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Business & Commerce

Starting from scratch is exciting

by Editor's Desk May 15, 2017

There is no illusion greater than fear. They say. Being afraid is a very common behaviour exhibited by many in their day to day lives for they feel it is the fear that saves them from great disasters.

How to recognize and conquer your fears, keep motivated and stay focused on the future is the key to success. Starting from scratch can be both exciting as well as frightening for entrepreneurs.

This is true whether you’re a first-time entrepreneur or you’ve recently quit your job to start up a new company. Your future, as of now, has no limits. You might be building the next billion-dollar company right now! Crazy, right?

Even though what is happening now and what comes next is incredibly exciting, every entrepreneur still has fears. It would be kind of terrifying if you weren’t at least a little afraid!

You need to overcome your fears if you want to excel and, thereby, successful. There’s a lot of upside if you can power over your fears.

Here are FIVE fears you’ll have to overcome as an entrepreneur.

Fear of Change

Change is the first fear you will encounter that will visit you and start hanging out with you long before you go all in on your new venture. Why? Because ending up screwing a good thing is downright scary.

It’s human nature to think that no matter how great your current situation is that it could always be better. Are you stealing defeat from the jaws of victory by leaving a known quantity to start something new? Until you take the leap and make a change, you will worry as one can’t know whether it will be an equally good or better outcome.

All businesspersons have to overcome this fear and make a crucial decision. Stay where you are or make a change. octopus-inc-designing-and-printing

Fear of Failure

Your company won’t work — not enough customers, not enough funding, whatever the reason. You won’t be able to pay your bills. Sure, but that’s only part of it. The real killer is the public aspect.

When you start a company, you’re really sticking your neck out. You don’t want people to think of you as a failure. Fear is just an emotion. You can’t worry about what other people sitting on the sidelines will think if you fail.

For crazy psychological or emotional reasons, some of your family members, friends, and peers won’t support you because they don’t understand what you’re doing. Consciously or unconsciously, some people will cheer for you to fail. Let them.

In the end, it doesn’t even matter! Remember?

Fear of Not Getting Funded

Will potential investors think it’s good? Raising funds for your new business ideas is competitive and scary. The process of pitching venture capitalists and angel investors is anything but predictable. Listen to the feedback you get from investors! Make amendments and improve your idea.

Doing so will help you secure the funding you need — and steer through your fears.

Fear of Being Wrong

When you kickstart your business, there are three areas that can just kill you: being wrong about your product, target audience, or go-to-market strategy. Scary stuff, right?

When this happens, startups pivot. Startup pivots almost never work.

A lot can go wrong in the startup world. That’s why it’s important to be intentional with your strategy when you’re starting out.

Try to be smarter about the initial guess you make about your market. You’ll have a lot more leverage if you don’t have to redo your business plan or make huge course corrections.

In the end

Don’t fight your fears but recognize them. Overcome them. Fear isn’t all that bad. You just need to recognize fear, punch it on the nose on occasion and continue building your business!

www.TrickyScribe.in

Total Views: 3,28,120

May 15, 2017

Simple steps to keep Ransomware away

by Editor's Desk May 14, 2017

written by Editor's Desk

Everything you need to know to prevent a Ransomware attack

Hackers attacked thousands of organisations this week in as many as 99 countries across the world but it can affect individuals using old operating systems. The systems with no active antivirus software are the most endangered ones.

A cyber-attack brought some Indian low-key business to a standstill this week with victims being demanded a ‘bitcoin’ ransom. The amount was not consistent for every victim. The things that stayed common amongst the victims spread across 100 countries were threats of doubling the ransom amount for late payers and total loss of data who fail/refuse to pay. Ransomware

The ransomware virus affected computers across nearly a hundred countries with Europol describing the attack as of “unprecedented level”.

The modus operandi is simple. Hackers lock victims out of their computers and demand a ransom to unlock it.

What is ransomware?

Ransomware is a type of cyber-attack software tool that sees hackers take control of computers, tablets or smartphones and demand a payment.

Often the hackers trick the user into downloading malicious software – using a dodgy email or app – and encrypt the victim’s information.

