Saturday, February 16, 2008

End of a famous grunt


You are forgiven if you think that’s someone wanting a cup of coffee. That evening of May 1990, watching my favourite player Steffi Graf crumble against the might of an unknown and gawky pony-tailed girl who was all over the court and just wouldn’t stop shouting COFFFFAAAAAAEEEEEEEE on hitting each shot, I was heart-broken. To watch my idol loose like that, I had never expected. But one thing was clear. Determination just got itself a new meaning. For that was not any ordinary call. That was a spectacular release of energy – experts call it a grunt – that Monica Seles was accustomed to while punishing her opponents, repeatedly. That was a determination to win quite unseen in anyone else. That was professionalism that had the urge to block out everything else when on a tennis court – even an unfavourable crowd in the stands – and to turn adversity into advantage and set sights on that trophy. That was the start of an illustrious career that saw Seles win 53 single titles, including nine grand-slams and six double titles.

Monica Seles was no ordinary player. She was the first girl to introduce women’s tennis to the power game – something that the next generations of girls would build their games around. With power came precision. Balls hit by the Seles racket would always find the lines and corners. And coupled with such power that few could find a way to hit them back. Many would be left standing in the middle of the court, watching the balls zip by, helplessly. Her predecessors like Navratilova, Evert and Graf relied more on grace, but Seles was brute-force and knew how to hit the ball never to see it come back again. The Williams sisters were to only to follow years later.

Similarly, though Martina Hingis was known to be a chess player on a tennis court, it was Seles who mastered the art of using the head. On numerous occasions, her most illustrious opponent Graf would hit her now-enshrined, inside-out fraulien forehand at her with brute force, going out far wide, and Seles would simply use that power to her advantage and simply place her forehand back into Graf’s court, but at the opposite end, miles away from Graf. Lesson learnt: no matter how great your forehand is, placement is as important when Seles is on the receiving end.

Seles was on a meteoric rise in the early nineties. In 1991, she played 16 tournaments and reached the final of all of them. Of them she won 10. The next year, in 1992, she lost only five matches. During the period from January 1991 to February 1993, Seles won 22 titles and reached 33 finals out of the 34 tournaments she played in. She compiled an astounding 159-12 win-loss record (92.9% winning percentage), including a 55-1 win-loss record in Grand Slam tournaments. In the interim, she held the top ranking in women’s tennis for a total of 178 weeks – the fifth-longest No. 1 streak in women’s tennis. This streak could have gone on for many more years had it not been for her stabbing. On April 30, 1993 a crazy fan of Steffi Graf stabbed Seles during a changeover during Seles’s match at the Hamburg Open. He did this because he wanted Graf to regain the top spot. Seles was sidelined for two years during which she became a US citizen.

Two years later, in 1995, she returned back on tour, won 2 exhibition matches against Martina Navratilova, won her first professional tournament – Canadian Open, crushing Amanda Coetzer in the final and quickly made it to the final of US Open – the year’s final grand slam – only a month later. All this, without dropping a single set. In the final of ’95 US Open, she ran into an inspired Steffi Graf. She lost 6-7, 6-0, 3-6. Few months later and in January 1996, Seles captured her ninth - and what would eventually be her last - grand slam title, Australian Open.

Seles never reached her brilliance thereafter. She had two sparkling moments in her tennis career in the years that followed. The 1996 US Open where she lost the final, yet again, to Graf and 1998 French Open where she beat the then-world no.1 Martina Hingis brutally in the semi-finals but lost to Aranxta Sanchez-Vicario in the final. After a series of insignificant results and injuries that kept her sidelined for over two years, Seles finally called it a day on February 15, 2008.

This is to one of the greatest personalities the sport of tennis has ever seen. Monica Seles has been a terrific player on-court and a wonderful person off-the-court. She took competition to another level and gifted it with a sense of professionalism that would, in years to come, be a source of inspiration to all the young guns of tennis. Wish her all the best for the future!

Some outstanding Seles matches that would stand out in her career
Monica Seles vs Steffi Graf – French Open final 1992
Monica Seles vs Martina Navratilova – Wimbledon Semi-final 1992
Monica Seles vs Jennifer Capriati – U.S. Open Semi-final 1991
Monica Seles vs Martina Hingis – French Open semi-final 1998

Friday, February 15, 2008

Not Quite There, Yet

MFs are now transparent and cheaper, but agents will now push Ulips harder

Part of the privileges I should enjoy by tracking mutual funds (MF) for so long is to avoid paying agent fees, isn’t it? After all, why should I pay the agent just because he gets me a form, when I decide on the funds that I should buy. My wish finally came true when, effective 4 January 2008, the Securities and Exchange Board of India (Sebi) abolished entry loads for direct MF investments. On 31 January, Sebi banned closed-end MFs to charge and later amortise initial issue expenses on the back of an NFO fever that saw 42 closed-end schemes— as against 34 open-ended ones— launched since amortisation in open-ended schemes was banned on 4 April 2006. Prima facie, informed investors and Outlook Money readers benefit as we already shortlist schemes for you.

Should agents be avoided then?
No. The uninformed investor still needs the agent’s help. The reality is that MFs need agents to grow. At present, MFs don’t have the required infrastructure to handle masses of investors. Setting up infrastructure is a costly affair that only big-pocket players can afford. Urban investors can invest through the Internet, but penetration is limited in rural areas. It is here that agents can play a vital role in mobilising collections.

The agents are upset. When amortisation was allowed, they were spoilt with a 5-6 per cent commission from MFs to sell their NFOs. Foreign trips came about once in two-three months at the expense of the investor. Further, with unit-linked insurance plans (Ulips) offering 10 to 25 per cent commission in the first year itself, agents are tempted to push Ulips. Sources say that on the back of Sebi moves, this has already started happening.

