One order of Big Data for Big Mac

Posted on April 30, 2019Categories Data analytics   Leave a comment on One order of Big Data for Big Mac

 “The key to making acquisitions is being ready because you really never know when the right big one is going to come along.”

– James McNerney

We can’t talk about McDonald’s without thinking about a burger or the World famous Big Mac. The iconic company founded by Ray Croc is today one of the most well recognized fast food brand across the world. It is known to have a very strict plan of work for all the work done in house.

Parcel deliveries and drive thrus are an important part of their revenue. It allows McDonald’s to sell more products without having to seat people. This allows it to have more sales.

McDonald’s has recently acquired “Dynamic Yield”, a startup based in Tel Aviv, Israel for over $300 million, in order to improve its ability to predict the kind of menus a customer would want to eat when ordering at a drive-thru or at via their mobile app.

Dynamic Yield allows retailers to use algorithmic models, known as ‘decision logic’ technology to understand a customer’s preferences and influence his/ her choices. Example: If you add an item to an online shopping cart, it tells you about what other customers have bought and helps you select the other similar products.

This is McDonald’s largest purchase since the Boston Market (which they acquired in 1999). For a company with an income of $6 billion in 2018, this was a very easy purchase.

So the main question is why did they decide to invest in big data? Why not just hire an external agency that could do it for them?

McDonald’s serves around 68 million customers every single day. Majority of these people prefer to pick up their orders from the drive-thru window. This is where McDonald’s aims to deploy Dynamic Yield – for understanding and influencing consumers driving by for their orders.

This is what the present drive-thru window looks like: When you drive up and place your order at any McDonald’s, a digital display greets you with a handful of banners items or some promotions. As you move forward towards the ordering area, you immediately get the full menu. Both these slides are currently static, excluding the obvious changes like rotating new offers or switching from breakfast to dinner.  

In a pilot program at a McDonald’s in Miami, which is powered by Dynamic Yield, those displays are now different. Algorithms crunch even small data like the weather, time of day, local traffic, nearby events and of course the historical sales data, both at that of the specific outlet and around the world.

With the new machine-learning program a remarkable display of real estate goes towards showing customers what other items are or have been popular at that location and prompting them with potential up-sells.

Ex: while exiting you receive a message like, Thanks for your Happy Meal order; maybe you’d like a Coke to go with it.

These small changes help McDonald’s sell more. With this machine-learning system, the real benefits will likely be immeasurable.

This system also provides many other benefits. Like if the drive-thru is moving very slowly, the algorithm can automatically switch the menu and can show items that are simpler to prepare. This will help speed things up. On the other hand, the display can also highlight more complex, pricier sandwiches on a slow day.

McDonald’s is looking to spread this technology to all its outlets all over the world. Dynamic Yield adds a personal layer to McDonald’s tech stack.  

“It’s probably is less about the product and more about the data scientists, the team that comes with it and their ability to move quickly with us,” says Mr. Daniel Henry, McDonald’s executive vice president.

Big Data and Machine Learning is evolving everyday – with new applications and uses being employed if varied fields. With Multi-national giants like McDonald’s investing heavily in the sector, the job opportunities are bound to multiply rapidly. BSE Institute Limited helps you to be the most sought Data Scientist in the country with its GFMP Edge Data Science Program. A 4-month course can help you secure your seat at global companies.

 

AI to replace Equity Analysts!

Posted on April 30, 2019Categories Short term programmes   Leave a comment on AI to replace Equity Analysts!

AI is emerging as a critical function like sales/ marketing for companies operating across the globe. Large MNC’s like Google, Amazon, Microsoft use a wide range of products enabled by artificial intelligence to support their staff in decision making and also to obtain great business insights, that helps them have a competitive edge.

The same is true for major financial conglomerates across the World.  

A San Francisco based nonprofit research team, “OpenAI” is working with the top tech talent of the World to invent a unique new system that makes life easy for anyone whose job includes a lot of data research. They have created a language-learning model which writes news, answers reading comprehension problems and has started showing an expertise at high level tasks like translation.

In a paper released, the OpenAI team displayed that they can get great results from an “unsupervised” AI. The system has self-learned a lot about what happens globally by reading over 8 million internet articles. The OpenAI team says their system has set a record for performance on “Winograd schemas”, which is a tough reading comprehension task.

This AI also achieves a near-human performance on the Children’s Book Test, reading and comprehension. It can also generate its own text, including highly convincing news articles and also Amazon reviews.

