Family Money: Investing Capital Part 1 - Acceptable Risk

By Leslie Wright

The biggest dilemma facing every potential investor with more than a modest amount of capital is where to place their hard-earned money.

Everyone wants his investments to produce a reasonable return. At the same time, they want to limit the risk of potential loss that accompanies every type of investment - even bank deposits, where fluctuating exchange rates may lead to a capital loss in your base currency, not to mention the risk of the bank closing its doors never to open them again. (Remember BICC?)

The traditional ‘safe’ investment is an interest-bearing account with a reputable and stable bank. But in a climate of low interest rates, the return on investment is often insufficient to meet the depositor’s needs.

Many investors avail themselves of the professional portfolio management services offered by private client divisions of international banks.

However, these services are available only to investors looking to place substantial sums of capital with such an institution - typically at least US$500,000.

Also, most such services see their task as managing risk more than producing capital growth - and indeed, this is what many millionaires are looking for. They require a steady, modest return on their investment without the risk of losing any of their capital.

That’s okay if you happen to live in a low-inflation area, or the annual return from your capital well exceeds your annual expenditure.

But how about investors with less than this significant amount of capital, or who for one reason or another are looking for higher gains than the quite modest performance usually returned by most banks’ private client investment services?

I am often asked how a private portfolio management firm such as mine, specialising in personal portfolio management for modestly wealthy individuals, goes about constructing and managing a capital investment portfolio.

What criteria are used? What factors determine the makeup of the portfolio? How actively is it managed? How often is it rearranged? How frequently do we report to the client? How do we get paid for our services?

As this is my special area of professional interest, it is perhaps appropriate for this 200th edition of ‘Family Money’ that we look further at this complex and fascinating topic.

Portfolio construction for any amount of capital - large or small - is an intensive, personalised task, based on both the economic and psychological profile of the client.

Whenever you invest capital, several criteria should be considered - and these will differ markedly from one individual to another.

For most people money is an emotive subject, and investing one’s hard-earned capital tends to be a fairly emotional decision. So before making specific recommendations we first have to identify a client’s personal investment profile. This we do by asking a series of questions. There are three main categories.

Establishing criteria

First, what is the objective of the investment? Is it for a specific objective such as buying a house, or holding your retirement fund, or the kiddies’ college fund, or what?

Second, what is the time frame of the investment? Is it for parking some cash for a limited period of, say, one or two years, or for a longer-term objective such as funding your retirement for the next 15 or 20 years?

Third, the risk-aversion profile of the client has to be determined and understood by both sides. What degree of risk can you accept? And as an extension of this, what degree of risk should you be accepting, given the objectives of the investment?

Identifying needs

Before making any kind of capital investment, the overall primary objective should be clearly identified. Is the objective to create new wealth or to conserve existing wealth? In other words, are you looking for capital growth or income?

For some clients, wealth conservation is the over-riding consideration: the portfolio must not lose money.

For others, wealth creation is the main objective: producing capital growth from which to draw down a regular income (a pension, if you will), or ad hoc amounts of cash as may be needed at some date in the future.

The investment strategy that is applied to these fundamentally different objectives must take certain basic factors into consideration.

If you’re looking for growth, the wealth creation scenario usually requires more risk to be attached to the portfolio. All other things being equal, such a portfolio will typically have a greater exposure to equities. And while higher growth can be expected over the longer term, this inevitably means greater short-term volatility. In some instances, this might be inappropriate to the client’s investor profile and his needs & objectives.

The wealth conservation scenario can and should be conservatively stanced: it will have less exposure to equities, more to low-risk elements such as cash, bonds, and guaranteed funds. But the likely returns will be lower also.

For most international investors, the risk their portfolio is exposed to is defined as not having money when they need it, or running out of it before they die.

For instance, many people retiring with a relatively modest amount of capital believe they need to produce higher growth to generate the income they want to draw out to meet their cost-of-living expenditure.

What they fail to take into account is that higher risk equates to higher volatility, which can lead to capital loss in the short term if their investment selection was flawed or the markets turn against them.

