Thursday, December 13, 2007

Portfolio Analysis

My paper on portfolio analysis


K.V.S.S. Narayana Rao*

IIT JEE Free Online Material

My IIT Blogs are slowly inching towards some definite material.

Thursday, September 27, 2007

IIT JEE One Question and Answer a Day

Started posting one question in each subject for day in

Thursday, September 20, 2007

IIT JEE orkut community


if you are a student, parent, family member, faculty, author, book publisher

Questions and Answers for IIT JEE Chemistry

I developed sets of questions for various chapters of organic chemistry and posted them in

Presently posting the answers to them in another blog.

Tuesday, September 18, 2007

IIT JEE Chemistry Question Bank

I completed first round of posting question bank for organic chemistry.

Friday, September 14, 2007

Vedas Simplified my new blog

I am posting simplified version of meaning of hymns of Sukla Yajurveda in

I completed one chapter so far.

Thursday, August 23, 2007

at Kakinada 24-8-2007

I am at Kakinada and spending time at an internet cafe with my nephew Sai Sankar. He is reading various english passages very well.

Sunday, July 22, 2007

Sunday, June 10, 2007

Industrial Engineering Handbook -Call for Papers and Articles

I started a blog for editing a handbook on Industrial Engineering.
I request Industrial Engineering students, research scholars, faculty members and professionals to contribute articles and papers as per the contents proposed. Please visit the IE handbook blog given above.

Sunday, May 13, 2007

Industrial Engineering (Human Effort Engineering) – Sixth Term

In sixth term all compulsory courses deal with managerial tasks of industrial engineers.

Sixth Term Subjects

Productivity and Quality Management
Project Management
Occupation Health and Safety Management
Elective 4:
Elective 5:
Elective 6:

Productivity and Quality Management

Productivity is the one of the important objectives of Industrial Engineering. In my paper I argued that productivity is a multi-dimensional concept and quality is included in it. But because quality management is a highly developed subject, in the subject title it was specially included. Management of productivity and quality that results from the man-machine system is the responsibility of IE department. Routine inspection is a responsibility of production system operation and management department. But if quality levels go down, industrial engineers have to take up responsibility. Productivity and incentives have a linkage. Job evaluation and wage incentives are to be discussed in this subject.

Project Management

Industrial engineers have to manage IE studies and work system design projects. Many times, IE department along with production engineering department have to take up the responsibility of installing the production system. Hence project management becomes an important functional management area to be learned by IE students.

Occupation Health and Safety Management

Along with productivity, comfort, safety and health of operators are important objectives of industrial engineering. The managerial dimensions of these objectives are to be explored in this subject.

List of Electives – A Quick Attempt (Visitors Please suggest more)

Elective Groups

Human Sciences Group
Decision Sciences Group
Industrial Engineering Group
Technology Group
Business Management Group

Subjects in Various Groups

Human Sciences Group

Industrial Psychology
Industrial Sociology
Physiology of Work
Occupational Pathology
Human Behaviour at Work

Decision Sciences Group

Industrial Statistics
Advanced Mathematics
Operations Research
Business Economics
Managerial Economics

Industrial Engineering Group

Research Methods in Industrial Engineering
Project Management for Work System Installation
Simulation for Industrial Engineering
Job Evaluation and Wage Incentives
Industrial Engineering in Agriculture
Industrial Engineering in Heavy Engineering Industry
Industrial Engineering in Software Factories
Human-Computer Interface
Knowledge Work Industrial Engineering

Technology Group

Computer Integrated Manufacturing
Air Conditioning and Climate Control
Environmental Engineering

Business Management Group

Production Management
Production Planning and Control
Marketing Management
Marketing Research
Financial Management
Project Finance
Advanced Project Management
Materials Management
Procurement Management
Supply Chain Management
Human Resource Management
Organization Behaviour
Value Engineering
Engineering and Technology Management
Strategic Management
Cost Accounting
Financial Accounting

For some of the elective subjects proposed, the subject content is to be specified by me. I shall do it in subsequent posts. In due course, I also propose to develop a list of books, research papers, Phd and MS thesis, and magazine articles which can be used in developing the course content for the courses proposed afresh by me.

The last term in the curriculum of NITIE is 16 week duration project.

All visitors of the blog are requested to post their comments on any issue raised in this curriculum proposal. Comments can be sent by mail (, if you do not have google account to post comments directly.

