You're An Exception Mr. Seller!

One sticks to an opinion because he prides himself on having come to it on his own, and another because he has taken great pains to learn it and is proud to have grasped it: and so both do so out of vanity. - Friedrich Nietzsche

Ever hear of the hard seller. Maybe you have them just around you, owners who believe they’re an exception, the idea that their homes are growing in value while real estate prices all around are stable. These owners truly believe that somehow their property is unique and different, a home so wonderful that general sales trends and everything else is irrelevant. They are unwilling to see any relation to reality. These kind of whimsical prices seem to enhance throbbing egos and hulabaloo rather than result in deals.

While such owners, having once they are firm and sure in their minds what a property is worth, sometimes see any lower price proposal as a loss when that's not the case.

If the home has been on the market longer while local properties typically take less time to sell.

Then what is "fair market value" and how is this number determined? The term "fair market value" generally means the price at which a seller will freely sell and a buyer will freely buy. Legally speaking definition speaks, "Fair Market Value is the price for property which would be agreed upon between a willing and informed buyer and a willing and informed seller under usual and ordinary circumstances; it shall be the highest price estimated in terms of money which property will bring if exposed for sale on the open market with reasonable time allowed to find a purchaser who is buying with knowledge of all the uses and purposes to which the property is best adapted and for which it can be legally used."

But what really happens is that house that is overpriced by 10 percent of its actual market value is much less likely to sell within the first 30 days than one priced within 5 percent of its true value. Not only does an overpriced home takes longer to sell, it is also likely to sell for less than its actual value. More so because of the negative effect often associated with properties that have been on the market for a longer than average time.

But referring to Market values is important because if a property value is set too high it's likely to languish on the market. If the value is set too low then owners won't get full value. The same problems also impact buyers: If the property is over-valued you'll pay too much if you buy, if it's undervalued it will be quickly sold, perhaps before you get to it. Also read, How NOT to lose your sight in the Indian Real Estate Market.

How to Lose your Money in 30 Days!

When a person is born, he can embark on only one of three roads of life: if you go right, the wolves will eat you; if you go left, you’ll eat the wolves; if you go straight, you’ll eat yourself. - Anton Pavlovich Chekhov

Whatever said and done perhaps but one of the most important step in getting your property sold is entering the market with an offer that's priced right. Because over-priced property gets all the attention but for all the wrong reasons and loses out on the reasonable offers.

Invariably every seller looks for the highest price for his/her proposition. Usually a typical unreasonable seller starts at the highest price point possible, more than his own belief or reason. But the continued renegotiation of price can be a humbling experience.

But when numerous sellers are competing for fewer buyers -- adjusting price down may come bit too late and cost the seller less in gain. This can be avoided if the home is priced correctly from the start. Looking at properties that have sold in the last two months or so provide you a picture of what price range. And active properties in the market also give you an indication on where the market is headed. It may be a good idea to package the product accordingly. Read Sell It Fast! Sell it Right!

Even though home prices may have corrected a bit, real estate continues to be immensely expensive for most buyers, especially first-timers who lack cash flow. So it’s better that the property gets exposed to right and more number of qualified clients. And that happens with the right Value Proposition.

Arbitrary demands only result in arbitrary offers, which are least likely to materialize. And no one else would want to spend time promoting the whimsical offers, unless of course he is a big gambler himself. The key is to generate maximum response, the quicker you get those queries the better. More the queries, better are the odds of getting the best price at better terms. But then nothing is worth doing unless the consequences may be serious.

Sell It Fast! Sell it Right!

A weak man has doubts before a decision; a strong man has them afterwards. But in either case you have to know the value of your decision and where it will take you thereon. In a volatile Real Estate Market common sense always speaks too late. You might be thinking to jack up the price a little bit more while the market would already be offering you what’s the best. But you would let yourself be driven by either greed or fear, but not the common sense.

Here are few tips to Sell Your Property Fast and Furious provided you’ve decided to do so:

1. Fix It Up! Don’t just do a cosmetic surgery. Add value to your home by getting it renovated and fixing up the old nagging glitches. Just try to figure out how does your house look compared to the new construction around you. Try to add the experience into your home, which is difficult to forget, pleasant of course. It’s just like a walk through of a Sample Show Home. Anything less, is not anything at all.

2. Price it Right! It’s better not to lose your money with your adamant unflinching demand for a little more. You’ll lose an equal amount by delaying your sale by even two months. If your competitors are selling less and offering more then you better get your value propositions right. And Value is what the buyer sees and not what you force upon. Attract by showing the bait, and sell sensibly, and invest at lower prices for own purchase. But if you’re absolutely sure that you’re holding a Gold Mine in your hand than Don’t Listen to Anyone! Wait as long as you would want to.

3. Try to Push the Deal rather than Just a house. Avoid stringent price tags. Think of your home as a value proposition which needs a proper marketing.

4. Come to think of it, it's not only about the buyers, even some agents want to chip in a little more incentive for their efforts. Devise ways to offer incentives in form of commission or an extra share if the property is sold at a higher price. When people ask for time, it’s always for time to say no.

5. Package it with other incentives to the buyer. Like the ease of deal flow, transparency, personal disposition, walking that extra mile to give the buyer a comfort level he always look for.

To Buy or Too Shy !

“You see, most people never have to face the fact that at the right time, in the right place, they’re capable of anything.” - Roman Polanski

Over the last one year home sales have taken a plunge thanks to broad macro economic measure taken by RBI and a speculation driven unorganized market. Prices are more or less the same across some categories like apartments while dead investments like barren unproductive plots have taken a beating. Builders and sellers are offering concessions, and the most recent forecasts say the market is due for another correction.

But given the fact that it’s virtually impossible to pinpoint the ebb of the market, waiting for that the best price is as risky for buyers as it for sellers who are certain that market is about to peak. Logically speaking, it's only a right time for you to buy a home, normally, when owning is a cheaper and better option, than renting. More so when home ownership fits your financial portfolio, fulfills aspirations and offers personal/professional value. But is you only want a short term trade off than better wait, and understand the art of real estate investing.

There are other who say that in case you want to buy to live and if you don't take the plunge and home price appreciation carries on, you could be left out in the cold, with an opportunity lost. Especially if you are waiting for the perfect best deal, you could end up waiting for years on end, missing the bus while prices keep rising. Under such circumstances it’s always better to understand the nuances of Value Investing and the The Right Price Equation. Statistically, in the long run, real estate prices rise, by an almost of about 6 to 8 percent annually, getting your property to doubles every 10 years or so.

