Competitive Strategy by Michael Porter

Today I'm focusing on reviewing Competitive Strategy book written by Michael Porter. This is an Industry oriented book and explains some wining strategies by the industries. This book is the best guide for any new start-up company or for any organization to chose a right strategy and how to become a market leader. 

 The best to competitive as an individual or as an origination is to know yourself better. Once you understand yourself better then there is no competition! This means companies need to do self-analysis first in order to stay in the competitive market.

 Let's see some important Insights from this book... 

Insight - 1. There are 5 forces that determine the state of competition in an Industry.

 These are Threat of Entry, Competition among Existing Competitors, Substitution of Product, Bargaining of Power of Buyers and Suppliers. Companies have to build strategies to cope with these five forces. 

 Insight - 2. There are 3 general competitive strategies. 

These are the 3 strategies to avoid above 5 barriers in an Industry Competition. 

1.Cost Leadership

In it, a firm sets out to become the low cost producer in its own industry.

2. Differentiation

In it, a firm tries to be unique in its own industry along some dimensions that are highly valued by buyers. 

Differentiation is rewarded for it's uniqueness in the market.

3. Focus

This helps for a narrow choice of the competitive scope within any industry. The focus strategy has two different  variants. One is Cost Variant and other is Differentiation Variant.   

How Happy Indians Are ?

 

Recently UN, Sustainable Development Solutions Network, published its World Happiness Report 2021 for 149 countries. In that report, Finland, Iceland topped the list whereas Afghanistan and Zimbabwe are on the bottom of the list. Considering the current situation in Afghanistan it wasn't surprising. The Prime Minister of Finland is a lady and this is not the first time that this country topped the list. It also showcases the Female Leadership is at it's the best.

Many factors were considered while creating this report. One factor that was newly added for this year is, "How countries tackled with the situation of COVID-19?". And this factor affected the ranking of many countries. Surprisingly, India's neighbours are ahead of India in this list. For example, china is at 84th and Pakistan is at 105th position, Bangladesh is at 101st position. For this report, the questions were based on the Gallup World Poll. The answers of these questions then correlated with other factor like the GDP of the country and the Social Security. 

The current Super-Power of the world, United States of America is at the 19th position. Even Americans are not happy in their homes! The population of Finland is around maximum 60 lakhs but job culture there and facilities provided to its citizens are remarkable. Half the year the Sun doesn't come on the horizon of this country, still people are happy there. 

I liked the factors which are considered for this report. 

Those are -

1.   Gross Domestic Product Per Capita (Purchasing Power Parity).

2.   Social Support.

3.   Healthy life expectancy at birth.

4.   Freedom to make life choices.

5.   Generosity.

6.   Perceptions of corruption. 

• This year the factor to deal with COVID-19 was also there.

By applying this factors for the India's perceptive, I can personally say that, there is no Freedom to make life choices. Corruption is also main point why India's rank is so low. The people who are in the power are not aware of what is going on in the society and those who have capacity to change the world are struggling with their daily life crises. For the simple job of Peon or Office Boy, they ask for your educational qualification but to become a part of politics there is no criteria. I'm not saying that education is everything but it definitely gives you that awareness to change the society. 

 

If you’re an Indian and you are reading this, then you can personally easily relate this factors by yourself.

Why can't we build a better society for everyone, where everyone can give their the Best. There is a need of Change or a Revolution which can make everything better. Till now, do your duties honestly and try to make a difference by at least helping a single individual. The satisfaction which you will get will be beyond the words. 

Be Better Human, Be Better YOU.

 

The Psychology of Money : Timeless lessons on wealth, greed, and happiness by Morgan Housel

CleanseBot - World's First Bacteria Killing Robot

Came across this amazing Robot 🤖 

Now you can carry your own cleaning tech servant (robot) with you all the time! Specially during this hard time of Covid, such innovations are really needed.  

This small robot can sanitize your hotel bed, can sanitize your smartphone and also it can charge up your phone. It's it amazing! A small bot with all these features. This is world's first bacteria killing robot 🤖. In Indian currency, it costs around 1.5 lakh. It's worth it. It's a blessing for people who travel a lot and this small 🤖 bot can take care of their health. 

