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Money matters: Portfolio building
Graham Macdonald
MBMG International Ltd.
We’ve recently been looking at the ways that you can
build a portfolio that will perform satisfactorily in good markets, hold
up extremely well in negative markets and overall produce extremely good
levels of relative and absolute return over periods of longer than one
year. In particular we’ve highlighted the need to avoid taking on board
any uncompensated risks within a portfolio as being one of the main ways
of adding value.
Enhanced index strategies typically have less tolerance
for uncompensated risk than traditional active managers. However,
investors have been faced with an increase in the different types of
enhanced index strategies - for example, investors can now choose between
enhanced index strategies that use an exclusively stock selection based
approach or an exclusively synthetic (i.e. derivative based)approach or
ideally a “hybrid” approach. It is therefore important that the
investor be able to differentiate between the different types of enhanced
index strategies and understand the different implications.
For the investor, the challenge is thus to identify an
enhanced index manager that has demonstrated an ability to stay one-step
ahead by discovering the latest investment insights and in applying these
insights broadly, quickly and efficiently. In order to separate the wheat
from the chaff, it’s important to understand the criteria. A “good”
enhanced index manager must be able to:
A) Capture market inefficiencies.
B) Minimize uncompensated risk.
C) Demonstrate a consistent and repeatable investment
process.
D) Prove stringent cost management controls.
Although all four criteria are of paramount importance,
it is the art of capturing market inefficiencies that is probably the most
difficult as today’s investment insight may be tomorrow’s old news –
market inefficiencies can get arbitraged away and systematic changes to
the marketplace do occur. Moreover, in today’s markets, new information
is impounded at an increasing rate thus eroding traditional sources of
capturing out-performance.
Also, the playing field is increasingly being levelled
due to tighter regulations surrounding the disclosure of material
information (e.g., in the US, disclosure standards recently changed under
SEC Regulation Fair Disclosure). As such, strong research and innovation
capabilities are pre-requisites to the success of any manager and these
are the key qualities that an investor should look for in an enhanced
index manager.
MBMG subscribe to the investment philosophy that
superior investment outcomes are most reliably reached through Total
Performance Management the management of return, risk, and cost. The
philosophy centres around three core themes:
1) Markets are not perfectly efficient, and therefore
securities become over/undervalued at different points in time. These
mis-valuations represent opportunities systematically add value by
superior forecasting of stock returns.
2) “Winning by not losing” - by minimizing all
investment and operational risks that aren’t justified by increased
returns.
3) Minimize implementation costs - an in-depth
understanding of trading costs is coupled with extensive global trading
capabilities designed to minimize them.
A systematic, quantitative approach enables forecasting
stock returns and implementation of enhanced index and risk-controlled
active strategies. Stock selection process should be rooted in sound
economic principles that have been thoroughly tested, and unlike the
processes of traditional active managers, are not driven by emotion. The
process identifies and captures excess returns from diversified
portfolios, based on an evaluation of literally thousands of stocks and
other assets, including futures, commodities and debt instruments on a
daily basis. It is this scientific approach that differentiates
risk-adjusted approaches from traditional active managers.
With stocks, the important focus is frequently on
understanding stocks’ fundamentals, their earnings and growth prospects,
and insights that can be gleaned from the actions of corporate management
and market participants. These sensible investment considerations form the
foundation of many risk-adjusted quantitative processes, which carefully
evaluate the trade-off between stocks’ expected returns, risk, and cost
of trading.
All of these are factors that lead to efficient
portfolios i.e. portfolios with high expected and realized IR. The driving
force is therefore often the combination of strategy and research, often
encompassing areas such as physics, mathematics, engineering and computer
science, as well as finance and econometrics.
MBMG International has been in the forefront of the
movement to bring these strategies and methodologies from the institutions
that have been profiting from them for many years (as have wealthy
accredited investors as we’ve mentioned in previous articles) to private
investors everywhere.
