Its time to hedge the risk...

Its the end of the third semester exams out here at SCMHRD for the people of the 07-09 batch.  All those who are destined to be MBAs by 2009 must be cursing themselves for so many different reasons.  Some for being born at the wrong time of the business cycle (Poor souls, they never even knew of a bicycle by then.  How the hell would they have known of a B-Cycle?!!)  and some others for quitting work and joining a B-School at the wrong time.  All this because of the innate ability of the Harvard grads out there in the Wall Street who made sure such a thing never ever existed.  All those who were earlier proud of associating themselves with the WALL are now running away from it.  The world's largest economy is down and it has not just gone down alone but carried all the others along  with it.  

Coming to the scene out here at SCMHRD, its a little cheerful still for the final placement season hasn't yet begun.  Everybody is sitting out there thinking that the Placements Team will find an 'Ideal Match' for them.  Its only when the mela begins that the true standing is likely to be exposed.  All those who earlier were thinking of Options, will now be faced with a situation in which they'll be forced to take whatever comes their way first.  Definitely, this is not the time to wait and speculate.  Just like they say in Finance, whenever you have an exposure, go hedge it.  Dont just wait and speculate expecting the market to move in your favour!  Right now, I've set myself Stop/Loss & Stop/Greed levels and am still to enter into a hedging contract to anul my risk completely.  This I'm doing because of the bad experience that I had during my summers selection process.  At that time I was completely down and had given up so early into the fight that I simply took what others had left out.  The first semester results had not come out by then and the entire selection was happening on the basis of the same CV which was used by the college for giving admission into the college.  My CV had nothing good in it except for the decent academics, which most other CVs on campus had too.  I had made-up my mind that I was not one of those gifted souls who was made to be an Investment Banker or an Equity Research Analyst.  All this for sheer lack of confidence.  

This time though, I wish the scene to be different.  Though the market situation is a little glum, I have grown in confidence.  All this could be attributed to my better performance in college, plus the extra effort that I'm putting-in to prepare for the International CFA exam.  To add to the pain, I'm having to go to Kathmandu to give the exam.  Let me tell you, all this has left very deep and huge holes in my pockets.  

Hence, the moral of the story is that I expect to make atleast some positive NPV out of the whole exercise, irrespective of the cost of capital that I'm incurring.  I wont say I have used leverage to make more gains on my investment but the bottomline is to atleast preserve the Initial Investment from getting eroded because of the market downturn.  I'm no expert in managing hedge funds or mutual funds or any portfolios worth millions but I think I've learnt my bit of International Finance and hence am hedging my risks with whatever contracts that are available in the OTC markets!

Cheers!

Ragging Blues

Disclaimer: The following is a real-life story narrated with a little bit of spice & humour. Readers are advised not to look for any resemblances & draw conclusions. The author will not be responsible for any such conclusions & the repercussions arising out of them :).