A retiree with a modest nest-egg may say he wants to generate income, whereas what he really expects is to produce significant capital growth from which to draw down that income.

On the other hand, a millionaire who says he wants to see capital growth may really want to conserve his capital; and in order not to risk that capital, he must expect to generate only a modest income from it.

These two opposite ends of the investment spectrum have confused their real investment objectives. And hence, they may be confused about the returns they can realistically expect in relation to the risk they should be taking on - as distinct from the risk they might be willing to take on.

Many retired expatriate residents of Pattaya are living on an income stream generated from capital. Most have investment objectives that fall somewhere between the two extremes of wealth conservation and wealth/income generation - or put another way, a combination of the two.

All too often, however, an individual investor will have positioned his portfolio too far towards one end or the other of the risk spectrum: either he’s overly conservative (usually from fear of losing money) or he’s too aggressive (because he needs to produce more income to support his lifestyle than can reasonably be expected from the available capital.)

As touched upon already, it is a paradox that millionaires - who can afford to take on a higher degree of risk and accept an associated short-term loss - will typically be more geared towards wealth conservation, while one with a more modest amount of capital - who should be conserving his capital because he cannot afford to lose it - may have exposed himself to a relatively high degree of risk in the attempt to produce a higher income to support his lifestyle.

An aggressive stance is all very well when the markets are kind and the portfolio’s making gains. But what about when the markets slump?

Investors always say they can take a long-term view until they’re losing money. Then they look very closely at the money they’ve ‘lost’ - even though this may be only an erosion of profit on paper. They forget the nice gains they made in 1999 and look at the loss they suffered this past year - even though they were made to understand at the start that growth averaging around 10% per annum was what could reasonably be expected from a strategically-balanced median-risk offshore portfolio.

If world markets go up by 15% and the manager makes 20%, most would agree that he’s done a good job. But similarly, if the markets go down by 15% and he’s made a loss of only 10%, he’s still done a good job - although many investors might disagree.

In both cases, the portfolio manager has achieved a positive Alpha (relative growth) of 5% against his benchmark index.

But similar criteria are applied by the banks that provide private portfolio management services in judging a portfolio manager’s performance.

In fact, most banks have a success-margin of only 2%: if the manager makes 12% when the market has gone up by 10%, he’s earned his bonus; similarly if the market drops by 10% and his portfolio dips by only 8%, his performance is considered to have been equally good.

In both scenarios, he’s beaten the index by 2%. This may not seem much, but it’s not as easy to achieve as many people may think!

Nonetheless, limiting losses in the bad times as well as making above-average returns in the good times is, in my view, a fundamental criterion by which you can weigh your portfolio manager’s performance - and whether you should perhaps be looking for another one.

A conservatively-structured investment will tend to produce a lower return, with less associated risk of capital loss. A more aggressively-structured portfolio may produce higher returns, but it may also produce capital loss in the short term. Return tends to be directly related to risk, and this should always be identified and objectively quantified before taking on any capital investment.

As mentioned earlier, many investors want to generate a regular income-stream from their capital while at the same time conserving their wealth. To achieve this objective calls for a strategic mix of holdings which are likely to produce capital growth (equities) and those that will produce an income (bonds & cash). This is the typical model of what used to be called a ‘managed’ fund - now more appropriately termed a mixed asset-allocation fund.

The risk attached to such a mixed portfolio will also be balanced somewhere in the middle. A ‘Goldilocks’ portfolio, if you will, that is not too hot or too cold, but just right for the investor’s taste.

Generally, such an allocation mix can be adjusted to take changing market conditions into consideration - moving to a more conservative stance (more bonds, less equities) in the bad times, and a more aggressive stance (higher proportion of equities) when conditions look more favourable.

Time matters

Over the longer term bonds have outperformed cash deposits by a significant margin, and equities have outperformed bonds by an even wider margin. But in the short term equities are more volatile than bonds, which themselves are more volatile than cash.