You can’t use the device while the hackers control it and if you don’t pay they threaten to increase the ransom or delete your files.

Usually, the ransom amounts to a few hundred pounds and has to be paid in Bitcoins, a controversial digital currency.

Who was targeted by the ransomware attack?

The hackers targeted thousands of organisations in as many as 100 countries but they can also be used against individuals. Around 40 hospital trusts across Britain were forced to cancel operations and turn patients away on Friday.

Here are a few ways you can protect yourself from ransomware:

Software providers like Microsoft will often ask you to install updates and restart your computer and, although it’s annoying, always do this as they often contain new programmes fixing vulnerabilities in your system that hackers are trying to exploit.

A reason why the ransomware attack affected so many British hospitals this week was because they were still using Windows XP – an old operating system first released in 2001.

Back up your files

Losing valuable documents and treasured pictures is the greatest damage a ransomware attack can cause so copy them onto a different device for safekeeping.

A good way is to use an external hard drive that isn’t connected to the internet so if you do lose control of your computer you won’t lose the files on there.

Ransomware only works if hackers can trick victims into downloading malicious software onto their computer which they can then use to control the device.

The most common way to do this is by asking a user to download a file from an email, clicking on a link, or use an app.

Users should be very cautious about what they download and particularly if they are asked to do so in an unsolicited email.

It’s also a good idea to only download approved apps on your phones and to check user reviews before doing so. octopus-inc-designing-and-printing

Use an antivirus program

As well as updating your computer’s operating system it is a good idea to download an antivirus programme for extra protection.

They can stop you from accidentally downloading ransomware by scanning emails before you open them and can block malicious software from installing themselves on your computer.

Often you will have to pay for this service but there are also free-to-use options.

Never pay the ransom

Victims are advised never to pay the ransom as it encourages hackers to keep doing them and doesn’t guarantee that you will get your files back.

Hackers usually require the ransom to be paid using Bitcoin which, although not illegal, is controversial and difficult to do.

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Total Views: 3,28,240

May 14, 2017

Govt to supply solar lamps in low electrification villages across 5 states

Business & Commerce

Cash calls stabilize a portfolio

by Editor's Desk April 28, 2017

written by Editor's Desk

Every asset has a value. Details of valuation, however, could vary from case to case. Investors value equities and various indices on the basis of their respective sectors and performance.

Fund managers, while taking such alignment calls, prefer to keep cash/liquid funds in a portfolio sometimes during uncertain situations in which it becomes hard to predict market movement. Cash calls in any situation could cause some underperformance to the portfolio/fund for 3 to 6 months. In the long run, however, it helps stabilize a portfolio.

So, when does a situation for cash call arise?

Very high market valuation

Portfolio managers take cash calls in over-valued or hyper-valued markets. Most fund managers set valuation limits to indices and sectors to make entry and exit decisions. During the fourth quarter of Calendar Year 2007, market valuation reached above 6.00 times price-to-book (PTB) value, which means the market was trading at six times its net worth against an average is 3.00 to 3.25 times. It was a strong sell call for most fund managers and few preferred to take cash calls, which saved their portfolios during the market crash that followed.

Similarly, after the stocks crash in 2008, the market reached a valuation of 2.5 times PTB, which was significantly lower than the long-term average. It was a strong entry call in the market.

India and other emerging markets are growing economies and thus carry a valuation premium over developed markets; every market oscillates within a limit and investors set those limits on the basis of their comfort zone. This helps decide the cash limit in a portfolio.

Uncertain macroeconomic conditions

Countries often witness divergence between stock market performance and economic data. Such scenarios create confusion and future uncertainty in the short-term to mid-term. For example, when a country is struggling on economic indicators such as export, GDP growth and unemployment; its indices operate at moderate valuations. In this kind of a situation, it is ideally better to wait, because quarterly earnings could drag market performance.

In such cases, some fund managers prefer to sit on cash Countries often witness divergence between stock market performance and economic data. Such scenarios create confusion and future uncertainty in the short-term to mid-term. For example, when a country is struggling on economic indicators such as export, GDP growth and unemployment; its indices operate at moderate valuations. Ideally, in this kind of a situation, it is better to wait, because quarterly earnings could drag market performance. Some fund managers rather prefer to sit on cash or liquid funds.

