Family Money: The US - A Bubble Set To Burst?

Many of my clients and readers have voiced anxious mixed feelings about the state of the US economy.

Some believe it will continue its upward trend with just a few bumps along the way; others feel it is overdue for a major correction.

Part of the problem nowadays is that with the advent of widespread instant news via TV, far more people pay attention to what’s happening in stock markets than even just 10 years ago.

And far more people bring their perceptions - or those of the news commentator they watched last night - to their investment decisions. And tend to make these with far less deliberation than they used to, based more on what they think is true than what they know is true.

The September dip

Considering that back last September, investors were very concerned about the outlook for US corporate profitability, and commentators at the time were once again predicting a meltdown of the world’s economy, one might then be surprised at the strength of the US equity market in the last few weeks before Christmas. (Although if you read this column at the time you wouldn’t be.)

What then brought on the September "panic" (apart from the voices of doom & gloom that get paraded out with monotonous regularity on a certain global TV news network)?

And what made it just as quickly evaporate with a new wave of buying? Were there in fact real reasons for concern? And if so, are those concerns still there, lurking just below the horizon of investors’ perceptions?

The fundamental causes of the September sell-off were, firstly, an alarming acceleration of the problems in emerging markets as the Asian contagion had spread to Russia and looked likely to threaten Brazil.

One of the primary themes in the US market was the huge strides American multinationals had made in expanding their presence overseas, particularly in the developing world, and one of the largest regions in terms of total overseas profits for S&P 500 companies is Latin America.

If Brazil had been forced to devalue, this would have resulted in a deep recession in the region, worse perhaps than the Mexico crisis a few years back. The US market would then have entered a further "corrective phase" (as economists like to put it - sounds so much less threatening than "major drop").

As it was, Brazil pulled through; but the risk of a Brazilian devaluation pushed the US market down to very oversold levels, largely as a result of investor "negative sentiment" (as economists prefer to call what laymen call "fear"), again exacerbated by "expert" commentary on that TV news network.

(Controversy and disaster - real, perceived or potential - always attracts more viewers than bland platitudes, and it’s the ratings that attract advertisers, which produce the revenues, which... well, you know the rest.)

Equating risk

There is a second, more sinister trend, and that is investors’ appetite for risk.

As a result of a long period of expansion in the US economy (which it is worth noting started way back in 1991), investors have grown used to stable profits’ growth from companies.

This means that they expect higher and higher prices for equities, as they perceive greater certainty of the up-trend continuing.

In addition, US consumers have shifted larger proportions of their assets into the equity market as a result of this perceived expectation of more certain returns.

In investment theory, this is called a lowering of the equity risk premium, or ERP.

In other words, as investors become used to higher returns from equities, and imagine this will continue, they regard them as less "risky" than they used to.

Another way of looking at it is to say that perceived certainty tends to breed complacency.

Academics argue about what the level of the equity risk should be, but mathematical models have not advanced enough to measure the psychological behaviour of investors, which is important in the assessment of this mysterious variable.

When investment managers measure the potential returns from a stock, whether they like it or not, they are making an assumption about the equity risk premium.

Unfortunately, the factor which affects the company valuation the most is - guess what? - the equity risk premium. And the assessed value of the company is very sensitive to small changes in the ERP.

If investors perceive it to be good value, they will buy it - regardless, it seems, whether the fundamental value is there to support the price being asked.

Conversely, even if the economy is sound, the company stable, and all is sweetness & light, a change in perception in the mind of investors can cause a panic sell-off, which can snowball and create an avalanche sweeping through the whole economy.

(Commentators in the financial press usually refer to this phenomenon as "the herd instinct", which traditionally referred to sheep, and lemmings...)

This, basically, is what ERP is all about. And although it’s an immeasurable factor, it’s clearly a very important one.

ERP & the US

If we cannot assess what is the value of the equity risk premium, how then can we determine the direction or likely future returns from US stocks?

The annual return achieved by the US equity market, on average over its history, is 14%.

However, its volatility is quite high, which means that good years tend to be very good (20%+), and bad years tend to be very bad (steep declines of more than 20%).