In fact for as little as ฃ100 per month, an
investor can now make regular purchase investments into a risk-adjusted
portfolio. The institutions have served the role as proving ground for
many of these strategies which complete with current refinements and
enhancements offer a long track record of consistency and repeatability
and bring investors the opportunity to structure their portfolios in a
manner that carefully considers the risk taken to achieve the desired
return outcome.
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on graham@
mbmg-international.com
Snap Shots: Aperture Settings for Dummies
by Harry Flashman
For many people, the idea of taking the camera off the
“Automatic” exposure setting is too difficult, however, after today
you can try it without fear. And you will still get properly exposed
photographs. Promise!
Learning how to take better photographs is really not
all that difficult. There are only two main variables, and after you
understand them and what they do to your photograph, it becomes very
simple.
The first thing to remember is that the correct
exposure is merely a function of how large is the opening of the lens and
how much time it is left open to let the light strike the film. That’s
it - photography in a nutshell. No gimmicks or fancy numbers - a straight
out relationship - how open and for how long - this we call the
“Exposure”.
Now look at the top of your SLR camera and find the
knob which you have turned to “Auto” and left it there, or the menu
system to give you different ‘modes’.
Let’s go straight to the position on the “mode”
dial which is called “A” or Aperture Priority. Don’t be nervous
about this function. It merely means that you can set the aperture, and
the camera will work out the shutter speed that corresponds to the correct
exposure. In other words, you can set the lens opening at any size you
want, and the camera will work out the appropriate shutter speed. In other
words, the camera will work out the correct shutter speed to produce a
correctly exposed print.
So let’s play with this facility to give you some
better pictures. Select “A” (or Aperture Priority) and then look at
the lens barrel and you will see the Aperture numbers, generally between
2.8 and 22. To give you a subject with sharp focus in the foreground and a
gently blurred background, you need to select an aperture around f2.8 to
f4. Hey! It was that simple. To get those “professional” portrait
shots, with the model’s face clear and the background all wishy washy,
just use the A mode and select an Aperture around f4 to f 2.8.
Now, if on the other hand you want everything to be
nice and sharp, all the way from the front to the back, like in a
landscape picture, then again select “A” and set the lens aperture on
f16 to f22. The camera will do the rest for you, so don’t worry about
the shutter speed. Again - it’s that easy!
Having mastered “A”, let’s try “S”, or
Shutter Priority mode. In this one, you set the shutter speed and the
camera automatically selects the correct aperture to suit. Take a look at
the shutter speed dial or indicator and you will see a series of numbers
that represent fractions of a second. Usually these will go from 1 second
to 1/2000th of a second. This is the way to “stop the action” by using
a fast shutter speed, and it doesn’t need 1/2000th either. For most
action shots, select S and set the shutter speed on around 1/500th to
1/1000th and you will get a shot where you have stopped the athlete
stretched out over the hurdle, or the motorcycle in mid corner, or the
horse jumping. Yes, it is that easy.
So this week you have learned that to get a good
portrait shot use the A mode and set the aperture on f4 to f2.8 and forget
about the rest of the technical stuff. Just compose a nice photograph and
go from there. (Do remember to walk in close!) To get a great landscape
shot, again use the A mode and set the aperture at f16 to f22.
Finally, to stop the action, choose the S mode and
around 1/500th of a second and you won’t get blurry action shots ever
again.
Now certainly there are some more points in advanced photography, but
learn the above tips and you have got a good basic grounding that will
improve your shooting - and give you more satisfaction with the results.
See you at the photo shop.
Modern Medicine: Better fed children
do better at school!
by Dr. Iain Corness, Consultant
Over the past twenty years there has been much
research into just how what we eat determines the kind of people we are going to
be. “Digging our graves with our teeth” has been a catch-cry for some time.
With children, not surprisingly, their food requirements are
not the same as adults, but very surprisingly, some “healthy choices” may
not be as healthy as many parents would imagine.
Unfortunately, especially in the so-called “developed”
countries, the incidence of childhood obesity is rising. It is a well documented
fact that if both parents are overweight, their children have an 80 percent
chance of being obese as well. This is not totally a straight out genetic
factor, but is a combination of Nature and Nurture. Children learn by watching
and copying, don’t they?