Abnormal situations

Abnormal conditions such as war or natural calamity can impact equity markets and keep the indices under pressure for several years. In such situations, fund managers look for other options or simply stay in cash and wait to tap opportunities. This kind of situations can keep the market depressed for a longer period.

To sum up

Cash calls in portfolio management could lead to underperformance in short to medium terms, but it has potential to work well in the long run.

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Total Views: 3,30,160

April 28, 2017

Business & Commerce

Panchayati Raj system rendered ineffective by Neta-Babu nexus

by Editor's Desk April 24, 2017

written by Editor's Desk

ne of the greatest shortcomings of any center-sponsored rural development programme is its inability to ‘trickle down’ to the true intended beneficiaries or the poorest of the poor. Being aimed initially at improving the rural sector notwithstanding, corrupt politicians and bureaucrats had rendered Panchayati Raj system ineffective.
Killings and a spurt in the purchase of arms and luxury vehicles in extremely backward Indian villages have started to bother the police. How are surge in purchasing capacity and crime linked to the rampant corruption in the local self-government bodies? A thorough investigation found that Mukhiyas had multiplied their assets beyond imagination. Interestingly, within a very short span of time.

More than 1 lakh mukhiyas are learned to have become millionaires in the past five years. They have amassed wealth by siphoning off money from centrally funded development projects related to MGNREGA, Indira Awas Yojana, solar lights, rural roads and the public distribution service (PDS).

After pan-India investigation, it was realised that the race for siphoning off development funds was leading to murders of former Mukhiyas or anyone who opposed. To tighten their stranglehold in villages the mukhiyas, whose salary is barely Rs 8,000 a month, are purchasing arms and SUVs.

The police are again busy joining the dots to understand how Mukhiyas are able to loot a large pie of development funds. Scams are not new in India. The rags-to-riches trend among Mukhiyas has led to a volatile situation in recent years. There have been murders of whistle blowers, including RTI activists. In the past three years, seven RTI activists have been murdered and in numerous cases Mukhiyas were directly implicated in the killings.

The Panchayati Raj in India has not been an absolute success. Its functioning all these years has demonstrated numerous shortcomings. Let us discuss the fallacies of Panchayati Raj system to mark National Panchayati Raj Day. Some of the defects of the system are as follows:

Irrational distribution of functions

The Panchayati Raj system is defective as far as the distribution of functions between the structures at different levels has not been made along scientific lines. The blending of development and local self- government functions has significantly curtailed the autonomy of the local self-government institutions.

Again, it has virtually converted them into governmental agencies. Even the functions assigned to the Panchayat and the Panchayat Samiti overlap, leading to confusion, duplication of efforts and shifting of responsibility.
Incompatible relation between the three-tiers

The three-tiers do not operate as functional authorities. The tendency on the part of the higher structure to treat the lower structure as its subordinate is markedly visible. Hierarchical domination and predominance fitters down from Zilla Parishad to Panchayat Samiti and from them to the Village Panchayats. Needless to state that this kind of mutual relationship is not commensurate with the genuine spirit of democratic decentralization.

Inadequate finance

The inadequacy of funds has also stood in the way of successful working of the Panchayati Raj. The Panchayati Raj bodies have limited powers in respect of imposing cesses and taxes. They have very little funds doled out to them by the State Government. Further, they are generally reluctant to raise necessary funds due to the fear of losing popularity with the masses.

Lack of cordial relation between officials and people

The introduction of the Panchayati Raj aimed at securing effective participation of the people. But in reality, this hardly happens since the key administrative and technical positions are manned by the government officials.

Generally, there is a lack of proper cooperation and coordination between the people and the officials like Block Development Officers, the District Officers etc. Again the officers fail to discharge the development duties more efficiently and sincerely.
Lack of conceptual clarity

There is a lack of clarity in regard to the concept of Panchayati Raj itself and the objectives for which it stands. Some would treat it just as an administrative agency while some others look at it as an extension of democracy at the grass roots level, and a few others consider it a charter of rural local government. What is all the more intriguing is the fact that all these conceptual images could co-exist simultaneously tending to militate against each other every now and then.