For Curriculum of First Term:

For Curriculum of Second Term:

For Curriculum of Third Term

For curriculum of Fourth Term

For curriculum of Fifth Term

Industrial Engineering (Human Effort Engineering) – Fifth Term

In this term and the next term, focus shifts to management. A provision of three electives in fifth term and three electives in sixth term is proposed. From this three, the learners have to take three electives from Human Sciences group/Industrial Engineering group and three electives from Decision Sciences/Business Management/Technology group. Work Systems Design is the course that integrates all the learning of the program and the learners have to engage in design of departments, single location plants, and multi-location production systems in this course. Business System Organization and Management provides an opportunity for the learners to appreciate how business concerns are organized and learn the principles of management. Managing IE Studies and Department provides inputs in the area managing the studies done by industrial engineers and the IE department. A tentative list of elective subjects is provided after the outline of sixth term subjects.

Fifth Term Subjects

Work System Design
Business System Organization and Management
Managing IE Studies and Department
Elective 1:
Elective 2:
Elective 3:

Work System Design

Work Systems Design is the course that integrates all the learning of the program and the learners have to engage in design of departments, single location plants, and multi-location production systems in this course. The location decision of the plant is discussed in this course. Case studies can be used in this course also to bring out the complexities in making location decisions and in facilities design decisions. Cases of setting up Steel plants, Refineries etc. can be discussed as cases in this course.

Business System Organization and Management

The IE student in this curriculum learns certain concepts of management through the history of scientific management. In this he is provided inputs in the topics of starting a business concern, various important functions of large company and principles of management.

Managing IE Studies and Department

This subject covers the managerial skills to be exhibited by the industrial engineer in carrying out IE studies. Understanding the viewpoint of the operator, communicating with him on the importance of the study, and managing the anxieties involved in studies are all explored in this subject. Managing IE department is explored, and place of IE department in different types of companies is also to be examined in this course. This has to be a course that develops managerial knowledge and skills of the industrial engineers.

All visitors of the blog are requested to post their comments on any issue raised in this curriculum proposal. Comments can be sent by mail (id in the profile), if you do not have google account to post comments directly.


Industrial Engineering (Human Effort Engineering) – Fourth Term

The fourth term is a summer internship in companies. It will be good if some of the students opt for doing their studies on self employed persons. This activity can be taken with the sponsorship of CSR departments of large companies.

New Blog -

I started a new blog to present my activity/views on Security Investment topics today

Saturday, May 12, 2007

Bahujan Samaj to Sarvajan Samaj

I felt happy when I first came to know that BSP won majority in UP. The movement of Dalits started may be 100 or 150 years ago has given fruitful results. It is not gift of any political leader, but the intelligence and hardwork they put in that gave the election victory to BSP. In a very short time, Mayawati developed an inclusive agenda and a party that has persons from all sections of the society. Still, everybody agrees that Dalit agenda is the main agenda of BSP. BJP should learn from Mayawati, how to develop an inclusive agenda, and include the aspirations of muslims and christians in their agenda, while emphasizing the issues that they are championing today. The attempt by L.K.Advani in Pakistan to give securalist certificate to Jinnah backfired because it was done in a haste without taking into consideration the feelings of his partymen. Jinnah was responsible for partition and the resulting bloodshed and misery, and any reconciliation about his role needs to be done in a very careful manner. But BJP should also move towards an inclusive political agenda. Such a move will create some unifying agenda in the present state of deep division among religious groups and caste groups in India.

Industrial Engineering (Human Effort Engineering) – Third Term

In the third term, the courses proposed consist of four subjects directly related to work systems design: Work Station Design, Productivity and Safety Device Design, Production and Inventory System Design, and Office and Knowledge Work Study. Economic Analysis for Industrial Engineering – II will contain the discussion of financial accounting, cost accounting and cost estimating. Industrial engineers require good amount of financial accounting and cost accounting knowledge to gather the information they need for determining the present cost of a production process, for estimating the cost of an improved design, and for post-verification of their implemented designs. Information Systems for Industrial Engineering is a subject to discuss the utilization of the power of modern information technology in developing and maintaining the data bases required for work systems design, in doing various calculations that follow time studies etc. The curriculum is proposing a subject with full focus on requirements of the Industrial Engineering function.

