As I start out with this blog and in specific, this post, pressing myself for words the first time, I begin to wonder: Who owns WordPress?  I learn that it is an open source project (essentially does not have liquid common stock, which is what I was more interested in) and I immediately navigate to the lead developer’s page and I find it difficult to get past the first line: We’ve been working our asses off and finally have a beta to share. Download, share and enjoy the pretty visuals. Even as I have constantly dealt with Betas (Beeetas to be precise) right from quadratic roots in school through engineering, till a few hours ago while valuing a company’s stock, my roots do not allow me to forget the hindi word, which is pronounced slightly differently and denotes a little kid. However I realize things could’ve been worse if he had more accurately and ironically said We’ve been working our asses off and have a beta to release. So I leave it at that.

Coming to issues that I take personally, my old blog Verbodynamics was started in my first year and saw an emotional and partly intellectual journey through my four years at IITM. I place great importance in a name, and I choose it passionately. My dear friend and co author at the Ignobel at Shaastra would at once recollect the joy, the utter joy when we were first privileged to be introduced to Albert Einstein’s 1905 paper on relativity, which was titled On the Electrodynamics of moving bodies. The paper could as well have been named A special theory of relativity, which was what it was. However, Einstein chose the fundamentals. It was all about electrodynamics, nothing more. In awe, we went on a spree choosing names similar to that, which included two of my personal favourites – The Ignobel paper and my blog.

My college life is long over, a nice big chapter in life. A new one has begun, and I propose to begin my writings in a new blog – Know arbitrage. I wouldn’t start to explain the beauty of the concept of No arbitrage (and how you need to know arbitrage for no arbitrage – you need a title for a URL);  I’d leave that to the reader to explore it for himself/herself. My writings might mostly be on Finance/Economics, daily life, logic, or a complex combination of these. They might also be rants, for instance on how I can never tackle a question as simple as ‘Why’ when I go back home (Yen da, Yen da, Yen da)

I’m idle No More.