Mittal Vs. Arcelor – A Strategy Lesson

The Mittal-Arcelor entanglement is a wonderful case of business strategy. Look at it this way. The steel industry is undergoing tremendous amount of consolidation. Both Mittal steel and Arcelor have been involved in mergers and acquisitions to build their potential. At this stage, how does one steel manufacturer get an upper hand over his rival? One way is to make sure that the competitor does not buy more firms. How to do that? Well, make sure the rival's money is tied up somewhere else so that he does not possess the financial muscle power to buy more companies. How is that possible, you ask? Look at what Mittal has done.
Mittal’s takeover bid on Arcelor would succeed only if a percentage of Arcelor's stock holders sell their shares to Mittal. So Arcelor's management is left thinking over ways to make the share holders happy with the current management. They give dividends and sport a friendly face, while at the same time erode their cash reserves. No more cash reserves - no more consolidation. How cheeky?
If that is some strategy by Mittal, then look at Arcelor's new strategy. Forget convincing your share holders not to sell and just make them a minority. If they are a minority then their intention to sell stocks wouldn't hit the management. How to do that again? This is how Company A takes over company S. Of the newly formed company A1, S's management is given a substantial stake with the agreement that they wouldn't succumb to M's offer. Now A's former stock holders become a minority though their wealth actually increases. Nice strategy, right? Except for one glitch. The takeover of Severstall has to be approved by 50% of Arcelor's share holders, and they seem to be getting greedy over Mittal's offer (Check: Arcelor shareholders urge Mittal talks)
Too much of strategy? I feel not. After all we have not considered the possibility that Mittal is genuinely interested in Arcelor

Reservations - Why not?

The immediate effect of the reservation issue seems to be the split of our society based on caste (Check: Split in IMA over quota issue. Let me not get into debating directly on whether the quota system is good or bad. Let me assume that it is something to be implemented (though I definitely am in support of the notion against it). If reservation is to be implemented in the top institutes of India, I believe the politicians would be fair enough in implementing it in all layers of education.
I have heard that some of the top tier colleges in India shred the students who form the bottom few percentile of academics every year. I am not sure of this but let me assume that it is true. Then that means that reservation has to be introduced even for the students being left-off every year. If suppose a college of 300 students leaves 1% of its students every year. That means that 3 students have to be made to discontinue their course each year. If we implement the 50% reservation system here, that would translate to 1.5 students of the reserved category being thrown off. As is obvious, half a student cannot be dismissed. Since 50% has to be implemented, the number of "reserved" seats would be approximated on the upper side and so would be 2.That means that exactly 2 students of the reserved category would be sent home every year. Right? Well, not exactly. In the admission reservations, the high-scoring candidates are let-in on general category and only those who could not fare that way are shown the reservation option (hearsay and not something that I can prove). So even in the reservation for people to be dismissed, the lowest scorer would automatically take the general category slot to be thrown-out i.e., a minimum of 2 reserved guys would be shown the door. How does that sound? If it sounds bad to you, then I suggest that you re-look at the whole reservation issue.

Confusing Code

It is a bit confusing. If the church is against the Da Vinci Code, then the book should have been banned in the first place. When the book, which would definitely be more detailed than the movie (See: Code is damned at Cannes), is allowed to reach everyone, then why is the movie being held-up? The movie seems to have no problem in Europe and the US where the majority of people are Christians. Why is there such a hue and cry only in India? I read somewhere that the only Christian country in Asia is the Philippines, and that the movie has not been banned there.
It is even more bizarre to ask for a disclaimer to be put at he beginning and end of the movie. I have never understood the purpose of disclaimers. Once in an interview, Shekhar Kapoor was asked about the issues he faced with the censor board for his movie "Bandit Queen". Shekhar said that he was asked to put a disclaimer in the movie stating that it is not a true story, and he did not mind putting it as people already knew that it was a true story! May be the disclaimers are there just to point to historians that the story is not to be cited anywhere
The only reason I see the movie being protested against is that children might learn history in the wrong way (or is that the right way?) through the movie. But then, to my knowledge, the movie has been ‘A’ rated and so is out of “harming” children.

Trading Secrets - Book Review

A Wall Street journalist, a broker, and a scandal - it's a one line story that is given even at the back of the book. The interesting part though is the narration of the author who happens to be the journalist involved in the scandal. Imagine a villain of a story scripting it himself!

Foster Winans, the author of the book, is a Wall Street journalist who is pulled into a scandal by Peter Brant, a stock broker. The plot is simple - Foster is to inform Peter on the article that he would write the next day in the journal. The stock market is a very sensitive animal that changes its mood heavily on good or bad news. So articles in a reputed journal like the Wall Street would make it swing by enough magnitude for a broker to make huge profits. It was a nice plan i.e., until the SEC (Securities Exchange Commission) thought otherwise.

The novel is pretty nice and takes us through the lives of two distinct personalities. Foster's story of graduating from a small time column writer into becoming a well known face in Wall Street is nice. But the more interesting part, atleast to me, is the story of Peter Brant. This person was so much indulged at becoming a rich man that he started living the life of the rich even when he was poor, though loans. He dressed rich, learnt only those games that the rich play (golf, polo and the like), and even changed his name to suit his profile. Peter rose from very humble beginnings to become a leading Wall Street broker, so much so that his firm placed ads in papers with his photo.

Quite similar to "Liar's Poker" this book takes us through the rise and fall of people in the Wall Street. "Trading Secrets" is a good read for its narration, for showing the making of a top notch broker, and more than all of these, for showing the pains felt while being involved in a scandal.

(T)Axing Me

It is nice to see election promises coming to effect (Check Source). But why should the rice scheme come to effect on the CM's birthday? For heaven's sake, my contribution as tax is more in that scheme than his! Ok, I guess that’s just my frustration coming out. After having paid a cool amount as tax every month last year, I still lost the whole of my March month's salary. To make things worse, 1/3rd of my April month's pay was deducted as tax spill over. May be that justifies my negative feelings on hearing politicians announcing freebies as though it comes out of their own pocket.

Freedom of Speech

An actor viewed her opinion on women -> Some people agitated -> Newspapers blamed them for blocking the actor's freedom of speech

Sehwag viewed his opinion on the Ganguly issue -> The cricket board has warned him (Reference)
If my memory serves right, even Harbhajan and yuvraj have been warned earlier on similar issues.

Where is the freedom of speech now? Does the cricket board own the players' freedom of speech? Personally, I don't think Sehwag's comments would harm the board in any way.