25 years and ...

It is amazing how this watch, made by Allwyn, is still going on and on (more like the Energizer bunny). I had received this watch as a gift from my dad in April 1986, immediately after my tenth grade. It is an automatic watch, which requires that I wear it at least 8 hours a day on my hand. I had worn it in extreme conditions of heavy rain, freezing temperatures of Northeast US, and it just kept working. Except for two instances, one was a glass replacement due to my bad handling, and the other was probably the age factor, I did not go to a watch service person.

I'm surprised that the company, Allwyn watches - with license from Seiko, that made watches like these had closed down (in 1999). I don't know if the Seiko watches of today have the same quality (my wife's Seiko quartz watch drains button cells like crazy).

Thinking of buying a telescope?

For several years, I had been thinking of buying a telescope to get a closer view of planets, their moons, etc. However, it is still listed in one of my to-do lists. During any of the shopping sessions when my wife digs deeper into the products that interest her, I get to do some window shopping of products in the nearby stores. Some times I get to see telescopes priced very low. I stop my self from buying them because "I did not do a good research about telescopes, and what if this brand is not good".

Today, I wanted some break from what I was doing and I searched for telescopes in Bangalore. Interestingly, one of the articles pointed me to http://www.astrocentral.co.uk/telescope.html. This website says "The most important thing about magnification is not to get too hung up about it.", "At night in towns, as everything cools down (especially after a hot day) heat rises and causes turbulence in the air. When looking through a telescope at high magnification this causes the image to swim in and out of focus." This has given me a good introduction to what I should do when I go out for shopping for my first telescope. To begin with - I should set aside atleast Rs 20k to get a good first telescope. Then I should find a good lawn accessible in the night. Finally, the place should be dark (away from the city lights). All this means that I should move to a village after purchasing the telescope :)

Can I donate blood if I have had Hepatitis A?

Hepatitis A infection is most often identified with Jaundice (typically yellow colored eyes) symptoms. I had this in mid 1990s. Couldn't trace the reasons for my infection. It got cured in 2-3 months time and I'm healthy as ever after that. Good thing about this disease is that it leaves anti-bodies in the blood stream which will protect you from further infections (that is what the literature says).

Few years after I was cured of Hepatitis A, I used to go to medical camps for blood donation. The first thing I mention is that I had "Hepatitis A" in mid 1990s. Doctors in medical camps were not sure whether they should collect blood from me or not. I was not aware about the recommendations by the medical councils. Fortunately, because of insufficient information and doubts created by my questioning, I was told that they'd not want me to donate blood. Good that I did not donate blood !

This morning, I was thinking of going for a blood donation for my colleague. I searched the web once again and came across this CDC link http://www.cdc.gov/hepatitis/a/aFAQ.htm. It says "If you had Hepatitis A when you were 11 years of age or older, you cannot donate blood. If you had Hepatitis A before age 11, you may be able donate blood. Check with your blood donation center."

Now, I have no more doubts. It is very clear that I should not donate blood. A request to everyone who had jaundice or Hepatitis -A, please refrain from donating blood because the recipient might not be immune to Hepatitis-A virus.

Some non-compete clauses unenforceable in India

http://publication.samachar.com/pub_article.php?id=8979992&nextids=8980746|8983625|8981065|8982327|8979992&nextIndex=0

The above link points to a news article that describes some of the conditions in which the non-compete clauses are not enforceable in India.

"However, Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts, viewing them as 'restraint of trade' impermissible under Section 27 of the Indian Contract Act, 1872 (the Act), and as void and against public policy because of their potential to deprive an individual of his or her fundamental right to earn a livelihood." -- Majority of Indian IT companies make every (mostly senior) employee (who exits the company) sign the non-compete agreement. Some of them make signing this document mandatory at the beginning of employment along with the non-disclosure agreements.

Majority of employers do not enforce this by taking a legal route. So, what's the point in making employees sign these agreements and increase the overhead for the company?

Also, employees do not care much about these agreements too. They join direct competitors and some disclose this future employer at the time of exit. Do these 'switchers' know that these agreements are not enforceable in India?

IRCTC : did the quota change in the recent past?

For the last few months whenever I book a ticket through IRCTC I'm always indicated that lower berths are not available. I always get a side upper berth. This happens even when the availability is more than 300. Did the quota for IRCTC bookings change in the recent past?

Another  observation is that IRCTC shows waiting list number when booking. However, on that particular day, there a lots of empty slots in the train. I had booked a ticket for my wife very early, got a confirmed ticket. Few days later when I wanted to book a ticket for myself on the same train, the status was waiting list; I had chosen not to book a ticket because the waiting list number was too high. However, to my surprise on the travel date, I had seen that there were lots of empty seats. Is this waiting list number only for IRCTC reservations? What percentage of the total seats are assigned for IRCTC quota?

Home Saver Home Loan - Watch Out!

This is my understanding of how the Home Saver loan operates (as against what is told to you when the loan product is sold).

Standard Chartered bank (SCB) offers Home Saver home loans where the home loan is linked with a Current Account where the borrower could deposit money. The interest to the extent of the deposited money will be waived (or what is called as interest saved). This is good because you'll save significant interest. However, there is a catch. The deposits are never treated as the payments towards the principal. This implies that your principal outstanding reduces at the same rate as it was with your normal loan.

For example: if you had taken a loan of Rs 10 lakhs, with an EMI of 10000 per month. For simplicity of calculation, let us say that the EMI comprises of Rs 9000 towards interest and Rs 1000 towards principal. Now, you made 2 lakhs in cash deposits in the linked current account. This deposit will make your interest payments go down. So if you're paying your full EMI of Rs 10000 per month then, your principal component is Rs 1000, your interest savings is Rs 2000 (approximately), this interest savings should go to the principal.

