Dynamic Pricing …in India

Hi Friends,

Its been a long time since my last post.

I want to discuss my view about Dynamic pricing and it’s future in India.

You see the flight prices, hotel prices and oil prices( In USA)  everyday (in fact every hour, sometimes every minute) changing dynamically. They are not static. This is because the flight  and hotel management want to gain (or minimize loss), depending on their business demand. The hotel prices on holidays will be more when compared to off season. Its the same with flight prices.

I would like to see this in restaurant business.

People usually (my friends and I), when goes to a good and big restaurant, discuss about the prices in the menu before us. Some people (like me) will be curious to know how fair the price calculation is for each item. Wouldn’t it be great for such people and restaurant owners to have a software which prices the item?. Of course, it should take the dynamic prices of the ingredients, man power charge, electricity, time spent, business demand and other miscellaneous parameters into consideration.

May be showing all the calculations involved in this dynamic food pricing is not a good idea in business perspective. But this pricing will help the restaurant owners for better management.

Pricing according to business peak hours and off hours is also important. Keeping low prices during the off hours will attract more customers and already prepared food will not go waste.

A mobile application which can help to track all these dynamic prices of the hotels nearby, will help customers to choose their restaurant better. People who really want to have food and avail these offers can be benefited through this application.

Hope, in India, the gas stations also follow this dynamic pricing soon .

More discussion on dynamic pricing in restaurants follows…………………………………………










Need Rating System for Media in India

These days, Media has become a powerful tool in India. And electronic media(Television news channels) has more importance these days. There is a great increase in number of news channels in last 5- 6 years. I remember seeing only one news channel(in my regional language Telugu) during my tenth class( that too only for few hours a day). But when i am into engineering( i.e 4 yrs after ) , i see a drastic increase in no. of Telugu news channels (around 10 news channels). Now i think the total no. of  Telugu T.V channels is around 40 which is only around 4 , 8 years back.

These news channels are exclusively for news around my state (Andhra Pradesh) and  they expose every single happening in the state. They mainly focus on political issues, film gossips, word news, social activities. It has been a improvement and i see information flow at great speed. At the same time many people benefited by exposing their problems to higher authorities with the help of these channels. This has been the same issue for most of the states in India. By not going into much more details, I think by  this you can understand how much role is played by these T.V in developing India.

Now the time has come where some news channels at some times rise up unnecessary issues, focus on irrelevant topics, make the issue to look larger than necessary, rely on their own decisions, and spreading news in  favor of their beloved political parties or beloved people.  This is all for their TRP ratings, fame and (not the least) MONEY. They raise irrelevant and stupid questions during the a personal interview or press conference which make the counter party vex. And then making up another report on why he has to become angry on media. There are many instances like this which makes news bad, which can’t be understood by illiterate people and some literate people.

What i Feel…

There has to be credit system which has to make some hard and straight rules on how the news can be spread, limitations and procedures in an interview, the topics that has to be focused and the limit that the topic has to be focused. These rules has to be made keeping the people’s interest, country’s development and social ethics in mind. And the channel making some good programs and spreading news that is useful to society has to be given a good credit(grade). Its just like the ICC announcing points for the cricket teams in deciding which team is first in the table. So people can know which news can be credited more. This can make the news channel’s freedom in check. More freedom without any limit will cause problems. Any silly and stupid questions by media to public or higher officials should be scrutinized and can make the corresponding news channels credit score to go down.

I welcome any corrections or suggestions.



Confusion ..Confusion…with Financial Engineering subjects

( This is written during my first semester of masters in financial engineering….. 🙂 )

These subjects in Financial engineering are really intriguing…

I am confused “What I am to specialize on?”


Doing the math problems very well (Stochastic Calculus, Probability, Pricing) – Do I need to do more in “Quant Research”?


Knowing that we can’t predict future accurately just by building Mathematical models but calculating the market risk would be better predicted by using various VaR methods, Time series Analysis and Monte Carlo –Shall I get “more expertise on financial risk analysis”?