However, no matter what your risk-aversion profile is, and hence your ability to accept risk, if the investment is for some short-term objective, whereby you will be needing the capital in the not-too-distant future, you should only be taking on a very limited degree of risk. Otherwise market reversals may result in your getting back less than the amount you put in - that is, you could lose some if not a significant portion of your capital.

Hence a short-term investment should consist primarily of cash deposits, money-market funds, with perhaps a small basket of international fixed-interest securities (government bonds).

If on the other hand you can take a longer-term view, you can afford to take a somewhat more aggressive view, and include equities in your portfolio.

Even though the value of an equity-based portfolio will fluctuate from month to month, you should train your eye on the longer-term goal, rather than on the short-term fluctuations, since these are inherent in a more aggressive portfolio. If you cannot accept volatility, you shouldn’t be taking on an aggressive portfolio.

Nonetheless, remember that until you cash in your investment, any profits or losses are only profits or losses on paper. Even if your portfolio value is down now, you’ll only suffer a loss if you cash it in. If you can hold on for another year or so, the paper loss may still turn into a handsome profit. Look what happened within 18 months of both the Crash of 1987 and the Global Meltdown of 1994.

But similarly, wonderful paper profits can be eroded just as fast: remember what has happened to the hi-tech and telecomms sectors over the past 18 months!

However, this simply means that a more aggressive portfolio needs more careful monitoring, and adjustments should be made when danger signals arise or opportunities beckon. (But that’s the hard part: identifying those trends means predicting the future, and no-one succeeds very well at that all the time.)

As a rule of thumb, though, if the capital you’re looking to invest is only a relatively small proportion of your overall wealth, you could perhaps afford to take a more aggressive stance. But if it’s all the money in the kingdom, you should tend to be more conservative.

(to be continued next week...)

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

Cultural ‘tics’

Every society has its little idiosyncrasies. I know it is devilish to smile a little when a foreigner comes to Thailand and sticks his or her foot in it, so to speak. What our visitors must understand is that Thais have this sense of the ridiculous, especially when it is not perpetrated on them. They giggle helplessly as they watch the newcomer wander through a minefield of esoteric and irrational cultural tics. The seasoned traveller finds these experiences actually provide the spice in the journey. Total surrender to the humour of their impossible situation is a special gift. This is a key which will open many doors which otherwise would be locked to them forever.

Naturally every faux pax is not humorous. Some can be terribly embarrassing or downright provocative. Thailand does have a lot of cultural taboos which are taken earnestly. Ancient customs practiced in a traditional society are serious business to the locals. Of course a guest in the Kingdom is forgiven honest mistakes. No pre-orientation session is going to prepare the newcomer for some of the encounters which lie in wait around every corner.

Buddhist temples and monks are surrounded by taboos which exist mainly out of reverence. For example, one should always sit at a lower level than that of a monk. Never sit or lie with one’s feet facing a Buddhist statute. Feet are considered lowly objects in comparison with other features of the human anatomy, and therefore in Thailand we think a lot about where and how to place them. Shoes are always removed before entering a temple. In the countryside, when monks are on their morning rounds and locals offer them food, Thais will often slip off their sandals before they pass the food to the monk.

Special restraints are placed upon women when in the presence of a member of the Buddhist clergy. They must not physically touch a monk, sit close to him, nor directly hand food, money, or other offerings so that her hands touch his. A simple cloth will always be provided to hold the offering, or a man can pass the offering for a woman. And of course, modest dress is expected of women when they enter a temple. Women should also not wear hats inside a temple. If on a crowded public bus, women must not share a seat with a monk, even if she must stand through the journey. Some of these special taboos for ladies are evoked for the purpose of giving the monk space and privacy, for he is a celibate and has taken religious vows. They are not intended to repress women or infer that they are inferior in anyway. Women do not offer monks fragrant flowers. Everyone must take care not to actually step on the threshold when entering a temple, but must carefully step across it. Buddhist images have their own set of taboos. For example, never put a Buddhist image in a trouser pocket, wear a broken image, or walk under a clothesline wearing one. Never say that you will ‘buy’ an image, but that you will ‘rent’ one instead.