In short people buy real estate because it's an investment that provides shelter or security, tax benefits, loans, the appreciation and fosters the pleasure of and self actualization, with freedom to create, shape and develop, an option which you can not avail as a tenant. But whatever you do, know what you’re doing, because knowledge transcends these barriers of indecision and opens your eyes to seeing, creating and trading Value.

And when you can’t figure out what to do, it’s time for a nap.

Never Tell Me Odds!

A Peep Into Speculative Real Estate Buying.

“There are two great pleasures in gambling: that of winning and that of losing.” - Anonymous

Never tell me the odds, someone once said. For there are none. Not to be seen at least for now.

Ever thought of speculative buying in Real Estate? Well if so many have done it before, why not you? Especially in a highly unorganized market like ours, where burning your fingers is the only way to learn. And you always have to learn it the hard way. Seen the unbridled unrealistic spiraling unreasonable prices in Delhi? What’s there to think! Or there is nothing to think at all! Indian real estate is like that, after all. So get ready to burn your fingers if you’re entering the Indian Real Estate with opaque colored glasses on your eyes.

What is Speculation after all?? Is it investing in residential real estate for long term? Or is it buying a home where you don’t have any plans to live? It can also be a short term gain where you want to buy cheap, add a little value and sell it fast? So what really qualifies as a speculative trading and investment? Users today buy property because they're not sure that they would be able to afford it next month and speculators know that very well. Speculation happens when a certain sect of investors, unlike true investors take risks bigger than their appetite with an aim of trading or reselling the property at a profit in the minimum possible time period. They differ from the Investors who would want to stick along with a property for a longer duration of time.

Speculators always have an important role in boasting the prices with their underwriting and long holding skills. Invariably, it’s for everyone to see that prices are going higher by each passing day only because speculators think they'll always be able to trade for a profit, at any given point of time. But what happens in declining market is, retail or small time investors may not know when to get out and exit gracefully. It becomes difficult to know the peak and the best price to exit. Excessive speculative buying also generates and brings into pipeline the "hidden supply" that could come back to disturb the market and speculators have no option but to offload their units at the best possible rate, setting a chain reaction. As someone rightly described that a speculator is a man who, if he dies at the right time, has a rich widow. So if you are an aspiring speculator, get yourself a plan to exit before you enter.

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Indian Retail & The Fear Factor !

The Indian retail market is highly disorganized and fragmented. But with rising disposable incomes (especially amongthe middle class), increasing urban consumer base and a potentially strong rural market, the need for organized retail is increasingly being felt. The impetus for the Indian retail sector is high income and the upper middle income groups which together comprise 81 million households. Also the country’s population is urbanizing at a rapid pace with the urban Indian population projected to increase from 28 percent to 40 percent of the total population by 2020.No wonder then, that AT Kearney GRDI Index has rated India as the most attractive emerging retail market in the world for the third time in succession.

According to some, farmers will be the ultimate beneficiaries and the fear about contract farming is misplaced as it would ensure better and assured prices to the farmers. They would not be at the mercy of middle men who often dictate prices and laugh away with maximum profits. While others feel that the small retailer will be wiped off and the only buyers left in the market will be big corporations thus limiting the sale options for farmers. The big companies will motivate the farmers to go for contract farming. For instance a farmer in Punjab may be forced to grow tomatoes all the year round. And the quality norms of corporate retailers are so stringent that any deviance from the pre-conceived quality is out-rightly rejected and the farmer forced to either short sell his produce or dump it at substantially lower prices.

In the Mint, TCS Daily Editor Nick Schulz argues that the battle between large retail chains will ultimately be to the benefit of India's economy -- including independent retailers. Whereas some businesses will have to exit, the ones that adapt to the new business environment will thrive because of the increase in efficiency and productivity :

. . . the current debate over the future of retail in India is too constricted. Opponents of big retailers fret that small mom-and-pop shops will be put out of business. The study reported in Mint last week shows this worry is realistic.Proponents of large-scale retail typically counter that consumers will benefit from the lower prices large retail can provide as well as the greater range of goods. This is no doubt true. But as the McKinsey data demonstrates, there is so much more to the story.

The role multi-brand retailers play in large, modern economies is to inject knowledge and know-how into the sector and into the larger economy, touching almost every industry. Today's most advanced retailers serve as change agents, pushing through needed business reforms that make manufacturing and other sectors far more efficient and productive.The right answer to Singh's question now becomes clear. Large retailers in the West have been engineering efficiency gains for the better part of the last four decades. They have been among the main drivers of economic growth. And they do, indeed, know a lot that other retailers simply haven't had the opportunity to learn yet, mostly due to government policies protecting small retailers from competition.

There is hardly any shame in the fact that some Western retailers may know more than their Indian counterparts. Gains from trade work both ways. In the US last week, National Public Radio reported about American filmmakers and animation artists working with and learning from their counterparts in India. American industries, including Hollywood, are benefiting from the specialized knowledge in some of India's most dynamic industries.Given the importance of a sophisticated retail sector to economic performance, the latest row over retail's future couldn't happen too soon. India's continued rise on the global stage depends on reform and advance in this sector.

In the World Politics Review, Anuj Chopra reports on the retail wars in India, and highlighted some of the inefficiencies of the current system:

The Western-style stores feature long, boulevard aisles, refrigerated cases, uniformed and meticulous workers, and offer a large variety of products, from fresh produce to other consumer durables. All goods are neatly packaged, accurately weighed, and attractively priced.

India's small mom-and-pop stores, on the other hand, are chronically inefficient, with prices 20 percent higher than they are in big stores. They buy in small quantities, lack storage facilities to keep produce overnight, and have almost no expertise in inventory control.. . ."Organized retail is not the evil business it is being made out to be," said Mukesh Mehta, the Managing Director of Reliance Industries, in a statement. "India's retail market is so huge that there is place for everybody, including smaller players." He also asserted that his company's retail initiative was configured to improve supply chain and distribution efficiency, promote high-tech farming methods that bring better yields, and reduce waste. "Currently, 30 to 35 per cent of 60 million tones of fruits and vegetables -- more than the fresh fruit produce of the UK -- are wasted due to a lack of storage and other facilities," he said. "Organized retail chains will minimize such wastage."

The Great Indian Land Grab!

In a glaring Tehelka expose it is shockingly revealed that how systematically the govt. policies have been drafted too aid the incessant and large takeover of the agricultural land to help corporates build their land banks.

