December 2005

“Why Business People speak like Idiots” – Brain Fugere , Chelsea Hardaway and Jon Warshawsky is a thorough fast paced book about the extent of bullshit that one comes across among management folks. A lot of times, be it presentations, be it in discussions , be it in seminars, mails etc , one does come across a lot of management jargon which comes in the way of clear communication. In the book authors cautions about the four traps that makes people get in to bull speak.

1. Obscurity Trap : If a person wants to somehow impress and not inform, then he resorts to Obscurity trap . By using jargon and evasive words, one tries to make the presentation as obscure as possible.  However there are sometimes when unknowingly a speaker falls in to Obscurity trap.  The way to come out of the trap is to use mono bi syllable words in the communication and try to consciously use simple, effective words

2. Anonymity Trap :This typically happens when the person gets lost in the templatized world, structured process oriented world, etc. This often results in a presentation or document which has no personal touch of the owner. There are few ways to overcome this trap. Firstly, by losing  some of the polish . Secondly, by making some funny quotes, grabby headlines, Anecdotes, one can bring in the personal touch
3. HardSell Trap : This trap is evident among people who always talk about what’s on their mind, but never put themselves in other person’s shoes and try to communicate their stuff.  Some times they offer sugar coated statements and often resist delivering bad news. The people who fall in this trip are also those people who have the fear of being different, fear of facing critique on their product, pitch, talk that they are communicating. One of the ways to avoid this trap is to kick the happy messenger habit, demonstrate instead of mere words , so that at the end of the day, audience can connect to the presenter in a better way
4.Tedium Trap : People fall in this trap who don’t pack emotional content in to their presentation. They are more fact oriented, as is oriented and do not make an effort to entertain the audience. People need to understand that entertainment is at the core of all the activities, be it selling a product, pitching a plan, project review etc , there is always a need for entertainment.  To stir the audience, it is important to weave a story using visual metaphors, intriguing words, what’s the point stories etc .
The book also provides a list of common bull words that are widely accepted as meaningless terms. Besides a software by name Bullfighter can be downloaded from their site and run through the documents to obtain the bull index of any document.
Overall , this book serves the reader a remainder of the importance of concise, clear and effective jargon free communication.



I chanced upon an autobiography of Joseph Abboud , the story of a designer turned entrepreneur. Needless to say , I picked it up as I believe that every entrepreneur’s venture story has some hidden leanings which can be applied across industries, contexts and business opportunities.

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The book , to begin with tries to remove some of the false notions about the fashion business. I had this notion that fashion entrepreneurism is nothing but cashing on a trend that’s in the market and keep moving on. Another notion that fashion biz personnel are more market driven rather than self driven. These and couple of other notions were thoroughly dispelled by charming , witty and an informative description of the world of fashion by Joseph Abboud.

JA’s mother was a seamstress herself, but it was more a bread and butter stuff and nothing that she could relate to. So, in a way JA was exposed to the fabrics at a young age. He started his career as a salesman at a clothing store, where he thoroughly enjoyed the process of making the customer choose the right clothing for their personality. From the beginning JA had this immense belief that clothing and personality go together.This clear cut sales approach where he had customer’s intrinsic nature in mind while selling made him the best performing salesman in the store.

