Family Money: Safe & Secure

By Leslie Wright

Many people who contact me for investment advice stipulate that they want “safe” investments.

Well, what is a safe investment?

By definition, “safe” means one that carries no risk - i.e., that cannot lose money. The only type of investment that meets this criterion in the short term is a bank deposit, with a sound bank in a well-regulated environment, and in your base currency.

A deposit in a currency other than your base currency carries a risk of exchange-rate fluctuations, which could lose you money in terms of your base currency. (Remember what happened to Asian currencies in 1997, and Sterling earlier this year.)

Similarly, bank deposits in regimes other than where a high degree of investor protection legislation is in place to guarantee your deposits are at risk of the bank folding and you losing your money - perhaps forever.

So even when considering bank deposits you are potentially exposing yourself to some element of risk.

Bonds are “safe” in the long term

If you are able to take a longer-term view, UK or US government bonds may be regarded as relatively “safe” investments, inasmuch as the issuing government guarantees to redeem the bond at maturity for its face value, and to pay a fixed amount of interest until that time.

However, that date may be 10, 15 or even 20 years off in the future, and few people want to have their capital tied up for that long. Also, prevailing bank interest rates may rise above bond yields in the meantime, making these instruments less enticing investments. (Which is why bonds are traded in the marketplace, for either higher or lower amounts than their face value, depending on the prevailing relative bank rate.)

The risk is that the government may default. This is highly unlikely in developed markets such as the USA, UK, or most European nations (with certain exceptions); but the risk of this happening is greater in less developed countries - hence the higher rates of interest offered on these less-stable countries’ bond issues.

‘Guaranteed’ investments

For capital investors who require absolute ‘safety’ combined with the potential for profit, some financial institutions have introduced relatively sophisticated investment funds that offer 100% capital guarantees.

The only trouble with these instruments is that one must take at least a medium-term view without touching any of the capital - typically for a minimum of five years.

Most investors are reluctant to leave a quite considerable amount of capital - typically at least $50,000 - tied up in limbo, with only a nebulous promise of potential returns on their investment at maturity.

Maybe they’ll make a handsome profit; maybe they’ll get back only their original capital with no growth at all. Depends on what the markets do in the meantime. Not terribly enticing, really...

There are also some shorter-term ‘guaranteed’ funds which permit accessibility to capital every three months and for lesser minimum investment thresholds: typically in the order of $10,000-$25,000. (But these generally require several weeks’ notice to redeem your units - so not exactly helpful in gauging market timing.)

Also, these low-risk funds’ performance over the past 18 months has not been encouraging - despite generally favourable movements in selected markets over that period.

Secured by law

What most investors really mean by “safe” is in fact what I call “secure”.

That is, that their investments are placed with internationally-recognised institutions located in well-regulated regimes where a high degree of investor protection legislation is in place.

In effect, that their investments are protected by law.

There aren’t too many of these places, and why those regimes that do have such laws in place are regarded as the ‘premier’ financial centres.

The best known are the three islands of Guernsey, Jersey and the Isle of Man, located off the coast of Britain. All three have stable independent governments, are strictly regulated by their own Financial Services Commissions, and have a very high degree of investor-protection legislation in place to guarantee investors’ assets in the unlikely event the investment institution should fold.

These rules and regulations are in some respects even stricter than those which apply onshore in the UK, which themselves are regarded as amongst the strictest in the world. They certainly provide investors with a much higher degree of security than is found in regimes with less strict laws and regulations.

These ‘premier’ offshore financial centres also practise a very strict code of non-disclosure and confidentiality - which is what the recent much-publicised fuss with the OECD is all about. The OECD wants all so-called tax-havens to disclose their dealings (and assumedly therefore their client lists), on the premise that this will eliminate tax-evasion and reveal “funny-money” derived from drugs and gambling.

Well, I know for a fact that the ‘premier’ financial centres in the Channel Islands and Isle of Man already have very strict anti-money laundering rules in place (I have to abide by them!), and I cynically suspect this latest move towards transparency is traceable back to the IRS up to their old tricks of chasing down errant citizens of the USA who have “forgotten” to report their offshore holdings, on which they have a tax liability even whilst living overseas.

(Because failing to file the required US tax return each year is only a misdemeanour - which carries a fine, albeit a potentially hefty one - while filing a false one is a felony, which would potentially carry a jail term in the US, as well as permitting the IRS to freeze or seize any of the felon’s assets they can lay their hands on.)