OF THE 13 Bills introduced in Parliament this winter, two critical ones included the Rehabilitation and Resettlement Bill and the Land Acquisition (Amendment) Bill 2007. The Bills were preceded by a National Rehabilitation and Resettlement policy, which was passed by the Cabinet on October 11, 2007. These legislations and policies are being touted as timely and a solution to what many call a “trouble-free” land acquisition. On the contrary, activists and NGOs fear that the ground is being set by the state to arm itself, once again, with unprecedented legal powers to aid and abet the corporate takeover of land.

Politics of Bharat Ratna!

Journalist Nikhil Chakravartty while refusing the Padma Bhushan said "Their legitimacy has hit rock bottom, so much so that some of those who get it are embarrassed while others flaunt it shamelessly. Let society honour its heroes." And it is indeed the society which has deserves to bestow any honor.

The Bharat Ratna has over the years become an integral politicking tool, ever since it was started in 1950 to honour achievers in various fields. And more recently BJP has made sure that the award dances to the tunes of such political considerations. It’s not that it has not happened before. But not this game is blatantly open and discrete! But for the politicians who make mockery of everything, it’s not a surprise that they have continued to make a mockery of an honour like Bharat Ratna. And till politicians decide the honors, it is not possible to keep it above politics. Such a prestigious honor lies at the hands of few who are trying to scale down the ‘greatness’ of the title to suit their partisan interests. These politicians are systematically lowering the scales for their own interests.

But there are others who said a BIG NO! But may be not anymore.

The Cocky Indian.

There has been a smart recovery in overall business confidence in the current round of the survey. However, this optimism is not reflected at the company level. There has only been a moderate increase in the proportion of companies which expect better profits, higher domestic sales and a matching rise in their production compared to the previous round. This implies that business sentiment has improved from the lows touched during the April-June ’07 quarter, but companies are still cautious and are modest about future projections. They seem to be mainly concerned about the future direction of the economy and its impact on demand.

A resilient investment demand and inelastic consumption demand for essentials goods and food may be responsible for this optimism. On the other hand, optimism among companies belonging to consumer durables and services sectors has shrunk in the latest round. In short, the gain in confidence at the macro level may take time to trickle down to individual companies, which are still reeling under the effect of a tight monetary policy and an appreciating rupee. In the near term, we may have to stay with a deceleration in industrial production. However, the silver line is that companies’ financial position may continue to remain strong with rising corporate profitability. This will enable them to comfortably absorb an economic slowdown, if it takes place.

Don't SpOIL!

The Big 5 of the oil business are spending less on exploration despite being flush with cash, a new study has found.

The study by Rice University’s Baker Institute said the five — Exxon Mobil, Royal Dutch Shell, BP, Chevron and ConocoPhillips — spent less in real terms on exploration compared to the early 1990s, despite a four-fold increase in operating cash flows. The trend, says the study, puts the companies’ long-term oil reserves at risk. “The handwriting is on the wall. The oil majors are not replacing reserves,” said Amy Myers Jaffe, co-author of the report. “It’s as if they are slowly liquidating their long-term asset base. They may see a declining rate of production over time and eventually that is bad news for both their shareholders and consumers.”

India Shrugged.

Pricewaterhouse Coopers report: Building Strong Partnerships and India: A Manufacturing Destination Key Opportunities point out significantly the mammoth Manufacturing Genius of this Country.

India has an existing road network of more than 3.3 million km, which is the second largest in the world. This is, though lower than USA which has the largest road network of about 6.3 million km significantly more than China which has a road network of about 1.4 million km. India has 110 km of road length available per 100 sq. km, far exceeding the corresponding figures of 68 km per Sq. km and 15 km per Sq. km for USA and China respectively. Similarly, India has 3,064 km of roads per million of population which is although lower than corresponding figure of 22,064 km per million population for USA, is significantly higher than that of China at 1,072 km per million population.

In India, the fact that National Highways and State Highways together constitute about 6% of the road network and carry about 80% of the total traffic, clearly emphasizes the importance of National Highways and State Highways. On the other hand District roads and Village roads together constitute 94% of total road network and carry only about 20% of total traffic. Irrespective of this, their importance cannot be underestimated as District Roads and Village Roads are important from connectivity point of view.

Road network in India requires major initiatives for enhancing its capacity. Only 12% of the National Highways are four-lane with two-lane and single-lane being 50% and 38% respectively. State Highways have lower capacity, with only 0.7% of total State Highway length being four-lane and corresponding percentage for two-lane and single-lane being 20.3% and 79% respectively.

Such huge funds requirement cannot be met entirely from the government’s budgetary resources, loans from multilateral agencies and Central Road Fund alone and, therefore, an increased level of private sector participation in the development, operation and maintenance of the road projects has been planned. In this direction, NHDP Phase III to NHDP Phase VII have been planned on (Build-Operate-Transfer) BOT basis. BOT projects are transferred back to the government at the end of the pre-determined concession period. During the concession period, the private developer recovers his cost and earns a return on investment through tolls and budgetary support. The NHAI is also beginning to experiment with private sector participation in road maintenance for completed NHDP stretches. The move could herald the beginning of a new era in road maintenance.

Road sector in India is seeing a lot of activity and one can expect this level of activity to carry on in future. There are ambitious targets set by Government and those targets can be met if issues from this sector are suitably addressed and if role of private sector is enhanced in road construction, operations and maintenance.

The Wheezing Giant!

Pricewaterhouse Coopers report: Building Strong Partnerships and India: A Manufacturing Destination Key Opportunities point out significantly the mammoth Manufacturing Genius of this Country.

The revival of the manufacturing sector has been a happy story in the country’s sustained economic growth. With a nearly 80 per cent weightage in the country’s industrial production the manufacturing growth rate has doubled in the last 5 years – from 6% in 2002-03 to a record 12.3% in 2006-07. Within the sector, industries such as machinery and equipment, food products, basic metals and alloys and chemicals have emerged as major growth drivers.

India is rapidly emerging as a force in manufacturing exports, with capital-intensive products featuring prominently”. And the best is yet to come. The manufacturing investments are the ‘first mile investments’ in as far as these are likely to be followed up by further investments to complete the projects and also for their further expansions.

