Love In Titanic

A friend and I were discussing love and what causes it to happen and to break. She cited the love between Kate and Leonardo in the movie Titanic. 

Which woman wouldn't love a character like Leonardo? He was a welcome breeze in her life, she being engaged to an arrogant man she didn't love. She was about to commit suicide when Leonardo saves her and during the course of the next three days becomes a good friend and ultimately gave his life to save her. Fairy tale like, isn't it?

Kate was grateful to him for being a good friend in time of her need. What else did they have in common? That he was from the lower classes and not an unmitigated arrogant ass like Kate's fiance? And that Kate disliked her fiance because she was "sold off" to her fiance?

Now was this really love between Leonardo and Kate? Could it have sustained if the ship didn't sink as it did? What would have happened if they had both survived and been in a relationship?

Would they have loved each other for the next 10 years? Could Kate have been happy with Leonardo's lower middle class life, upbringing and aspirations? Could Leonardo have moved "up" the rung?

This is almost like Audrey Hepburn and Gregory Peck in Roman Holiday. They had 3 days of close friendship but after that they had to go to their separate lives. Their lives couldn't be one. Were Audrey and Gregory in love? Or did circumstances cause a good friendship, with likely a low shelf life? I think it's the latter.

Both sets of couples (in Roman Holiday and Titanic) truly liked each other's company for those three days. Put them together for a longer period of time, then their fondness towards each other would likely have turned sour. I guess I would predict the same with Richard Gere and Julia Roberts in the movie Pretty Woman.

Transient fondness can be created by circumstances. Love cannot be created/sustained if people come from too different a background. And certainly love needs a longer time to grow and take roots. You cannot be in love with a person whom you have known for three days.

Was the love between Eliza and Darcy in Pride and Prejudice (http://vbala99.blogspot.com/2011/11/why-did-elizabeth-love-darcy.html) or between Jennifer and Oliver in Love Story (http://en.wikipedia.org/wiki/Love_Story_(novel)) of a transient kind or a permanent kind?

Comments welcome.

Capital Protection Fund

I came across a presentation which explained how a capital protection scheme worked. 

It's like this. The money is invested for a specified duration, say, 5 years. About 65% of the amount you invest is deployed into debt funds (fixed deposits etc) which at the end of the period will grow to the total amount you invested. Thus your capital is protected no matter what.

Now the balance amount (35% in this case) is invested in equity. Over 5 year period this can double or grow by 50% or you can lose your shirt. Any which way, the capital you invested is protected.

Now, the presentation also had made an analysis in the last 12 years of returns from investment in equity over a rolling 3 year period. There were 3000 odd data points.

I assume the data points were like:

1 Jan 1999 - 1 Jan 2002

2 Jan 1999 - 2 Jan 2002

...

30-Sep-2008 - 30-Sep-2011

You can see that its about 10 yrs (of 240 days each approx, excluding weekends and other holidays) which comes to about 2400 days.

Now coming back to what the analysis in the presentation...

It was mentioned that the investment (in equity) gave positive returns 80% of the time (of the 3000 samples) and gave negative returns 20% of the time. Meaning, if you had blindly invested in equity between 1999 and 2008 and stayed invested for 3 years, there was a 80% chance that you would make money and 20% that you would lose money.

Note:

I am not going into how much one would have profited or lost. I am assuming that it may not be an important factor in this analysis. 

Now if we change the 3 year investment period what happens to the analysis? Investment in equity is risky. One could make or lose a lot. If we reduce the investment period to 2 years then we would have made negative returns probably 40% of the time (instead of 20% of the time as in the case of 3 year lock in).

Conversely, if the lock in period was increased to 5 years, the probability of negative returns would reduce. Maybe it might only be 10% instead of 20%.

Now, if the probability of getting a negative return when we invest in equity market over 5 years is only 10% (and I assume the expected loss is about 15%) then this also is a form of capital protection. You don't lose more than 15% of your capital. While the upside in case of profit would be much higher. Right?

So my question is: why are people selling debt instruments when the investment horizon is 5 years? Why do investors buy it?

Should we not focus on (a) CAGR Returns (b) risk (c) liquidity while making an investment and choose whichever product/instrument which meets our goals. Whether its gold or silver or real estate or sectoral funds or stocks or equity funds or debt funds or balanced funds etc? Why do we compare each asset class with its own benchmark? Should we not instead compare across asset classes using the common parameters like the three mentioned above?    

Getting What You Want

A friend sent me this quote: 

""The only thing worse than not getting what you want is getting what you want". 

I modified it for her.

"WHEN YOU DON'T DESERVE SOMETHING, the only thing worse than not getting what you want is getting what you want".

In Tamil there is a saying "Mudavan kombu thenukku aasai paduvadu pola". It translates roughly as "a lame man wishing to get honey from a tree (how stupid it is, he will never get it)".