Undemocratic composition of various Panchayati Raj institutions

Various Panchayati Raj Institutions are constituted setting aside democratic norms and principles. The indirect election of most of the members to Panchayat Samiti only increases the possibility of corruption and bribery. Even the Zilla Parishad consists of mainly ex-officio members. They are, for the most part, government officials. This negates sound democratic principles.

Disillusionment on structural-functional front

The performance of Panchayati Raj Institutions has been vitiated by political cum caste factionalism, rendering developmental projects into chimeras. Corruption, inefficiency, scant regard for procedures, political interference in day to day administration, parochial loyalties, motivated actions, power concentration instead of true service mentality- all these have stood in the way of the success of Panchayati Raj. Furthermore, the power to supersede the local bodies on the part of the State Government clearly violates the spirit of democratic decentralization.

Administrative Problem

The Panchayati Raj bodies experience several administrative problems. They are the tendency towards politicization of the local administration, lack of co-ordination between the popular and bureaucratic elements, lack of proper incentives and promotion opportunities for administrative personnel and apathetic attitude of the government servants towards development programmes etc.

Politics is an inevitable part of a democratic framework

The manipulative nature of rural politics is manifest in the techniques used at the time of elections. The fact-finding research teams observe that the caste system in rural India has made a mockery of the concept of rural development. Even the Panchayat elections are fought on caste grounds and the traditional dominant castes have manoeuvred in such a way that they still occupy the positions of power in the changed set-up.
Once the dominant castes have managed to occupy important positions where the decisions are made, they find it easy to manipulate the plans to serve their best interests. Consequently, the schism of caste grows wider day in and day out, alienating the low castes farther and farther from participating in rural development programmes.

www.TrickyScribe.in

Total Views: 3,30,640

April 24, 2017

Alarming Increase in Carbon Footprint of Emerging Economies

Business & Commerce Climate Change

Do we know Carbon Credit?

by Staff Correspondent April 22, 2017

written by Staff Correspondent

The TrickyScribe: Carbon credit is a financial instrument that allows the holder, usually an energy company, to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their greenhouse gases below their emission quota. Carbon credits can be legally traded in the international market at their current market price.

Air Pollution

Carbon credit system was a solution that came about near the end of the 20th century, as people became more aware that human industrial activity is potentially responsible for global warming and environmental degradation. The premise of the system is that a government or another body can regulate the total tons of carbon dioxide emitted but is given some flexibility as to how exactly the regulation is accomplished.

Carbon credit systems place a cost on carbon emissions by creating credits valued against one ton of hydrocarbon fuel. A carbon credit, then, is essentially a permit that allows the receiver to burn a specified amount of hydrocarbon fuel over a specified period of time. Credits are granted to companies or other groups that take action to measurably reduce carbon emissions.

Illustration

Trees of the Future, an environmentalist group that works to reduce megatons of greenhouse gases from the atmosphere, plants enough trees to reduce emissions by one ton and is awarded a credit. If a company has an emissions’ quota of 10 tons but is expected to produce 11 tons, it can purchase the carbon credit from the environmental group. The carbon credit system looks to reduce emissions by ensuring that all countries keep their overall carbon emissions in check.

The Kyoto Protocol

Carbon credit proposals have been spearheaded by the International Panel on Climate Change (IPCC) as a market-oriented mechanism to slow carbon emissions. An international carbon credit system was ratified in conjunction with Kyoto Protocol, and its market mechanisms were clarified at the subsequent conference in Marrakesh. In addition to the legally binding goals of the Kyoto Protocol, there are also voluntary carbon credit markets, such as in some cities in the United States.

The Kyoto Protocol divides countries between industrialized and developing economies. Industrialized, or “Annex I countries,” operate in an emissions trading market that gives each country it’s own emissions standards to meet. If a country beats its target, it can sell its surplus to countries that haven’t met their goals. The separate Clean Development Mechanism for developing countries issues carbon credits called Certified Emission Reductions (CER). These credits are issued for supporting sustainable development initiatives in developing countries and can be traded on a separate market.

