Retail Investors are getting shut out of new ventures

Since investing is for the future, I decided to consult my 16-year old son about companies and sectors he saw as holding promise.  “Technology,” he said. “Phones, and computers.” Like Apple, I thought. That’s a US company. Samsung? Korean. There is, of course, Micromax, but that’s not yet listed. “Can’t really invest in those.” I told him. “Other gadgets?”, he offered “Like TVs, fridges, air-conditioners?” “The Koreans practically own the space”, I explained. “And none of them have listed in India” “If I was a little younger, I would have said, candy”. “Chocolates dominate candy markets around the world. And I would love to own shares in Cadbury. But that’s now owned by Mondelez, and they delisted Cadbury India a long time ago” “Amul?” he asked. That’s a cooperative federation, and its shares are not openly traded. The soft drink space is dominated by the global rivals, Pepsi and Coke, and neither of them have Indian listing. Through its Frito-Lay division, Pepsi also dominates the Indian snack food market, with Kurkure and Lay’s potato chips. The number two snack-food player, with the Bingo range, is ITC. One could buy ITC shares, but you’d be buying into a conglomerate which purveys everything from cigarettes to agarbatti, and exercise books to hotel rooms. The largest player in aviation, Indigo, is also unlisted. Times of India, the largest print media brand, is owned by Bennett Coleman, a privately held company. Among television channels, two market leaders, Sony and Star, are owned by foreign companies. The digital space is completely dominated by US brands, whether Google, Twitter, Facebook or Instagram. The battle for Indian e-tail is likely to be an intense and keenly fought one, with Flipkart and Amazon India both drawing up investment budgets that top a billion dollars, but not a paisa of that is coming from the Indian retail investor.  You get the drift - as an ordinary investor in listed Indian companies, vast swathes of business are not looking for my money. This makes me feel deprived. The figures are eloquent - in all of 2014, Indian markets have had 5 IPOs*, with an aggregate issue size of Rs. 1355 cr. To put that in context, the market cap of Indian stocks is close to 1.8 trillion US dollars, or 100,000 crores. That’s a lot of zeros, but if I got my math right, the Indian IPO market in this year of boom and optimism is .001% of the market cap. The investor is secondary to the process of raising capital! The stock market trades only in second-hand goods. The factory-fresh merchandise is ear-marked for financial intermediaries of all manner - VCs, PE funds, pension funds, investmant banks, sovereign wealth funds. I’m not writing this piece to plead for my right to invest. My intent was to explore three thoughts: • how constrained my opportunities are, which I have done above • whether regulation or other structural issues have moved the market in this direction • how an individual might expand his pallette of opportunities. *IPOs in 2014:  Shemaroo: 120 cr., Sharda 352 cr, Snowman 197 cr, Wonderla 181 cr. , Engineers India 505 cr.

The Falling IPO Market The IPO market has been falling, both in numbers and money collected, since 2007. Last year saw a late issue by Powergrid that bumped up the number (it was a 7,000 cr. IPO). But thats still tiny compared to the 34,000 cr.+ issues in 2007 and 2010, both great bull market years. This year is a bull market, by any standard, except the enthusiasm to list companies through an IPO.

In context, Zomato, Snapdeal, Ola cabs and Housing are Indian businesses that raised money from private markets (venture capital). Snapdeal alone raised 3,700 cr. - more than all the public market IPOs in 2014 put together and multipled by 2.  In the next part, we'll speak of regulatory hassles companies face when they go public, and how we can look forward to participating in a growth story that is almost exclusively restricted to non-retail investors today.

During night, wear something light

Delhi's traffic - I increasingly feel -  has passed the tipping point.

This morning, as I negotiated morning traffic at Adhchini, one car swung from the middle lane to the right, to perform a U-turn. A motorcycle plonked off the pavement at a perpendicular to the traffic, darted across a red light, and revved towards IIT Gate. A cycle-rickshaw headed directly at us, in the wrong channel. Two traffic cops on duty looked on, impervious - this is the normal state of affairs, why do you expect us to do anything about it?