And because of ERP, investors change their perceptions very rapidly, and often make rash decisions on when to buy in or when to sell out, resulting in few investors achieving this average return of 14%.

Thus, determining the direction of the trend in equity risk premium may be more important than equity’s actual value. (Remember, small changes make a big difference to equity valuations.)

While no-one is quite sure exactly what determines the ERP, one could argue that the level of interest rates and the profitability of companies are both very important.

Continued falling inflation and a general paranoia about the global financial system are both putting downward pressure on the level of international interest rates.

The US Federal Reserve has shown the way by cutting official interest rates aggressively in recent months, which has provided additional liquidity for the stock market.

As a result, the perception of the investing public has become: "Why invest money in low yielding deposits when you can get higher returns from equities?" This sentiment was of course the objective, and has applied just as much here in Thailand as the US (and elsewhere). It largely explains the current strength in the US equity market. (And the renewed desire of many investors here to buy Thai stocks, despite the general trend.)

The global effect

But there is another fundamental factor working against US stocks.

The profitability of US companies is at record highs and several global events question the sustainability of this achievement.

The effect of Asia and the other emerging markets on American companies led already to a large correction on Wall Street last year.

The chances of a collapse in world economic growth have been significantly reduced by the action taken by the IMF to shore up emerging economies, not just in Asia in 1997 but in several other areas in 1998. These areas will undoubtedly have an impact both on the US and the rest of the world as growth in these areas is expected to slow dramatically this year.

While this slowdown has now largely been discounted in emerging market stock markets (i.e., they’ve already dropped by significant amounts), this is not the case in the US.

A slowdown in demand for American exports will in turn affect American companies. Similarly, a slowdown in worldwide consumption or demand for goods made locally by American multinationals will affect overall profitability of these giant firms, in turn affecting US investor confidence and their perceptions about ERP, which will impact on stock prices.

A huge engine

Secondly, it is important to understand how important the US stock market is in determining the direction of the economy, both of the US and indeed of the rest of the world.

One shouldn’t forget that the US stock market constitutes over 44% of the world’s total wealth in equities, and dwarfs the rest. Indeed, the capitalisation of the US stock market alone just about equals the total of the next 9 largest economies. (Which also indicates how relatively unimportant the rest of the world’s stock markets are by comparison - except when it comes to investor perception and TV commentary.)

Inside the US, the service sector of the economy accounts for over three-quarters of total output. Thus, the US consumer is the principal driver of overall economic growth.

The US domestic public has over half its net wealth invested in the stock market; and high-net-worth individuals have much of their significant wealth locked into company option schemes.

Thus, once the US stock market starts to fall this will quickly lead to falling consumer confidence and deterioration in economic conditions inside America.

This will lead to serious risks for corporate profitability and upward pressure on the equity risk premium - i.e., loss of investor confidence, and a sentiment-driven sell-off.

And so?

If you’ve read this far and followed the rationale of what I believe are the key market drivers for the US in 1999, I can now (at last) venture my opinion for what could happen in 1999.

The first prediction which clearly arises from the above is that the volatility displayed by the US stock market in the second half of last year is here to stay. There are forces that will pull the market in both directions.

On the negative side, investors will develop a lower appetite for risk caused by worries about the prospects for corporate profits. The positive aspect for stocks will be falling interest rates as the Federal Reserve continues to respond to worries about the outlook for global growth and financial markets in general.

As for returns during the coming year, I think US equities could still return a profit in the first part of the year as interest rates continue to fall and corporate profits come in okay. Not wonderful, not perhaps as high as were hoped for, just okay.

Later on in the year, I think corporate returns will falter and be disappointing. And although US investors will then be looking not at a global meltdown, but a global slowdown, they will lose much of the euphoria they’ve acquired during the very long ride up the hill over the past 7 years.

Given how the "instant" TV commentators will undoubtedly react, and given the resulting sharp reversal of ERP as it rises from abnormally low (or you could say bubble) levels back to reality, the result will be a sharp fall in stock prices - probably worse than we experienced in September last year.