Sebi’s moves have also encouraged passbacks. As agents get trail commissions of around 40 to 60 basis points, some of them have started to return the 2.25 per cent entry load to the investor. This way, both the investor and the agent are happy. Remember, passbacks make sense when a planner sells you a product since he recovers his cost through the fee. and he needs to be the passthrough to service the client.

There’s a four-point solution to the mess:
Sebi should encourage a variable load structure, wherein investors and agents could negotiate and decide how much commission the agent should get. At present, discount brokers (agents that only give forms and little or nil advice) as well as financial planners get identical commission even if the latter does the planning. If fees could be negotiated—anything between nil and 2.25 per cent, and not just either of the two, as is at present—both parties would be satisfied.

This would also encourage serious financial planners. Agents, after all, have had it very good so far and it’s time that the freebies stop. This really means legalising passbacks, that incidentally are allowed in the mature markets.

MFs need to find a way to increase trail commissions on existing schemes once they complete three years to avoid churning and give credence to performance. Ulips, too, should have a similar approach. The insurance industry might justify higher costs saying it is growing; the reality is that most Ulips are mis-sold and the industry is growing in a wrong way. The industry is now hiding costs inside the product.

Sebi should expedite its financial intermediary guidelines and ensure that all types of agents selling all kinds of financial products are governed and made accountable for their actions.

Ultimately, all regulators—Sebi, Reserve Bank of India, Insurance Regulatory and Development Authority and even Pension Fund Regulatory and Development Authority—must sit together on a continuous basis. They should ensure that an equitable cost structure is arrived at across investment vehicles so that none is over- or under-regulated.

Tuesday, February 5, 2008

Postcards from Parwanoo

My office's annual offsite just ended and I returned from a long and exhausting trip to Parwanoo, a serene hill-station in Himachal Pradesh. We stayed at the Timber Trail Resort (TTR) for 1 night and then moved further up in the mountains at the Timber Trail Heights (TTH), a 3-star resort nestled around 6,000 ft above sea level. On a clear day you get to see as far as Chandigarh from here. You first go to TTR, that is at 3,000 ft above sea level and then take their cable car atop the opposite mountain to reach TTH. Since the cable was not working the first day we reached, we had no option but to stay at TTR.

The place was good and well-maintained, though knowing the bitter cold at Parwanoo in the winter months, the heating facilties at these hotels were very inadequate. The winters are more severe than the summers. Yet, there were 2 split air-conditioners in my suite, but only one small rickety-rackety heater that would - at best- heat up an area of about 2 square meters! I had to squat around the heater, especially early mornings, when it was chilling, to get some warmth, then go about with my errands in the room, come back after 10 mins in front of the heater to intake some warmth again.

Otherwise, the rooms were large, spacious and well furnished and the service was also good. Food at TTR was oily and greasy, but TTH served better food.

The outing wasn't a holiday though, as we had sessions by experts who came and spoke to us on topics that they excel in. So while Uma Shashikant gave us a lesson in macroeconomics, Partho took us on a journey on work-life balance, Lovaii Navlakhi explained us the essentials of financial planning while aptly criticising Outlook Money's shortcomings - (I agreed and disagreed with him there) and Swami Saran Sharma took us through insurance and taxation. Then, there was also Mohit who took us through his journey from Delhi to his now-famous two homes in the hills and the stocks that he bought and sold along the way.

The lectures were fine and well-explained, but macroeconomics on an afternoon after a heavy lunch and 5-hour travelling and waking up at 5.00 am in the morning, took its toll on me. Given a choice, I would attend a morning session on it, rather than the afternoon. But to Uma's credit, she simplified the complexities and gave it a very realistic touch and explained it in the context of the present global scenario. It's always a pleasure attending Uma's sessions; she's a teacher at heart and really involves the entire class in her lectures. Her explanation is simple and lucid and always very practical. If you are a financial planner or would like to learn about financial services, I strongly recommend her online training module. It's worth the time, effort and money.

Anyways, it was good fun up at the hills. We used to party after the daily sessions, though I personally preferred hitting the Table Tennis courts with Anagh, Ronojoy, Nilotpal, Kaveri & co. Though I am not a teetoteller, I ain't a social drinker either (definitely not a regular one) and I get very bored being in people's company when they are drinking slowly, sip by sip. Being a part of a drinking session when you are the only one not drinking can be the most boring thing in the world.

So it was fun catching up with the gang and gossip. On our last day of the trip, we went off on a day's trip to Kasauli, a hill station further up north (around 5,800 ft above sea level) and laregly an Army cantonment area for a day's excursion. At Kasauli, we went to Monkey Point, a place atop a hill that entails a steep and rigourous climb. Legend has it that Lord Hanuman touched this hill on his way back from the Himalayas to Lanka carrying the Sanjivany booty with him. Hence, on top of this hill, is a Hanuman temple - a most serene place of worship. As it had snowed a couple of days before at Shimla, we saw traces of snow on the higher levels of this hill.

By afternoon we were back in our cars en-route to Kalka to catch the evening Shatabdi back to Delhi, and further to Bombay the next morning.

(Picture #1: View of TTH on the mountain top, as seen from my TTR room)
(Picture #2: Cable car at Timber Trail)
(Picture #3: Kalka-Shimla narrow gauge line)

Meher Mahino, Ava Mahino and Adar Mahino: The holy trinity of Zoroastrian calender

Zoroastrians- or better knows as Parsis and Iranis of India- have a separate calendar. We look at the English calendar of course, but we al...