The response of the senior admin is to compose doggerel and put it out on Twitter:
- Share the road with care
- Speed thrills but kills
- Don't be daring, be caring
- Caution and care, make accident rare
- Accident brings tear, safety brings cheer
- Have road sense, drive with confidence
- Drinking and driving, a bleak chance of surviving
- Alert today, alive tomorrow
- During night, wear something light

The versifiers have been deserted by their muse; this morning, I read:

-Always wear helmet Tight, and
- Stop before Stop line.

Oh dear.

8/9 The muse returned over the weekend:
-  Have road sense drive with confidence

Find Your Dreams, and Fund Them

Liberty is the rosary of choice, on which I count my many blessings.

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I choose where to live within my nation—unlike the Chinese, who need a hukou, a residence permit.

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I chose whom to marry—unlike millions in South Asia, whose parents arrogate that decision.

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I choose what clothes to wear—unlike those who reside in jails, or work in banks.

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The state curtails my many freedoms—to buy land in some parts of the nation, to have sex with other men, to read some books, or watch some films.

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Yet, it disturbs me even more when we willingly yoke ourselves to conformity, a burden that eventually deforms us. When the stays chafe, and we notice our shoulders sag in the mirror of contemplation, we shrug. “Life’s like that.”

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It is not, but we make it so.

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Management guru Michael Porter wrote: “Strategy is about making choices, trade-offs, it’s about deliberately choosing to be different”.

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I chose to be different very early. Within a year of joining the ranks of management trainees at a multi-national corporation, I realised that I was not meant to be a corporation man, that I needed to live in nature, to watch the peaches grow. In my spare time, I drew up business plans to run a dairy farm, or drive a tourist taxi. Most importantly, I realised I needed to build up a war-chest from which to fund my freedom. My F*** You Fund, I called it.

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For the next two decades, I fed my fund. I changed jobs and moved homes; started a business and watched it crash; joined the stage and learned to light plays; worked with street children and shared their dreams. But I never lost sight of that FY Fund. It was my finger to the world, my faith in my own future. Irrespective of my material circumstances – and they were often strained –  I never used that money to pay for my daily life. Michael Porter again: “The essence of strategy is knowing what not to do.”

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When I left the corporate world, I lost my company car. I didn’t replace it for 7 years, wrote TV scripts at home, and cycled to the editing studio. Expensive suits gave way to denim jeans; hand-made shoes to Hawaii chappals. Holidays were a bus ride or a friend’s car into the hills, a tent in open fields, or a run-down room in a dak bungalow. On one of these trips, waking in a clearing in a Kumaon forest, I realised the home of my dreams would be here.

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Meanwhile, with the magic of compounding, and the deepening discipline of material restraint, the FY Fund had grown, and stretched to a small plot of fallow land, and a one-roomed cottage of stone and pine, built by a local mason. No architect, no interior designer. No furniture, except for a picnic table, and a cast-off sofa. To this day, we sleep on mattresses in the loft, and my work-space is the sill of our large window on the garden.

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The winter view from our cottage in Satoli

During the six years we lived in our forest Eden, we had no phone, no road to our door, little money, and no shops in which to spend it. Banks, telecom and groceries were over an hour away, and we made that trip less and less often. Our financial plans for our time in the mountains were drawn up on the basis of gradual depletion, but that didn’t happen. The joy of living close to nature, close to our essential nature, and close to each other pared our needs to the bone, and we needed less and less to get by.

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In the late 90s, dot-coms boomed, stock markets surged, and the FY Fund bloomed. As the century turned, and financial markets crashed, the fund ebbed. But our resolve didn’t, the money stretched, and my wife found off-line work to do in the quiet of our mountain home.

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The Delhi of this decade is a different time and space, and I have a new-found familiarity with the world of business, with the adrenalin of large M&A deals and larger egos. Young professionals take 5-star holidays for granted, wear labelled clothes, and change phones with the seasons. I admire the ease with which my son’s generation leads a life of affluence, and struggle to find a balance between his need to belong and my own habits of abstinence.

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But, above all, I pray that he will find a dream to nurture, and the focus and self-discipline to achieve it.

Published here:
http://qz.com/244258/i-can-afford-the-choice-of-not-working-full-time-it-took-two-decades-of-planning-and-discipline/

Two Top Regrets I Won't Have

TIME UNWATCHED*

Life is too short for a full-time job. Too short, and too precious.