Women in Thailand are raised to adhere to Thai ways which will perplex a newcomer. We can refer to these cultural niceties as taboos, or simply a catalogue of dos and don’ts which make up a list of good manners practised inside local society. Thai women are taught not to give perfume or cologne to a man as a gift. A well bred Thai woman will not be comfortable holding hands and kissing in public. That display of affection is considered private, and embarrasses other Thais forced to observe it. Thai women should not comb their hair in public, and if she is not married, should never sing in the kitchen. Married or not, whistling in the house is a no-no. And so is sweeping the floor at night.

A member of the fair sex of the Kingdom doesn’t try on her wedding dress before that special day, nor will most Thai ladies marry on a Thursday. The kitchen is an area which has an individual energy and demands some behavioural discipline. Thais never cry in their kitchens, especially when they are cooking. Tears in other people’s food bring the worst kind of bad luck, especially for the diners. Women here never remove their skirts by slipping them over their heads. They don’t fly kites. They never keep cut hair at home, in the way some Europeans will keep locks of a loved one’s hair in a locket or scrapbook. Broken dishes and cracked porcelain will be removed from under the family’s roof and set into an outdoor area. Ladies here don’t bring children to funerals. Pregnant women do not sit on stairs, even to rest a little. And they never bathe at night, so that last shower before the sun goes down is important to them. Never tell a new mother her baby is beautiful in case an evil spirit is looking for just such a cutie. The list goes on. And on. And on.

by Lesley Warner

I always thought of Florence Nightingale as a romantic personality fighting for her dreams and becoming some sort of angel to the sick and injured during the war. But actually it was only two years out of her life of 90 years that were spent as the angel in the Crimean War, and it was these two years that made her famous.

Florence had wealthy parents, William and Frances Nightingale. She was born in Florence, Italy on 12 May 1820. When they returned to England the Nightingales divided their time between their two homes.

Florence was very much admired in the family’s social circle. She should have been content to enjoy the benefits of a wealthy family and make a good match (marriage) but Florence had other ideas.

One day in 1837 while she was in the garden at Embely, Florence maintains that she had what she described as her ‘calling’. Florence heard the voice of God calling her to do his work.

Florence developed an interest in the social questions of the day, made visits to the homes of the sick in the local villages and began to investigate hospitals and nursing.

In the 19th century nursing was not considered a respectable profession for a well-educated lady of Florence’s background. Florence’s parents decided to send her to Europe with friends. They travelled to Italy, Egypt and Greece, returning in July 1850 through Germany to Kaiserswerth, near Dusseldorf, where they visited Pastor Theodor Fliedner’s hospital and school for deaconesses.

The following year Florence returned to Kaiserswerth and did three months nurse training. She then took a vacancy as superintendent of the Establishment for Gentlewomen during Illness at No. 1 Harley Street, London in 1853.

In March 1854 Britain, France and Turkey declared war on Russia. The allies defeated the Russians at the battle of the Alma in September but reports in The Times criticised the British medical facilities for the wounded. Sidney Herbert, the Minister at War, who knew Florence socially and through her work at Harley Street, appointed her to oversee the introduction of female nurses into the military hospitals in Turkey.

On 4 November 1854, Florence arrived at the Barrack Hospital in Scutari, with 38 nurses. The doctors were not impressed but within 10 days fresh casualties arrived from the battle of Inkermann and there were enough injured to keep the nurses and doctors busy full time.

The ‘Lady-in-Chief’, as Florence was called, wrote home on behalf of the soldiers. She acted as a banker, sending the men’s wages home to their families, and she introduced reading rooms to the hospital. In return she gained the undying respect of the British soldiers.

The introduction of female nurses to the military hospitals was an outstanding success, and to show the nation’s gratitude for Florence’s hard work a public subscription was organised in November 1855. The money collected was to enable Florence to continue her reform of nursing in the civil hospitals of Britain.

When Florence returned from the Crimean War in August 1856, four months after the peace treaty was signed, she hid herself away from the public’s attention.