2018 BUDGET REVIEW: Wider connotations, but little in the budget on climate change

Total Views: 3,30,880

April 22, 2017

Business & Commerce

Investing in movies? Read this

by Editor's Desk April 19, 2017

written by Editor's Desk

Investing in a movie is potentially a perilous endeavor. Hunting for the right talent, managing production costs and finding the right distributor(s) are but a few of the hurdles that investors share as the production moves forward.

Most difficult are to gauge the personal whims of the average moviegoer. Taste is picky. A story with a broad appeal in one decade could fall flat on the other. If a movie does well, it may open the possibilities of a franchise; if it flops, it could claim numerous casualties, from studios to the careers of actors.

Pre-investment Considerations

Good investors work with due diligence. So it is with investing in movies. The hedge fund/ private equity vehicle appears to be one of the most common means for direct investment. Naive investors are suggested not to apply. The threats of such an enterprise can be substantial.

Diligence throughout is critical. Offering documents must be in concurrence with security laws applicable. What is the producer’s reputation, his experience? Backing one with nary a track record is akin to investing in a mutual fund with greenhorn portfolio managers.

What is the potential market? Blockbusters tend to have a broader appeal; foreign films and documentaries, black and white and silent are considered to films have less.

Films with religious messages or ones with a more intellectual humour could be a hard sell to the distributor as their audience-base is typically quite narrow. What if the film has no top grade talent? Though sometimes the film itself is the talent at times but that could be a major problem. Think of “Slum Dog Millionaire.” Movie

Name recognition could vary depending on where the film is targeting its release. Learn about the director’s idea. An outsized ego can prove fatal, as was the case with Michael Cimino’s “Heaven’s Gate.”

Are the interests of the filmmaker(s) properly aligned with the distributor and investors, or does much of the revenue inure to the benefit of the filmmaker? Is the investment a fair arrangement?

Where the Money Goes

Revenue is used to repay investors all of their investment and debts incurred first. The process is similar to a return of basis or of the investment. Next would be profit sharing, or the return on the investment. The split is even between the producer and investors.

The film’s stars, writers and director are paid from the producer’s profits. Any investment proposals should be in writing and contain an arbitration clause for a more cost effective dispute resolution. Filmmakers would do well to have such a clause when dealing with financially stronger distributors in order to protect the former’s interests.

The producer should have secured a completion bond which is a surety bond that kicks in to pay for cost overruns rather than having the investors shoulder the burden. Different fundraising options should be considered, depending upon the script and budget. Tax incentives properly pursued are another revenue generator, so long as the incentive tail does not wag the movie dog. The filmmaker should escrow funds during the fundraising stage of the film. This helps to ensure transparency and accountability. If insufficient funds are raised, then they should be returned to investors. All of these considerations point to the need for any investor to work with a professional with experience in the film industry.

Way Ahead

As an asset class, film would appear to be uncorrelated to the other types of investments and somewhat recession resistant as people still go to the movies or rent them. Slate financing is the hedge funds’ approach to risk management and return generation. This approach simply entails investment in a portfolio of films, rather than a single production. Through diversification comes a more proper balance of risk and return. What films are included in the portfolio may be a function of how the fund’s co-financing efforts with the production and distribution company work through the film studios. Part of the challenge is untangling opaque financial accounts through due diligence in the quest for greater transparency.

The film industry plays in the form of common shares, and is available to individual investors, who need to understand where in the chain of production the companies lie and to what risks those companies are subjected to. For example, is the investment in a studio like Lionsgate (which nearly doubled its share price since the beginning of 2012) or distribution like Netflix or Coinstar?

The Bottom Line

Have movies been commoditized? Consider how easy it is to access a favorite movie. The theater is but the first of several distribution channels which include cable television, Internet and rental outlets. Ready availability of content has stolen a march on the movie theater experience and created more revenue streams and greater profitability. Perhaps it is for this reason that the Academy Awards this year focused on the lost grandeur of the Golden Age of film.

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Total Views: 3,31,240

April 19, 2017

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