No-one will be able to explain this movement in the US stock market because on the surface - or to put it more accurately, fundamentally - nothing will be that much different from now.

It is just that the critical fulcrum point will be reached beyond which investors will change their perception about the world we live in.

But that’s what makes life so interesting for people in my profession...

If you have any comments or queries on this article, or about other topics concerning investment matters, write to Leslie Wright, c/o Family Money, Pattaya Mail, or fax him directly on (038) 232522 or e-mail him at [email protected]. Further details and back articles can be accessed on his firm’s website on www.westminsterthailand.com.

Leslie Wright is Managing Director of Westminster Portfolio Services (Thailand) Ltd., a firm of independent financial advisors providing advice to expatriate residents of the Eastern Seaboard on personal financial planning and international investments.

Successfully Yours: Amorn Amornkul

The first impression of meeting the General Manager of Pattaya’s Royal Garden Plaza, Khun Amorn Amornkul is a handsome, friendly, and surprisingly young Thai man with a slight hint of an American accent. Talking with him reveals different layers to his personality, a sense of humour, an appreciation of classical music and art, a team sports player and a movie enthusiast.

Amorn Amornkul.

After his tertiary education at Kasetsart University in Bangkok, Amorn went to Washington D.C. where in ’94 he completed his M.A. in Business Administration. He chose marketing as his major, and his career, because, "I love to work with people."

Amorn feels fortunate that he was also able to work part time in Washington’s famous Thai restaurant, Busara. "I started off as a waiter and finished as assistant manager. It was a great training experience mixing with many different people. I learned a lot."

He returned to his family home in Bangkok two years ago and spent five months looking for a job. Though with typical Thai good luck, he chanced on the position with Royal Garden Plaza in Bangkok at the right time. "The first time I stepped in there I accidentally started talking to the Group President. The position had not even been advertised but he was looking for a Marketing Manager, saw my resume and ended up hiring me." Amorn started with both the Bangkok and Pattaya Royal Garden Plazas and has now been promoted to Pattaya as Plaza Manager.

Although Amorn works long hours, from 9 a.m. to 11 a.m. six days a week and missing the chance to play team sport because of this, he loves Pattaya and his job. "I was looking for a great opportunity to advance my career and here is my place, both with the company and in Pattaya. I want to be able to add value to the company to make it more successful."

"One of my other goals is to return something back to the community. We are organizing a Fespic Games promotion where 15 - 20% of the revenue will be given to local charity. We are already changing the image of the third floor in to a food court with a family theme."

"I brought back a good concept from the states: ‘I am not a manager, I’m a team leader.’ I cannot complete any job by myself. Although my staff are older than I am, we all have an equal job on the team. Everyone respects each other, we all work together like family."

Family means a lot to Amorn. One of his role models is his now 84-year-old grandfather. This man fought the communists and was invited to deliver a speech in the Pentagon in the USA. Amorn positively glows when talking about him.

Consequently, our Plaza Manager spends what little spare time off he has visiting his parents in Bangkok. His other spare time pursuits include reading, listening to classical music, from Mozart to Vivaldi to Jazz, and viewing one of his 200 movies on laser disc in his own mini theatre.

Amorn’s personal plans for the future are also family orientated. "In the long term I am looking for a good family. Not just a wife but a warm loving family with good kids. That is for the future when I have more experience and have something to teach them." This is perhaps the time to get out the invitation book, ladies!

Success to Amorn is "setting attainable goals and reaching them." The most important values are "Honesty to everyone, all the team players and the staff and the boss. A sense of humour is important too. No matter how bad things can look, I can always tell a joke and laugh. It is easy to smile because I like everyone, no matter what their position may be."

And the reverse also holds true. It is very easy to like him.

Snap Shots: Sharp as a tack!

One of the most important qualities you look for in any print is just how sharp it is. Unless you are doing soft romantic images, every shot needs to be sharply in focus.

I suppose I should say what I consider to be a correctly focussed, sharp image. It is when you look at a picture of someone taken waist up and you can see the eye lashes, or clearly defined individual teeth, even at that distance. No "blurring" and strong sharp edges everywhere.