If the lame man doesnt deserve it and gets it, later the honey will think "what did I do to deserve this lame man and walk out." Getting something that you don't deserve creates more problems than it solves.

Maths Puzzle - 21 - Forgotten Password

A boy forgot his pin-code which was of 5 digits, but luckily he remembered some hints to remember that password, here are those clues. 

1. First digit is equal to the square of second digit 

2. Second plus 3rd digit are equal to 10 

3. 4th digit equal to the 2nd digit plus 1 

4. 5th plus 3rd digit make 14 

5. Sum of all the five digit make 30. 

Find the pin code. Let's see how your math is.

Maths Puzzle - 20

Only 2% students had solved this question in an exam.

5+3+2=151012 

9+2+4=183662 

8+6+3=482466 

5+4+5=202504 

Then 7+2+5=???

(I couldn't solve it fully. Guruji provided the solution).

Maths Puzzle - 19

Guruji gave me this puzzle.

Try to solve this puzzle. She said only 1 Out of 100 Has been able to solve this. If you’re able to solve it you’re one of those … And your IQ is also above 150. (I don't think this is true. It is far too simple for that.)

IF

7 - 3 = 10124

6 + 3 = 3279

5 – 2 = 763

11 + 2 = 92613

Then,

15 - 3 = ?

Maths Puzzle - 18

A friend gave me this puzzle today.

A man wanted to enter a club

Every member knew the password,

The man hid himself beside a wall and tried to listen to the password.

A member came, watchman said 'twelve'

Member replied 6,

Watchman opened door.

Another member came, watchman said 'six'

Membr replied 3,

Watchman opened door.

Man thought he had got the password

He went to the door,

Watchman said 'eight'

Man replied 4. Watchman didn't open door.

What was the password?

Some Articles On Relationships

A friend sent me a link on relationships; about the kind of men you shouldn't marry I did a back of the envelope calculation: 

There are 7 billion people in the world. 3.5 billion males.

Males up to 18 years age (@20% of total population):  0.7 billion

Males above 60 years of age (@15% of total population): 0.5 billion

Males between 18 and 60: = 3.5 - 0.7 - 0.5 = 2.3 billion

Males (and also females) between 18 and 60 who are not married (@40% of above population): 0.9 billion =900 million.

After you eliminate all of the kind of males listed in the article, I wonder how many of the 900 million males will remain still eligible though. Maybe 2 million?

So 900 million women would be looking out for 2 million men? If a man is part of this 2 million, imagine his odds. Wowowowow.

Another interesting article:

Are you a standby in his life? (http://timesofindia.com/PDATOI/articleshow/10507078.cms)

Why Did Elizabeth Love Darcy?

I recently read Pride and Prejudice and wrote about it (http://vbala99.blogspot.com/2011/11/pride-and-prejudice-by-jane-austen-read.html and http://www.pemberley.com/janeinfo/ppv3n58.html#darcylove). Guruji also read the book.

I asked her today. Why did Eliza love Darcy?

She said:

• All the negatives that Eliza had seen in Darcy earlier were because of her misunderstanding. Darcy was a very good man (he had helped Lydia get married to Wickham).
• Darcy had a strong mind.
• There were not many men like Darcy (My comment: There are also not many men who are five feet tall. Does one fall in love with someone just because he belongs to a rare kind?)
• Eliza said that her disposition was suited to Darcy's. (My comment: That is my question. Why did she say that?)

She stopped here since Dimple had called her to say dinner was ready. She said she will continue after dinner. My thoughts continued. Why did Eliza love Darcy?

• Initially Darcy got off on the wrong foot with Eliza and she thought him to be very arrogant, just as many others thought of Darcy. Later after she ready the letter from Darcy (http://www.online-literature.com/austen/prideprejudice/36/) and after hearing what Darcy's housekeeper had to say about him (http://www.online-literature.com/austen/prideprejudice/43/) she understood that she was not only completely mistaken in her evaluation of him but also that he was a very nice man indeed with a very forbidding exterior.
• The fact that Darcy had left his arrogance aside and had gone out of his way to help her family problem (arranging for Lydia to wed Wickham http://www.online-literature.com/austen/prideprejudice/52/) was only because of his deep love for her. When someone loves us deeply we usually soften our stance and "reduce" the bar. And when Eliza went through these emotions, also recollecting how she had treated an essentially good man, she was shocked, ashamed and finally fiercely in love. That was when she refused to acquiesce to Darcy's aunt (http://www.online-literature.com/austen/prideprejudice/56/).

What Eliza really expected was a man who would accept her spirit and tame it. She definitely would not have tolerated a Bingley who, while an exceedingly nice man, would not have ever got her respect. Darcy had the raw power and the mind to which should would be only glad to surrender.

These were the reasons why Eliza loved Darcy. Have I said anything different from what Guruji told me? Well, not really. I have only explained it better. I have added no new points really.

As I often tell my friends, women have a serious trouble in communicating well. They confuse eloquence for quality.