Third Term

Work Station Design
Economic Analysis for Industrial Engineering - II
Productivity and Safety Device Design
Production and Inventory System Design
Office and Knowledge Work Study
Information systems for Industrial Engineering

Laboratory/Project Work

Work Station Design
Production and Safety Device Design
Interpersonal Skills – Interacting with Subjects of Studies

Work Station Design

This subject has to focus on micro aspect of work systems design. Design of work station for a single operator is the lowest level. Design of workstations for group working as well as even design of assembly line can be taken up in this course. The emphasis has to be on the actual design of the work station that includes the production equipment, tools positioning, and movements of the operator. The course offers scope for case discussion methodology. Designs of a work station for a machine tool, assembly work station, work station of a software coder, work station of a cashier in a bank, work station of a truck driver, computer engineer, and work station of an air craft pilot etc. are examples for developing case studies and design problems.

Economic Analysis for Industrial Engineering - II

This subject’s content has to focus on financial accounting, cost accounting and cost estimating. These topics are discussed as chapters in some of the engineering economy texts. This course has to integrate these chapters with more details from financial accounting, cost accounting, and cost estimating texts. It is important that these courses are handled by teachers, who have industrial engineering background and advanced qualification in engineering economics and accounting areas.

Productivity and Safety Device Design

Industrial Engineers design systems of man, machine and material. Somehow, industrial engineering curriculums neglected technology side of industrial engineering. There is no significant invention from the industrial engineering profession in the recent days. The reason is that the profession has not made any worthwhile attempt in that direction. While productivity device may be a radically new idea, safety device is an old idea. This course will provide the design principles that help in designing various items that an operator uses in operating the machines that will improve productivity and safety.

Production and Inventory System Design

To integrate man, machine and material, industrial engineers have to develop the plans machines and plans for material storage at raw material stage, work in process stage and finished goods stage and plans for material handling facilities. In planning these, they have to work in close cooperation with production/process engineering department. The course has to cover capacity planning, selection of machines, determination of maximum and minimum inventory to be stored at various stages and selection of material handling equipment. This course has a significant technology component. This course should help learners to refresh their knowledge of machines and material handling equipment and also to acquire knowledge about fresh offerings of various machine tool and machine manufacturers and material handling equipment firms.

Office and Knowledge Work Study

Industrial engineering profession has done some significant work in this field. Knowledge work is increasing day by day in comparison to physical work in all countries. This subject will discuss the state of industrial engineering practice in this area.

Information systems for Industrial Engineering

Industrial engineering as a design discipline is based on data. A number of studies are done by industrial engineers and these studies can be extrapolated to many other situations with appropriate adjustments. Hence information systems are essential and this subject provides inputs in the area of information systems in general and then about specific applications in industrial engineering function.

Laboratory/Project Work

Work Station Design
Production and Safety Device Design
Interpersonal Skills – Interacting with Subjects of Studies

Work Station Design and Production and Safety Device Design subjects must have projects which result in tangible output. Industrial Engineering departments and institutes should hold an annual exhibition of the projects carried out by their students. Such exhibitions motivate the students to put more effort into the project and also act as knowledge transfer mechanisms between institutes and industry. Even faculty developed designs and devices can be exhibited in such events.

Interpersonal Skills laboratory will help learners to pick skills in dealing with subjects of their industrial engineering studies. This will help them in their studies in summer projects.

All visitors of the blog are requested to post their comments on issues raised in this curriculum proposal. Comments can be sent by mail (id in the profile), if you do not have google account to post comments directly.


Industrial Engineering (Human Effort Engineering) - Second Term

In the second term curriculum, one applied science of human sciences group, ergonomics is included. Three subjects related to work and work systems are included. Two subjects are subjects in the decision analysis group of subjects, but they are titled to point out that they are to be taught with a focus on their application in industrial engineering practice.

Second Term

Principles of Motion Economy and Safety
Methods Improvement
Work Measurement
Economic Analysis for Industrial Engineering-I
Quantitative Techniques for Industrial Engineering

Laboratory/Project Work

Rating workshop
Methods Improvement Project

Principles of Motion Economy and Safety

This subject could be a new proposal. I mentioned in the preface, that industrial engineering curriculums lack the depth. The topic “Principles of Motion Economy” is generally discussed as a chapter in work study books. Probably, Barnes gives an extensive treatment of this topic. Here I propose that principles of safety are also discussed along with principles of motion economy. Also the pace at which operators are expected to work using their various body parts, has to be discussed in this subject. A number of case studies related to use various body parts fingers, hand motion (full), hand motion (half), use of feet, use of legs, use of eyes, twist of body, bending and lifting weights are to be discussed as a part of this subject. There may not be any readily available book at this moment for this subject. My quick search resulted in two hits.