In November 1856 Florence took a hotel room in London that later became the centre for the campaign for a Royal Commission to investigate the health of the British Army.

During the decade from 1862 her main concerns were the health of the Army in India and the state of Indian public health, the development of irrigation and the system of land tenure.

In 1860, with the public subscriptions of the Nightingale Fund, she established the Nightingale Training School for nurses at St Thomas Hospital. This was said to be her greatest achievement, to raise the level of nursing to become a respectable profession for women.

Although Florence Nightingale was bedridden due to illness contracted in the Crimea for many years, she campaigned tirelessly to improve health standards, publishing 200 books, reports and pamphlets.

In recognition of her hard work Queen Victoria awarded Florence the Royal Red Cross in 1883. In her old age she received many honours, including the Order of Merit (1907), becoming the first woman to receive it.

Florence Nightingale died at home at the age of 90 on 13 August 1910.

by Mirin MacCarthy

Salamander is the common name for about 320 species of amphibians with tails. They include all the members of the order Urodela, including the newts (family Salamandridae). Salamanders may live permanently in fresh water, but generally live their adult lives on land only returning to the water to breed. On the other hand, Newts are primarily swimmers, though some adults that live part of their lives on land may have a “warty” skin when out of water.

It is easy to mistake Salamanders as lizards, but they lack the scaly skin and external ears and claws that are characteristic of lizards. Salamanders are also a very old group that split off early from the other amphibians such as frogs but are related to them by characteristics of tooth form and skin structure.

The family Salamandridae live on all continents except South America, Australia, and Antarctica. The families Hynobiidae and Cryptobranchidae comprise the most primitive salamanders, and they practice external fertilization, with the eggs laid in water and sperm deposited over them. Hynobiids live in eastern Asia, and the cryptobranchids live in China and Japan (the giant salamander) and North America (the hellbender).

Another family, the Ambystomatidae occurs in the New World from Canada to central Mexico and includes the tiger salamander and the axolotl.

The families Sirenidae (sirens), Necturidae (mud puppy), and Amphiumidae (congo eels) occur only in the south-eastern United States. All of these are permanently aquatic, with reduced limbs and some larval features. The family Proteidae occurs in the caves of coastal Yugoslavia. The animals are gilled, blind, and un-pigmented - adaptations to life in darkness.

The most abundant family, containing about 200 known species of salamanders, is the Plethodontidae. Evolved in the Appalachian Mountains of the United States, it has many species in eastern and western North America, a group of species that has invaded the tropics and radiated extensively, and two species in Europe. This family contains burrowing, tree-living, stream-dwelling, and terrestrial species.

Since salamanders are amphibians, their skins are sensitive to being dried out; therefore they are found in or near water and damp places. Many are brightly coloured. Most adults hide by day and feed at night.

Generally salamanders are 10 to 15 cm long, though the largest, the giant salamander of Japan, Andrias japonicus, grows up to about 180 cm and weighs about 25 kg. Salamanders have short bodies with tails, usually 4 legs (some have two back legs and only vestigial front ones), well-developed heads often with large mouths and eyes, and a smooth, moist skin. Their colours include brown, black, yellow, or red, and often have light or dark spots, bars, or stripes. The skin contains many glands, some secreting mucus to help maintain moisture and others secreting a toxic or irritating substance when the animal is frightened.

Internally, salamanders share a number of features with other amphibians, such as a three-chambered heart. The respiratory system typically involves gills in larvae and lungs in adults, and some adults have gills as well. Oxygen uptake can also occur through the skin and the mouth membranes (as in the plethodontids, the lung-less salamanders).

Salamanders are carnivores, feeding on insects, worms, and similar prey. Some plethodontid species can flip their tongues the lengths of their bodies to catch prey. As in other amphibians, water is also absorbed through the skin.

Some species (for example, the axolotl) display neoteny - that is, the larval features persist into sexual maturity. In many terrestrial species having direct development (no larval stage), the females brood their eggs. They coil around the clutch, protecting it from predators and even from fungus.