After gaining knowledge in Fixed Income Markets (Credit Risk, Yield curve analysis, PCA, Repo Markets)  –  “Will it be better if I work more on Fixed Income market analysis /Credit Risk Analysis”?


Seeing the money we get in Options/Derivatives trading – Can I research on “new strategy’s in Options trading”?


Seeing the project works and today’s demand – Should I go for “Computer/Programming skills in Trading”?


Listening to Spread trading class – Am I intelligent enough to “Win on Spread trading market”?

Spread Trading – Why it should be risky?.. It’s easy to bet on the difference of two related stocks rather on betting on a single stock.


By doing the portfolio management project (getting to know the flaws in  MPT) and seeing the complicated financial instruments used – Is it good enough to research on “A Mathematical model which is useful for today’s portfolio management or pricing a new Instrument”?

The flaw in portfolio management is interesting- when we are valuating risk we are considering both downside risk and upside risk…why the hell, the investor worries about in upside risk.


Knowing the difficulties in getting a job in U.S (in  Financial engineering stream) and having required analytical skills and managing skills  – Can I be satisfied with the jobs like “business analyst in corporate finance” ?


Confusion ..Confusion….Confusion…


Do Stock Markets follow Random Walk?

Here are the few articles which discusses about the causes for 2008 financial crisis and the role played by mathematical models in it.

Some say the flaws in the mathematical models is the cause for the recession and others argue that financial engineers didn’t know the assumptions and restrictions of the models used. But as one of them said , i agree that people forgot to include some variables ( investor confidence, human behavior) while coming up with the results.

The main assumption of many mathematical models is that stock markets follow random walk or stochastic process. They may not be wrong but couldn’t work in all situations.


This is the one which discuss about the evolving field of neuroscience in finance (interesting and i feel it can be more powerful than stochastic mathematics).

The below article explains the flaws of   mathematical equations used in wall street.


Let me know what you think about the financial market after reading the articles.

I believe” we can’t beat the market by creating just the mathematical models.”

One guy quoted “financial markets can’t be translated into formulae. Any set of assumptions to simplify the world is going to create trouble one day or the other”.



Fav. Quotes

“Choose a job you love, and you will never have to work a day in your life.”

“The Black-Scholes equation does not apply outside 2.5 standard deviations from the mean”

“Financial markets can’t be translated into formulae. Any set of assumptions to simplify the world is going to create trouble one day or the other”

Financial Engineering as a career?

Go through the  below articles and get to know what quant finance is about..







Studying MBA/Engineering in India?

In INDIA, there are many MBA schools/Engineering and still more to come. MBA schools develop the managing skills, leadership qualities and make students good administrators. People in India, spend a lot of time and energy to get into top MBA schools like IIM’s, ISB, Xavier,IIT’s etc. They take up difficult exams like CAT,XAT,GMAT. The question is do we need that many MBA schools in INDIA?. This reminds me of another question what’s the future of gazillion Engineering colleges?

My dad,uncles and some people i know who are good administrators and managers didn’t have any education from IIM’s or IIT’s. They didn’t toil up to get into the big schools. The life and challenges thought them the things needed. I am not against these MBA schools, Infact they produce very good quality people these days. I feel the hype is not only for the colleges but also for the courses which is not good.

Sometimes sheep herd comes to my mind whenever i see some people’s mentality. The whole herd follows the lead one without much thinking. Thus, if people see one man succeed in career, they want their siblings to follow the same path. In India its more prominent. There’s a time when engineer’s made their success and  as a result many engineering colleges and surplus seats. And after that computer science engineering dominated. Now i feel its time for MBA.

Many friends of mine got into engineering without much interest. Some are there because they don’t  know what want to do. Some others are forced by their parents and some others don’t have other choice. The software jobs they get into after engineering(excluding CS)  never makes them happy and this is when MBA comes into their mind.

****still to update**

can leave your comments or suggestions***