“A Vice-like grip”

However, there are lots of ways that you will end up with "soft" pictures. Let’s look at some of these and what you can do about it.

The first and most obvious is "Camera Shake". Taking photographs needs two hands on the camera. I don’t care how small, light, easy, autofocus or other hocus-pokery is inbuilt into your camera - you need two hands to keep it still enough to get sharp images. It stands to reason that if your camera is moving you will not get a sharp shot. If needs be, lean on a post, or rest the elbows on a table just to ensure the camera is held steady.

The next most obvious cause is too slow a shutter speed, relative to the lens being used. It is difficult enough to hold a camera steady at 1/60th of a second with a standard lens. With a telephoto you need an even faster shutter speed to stop the exaggeration of shake caused by the "enlarging" nature of the lens. In general, the shutter speed should be the reciprocal of the length of the lens. Now, while that sounds difficult, it just means that if the lens is 250 mm then the shutter speed needs to be 1/250th or faster. Likewise if you have a 500 mm lens in the bag then you must use 1/500th of a second if you are hand holding the camera.

The next reason for fuzzy prints is incorrect focussing technique by you, the photographer. If yours is a split image viewfinder, then make sure you do it correctly and exactly for every shot. If needs be, turn the camera sideways to get a sharp line to focus on before you return to the right way up.

If you have an autofocus camera you haven’t escaped, you can still get out of focus shots. You MUST have the subject in the centre of the viewfinder when you take up the focus, otherwise the camera can have the background in focus instead of the subject. This is particularly important if shooting couples.

There is yet another way you can get back a book of blurry pictures - the photo-processing outlet does not focus its printing machine correctly. This was brought home to me the other day when I got back this dreadful set of prints. I had been having some camera problems and I was almost ready to put it down to that when I decided to have a look at the negatives. Perfect!

Taking the negatives to another outlet returned me a set of crisply sharp photographs. I will be returning there and for those of you who are not satisfied with your current photo-processing place, I suggest you try the Kodak Royal Express, Royal Garden Plaza Beach Road shop (almost next to McDonalds). Friendly staff and good final products.

So there you have it. Hold the camera in two hands, brace yourself or lean on an immovable object, select a fast enough shutter speed and check your negatives! The secrets of sharp pictures is yours!

Modern Medicine: Middle Ear Infections

by Dr Iain Corness

Children are amazing little people. They come up with all sorts of cute symptoms, which initially you would imagine point towards one bodily system, but in actual fact belong to something apparently quite unrelated.

This absolute "truism" was brought back to me a couple of weeks ago when my 7 year old nephew came to stay. This sick kid arrives in Pattaya, having been unable to eat for two days and intermittently vomiting for the past 24 hours. He was flushed, and a hand on the forehead was enough to show he was running a fever.

His mother was worried that son and heir was going to end up having his appendix removed in this foreign land. A strange pagan country where they eat grasshoppers and beetles as an after dinner delicacy! (Personally I prefer chocolate frogs!)

She was even more worried when I approached him with an Auriscope. That’s one of those instruments for looking in ears.

Sure enough, there was the flaming red ear drum, the herald sign of Otitis Media, otherwise known as "Middle Ear Infection".

Going straight to the cause was not a case of brilliant diagnosis (though the plaudits of the crowd are always accepted) but purely the result of many years of experience. In any young adult with those symptoms, one must always suspect and exclude the middle ear problems.

Why do they vomit with it? Probably for the same reason that people get sea sick - disruption of the normal fluid workings of the inner ear. Whatever, it is always worth asking your vomiting, febrile child if he or she "hurts" anywhere. If they point to or pull at the ear then you are most likely on the right track.

Remember that the middle ear infection does not necessarily produce an ear discharge as an initial symptom. For that to happen, it means the pus and goo trapped in the middle ear has ruptured through the ear drum. What we call a perforation, generally shortened to "perf".