Here’s how it happens when you give this AI system a sentence:

The AI selects the words one at a time and then considers what the next one should be. It takes a few seconds to add sentences accordingly. To be clear, the AI can write news articles that are sometimes so convincing, that nobody would be surprised to see them in the newspaper.

Learning to read and understand information like humans:

What’s quite remarkable about the system is that it can read and process information just like a real human being would!! What’s funny is that this is exactly what a human Financial/ Equity analyst does. Analyzing data from various sources and to come to a conclusion about what’s investment worthy is what an analysts’ job is all about.

Identifying the right investment avenues for value maximization for your client’s/ corporation is what an analyst’s primary job is. Now imagine this – what if AI is able to do this all 24*7, without any errors that are usually associated with human beings? The bankers will go for it for surely!

Any means to save time, money and human efforts is absolutely necessary. These investment analysts can then move on to doing other important jobs like handling HNI clients or scouting for more clients. The scope of an equity analyst’s job is bound to change in the future.

BSE Institute Limited has introduced various short-term courses on AI, Machine Learning, Blockchain, etc. These courses are available for all students, professionals and investors on its website bsevarsity.com. A basic course on the Introduction to Artificial Intelligence can help you learn about the latest technology, tools and stay ahead in an evolving industry.

AI is the future and this technology and is changing industries in ways we never dreamt of!!

 

New asset classes – Commodity Markets!!

Posted on April 22, 2019Categories Short term programmes   Leave a comment on New asset classes – Commodity Markets!!

 

Commodities play a significant role in our everyday lives. Anyone who drives a car daily is affected due to any change in the price of petrol. Commodities are sometimes looked at as a smart way to diversify your investments. As there are various ways to enter commodity markets, many fund managers are sitting up and taking notice of these investments. In some cases there are avenues for retail investors and traders to invest in commodity markets.

Recently, the Securities and Exchange Board of India (SEBI) has allowed Mutual funds and portfolio managers to invest in commodity derivatives. This move will help Mutual Fund Investment Managers to diversify their investments and offer better investing options to their investors. SEBI approved the proposal to enable participation of mutual funds and portfolio managers in exchange traded commodity derivatives in India, as the risk taking ability of many retail investors has increased significantly in India.

The Indian investment scenario has changed considerably today. From the days of investing in Fixed Deposits offering 8% returns, Indian retail investors are now seeking better returns from Stock Markets. The number of new demat accounts has reached a 10 year high of almost 4 million accounts – which is a strong indication of the new risk taking ability of retail investors, who want annual returns of 20-30%.

The participation of Mutual Funds and Portfolio managers would be a game changer in commodity markets as it allows retail investors an avenue to maximize their investments. “SEBI will soon be allowing the investments in commodity indices”, said Mr. S.K Mohanty, a whole-time member of SEBI.

This initiative will also encourage participation and investments in the commodity markets. Institutional participation in commodity markets has been a long pending demand of Mutual Fund houses.

Prior to this announcement, only retail and wholesale commodity traders and a few corporate clients participated in the commodity markets. The presence of financial institutions will offer investors an additional layer of protection to their investments as these will be strictly regulated by SEBI.

With mutual funds being allowed to invest, the commodity market will have greater credibility, more liquidity, lesser volatility and better price discovery.

Enhanced liquidity and presence of various participation groups, including hedge fund managers and financial institutions, would strengthen the price discovery mechanism. This will also make risk management on exchange platforms more efficient and cost-effective for stakeholders by lowering the impact cost of trade.

As the demand of better investment options, the investments on commodity markets increases and knowledgeable traders and investors is also bound to increase. BSE Institute offers a short-term online course on the Fundamentals of Commodity Trading at BSE Varsity. The course is designed to help you learn he basics of commodity markets and can help you successfully trade in commodities.   

 

5 tips to trade in Forex Market

Posted on April 22, 2019Categories Short term programmes   Leave a comment on 5 tips to trade in Forex Market

“The goal of a successful trader is to make the best trades. Money is secondary.”

– Alexander Elder

Trading is like any high-performance endeavor. It requires skills, focus and discipline to achieve success from it. Those who are in it with the only aim of making money aren’t likely to be a good traders. Your first aim is to be a good trader and the money follows automatically.

Foreign exchange (Forex) is considered to be the most liquid and the largest market in the world. It includes all the currencies used across the world. This market is open 24 hours a day and 5 days a week except on weekends. The Forex market is the largest market in terms of the total funds traded. Anybody, from any part of the world, can participate in this market. This is the beauty of it – as it offers a chance for everyone to profit from it.

