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Money matters

Snap Shots

Modern Medicine

Learn to Live to Learn

Heart to Heart with Hillary

PC Blues - News and Views

Psychological Perspectives

Money matters: How Low Can it Go?

Graham Macdonald
MBMG International Ltd.

According to Michael Belkin’s recent report, most stock indices are now down modestly on the year (NASDAQ -6%, S&P500 -1%, DAX -3%, FTSE -3%), but he forecasts that they will be down a lot more by the end of the year. So far, indices have had a slow-motion deterioration amidst a downgrade in over-optimistic economic and earnings expectations, but Belkin points out that some leading groups have fallen much more than indexes (US semiconductors - 19% and securities brokers - 13%). “The 200 day moving average is often a dividing line between bull and bear markets. Major market tops usually have a first peak, an initial decline to the 200 day average vicinity, a bounce, then a renewed drop below the 200 day average that becomes a serious decline.”

We’ve described that pattern all year, but most indexes have had two bounces off the 200 day average this time instead of just one (early April and late-May to June). The July decline has taken most indexes back down to their 200 day averages again (for the third time).

He adds that some key sectors and groups have already broken decisively below their 200 day averages and classifies indices into three categories: 1) On or near 200 day average. (S&P500, DJIA, CAC 40). 2) Recently broke below 200 day average. (NASDAQ, FTSE, DAX, SMI, AEX S&P500 financial and consumer discretionary sectors, Stoxx banks and industrial goods & services groups). 3) Already fallen way below 200 day average to new 2004 lows. (S&P500 tech sector, SOX semiconductor index, XBD securities brokers index, Stoxx Tech.).

Many market participants only watch the S&P500 and DJIA (on 200 day averages) and aren’t noticing the greater deterioration in tech, financials and European cyclicals. Belkin compares that to “ignoring the symptoms of an acute disease” and sees an overall picture of a market rotting from within, without much recognition by the average investor.

He believes that such complacency makes equities vulnerable to a downside shock, as earnings expectations careen from giddy optimism to gloom, and that such an adjustment should take place over the remainder of the year, adding that “Major indexes like the S&P500 and DJIA will probably soon follow the tech sector and break decisively below their 200 day averages, sending a wake-up call to those oblivious of the sector deterioration. Once major indexes break 200 day averages decisively (and market upside is capped), the next logical question becomes how low can the market go? That question has an easy answer - in a long term bear market (below declining 200 week average) - downside risk in intermediate term declines is back to the lows (at least). That is minus 41% for the NASDAQ, minus 29% for the S&P500 and down 43% for the DAX.”

Therefore, he recommends the most defensive equity market exposure possible (alternatives, cash and bonds, overweight low beta groups, underweight high beta groups, increase short positions, sell brief rallies). Currently, the energy and utility sectors have the strongest model outperform forecast (US and Europe), while the sectors with the weakest model forecast are tech and consumer discretionary (US) and tech, financials and cyclicals (Eurozone).

His view is that stock investors should look to avoid being flattened in the forecast decline back to the lows - and then to have the wherewithal to step back in on the long side for another bear market rally when the decline has run its course. On balance we’re not a million miles away from that view ourselves.

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

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 [email protected]


Snap Shots: How to improve - the equipment and the basics

by Harry Flashman

In my time I have bought and sold many cameras, including Nikon, Hasselblad, Voigtlander, Cambo and Minolta. There was also one I threw away, called a Golden Dream Pigeon. I threw it away, not because it didn’t work, but because it took lousy photographs. It had also cost 90 baht, including the film, so I was not losing much!

What I learned from my Golden Dream Pigeon was simply the old adage - you get what you pay for! Unfortunately, all of us fall into the trap of the tight fist. Why spend big baht when a much cheaper article will surely do the same job just as well. I rationalized Golden Dream Pigeon’s purchase in this way as I did not think that it could be quite as dreadful as it was!