The treatment is a swiftly administered appropriate anti-biotic. If the ear is discharging, then a culture can be taken and the exactly appropriate antibiotic chosen. If not, then most doctors fly by the seat of their pants and prescribe a Penicillin derivative or one of the newer Cefaclor type drugs.

Some paracetamol to ease any pain and lower the temperature completes the package and expect junior to be better in a couple of days.

If your child gets recurrent middle ear infections, then you really should get this investigated - including an Audiogram (hearing test) to ensure there is no lasting damage.

So just remember, Mums of the world, vomiting may not necessarily mean an intra-abdominal problem. It could all be in the ears!

Dear Hillary,

It’s very disturbing. Why don’t Thai people sleep at night? They come home around 2 a.m. and then have parties and fights. I wonder how they have any energy to work at all. I don’t know how to speak Thai, so I don’t know how to ask them to not make so much noise. They would probably think I was being rude. This is very upsetting, as I have to get up and go to work very early in the morning.

Sleepless

Dear Sleepless,

Actually, rural Thai people go to bed at about 8 p.m. Everyone must work, so people get up at about 4 a.m. Pattaya is a resort town and most of the people who live around you are probably service workers who have night jobs. The only way to get out of this situation is accept it or move. Remember, people are not going to change for you. You must adjust to them or find some other mode of life.

The computer doctor

by Richard Bunch

It seems timely to say a few words about computer viruses, since this week our workshops have seen some very unpleasant proliferation’s.

But first, what is a computer virus? It is a program that searches out other programs and "infects" them by embedding a copy of itself in them, so that they become Trojan Horses. When these programs are executed, the embedded virus is executed too, thus propagating the "infection". This process normally happens invisibly to the user.

A virus cannot infect other computers without assistance. It is propagated by vectors such as humans, e.g. trading programs with their friends or downloading programs from dubious Internet sites. The virus may do nothing but propagate itself and then allow the infected program to run normally. Usually, however, after propagating silently for a while, it starts doing things like writing ‘humorous’ messages on the screen or causing strange behaviour from programs. Many nasty viruses, written by particularly antisocial characters, do irreversible damage, like deleting all the user’s files; some even render hardware useless.

The first virus capable of damaging computer hardware was the CIH virus, which was first discovered in Taiwan. Besides infecting Windows 95, 98, and NT portable executable files, CIH contains a routine that, when triggered, will overwrite the code in the infected PCs system BIOS. The BIOS chip is located on the PC’s motherboard and is loaded on boot-up to control the keyboard, disk drives, and other system functions.

According to Jonathan Wheat of the International Computer Security Association, the result is a major inconvenience. The CIH variant 1.4 triggers on the 26th of each month.

Fortunately, many motherboards have write-protection switches that protect them from the virus. And since the virus only travels in infected executable files, if you don’t share applications with other users, you should be safe. Like many damaging viruses, CIH should be self-limiting, since it tends to destroy the host that it infects, preventing further infection. It appears that CIH is becoming quite a common phenomenon in Pattaya at the moment, so be on your guard.

Last week, some readers received spammed e-mail with the Trojan Horse attachment picture.exe. This program captures personal information from hard drives and then sends it to an e-mail address in China. When picture.exe is opened, it installs a file called manager.exe onto a user’s PC. Manager.exe then unleashes note.exe, which hooks onto a Windows subdirectory, looks for information on different drives and encrypts it. The next time the PC runs, note.exe creates a list of URLs and manage.exe runs, attempting to send the information to the Chinese e-mail address. If readers receive this file, it is recommended that they delete it. If picture.exe has run, use an anti-virus program to remedy the problem.

The effects of a computer virus can at the very least be annoying but are more likely to be expensive in terms of the loss of computer availability and/or data coupled with the cost of eradication of the virus itself. With more than 25,000 virus’ in circulation it is important to have a quality anti-virus software installed on PC’s and to keep the virus lists regularly updated. Remember, new virus are discovered frequently

Please continue to let me have your views on the local Internet Service Providers.

Send your questions or comments to the Pattaya Mail at 370/7-8 Pattaya Second Road, Pattaya City, 20260 or Fax to 038 427 596 or E-mail to [email protected].