Trading in the Forex market is very exciting, efficient and also offers exceptionally high liquidity to the traders. Forex trading profits can be easily reinvested without liquidity becoming a problem. This investment can also take place in the comfort of your own home, from your mobile phone/ laptop.

A few tips that one must be aware of before investing in this market:-

  1. Don’t imitate others:

The first and most important tip is, “Stop following others blindly”. Try to learn and build your own strategy. Be a free thinker. Make your own strategies and plans by studying the financial markets. Traders who win big always think differently than the majority. By blindly copying another trader, you are facing risks you have no knowledge about. At a fundamental level, the trader has different resources and different financial objectives, which let him take the decisions he is making. Understand this and then build your ow strategy.

  1. Always be practical:

Try to be realistic and start from scratch. Don’t think about earning lakhs of Rupees by investing Rs. 1000. This only happens in movies!! Successful investors and traders make strategies and plans before investing. They are highly patient about the goals they set as they have kept the gestation period in their plan. Generally, traders who desire to be rich quickly lose and exit fast.

  1. Choose the right broker:

Always opt for an authorized broker while trading in forex. In India, it is legal to carry out forex trading, but only on Indian exchanges like BSE, NSE etc. If trading takes place between an investor and an unregistered party directly or indirectly, it is considered to be an illegal transaction.

  1. The lesser the better:

Always opt for trading in minor volumes. This will help you win in the long run. Planning your profits, in the long run, is one of the biggest reason for amateur traders to double their investment accounts. Plan to begin slowly as it lets you get the hang of a particular currency/ trade. Once you are comfortable with a certain market/ currency, you can increase your investments and rake in more profits.

It’s not important that you make a large sum of money from every transaction in the beginning, but it is important to that you learn to make money from Forex trades.

  1. Set a stop-loss before entering the market:

A stop-loss is a price point set by a trader, at which the stock/ equity/ security gets sold in order to prevent losses. A trader may have bought a security at a certain price, but if the price of the security falls steeply, the system sells it at a price set by the trader in order to prevent losses. This is a system put in place to prevent traders from extraordinary losses.

Ex: A trader may buy a security at Rs 100 and sets the stop-loss price of Rs 75. In case the price reduces and touches Rs 75, the security is sold automatically by the system/ broker. In case a stop loss price is not set, the trader has to personally sell the security. In some cases, the trader is able to sell it after quite sometime, .i.e. possibly at price lower than what had been decided.

Conclusion:

The Forex market is one of the most lucrative in the world and investors need to keep learning to stay on top of this game. You must always stay updated about the new trends and instruments that the stock exchanges offer.

BSE Institute offers some of the best short-term online investment training courses on its online platform, BSE Varsity. For all investors, traders and students who wish to learn about Forex Trading, BSE Varsity offers a great short term Course on Forex Trading, which can help you start investing and earning fast.

Start learning today for a better future!!

 

All about Data Scientists!!

Posted on April 15, 2019Categories Global finance   Leave a comment on All about Data Scientists!!

“Information is the oil of the 21st Century”

With increased internet connectivity – all thanks to the availability of high speed 4G and 5G networks, people are spending almost their entire day in close proximity of one smart device or the other. The places people go to, the routes they take, the things they do along the way, etc. Data helps businesses understand what people do, why do they do them and how do they profit from this behaviour.

By understanding a consumer well, it’s easy to tailor a product according to his needs, which makes it easier to sell products to him/ her and a wide population that’s just like it. This is the end goal of data mining. Using data to understand consumers and predicting their behaviour in the future.

It makes data analysts one of the most sought after and well paid professionals. With an average base salary of $110,000/ annum and a job satisfaction score of 4.4 out of 5, it’s no wonder that Data Scientists get the number one spot on the best jobs list. Research by IBM shows that the demand for data analysts and scientists will increase by almost 30% in 2020.

A data scientist is defined as a professional who is employed to analyze and explain complex company data like sales, ad spends and revenue figures from various websites, reports etc. It helps the management take crucial business decisions. It is an interdisciplinary field that combines computer science, statistics, Machine learning, and business; which allows the management to plan the future course of the company.

With specialized skill sets, data scientists are often said to be the secret weapons of an enterprise. They conduct a SWOT analysis and find solutions for the business questions posed. Being a vital cog in a company’s structure makes a data scientist’s job among the highest paying ones of 2018.

