Book Review - Animal Farm by George Orwell

A satire story written in 1945 to symbolise communist party rule and how personality cult takes shape leading to autocratic rule.

A synopsis - Mr.Jones runs a farm with many animals where he treats them badly.  One day the animals rebel, chase Mr.Jones out and take over the farm and live a happy life working all for themselves.  The pigs being intelligent of the lot take over leadership of the farm and more particularly over a period of time by Napoleon (one of the pigs) who turns autocratic and is protected by his fierce dog force spreading fear among other animals.   As days pass to years Napoleon take full control and all animals are worked as slaves and Napoleon becomes more ferocious than man in his cruelty to animals. 

Even though it is now 75 years since publication of this book many points in the book is quite relevant even today.  Some takeaways for today's corporate world from this book

Work Smart use your intellect - Working Hard without thinking is no good

A great character in the book is Boxer the horse who is a very strong animal and has an appetite for work.  He works extra hours in the morning & also in the evening, at times all alone.  When two times the wind mill gets destroyed he takes upon himself to re-build it.  Though being a strong horse he fails to understand certain things.  One he cannot be healthy always and run with the same energy all the time, second he always blindly believes his autocratic leader Napoleon and refuses to question his action and always says "Napoleon is always right".  He continues to work hard and does not use his intellect leading to his health getting deteriorated and finally being sent to the slaughter house by the leader whom he believed so much.  

What you hear and see is not the truth always - Use your judgement & act only when fully convinced

Squealer the pig is the number two after Napoleon and is the "Propaganda minister" of the farm.  He is the communicator between the autocratic leader Napoleon (who seldom appears in public) and other animals in the farm.  He is such a master communicator that he passes on all lies as true almost always ending the story with "you do not want Mr.Jones to be back don't you?".  This scares the animals and they take word of Squealer to be true.  Squealer also amends the seven commandments written on the wall time to time to suit the pigs cause in a clever manner knowing pretty well that rest of the animals have little memory power and do not know to read.  Believing Squealer all animals in the farm over a period of time become slaves working with little food & rest.  If the animals have checked the stories of Squealer right from the beginning the autocratic leader Napoleon would not have become very strong and lived up to the original commandment which read "all animals are equal" rather than the amended commandment which read "all animal are equal, but some animals are more equal than others"

Team work is a winner always

During two battles in the farm - "battle of the cowshed" and the "battle of the windmill" - it was the team work of animals charging together against the men with guns in their hands made victory possible for them.  True there were some casualties among the animals in the battle but teamwork ultimately turned tide in their favour and animal's turned victorious in both the battles.  Whatever may be the situation it is better to face it as a team which will bring more desired result than an individual action

When you have to Action - Action 

Benjamin the donkey is a old & wise animal in the farm almost equal to the pigs in intellect.  He is well aware of the actions of the pigs and dogs and also aware of the change in commandments done by Squealer.  He is always skeptical about all events happening in the farm but not take any action or warn any animal.   He is also a cynical animal taking care of himself and least bothered about group welfare.  Though being aware of all events in the farm he never takes any action or induces anyone to take action, he remains a mute spectator (with some grumbling) and allows the pigs and dogs to take absolute control of the farm thereby making other animals including himself as a slave.  Had he taken action, situation would have been different at the farm which he failed to do.

Overall a very good book to read by people of all ages.  I enjoyed reading this book and was able to correlate very easily to day to day life.  Must read book.  I am planning to watch the Animal farm movie also soon

Book Review - Mossad by Michael Bar Zohar, Nissim Mishal

Mossad the Israeli secret service is undoubtedly one of the best of its kind renowned for its secret operations against its targets across the world.  This book provides an inside view of key operations undertaken by Mossad and the way they went about executing these operations which ended many times in success or at sometimes failure.  A very racy book which makes it quite difficult to drop once you have started.  It provides an excellent narration of the events which at times are pulse raising and makes you awe at the meticulous  planning carried out by Mossad agents.  There are about 20 (though I did not count exactly) incidents / operations narrated in the book of which I would pick up the below operations for some corporate learning.  

Very detailed Planning, Multiple Rehearsals, Trained team members, Back up plans - key to success of a project  

In 1960, capture of Adolf Eichmann a ex-Nazi officer who absconds to Argentina after defeat of Germany in world war II.  Adolf Eichmann was held responsible for killing of Jews during the war.  Once Mossad gets information of Eichmann hiding in Argentina they put in a detailed plan of abduction knowing well that Argentina would not accept for repatriation of Eichmann.  The planning for this abduction was carried out to the last detail, rehearsals held, agents posted with false identities, multiple options discussed, back up plans laid out to the last detail which made the abduction plan so fool proof that probability of it failing was very minimal.  With these traits the abduction was carried out and there was no flaw and Eichmann was brought to trial in Israel.

