The Hindu Business Line : Give luck a chance

Puck talks of ‘unearned luck’, in Shakespeare’s A Midsummer Night’s Dream, and Falstaff hears, in King Henry IV, of ‘lucky joys, and golden times and happy news.’

So, what is luck? “A vast subject that is extremely personal,” say Barrie Dolnick and Anthony H. Davidson in ‘Luck’ ( www.landmarkonthenet.com ).

Luck can evoke a spectrum of feelings, ranging from enthusiasm to annoyance and frustration, they add. “No one can avoid using the word luck in everyday language. It seems to be as embedded in our lives as breathing.”

The authors define luck as ‘winning in the short term or being successful in the long term owing to chance’.

Luck as ‘a force that tips the balance in life’ is clearly understood by investors, be they gainers or losers.

The book traces luck to ancient times – ‘as early as cavemen’! “Our ancestors studied the subject carefully, and much of what they found and believed survives today.”

A chapter on ‘gambling’ – a sport that courts luck openly – speaks of ‘eight rules of luck’, derived from ‘collective gambling experience’, as ‘guidelines to keep you on the winning side of the curve’.

Rule 1 is, ‘Make your own luck’, that is, ‘make a list of the places, times, people, and things that make you lucky’. The place where you gamble is important, the authors say.

“If you’re lucky playing horses at a certain racetrack, then concentrate your efforts and money there; same for lottery tickets.” Applies to stocks, too, perhaps?

The second rule is that money doesn’t buy luck. “If you are simply not winning, take a break,” advise Dolnick and Davidson.

“If you continue to play, you probably won’t get any incremental entertainment value. Spending additional money won’t buy you luck.” Also, keep off from the game when ‘you become hesitant or afraid to make a bet’, because ‘scared money’ is unlikely to win.

Next, ‘give luck a chance’, by playing a random number ‘just in case the personal numbers aren’t lucky at the time you’re playing’.

Notice the numbers as they come up in your life, the authors recommend.

“If your gym locker is 463 and you see that number come up again in another way, perhaps a receipt for $4.63, those numbers are giving you a clue…”

For a solemn read, even if you don’t believe in luck.
BATNA, ZOPA

BATNA is the first of four key concepts that you must remember when negotiating, says Harvard Business School Press’ Pocket Mentor ‘Negotiating Outcomes’ ( www.tatamcgrawhill.com ). The acronym, as you may know, stands for ‘best alternative to a negotiated agreement’ – the options when your negotiations fail to result in an agreement.

“This term was first used by Roger Fisher and William Ury of the Harvard Program on Negotiation in their famous book, ‘Getting to Yes’.”

Your BATNA determines the point at which you can say no to an unfavourable proposal, the book explains. “Thus, it is critical to know your BATNA before entering into any negotiation. If you don’t, you won’t know whether a deal makes sense or when to walk away.”

The second key concept is the reservation price, also known as the walk-away, or ‘the least favourable point at which you would accept a deal’. Together with BATNA, this gives you the confidence in negotiation.

Third, ZOPA, the zone of possible agreement, or the range in which a deal can take place.

This exists in the overlap between the high and low limits between the parties’ reservation prices.

Therefore, no ZOPA, no overlap, no agreement, “no matter how skilled the negotiators.”

Lastly, value creation has to happen through trades, meaning goods or services have only modest value to their holders compared with ‘exceptional value to the other party’.

Both parties end up satisfied, however, because “each party usually gets something it wants in return for something it values much less.”

Another chapter in the book is on ‘nine steps to a deal’…

A good bargain.

Finance the SMEs
There are at least four benefits in financing SMEs, according to S.K. Bagchi in ‘Bank Finance for Small & Medium Enterprises’ ( www.jaicobooks.com). One, the SME sector has been growing in its contribution to the GDP (gross domestic product); two, entrepreneurial interests would be encouraged and growth in the number of SMEs made possible; three, new products/services would be increasingly available for consumers; and competitiveness in business would rise.
“In India, SME is a generic term used to describe small scale industrial (SSI) units and medium-scale industrial units,” educates www.dsir.gov.in. “Any industrial unit with a total investment in its fixed assets or leased assets or hire-purchase asset up to Rs 1 crore is considered an SSI unit and investment up to Rs 10 crore is considered to be a medium unit.” Globally, 99.7 per cent of all enterprises in the world are SMEs and the balance 0.3 per cent are large-scale enterprises, it informs. In India, “the SSI sector accounts for 95 per cent of all industrial units.”
Indian SMEs are the fastest growing among peers in Singapore, reports www.channelnewsasia.com in a story dated November 2. “SMEs account for about 45 per cent of Singapore’s GDP and provide about 60 per cent of jobs there.” Indian SMEs there are growing at more than 30 per cent year-on-year for the last three years. Wish such growth were possible closer home too.
Instructive.

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