Newer offshore financial centres

In recent years a number of other less well-known places - Mauritius, Labuan, Vanuatu, to name just three - have set themselves up as “offshore financial centres”, with a view to inducing banks and other investment institutions to establish offices in these regimes, and entice the ever-increasing number of international investors to place their money in these locales.

The primary purpose of this move is to increase their hard-currency reserves which are not coming in from other activities such as exports or tourism.

Inevitably, the rules and regulations which apply in these newer offshore centres are more lenient than those applied in more strictly regulated regimes. Thus, less well-established institutions are permitted - indeed encouraged - to set themselves up in these locales. And with less stringent rules comes less security for investors.

If a financial services company sets itself up in a less regulated environment, it may well mean it wasn’t able to get a licence to operate in the more prestigious (but more strictly regulated) ones.

Such a firm may be smaller, have less paid-up capital, less assets to support its activities. In some cases its owners or directors may even have been banned from operating in more regulated environments because of dubious or illegal practices.

So when considering making any offshore investment, ensure you are dealing either with an internationally-recognised institution which is located in a well-regulated regime, or through a broker who deals only with such institutions.

Placing your hard-earned money with less secure firms in less well-regulated regimes because their offers are more enticing is simply taking on an increased element of risk and lowering your safety factor - perhaps unwisely.

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. If you have any comments or queries on this article, or about other topics concerning investment matters, contact Leslie directly by fax on (038) 232522 or e-mail [email protected]. Further details and back articles can be accessed on his firm’s website on www.westminsterthailand.com.

Editor’s note: Leslie sometimes receives e-mails to which he is unable to respond due to the sender’s automatic return address being incorrect. If you have sent him an e-mail to which you have not received a reply, this may be why. To ensure his prompt response to your enquiry, please include your complete return e-mail address, or a contact phone/fax number.

The Computer Doctor

by Richard Bunch

Continuing the Windows 2000 theme, this week I’ll answer a few more general questions that get posed.

Question: Is it necessary to defragment my NTFS drive.

Computer Doctor’s Answer: Many people are under the impression that NTFS partitions in Windows 2000 (Win2K) and Windows NT do not fragment, alas this is not so and they will fragment over time. The system does not write files in contiguous areas on the hard disk and the larger the volume size, the more fragmented your hard disk is likely to become. As a result, it takes longer for the operating system to access files and folders as it must perform extra disk reads to collect all the pieces before assembling the ‘jigsaw’. Even creating new files takes longer because the OS must locate free space scattered across the volume.

Disk defragmentation is the process of reassembling files and folders in one location on a volume. The process, which works only on local volumes, consolidates files and folders in one contiguous place. It results in improved disk access because it consolidates most - but not all - of the volume’s free space. The time it takes to defragment a volume depends on several factors, including the size of the volume, the amount of fragmentation, the number of files and folders, and the available system resources. In Win2K, you can defragment all three types of supported file systems: FAT, FAT 32, and NTFS.

Windows 2000 includes a disk defragmenter and you should aim to use this regularly, ideally at a time when you are not otherwise using your system. You need to be logged on as an Administrator to perform defragmentation then you can access the defragmenter from Start, Programs, Accessories, System Tools, Disk Defragmenter.

It is useful to analyse the volume first then the improvement can be seen graphically. The analysis report gives you several pieces of useful information, including volume size, cluster size, and the amount of free and used space. You can also see information on volume, file, pagefile, directory/folder, and Master File Table (MFT) fragmentation. A good indication of fragmentation is the average fragments per file, listed under the report’s file fragmentation section. The optimum number is 1.00. If your fragments per file are 1.10, then about 10 percent of your files exist in two pieces. A value of 1.20 means 20 percent, and so on. If the fragments per file is 2.0, your files average two fragments each; 3.0 means three fragments each, and so on. The analysis report also shows you which files didn’t defragment. You can print or save the analysis reports in a text file.

NTFS reserves a portion of free space on NTFS partitions for the MFT and partitions that contain many folders contribute to free space fragmentation. If the analysis report indicates that you need to defragment your volume, you can proceed with the defragmentation process. You cannot defragment certain system files, including the pagefile and the MFT, because they’re in use during normal Windows operations. One way to defragment a pagefile is to temporarily move it to a different volume. For example, to defragment the existing pagefile on your D: drive:

Run the Disk Defragmenter tool to defrag the D: drive.