Richard Bunch is Managing Director of Action Computer Technologies, the One Stop Shop for all your computer and Information Technology needs.

GRAPEVINE

Animal Crackers: Animal Behaviour

Can you make a cat conform?

I attended an interesting lecture recently on animal psychology by Liz Milintacupt-Taylor. She confirmed my suspicions that pet behaviour is a direct result of owner imprinting.

My initial theory, developed over years of observation and motherhood of both ankle-biting children and animals, is that OTHER PEOPLE’s pets and children’s neurotic behaviour is a measure of their handlers neuroticism. As a child I never had any problem with my pet birds whom I taught to speak and fly to my finger, or my cats all of whom came when I called and eventually even learned to lie stretched out in bed beside me with their heads on the pillow.

Prawn to be Wild (Simon Drew, Dartmouth)

Later my own children and animals would generally comply if only after a warning. I discovered that ‘time-out’ in a darkened room discouraged both screaming birds and screaming children, a spray of water was very effective prevention for cats climbing the curtains and a whack with a rolled up newspaper stopped dogs chewing furniture.

However, the behaviour problems belonging to OTHER PEOPLE theory was revised with time, experience and the onset of progeny’s adolescence. You discover most teenage children do develop delinquency, hormonal dogs tend to become over-protective and antisocial and love struck cats yowl and spray, all in spite of your best efforts. It is then you secretly subscribe to the theory of genetics, and that some critters are just born plain mean anyway.

"Not so," says Liz. "Animal Behaviour is all a matter of imprinting and constant positive and negative reinforcement, or the Yum and Yuck scale," the term she prefers rather than ‘Reward and Punishment’. "We subscribe human emotions and intelligence to animals that they just don’t have. Response to animal behaviour must be immediate and instant to be effective. Although highly observant, their behaviour is only a direct conditioned response. If they get a positive Yum result then they will repeat that action while a negative or Yuck result works as discouragement. Timing is all, it is useless to punish an animal for dragging chicken bones out of the garbage or eating the goldfish if you did not catch it in the act and intervene. It is too late after the event, they have already had their reward, are conditioned to repeat the behaviour and will just not understand why you are angry."

Thank you Liz, I have begun to realize that instead of cuddles and pats at the good times, a rolled up newspaper and a water sprayer may be a more effective deterrent for antisocial animal behaviour at the bad times!

Auto Mania: Formula 1 set to roar in ’99

By Dr. Iain Corness

The Provisional Formula 1 Calendar for 1999 has been released. There are a few question marks over the venues, with some such as Imola in doubt till Italian law gets clarified (so we should see a race there in 2034!).

The Aussies will see the first race for the new British American Racing (BAR) team in cars designed by Australian Malcolm Oastler. Mind you, the usual shenanigans have started with BAR in legal wrangles as to whether they can run their two cars in different liveries. As if anyone really cares! However, I’m sure it will cost countless millions of good British pounds to get the nod from the powers that be. I think I’ll make my New Year’s Resolution to eliminate a lawyer a day!

Here is the calendar for the forthcoming year, so mark the dates off on the wall.

March 7: Australia (Melbourne)
March 21: Argentina (Buenos Aires)
April 11: Brazil (Sao Paulo)
May 2: San Marino (Imola)
May 16: Monaco (Monte Carlo)
May 30: Spain (Barcelona)
June 13: Canada (Montreal)
June 27: France (Magny-Cours)
July 11: Great Britain (Silverstone)
July 25: Austria (Spielberg)
August 1: Germany (Hockenheim)
August 15: Hungary (Budapest)
August 29: Belgium (Spa-Francorchamps)
September 12: Italy (Monza)
September 26: Europe (Nurburgring)
October 17: Malaysia (Kuala Lumpur)
October 31: Japan (Suzuka)
Reserve venue: Argentina (Buenos Aires)

1999 F1 Jockeys

The Provisional Drivers’ line-up has also been published with very little surprises.