Protect your team - sincerely help them get out of difficult situations - a message to current team members and future team members that the organisation cares for you - Motivation

For this I would quote two incidents.  First in 1951, escape of Israeli Mordechai Ben Porat from Iraq which was masterminded by Israeli agencies when his cover was exposed in Iraq.  He was taken to secret places hidden and then made to board a plane while the plane was taxing by dangling a rope from the aircraft - the escape was a filmy styled dramatic one.  This was a great planning by Israel to support & save its agents at any cost instilling confidence in agents that their country will come out in their support.  Second was in 1997 the failed assassination attempt in Jordan of Khaled Meshaal in which 6 Israeli agents were stuck in Jordan and were facing serious charges.  Finally Israel prime Minister Benjamin Netanyahu had to intervene and after series of negotiations and exchange of prisoners the 6 Israeli agents were released.

Concern for peers - Helps in harmonising team to achieve greater goals 

This was demonstrated by Israeli agents when they brought Jews from Ethiopia to Israel.  Their concern for their social peers was genuine and highly regarded.  

This books is written in a story format and feels like reading a spy novel.  Nevertheless it provides a very good read if you want to have a brief idea on working of spies.  

Book Review - Elon Musk by Ashlee Vance

I wanted to have an understanding of the history of Tesla and SpaceX ventures and hence chose this book to read.  This books gives an intrinsic view of the same.  This is a well researched book, giving full details and well written to keep the readers attention.   A must read book for all as it encompasses within it many facets which will enthrall all type of audience.  Some take away's from the book which I would like to share.

Think BIG - don't stop - GO FOR IT

Tesla was a company not started by Musk, he invested in it and then made it really big.  There was the idea by the promoters in 2003 but it was Musk who not only dreamed big also went for it.  Space X & Tesla are both examples of organisations whose ambitions were too big and highly futuristic without any precedence, it was the sheer persistence of Musk to make it big against all odds (including near bankruptcy in 2008, launch failures, missing deadlines) which ensured Musk succeeded in his ventures.  Musk believed in his ideas and worked towards it persistently and ensured that he succeeded in them.

Take away : Do not only dream, action the dream to realise the dream.

Time to action - Immediate

Call it impatience or setting challenging targets.  Musk's feature is he sets targets which are very very challenging and never likes to be challenged for these decisions.  SpaceX was started in 2002 and he wanted to set up a first launch in 15 months!!  He was not afraid of failure.  Between 2005 and 2008 there were 3 unsuccessful launches and finally succeeding in the 4th launch in September 2008.   But for his tough target setting this launch within a short period of time would not have been possible  

Take away : Action should be immediate no procrastination, set challenging targets 

Take Control 

Musk likes to be in control.  This is vindicated by the fact that he did not have multiple suppliers for his components as was the case with his competitors who had multiple vendors across the globe and did not have direct control over them and had to to depend on them for various components.  Musk wanted to have control over his components and their supply chain and hence he believed in in-house production and vertical integration.  Musk ensured that many components required for his end products are manufactured at his plant at the least time and cost possible at the same time high quality products 

Take Away -  Wherever possible be in control of our related activities

Surround your self with excellent team members 

Musk believes in hiring the best team members.  He recruits personally top rank holders from universities and assign them with challenging tasks.  He always believes that it is best to hire one excellent engineer than having 3 mediocre ones.  

Take Away - Surround yourself with the best or ensure that your training makes your peer group the best in class 

 

Challenging himself and his team

Musk has a grueling work schedule working for very long hours and also expect his employees to do the same. When there was problem in some components for Roadster project Musk immediately flew to England in his jet picked up the component and delivered it to the factory in France to be on the deadline.  Another instance when one of his engineers wanted to order an component (Actuator) for $120,000 Musk challenged the engineer and gave him a budget of $5,000 to develop this product in house which the engineer did.  When challenging is at high levels it becomes a personal challenge for team members and it improves productivity and with it the results.

Take Away - Challenge and bring out the best (rough sea makes a good sailor) 

Knowledge of what you do (Subject knowledge)

A must to have for Musk.  He important traits are two fold one to read and acquire knowledge about the process to manufacture his products and to discuss with his engineers in detail about all aspects and acquire as much knowledge as possible on all aspects of his product.  This helps him in developing his product and also to challenge his team members.  In this way Musk became an aerospace expert and also a electric car expert.  This trait helped him guide his companies to success

Take Away - Acquire in-depth knowledge in whatever you do

   

Vini Vidi Vici : Dream - Create - Market

I came, I saw, I conquered said Caesar.  Musk is only slightly different.  He had a dream (electric car, rockets), he created them with precision.  What is the use of dream and creation if you cannot sell your idea or product and make it commercially successful.  Musk used his extrovert approach to good use, he kept the media fed with interesting news at times he boasted too.  He was constantly in the news giving regular updates about his products and kept his marketing ante upwards.  This ensured that his products were well noticed and well received (ofcourse quality of his products were also of high standard).  His after sales also was great and any complaint from customer is attended to immediately.

