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Family Money:
Clarifying the Currencies’ Conundrum - Part 2
By Leslie
Wright,
Managing director of Westminster Portfolio Services (Thailand) Ltd.
To continue from last week’s
examination of currency speculation, and how it all really works, many
investors hold the belief that if they have their investments denominated
in what is perceived to be a weak currency – for instance the most
popular one these days is the Euro – that if and when the Euro
strengthens against their base currency (be that Dollars or Sterling) then
they stand to make a windfall profit by selling their revalued assets
(stocks or funds) at the higher revalued price. This belief is based as
the premise that when the Euro strengthens, their whole portfolio will
move in line with it. In fact, this whole idea is a fallacy. Let me
explain why.
Let us look at what happens to individual funds within
a larger portfolio and the true situation may become clearer.
Assets valued in THB;
fund in USD
Let us assume that our shrewd investor has bought units
of a single country fund – for the purposes of our exercise, let us say
one that invests purely in stocks quoted on the Thai SET.
The underlying assets – the individual stocks and
shares – will mostly be bought and sold in the local currency: Thai
Baht. But since the Thai Baht is not an internationally traded currency,
the fund will almost certainly be valued – and priced – in US Dollars.
If the US dollar strengthens against the Thai Baht,
what happens to the value of your units in your SET fund?
They increase in value, you say. Oh really? Imagine for
a moment that instead of stocks and shares, that fund bought chocolate
candies, priced originally at 1 candy for 1 Baht. When the Thai baht stood
at 40 baht to the US Dollar, you got 40 candies for 1 dollar. But now the
USD has risen by 5%, so 1 dollar is now worth 42 Baht. Does this mean that
your 40 candies are also worth 42 baht? No – they’d still be worth 40
baht (all other things being equal). But 40 baht is now equivalent to only
US$0.952 of the now-more expensive dollars, not US$1.00 as you might have
erroneously assumed.
In other words, the value of the underlying assets in
local terms will not have changed with the currency having moved up or
down relative to the Universal Currency Marker – or stayed constant
relative to the UCM in the case of our example. Thus, whereas the
strengthening USD will have moved up in relation to the fixed point of the
UCM, the price of underlying assets in Dollar terms will have moved in the
opposite direction by the same amount that the USD strengthened against
the UCM – but remained the same value in terms of Thai Baht.
So instead of making a windfall profit in Thai Baht, as
you might have expected based on the fallacious argument that a
strengthening Dollar will carry underlying assets in another currency with
it, in fact you’d have neither gained nor lost anything if in this
instance the Thai Baht remains at a constant value relative to the UCM. I
do hope you can follow this argument: it’s really only common sense.
Denominating the
portfolio
But what if your SET fund was not the only fund held in
your portfolio? What currency should your portfolio be denominated in, and
does it really matter?
If you spent dollars to buy the fund, and your other
funds are also denominated in USD, then it makes simple sense to
denominate the whole portfolio in USD – purely for purposes of
simplicity in tracking the overall portfolio.
But a global fund, priced in USD, will actually be
holding a mixed bag of international assets each of which will move – or
not – relative to the UCM as our SET fund did not move in THB terms, but
lost in value in USD terms when the dollar strengthened relative to the
UCM (or other currencies that did not move parallel to the USD.) So our
global fund is most likely to gain or lose ground in the opposite
direction from the way the US dollar moves, as the underlying assets
retain their fundamental value whatever the currency of denomination of
the fund does.
Similarly with the overall portfolio. You may be
holding some funds priced in Dollars; others priced in Sterling; others
priced in Euros. You have to look at how each of these currencies has
moved relative to the UCM before you can decide whether you have made a
windfall profit or loss from currency movements – and then, whether that
apparent profit or loss is real or just illusory in terms of your base
currency – whether this is in Sterling, Dollars or Euros.
Again, it’s a matter of common sense – but as the wise man said,
common sense ain’t too common.
Snap Shots: Cinematography for
(J. Arthur) rank amateurs
Or the truth about Cinema Verite
by Harry Flashman
From the outset, let me assert that I do not claim to be an
expert in shooting video, but there are certain aspects that are true for all
types of photography. However, I have written and directed a few TV
commercials, and even appeared on the other side of the lens.
 Let
us begin with one very important fact. Still photography freezes a moment in
time, while video photography tells a moving picture story. Try not to shoot
‘stills’ with a video camera and your videos will start to look
professional immediately. Like all aspects of good camera-work, you have to
think about the end product before you begin to shoot. For the still
photographer it is a case of looking at the background and then working out the
best combination of shutter speed and aperture. For the video photographer it
is a case of working out the story line and then how to shoot the various
elements in the story.