There are lakes to swim and hills to climb, sunlit valleys of green and gold, forests rich in dew and shadows. There’s music to be savoured and books to flood your mind. Time unwatched is its own treasure, gracious host to conversations that drift and swoop, afternoons that stretch into evenings, dinners that slur into a last coffee.

And, if you’re like me, and can spend entire winters watching tongues of fire flicker in an open fireplace, “There's never enough time to do all the nothing you want.”  Bill Watterson

But you don’t have to listen to me, part-time mountain dweller and full-time maverick. Here’s Carlos Slim, the world’s second richest man,  “We should be working only 3 days a week”. It is time, he says here*, for a radical overhaul of our working lives. We need more time to relax, for quality of life..

*http://www.ft.com/intl/cms/s/0/4899aaf8-0e9f-11e4-ae0e-00144feabdc0.html?siteedition=intl#axzz37tebgYNQ

In his book, Critical Path, polymath and futurist Buckminster Fuller anticipated that rising productivity would make part-time work an option for all of mankind. We haven’t got there yet, but it is an option for most readers of quartz, I’d warrant. Appropriately, I only found time to read Bucky when my wife and I decided to honeymoon for a year in our stone cottage in the Kumaon. One autumn morning, when the sun glistened off dewdrops, and the Himalayas towered in their snow-white clarity, my wife offered a prayer to the grace bestowed on us. “Do we need to go back?”  

We didn’t, and spent six incredibly rich years in our garden in the forest, watching the peaches grow, and our son toddle, rocking him to sleep with Dave Matthews or vintage Stones, serenading the moonlight with candles and home-made peach wine.

When we returned to Delhi, to send our son to school, I knew I could never go back to full-time work.  I was too consumed by the love of life and family to chain myself to the clock of a daily routine. I needed the freedom to spend the day in a couch reading a book, or taking the sun in the park. I needed to have time to listen when a friend wanted to talk. I needed to be home when my son came back from school.

Modern life is not structured for such eccentricity. Early feelers made it clear I needed to occupy a desk, administer an office, sit in long meetings, work late hours. “Surely”, I thought, “someone can see my detachment yielding objectivity, my dilletante behaviour offering unusual perspectives, even creativity.” Meanwhile, I ran in the park, lounged in my couch, hugged my son as he told me of his day at school, and drove him to birthday parties in a car bashed into disreputability by years of mountain driving.

When the assignments came, tentative at first, they paid a fraction of a full-time wage for someone of my age and training. But I was grateful. Material progress gives us the choice to trade our earning ability for more consumption, or more time. I had made mine, and found enormous joy in every day.

More recently, I found affirmation in the writings of Bronnie Ware, an Australian nurse who worked with dying patients. She recorded the reflections of their last days in a book, The Top Five Regrets of the Dying (see this article: http://www.theguardian.com/lifeandstyle/2012/feb/01/top-five-regrets-of-the-dying).

Near the head of her list, “They missed their children’s youth, and their partner’s companionship”. I believe that our children are the most lasting legacy we leave to the world, and it needs both love, and time, to craft that legacy. As my son turns 16, I can see him turn to step out into the world.  He will carry his gifts and my flaws, but the flaw of inattention will not be one of them.

Last week, I was at IIM Ahmedabad, briefing a group of students about a property rights project to which I have contributed some time. When we were done, they took me to chai, and asked me about my life in the mountains, my life in theater. “I can also say ‘I want to go and live in the mountains’. But who will let me?”

“Remember this”, I laughed, “You need no one’s permission to be yourself.”  When I got back, I read The Top Regret again - I wish I'd had the courage to live a life true to myself, not the life others expected of me.

*This piece appeared, slightly edited, in Quartz India on Jul 29, 2014:

http://qz.com/241043/i-quit-working-full-time-years-ago-heres-why-i-recommend-it-highly/

Extreme exercise and heart health

"Each time the suggestion that too much exercise is harmful makes the news 'it invariably rockets around the cybersphere powered by schadenfreude.'"

As this article in the New Yorker concludes, the jury is still out on how much exercise is too much. However, this medical study of 18000 runners in Copenhagen, "published in theAmerican Journal of Epidemiology, confidently concluded that, when compared to non-joggers, runners lived, on average, five to six years longer." 

http://www.newyorker.com/tech/elements/extreme-exercise-and-the-heart

The evidence suggests that there may be a diminishing return to vigorous exercise, beyond about 45 minutes per day.