The world’s top five mobile manufacturers -- Nokia, Motorola, Samsung, Sony Ericsson and LG – have all set up manufacturing facilities in India. India has become the second-largest market for Nokia in volume terms, displacing the USA. Nokia has gone ahead and set up a Special Economic Zone (SEZ) near Chennai as a developer. Nokia and many of its vendors have also set up their manufacturing plants in the SEZ which is used as a hub wherein the various suppliers of Nokia either manufacture or store their products and provide the same to Nokia as and when required.

Defying the traditional view that India is good only for services, the manufacturing sector in India has been moving up the value chain. While Hyundai is setting up a second car plant in the country, Toyota is exporting transmission systems from a new plant in Bangalore. The world’s largest auto parts’ maker, Delphi Corp, has relocated several product lines to India. So has Bosch, another auto parts giant. The phenomenon is not restricted to auto and auto-component firms alone. Companies like Unilever, Kodak, Whirlpool, Timex Watches, Cummins, Tecumseh, GE, ABB and Siemens are already sourcing products from their Indian plants for their global markets. And companies like Nokia and Elcoteq Network Corporation are considering setting up plants in India to meet their global demand for mobile phones.

India has a significant competitive advantage in the skill-intensive industries. Over the next decade, the global trend to manufacture and source products in low-cost countries is likely to gather strength. Taking advantage of this trend, India’s manufacturing exports could increase from US$40 billion in 2002 to approximately US$300 billion by 2015, leading to a share of approximately 3.5 per cent in world manufacturing trade.

If India is to achieve this quantum jump in manufacturing exports, several factors need to play their part. India’s manufacturing industry needs to adopt a global mindset and carefully select the product segments. The government needs to play its part by implementing key reforms in taxation, infrastructure, SEZs, labour and skill development.

Unraveling the Indian Retail Tale !

Pricewaterhouse Coopers report: Rising Elephant takes a look at Indian Retail Industry. Several global studies rank India as the most attractive retail destination in the world. PricewaterhouseCoopers estimates that India’s retail sector is worth an estimated USD350 billion. Over 12 million retail outlets (or kirana stores) comprise India’s unorganised market; more than 80 percent of kirana stores are operated by small family businesses using household labour. Organised retail penetration in India is between three to eight percent. Organised retail is growing at a compounded annual growth rate of between 30 to 40 percent per annum.

India’s retail sector will witness increased growth due to the following factors:

• Stable GDP growth rates of nine percent are resulting in increased economic prosperity for the country and for consumers.

• India’s 300 million-strong middle class are demanding increased access to good and services.

• Changing lifestyle patterns are witnessed in the increase of lifestyle- and luxury-oriented purchases and a decrease in essential purchases.

• The higher numbers of working women are resulting in an increase in double income families who want to purchase more consumption-oriented goods. Also, the higher number of urban professional working women is driving demand in urban centers.

• India has one of the world’s largest youngest populations where half the population is under the age of 25 years.

• Increased access to credit is enabling consumers to spend more and save less. (Retail loans have doubled since 2003.)

• Residents in rural and Tier II, III cities are demanding that modern trade move into their localities. The population of rural India is the combined populations of the US and the EU and represents 51 percent of consumption. In addition, the spread of IT and BPO operations to Tier II and III cities is raising incomes, improving standards of living and resulting in a desire to acquire more goods and services.

The success of any retail format largely depends on the efficiency of its supply chain. India has a fairly organised and developed non-food manufacturing supply chain, mainly due to the presence of large local and multinational companies that have built significant experience and scale by following best practices in their respective fields. Like most other developing economies, however, India lacks in the last mile distribution segment. The supply chain in India is fairly unidimensional and there is very little value-added activity since the distribution remains fragmented and unorganised. This is primarily due to the geographical and cultural diversity and complexity of the region and the lack of capital available for investing in technology and modern retail formats.

PricewaterhouseCoopers’ position paper entitled The Rising Elephant: Benefits of Modern Trade to Indian Economy* indicates that India is among the top two producers of milk, fruits and vegetables in the world. Yet, the organised food retail business in the country is among the least developed in the world.

In order to encourage the development of farm-to-fork retail models, the Government can offer incentives and tax-related benefits to incentivise the development and upgradation of the food supply chain. A robust and comprehensive farm-to-fork retail model is required in order to:

• Ensure a smoother transfer of goods from point of origin to point-of-sale

• Increase operational efficiencies

• Reduce overall costs

• Improve customer service since goods can be moved rapidly and efficiently between factories, warehouses and outlets

• Gain insight into which goods move quickly off shelves and which remain in stock

• Reduce wastage across the agricultural supply chain from the current levels of 24 to 40 percent

• Improve farmers’ realizations

• Encourage safer crop management practices

• Ensure that India can supply more fruits and vegetables to overseas markets

A Good Reason Why to Study Abroad.

Pricewaterhouse Coopers report: Building Strong Partnerships states that India is one of the world’s fastest growing economies. Its population has a median age of 25, which means that over 550 million people are 25 years or younger. While this gives India a huge demographic edge, it also puts considerable pressure on its policy makers to ensure that the young population is given quality education that will empower the future generations to contribute to and participate in the growth of the country. Is India’s education system geared up for this massive task? Is it ready to meet the current and future challenges?

In India, the formal education system consists of 1 to 3 years of preschool, 10 years of school; 2 years of higher secondary school; 3 to 4 years for under-graduate degree followed by Masters, M.Phil and Ph.D degrees. The focus of this paper is on higher education and vocational education in India. India has one of the largest higher education infrastructures in the world with 388 universities / institutions affiliating some 17,000 colleges. Over 450,000 teachers teach 10 million students; third largest after the US and China. This number is growing rapidly. Programmes are offered in all major disciplines. Professional education is imparted with English as the medium of instruction. Prestigious institutions get to pick the very best students. Only 1 out of 200 applicants gets admission into the famed Indian Institutes of Technology. The figure of acceptance is about 1 out of 10 at MIT(USA). Stories of students not making it to IITs, but securing admission in Ivy League colleges in the U.S. are commonplace.

India’s higher education system has been a great asset – it has not only catered to the manpower needs of the economy and helped India become self reliant in several areas but its doctors, engineers and scientists have been spectacularly successful in the global arena. Clearly the higher education system has done a good job. But is it good enough for the very rapidly changing present and a very demanding future? Perhaps not and that is the key issue. While there has been a 113% increase in enrolment in higher education (from 4.95 million in 1990-91 to 10.58 million in 2001-02), the net enrollment ratio in 2005-06 is still a mere 9.7% While we spend a meagre 0.37% of our GDP on education, developed countries like Canada spend 1.88% of GDP on higher education alone.