2. Analysis of principles of motion economy relating to bodily movements /--by Ram Vaswani. (1954) Thesis (M.S.)--Illinois Institute of Technology, 1954.

There can be number of articles on the topic of principles of motion economy and principles of safety are to be covered from safety books and articles and integration between these sets of principles is to be attempted by the faculty.

Methods Improvement

Methods improvement is specified as a full subject to provide depth in the topic. The material in old work study books is to be integrated with the material developed by Japanese practitioners. This subject best suited for case discussion method. Therefore explanation of established and case discussions sessions are to be used in this subject. The case discussion method will help in developing the creative efforts of aspiring industrial engineers and also help in developing their communication skills in selling their solutions to other executives and operators. There is a real need for a number of case books in this subject.

Work Measurement

This subject provides one objective basis for evaluating the improvement of work systems. It also provides a basis to help the operators to improve their productivity by employing the proper pace of working. In my article, I emphasizes that industrial engineering becomes durable and welcome discipline when a self employed person invites industrial engineers to help him to increase his productivity. The origins of industrial engineering were in factories and employees look at his industrial engineers with suspicion even today because of that reason. It is up to industrial engineering as a profession to take up improving the work of self employed persons and earn the reputation as a facilitators and coaches of operators in their quest for productivity.

This subject has to cover traditional methods as well as modern methods like MTM. A rating workshop has to be a compulsory part of this subject and institutes have to set up a common certifying body to test and certify the competency of the learners in these techniques. Presently in India, there is no certifying body.


This subject deals various aspects related to humans at work and is application of concepts mainly from physiology and anatomy in work situations.

Economic Analysis for Industrial Engineering-I

There are books on Engineering Economy. But their focus on industrial engineering is negligible. There is a need for text book that has exclusive focus in application of engineering economy in industrial engineering practice. The economic analysis to be conducted by industrial engineers in various decisions related to work systems have to given as examples in texts focused on industrial engineering. Such a treatment of these subject will deepen the understanding of learners in the work systems design area also apart from the the topic of economic analysis.

Quantitative Techniques for Industrial Engineering

The comments made for the subject above apply in this case also. Books have to written with a special focus on application of quantitative techniques in industrial engineering decisions. Till that time, faculty in industrial engineering departments have to make special effort to develop examples that have relevance to methods improvement, methods design, selection of productivity devices, design of working conditions etc. Assignment problem is to be discussed with special reference to allotment of work to various operators based on the observed or measured efficiencies on various jobs undertaken in a shop. Transportation problem is to be discussed in relation to the transport of material within a plant.

Laboratory/Project Work

Rating workshop
Methods Improvement Project

The importance of ‘rating workshop’ and ‘case studies in methods improvement’ was emphasized already. Ergonomics laboratory work has to deepen the skills the acquired by learners in physiology and anatomy laboratory practice and introduce them into measuring parameters of work places that are important in work systems design.

I request visitors to the blog to post their comments on issues they agree with and on issues they do not agree with.


Industrial Engineering (Human Effort Engineering) – Proposed Curriculum

“Industrial Engineering is Human Effort Engineering. It is an engineering discipline that deals with the design of human effort in all occupations: agricultural, manufacturing and service. The objectives of Industrial Engineering are optimization of productivity of work-systems and occupational comfort, health, safety and income of persons involved.” (Narayana Rao, “Definition of Industrial Engineering: suggested Modification,” Udyog Pragati, Oct-Dec 2006, pp. 1-4.)

This proposal is an initial or draft effort by me. Designing the curriculum for industrial engineering is a system design effort. It may take some iterations of creative effort and evaluation to come out with a design that is acceptable to many people as a near optimal design. I request all visitors to the blog to post their comments or send them by email to me (if they cannot post the comments). I shall post them on the blog.

The comments will be useful to me as well as other faculty to synthesize all the views and incorporate them in their ideal design of the curriculum as well as to incorporate at least some of the ideas in their institute curriculum. Every personal idea of every faculty member need not become a part of the institute curriculum as the institute curriculum is a consensus of the all the faculty members of the institute as well as the other members of the curriculum approval bodies.

