Nobel laureate Markowitz’s theory falls flat on the face of globalisation!

IIPM PUBLICATION

The Modern Portfolio Theory’s (MPT) propounder and famed economist Prof. Harry Markowitz, who bagged the Nobel Prize for Economics in the year 1990, clearly failed to take into account the manoeuvres of capital markets while formulating his theory. That’s because the basic premise of his theory of international investment and the benefits of having a geographically diversified portfolio rests entirely on correlation between different domestic securities and foreign ones than between different domestic securities. Evidently, since the time Markowitz penned down his unique theory, capital markets have evolved a lot beyond what MPT can comprehend, a finding backed by empirical data; both current and historical. In summary, the correlation between markets, the world over, is slowly and steadily turning positive and reaching closer to one – a situation which Markowitz did not expect.

Stocks the world over now move in a more synchronised pattern than at any time in the past two decades. Similar kind of returns from emerging & developed markets, and even elsewhere, have made it difficult for investors to increase returns from the ‘so-called’ Markowitzian diversify cation technique. For example, the correlation between the Morgan Stanley Capital International (MSCI) World Index and the MSCI World Small Cap Index in 2007 has increased to a mind-boggling 0.96; the highest since 1995.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Wheeler Dealer!

MANAGEMENT GURU

It's not only his behind the scene skilled manipulative abilities that have placed him among the top policy makers of the administration. "More than the manipulations, it has been Cheney’s CEO credentials and close contacts with the oil companies, which have tarnished the image of US democracy", says Ajey Lele, a noted columnist & author of the book Bio-Weapons-a ginne in the bottle, while talking to B&E . Cheney's work as head of Halliburton (the leading MNC providing products & services to the oil & energy firms) is duly recognised – mainly to lobbying for getting mouth watering contracts from the US military. His role, ironically, was not for understanding corporate ethics but cementing relationship with powerful decision makers across the globe. Not only this, his contacts then with Arab Sheikhs as with the Bush family were instrumental in placing him at the helm of affairs.

Cheney is no simpleton, but a smooth operator. He is the leader of neo-conservatives, aiming to keep the world in a constant state of revolution.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Quest For Value

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With drowning ARPUs, the VAS industry is on the ascendant and a world of possibilities in the mobile domain is just opening up. The Indian mobile VAS industry is most likely to grow by 60% in 2007 to touch Rs.45-60 billion mark. Bharti Enterprises has crafted a different entity Bharti Telesoft, which has extended its reach in 25 countries to over 100 networks. Sanjiv Mital, CEO, Bharti Telesoft says, “...a large proportion of our profit is reinvested in R&D & product development, but this investment is from internal accruals.” In order to meet customer expectations and survive the rising competition, bringing more such services to the market quickly & cheaply can be a major differentiating factor.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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IIPM going global
IIPM Management Guru India, Planman Consulting India
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On "IIPM - Arindam Chaudhuri - Planman"

Dell offers a cheap bargain to Chinese

MANAGEMENT GURU

In order to capture the emerging markets in developing countries, Dell Inc. introduces its new range of Desktop PCs in China, that are not only succinct in terms of size but also in price. Following the fastest growing PC market in the world, Dell would then take its product to other countries including India. This EC280 comes embodied with an Intel 205 microprocessor and energy saving features. Holding a price tag between the range of $333 and $513, this product comfortably fits the pockets of its Chinese amateur computer users. However, Dell’s efforts follow the numerous attempts made by other PC players like Lenovo, Hewlett-Packard Co. and Acer Inc. to target the Asian consumer market.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Article, Visit Below....
Management Guru 's Speak on IIPM
IIPM going global
IIPM Management Guru India, Planman Consulting India
Management Guru 's Message
IIPM : EDITORIAL & RESEARCH
The maverick management guru
IIPM Alliances
IIPM Academics : Curriculum
On "IIPM - Arindam Chaudhuri - Planman"