Take Away - For a successful entrepreneur 360 degree skills are essential 

Overall a very good book especially for youngsters who are setting out on their career.   A must read.

NBFC Regulations dated 22.10.2021 - A good move by RBI

Check the below facts of some 2021 successful IPO's

Paras Defense and Space Technologies Limited - Issue Size 170.78 crores

IPO was oversubscribed overall by 304 times.  Category wise over subscription - Qualified Institutional Buyer (QIB) 170 times, High Networth individuals (HNI) 928 times, Retail investors (RI) 113 times

IPO Price - Rs.175; Listing day price Rs.498.75

MTR Technologies Limited - Issue Size 596.41 crores

IPO was oversubscribed overall by 201 times.  Category wise over subscription - Qualified Institutional Buyer (QIB) 165 times, High Networth individuals (HNI) 651 times, Retail investors (RI) 28 times

IPO Price - Rs.575; Listing day price Rs.1082.25

Tatva Chintan Pharma Chem Ltd - Issue Size 500 crores

IPO was oversubscribed overall by 180 times.  Category wise over subscription - Qualified Institutional Buyer (QIB) 185 times, High Networth individuals (HNI) 512 times, Retail investors (RI) 35 times

IPO Price - Rs.903; Listing day price Rs.2,310.25

Devyani International Limited - Issue Size 1,838 crores

IPO was oversubscribed overall by 117 times.  Category wise over subscription - Qualified Institutional Buyer (QIB) 95 times, High Networth individuals (HNI) 213 times, Retail investors (RI) 39 times

IPO Price - Rs.90; Listing day price Rs.123.25

The common thread running in these IPO's are 

1. the HNI segment is oversubscribed many times higher than other categories especially retail investors.  
2. listing of shares on first day was with a huge premium and HNI investors had a huge opportunity to offload shares at a huge profit

What makes the above 2 common threads interesting?

IPO financing by NBFC's is a very lucrative business for them.  NBFC lend to HNI short term loans with interest rate ranging between 6% to 10% (interest rate depends on demand for a particular IPO).  Another interesting point to note here is the leverage for these loans are as high as 70 to 80 times, which means that an individual can place bids for Rs.70 to Rs.80 crores by just having Rs.1 to Rs.2 crores in their account.  This practice leads to build up of high demand for IPO's and leads to high levels of over subscription which is also one of the reason for high listing price on date of listing.  HNI's who exit on the listing date at times make huge profits without actually having any money (minimum money) in their account.  Though there is a big risk in this (if listing day price falls below issue price).  

With big ticket IPO's still lined up like Paytm, PaisaBazaar etc HNI activity is expected to be high.

This is the reason why RBI has acted now. In a notification number DOR.CRE REC.No.60/03.10.001/2021-22 dated 22.10.2021 RBI has directed as below the NBFC's (effective date 1st April 2022)

Ceiling on IPO Funding – There shall be a ceiling of ₹1 crore per borrower for financing subscription to Initial Public Offer (IPO). NBFCs can fix more conservative limits. 

This will regulate huge demand from HNI's by leveraging funds of NBFC's and also will stop artificial inflation of subscriptions.  With this action of RBI there will reduction in speculation in IPO market.

A good move by RBI.                

Higher GST collection in October 2021 - A show of economic recovery?

Second highest ever revenue GST collection of Rs.1.3 lakh crores was clocked in October 2021, promoting our finance minister to comment  “This is very much in line with the trend in economic recovery”.    Is this correct assessment?

Consider the below facts

• Fuel prices increased by 23% in 2021 (global oil prices increased by 65% during the same period)
• LPG prices increased by 30% in 2021
• Steel - Hot rolled coil was selling at Rs.54,500 per ton in January 2021 now it is Rs.72,500 per ton - 33% increase
• Palm oil prices increased from $ 1,020 in June to $ 1,125 now
• In March 2021 Hindustan Unilever increased prices across its portfolio by 6% to 14%.  Again in September 2021 there was an increase ranging between 3% to 8%.  For July to September quarter HUL reported 11% year on year sales growth but it volume growth was 4% indicating a 7% price-led growth in this quarter.
• Maruti Suzuki India Limited has cited rising input costs, including escalating prices of raw material such as steel and precious metals, as the key reason behind the soaring prices. Maruti Suzuki increased its price 4 times during this year
• Asian Paints has informed that so far during this financial year they have increased selling prices by 7% as against a 21% increase in input costs

The above facts are only a tip of the iceberg.   Across industrial sectors inflation is soaring prompting almost all companies to increase their selling prices to protect margins.  With increase in prices, volumes are shrinking which means there is recession in the economy.  People are cutting down consumption to offset increase in prices.  

This unprecedented price increase is increasing GST collection in the country and not growth of economy.  This is not a sustainable tax growth.  

There needs to be strategies in place to smoother input cost increases, else there will be larger dip in GST collections.