The curriculum is based on my view that industrial engineers specialize in understanding the human resource at work. Their understanding of the machines and technology is not unique but common with engineers of that discipline. For example, in case of an industrial engineer working in a chemical engineering factory, knowledge regarding chemical equipment, material handing, and the processes involved is common between the chemical engineer and industrial engineer. The unique knowledge of the industrial engineer is his understanding of the principles of work of men and women in the chemical industry. The main of focus of the industrial engineers is in designing or specifying the work to be done by the operators.

The curriculum design incorporates the following division of time or effort. 25% for human sciences and their model applications in work system design. 50% focus in on subjects with full focus on work systems design, subjects of work systems design, subjects that focus on objectives of work system design and subjects that help in managing industrial engineering activity and industrial engineering department. 25% for subjects related to appreciating the business system, managing the various functions of the business system, technology subjects, decision sciences and others.

I came up with some names for subjects which, I feel would be useful to provide focus, depth and practice to industrial engineering graduates. Lack of depth and practice in core industrial engineering is the main reason for many industrial engineers shift to areas like material management, production planning and control and software. I shall provide my view of the subject; try to point the books which may be useful in developing the subject. I feel industrial engineering discipline has not adequate interest in coming out with books that have a special focus on the discipline. We are using books published for with a different focus.

The curriculum specified is tailored in terms of the current term pattern followed at NITIE. There are 5 terms of institute study, and one term of 8 weeks industry project and a second term of 16 week industry project. I have included six theory subjects in each term and some laboratory work, which could a part of the theory subject or could be extra hours. The decision can be situation specific. I am presenting the curriculum term by term.

Industrial Engineering (Human Effort Engineering) – Proposed Curriculum

First Term

Evolution of Scientific Management and Industrial Engineering
Documentation of Operating Procedures and Working Conditions

Laboratory/Project Work

Documentation Project Work

Evolution of Scientific Management and Industrial Engineering

This subject shall provide the opportunity to learn the origin and evolution of various industrial engineering techniques apart from providing the history of the discipline and the contribution of various individuals who were pioneers and made significant contributions. Through this subject, students have to learn industrial engineering techniques through case history (brief historical account of the origin and application) method. It is important to specially to discuss the significant achievements of top industrial engineers of the current day as well as the achievements of the excellent industrial engineering departments in the current and recent past.

A list of books and articles which can be used in this course needs to be prepared. Taylor’s Scientific Management is must. Actually this book should be a compulsory reading for every industrial engineer. Unfortunately, it does not seem to be so.

I have in my possession The Making of Scientific Management, Volume I by Urwick and Brech. In this book, it was mentioned that ‘A Golden Book of Management’, an edited volume by Urwick was published on behalf of The International Committee for Scientific Management.

In this course it is important to distinguish between Scientific Management and Industrial Engineering. Industrial Engineering could be an offspring of Scientific Management. But the entire gamut of scientific management is not covered by industrial engineering. In the field of business management, scientific management is an approach competing with other approaches. Some of the confusion in the industrial engineering profession is created, because, subjects which are a part of scientific management are treated as subjects of industrial engineering. For instance, Statistical Quality Control has been developed by pioneers of scientific management. It need not be a core subject of industrial engineering, when its focus is on man-machine integration. Similarly, Operations Research can be and is a part of Scientific Management. It is not a core subject of Industrial Engineering. It is a useful subject for industrial engineers in their integrated work systems design. Industrial engineers have to use appropriate OR techniques.

Documentation of Operating Procedures and Working Conditions

The subject may also be termed as Documentation of Work Systems. Industrial engineers learn about recording work procedures in the subject work study. The focus in work study is to record the procedure of work for analysis purposes. In this subject, the focus is modified and enlarged to communicating the work procedures. Document template of an operating procedure is the language of industrial engineers. Industrial engineering department has to take ownership and make sure that every operation has a specified operating procedure documented in a standard way so that at any time it can be analyzed for improvement. It is always there for communication between industrial engineer and other executives in company, industrial engineer and operator. The visual techniques pioneered by Japanese industrial engineers have to be incorporated into this subject. The material in work study books is to be complemented by recent developments and this curriculum points out the need for separate text on this topic.