One of the biggest problems with children is what I call the
“picky” eater. Very often Mum gives in to the refusal to eat “good”
foods, thinking that if the child will eat other items, then he or she is at
least getting “something”. Unfortunately, that “something” can sometimes
be quite wrong for growing children. One example of this is fruit juice. It is
“natural” and therefore “healthy” as far as most exasperated Mums and
Dads are concerned. However, any child that takes more than one litre of fruit
juice daily is more likely to get dental caries, diarrhoea and even suffer from
a failure to thrive. The best liquid for the thirsty child is, not surprisingly
- water! One side effect of changing from juices to water is that the child
appears to drink less. This is fine, because the child is now drinking to
counteract thirst, not drinking for the sweet taste.
So what should children have in their diet? Pre-schoolers
should get three serves of milk or milk products every day and three serves of
meat every week. They should also have five serves of fruit or vegetables and
three serves of cereals or grains every day. Low fat products, just like those
recommended for adults, are also the go for children over the age of two years,
though under two the high fat, high energy diet is satisfactory. There should
also be no added salt or sugar. Water should be the primary thirst quencher, and
snack foods and soft drinks should be restricted to once a week. (The soft drink
industry will probably send me hate mail after this article!)
Dieticians are now also suggesting that this age group should
only get a maximum of one hour’s TV daily as well. Not that TV viewing is
edible - it is the plethora of snack food and drink advertisements that is the
problem in dictating or influencing children’s choices! We ban cigarette
adverts because of the influence - but unsuitable foods are ignored!
Now breakfast does matter! Kids who skip breakfast because
they are running late, or doing last night’s homework, are more likely to fill
up on high fat and high cholesterol foods during the day. And with those who do
eat breakfast - a high fat breakfast tends to produce children who eat high fat
meals for the rest of the day as well. On the other hand, high carbohydrate
breakfasted kids are more alert and less hungry during the day. Finally, kids
who get more than 20 percent of their recommended daily energy intake at
breakfast perform academically better than those who get less than 10 percent.
Makes you think, doesn’t it!
 Heart to Heart with Hillary
Dear Hillary,
You’ll be happy to know that I am about to start another business venture in
Pattaya. I have developed a tiny piece of electronic gadgetry that attaches to
all mobile phones thus converting them to lie detectors. Males will now be able
to test their girlfriend to determine if deceptive behaviour is being
demonstrated. At the push of a button the device will emit a hypnotic ringtone
that puts the subject into a trance. Tiny wires are then attached to various
body parts to monitor and record responses. Questions can be asked and a red
light will flash if the person is lying. Each time she smiles at you, her
thoughts will be visually interpreted and an image of either you, another lover
or an ATM will be displayed on the colour screen of the phone. Customers will
now be able to determine whether or not their Thai girlfriends are truly
faithful, how many email addresses are stored in her Hotmail account and if the
water buffalo has really died. Do you think that there are enough untruthful
Pattaya girls to make my business successful?
Mighty Mouse
Dear Mighty Mouse,
Shame on you, my pet squeaker! How could you possibly infer that Pattaya girls
could be guilty of being sparing with the truth? Have you been hurt, my Petal,
and this is your way of getting revenge? Has Minnie Mouse been nibbling at more
than just ‘your’ piece of cheese? I can’t really believe it, you have
always been such a careful little mouse when chasing birds, leaving no tern
unstoned on your relentless pursuit of truth and adherence to the law. However,
in answer to the question, there are probably enough untruthful girls in
Pattaya, but are there enough ‘savvy’ males in Pattaya to buy your device? I
think a much better business proposition would be peddling miracle cures for
buffaloes, as the mortality rate in these imposing and expensive beasts seems to
be way too high.
