A century ago – there was a strike by
the workers of Buckingham and Carnatic Mills in the city of Madras,
against the managing company, Binny and Co. The strike, which lasted from June
to October 1921, caused severe losses to the Madras economy. It also created a
rift in the ruling Justice Party.
Half a century or so ago,
industrial activities were at their peak at Ambattur – a blooming Industrial
estate with mushrooming small scale units. Sadly, strikers broke the backbone
of small upcoming entrepreneurs – by those orchestrated strikes by Left Unions,
the worst sufferers were the workers themselves, as one after the other Units
started closing. Now the Estate is struggling more so with migrant
workers not being available due to Covid 19. A couple of decades ago, in Banks
and PSUs – Unions could threaten the management calling strikes too often – all
that has changed ! totally. One would remember witnessing – ‘agitations /
demonstrations at lunch or at the start of the day itself – workers shouting –
worker’s unity zindabad ! management murdabad !!’.
The right to strike in the
Indian constitution set up is not absolute right but it flow from the
fundamental right to form union. As every other fundamental right is subject to
reasonable restrictions, the same is also the case to form trade unions to give
a call to the workers to go on strike and the state can impose reasonable
restrictions.
Section 2(gg)(q) in The
Industrial Disputes Act, 1947 – defines : " strike" means a
cessation of work by a body of persons employed in any industry acting in
combination or a concerted refusal, or a refusal under a common understanding,
of any number of persons who are or have been so employed to continue to work
or to accept employment; Whenever employees want to go on strike they have
to follow the procedure provided by the Act otherwise there strike deemed to be
an illegal strike. Section 22(1) of the Industrial Dispute Act, 1947 put
certain prohibitions on the right to strike.
An interesting
movie purportedly about stock market – the story unfolds the day after a major listed
company, Ibis, has declared a “glitch" in its algorithms has led to the
loss of $800 million. The chief executive officer, Walt Camby (Dominic West),
due to appear as a guest on Money Monster, is said to be mid-air between Geneva
and New York and therefore unable to attend the show. May be of more interest to those investing in
Shares ?
How much have
you invested in shares ? – is that more than 50% of your portfolio – and how
closely do you follow the market ?- daily, hourly or at a higher frequency ! –
it is close follow-up and mental Maths one may think .. .. more wise people
would use algorithms. Instead of
following the market, and buying (online or through a broker) intra-day – you
could set rules.
I am an absolute
novice in this : but suppose, if you want
to invest Rs.2 lakhs – and would like to keep your portfolio by buying 100
shares of a stock when its 100 day moving average goes above 200 day moving
average ! and sell your owned stocks
when their 100 day moving average goes below 200 day moving average ! (sounds
pretty complex!) – you can have a program written which would constantly
monitor the stock price and the moving average indicators and execute ‘sell /
buy’ orders when the set conditions are met.
You need not monitor the market on hourly basis but this will happen
based on the ‘algorithm’.
The basis of any computer
application and its functions is algorithm. With the advent of advanced
technologies, almost every sector is basing its effectiveness on this piece of
logical coding. Algorithms leverage user data, past patterns and a designated
set of prespecified instructions to achieve the set goals. In the financial
domain, the rise in demand for reducing transaction cost is fuelling the demand
for use of algorithms in everything, from customer service to stock trading. In Mathematics and Computer Science, an
algorithm, is a finite sequence of well-defined instructions, typically used to
solve a class of specific problems or to perform a computation.
Algorithmic
trading (automated trading, black-box trading, or simply algo-trading) is the
process of using computers programmed to follow a defined set of instructions
for placing a trade in order to generate profits at a speed and frequency that
is impossible for a human trader. The
algorithmic trading strategies follow defined sets of rules, and are based on
timing, price, quantity or any mathematical model. Apart from profit
opportunities for the trader, algorithmic-trading makes markets more liquid and
makes trading more systematic by ruling out emotional human impacts on trading
activities.
On a not so
fine day, flamboyant television financial expert Lee Gates is in the midst of
the latest edition of his show, Money Monster. Less than 24 hours earlier, IBIS
Clear Capital's stock inexplicably cratered, apparently due to a glitch in a
trading algorithm, costing investors $800 million. Lee planned to have IBIS CEO
Walt Camby appear for an interview about the crash, but Camby unexpectedly left
for a business trip to Geneva, Switzerland.
Midway through the show, a deliveryman wanders onto the set, pulls a gun
and takes Lee hostage, forcing him to put on a vest laden with explosives. The
man reveals that his name is Kyle Budwell, who invested $60,000—his entire life
savings—in IBIS after Lee endorsed the company on the show. Kyle was wiped out
along with the other investors. Unless he gets some answers, he will blow up
Lee before killing himself. Once police are notified, they discover that the
receiver to the bomb's vest is located over Lee's kidney. The only way to
destroy the receiver—and with it, Kyle's leverage—is to shoot Lee and hope he
survives.
With the help
of longtime director Patty Fenn, Lee tries to calm Kyle and find Camby for him,
though Kyle is not satisfied when both Lee and IBIS chief communications
officer Diane Lester offer to compensate him for his financial loss. He also is
not satisfied by Diane's insistence that the algorithm is to blame. Diane is
not satisfied by her own explanation, either, and defies colleagues to contact
a programmer who created the algorithm, Won Joon. Reached in Seoul, Joon
insists that an algorithm could not take such a large, lopsided position unless
someone meddled with it.
Lee appeals to
his TV viewers for help, seeking to recoup the lost investment, but is dejected
by their response. New York City police find Kyle's pregnant girlfriend Molly
and allow her to talk to Kyle through a video feed. When she learns that he
lost everything, she viciously berates him before the police cut the feed. Lee,
seemingly taking pity on Kyle, agrees to help his captor discover what went
wrong.
It turns out
that Camby bribed a South African miners' union, planning to have IBIS make an
$800 million investment in a platinum mine while the union was on strike. The
strike lowered the mine's owners stock, allowing Camby to buy it at a low
price. If Camby's plan had succeeded, IBIS would have generated a multibillion-dollar
profit when work resumed at the mine and the stock of the mine's owner rose
again. The gambit backfired when the union stayed on the picket line. Camby
attempted to bribe the union leader, Moshe Mambo, in order to stop the strike,
but Mambo refused and continued the strike, causing IBIS' stock to sink under
the weight of its position in the flailing company. In the aftermath, the SEC announces that IBIS
will be put under investigation, while Camby is charged with violations of the
Foreign Corrupt Practices Act. .. that's movie Money Monster!
Interesting and life offers so many learnings, if only we are ready to !!
10th Apr 2o22.
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