One of the ways you can pick the first time video user is
the fact that the camera operator spends much time taking shots of still
subjects. Having not made the mental adjustment from still photography, many
minutes are taken up with video of his wife standing by the front door of the
hotel you stayed at in Korat. That, Mr. cameraman, was a ‘still’ shot. With
video, you film your wife checking out at the cashier’s desk, picking up her
bags and walking towards the exit. Then you rush outside and the next footage
is her coming out of the hotel and hailing a taxi. You have just shot a living
‘story’.
Just as still photographers have photographs in books and
magazines to study, the video photographer has a very ready source of
informative examples to scrutinize. This is called TV! Sit down in front of the
goggle box and see how the pros do it. Start to look critically at technique.
Where was the camera, relative to the subject? Did they “zoom” in or was it
one far shot and another close up to follow? How many times did the cameraman
actually use the inbuilt zoom? You may be amazed to see how seldom!
One of the common problems for both the video and the still
photographer is low light levels. Filming while the light is too low produces
poor and muddy video because the camera has to do all sorts of electronic
whizz-bangery to artificially increase the apparent light levels. This function
is generally called Automatic Gain Control and while you can continue to shoot,
the end result is very disappointing ‘grainy’ video.
Another of the common problems with both types of camera
work is ‘camera shake’. For a still shot you get a ‘soft’ and blurred
image. For a video shoot you get drunken backgrounds, jumping foregrounds and
seasick viewers. Now the still photographer can avoid this problem by the use
of both hands and a tripod as well if necessary, and guess what, the video
cameraman should do the same. Ever seen a pro video shoot? The camera is
mounted on a ‘dolly’, a tripod on wheels and moved around. Ever watched a
news video cameraman? He has the camera mounted securely on his shoulder and
uses two hands to hold it there. Yet how many times do you see the one handed
video approach? Lots!
Focusing. This is a common problem with still cameras with
Auto-Focus (AF), and 99% of video cameras are AF too. The magic eye in the
camera focuses on a spot in the middle of the screen. When you are filming a
couple in front of the Wat Arun, if the magic dot is not on one of the people,
they will end up out of focus and the Wat perfectly sharp. This is where you
may need to use manual over-ride.
Application of these simple aspects of video photography will give you (and
those who watch your videos) a much better end product, and a much more
satisfying one for yourself to produce.
Modern Medicine: Breast Cancer Screening
Presented
by
Bangkok-Pattaya Hospital
by Dr. Iain Corness, Consultant
Breast cancer is an emotive subject, and unfortunately
then becomes a very popular subject for the ‘pulp’ press. The stories
generally run as the “I got breast cancer the day after my mammogram”
shockers, or the “I had my breasts cut off because my family has the
cancer genes.” All these are guaranteed to panic half the population and
send readership numbers up, which is the name of the game. Nothing even
vaguely related to dissemination of the truth.
Ladies, let me assure you that breast cancer is well
understood, and the results are not as the pulp papers would have you
believe. Unfortunately, the cancer detection story is one that suffers
from the problems of being an inexact science. Since we can put men on the
moon, clone sheep (and even cattle in Korat) and other incredible facts,
we should then be able to diagnose human conditions with pin-point
accuracy. Wrong!
Diagnosis and detection are “real time” arts, not
sciences, even though we would like them to be. Sure, we use “science”
as a tool, but that is all it is. A tool to help us see the problem. Just
like we can use a telescope to see things at a distance - even if we
can’t see the object, that doesn’t mean to say it isn’t there.
There has been a bit of that thinking with Mammograms
of late. A lady has three annual clear Mammograms and then finds she has
advanced breast cancer during year number four. Was the testing useless?
I ask you to look at the “real time” situation. So
today cancer was found. When did it start to grow? This week, this month,
this year? The answer depends upon the type of the cancer. Some fast
growing cancers would be impossible to pick up, even if the person had
monthly mammograms. The slow growing variety can be picked up years ahead.
Unfortunately mammography cannot be a 100% indicator - we are not that
good - yet. But it is still one of the best diagnostic procedures we have.
And it is better than nothing.
Likewise, Breast Self Examination (BSE) has its
detractors as well as its proponents. Sure, a lot depends upon how well
the woman carries out this self testing, but again, surely it is better to
look than to carry on in blissful innocence?
I do not believe the doomsayers who would tell you that
the outcome is just the same. Breast cancer is like all cancers - the
sooner you find it, the sooner you can deal with it and the earlier
treatment is administered, the better the outcome. In fact, did you know
that studies from the American National Cancer Institute show that 96
percent of women whose breast cancer is detected are still alive 5 or more
years after treatment? This is called a 96 percent five year survival
rate, one of the ways we measure the severity of life threatening cancers.