His lucky break came when he was recruited to work for Ralph Lauren, one of the highly acclaimed work places for any designer.Murray, his boss was the mentor who helped JA understand various facets of technical and business aspects of fashion industry.JA spend a considerable amount of time in the operations aspect of the business learning merchandising aspects, applying and experimenting with various channel tactics, dealing with copyright violations, recruiting designers for various assignment, managing the supply of the clothing for various fashion seasons, negotiating deals with various models who would be the brand ambassadors, etc. His portfolio of works and the successful performance in all the areas made him the associate director for Mens suiting’s at Ralph.
Next, JA decided it was time to move on and start his own venture as his head was exploding with ideas and Ralph was a place which was becoming a huge organization which was struck a little bit by “Innovator’s Dilemma”.Along with his friend, he launched JA label clothing and made his sales mainly to the speciality stores in USA. Two years after introducing his label, Abboud joined forces with GFT USA Corp., a subsidiary of the international conglomerate Gruppo GFT, to form Joseph Abboud Apparel Corporation. It has been a spiraling ascent ever since. In four short years he captured all of the industry’s top honors, including Menswear Designer of the Year two years in a row, (1989 & 1990), from the Council of Fashion Designers of America, (CFDA).
Under the current licensing arrangement between Joseph Abboud Worldwide, Inc. and GFT USA Corp., GFT manufactures and distributes a wide range of Menswear products, including formal wear, tailored clothing, furnishings, and sportswear, under the Joseph Abboud diamond and rectangle label. Other licensed products include men’s footwear, accessories, eyewear, fragrance, as well as a bed and bath collection of home furnishings.Worldwide, Abboud’s men’s collections are available in Canada, Mexico, and Australia through distribution agreements; in Jakarta, Indonesia with a freestanding Joseph Abboud store opened in January 1996 and throughout Japan via a licensing agreement with Onward Kashiyama signed in 1995. To date there are sixty in-store boutiques in Japan. Abboud’s Menswear is also available in select stores in Hong Kong, Taiwan, Singapore and Amsterdam.

The secret behind the success story of Joseph Abboud is echoed in the following statement
“Creative life isn’t about ego gratification.But about curiosity – what-ifs and what nots.
 That’s what drives me forward and forces me to challenge and overcome obstacles”

FooledbyrandomnessI came across this book while reading Malcolm Gladwell’s seminal piece on behavioral economics. Since then I had always been wanting to read it. My travel , a fortnight ago gave me sometime for myself and hence was able to read this book by Nassim Taleb.

This books is all about, as the title suggests, randomness, It’s manifestations in our lives, the way we approach/escape it, and the consequences of the same. Here is what I have learnt from the book :

Who are fooled by randomness ?
There are a lot of us who make the mistake of thinking in probabilities of events alone , and not looking at the expected outcome of the event. The author makes a strong point that we must start thinking from a payoff point of view rather that toying with mere probabilities. There are umpteen number of cases presented in the book, which gives a reader a chance to profile the nature of the person who is fooled by randomness. The following are some of the behaviors of such a person

  • Overestimation of beliefs in some measure,   either economic or statistical
  • Using a rigorous economic analyses to   trade
  • Tendency to get married to positions
  • Tendency to change their story
  • No precise game plan ahead of time as to what to   do in the event of losses
  • Absence of critical thinking expressed in   absence of revision of their stance with stop losses
  • Denial

One needs to be appreciative of the fact that success / failure is dependent on path outcome. It is more often that luck decides the success rather than anything else!

Skewness and Asymmetry:
Most of our understanding of the world is that payoffs of various events are same. Hence we are attuned to think in terms of odds of a certain event  , rather than expected payoff of an event. This is particularly problematic when one looks at asymmetric distributions. Time series events relies solely on historical data and hence does not tell us anything about the rare event that would hit us in the future. In that sense, historical data should be used to detect those events that have not happened in the past and then factor those events in the future calculations.  Rare events analysis makes sense when there is a cumulative effect to the things one is talking of. For example , Money management ,Research , yield of which is definitely a rare event,Startup until it crosses the chasm, etc

Statisticians for this precise reason cannot detect rare events as their historical data by definition tries to remove outliers, and does not have any outliers which makes an event rare event.

Robert Lucas dealt a blow to econometrics by saying:
If people were rational, then their rationality would cause them to figure out predictable patterns from the past and adapt so that past information would be completely useless for predicting the future

The problem with Induction:
The following statement summarizes the problem with induction:
" I have just completed a thorough statistical examination of the life of Vajpayee. For 80 years close to 21000 observations, he did not die once. I can hence pronounce him as immortal with a high degree of statistical significance"
In this aspect, one comes across a lot of theories in our lives and unless we think critically about them, we will be carried away by them . A theory that does not present a set of conditions under which it world be considered wrong would be termed charlatanism – it would be impossible to reject otherwise. There are essentially two types of theories, firstly Theories that are known to be wrong , as they were tested and adequately rejected AND secondly , Theories that have not yet been known to be wrong, not falsified yet , but are exposed to be proved wrong.

