Busy-ness February 7, 2010
Posted by admin in : Business, Living , add a commentWhat’s one good thing about being super busy?
Wait! I have no time to think on that. Back to work.
Preferences January 22, 2010
Posted by admin in : Business , 1 comment so farHere’s a situation.
I give you $300 with the following options:
a) Give you $100 dollar more
b) toss a coin and give you $200 more if you won and nothing if you lose
It was found that most preferred option a.
Here’s a little change
I give you $500 with the following options:
c) you need to give me back $100
d) toss a coin and pay $200 if you lost but nothing if you win
Now the option d was a more preferred one.
But from the probabilistic theory all these four choices are identical. They all have the expected value of $400. Then why do we have such strong preferences?
Because we are more willing to gamble when it comes to losses but are risk averse when it comes to gains.
Economy: Food for thought October 19, 2009
Posted by admin in : Business, Insight , add a commentTo her who was careful on putting her money in the bank, does not take risks, and does not borrow more than she can pay back comfortably — if everyone had this mindset we might have escaped the mess we are at now
To everyone - Now that mindset won’t help us get out of this mess
Why sell ice to eskimos when you can sell life jackets to the drowning man? October 8, 2009
Posted by admin in : Business , add a commentDoesn’t that make sense? Yeah, it does.
Why push for customers when you have a different set of customers pushing themselves for the products. Know your market. Digg in.
Present Economy Recovery Analogy September 9, 2009
Posted by admin in : Business, Insight , add a comment5 minutes from my finance class ( September 8 )
As the wall street figures starts climbing everybody seems to be in a rush to get the bigger piece of the pie. And everybody is rushing even more to claim the credit of economic recovery. So this issue “U.S. economy gets lift from stimulus” dated Sep 9 on wall street journal talks on the economy stabilizing and regaining from the brink, and analyzes different stimulus and plans that were put together on overcoming the greatest financial crisis since the great depression.
Some economists argue that it was because of the Bush administration that provided the recovery to this crisis. Some argue that it was due to the federal reserve’s aggressively buying of Treasury debt and mortgage backed securities. Some said that it was due to the stimulus packages and programs like ‘cash for clunkers’ under Obama’s administration that ignited the recent recovery.
To give a better picture to the scenario my finance professor described the following analogy:
A teen was speeding on his Ferrari on a highway at an amazing (unbelievable) speed when he met an accident. When he crashed with such a speed he broke all his bones and damaged all his organs and was in the brink of saying his final goodbye. Somehow he managed to still be alive. But with such severity and critical condition nothing could be said just yet. At the hospital the experts were bemused when they saw this case. It was nothing even close to anything they have ever seen. Nothing was working and nobody had any idea on where to start and which body part to focus on. So each expert tried out his own way on the patient. Each one tried completely different tactics and methods to the injured boy.
Now after about couple of months, the boy seems to show some sign of progress. Now each expert wants to be the first one to claim that it was his method that was responsible for the recovery.
This scenario depicts today’s situation on global economic progress.
Recommendation from my professor Dr. Raman Kumar:
As this is a kind of situation where the world economy is in a state no one has ever seen before and no one has any idea on how to precisely save the economy, it’s worthless to argue about whose method was responsible for this slight progress. It’s the time to try all the methods and work from all the possible sectors to save the crashed economy. And to make sure nobody get away with driving the unchecked Ferrari in the future.
Financial Situations for Dummies January 24, 2009
Posted by admin in : Insight, Techie , 1 comment so farFor most of us (including me), it has been a tough time understanding about the current global financial situation. Here’s something that will help people like us to understand it better.
How we reached the situation of today?
Once upon a time in a village in India , a man announced to the villagers that he would buy monkeys for $10.
The villagers seeing there were many monkeys around, went out to the forest and started catching them.
The man bought thousands at $10, but, as the supply started to diminish, the villagers stopped their efforts.
The man further announced that he would now buy at $20. This renewed the efforts of the villagers and they started catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer rate increased to $25 and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch it!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now act as buyer, on his behalf.
In the absence of the man, the assistant told the villagers: ‘ Look at all these monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them back to him for $50. ‘
The villagers squeezed together their savings and bought all the monkeys.
Then they never saw the man or his assistant again, only monkeys everywhere!
Welcome to WALL STREET….!!
source: unknown