Create a new pagefile on a different drive (e.g., the C: drive) and delete the one on the D: drive by setting its size to zero. Reboot your computer.

Recreate the pagefile on the D: drive and delete the one on the C: drive by setting its size to zero.

Reboot your computer one more time.

The system will create the new pagefile on the D: drive in a contiguous space, assuming you have enough contiguous disk space on the drive.

Next week, scheduling disk defragmentation.

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]. The views and comments expressed within this column are not necessarily those of the writer or Pattaya Mail Publishing.

Richard Bunch is Managing Director of Action Computer Technologies Co., Ltd. providing professional information technology and Internet services which includes; custom database and application development; website design, promotion and hosting; domain name registration; turnkey e-commerce solutions; computer and peripheral sales service and repairs, networks (LAN & WAN) and IT consulting. For further information, please e-mail [email protected] or telephone/fax 038 716 816 or see our website www.act.co.th

Successfully Yours: Jerry Johnson

By Mirin MacCarthy

Jerry Johnson, black, beautiful and proud of it, was born back in Tennessee USA forty-nine years ago. Jerry, who majored in psychology and sociology, spent much of his life as a youth worker. However, dealing with emotionally disturbed and drug addicted juveniles was a very stressful job so he took early retirement after open heart surgery in 1996. Now he spends six months of the year here in Jomtien and six months back in San Jose.

His father was an IBM quality assurance manager for 20 years. Jerry feels they had an easy life perhaps because it was a close knit Christian family of one brother and 3 sisters. “The kids were number one in my parents life; wherever they went there were always five little kids tagging along.”

The family moved to California when Jerry was 3 and took up bible studies. “From what little I remember or maybe I was told, Tennessee was O.K. but California was more inter-racially balanced. Everybody was the same no matter what colour - some were just as intelligent, some were just as stupid. That’s where I learned to get along with all different races.” By the time Jerry was in high school his father was a Deacon in the Baptist church.

When Jerry was just eleven years old he was already talking to youth groups for various churches. Somehow, by osmosis, church was his life. Far from being retiring and lazy Jerry was vice president of his class in his junior high school. Much involved in the theatre group and sports, Jerry won a scholarship to San Jose Baptist College. There he spent a year studying and acting in a famous drama trilogy called “The People Versus Christ” with which the group travelled all over Southern California. Jerry then returned to San Jose on a theatre scholarship and earned his B.A. with a double major in sociology and psychology.

With all that behind him, Jerry worked from 1972 to 1979 in Juvenile probation as a peace officer in Juvenile Hall, Santa Clara County. “In the seventies, the juvenile problem had changed, most of them were from broken homes and high on drugs. They came from all different backgrounds - some very rich and some very poor. I knew them personally and knew their pressure problems.

“We dealt with fifty kids at a time, with a staff of 2 or three. My job was to take them though routines and encourage the staff to treat them by guidelines, to keep a rapport and trust by being fair and reasonable. It was a very stressful job.”

Jerry then took a well earned break for four years. He moved to southern California and took a job as a security guard, made a few movies and had fun doing it. Jerry supplemented his income by working on call at a residential treatment centre for kids with emotional problems.

In 1989 he returned to Juvenile Hall as a senior counsellor and on call supervisor. The pressure was on again and the warning bells to slow down came in 1995 when he had coronary artery bypass surgery. 1996 brought his early retirement after the open heart surgery. “In that situation you are faced with your own immortality. Belief in God is a personal thing. Because He is a friend and very much part of my life I prayed, ‘What do I do now?’ Things happened, Thailand kept coming up. I kept hearing about it.”

Jerry continued, “I came here for the second time in 1996. I had to give up luxuries like a house and a car, but it appeals to the adventurous side of me who wants to help people and especially children. I’m an uncomplicated person. If I can help a few people then it will be worthwhile. I relate to children; if you want to know what a society is all about you talk to the kids, they will act it out or tell you, they are innocent and honest.” While here Jerry helps with the activities of the New Vision Christian Fellowship in Pattaya, delivering rice and clothes to 70 impoverished Thais from Surat Buri, who have built corrugated iron shelters here on a tiny block of land they rent for 400 baht a month.

Back in the States Jerry is an associate Minister in the Antioch Baptist Church, and in his six months at home he works as a counsellor with ARC, an Adolescent Residential Center for kids with emotional problems and spends the rest of the time with his family.