Are we probability blind ?
There are a lot of  situations when we become blind to the basic principles of probability. When we peruse the list of millionaires list, top 10 lists etc, it appears that the attributes which the journalist seems to bring out are THE ATTRIBUTES of success. Never does it strike us, that it might be because of pure luck that the person has become a millionaire. In all articles where we see generalizations being made my journalists, we must be extra careful about few aspects. They are:


  • Article inevitably suffers from survivorship   bias- Winners appear and Losers disappear. Is there some sampling correction   carried out ?
  • What is the initial sample size of the   population , from which someone is deriving a conclusion. If the sample size   is small, then there could be some cause of belief, YES Belief…This goes   against the principle of statistics which says that by doubling the size of   sample, one increases the probability confidence by 1.414 times. An example   would prove a point. If the initial sample size is very large , lets say   100000 monkeys sit on a type writer and start typing something and at the end   100 monkeys come up with a novel, out of which 10 become national best   sellers, and one becomes an international best seller. If one were to look at   100 monkeys who at the first place are visible and draw conclusions about the   monkeys writing abilities, then there is great bias in the way we look at   things. In the above case the sample size in the beginning was 100000 was too   high that by a mere chance 100 monkeys could have produced some comprehensible   stuff..However on the other hand, if there are 100 monkeys to begin with and   10 produces some comprehensible stuff, then there is case for monkey and   typewriter business.
  • Most of us confuse between absence of evidence   and evidence of absence.
  • Reference anchoring :We tend to feel good / bad   based on the last reference point in our mind. It is not necessary that 2X in   our bank would make us more happy than X in our bank.Also people might have 2   different anchor points for win and lose situation. In our lives, we have to   take in to consideration about reference anchoring to understand various   phenomenon
  • It is very important to understand the   difference between joint and conditional probability, If not its easy for   anybody to take you for a ride with specious arguments
  • Too much of importance is given to reason part   of a human that one over looks the abundant research which seems to say   emotions which become the lubricants of reason drive the decision   process

Monte-Carlo Simulation:
One of the biggest takeaways from the book is the importance of playing with Monte-Carlo generator so as to come to terms with the alternate paths which world would have taken , which we cannot see them. We can only simulate them and then be prepared for the rare event. One has to read the book to understand Monte-Carlo simulation and how simple, though powerful playing with it can help an investor / trader than pouring in to Newspaper, Media CNBC, Mobile alerts which only add to the noise.

Over all, a thoroughly engaging book for anybody and it should not be missed by any student of finance.

Zen_1I stumbled across a very interesting book at Crosswords, the other day . A book by Ray Bradbury, titled " Zen in the art of writing" . It is a 150 page easy to read book which talks about the experiences of an author, story teller who listens to his heart and subconscious mind for writing stories.

One of the first things which the author strikes a chord with the audience is that he explains most of the stuff as a result of the sub conscious mind working on his childhood and adolescent experiences. In that context, the author suggests that any writer should have Zest and gusto for life, which are the prime driving forces to a good story.

The author introduces a technique which he himself to have followed through out his writing life. This technique essentially urges any writer to have a list of nouns to be written in a place and constantly feed the list to one’s sub conscious mind. It is said that writers get ideas for their stories at very odd moments and the common nouns list acts as a trigger for the same.
Regarding ideas for writing , one gets a feeling from the book that it is all within us . We don’t have to look out for new ideas somewhere else. If we constantly feed our subconscious mind with new words and experiences, the stories and writing will follow .

One other important aspect of any aspiring writer , according to author , is the ability of a person to have a child like curiosity and hunger for life. Only then one can follow the path of Work — Relaxation — Don’t think — Even more relaxation.   The author strongly recommends a high level of experimentation with the ideas and writing so that one reaches a point where work equates to relaxation , where work equates to something which is done by subconscious mind , whereby one can relax more.

The overall takeaway from the book is as follows:
The only way to write better is to write whatzz in your heart. One doesn’t have to write to cater to commercial needs, one doesn’t have to write to cater to the literary magazines . If one does write for money , fame , success, power, commercial needs, etc, it is unlikely that he is going to derive fun from writing , which is actually the purpose of a writer.

In the words of Bradbury
"Stand aside, Forget targets, Let the characters, Your fingers , body, blood and heart do the story telling"