You feel so happy when you cherish your dreams. The dream could be anything. It could simply be ragging your junior. This story is about Pappu, who is an Engineer & is now in the second year of MBA. All the years, even when Pappu was in Engineering, never ragged a single junior! Ask him why, he’ll say that he doesn’t want to pass-on the pain that he had expressed during his ragging sessions. Let Pappu go to hell. Arey, how can ragging sessions always be painful? Well, ragging sessions can be great fun too. But ever heard of heart-breaking ragging sessions?? You wouldn’t believe but it happened with Pappu – the poor soul who attempted to rag someone for the first time in his life :(
How long can you tie-up yourself to the bed & curb all your inner-most desires just for the tag of a ‘good boy’?? Well, I’ve noticed it can’t be done for a very long time. The same happened with Pappu. Now that Pappu is in PG, he realised that this was his last chance of enjoying life. He was a studious guy all through his life. Never dared to enjoy life for the fear of losing out on academics. Never dared to try his hand at any sport. Never looked to bunk a class. Never dared to copy in an exam. Never dared to sneak into a petty fight. In short, Pappu had never dared to challenge anything & anyone in his life till now. But there is always room for change.
One fine day, Pappu reached college after finishing his summers. The Juniors had already arrived. They were already running tight scheduled, cursing the college, the director, the CLO etc. etc. for all the pains that they were going through. Pappu wondered if there were any juniors who would come to him & recognize him as a senior?!!?? Hehe..true, Pappu was in 2nd yr of MBA & he’d cleared all his 1st yr subjects by quite a good margin but then the looks should also tell the opposite person that you are the one – that you are the senior! Unfortunately, Pappu wasn’t that kind. He always looked lost, morose, calm, deserted, friend-less, unpassionate, unenthusiastic, sick, tired, bored, dumbo-like etc. etc. Poor Pappu, what could he do about it except for cribbing. But Pappu knew that there was something lacking in him which was preventing him from hogging the limelight. Pappu soon found out that he needed to change his attitude towards life & that it was the last chance that probably God is throwing at him. This time around, Pappu was not on the back-foot. Pappu picked up the signs from the almighty & set out to find the ultimate happiness in life.
Pappu was early into the 2nd yr & had not much of classes. On the other hand, the juniors were being grilled like loaves of bread in a toaster :(! It was freshers time. Yes, you guessed it rite. It’s the same time when the Juniors have to ask the Seniors out for a date ;). Pappu smelled a chance in here. He thought that if he didn’t act now, he would never get a girl in his life ever again. This was the time when he had a weapon in his arms that he was a Senior & that the Juniors can’t refuse anything he does. Ideally, the Juniors would’ve to come to the Seniors & ask them out. But given the stature of Pappu, the ideology could’ve failed! Hence, with this in mind, Pappu sought the help of a few of his friends who are girls from his batch & worked out a cool plot to trap a nice-looking girl with his geeky brain.
After several eventful circumstances, the stage was set for the asking-out ceremony to begin. Pappu was in the best of his moods, all geared-up. Though Pappu hadn’t prepared himself for the session, no sooner than it began, all the enthusiasm which he had curbed over the years appeared to overflow him & came out in the form of the creative pranks which he was throwing at the poor junior girl. Pappu starts-off with asking the girl her complete details. Name – School – College – Work Experience – Hobbies & Interests etc. etc. People around him watching the show are amazed at the creativity of Pappu. They wonder what had happened to Pappu all of a sudden. Where had the creative genius been hiding all the while??? Pappu is even more excited by the response that he is getting from the crowd. The poor junior also has been obliging every order from Pappu without much resistance. However, there has been some level of arrogance in the way the girl was answering. Though this has been hitting on Pappu’s mind, he decided to carry on & work on it a little later. Pappu’s friends also had come up with funny suggestions about how the girl should propose to Pappu & ask him out for a date. Pappu was so happy. It felt like the best moments of Pappu’s life. When asked to sing a song for Pappu, the girl started off with ‘Pehli nazar mein (RACE)..’ Wah! Could a guy ask for a better song from a girl?? That too from the one who is about to bow before you, propose to you & ask you out for a date?? The song was amazing. Pappu was awe-struck. Now, truly the best moments of Pappu’s life.
BUT, there is always a twist in the tale :(! All was going on well until Pappu threw that dreaded question at the girl. No one knew why Pappu felt like asking her that question. Poor Pappu, couldn’t overcome his anxiety & curiosity and shot that dreadful question at the girl. Ideally, a girl would’ve found it difficult to answer that question. But this girl didn’t feel even a needle’s prick! That made the blow all the more painful for Pappu. Poor Pappu, he almost had a heart-attack. People beside him could hear the sound of shattered glass! Pappu didn’t move an inch. Neither could he open his mouth. He heard something which he never wanted to hear. Pappu never expected that his best moments would be closely followed by his worst L! The ragging session had ended. The girl walked away without any signs of worry or regret of having caused pain to someone. The blow was sudden & it was terribly bad. Pappu couldn’t recover immediately. Pappu’s first & last ragging session ended abruptly & terribly. This is Pappu’s sad story – the story of a heart-breaking ragging session.