Thought for the day
"It is clearly better that property should be private,
but the use of it common; and the special business of the legislator is to
create in men this benevolent disposition."
-
Aristotle (Greek, 384-322BC)
Word for the day
Contrite (adj)
Deeply affected
with grief and regret for having done wrong; Penitent.
(Source: Dictionary.com)
Teaser for the day
AIB Roast - is unacceptable because (a) it hits
where it hurts most, at the core of our Hippocratic morality; and (b) it is
truly f****g s**t.
"Good" as
a noun
I often wonder how many of us usually rely on IMD weather
forecasts to plan our day? and how many of us judge the winter cold by the
minimum temperature and summer heat by the maximum temperature recorded on a
given day?
Hand on my heart - I could not care less for IMD forecast in
planning for my daily schedule; a tiny shiver does travel up my spine when I
hear about day's minimum temperature in winters and few droplets of sweat do
appear on my temple when I hear about day's maximum temperature in summers. It
is also true that it makes absolutely no difference to my life beyond these
ephemeral feelings.
I know, till this point there would be little disagreement. Even
those disagreeing may want to nod in agreement just to keep me in good humor.
But I do not want to stop here. I want to apply this ratio to the
macro economic data issued by the government other agencies! This would
certainly ruffle some feathers. A large majority of economist and analyst
community who rely heavily on the "periodic official data" for their
livelihood would strongly resent any attempt to trivialize the importance of
such data.
To test my hypothesis I discussed the issue with some consumers,
producers and investors. The key take away are follows:
(a) An executive with a midsized cement
producers suggested that they do use GDP multiplier to forecast the cement
demand for their investor presentations, but in real life the decision to
increase/curtail production and add/reduce production capacities are strictly
based on actual sales and feedback from dealers. GDP multiplier for demand
forecast is mostly a post facto decision justification tool.
(b) A middle class home maker tells me that
inflation number you people discuss on television and newspapers means nothing
to her. It is monthly outgo from her purse that matters and that amount is
rising consistently for past one decade.
(c) The sweet shop owner in my neighborhood
market says that his sales are growing much faster as compared to 2003-2007
period. GDP growth deceleration from 9% to 5% does not matter to him. The
inflation inside his shop has recorded over 15% CAGR in past five years. The
wages though are stagnating for past couple of years.
(d) "The change of GDP growth rate by
changing the methodology does not get my engineer daughter a decent job",
is what an investor had to say.
Trust me, I am not at all cynical. I fully understand and
appreciate the importance of empirical data as a critical input in future
planning. But I suspect the utility of forecasts based on extrapolation of
empirical data using the great gift of Bill Gates to mankind (MS Excel) for my
investment decisions.
My favorite Robert Pirsig noted in Lila
"Quality is Good as a Noun". I agree.
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