• 03/07/2016

Paula DiPerna: Of Mice and Management: Unexpected Costs That Eat into Value and Time

Of Mice and Management: Unexpected Costs That Eat into Value and Time

By Paula DiPerna

The “check gas cap” indicator lit up on the dashboard of my car, all of a sudden. I retightened it, and the indicator light went off.  But, then next morning, another warning:  this time it said,” Check engine.”  What was going on?

I had a tight schedule ahead and had not planned my time to include car problems.  I looked in the manual to decode the indicator warnings.  But though the manual proposed many possible causes, it proposed no clear-cut answer, other than, “Check with your service provider.” In other words, the handbook told me what I already knew:  see a mechanic. Cut to the chase.

I was reminded of all the roundabout management meetings we attend where we entertain opinions often from so-called stakeholders who have no directly relevant expertise. Often, after much discussion of possibilities for the sake of inclusiveness, we still have to boil down the proceedings to the universal truths of management: stay with the fundamentals, use common sense, don’t over think a problem, and only take advice from people who know what they are talking about.

… I took my car to the mechanic, whose protocol told him to first run sophisticated computer error message scans to see what was wrong. But he got no clear answer from the many options presented. At last he popped open the hood–and voila! The culprit was clear. Mice. During an especially long period of cold weather, a mouse had set up a cozy nest in my engine, lined with fuzzy blue threads from a fabric I had left on a seat.  And food? The mice had been nibbling at the hoses of the emissions control system, causing minute leaks that triggered the “check engine” messages.

We lose a lot of valuable time in speculation, when in our gut we all know that the best manager is the one with a clear-cut view, based on experience, who has the courage to be definitive.

US$ 200 or so later, I drove away, with new hoses, and the mechanic offered high level advice on how to keep the mice out of the car. According to him, the best answer was hot sauce. He suggested I buy a jar of the spiciest hot sauce I could find, put it in a spray bottle, and coat the new hoses with the spicy mist. “Mice do not like spicy food,” said the mechanic, “No mouse will ever nibble your hoses again,” he predicted.

But before I could buy that sauce, after just a few miles of driving, the warning lights came on again on the dashboard. Back to the garage for more computer scans. Again, no answer. So, again, back to fundamentals. Take a further actual look. This time, the mechanic looked deep into the engine and there, sure enough, more mouse evidence. The nibbling had cut into the neck of the gas tank, and the neck alone could not be replaced. I would have to buy a whole new gas tank. Another US$ 300, making the mice caper a US$ 500 unexpected cost.

All of this is laughable, except the joke was on my checkbook.

Of course, a parable emerges. Our fully computerized autos can flood us with sophisticated sensor devices, but, a simple “Black swan” event, such as a mouse in the engine, can flummox the system.

When I think of value chains and cost overruns, I’m reminded that often we cannot outguess the ordinary.

Engines are nothing more than the physical manifestation of ideas–they have to work in real life. So it is with management. We lose a lot of valuable time in speculation, when in our gut we all know that the best manager is the one with a clear-cut view, based on experience, who has the courage to be definitive without being arbitrary. The best manager is the one who can simplify even the most complex challenge into doable, comprehensible remedies.

Next time I’m tempted to give a complicated answer to a simple question, I’ll remember the mice nest. That nest was costly and reminds me that the most elegant answer is often just a matter of taking a good look at the basics. And the answer may not be, at all, in the manual. My mechanic invented the only answer that worked.  He even did me the extra service of buying that bottle of hot sauce and super coating all the new hoses and the tank.  I drove away with my hot sauce engine, smiling at the idea that now I was counting on a bottle of hot sauce that cost US$ 4 to protect me from another unpredictable US$ 500 down the drain. BM


Matthew Fletcher 撰文

說到選股,一切皆關乎對細節的認真探究,這正正是木星資產管理的優勝之處。因此,由文智華(Avinash Vazirani)管理的木星印度精選SICAV基金,自2008年中推出起表現一直跑贏基準指數。 為表彰此方面的卓著表現,基金已獲評為《指標》2016年度基金大獎印度股票「同級最佳」基金。






他提出五個將帶動印度公司的長遠盈利能力,但目前仍被市場低估的因素,包括:政治穩定性、引入「福利直接轉帳」(DBT)計劃、在全國實施商品及服務稅(GST)、增加高速互聯網的覆蓋率,以及把人民的實體儲蓄轉化成金融儲蓄。去年十一月,總理納倫德拉・莫迪(Narendra Modi)決定廢除大面額現鈔的流通,或稱「廢鈔」,是對印度經濟有重大影響的事件。此項令人震驚的公佈,主要為了遏制恐怖主義發展,杜絕不明來歷的黑錢。由於被剔出法定貨幣的鈔票,包括主要為500 盧比及 1,000 盧比鈔票,佔總流通現鈔量的86%,或約2,200 億元,此舉對「黑市」經濟及官方經濟均構成直接衝擊。






印度是2016年表現較佳的新興市場之一,雖然股市不算太好,未有礙此基金跑贏大市。2017年的外圍環境正為印度帶來種種不明朗因素。自唐納・特朗普(Donald Trump)當選美國總統,並決定美國退出《跨太平洋夥伴關係自由貿易協定》起,可能已拉開貿易關係不穩的新時代序幕。美國息率上升的預期,可能有損海外投資者對印度證券的投資意欲。


對印度及長遠股市前景更重要的是,莫迪能夠成功推行廢止大面額現鈔,並令已討論了數十年的商品及服務稅,最終能於今年夏季推行。有關稅項將大大簡化印度繁複的稅制,同時令營商更加便利。對於文智華而言,這些是印度自獨立以來最大的制度改進。他說:「莫迪已取得很大的成功,他所作出的改變是如此驚人,你不能低估已推措施的成效。印度現正處於變革期的開端。」他續說:「投資印度多年,我從未如此深信各公司的未來賺錢能力和投資契機。」 BM