The life span of salamanders may be 1 to 60 years, depending on the species. They are components of a balanced ecosystem. They serve as food items for various predators, including fish, snakes, and birds. Recently they have contributed much to science from studies of ecology and evolution, behaviour, and general physiology to genetics, endocrinology, and cell structure and function. Clever little Salamanders!

by Richard Brunch

From Terry Sanderson, Map Ta Put: One of our employees created a database in MS Access to allow us to track orders. Whilst it works fine at the moment, we now need to change it, but it was converted to a MDE file and the employee that created it is no longer with the company and nobody knows either her whereabouts or that of the original MDB file. I can of course extract the underlying tables but without the forms and other functionality these are not really of much use. How can I recreate the MDB file?

Computer Doctor replies: I am not aware of a way to do this. The creation of the MDE file is a one way process that removes certain information like the VBA source code and creates a token format which is a sort of halfway house between source code and an executable. The purpose is two fold, firstly it protects the intellectual property of the developer and secondly it prevents users making changes to the structure either intentionally or unintentionally. Regrettably you are either going to have to locate the MDB file or else be prepared to start development again from a clean slate. Another alternative although cumbersome and depending on what changes you now need to make could be to process the changes in another file. Good luck!

From Ingar Gjersdal, Norway: As a farang moving to Pattaya just over the New Year, I have some questions concerning ISP's. Does anyone in Pattaya provide broadband services or if not at least ISDN?

Computer Doctor replies: The Internet in Thailand is still emerging and there are changes afoot so the information I am giving now may not be accurate at the time you arrive here in Pattaya. Presently there is no broadband connection available here but several of the ISP's provide ISDN, commonly, Loxinfo, KSC and INET. Also you may find Turbo Internet from Shin appropriate - the link directly for this is http://www.cscoms.com/en/product/turbo.html. For up-to-date information before you arrive you can check the various ISP's websites or contact them via e-mail. A full list of all the ISP's can be found at www.thnic.net

From McDonald, Pattaya: I am using MS Outlook and have created several sub-folders within the folder "Main Identity's Contacts". Each sub-folder contains different address contacts. The issue is...I'm attempting to copy only one specific sub-folder, export the contents to floppy A: as a WAB file and import to my Outlook address book on another computer, hence not re-creating each contact on the 2nd computer. What actually happens...all the contacts, in all folders, transfer to floppy A: and then when I upload to the 2nd computer's Outlook, every contact address from computer 1's entire address book is copied to computer 2's "Main Identity's Contacts". I'm sure it's just my lack of knowledge and would greatly appreciate your input on how to transfer a sub-folder address book from computer 1 to a sub-folder on computer 2. Any advice would be greatly appreciated and thanks for your continuous support!

Computer Doctor replies: So far as I am aware, it is not possible to export from any version of Outlook, be it 97, 2000 or XP as a .WAB file. If you select the option to Export to a File then Personal Folder File (.PST) and from the next screen the Folder/s you wish to export either selecting include sub folders or not as appropriate, then selecting the destination as your A: drive you will have a PST file containing only the required information. Reversing the process on the second machine, selecting Import/Export then From another Program or File then Personal Folder File (.PST) and browsing to the A: drive where your exported file is located will enable you to import just the required data and allow you to either overwrite or create duplicates as needed.

by Duncan Stearn

Part Two: The Road to War

In June 1940, Thailand signed Non-Aggression Pacts with both Japan and Britain. Following the fall of France to the Germans that same month, the Thais approached the new Vichy-aligned government in Indo-China, believing they would be more amenable than their predecessors. The Thais were sadly mistaken, but the British, concerned about the very real possibility that Indo-China would fall to the Japanese, put pressure on the French to enter negotiations with the Thais.

In August 1940, Japan, aiming to improve their strategic position against China, demanded that the Vichy government in Indo-China give them the unfettered use of three northern Vietnamese airfields as well as allowing 5,000 Japanese troops to be stationed in the Red River Valley.