Jerry believes honesty and respect for yourself and others are the most important values in life. His advice to school leavers is: “Choose a career you enjoy doing. Hopefully a career where you can do something meaningful for someone else.” Jerry will consider his life as a success at the end of the day (and please note he says ‘When’ not ‘If’), “When I get to heaven and the Lord says, ‘Welcome, good and faithful servant, job well done’.”

To try to tempt a man like Jerry with money was a pointless exercise. I asked him straight, “What difference would it make to your life if I just gave you a million dollars?” The reply was predictable; “I want 3 million baht to build a centre for street kids with vocational training, laundry, mechanics, furniture shops. They would learn English in their own campus school with child care workers teaching morals that are universal.” Maybe one day it will happen, but if it does, Jerry Johnson will be ready.

by Mirin MacCarthy

by John D. Blyth

The Meyer locomotive as built had a number of snags, of which the most obvious was the space taken up by the driving gear of the rearmost power unit impinging on space needed for the lower part of the firebox, grate and ashpan. So there came the “Kitson Meyer”, which was somewhat longer, drawing out the space between the engine units, and allowing some much needed space. One writer suggests that it was Robert Stirling of The Anglo-Chilian Nitrate Railway, who first suggested the modification, and it was certainly worthwhile. The Kitson Meyer was a South American speciality, and some remarkable designs appeared. That shown is one of two supplied in 1935 for the Colombian National Railway - actually the last two built before the Kitson Company, despite all efforts of its leader, Lt. Col. Kitson Clark, went into liquidation. The parts were made by Kitson’s, but it was too late to assemble them at the Leeds workshop, and so before dispatch, partly at least dismantled, they were put together at the Newcastle works of Robert Stephenson & Co., and tested there.

Three cylinder, three truck Shay locomotive for the English Lumber Co.

E. F. Clark, grandson of Lt. Col. Kitson Clark, kindly supplied me with details of these two locomotives, highlighting the similarity in a surprising number of ways between these 1935 locomotives and the then brand-new B.R. Class 58 Diesel-Electrics, introduced just 50 years later. Length, width, height, weight, bogie wheelbase, tractive effort, show this very clearly; only the maximum speed of the diesel locomotive is substantially higher. The Kitson locomotives, as was essential in those days, had to be assembled at destination by less-than-skilled staff, and to go straight into service and work first time; this they did, and were trouble free until withdrawn in 1960. By contrast, the Class 58 Diesels never really got through their teething troubles, and at age 15 years (designed for a 35 year life), many of them have been set aside, in favour of the newly arrived Class 66 locomotives from the Canada works of General Motors. The latter were in many cases put under power on the dockside at Newport (Gwent), and did indeed work “straight out of the box.” A recent report shows that the 250 of these now in service are achieving an availability of around 99%.

British Rail had high hopes of offering the Class 58 locomotives for export, too, but their reputation in Britain was such that there would have been no takers. Mr. Clark suggests that they were far too sophisticated for the kind of work they had to undertake, passing over very bad track in colliery yards and steelworks sidings.

2-8-0+0-8-2 Kitson Meyer locomotive for the Columbian National Railways; one of the last two Kitson Meyers built, in 1935.

I have also a full side-view of the Colombian Kitson Meyer, and it reveals a remarkably long locomotive indeed.

Soon I shall report on the Garratt type of locomotive; had this not had clear superiority over even the Kitson Meyer, the latter might well have been used in more countries than was the case, and maybe even the old-established Kitson works and company might also have been saved.

To go over the Andes by rail entailed very steep gradients indeed, and when I come to write about rack railways I will come back to them. Not all were by Kitson, but certainly the most successful came from them.

Shay, Climax, and Heisler Locomotives

There were many types of articulated locomotives; I cannot mention them all, but I think these there are worth a look.

‘Climax’ 35 ton locomotive built in 1899; it bears the Climax firm’s name, and that of the customer is not known.

Ephraim Shay was a lumberman, in trouble with the small railway on his estates; in some desperation he designed and built a small crude locomotive, which worked, and a little later he patented it, disposing of the rights to the Lima Machine Works who developed the idea and thereafter built every subsequent Shay locomotive. The one shown makes clear the principle: alongside the boiler (which is off-set) are the cylinders (two or three) set vertically and driving on to a crankshaft which forms part of the main drive shaft the length of the locomotive, and from which bevel gearing takes the drive to each pair of wheels on each of the three “trucks”. This was built for the “English Lumber Co.” - nothing to do with England (U.K.)!