Dear Hillary,
After spending six months and much money on a young lady here I am confused. She
has had a hard life so far and I started the relationship by thinking that I
would be showing her there is a ‘better’ world out there, instead of a bar
life. But now I’m not so sure of what is going on. This dame runs hot and cold
and it only seems to me that she becomes satisfied when I am pouring money into
her tiny little hands. If it’s not Mama that’s sick, it’s the buffalo or
the brother’s motorbike. Are they all like this Hillary? Or have I just picked
a gold digger?
Mike the Miner
Dear Mike the Miner,
There are many, many sob stories out there, my Petal, but working in a bar is
surely the worst as far as any young woman’s future is concerned - but these
girls pick the ‘profession’ and pick the suckers. The number of young ladies
from Isaan who are forced into prostitution in the expat end of the scene is
very small. Even poorly educated farm girls could get other employment, as
maids, for example. Finally, a proper relationship is not based upon money, but
I am sure that while your little lady knows what’s in your account, you have
no idea what is in her account!
Dear Hillary,
Hillary’s boob! What pedaling?
Spelling!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Mistersingha
Dear Mistersingha,
I’m sorry, my little purple plum (who never carries through his promises), but
‘pedaling’ is perfectly acceptable. With a single ‘l’ it is American
spelling, with a double ‘l’ it is English. However, in either version of
your mother tongue, ‘mean’ and ‘non-delivering’ is spelled the same, and
apply equally to you. Get a better dictionary and try again, Mistersingha! By
the way, in future please refer to my bra’s contents as ‘breasts’, not
‘boob’.
Dear Hillary,
I am intrigued as to why when eating Thai food you get given just a fork and a
spoon. Yet at other times chopsticks appear as well. When I asked my husband who
has travelled extensively throughout Thailand, he had no real idea either. I am
really confused as to when I am supposed to use chopsticks and when to use the
fork or spoon. Can you help us?
Jan
Dear Jan,
Like all things in Thailand there is a certain historical aspect to it, my
Petal, wrapped up with the inherent Thai practicality and pragmatism. Chopsticks
come from the Chinese element, and many Thais (in fact some authorities would
say almost 90% of Thais) come from this background, so the use of chopsticks is
fine with dishes of Chinese origin. So you will be given chopsticks with many
noodle dishes (kwiteo nam, for example). With ‘steam boat’ dishes you will
also get chopsticks to help you fish the food from the broth - the long sticks
stop you burning your fingers from the heat. On the other hand, with curries you
will be given spoon and fork. There is no need for knives as everything is cut
into bite sized pieces before cooking. Knives are also a symbol of aggression
and so these should not be brought to the family dinner table. One last thing,
you eat Thai food with the spoon, not the fork, so you don’t leave the curry
behind!
Personal Directions: What
we want and need... is right in front of us.
by Christina Dodd
Sometimes we search high and low for the
things we want and need, to suddenly find that they are literally right
there in front of us. Things of not only a material nature, but those that
concern our lives and the very way we live them.
Yesterday I spent all day roaming up and down Sukhumvit
Road going in and out of every hardware store, framing and cabinet-making
shop, in the search for some simple shelving brackets. Having been
disappointed so many times by several major stores who guarantee delivery
then amazingly report that the product is out of stock or no longer
manufactured, I was not about to give up! Somewhere, someone had to have
these brackets and I was going to find them. I really like this type of
shelving and I want it over other designs. I had travelled this path before,
but this time I was going to scour stores with even more tenacity and
determination.
Up and down Sukhumvit, U-turn here and there, dashing
into this and that store - what a time it was and even though I love
hardware stores, I’ll be happy not to see one for a while. I made sure I
took a bracket with me so there was no misunderstanding as to what I was
looking for and so that it could be touched and talked about by everyone in
the store. Quite often a customer would come up with a suggestion as to
where these elusive brackets might be and so the hunt expanded. I even got a
great tip from the man who had to re-gas the car air-conditioning, which
also suffered at the hands of the heat and the task at hand! This man had
the identical shelving system in his shop and I was thinking of whipping out
the lot of them and offering him a price, but he too was in love with his
brackets and they were there to stay.