The French colonial administration agreed in principle to the demands, but haggled over the details. By September 1940, the Japanese were effectively in control of northern Vietnam.

Thailand, led by Prime Minister Pibul Songgram, offered to sign a Non-Aggression Pact with France, similar to the one then in force with Japan and Britain.

Talks, led on the French side by Admiral Decoux, the Governor-General of Indo-China, commenced early in September 1940 with six major points to be addressed between Thailand and France. These involved clear demarcation of certain border areas as well as the return of some territory to Thailand.

The negotiations lasted just two weeks before they broke down through the intransigence of both sides. In retaliation, the colonial French authorities began making life difficult for Thais doing cross-border business. A number were arrested and in October matters were exacerbated when Khun Canta Sintharako, after crossing into Cambodia to visit his business partner, was beaten to death by police in front of his family.

The Thai government demanded an investigation, a formal apology and a renewal of border negotiations. The French reply, according to the Thai version of events, came in the form of military provocation.

French military aircraft began flying over Thai territory while artillery began shelling border posts. French patrols then began making incursions into Thailand.

Thailand responded by sending aircraft to patrol the border with orders to attack any foreign troops they encountered on Thai soil. The army also moved artillery units up to the border and began returning French fire.

The French claimed that the provocation came from the Thai side with units being sent across the Cambodian border in probing actions.

Whichever nation was at fault, by November, border incidents were getting more common and more serious. The French sent their bombers in at night to attack military positions and border towns while avoiding Thai aircraft.

by Anchalee Kaewmanee

This combination is the most creative of all the Gemini combinations. But it is also the one most prone to neurosis, depression and mood swings. The Gemini’s need to give practical expression to new and innovative ideas is enhanced by a Cancer inner nature that is imaginative, highly sensitive and sympathetic. Intuition, versatility and high intelligence combine to help assure the success of people born into this sign. Just a few outstanding natives of this combo are Igor Stravinsky, Jean Paul Sarte, and Franze Kafka.

The gifts inherent in the Gemini-Cancer far outweigh any limitations. But like all highly emotional and imaginative individuals, these people must learn to cope with a variety of difficulties. Certainly they must come to know themselves and with self-knowledge comes self-esteem.

Hypersensitive and impressionable, it is difficult for this group to separate their own feelings from the feelings and moods of those around them. Spouses, co-workers and friends are often able to exert undue influence over these natives. So naturally it is vital for them to live, work and create in an environment which is relatively free of tension, discord or animosity. In a highly charged atmosphere, these individuals tend to become moody, despondent and withdrawn. It is important to learn to become master of ones own surroundings. It is also imperative that the Gemini-Cancer does not become such a chameleon that he or she is forced to blend into the scenery. These people must insist on their own individuality. Sometimes they work so hard for other people’s happiness that they sacrifice much of their own.

This Sun-Moon sign has an exuberant and light-hearted approach to life, but sad to say, some of these natives do have trouble with their self-image. Certainly it is wise to recognise sensitivity as a great strength rather than a weakness. Once greater confidence is gained, these people can become more assertive. When this happens, there is simply no limit to what they may be able to accomplish.

That ability to adapt to surroundings makes them excellent role-players. Many Gemini-Cancers excel in the theatre. When they learn to use that discrimination and intuition for choosing a lover, friend or associate, they will find they are less accommodating at the expense of their own well-being. It is vital to learn to say no. Otherwise others will certainly take advantage of that good nature.

Subject to mood swings, this combination may periodically retreat from the world. A certain amount of seclusion for contemplation and introspection might be beneficial. However, prolonged isolation could be disastrous. It is very important to stay socially active. All that charm and affability, that quick incisive wit insures popularity, especially with members of the opposite sex.