And when it come to more extreme forms of exercise, like the marathon, preparation is key: "the degree of detectable damage was lowest, or completely absent, among those who had trained by running more than forty-five miles a week, as opposed to those who ran thirty-five or fewer." 

What I learned about, when I learned about running

Inspiration is an unexpected guest, an unknown young woman at a party, high on whisky and the thrill of romantic pursuit. For reasons unfathomed, she took a break from her dalliance, and turned to the oldest man in the room - “ I really want to do the Delhi Dream Run next month.”

“You must,” seemed an appropriate response.

“But I’ve never run before.”

“Nor have I. Let’s train together. Tomorrow morning?”

Then, as she took another slug of whisky, “The day after.”

We never met again. November passed, as did Christmas and the excesses of the New Year, all of which showed up on the bathroom scales. I’d been overweight before, but at age 54, the window of fitness was all but shut. I resolved to nudge it open, one step at a time.

Which is exactly how I began. My first jog was 100 m long. My second, two days later, was 2 stretches of 100 m each, separated by a 2 minute walk. Surfing the net, I found this training schedule that mimicked my instinct. Using it as a rough guide, I took 6 weeks to hit my interim target of 2 km.

http://running.about.com/od/trainingschedules/a/fourweekstoonemile.htm

Getting from 2 to 5 km. took me another 2 months. That winter, I ran the Delhi Dream run with ease. The Christmas indulgences seemed deserved, but the scales weren’t happy. That New Year, I set myself a target of 10 km. With a year of running behind me, building the distance was easier. But there’d still be mornings when I’d wake up and regard my shoes as cruel slave-drivers. Sometimes, I’d take a deep breath and submit to a hot morning in the cotton fields. Others, I’d head to the pool and relish not just the coolth of the water, but also the reprieve from training. Between the indulgences and the discipline, I hit my 10 km. target by the end of May. Before my summer break, I resolved to run the half-marathon that November. Two years from zero to a half-marathon - is that too long? I don’t know, but in play and in business, that’s me - start off on a whim, or a random inspiration, give it time to become a part of me, build on it, and set new goals only when they feel right.

Listening to yourself is key. In the early days, I experimented with different ways to run - longer strides and shorter; on the mid-foot and the front-foot; lots of arm action or not. I was mindful of how I held my lower spine, watched how other runners held theirs. And, as I ramped up the distances, I watched for tensions emerging in my neck and shoulders, sought the stride, the pace, above all, the ease that eliminated them.

It’s like experimenting with different business models and delivery systems for a new business. The most successful - especially in the digital space - have beta tests going all the time. But, once you find what works best, Keep your form. In the second half of a long run, especially if you have a target time, you’re most liable to drop form - allow your limbs to splay, your head to roll, try to compensate with the rest of your body for the tired muscles that have been driving you for hours. STOP. Take a break There is only one best way for you to run, and engaging these other body parts is not going to help. If you break form, you’re liable to crack. We fashion our selves, our lives, from awareness of self. When we lose that awareness, to ambition or greed, the results can be ugly.

Finding the right pace is key. After 4 years of running,  with 8 half-marathons under my Nikes, it still is. Every few minutes, as the rhythm builds and the endorphins flow, I’ll  find I’m running ahead of myself. “Slow down before you’re out of breath. After is too late.” If you pace yourself well, you’ll be running most strongly at the very end. And if you can cross the finish line with grace and a smile, why that’s the way to live life!

Mohit Satyanand

Occasional entrepreneur, occasional mountain-dweller, occasional actor, recent runner, and triathlete-in-the-making

This piece was published in quartz India, on Jul 18, 2014.
http://qz.com/236617/i-became-a-better-runner-once-i-saw-all-it-has-in-common-with-starting-a-business/

The Stray

Millennia of breeding will do that

To wolves -

Make them prance for affection
Even if they're stray
And gray
And wet,
At a blinking early-morning traffic light.

Decades of city life will do that
To men -
Make them chary of affection
Even if it prances
And wags
And begs,
At a blinking early-morning traffic light.