Going to an extreme case, let us say that you had deposited Rs 10 lakhs in the bank account (you could have cleared the loan - however, you wanted to have an option of taking that amount as liquid cash for you to use for other purposes - if required). This means that no interest is being paid. Ideally, since the EMI is being paid, all EMI must go to the principal.

The above story looks appealing. However, this is not how real computations might be happening. The real computation could be as follows. The EMI payment is taken as the actual EMI minus the interest saved. So, the principal deduction is very small, and happens at the same rate as if it is a normal loan. The interest savings are tracked. What effect does this have? The assumption that your full EMI is being deducted from the current account is *WRONG*. If your full EMI was deducted then the principal outstanding should have reduced rapidly because "full loan amount" is in the current account. However, since this does not happen, and the principal outstanding moves down slowly, if you'd want to close the account after few years, you'd still have a large principal outstanding. In the above example, when you have 10 lakhs in the bank account, the principal outstanding decreases (approximately) at Rs 1000 per month. Thus, after two years your principal outstanding goes down by Rs 24000. However, you'd have expected it to go down by 2.4 lakhs assuming that the entire EMI would go to the principal outstanding because you need not pay any interest. So, if you're planning to close a loan after two years, the 2.5% penalty will be applied on 9.76 lakhs (instead of 7.6 lakhs). This is a significant loss because you'd be paying an excess of around 2.5% penalty on approx. Rs 2 lakhs.

Note: Many other banks also offer similar home loan product. Most likely, they also operate the same way.

new type of internet auction sites - bid20.com

Recently a friend of mine mentioned about a new twist to internet auction sites - bid20.com. The site claims that you can win item at a very low price. Is it really true?

How does bid20 auction work? Here are some steps:

1) Buy N bids at the price specified. Each bid is prices > Rs 10, in bundles specified by bid20
2) Go to the item listing and bid one at a time when u r not the highest bidder
3) The last bidder will be the winning bidder. All the other bidders who had bid lost the money for the bids they've made.

What does the winner get?

Let us consider an item that has an MRP of Rs 1000, and assuming that each bid costs you Rs 10, here are some scenarios:
1) You are the only bidder. In this case, you'll only bid once and your cost is Rs 10, and you'll get the item for Rs 10. This is good for the buyer, and a loss for bid20. This is a very rare case.
2) When there are more than one bidder, say 20 bidders. During the bidding process let us say that each bidder bids an average of 10 bids, and you are the last and the winning bidder. In this case there are a total of 200 bids, which means the price realized by bid20 is Rs 2000, which is good for bid20. This is also good for the winner because the cost for the winner is only Rs 100 (10 bids x Rs 10). However, there are 19 bidders who lost an average of Rs 100 each, and are potentially not happy about the loss. (Note: they might recover this loss by winning another auction - gamble?)
3) Scenario same as 2. However, the winner steps in just before the auction close, and after 190 bids have come in. He has more resources to bid at because he is starting from zero and the others at an average had already bid more than 15 times. Thus, the late entrant bidder, and more importantly very sparse bidder or a bidder who spends his bids miserly, is going to benefit a lot because he needs to spend fewer bids to win the auction. Bid20 is still not at loss. The winner here will maximize his returns. However, the initial bidders will have maximum dissatisfaction.

Who is at a loss?

Often, people do not realize the potential for loss. Auctions bring out impulsive nature in the bidders. Many of them don't analyze or realize how go gain maximum out of minimum bids. Also, people are used to ebay style bidding where the bidding does not cost you, and  one has to pay only as a winner. However, in bid20 style auctions, people start losing money (except the winner) with every bid. This is where the potential for a loss exists.

Business Model for Bid20:
1) Bid20 benefits a lot because (a) it gets money upfront by selling the bids - whether the buyer spends the bids or not is not its concern (b) The price/bid can be adjusted by it at the time of selling the bids, which makes it realize the price of the item at the rate it decides.
2) It can make a loss if there are not many bids on that item. However, bid20 says that it reserves a right to cancel the auction - it can protect itself.

The only concern for this business model is the user dissatisfaction. Over a long run, users realize that they're losing money when they bid and they not being the winner. When people realize that winning is possible only if they enter the auction at the closing stages, each auction will see traffic at the last moment. However, there is a catch here. The auction can get indefinitely extended if bids are received within 15 seconds of the auction end. Thus, there is no right time to enter the auction unless you see lots of people had already bid on the item.

Conclusion: The bid20 model will work and will have a buzz factor until users realize what they're getting into, and realize that they are accumulating losses. Once the buzz factor fades away and user realization happens, the user participation will go down. The Nov'09-Feb'10 Alexa traffic plots indicate this trend. Bid20 can continue with their model by bringing in new users; however, retaining the users might be difficult in the current model. Some new aspect must be introduced into this model to make it work over a longer period.

Notes from internet Auction History: There were auction sites like ubid, yahoo-auction, etc., that had the concept of extending the life of auction when the bids happen within certain time frame of the end of the auction. All these auction sites had decline in traffic while ebay kept gaining share. The sellers were happy to have fixed-time auction because of better operation management, while the buyers were happy to set a maximum price and time for an auction, and spend less time for buying an item. May be, sites like bid20 must take some hints from the internet auction site performance history and reasons for their demise, and change the way they operate so that they can survive for longer periods.