These four subjects are the basic human science subjects. Industrial engineers have to study them to develop the unique expertise of theirs among engineers. They understand the human being at work. The abilities and disabilities of a person at the work situation are to be described in the parameters which are described in these disciplines.

Laboratory/Project Work

Documentation Project Work

The laboratory work in Physiology and Anatomy should make industrial engineers proficient in measuring the important parameters used for evaluating the efficient motions, comfort, safety and health aspects of operators.

Computer laboratory work has to facilitate the documentation work. Documentation Project Work has to provide practice for industrial engineering students to record procedures and communicate them to other executives and operators.


Friday, May 11, 2007

Industrial Engineering - A New Curriculum Proposed

Yeterday I came across the paper "Return to work: Toward post industrial engineering" by Diane Bailey and Stephen Barley of Center for Work, Technology and Organization, Management Science and Engineering, Stanford University, IIE Trasactions (2005) 37, 737-752. In this paper, authors argued for return of the IE discipline to its study of work focus.

I also made a similar argument and proposed a modification to the definition of IE.

“Industrial Engineering is Human Effort Engineering. It is an engineering discipline that deals with the design of human effort in all occupations: agricultural, manufacturing and service. The objectives of Industrial Engineering are optimization of productivity of work-systems and occupational comfort, health, safety and income of persons involved.” (Narayana Rao, Definition of Industrial Engineering: Suggested Modification, Udyog Pragati, Oct-Dec 2006, pp. 1-4.)

I got excited after reading the Bailey-Barley's paper and sat down and prepared an initial framework of the curriculum to implement the suggestion made by me and Bailey & Barley. I circulated the curriculum to some of my colleagues. If any of the readers would like to have a copy, please send a mail to me. I shall be very happy to mail the proposed curriculum. I proposed that focus of the curriculum has to be 25% on human factors, 50% on design of work systems and 25% on business system and business management.

Narayana Rao

BSP win in UP - Good for the country

Good for the country
by KVSS Rao on May 11, 2007 01:38 PM

It is good for country's unity and democracy that a party with the name Bahujan Samaj Party came to power on its own in the most populous state in India, when it genuinely included all sections of the society in its agenda and party. This will motivate more people, who are underdogs today, to put in efforts to come on top some day.

Narayana Rao KVSS
(Comment on

Tuesday, May 01, 2007

Depth, Breadth and Familiarity of a Teacher

Quite sometime back I read in an article or book on teaching that a teacher's knowledge has to be like that of an iceberg. The portion made visible to the students is like the visible portion of the iceberg. The teacher needs to have a lot of knowledge inside him in comparison to the matter he is expected to teach in a class.

The writer mentioned a factor of six as the advantage to be had by a teacher. The teacher requires six times depth, six times breadth and six times familiarity of the subject matter to be taught in a class. A teacher teaching intermediate with a post graduate degree would naturally satisfy the depth and familiarity criteria. He still has to take care of breadth which requires his reading five books having similar subject matter at the same level as he is teaching. At higher education level, the depth requirement itself requires a great effort from the teacher.

In a business school, a teacher, who puts in the effort, would be in a good position to integrate the knowledge of several disciplines in many of the subjects and thus become a role model to students. Many persons feel that business school students do not show an integrated view of business and they blame the curriculum for it even though every b-school curriculum has a variety of subjects.

Sunday, April 29, 2007

Current Teaching Responsibility and Study

I have to teach the subject Mergers and Acquisition from the last week of June 2007. I am going to use the book, Takeovers, Restructuring, and Corporate
Governance, fourth edition by Fred Weston, Mark Mitchell, and Harold Mulherin as the text book. There are 22 chapters in this book. As a part of my preparation, I plan to read 22 books one on each chapter to acquire the required depth in subject. I also plan to read five other books on mergers and acquisitions to pick up various ways of explaining the same topics.