The Rudest Book Ever by Shwetabh Gangwar

Shwetabh Gangwar is a YouTuber, professional problem solver and also a motivational speaker. I know him since long time. I used to watch his YouTube videos and don't know from where I used to get a motivation. He is very realistic person. Directly or Indirectly he helped many young people like me. The way he sees the problem, the situation is different from anyone else point of view. When I came to know that he published his own book then I decided to read it. And trust me, I got a very different perspective of life and looking at things. In this book, Shwetabh almost touched every aspect of life. He literally wrote what young people like me feel and also tried to give solutions and a perceptive for that. From dating to marriage, from deciding your career to long term goals, he almost touched every situation of life.  According to me, this book should be part of high-school syllabus! A must read book for every growing kid out there! I wish I came across any such book during my early teenage days. 

My favorite part of the book is where he talked about comparing yourself with others and also about happiness and comfort zone. 

This book should be National Book for Teenagers!!! 

Before reading this book, from my personal experiences, I used to think that people really don't get mature with age. And he literally said that, people are just aged babies! The language of the book is also easy to understand and not so hard. I can say that this book is the most realistic book ever!  Shwetabh really understands  the psychology of people. 

Thank you Shwetabh Gangwar for such a good book and I hope you write something again in upcoming future. 

10 Finance related movies to watch

 1. Wall Street (1987)

2. Margin Call (2011)

3. Boiler Room (2000)

4. The Wolf of Wall Street (2013)

5. Trading Places (1983)

6. Rogue Trader (1999)

7. Glengarry Glen Ross (1992)

8. American Psycho (2000)

9. Barbarians at the Gates (1993)

10. The Big Short (2015)

Onshore VS Offshore Hedge Funds

  

This topic got my attention because the firm for which I work provides services for Hedge Fund Administration. Hedge Funds are only for the Ultra Rich!

Before we understand the difference between Onshore and Offshore Hedge Funds, it's important to understand what is Hedge Fund?

A hedge fund is any privately offered, managed pool of capital for wealthy, financially sophisticated investors. 

 Investor capital flows into Onshore and Offshore hedge funds. From the manager's point of view, which one is more beneficial and what are the key differences between these two. Onshore funds are Domiciled in the USA whereas, offshore funds are domiciled in low tax jurisdictions outside the USA.

Both have different performance, investor flows & organizational designs.

The offshore market is larger compared to the onshore market also the growth rate seems to be higher in the offshore market than the onshore market. Onshore funds are organised as a limited partnership whereas offshore funds are under a corporate.

Offshore funds are more appealing to tax-exempt investors than onshore funds.

Onshore funds keep their status as private funds i.e. avoid registering or avoid being regulated under-investment company act of 1940. For these onshore funds use sections 3(c)(1) and section (c)(7).In the case of onshore funds, there is a limit on the number of investors. 

The offshore fund is more advertising friendly than the onshore fund. But onshore funds have more ability to attract investors & more distribution channels.

Fund Performance is much greater for the offshore fund manager.

For the same manager, same strategy, offshore funds have greater incentive fee & a greater management fee. Due to greater share restrictions of onshore funds than offshore funds, there is longer lockup periods, less frequent redemption & subscription periods.

Reference: "Onshore and Offshore Hedge Funds: Are They Twins?" by Hyuna Park (Minnesota State University) and Bing Liang (UMass-Amherst). 

Eclipse

In that universe, he was the sun and she was the moon with the rest of all-stars in the sky.

The earth was lucky to have both of them. 

Moon envied the earth, and said, "I belong with the sun."

But destiny was cruel, and they never meant to be together in that sky above the ocean.

One ordinary day, in the beautiful sky, a rare but beautiful celestial thing happened - Eclipse.

Moon was there along the side of the sun, in-between the sun and the earth. 

This is how her destiny to be with him is completed. Not for eternity, but yes for one day called - Eclipse.

Life After Global COVID 19 Pandemic

 

There are many people who believe that Nature has a strong power to control & limit the excess damage created by we humans. Was Covid-19 was the vehicle Nature used to control our excess of everything? May be yes! But this global pandemic changed everything. From the way we walk around each other to the way we work now. Nothing is same like before. Schools and colleges are adopting the new norms of eLearning across the globe.