The Heisler and Climax types have something in common. I show a Climax, on which will be seen the unusual disposition of the two cylinders, steeply inclined on either side. The drive is taken from a cross-shaft between the two - reduction and bevel gearing transmitting the power to a longitudinal shaft, in turn passing the drive to the axles, again through bevel gears. The 1899 locomotive shown has just two “trucks” but in later times bigger locomotives spread the power through the wheels of three “trucks”.

The Heisler differed in two essentials: firstly the cylinders, two or sometimes four, were at right angles and placed in a V-formation beneath the boiler, whence, again, reduction gearing took the power to the wheels, rather more simply than in the Climax; secondly the drive was not taken to each pair of wheels, but to the outer pair on each truck, the inner pair being driven by side-rods, much in the way of a normal steam locomotive.

All three types had their supporters, and these included export orders. One Shay went to a British iron and steel works, whilst the Avonside Co. built a number of locomotives for sugar cane plantations in Natal, South Africa, at lease one being still in service as late as 1969.

by Lesley Warner

Ladies, I think that it is important that we try and take care of every part of our body. It’s all very well for the book cover to look good but what about the rest? For example, have you ever found your eyes riveted to someone’s smile and thought ‘Stone Henge’? My second thought is always what rotten parents not finding a good Orthodontist. There are no kind thoughts when presented with ‘bad breathe’ (Halitosis). I hasten to add for those of my friends that will immediately think, “Is it me?” No, this is not a dig at anyone I know but it’s not much good only writing about the pretty things.

Contrary to popular belief our teeth are designed to last a lifetime, but gum (periodontal) disease can change this. Dental disease has a reciprocal effect with overall body health. If you’re over stressed and generally unhealthy, your immune system will be suppressed and dental caries, caused by bacteria, will flourish. If your mouth is unhealthy, especially with gum disease, it overloads your health every moment of the day, lowering your resistance to all disease. The main way to keep your mouth clean is to eat a sugar-free, natural food diet.

Herbal medicine abounds with great substitutes for store-bought toothpaste. Most effective natural tooth powders are warming, which promotes circulation in the gums; astringent, which tightens the gums; and detoxifying, which removes debris. Of course any preparation should also remove plaque. Flossing and tongue cleaning reduce bad breath and help to prevent plaque. Also, get a good toothbrush.

A classic Ayurvedic combination contains two parts powdered potassium alum, an astringent, and one part powdered salt. Prickly ash bark is a classic toothpowder from North America, and myrrh gum is widely used in Middle Eastern herbalism. Tea tree oil (very dilute) stimulates circulation and kills germs.

Most herbalists and natural healers recommend using warming, astringent, connective-tissue-healing herbs to enhance and maintain oral health. These herbs can be used as a rinse or applied as packs (a pinch of powder, wetted to a mush with a liquid such as water or vitamin E, and tucked next to the teeth). Rinses are made by preparing a herb as tea in the usual way, or by simply stirring herb powder into water. Hold the rinse in the mouth for a few seconds or up to several minutes, gargle, and spit out. Bilberry fruit and hawthorn berry stabilize collagen, strengthening the gum tissue. Licorice root is a gem for the mouth: It promotes anti-cavity action, reduces plaque, and has an antibacterial effect.

The tooth sockets are joints, and the teeth are essentially bones. Herbs that treat the skeleton and the joints when taken internally are good bets for long-term tooth health. Standouts include yellow dock root, alfalfa leaf, cinnamon bark, and turmeric root.

Periodontal disease (PD) is a long-term, low-grade bacterial infection of the gums, bone, and ligaments that support the teeth and anchor them in the jaw. The bacteria are normal inhabitants of the mouth, but when allowed to overgrow, they form plaque and tartar, and produce toxins that provoke the body’s immune response. When allowed to progress, the disease destroys the supporting structures of the teeth, which eventually leads to tooth loss. This can happen at any age is a major cause of bad breath. Diabetes in particular drastically increases the risks.

Mouth ulcers we’ve all suffered at some time can be supremely painful. Commonly thought to be linked to food allergies and nutritional deficiencies, particularly iron, B12, and folic acid. Chamomile mouthwash, alum and licorice root are all said to have healing qualities to help relieve the mouth sores.

Your teeth are a reflection of your whole body. If you are healthy, your mouth will be healthy. Teeth, gums, and bone can heal. Give these techniques a try. You’ll be pleasantly surprised at how well they work.

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