Average salary structure:

The average salary range of an experienced data scientist ranges from Rs. 80 lakhs to over Rs. 1 crore a year. Different countries have different requirements, thus making the demand and compensation for data science executives vary wildly across the world. We share the details of some geographies with a lot of demand for data scientists

  • USA

USA ranks 1st globally, in their demand for data scientists who make an average of US $120,00 a year. The demand is mostly in the fields of IT, e-commerce, retail, professional services and the financial sector which make up over 60- 65 % of the total demand. USA is also slated to provide more opportunities in data science, with it having upto 2 million openings by 2020.

  • UK

British data scientists make over $66k per annum. However, the UK has the record of having most qualified data scientists with over 30% having a doctoral degree. The UK is an important market as it’s the gateway to the EU. Hence , it must be looked at from the perspective of the entire EU and not just the UK – thus making any experience gained while working here, invaluable.

  • India

Indian data scientists make an average of just Rs.9.5 lakhs per annum and are the highest paid data scientist group in the world in terms of purchasing power parity. This is commendable as more than 50% data scientists have ony a Bachelor’s degree. With the Indian Economy looking up, recruitment is set to ramp up at a rapid pace.

  • Australia

Australia ranks 2nd in terms of data scientist salaries in the world. The average salary of a data scientist in Australia goes up to $110,000 a year. These salaries are growing rapidly as 74% of professionals noted an increase of more than 6% in fresher salaries over the past 3 years.

Conclusion:

Having the skills needed to be a data scientist are very very important, not just for those who have to work in the industry, but also for other professionals who need to use data. It is infact a critical requirement for anyone hoping to vault into the senior management. Hence, it’s advisable to have a decent working knowledge of the languages of Python, R and SQL.

BSE Institute’s GFMP Edge Data Science program is an intensive course which has been exclusively designed by senior industry professionals to help you learn the various programming languages and softwares used in data science, in just 4 months.

 

Mutual Funds or Stocks?

Posted on April 8, 2019Categories Short term programmes   Leave a comment on Mutual Funds or Stocks?

If you judge a fish for it’s ability to climb a tree, then yes, that fish is STUPID!!

– Albert Einstein

This is applicable for many things which we do daily. Each individual, business or object has a unique purpose and expecting it to be an all rounder is not a wise expectation.

Investing in mutual funds has always been safe for many well informed investors in India. Due to the daily guidance which an investment/ fund manager gets from his dedicated team of analysts, it is a little difficult for him/ her to go wrong.

However stocks are considered to be very complicated, as it is difficult for retail investors to understand how an individual company operates. If invested with proper knowledge and information, stocks can offer extraordinary returns in a small amount of time.

Can Mutual Funds do the same?

The raison d’etre for a mutual fund is to average out the risk for an investor by investing in a basket of securities. “Mutual funds are designed to give an average of the performance of the stocks held in that portfolio. If a mutual fund scheme has 20 stocks, the scheme’s return will neither be that of the worst stock, nor that of the best stock. This returns obtained will be an average of the entire portfolio.

Only with a proper knowledge to identify the best stocks which are poised to generate great returns, should one should risk investing in stocks. If you cannot do that, always go via mutual funds. Most of the people who invest have a full day job and do not have the time and knowledge of picking the best stocks. This is where the role of a mutual fund and a well-educated fund manager comes into the picture.

With the correct formula, knowledge and understanding, an investor can easily understand the amount to be invested in various funds or stocks. It also lets him understand in advance, the amount he/ she will make at the end. This works beautifully as long as the interest rate is fixed. Like in case of FDs, loans, but this does not fit when we go beyond the well-defined aspects of financial markets.

Here are some common behavioral mistakes committed by most investors:

  • People never admit their losses: This is the main problem in the market. People never understand their losses. They become revengeful and try to recover their losses from the same investment by investing more in it. This strategy mostly proves to be bad if it is purely out of ego without understanding the consequences.
  • Loss aversion: This is also like the previous trap. Here, the investors do not feel they have made a loss until they sell that investment. Investors might illogically hope that the price will come back to him at the original price. In that wait, the investor does not sell the bad investment.
  • Waiting for the same price you have seen in the past: Assume an investor bought a stock at Rs 1000. Current price is at Rs 1600 but because the investor has seen the stock touch Rs 2,000 in the past he/she will not sell it and book profits. Even if he/she needs the money in urgency.
  • Not sticking to your plans and decisions: Another common trap is when an investor is holding a particular asset and tries to overvalue it. Even if he/she believes the value of the same asset should be much lower. Because of this, many times, investors are unable to stick to their decision and plans to get in and out of the particular investment.
  • Recency effect: Investors are mostly driven by recent events. For example, if a stock is going up, they believe the stock will always keep on moving up and continue to generate similar returns in the future as well. Investors either become too optimistic or too pessimistic. They always tend to forget the long term impact here.