Who thought of working from will be so convenient and most of the people are now loving it. The industry which got affected the most is the Hospitality industry. Many people who in this industry now lost their jobs. People who work in an industry like Hospitality cannot work from home.

Internet connection got sudden demand in the remote areas of India. And people got some extra time for their friends & family (Of course, keeping in mind the social distancing!). OPEC countries or countries like Russia are somewhere suffering. Since people are not going anywhere, the demand for Petrol, Diesel is reduced now. These countries are trying to maintain their wealthy economy by increasing the prices of crude oil in the international market.

Life now will never be the same. Even after vaccine discovery. Our faith on our globalisation and so called developing economies is bursting now. After spending months in lockdown at home, we may now realise that we are not following the sustainable global growth. In fact, our growth is not even growth, but just a bubble of growth, which a non-visible virus exploded now. 

May be now we will forget about Handshakes forever. Sanitation will be the new normal along with the mask and following social distancing.

Technologies like Artificial Intelligence is going to stay now. It will help us to go through this hard times and to remain safe in our homes. Self-Isolation is also going to stay here. Global out-breaks like this and the upcoming climate change crises will give us only one solution of Self-Isolation. Apps like Zoom are going to make a huge revenue. 

Watching movies at home and on Netflix is going to stay but going out to watch a movie on the first day first show is hard now. Its possible with following all the social distancing regulations only. Even if our schools & colleges reopen now they have to take extra measurements and precautions to keep children safe & sound. This applies to every other industry as well like restaurants, travelling. 

The way we do shopping will not be remain the same. Online shopping apps like Amazon are going to boom now. 

The politics on the global level is also changed due to this pandemic apart from the blame game! The mask is a part of new fashion now! Our doctors and nurses are true saviours during this hard time.

 In the end, life will not be the same after this global pandemic. Nothing is same like before now.

7 Secrets to Investing Like Warren BuffettBook by Mary Buffett and Sean Seah

 Recently I finished reading the book : 7 Secrets to Investing like Warren Buffett by Mary Buffett & Sean Seah. 

The language of the book is easy to understand for someone who have no knowledge or understanding of stock market or of finance. The language is narrative, it includes stories from both writers life regarding investing and saving money. Mary Buffett is the ex daughter-in-law of Warren Buffett. She saw closely how Warren Buffett thinks regarding the investment techniques and she also observed his habits. This book is like bible who is new to stock market and also new to investing. 

Many financial terms are explained very well. This book also revealed that behind a successful investments there is good and healthy lifestyle, habits.

This book is basically a guide for anyone who is looking out there for a lifelong journey of wealth-building like Warren Buffett. 

Financial Budget of India

 It was finance minister Nirmala Sitharaman's second budget. Everyone was anticipating something good out of  it. But reality turn out to be different. Sitharaman's 45-pages budget remains drenched  in the chronicle. 

The main surprise was when Chief Economic Advisor said that the credit rating agency did not rated well to India, despite the economic size and thereby the ability to repay debt, the fifth-largest economic system in the world. India's currency sovereign credit rating is BBB-/Baa3, which clearly shows in which direction the economy is moving. 

And every Indian knows the ground reality.

What common Indian people were expecting from this budget was  to help catalyse entrepreneurial ideas and turn them into wealth for the good. But what people got is completely unlike. There was the  same-old-same-old politics dominant sloganeering even before and after the budget. 

In terms of direct taxes for common citizens, there is only complexity of rates in GST and transplanting it on Indian people.

This budget was somewhere trapped in the policymaking of the past 20th century like Command, Control and Force.

The main focus in this 21st century policymaking should be more simple, more effective, easy to pay and easy to implement. Somewhere government tried to put load on bureaucracy. 

What I personally felt is that this budget was somewhere only for the rich people in India, and not for common citizens. The best way to judge that is from the current rising prices of fuel in India.

It may be a pure coincidence! But this budget was represented by keeping in mind the upcoming elections in some states of India. They got benefit of it, but somewhere it's not fair with other states of India.

We can only hope now that, other policies during this course of the year will help India to perk up growth.