Turning our focus to primary education, India presents a dismal picture. Article 8 of the Indian Constitution mandates universal primary education. Yet, 41 per cent of children do not reach class 5 in India. In this respect, India fares worse than Gambia (20%), Mali (18%), Senegal (15%), Tanzania (17%) and Burkina Faso (25%). Further, the literacy rate in India is lower than that of many other developing countries. Many argue that the development of higher education in India has been at the cost of primary education. Higher education is highly subsidized by the Government – fees at universities have not been revised for several years. At present only 5% of the total cost of operating a university is generated through fees.

Yet there is a woeful lack of quality higher education institutions, giving rise to severe competition for entry. Admission to reputed colleges is extremely difficult; one such college in Delhi rejected students who scored less than 95% in their school leaving examination for its bachelors course in economics. This level of competition has resulted in increasing numbers of students seeking higher education overseas – US, Australia and UK being the chief destinations. It has been estimated that Indian students spend approximately USD 4 billion on education overseas every year. In 2004-05, about 80,000 Indian students were studying at US universities comprising roughly 14% of the international students there. A considerable percentage of this student group ultimately settles down overseas – a migration of talent and resources that India can do without.

There are two key issues on higher education in India.

1. The need to expand the infrastructure to provide quality education to much larger numbers and

2. The need to recognize that the Government alone will not be able to do so and it must seek out partners from within and outside India and that partners will come only when they are made to feel welcome.

These two issues are well debated and well understood. India’s policy makers now need to muster the will to do what is necessary to effect changes.

India needs to expand its educational infrastructure at all levels. Towards this end the Indian Government needs to seek out partners both within and abroad. India needs to put much more emphasis on Vocational Education and Training to bring about a transformation in its manufacturing sector and build entrepreneurship. A major expansion of the vocational education programme is the need of the hour.

Who Else Wants to Be A Part of the Great Indian Media?

FICCI-PricewaterhouseCoopers’ Indian Entertainment and Media industry - Unravelling the potential, Points out that The Indian entertainment and media (E&M) industry has out-performed the Indian economy and is one of the fastest growing sectors in India. The E&M industry generally tends to grow faster when the economy is expanding.

The Indian economy has been growing at a fast clip over the last few years, and the income levels too have been experiencing a high growth rate. Above that, consumer spending is also on the rise, due to a sustained increase in disposable incomes,brought about by reduction in personal income tax over the last decade. All these factors have given an impetus to the E&M industry and are likely to contribute to the growth of this industry in the future. Owing to the strong impetus for growth from the economic and demographic factors coupled with some regulatory corrections, the sector also recently witnessed increasing foreign investment inflows in most segments of the E&M industry, especially the print media. Recent examples include foreign investment in English dailies such as Hindustan Times and Business Standard by Henderson Global and Financial Times respectively. Vernacular media too saw its share of foreign investment with a strategic equity investment by Independent News & Media in Dainik Jagran, a leading Hindi Daily.

The Indian economy continues to perform strongly and one of the key sectors that benefits from this fast economic growth is the E&M industry. This is because the E&M industry is a cyclical industry that grows faster when the economy is expanding. It also grows faster than the nominal GDP during all phases of economic activity due to its income elasticity wherein when incomes rise, more resources get spent on leisure and entertainment and less on necessities. Further, consumption spending itself is increasing due to rising disposable incomes on account of sustained growth in income levels, and this also builds the case for a strong bullish growth in the sector. The size of E&M in India is currently estimated at INR 353 billion and is expected to grow at a compounded annual growth rate of 19 percent over the next five years.

An estimated 28 million Indians are currently hooked on to the internet. And this rising number is leading to the growth of internet advertising, which today stands at approximately INR 1 billion. The internet is being used for a variety of reasons, besides work, such as chatting, leisure, doing transactions, writing blogs etc. This offers a huge opportunity to marketers to sell their products. And with broadband becoming increasingly popular, this segment is expected to grow by leaps and bounds.

With rapid advancements in technology, we believe that convergence will play a very crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. Broadband access and Internet Protocol (IP) will be the technology enablers that will evolve this new breed of consumers. In the converged world of tomorrow, content and access will no longer be in short supply. Opportunities for consumers to access and manipulate content and services will not only be abundant, but overflowing. However, consumer time and attention will be limited. Thus, established approaches of pushing exclusive content through non-linear-channels or networks to mass or segmented audiences will no longer guarantee competitive advantage.

The Indian entertainment and media industry today has everything going for it - be it regulations that allow foreign investment, the impetus from the economy, the digital lifestyle and spending habits of the consumers and the opportunities thrown open by the advancements in technology. All it has to do is to cash in on the growth potential and the opportunities. The government, on its part, needs to play a more active role in sorting out policy-related impediments to growth. The industry needs to fight all roadblocks- such as piracy- in a concerted manner, while churning out high-quality, world class end products. The entertainment and media industry has all that it takes to be a star performer of the Indian economy.

Outsourcing Comes of Age!

Outsourcing is becoming an essential business practice for firms across globe, says the PricewaterhouseCoopers (PwC) 2007 Global Outsourcing Survey. Titled Outsourcing Comes of Age: The Rise of Collaborative Partnering, the survey was conducted by PwC across 24 countries. 91% of the 66 businesses surveyed said that they would continue outsourcing. Interestingly, customers defined as “high collaborators” are more from emerging markets than others (66% vs. 52% for the total sample). This may reflect the power of social ties in the business cultures of Asia and continental Europe, as compared with large and medium mature markets comprising the UK, North America and Australia/New Zealand, said PricewaterhouseCoopers.

While outsourcing remains a critical element of the corporate strategic mix, success in today’s complex outsourcing marketplace is contingent on new dynamics, specifically the customer and service provider relationship, according to a PricewaterhouseCoopers’ Global Outsourcing study, Outsourcing Comes of Age: The Rise of Collaborative Partnering. The study explores a key issue raised by CEOs in PricewaterhouseCoopers’ Annual CEO Survey at Davos and reflects insights garnered from both outsourcing customers and providers representing 19 countries across several continents. In other findings, while information technology still accounts for a predominant part of outsourced activity, the scope is extending rapidly into inherently strategic areas such as production/delivery of core products/services and innovation/ R&D, both of which are expected to experience growth during the next five years. The expansion into innovation and R&D is particularly visible in the media/telecommunications/IT sector, likely due to competitive pressures to mine every potential source of new ideas and revenue streams.