For any goal, a balanced portfolio is a must. It is the best way to avoid risk and earn better returns. It ensures that you don’t abandon or over-invest in any asset class or stay under invested in one.

If you are just a beginner, you can start with the low-cost large capital fund which is also called a balanced fund. Once you have done so, you would be able to save up money on one side to buy your next fund. Thereby continue managing your portfolio. So for investing you will definitely need to have proper knowledge about the various funds available in the market.

BSE Institute, one of the oldest financial institutes of the country, offers many short term online courses on its online learning platform – BSE Varsity. It provides online short-term courses for students and working industry professionals. A short-term course on Building wealth with Mutual Funds can be an ideal program for you to increase knowledge about Mutual Funds.

 

Peace of mind with Mindtree!

Posted on April 1, 2019Categories Executive Courses   Leave a comment on Peace of mind with Mindtree!

“Never give in, except to convictions of honour and good sense”

– Sir Winston Churchill

Most people thought that the takeover of Essar Steel by Lakshmi Niwas Mittal would be the business story of the year 2018-19, but we all were wrong! Another interesting story has taken its place and it promises to be as juicy and exciting like the Essar Steel saga.

Larsen and Toubro is trying to acquire a leading Bengaluru based IT giant, Mindtree. With revenues just shy of a $1 billion and a stock that has doubled in the last 2 years – it is a great company for investors and other large IT behemoths.

Mr. V.G.Siddhartha, the founder of Cafe Coffee Day was the seed investor in Mindtree and till recently owned almost 21% in the company. He was believed to be looking to exit Mindtree in order to pursue greener pastures – a thought which he shared with the current management and the founders of Mindtree. He offered the founders to buy his stake in the company – an offer which they rejected.

Siddhartha wanted to offload his shares to pare down his debt from other business investments. The company founders cumulatively own just 13% of Mindtree. He had offered the founders a way to maintain their control at Mindtree, as with his stake, they would own a strong 33% of the company.

As they did not seem keen to take up this offer, he took his offer elsewhere – an interested Larsen and Toubro, which already help a stake in Mindtree via the L&T Mutual Fund. L&T made an offer to Siddhartha and has purchased his entire stake in Mindtree. They now plan to acquire a total of 66% of Mindtree.

The founders and the many Mutual Fund houses are opposed to the hostile takeover of the company as they are not sure what will be the future of the company under L&T. Also, Mindtree as a company is quite different in terms of the clients, technology, workforce and the work culture that it has. This suggests that the supposed plan to merge Mindtree with L&T Infotech in future may not be financially sound idea.

However, with L&T owning 21%, it is now difficult for the company founders to protect their position at the company.

This is a great example of risk anticipation and mitigation. The Mindtree management did not anticipate their biggest shareholder selling his entire stake to one strategic investor, that to a competitor interested in taking buying them out.

L&T had tried hard to acquire the scam hit Satyam Computer Services company in 2009, but it missed it by a whisker, when Mahindra and Mahindra managed to scoop it at the last moment. When asked if this acquisition is right for L&T, Mr. A.M.Naik, Chairman of L&T said that “This acquisition fits into our larger plan”.

They still had a chance to buy out Siddhartha, but they decided against it. This was again a failure to anticipate the risks involved.

We read about daily news reports where the founders are fighting to maintain control at Mindtree. They are trying many many things to maintain control at Mindtree, which is again quite interesting to see.

The board of directors is planning a share buyback and if that doesn’t work, they plan to have Private Equity investors buy enough shares to ensure that the control stays with the current management.

Elon Musk is well known for his aversion to diluting his equity in a company to a position where he might lose control and be forced to exit it. This is a risk management strategy which many company founders and investors use to ensure they can run the show like they wish to. A critical aspect which which seems to be overlooked by the Mindtree founders.

Learn multiple risk management strategies to avoid and mitigate risks with BSE Institute Limited’s executive program on Risk Management. This program is designed specially for senior executives looking to get a profound understanding of corporate risk management strategies.

PS:- V.G.Siddhartha made a profit of Rs 2,858 crores from his stake sale in Mindtree – talk about peace of mind, from Mindtree!