The five books being used for broadening the knowledge are:

1. Wyatt & Kieso, Business Combinations: Planning and Action, International Text Book company, 1969
2. Weston & Samuel C. Weaver, Mergers and Acquisitions, Tata Mcgraw Hill, 2001
3. James W. Bradley and Donald H. Korn, Acquisition and Corporate Development, Lexington Books, D.C. Heath & Co., Lexington, 1981 ( a book by Arthur D. Little Executives)
4. P.S. Sudarsanam, The Essence of Mergers and Acquisitions, Prentice Hall of India Private Limited, New Delhi, 1997
5. Fred Weston et al., Takeovers, Restructuring, and Corporate governance, second edition

The books being used for deepening the knowledge include: 1. Book on Income tax of India, 2. Company Act of India, 3. Advanced Accounting text, 4. Valuation by Copeland, 5. Book on Joint Ventures by Yoz and Hamel, 6. M&A:
A Practical Guide to Doing the Deal by Jeffrey Hooke, 8. Strategic Management:Concepts and Cases by Thompson and Strickland 13th edition, and 9. Mergers et al, Issues, Implications, and Case Laws in Corporate Restructuring by S. Ramanujam.

I am now involved in a study marathon.

Friday, April 13, 2007

Markowitz/Sharpe Portfolio Analysis and Target Prices

Portfolio Analysis proposed by Markowitz requires estimates of expected return and risk. Target prices provided by analysts can be used as the expected returns. Literature on the portfolio theory says the risk can be estimated from the historical data as it is more stable.

I have done the portfolio analysis using target price data from Sharekhan Value Line October 2006 recently using an excel spread sheet template. The template accommodates only 20 risky securities.

Out of the 95 correlations 17 were found to be negative when correletions were calculated using past 27 month data. The output that allows negative holdings or short selling gives an expected return of 92.50% and 17.44% standard deviation.

The highest return possible on a security was 68.7% and the lowest standard deviation on a security was 28.2%. The hedge portfolio enhanced the return and decreased the standard deviation.

The immediate questions are the level of confidence that we can have in target price estimates and the confidence in the risk estimated made using the past data (27 months in this case).

Thursday, April 12, 2007



We the unwilling, led by the unknowing, are doing the impossible for the ungrateful. We have done so much for so long, with so little knowledge that we will one day qualify to do anything knowing nothing. Be proud to be an ANALYST.

The above preamble was sent by an analyst through email among an analyst e-group. Below is my response to this preamble.

My response:

Dr. K.V.S.S. Narayana Rao

I appreciate this preamble.I published a paper arguing that the text books on security analysis were not written properly and I circulated this paper to all text book authors in USA. After we study a text we cannot do an analysis in which we have confidence. I feel in this respect technical analysis is much better. Fundamental analysis is described in very ambiguous manner. Financial forecasting is not covered properly in the texts. DCF model is criticisized in the texts. There is no adequate explanation of determining target prices.

But the work being done by analysts "led by the unknowing" is useful to convey some useful and valuable information to the traders and investors. That is why research departments are being maintained. Many of us join the departments not unwillingly, but with a big hope.

To improve the analytical part, my proposal is that the analytical methods are documented in a such a detailed manner, that every investor and trader can understand the methodology. That does not mean every investor and trader can do his own analysis. Analysis to identify one share that satisfies a specified analytical method requires analysis of a large number of shares. This is time consuming. Hence professional analysts come out with research reports on those scrips which pass the screening test of the method. Because investor/trader knows the method he can study the report, convince himself that the analysis is appropriate and do his trading/investment with conviction. Such an approach and attidue on the part of analyst community will reduce ambiguity to some extent, and we will all be more comfortable psychologically in our participation in this activity which is basically a risky situation. What I mean by risky situation is that our judgments are sometimes right and sometimes wrong. We are the same persons, our methods are same, but sometimes they succeed and sometimes they fail. People laugh at us and criticize when we fail.

Thanks to the analyst for bringing out an issue that troubles some of us.

Narayana Rao


Saturday, February 03, 2007

Graham-Rao Method - Meeting with a CEO on 1st February 2007

I had an occasion to meet a CEO of an investment organization and clarify certain issues in the two articles of mine, The Merit of Value Investing and In Search of Value. I am happy that the two articles were noticed by the professionals. On the way back, I went to a broking company, and there also I was informed by an analyst that he kept the copy of the article with him. I have to now do a similar work on Piotroski Method's application in India.

Monday, January 22, 2007

Mumbai Marathon 2007 - II

In my last post I mentioned that I was there at the event. Actually, I walked the half marathon distance on the finishing side. I went ten and half kilometres and returned. That was the reason I could see all the winners of half marathon and full marathon. I spoke to Mr. Vijay Kumar Tendulkar, BIB No. 502 who completed in 4 hours 13 minutes and 54 seconds and walked along with him for some time.