The point to note is that today China and India—which together account for a third of world population—have evolved from closed to partially open economies shows that globalization seems to have reached a critical mass. It is likely to accelerate in the years to come. Globalization is an ongoing process that can only peak when citizens across the world enjoy its benefits without any barriers whatsoever. It has to be measured in terms of the collaborative progress that mankind experiences over a period of time. It can only peak when everybody on earth is clothed, fed, and sheltered. Disparate conditions and islands of poverty, hunger, thirst, darkness, etc., are red flags that keep it from peaking. Insourcing and outsourcing are not mutually dependent. As the article noted, the total number of jobs realized in the United States from insourcing is far less than those lost through outsourcing.

The Layman's Economy ???

The rich are growing richer faster than the poor in developing Asia as disparities in standards of living continue to widen in one of the most dynamic regions in the world, an Asian Development Bank (ADB) study said Wednesday. "For example, the expenditures of the rich or top 20 percent have increased much more than those of the poor or the bottom 20 percent," the report said. "This has happened even in countries such as Indonesia and Malaysia where relative inequality declined."

Relative inequality, measured as the change in proportionate differences in income between the richest and poorest in society, has risen in 15 countries studied since the early 1990s, according to the bank's Key Indicators 2007 report. Although basic poverty levels have fallen as Asian economies have expanded, the living standards of the wealthiest in society have improved at a much faster rate, leaving the poorest lagging even further behind.

The Economist states that populist measures to soak the rich are not the answer: they would stunt growth. The ADB instead recommends governments focus on policies that lift the incomes of the poor, such as improving rural access to health, education and social protection. More investment in rural infrastructure could boost productivity in farming and increase job opportunities for the poor. But that is easier said than done. Rajiv Gandhi famously remarked that only 15% of government money intended for India's poor ever reached them. Most of it leaks out in bureaucratic incompetence or corruption—fattening the wallets of those who are already well-to-do.

The Insider!

People often face situations when organisation rotates them from one function to another. Such radical shift or ‘lateral shift’ not only helps in the overall personality development of an employee, but for organisations it is a good way to meet the shortage of skilled workforce. However, if you are not sure about your ability to cope with the situation, think differently.

Given the scarcity of talent, organisations feel that internal hiring is the most feasible option. Employees are not only familiar to the organisational structure and culture, but understand working habits of co-workers better. It also opens channels for growth within the organisation.

Now Showing!

Advertising used to contribute around 1-2 % to multiplex revenues five years ago. That figure has risen to 8-10 % today and is expected to touch 15% by 2010. Multiplexes are cashing in and improvising on technology to offer wider options to advertisers . PVR is converting doors to ‘plasma doors’ where advertisements will be screened until the doors open, and will have ‘magic mirrors ’ in all bathrooms where the mirror doubles up as an advertising screen until you come closer to take a look at yourself. They’re also looking to introduce interactive floor stickers which can have animated floor advertising .

“Advertising in multiplexes today has moved out of just screen. With a demographically filtered, captive audience that spends over three hours in the multiplex environment, a brand can reach out to their target effectively ,” says Saurabh Saxena, VP (operations) of Shringar Cinemas, that runs the Fame multiplex chain. Read More.

Peter Drucker famously said that “the purpose of a business is to create a customer.” And that’s exactly what the advertising for the snack bar did to us. It turned us from uninterested non-customers who didn’t even feel a “need” for their product into customers who wanted and demanded it by simply stimulating our appetites visually, repeating a call to action verbally and eliminating the need for any effort on our part (other than taking twenty bucks out of my wallet). The Piss-Screen (the site's dead) is a pressure-sensitive inlay for urinals. The game is displayed on a screen above the urinal. We designed a driving game in the style of Need for Speed." The game would end with a crash and display a message to the effect that the player should take a cab home.

No Booze Please,We're Indians!

ET Research reports that India is not in top 100 drinking nations .

Indians might think of themselves as great tipplers. But when one compares our love for the bottle with others, India is still Gandhi’s land. Down to the basics as to who puts away how much alcohol—Indians are nowhere near the top of the world chart. In fact, we are much closer to the bottom. Read More.

Life is Beautiful, Or So It Seems.

Notwithstanding the problems facing them, Indians are a happy lot. In fact, 64% of them say the next generation will enjoy a better quality of life. Read more at, Most Indians happy, foresee better future.

According to Global Opinion Trends 2002-2007 , a survey conducted by the Pew Global Attitudes Project in 47 countries and involving 45,000 interviews has concluded that the world seems to be a happier place for people living in the developing world. Their incomes may be low and their lives tough, but the mood is upbeat . They are more satisfied with their personal lives, incomes and national conditions as compared to the developed world. And they are optimistic about the future as well.

LIFE’S BEAUTIFUL

77% Indians have no complaints about government, but crime and pollution are major worries People in developing world content with life and salaries, says survey Developed world neither happy about present nor optimistic about future.

In the end, the new Pew Global Attitudes survey suggests that in many parts of the developing world, happiness, especially satisfaction with income, seems to improve most in societies that experience rapid growth in per capita income. And the Pew data generally reaffirm findings from other public opinion surveys that frustration with inequality can outweigh the positive benefits of economic growth. Moreover, the data show that extreme poverty and unhappiness go hand-in-hand in much of Africa, as well as in other struggling societies.

Most important, the Pew data confirm the work of other researchers who find that the ingredients of happiness can help explain differences among poor countries. At the same time, the Pew survey underscores that income alone is not sufficient to explain why people in some societies are more satisfied with their lives than others.

Media, Military, I'm Loving it!

According to recently conducted survey, Indians have the highest regard, anywhere in the world, for the military and, hold your breath, media and news organisations. And this, from the world’s most engaged citizens, the broad elite, or as we would call in India, the decision-makers. About 88% of India’s elite have a very positive view of the military; no surprises. But a thumping 51% have an equally positive attitude to media, making it the first in the world.

Global market research leader Ipsos’ annual survey in over 20 countries and through 20,000 interviews, measuring the attitude of ‘engaged consumer citizens’ to everything, has thrown up quite a few contrarian findings across the world, and sent many international commentators into a bit of a tizzy. However, the stereotypical view that developing countries focus on material improvement, while the developed world cares more about social and environmental issues, is wide of the mark. According to this survey it is developing countries that call for increased regulation, with environmental protection at the top of their agenda.