In romance the Gemini-Cancer is experimental, imaginative and responsive to the needs of a partner. That partner, however, must understand that sensitive nature and emotional make-up, and give the generous amounts of love which is required by this sign. A spouse must be able to give emotional support, encouragement and loyalty. Although this Sun/Moon sign will have many romantic affairs, that search for the ideal partner is important, for eventually these natives must find the solace and stability of a happy home and domestic stability.

by Apichart Panyadee

To arm against deceptions, the collector must be aware of what makes an antique genuine, and the background of restoration. He needs to know what the expert or dealer looks for in an antique, how restoration occurs, and how it is graded. Pieces can be allocated into five categories, from perfect original to outright fake. Within these categories there are degrees of restoration, from minor to major.

The Perfect Piece

The "perfect piece" has all of its structural parts intact and glue, blocks, inlay, surface, edges, finish, etc., in a perfect state of preservation. It retains its original brasses, finials, and decorative carving. The true antique radiates its own authenticity and shows the following features:

Patina - the surface quality of the piece, a natural glow that develops after many years of care and shines out to the observer.

A totally faked 'Chippendale' corner chair, which was, however, accompanied by a fraudulent history which traced it back to the American Revolution

Erosion of edges - this natural erosion develops after generations of waxing, polishing and handling.

Shrinkage - wood shrinks across the grain which causes irregularities where elements are joined. After 200 years, mortise pins become compressed and pop out. A chair's splat with its vertical grain shrinks from side to side, while the crest, with its horizontal grain, shrinks from top to bottom, causing a minor break in the flow of the design where they meet.

Genuine Queen Anne corner chair; Philadelphia, c. 1740-60

Color of structural elements due to oxidation - these structural elements were left untreated and therefore oxidized naturally over the centuries, turning various shades of brown. To simulate this natural color, the faker must stain the altered pieces of wood, and this produces an artificial color which can be easily spotted by the trained eye.

Contrast of structural color depending up on exposure - structural elements that are more exposed to air will oxidize more and turn a darker brown than protected elements. For instance, the undersides of the bottom drawers of a highboy will be darker than those of the upper drawers. All of these points reflect the natural ageing process over the centuries and can be seen by the naked eye.

Minor Restoration

This is a basically intact genuine article with a few missing blocks, a possible crack in a bracket foot or a small missing segment, some chewed off edges on a drawer lip, a segment of molding broken or missing, a chipped toe, finials or pendants restored, some or all brasses replaced, drawer runners replaced, cracks filled in, and so forth. These are still fine pieces; they just show normal wear and tear of everyday use for 200 years or more.

Major Restoration (Original Design)

This category will include the piece with greatly restored areas of inlay, or with a new foot or feet, a new drawer front, new base, a case piece with new bonnet, or a piece restored a generation ago, but with a family background that might give it a false promise of complete authenticity.

Altered Queen Anne highboy with added bonnet top, which subsequently only added in decreasing its value

All these restorations are part of the preservation process and restore a piece to its original form. They may or may not seriously devalue an item. Unfortunately, many of these restorations are poorly done, sometimes by amateurs, but often by inexperienced cabinetmakers. In this area, the loudest differences of opinion occur. And to a great degree, these dissenting opinions depend on the importance and rarity of the piece in question. Defining these restorations requires experience and judgment when considered by dealers and collectors.

Major Restoration (to create a more valuable form)

A piece that has been altered to increase its price falls into this category. This is the area of fraud. Value is being created where it did not exist before. These pieces have been altered to deceive and, no matter how beautiful, they are misrepresentations and false bargains. These pieces may appear in a private or public sale with a wonderful provenance which may be true to the original form. But the altered section will not be revealed in the catalogue. The seasoned expert knows what to look for because over the years, he has accumulated his list of likely alterations, and he therefore examines a piece with these things in mind.

The Complete Fake

This is a piece which has no roots in history, but has been created with the intention of deceiving, and is a vicious crime perpetrated on the collecting public. Important forms are made from scratch, sometimes with the aid of old parts, but more often with new wood. These items are created by a skilled craftsman with the knowledge of regional motifs, forms and woods. Today, with many pieces of American antique furniture fetching hundreds of thousands of dollars, the incentive to fake is considerable.

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Updated by Chinnaporn Sungwanlek, assisted by Boonsiri Suansuk.
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