If the five year survival rate was only 10 percent - in other words, after
5 years only 10 percent were still alive, then I would also probably feel
that predictive testing was not all that worthwhile. But it is not that
bleak an outcome in this case - 96 percent are still alive and many go on
for many, many years.
Ladies, talk with your doctor regarding breast screening, and ignore
sensationalism in the popular press! For western women particularly, this
is important.
 Heart to Heart with Hillary
Dear Hillary,
Recent research from Cornell University indicates that female Wolf Spiders
sexual preference may be determined by pre-pubescent experience. Well now, you
may be wondering what this has to do with your weekly outpouring of worthy
advice and support. The fact is that the male of the Wolf Spider specie is
faced with many of the difficulties and hazards that apparently confront your
readers (and this writer) on a regular basis. Lady Wolf Spiders have a tendency
to treat potential suitors as a mate, and/or, a meal - so that the more
athletically challenged males frequently find themselves amorously devoured.
Apparently the bite or bonk decision devolves on the efficacy with which our
wandering male uses his forelegs, which can vary widely in color, during the
extravagant courtship ritual. If she likes the color, and the angle of dangle,
lunch may be put aside for an afternoon of hanky-panky. If the color of the
well turned leg does not meet with her Ladyships approval, the admirer will
find himself in a state of extreme prejudice, namely eaten! The University’s
research has, however, gone on to show that said ladies are predisposed to
potential heartthrobs, whose forelegs are of a hue consistent with her routine
observations during formative years. Whilst I would be the last to suggest that
the ladies of Pattaya are akin to female Wolf Spiders, I suspect that many of
your readers, and of course your wise and wonderful self, may indeed recognize
some very salient similarities! My question to you, sophic and gnostic Hilary,
is, what color do you feel I should seek for my legs, so as to optimize the
potential for harmonious relations and forestall any prospective risk of
succumbing to the less socially desirable attributes, of the noted Arachnid
role models? I would add that at present my limbs are sort of pale and pink,
but on the basis of your wisdom, I am prepared to ardently adhere to the
recommended regimen. The researchers at Cornell tested color impact by painting
forelegs with nail polish, but I was thinking more in terms of socks and shorts
of an appropriately matching scheme. What do you think?
SpiderMan
Dear SpiderMan,
Succumbing to the amorous nibbles of a Wolf spider does not sound like a
preferred option to me, my Petal. Whether the ladies of Pattaya are akin in
their habits to the aforementioned arachnid and are guided by pre-pubescent
hues sounds like an interesting theory worthy of a PhD any day, and I have
heard of weaker excuses for spending many evenings doing ‘research’ in the
chrome pole palaces. However, to make it easier for you, I have asked several
of the gentlemen I know to ask the colour question for you, a sort of
“hue’s who”, if you’ll pardon the expression. From this exhaustive poll
which cost me several beers for my companions, it appears that since 99.9
percent of all the ladies come from Isaan, the first colour that they remember
seeing is Buffalo Black (Jotun paint number BB 1736 - they have millions of
colours). But before you go for the black leather pants and police issue patent
leather pumps, you have totally misunderstood some zoological facts. Cornell
indicates that it is the ‘forelegs’ that are used in the foreplay, Petal.
Not the hind legs. Looking now at some basic anatomical differences between
yourself and the Wolf spider, you have a basic problem. Lack of legs, Poppet.
Spiders have eight and you only have four (not five, no matter how impressed
you are with your anatomy). So not only are you several bottles short in the
proverbial wine cellar, but you will also appear relatively legless to the
marauding ladies. My best advice, SpiderMan, is to get out of the red cobweb
suit and run away as fast as your few little legs will carry you. Try your luck
in Chiang Mai, the ladies there like soft squishy pink things they tell me!
Dear Hillary,
I am having dreadful problems trying to buy a second-hand car. I don’t have
much to spend, but I want a good one. I have trudged in and out of so many car
sales outlets, I am starting to recognize the faces of the sales executives.
Have you any foolproof way to make sure I don’t buy a lemon?
Carless Carrie
Dear Carless Carrie,
What do you think I am running here, girl? A used car lot? A car buying
service, or what? In your defense, I must admit that when reading the
outpourings from many of my letter writers, they definitely have been
‘used’, so I will excuse you in this instance. So you want “a good one”
- pray tell, Petal, a good “what”? The mind boggles at the paucity of
language exhibited on these pages. So let us assume that it is a good ‘car’
you are after. Sorry, but there is no foolproof way to select a motor vehicle,
but the basic rule to follow is merely that you get what you pay for. To avoid
the lemons, buy oranges. More expensive, but leave a sweeter taste in the mouth
afterwards. Lots of luck. An even better plan is to save your money and buy a
new one in a couple of years if you must have a car.
