"Efficiency Doesn't Reduce Consumption It Increases It"

How-do-you-do?

In this competitive technology driven society any organization or individual or creature can never hide efficiency along with consumption. You must be thinking why is it so? Just talk about electricity appliances, automobiles, telcos, engineering, or any sector everywhere efficiency is important. It is directly related to the ROI (Return on investment). ROI is not only related to organizations performance but also to Individuals scorecard. Companies emerge with the state-of-art technology for increasing the efficiency of operating systems or processess for the betterment of the human beings and the environment. However, at the same time we are getting accustomed to technology driven goods or services. The more efficient products are the more consumption is done. Let's understand How?

Considering the example of Refrigerator. Going 10 years back I argue, people used to say refrigerators are too costly and after the purchase, use to cry saying electricity bills touch the sky rocketing after using refrigerator so they stopped using it for 12 hrs .ie. usage is only during day time. Nonetheless, boost in technology leads to lowering of purchase price and low consumption of electricity which ultimately leads to increase in the sales of refrigerator vis -a -vis inch up in consumption. This way infinity examples can be quoted and the theme can be justified.

If you feel that the axiom proven by me is false...I warmly welcomes your suggestions with logical explanations.

Market Aberration

Most of you must be thinking, what is this Market Aberration? Some finance guys and many professionals certainly know about the ups and downs of this aberration which is ultimately a relation of yield curve. But then let me tell you the behavioural aspects of this yield curve. First of all what is yield curve? It is nothing but the relationship between the yield and the maturity. Generally it is seen that when a money is invested for a longer period of time a higher rate of interest is earned as compared to short term investment. This scenario is called Normal yield Curve. Suppose the situation is opposite. ie. if an investor gets higher return on short term investment as compared to long term treasury bonds then what will happen? This scenario is called Negative Yield Curve (NYC) Inverted Yield. It emphasises a lower interest rate in future leads to prediction of economy recession.

Now how Negative yield curve affects companies or an individual?

Lets say an investor wants housing loan. If the scenario is NYC then it means bank pays higher rate of deposits. Henceforth, lending rates would also be high so variable rate of interest will be high. This means individual has to pay more amount of money to the bank which is very difficult for everyone. In the same way if we consider the company then company has to pay to investors so the profit margin falls for the companies that borrow cash for short-term rates and lend for long-term rates. Thus NYC has a great impact on the overall economy. In NYC generally Fixed rate of interest are having a great attention as compared to variable rate of interest.

I hope all the MBA students will be benefitted from this article. If at all any change is required, Please post your comments. I heartily welcomes...

Travel by Air

Hello everyone...

Its' a great news for those who are thinking to travel by air atleast once in a life and also for those who travel frequently. As the DGCA (Directorate General of Civil Aviation) regulator has made it clear to all the indian carriers to show route-wise and date-wise airfares on their websites by wednesday evening to ensure that flyres do not feel cheated by high ticket prices...

So hain na good news...why wait then? Let's enjoy the airlift...