This time I walked the half marathon distance without any preparation. At around 15 kms, I stated having pain in the buttock. Luckily, it cleared off by 12 noon on Monday and I attended the office without any problem on Monday. This experience will certainly motivate to plan full marathon in January 2008.

Somebody told me that the distance from ground to Tirumala in Tirupati is 21 kilometres. It that is so, every day thousands of persons must be completing half marathon every day, in a well organized permanent set up. It could probably become a world record for half marathon finishers if we start collecting statistics.

Partial results of the race are available on


Sunday, January 21, 2007

Mumbai Marathon 2007

Luckily I did not miss the Mumbai Marathon 2007 even though I did not register this time. I was there at 6.45 a.m. just before the half marathon started. Walked along. Saw all the winners of half marathon and full marathon. Had a talk with three or four full marathoners, who stated walking after 35 or 36 kilometres. One of them was a primary school teacher from Punjab, Patiala district. One was Mr. Tendulkar from Goregaon, employee of Bank of India. One is from Army. All of them will complete the full marathon in four hours. Saw the ladies favourite L. Amman from Ethiopia in a tired and bewildered state.

The receiving area and procedure needs an improvement. It may be good to put the chip refund and certificate area by the side of cloak room area. Have a place for all the finishers to stretch and rest for sometime. Then they should be allowed to go to the cloakroom area and put on their dry clothes. Then if the certificate area and chip refund area are close to cloak room area, they can collect them in more comfort.

Procam needs to put in some effort to organize marathon running clinics and marathon gear shows to promote full marathon running in Mumbai and they should earmark some money from every marathon revenue for this purpose and also rope in sponsors fort this.

21st January 2007
Sunday 6.25 p.m.

Sunday, January 14, 2007


The above is a mathematical puzzle sent by one of friends. "O"s are odd numbers and "E"s are even numbers in the puzzle. The expression made me think of some english words.

(Opportunity,Expertise,Enablers)*(Excitement,Effort) = Ovation, Outstanding achievement, Efficiency, Effectiveness)

Some more "E"s which also can be used are Education, Experience, Eagerness, Enthusiasm, Energy

on the day of Makara Sankranti
14th January 2007

Sunday, January 07, 2007

Value Stocks of January 2007

My article on application of Graham-Rao analysis to Indian stocks at the moment appeared in Smart Investor of 8/1/07 on page 7. 9 stocks came out to be value stocks with reference to prices on 3/1/07.

They are:

UCAL fuel systems
Kothari Products
South Indian Bank
Shipping Corpn
Micro Inks
Oriental Bank of Commerce
Sutlej Industries
City Union Bank

The article can be accessed from

As far as my knowledge goes, this is the first time that a full list of Graham's defensive analysis is published on Indian stocks.

Narayana Rao
10.50 a.m.

Tuesday, January 02, 2007

Another thing to feel good about

Internet free sites and blogs allows us to express ourselves. They are also providing a way to find the reaction of others. My article on value investing in Business Standard was included in their blogs by two bloggers and today I found that my article on marathon running by CEOs was quoted by a blogger (the blog is given below). These things provide the push to start the search again for a suitable topic to continue writing.
Saturday, October 21, 2006

Why I run? And why should you?

Why should you? – Indeed, I should not ask this question. However, I will enlighten why you may regard this question.Foremost point certainly is that you will have a mission toward your fitness regime. And here are some more points you should deem to.
1. When you train or run for marathon you don’t run for only yourself. There are ways to contribute to the society.
2. There is an indirect and immense benefit that you gain i.e Physical fitness.
3. If you set your mission as finishing marathon and when you accomplish this – You will have a great sense of satisfaction and achievement. I don’t have to explicate this one. (As I am yet to get there!!)

Recently, I have read one article on Marathon running – A hobby to global CEO’s. In this article the author emphasizes very much on running a company is identical to running Marathon.In fact this is the article really blazed me up to take up this mission.

My sincere thanks to Dr.KVSS Narayana Rao – Author of this article. Courtesy: Global CEO special issue, ICFAI university press.He dictates that the business success can be learnt, honed and demonstrated by training for and running Marathons.

As opposed to the aforesaid points, when you go to gym, it seldom gives any kind of gratification to your life, but it possibly will give you physical fitness, only after paying your gym fees.So, why do you wait…? Just Run! Run!! And run!!!

posted by Guna Sekaran @ 10:41 PM 0 comments