So, off I went following his tip and sniffing out all
other possibilities. The results were still the same. It was time to turn
back and re-think the situation. I had done this before too, but my desire
to find these particular brackets did not fade and suddenly I found myself
pulling into places that you would not normally pull into. In exasperation I
drove up to a store that was separated from the main road by an enormous
area of mud. A bulldozer had been through in the past day and by the look of
it, so had the monsoon! But it looked well-stocked and so I said - maybe
they have them!
In I went and approached a lovely young girl who looked
at my sample and said, “Yes, we have them but not his size.” I beamed a
huge smile and jumped up and down asking what size she had. She showed me
the boxes of them hidden under loads of other bits and pieces of metal and
we both began to rummage through them. To my surprise she held in her hands
boxes of my beloved brackets! There they were and we both began to laugh.
She was intrigued as to my exuberance and after I explained my
“journey”, she immediately began to laugh and giggle.
What a day! What a wonderful experience! Almost right in
front of me - in a “tamada-looking” out of the way store - were the
brackets I had been looking for, for so long. I felt as though I had won the
lottery. Of all the places I had been and conversations I had had and the
number of orders I had made, only to be disappointed, suddenly I found
myself in my own back yard with what I wanted!
This episode tells me lot about the way we live and
behave in our lives. It is a very simple event in my life but one that is
filled with so many lessons and valuable input. It tells me so clearly and
very loudly that I should continue to “never give up” as long as it is
humanly possible and realistic, in my search for what I want in life. It
tells me and reinforces in my mind and my heart the goodness and kindness
that exists in people everywhere. It is there and it is right in front of
us! Having met dozens of different people during this quest, I can say that
all of them warmed to me and genuinely tried to help - drawing maps of other
stores, calling other shops, asking in the street. People seemed to feel
good about the fact that they could suggest an alternative. People feel good
about helping others even though they are complete strangers.
This episode also tells me that in this day and age of
the super and hyper stores, that we should still support small business
owners, as they are the back-bone of each and every community. Sure the
“big boys” are here to stay and yes - I shop there too. But I never want
to forget the “little people” stores that we actually grew up with in
our youth and our own home-countries, and which we use today in this
wonderful country. It is tough running a business anywhere and I will always
take my hat off to anyone who ventures this way.
I feel as though I have made a hundred new friends. In
the past weeks and particularly yesterday, I was encouraged with smiles and
sincerity that will stay with me for a long time to come. And it is true
what they say about OUTPUT. It is shaped entirely by the INPUT. Always look
for the goodness in people and you will be pleasantly surprised.
Until next time, have a tremendous week!
If you would like to write to me or contact me further
about any of our business skills programs or personal development courses,
then please email me at Christina: dodd @asiatrainingassociates.com
Social Commentary by Khai Khem:
Old hands and fresh eyes
Most every Friday a bunch of us pals get
together for an early breakfast at an agreed venue in Pattaya. Mostly we
end up having breakfast at the last bar we got drunk in the week before.
Our Breakfast Club is loosely structured so almost anyone is likely to
turn up.
Pattaya is two different cities to some of us. The day
city and the city at night are split personalities. So naturally our
conversations at night are full of ‘beer talk’ and the breakfast
conversations may include a few bottles of beer at 8 a.m. but they have a
more intelligible edge about them.
We all try to bring in a new person to join us so that
we can keep abreast of what’s happening outside our personal worlds. Old
Hands tend to stagnate into a “samo, samo” groove, stick to our
individual routines, neighborhoods, favorite bars and restaurants and
rarely change shopkeepers, barbers, tailors or whatever. New additions to
the group help to keep us from stagnating. They also bring different
points of view on various subjects to any of us who have become too
cynical, isolated or set in our ways.