Need for an Auto Start.

Economic Times reports that India's booming automobile industry may be a crucial driver of economic growth and pose a serious threat to manufacturers in many developed nations, but a new study has revealed that the country's automakers are plagued by several challenges.

However, according to the study, the Indian auto industry will surmount the impediments to make India one of the world's top ten vehicle-producing countries by 2015. "Roads are the big problem... The infrastructure needs to be improved more than you might think. There's a number of problems, but they're aware of them and they know what it takes to overcome them," Senior Managing Consultant of the IBM Institute for Business Value Allan Henderson said.

Exporting is troublesome as well. Indian automakers have difficulty understanding foreign consumers, developing a range of models, managing global supply chain logistics and incorporating advanced technology, the study concluded. Additionally, Indian ports would need significant upgrades to handle high volumes of vehicles. The country’s automakers do have several important factors working in their favor: The Indian government is solidly behind their efforts, even drafting an aggressive mission plan for the industry, and Indian consumers generally want to buy vehicles made in their own country to support the economy.

Even if automakers are able to increase production, the study found that many consumers do not want to buy cars because roads are in poor shape and congested. Motorcycles and other two-wheelers are the most popular form of transportation, outselling four-wheeled vehicles by a four-to-one margin.

“There is no doubt the Indian government will play an integral role in shaping the automotive industry and its future. The Automotive Mission Plan (AMP), created by the government could be construed as a step in the right direction as it outlines development goals till 2016. More importantly, it clearly describes the role of the government in supporting the industry, especially through improved infrastructure, tax, and labor law revisions. During our study, most of the interviewees were unanimous when it came to the optimism about government’s support for the growth of the industry,” commented Bruce M. Belzowski, Assistant Research Scientist & Associate Director, University of Michigan Transportation Research Institute.

Bitter Pill, too Shalow

Economic Times Quotes, “GLOBALLY, healthcare is threatened by a confluence of powerful trends – increasing demand, rising costs, uneven quality, misaligned incentives. If ignored, they will overwhelm health systems, creating massive financial burdens for individual countries and devastating health problems for the individuals who live in them.”

These excerpts from PricewaterhouseCoopers report, HealthCast 2020: Creating a Sustainable Future provides a true picture of the state of the global healthcare industry. In essence, the report states that healthcare is a global issue and requires healthcare organisations and policymakers to seek urgent solutions outside their own borders.

With the support of the IT industry, the medical device industry can focus on continuous product improvement, delivering more features and more innovation — all while meeting increasingly stringent product quality norms. By outsourcing specific portions of the product development process, medical companies can now focus on building programs to reach out and provide its products to a larger set of customers and enhance customer relationships. This association will thus provide a new positive dimension to the challenges affecting the industry. Indian IT companies have made a great beginning. Realising the high propensity of certain cardiovascular ailments that need attention, Indian IT companies have taken upon the challenge of developing critical technology. For one, companies are now building technology for non-invasive assessment of cardiac diseases. Read More.

For long India has been suffering from having multiple policies which are futile – It’s just like knowing the price of everything and the value of nothing. Leaving aside few multinational chain of private hospitals, India has no healthcare, so to speak.

Looking at India’s economy which is growing rapidly, with is its middle class, and consequently, decision-makers place India now as a superior destination for investments because of its sustainable economy. We are talking about cutting-edge technology and services at one end of the scale, when there are clearly parts of the country where healthcare is extremely poor or non-existent. The move for global integration of the healthcare market will not be driven by the needs of the developing world, but by the compulsions of the developed world – costs and response time will be huge value-drivers. In healthcare- apart from innovation and technological prowess- scalability will be an important parameter determining the competitive advantage between nations, and qualified manpower availability will impact all three areas.

No Nonsense : Why do we buy Property ?

The point to ponder is that usually accepted real estate investment reasons such as for investment profit, rental income, wealth, good location, good property management, good building design, good accessibility, even favorable market conditions, and the like, are more on surface veiling and protecting the human desire for warmth, security, and safety, and feeling of pride, achievement, and success. Things that don’t meet the eye and can’t be touched, but noticeable, can be more significant that what can be seen.

Even though to date, there are no verified methods yet to statistically and scientifically classify, watch, bring together, compile, or examine the intangible aspects with any acceptable degree of implementation

It’s interesting to note that most people prefer to invest in real estate more than other forms of assets such as stocks because they feel more secure with real estate, which offers a ‘tangible’ form in terms of steel, bricks and mortar, thus offering some utility e.g. shelter even if it loses its paper value. Forgetting this ‘utility’ bit for a while, real estate could be worth nothing in theory, or even has a negative value yet in practice this is seldom possible if not impossible.

Convinced that private ownership has become essential to smart living, buyers bid up home prices. Moreover, the fear that one must get in on the boom before it is too late often drives people to bid up home prices faster now. Real estate booms have been going on in these countries’ major cities for years. But the boom generated by such beliefs cannot go on forever, because prices can’t go up forever.

Out of Money Experience!

What will an investor in Indian Real Estate say if you ask him for money, “I’m having an out of money experience.”

Liquidity has dried up.

Maybe real estate prices are unlikely to fall to pre-boom levels because the fundamental change in perceptions concerning capitalism’s triumph will be longstanding. Changes in people’s fundamental ways of thinking are not easily reversed. Nor, therefore, is their interest in housing as a major speculative investment asset likely to change. High and rapidly rising home prices tend to stimulate new housing supply, which in turn tends to undermine prices.

But there is a view which states that over a period of years, as people see how much new supply there is, they may begin to revise their view that homes are such a terrific investment, causing a gradual, but eventually significant, drop in home prices. All that is required is that growth in housing supply eventually outstrips investors’ faith in capitalism to sustain faster growth in demand. But in India this is unlikely to happen as the demand is exponentially higher than even the super supply. The question is affordability: What Price and How many can afford?

Behavioral finance has repeatedly proved that whenever asset prices start escalating, the initial interpretation has been of a ‘bubble’. In-depth analysis of price appreciation in real estate and the reasons thereof would help in comprehending these fears. Price appreciation in real estate is backed by the following fundamentals: With land always being a scarce resource, property prices would follow basic economics of demand-supply and pricing.

GDP is measure of the total value of production of all residents producing units of a country or territory in a specified period, before deducting allowance for consumption of fixed capital. GDP takes into it’s fold both population size and how much they earn (produce). However, it seems reasonable to suggest that the level of speculative demand (or supply) is related to the general level of confidence in the short to medium term performance of the economy. More so when second assumption is consistent with the idea that there are forces which pull prices towards the “fundamental value”, counteracting forces that pull them apart.