Personal Directions: Finding someone who doesn’t judge you is like finding gold
by Christina Dodd
I remember years ago when I was traveling to Singapore
I had a most enjoyable flight. It wasn’t because of the service, but due
to the enlightening conversation I had with the complete stranger sitting
next to me. For the whole time of the flight we were sharing views and
ideas on numerous subjects and of course, solved all the problems of the
world. We exchanged cards and contact numbers and both went our different
ways after landing. We have never been in touch since that time, but in
some ways I wonder if that really matters. Perhaps the idea of us meeting
up again was not the purpose of our encounter.
There are dozens of instances in our lives when we have
this kind of experience and I’m sure as you read this, you can recall
one or two. There is a sense of comfort and pleasure that “totally
belongs to the individual” when something like this happens. It is
indeed a strange thing how we can relax and open our minds so easily to
someone we don’t even know anything about! Perhaps this is partly
because engaging alone in conversation with a stranger allows us to behave
as we really are. No one is judging us or expecting certain things from
us.
Unfortunately a lot of our lives is spent behaving
“and being” according to how other people around us want us to behave
and “to be”. Many people live their lives like this. There are those
who are oblivious to this fact and there are those who are aware of it and
just put up with it and the unhappiness it can cause. Then there are those
who are all too well aware of this happening to them and experience the
full consequences of it, and they desperately seek ways to put it right.
Talking to a stranger (I refer to those
well-intentioned and you can usually get a feel for people’s intentions)
allows the opportunity to escape. It is easier to confide in someone who
knows nothing about you because they have an open mind and heart to
receive the things you wish to tell them. Both individuals in the
encounter feel free and unrestricted as they behave and simply “be”
themselves. This brings me to the point as to why we adopt this approach
to some of the activities in our Personal Directions program. It is a
proven method that time and again brings results and every participant
feels rewarded in the end.
It also brings me to the subject of coaching, a service
which we previously only offered on a limited basis, but which we are now
providing as a full service through our affiliatecompany
lifecoach-asia.
Today there is a growing need for individuals, be it in
a private or professional capacity, to find focus and direction with their
personal or professional lives through working – one-on-one - with a
“coach”.
An interesting fact is that most people share their
goals and dreams more fully with a coach, than with their friends, family
or spouse (Source: International Coach Federation).
So what exactly is
coaching and what does a coach do?
Perhaps it is easy to explain it like this: “Imagine
your life as if you are running a never-ending marathon … your parents
would tell you how to pace yourself and what you should and should not do
throughout the race, a fellow competitor would look you up and down and
judge your ability, your sponsor would ask you to be sure to display their
logo on your clothes, a friend would wish you luck and wait for you at each
checkpoint, and your life coach would help you plot your course, run beside
you following your lead, whisper words of encouragement, gently push you
back on track should you slip off, and celebrate with you every moment of
the race!”
Why use a coach? you
might ask…
Some of us don’t know where we’re going, what our
lives are about, and how our values affect us each day. Coaching helps us
clarify our purpose, values, and goals.
Some of us may know where we’re going and what we need
to do, but we forget or simply get stuck in our limiting belief systems,
ineffective habits, or inability to focus. A well-trained coach gets us
back on track by helping us identify limiting beliefs and ineffective
habits and find more effective ways of living and enjoying life.
Many times we resist change because it’s easier and
more comfortable to stay the way we are. Any change we make causes
resistance and backlash within ourselves as well as from other people in
our lives. A coach helps us move beyond that resistance — with greater
ease and flow.
In the coaching relationship an individual may decide to
work on several areas of their life, or just focus on one. It is entirely
up to the comfort zone of the individual. But the most important point I
would like to make about coaching is that a coach is completely
non-judgmental. You – the individual - are totally free to be yourself
and who you are in the time you share with your coach.
How coaching works
Coaching is best delivered during regular weekly
one-on-one sessions by telephone (if it is suitable and acceptable) or in
person (for some this is preferable) over an extended period of time. Each
individual client brings an agenda or items to the initial call or meeting,
then the program is targeted and focused to the their individual needs. It
is totally confidential and highly personalized.
Finding life direction can be a rewarding experience for
any of us. Waking up one morning and finally being able to honestly say
that the world is a beautiful place to be and it is really wonderful to be
alive is what we should all be able to announce every day!
I hope that through today’s column you may be inspired
to let me know how you truly feel about your life and what it is that is
holding you back, and, more importantly, how it is that we can help you
feel good about yourself and the remarkable life that is so totally yours!
If it is life coaching you are interested in and you
would like a presentation on our lifecoach-asia services, or any of our
other professional and life skills programs, then please contact me at
Christina .dodd@asiatrainingassociates .com
I really look forward to hearing from you and until next time … have
an extraordinary week!
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