Recently the Friday’s get together saw fewer people
turn up. And the ones who did were more than usually ready to grumble
about the weather and traffic. After a couple of beers and a plate full of
eggs and sausage, tempers cooled as the sun got hotter and hotter. You
guessed it, we were all whining about the heat. Well, not all of us. An
English friend had brought his parents along since they were here on a
visit for scuba diving and golf, and as we moaned about the “worst
summer we’d ever been through,” they countered our every negative
comment with a reminder; we could be freezing our butts off in harsher
climes. As the Grand Dame put it, “During some English summers I’ve
had to bundle up in woolies just to walk the dogs, Luv.” I shivered and
ordered her another beer.
I gave her my humblest smile and mentally filed that
thought. Her arthritis was giving her less pain and she’d lost 6 stone
since she’s been here. And all the while she’d been gorging on Thai
food. I went green with envy as I pulled my T-shirt over my growing
waistline. Too hot to exercise I’d taken to elbow-bending even though it
was not my elbow that needed a good workout. But of all the excuses our
group could think of, that was the most popular.
Besides it was too hot to argue. She’d spent the
whole of her holiday lounging poolside and scuba diving while I was
banging away on a keyboard in my office which hits about 38 C after lunch.
Her husband had golfed his way through the hottest part of the year and my
jaw gaped as I surmised these two were super-human jocks. I agreed to a
round of golf on the weekend and lived to regret it. The skin is still
peeling off my face. The course was so hot every hole was a floating
mirage. I didn’t make it through the game and begged off and hit the
showers.
We exhausted the weather subject and went on to the
water shortage problem. Aha! I’d finally hit a weak spot with Super
Jocks and they were aghast that the village where their son lives goes
without a reliable water supply through this terrible heat and that
they’d had to buy drinking water here which is an expense they hadn’t
counted on.
Drought is drought. What could I say? We still have no
official elected Pattaya government that I know of, so I blamed it on that
and flashed my best smile. Corruption? We never discussed it. Inflation
took its place. My new-found acquaintances had been to Pattaya before.
They were not happy with the higher prices. Not traveling on the
‘cheap’ but still limited to a budget, they knew how to watch a baht
and were keeping a closer eye on it this time around. Their son Mark lived
with lots of fans but without air-conditioning to keep the monthly bills
in check. No wonder they’d just spent 60 days in the swimming pool or
under the sea. FREE water is the best water.
I’ve been lucky. I haven’t had to buy water for a
number of years. Now my neighborhood is not only sizzling in the sun after
they cut down all the trees to build more houses, but most days our water
supply provokes dread so we are very careful. Not fitting conversation
while people are eating, I deferred the comments on un-flushed toilets and
unwashed laundry, food drying on the plates while we wait for water trucks
to arrive, and that when guests arrive, the first thing we do is greet
them with water instead of wine since it is much more precious these days.
As the subject changed to holidays and the sun rose in
the sky and the temperature soared I looked at my untouched plate of food
and paled. Too hot to sleep or to eat, I toyed with the sausage and
started to fidget. The taste of food turned to metal in my mouth and I
knew I was dehydrating. I gulped down another bottle of water and made my
excuses. It was one of the few Breakfast Club’s gatherings I had had
nothing much to say. Too hot to speak.
Making a beeline back home I noticed all the
construction going on in the city. Thai laborers were working in the
blazing sun wearing caps and jackets. Incredible. That sight never fails
to awe me, and tourists almost never mention it anymore. Well, at least
not to me. Are our cultural quirks so well-publicized and we are now too
well-known as a tourist trap that ‘culture’ is canned entertainment in
a hotel or designated venue?
Thai weirdness had not come up that morning. No blasts
about our maniacal driving, beastly traffic, sly cheats, dirty sex shows,
stolen handbags, missing jewelry, city without government, filthy beaches,
trash ridden neighborhoods, and all the other things Pattaya is supposed
to manufacture for gritty conversation. I had tried to introduce a little
grist into the morning’s chat and it had all come up roses. Maybe that
means I gotta hang out with scuba divers more often. As the English
gentleman had laughingly put it, “You’re the oddest duck we’ve met
since we’ve been here.” Touch้.