Snake Charmers & Indian Real Estate Bubble

The best vision is insight.

Fearing that there may be a bubble in the real-estate prices, RBI has made it increasingly difficult for the builders to access bank finance. Also, the interest rates on their borrowings have gone-up. The idea is to cool down the speculation in the real-estate sector. RBI is trying to contain the snake which could sting if left out in open.

It’s a situation wherein banks and financing institutions start over-lending arbitrarily to real estate developers ensuing a likely oversupply, or households buying more home than is necessary owing to low interest rates, or even investors going for real estate not due to having confidence in the market but the tax SOP’s. What it means is that, the diverse financial products are not able to be of much help if and when real estate markets dive or show volatility. Some instances show, such financial products and mechanisms may become a Catch-22 as they increase the return when times are good, but turn upside down when times are bad.

Therefore, there is a general expectation that the prices may correct or at most remain stable in the near future. If that is so, it may be prudent to wait and watch the scenario. Moreover, the second house is an investment, and not a necessity. The objective here is capital appreciation rather than a need for a shelter.

How NOT to lose your sight in the Indian Real Estate Market

If you were to go any broker today to buy a property, you will most definitely have some apprehensions against the unbridled nature of a speculative market as it is today. But most conveniently he would like to turn a blind eye to all this and his suggestion would be more like, “Keep your eyes on the road and stop reading these signs.”

Recent reports suggest that the Indian real estate market is burgeoning and becoming a significant contributor to India’s economic growth. The country is on the radar of many corporations looking at investing or expanding their businesses in Asia and the economic and business outlook is positive.

But the prices if left out of control can also add to the cost of production and services, making things back to square one. The boom is rooted in speculative investment by ordinary homebuyers, fueled substantially by the worldwide perception that capitalism has triumphed, and that all people must look out for themselves by acquiring property. Convinced that private ownership has become essential to smart living, buyers bid up home prices. This certainly seems to be the market psychology in India, where rapidly rising incomes and newly successful people are widely expected to put pressure on markets for land, real estate, and construction materials.

According to the value investing theory for the stock market, the mood in the market alternates between over-exuberance and depression. Whenever a mood swing in the market (or a company’s temporary misfortunes) depresses the price of a stock far below its intrinsic value, the value investor should buy the stock at such bargain prices, provided he thinks that the company’s fundamentals remain strong.
When assessing the feasibility of and demand for a real estate project, generally one would look related macro and micro factors, such as GDP performance, supply (competition), absorption, market price, construction costs, population, demographics, household income, working population, site location, infrastructures, amenities and so on, and work out the likely demand from bottom up.

However, this is not always possible or even meaningful, especially if the market (economy) in question is an emerging / developing one, as whatever existing market statistics it has (may or) may not be helpful in pointing toward certain market trends and real estate opportunities previously unseen. The same is the case with India where Exceptions always outnumber rules.

So far so good. But it’s the time to keep your eyes on the road and hands on the wheel.

Predicting the Next Terror Strike ?

Understanding the Evolution of Prediction Markets.

Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision-making and risk management - in both the public and private sectors. Prediction Markets, sometimes referred to as "information markets," "idea futures" or "event futures", are markets where participants trade contracts whose payoffs are tied to a future event, thereby yielding prices that can be interpreted as market-aggregated forecasts.

Justin Wolfers from Wharton, University, Eric Zitzewitz and Bo Cowgill(Google) in their research, Using Prediction Markets to Track Information Flows: Evidence from Google propound:

“ Last 2.5 years, Google has conducted the largest corporate experiment with prediction markets we are aware of. In this paper, writers illustrate how markets can be used to study how an organization processes information. We document a number of biases in Google’s markets, most notably an optimistic bias. Newly hired employees are on the optimistic side of these markets, and optimistic biases are significantly more pronounced on days when Google stock is appreciating. Writers find strong correlations in trading for those who sit within a few feet of one another; social networks and work relationships also play a secondary explanatory role.

There are two main conclusions. The first is that Google’s markets, while reasonably efficient, reveal some biases. During our study period, the internal markets overpriced securities tied to optimistic outcomes by 10 percentage points.3 The optimistic bias in Google’s markets was significantly greater on and following days when Google stock appreciated. Securities tied to extreme outcomes were underpriced by a smaller magnitude, and favorites were also overpriced slightly. These biases in prices were partly driven by the trading of newly hired employees; Google employees with longer tenure and more experience trading in the markets were better calibrated. Perhaps as a result, the pricing biases in Google’s markets declined over our sample period, suggesting that corporate prediction markets may perform better as collective experience increases.

The second conclusion is that opinions on specific topics are correlated among employees who are proximate in some sense. Physical proximity was the most important of the forms of proximity we studied. Physical proximity needed to be extremely close for it to matter.

An important caveat to our results is that they tell us about information flows about prediction market subjects, many of which are ancillary to employees’ main jobs. This may explain why physical proximity matters so much more than work relationships – if prediction market topics are lower‐priority subjects on which to exchange information, then information exchange may require the opportunities for low‐opportunity‐cost communication created by physical proximity. Of course, introspection suggests that genuinely creative ideas often arise from such low‐opportunity‐cost communication. Google’s frequent office moves and emphasis on product innovation may provide an ideal testing ground in which to better understand the creative process.”

While Eric Zitzewitz in their research Prediction Markets analyze the extent to which simple markets can be used to aggregate disperse information into efficient forecasts of unknown future events. Drawing together data from a range of prediction contexts, they show that market-generated forecasts are typically fairly accurate, and they outperform most moderately sophisticated benchmarks. In their further quest Five Open Questions About Prediction Markets Eric Zitzewitz outlines five open questions in the literature, and we argue that resolving these questions is crucial to determining whether current optimism about prediction markets will be realized.

The evolving nature of these markets would make it possible to tentatively predict events like the next terror strikes, stock corrections, new social trends or socio-political situations. The future is not perfect and it will never be. So are the prediction markets.

Prediction Markets could never be Precision Markets but they will play an important role in how we see through the information maze.

The complex nature of these markets make it inaccessible to a layman but as the technology and thinking converges these markets would have a broader reach and easy to understand patterns. The prognosis of this imperfect market “prediction market” is a prediction in itself. A prediction very few would want to bet on, at least for now.