Frank Williams and Eddie Jordan swapped Heinz-Harald Frentzen and Ralf Schumacher, to make it the second time Eddie’s lost a Schumacher. Eddie has retained Damon Hill and it will be interesting to see how that pair get along.

Frank’s second driver is also new, with Italian Alessandro Zanardi coming across from a successful year in Indycars. Perhaps he is hoping to repeat the initial success he had with Jacques Villeneuve (now no longer sporting his "blondie" hairstyle).

Johnny Herbert managed to extricate himself from Sauber Petronas and has got back to the British fold with Stewart Racing to run alongside Rubens Barichello who only showed flashes of brilliance in ’98.

The new team of British American Racing with zillions of fag packet carcinogenic dollars behind it has the defected Villeneuve (whom I do not consider to have anything near the talent of his father) and Brazilian Ricardo Zonta up from the "other ranks".

Ferrari and McLaren have retained their strong pairings of Michael Schumacher/Eddie Irvine and Mika Hakkinen/David Coulthard. Eddie was really the surprise of 1998, becoming clear headed and hitting very few other cars (or drivers)! I expect the championship to be fought out between these two teams again this year.

Benetton have also retained their pair of Fisichella and Wurz, both of whom did not fare all that well in ’98. We’ll see if they can produce some fire this year.

Sauber Petronas will continue to make no impression with Alesi (on the dizzy downhill spiral of success) and Pedro Diniz, who mightn’t be a bad sort of driver but wouldn’t get a start if his pockets weren’t stuffed with Brazilian pesos or whatever.

Alain Prost still can’t get his nose in front with the Prost Peugeot and is persevering with Lucky Legs Panis and Jarno Trulli.

Who’s left? Who cares? Arrows with Mika Salo and his mate TBA and Minardi with a brace of TBA’s. Expect them down the end of any grid, anywhere, any time.

Inter Car

The observant ones amongst you will have noticed a European-look Used Car outlet has sprung up on Sukhumvit Road, next to Lotus. This is the second Inter Car business on Sukhumvit, the first, with a full Service Centre, being down at Jomtien.

To double in size in less than one year they have to be doing something right, so I paid them a visit to check them out and see just what it was they were doing. Turns out that the brains behind the outfit is Martin Moklin, a Swiss national auto technician, with the beauty being supplied by his partner Khun Som.

Martin feels that some of the reasons for the success of Inter Car is that he is very particular in the cars he buys to resell at the outlets. He will not buy from auctions, for example, because he does not get the opportunity to drive them beforehand. He personally test drives all vehicles offered for sale and is then willing to give a 60 day Service Guarantee on any car. This covers all labour charges if something fails during that two month warranty period.

Martin says that he runs the business like a European Car Sales yard, and adds that 90% of his customers are "farang" and his ability to speak most European languages helps with this.

Since he offers a full "One Stop Shop" service for his customers, from routine servicing, repairs, auto-electrics (always a black art in my book!), transmissions and even body repairs he also believes that this will keep the customers coming back.

However, after my visit I have to inform Martin that the reason for the success is in the beautiful melting brown eyes of K. Som. Who could resist her! I almost left with a new car myself (it was only the empty wallet I gave her that stymied the sale!).

Jokes aside, they do seem to be nice people and have a good range of cars available. If you are in the market for a secondhand car then it will be worthwhile checking them out. You have a more than fighting chance that the vehicle is a good one.

Autotrivia Quiz

Last week we asked who it was who pushed the Ford Mustang concept through the company until it became a reality. It was, of course Lee Iacocca, who later went to Chrysler to try and turn that company around. A very charismatic figure from the 60’s which were then still very entrepreneurial days of marketing motor cars. Unfortunately, today’s motoring decisions are most often taken by bean counters, rather than true motoring enthusiasts. More’s the pity. There is a great character in motor sport in America called Carroll Smith who said, "The function of a bean counter is to tell me how many beans I’ve got to spend. Not to tell me how to spend my beans." How true! How true!

Now a question for this week and a Formula 1 quickie. What name will the Stewart Ford Team be called in 2001? An animal of a question. Fax or email the Editorial office. First correct wins a FREE beer on me!

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