I went back to my home office and stripped down to
‘unmentionables’ and turned on the computer. Well, it was that or
grouse about the war, fuel prices and falling stocks. Hell, I can get that
on the BBC.
PC Blues - News and Views: Secure your computer
by Monitor
This is all about a very useful site with the address
grc.com (Gibson Research Corporation). Go there, admire the pretty logos,
and then click on Shields Up.
When your computer is connected to the Internet, there
are literally thousands of ways it might be connected. Each of these ways
is called a ‘port’. Port 80 is standard for the World Wide Web.
Micro$oft, in its wisdom, leaves many of these open.
Shields Up will check these for you, and tell you how
you are at risk, if not already infected. Being a kind man, Steve Gibson
also tells you how to close these (port) holes, but you have to follow him
carefully.
One port you should particularly close down, if open, is
netbios. How to do it is fairly lengthy, and buried deep on Steve’s web
site at grc.com/su-bondage.htm
You will need to look up things, take notes, and print
off his instructions, in order to do the job properly (I’m assuming here
that you are suffering from Micro$oft’s operating system). However,
before you install a firewall, you will have to make sure your computer is
clean, or what is the point of it all? This will be just another step in
cleaning your computer.
Your computer should have a firewall
(grc.com/su-firewalls .htm), and a virus checker. A firewall is a piece of
software which manages traffic across these ports. Any ports you have no
use for should be closed, and those that are open should be guarded: the
firewall does the guarding. Steve recommends Zone Labs firewall
(www.zonelabs .com): I currently use Sygate Personal Firewall (smb.
sygate.com). Both of these are free to a private user. Mine flashes red,
and shows me a log, when someone is trying to find a way in to my computer,
which they have done frequently in the past week!
The virus checker tries to stop viruses getting in on
the back of traffic you do want, such as e-mail and web pages. Because you
want to download these things, you cannot ask the firewall to block them,
so you need to examine them very carefully before letting them anywhere
near Micro$oft software. Also, because viruses change, and because the
vandals keep making new ones, you need a virus checker with frequent
updates - a service for which you have usually to pay. I use Norton System
Works, which I paid for, but I also use AVG (Anti Virus Group -
www.grisoft.com/us/us_dwnl_free.php), which is free for private use. Norton
System Works comes with other useful tools, like a good disc space
optimiser, and a program which checks your system and fixes most faults,
and I do recommend it.
Another associated program I have on my computer is
Ad-aware (www.lavasoftusa .com), which looks for, and removes, spy-ware.
Spy-ware is software which sits in your system and monitors and reports on
your activities to its master on the Internet. Steve Gibson discusses this
subject at some length on his web site (grc.com/optout.htm). As he says, he
used to have a program to do this, but he now recommends Ad-aware. The
spyware software is usually something you installed in good faith for some
entirely different purpose, so it evades a virus checker, but does
something you had not contracted for!
How to clean your computer
The best way of cleaning your computer is to save all
your data files, and configuration details, and so on - write them on a CD,
or a stack of CDs, AND MAKE SURE YOU CAN READ THEM AFTERWARDS. You then
re-install the operating system, and install, configure and run the virus
checker: configure the virus checker to scan removable media (this is
probably the default, anyway). You then install, configure, and run the
firewall. Next, you connect to the Internet, update the virus definitions
(and maybe the virus software as well, if the supplier so recommends). Then
re-run the virus checker.
You can now use the virus checker to scan your CDs of
saved data. If there are any viruses there, you will have to follow the
suppliers instructions to get clean copies of these files - you probably
wont be able to fix them on the CD, certainly not if its a CD-ROM. Use
pencil and paper (the original word processor) and make clean copies
somewhere on your hard disc.
You are now in a position to reload your application
software. Have you got copies of all the serial numbers?
Usually, you don’t have to go to this extent. The virus checker
installation guide will usually tell you to run it first, straight from the
CD, to clean the system, before installation, and this is usually enough.
Once you have installed it, though, do install the firewall, and then
update the virus checker software and virus definitions, and re-run it.
Don’t use the internet normally until you have done this.
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