As justification you tell yourself that all you are paying for is the “name” plus very expensive packaging with the high ticket items. Unfortunately, in photography, you pay for more than the “name”. You are paying for that other ingredient called Photographic Quality.

The interesting feature about photography is that the measure of excellence is always the end result. In other words, the photo says it all. A clear, sharp and well exposed shot shows the lab did a good job in printing, the film was top quality, the camera set at the correct exposure, the lens let the light rays through without distortion and the image was focussed correctly.

So let’s look at some of these basic factors. First, let’s deal with the camera. What is often not realized is that the principle function of the camera body is really just to hold the film flat and be able to alter the shutter speed and aperture required for correct exposure. It’s still just like a Box Brownie - but smaller with built-in goodies.

The cost of the camera body today depends on the degree of sophistication in its built-in features. Electronic multi-pattern metering, motor driven film advance, auto rewinding, DX coding to set the film speed automatically, different exposure modes, smart cards and memory stick replaceable electronic gadgetry, LED viewfinder displays, dedicated flash electronic circuitry and ergonomics in design all add to the cost. None of the above were available in the Golden Dream Pigeon, by the way.

Next item is the lens. The equipment necessary for the super sharp snap is the super sharp lens. The sad fact is that no matter how good or expensive your camera body, you will only get lousy pictures if you use a lousy lens. A good lens is just as important as a good camera body.

If excellence is your pursuit, look at good quality “fast” (f 2.8 or better) fixed focal length lenses from the same manufacturer as your good quality camera body. Sure, you can get a “bargain” at some camera shops (and Duty Free outlets) who will sell you a Nagasaki 28 - 3000 zoom for your new Nikon or Canon or whatever. Certainly it will be cheaper outfit than a Nikon lens on a Nikon camera - but in saving a few baht you just lost out on excellence.

Now let’s look at some very simple fixes for some common problems. Blurry photographs can be fixed by selecting shutter speeds of 1/125th second or faster. Hold the camera with two hands. None of this one handed technique, waving one-two-three fingers with the other hand as a count-down.

There are six simple steps on the road to improvement:

1. Use more film. At least one roll each time, taking notes to check your results later.

2. Move in closer. Many shots fail by being too distant.

3. Keep it simple. Photos are far more effective with one subject and no background clutter.

4. Specialize. Take pictures of one subject, say boats or trees, until it is mastered.

5. Read books on the subject. Kodak “How to ...” books are instructive and easy to follow.

6. Edit your own work by constantly sorting through your photos and discarding the failed shots. Be ruthless! And remember just “why” the shot failed.


Modern Medicine: The 100 percent vegetable diet to a longer life

by Dr. Iain Corness, Consultant

The following lifestyle diet was sent to me by an old friend George Comino, wondering if he should take it up. Here is the proposal:

Q: I’ve heard that cardiovascular exercise can prolong life. Is this true?

A: Your heart is only good for so many beats, and that’s it. Don’t waste them on exercise. Everything wears out eventually. Speeding up your heart will not make you live longer; that’s like saying you can extend the life of your car by driving it faster. Want to live longer? Take a nap.

Q: Should I cut down on meat and eat more fruits and vegetables?

A: You must grasp logistical efficiencies. What does a cow eat? Hay and corn. And what are these? Vegetables. So a steak is nothing more than an efficient mechanism of delivering vegetables to your system. Need grain? Eat chicken. Beef is also a good source of field grass (green leafy vegetable). And a pork chop can give you 100% of your recommended daily allowance of vegetable products.

Q: Should I reduce my alcohol intake?

A: No, not at all. Wine is made from fruit. Brandy is distilled wine, that means they take the water out of the fruity bit so you get even more of the goodness that way. Beer is also made out of grain. Bottoms up!

Q: How can I calculate my body/fat ratio?

A: Well, if you have a body and you have body fat, your ratio is one to one. If you have two bodies, your ratio is two to one, etc.

Q: What are some of the advantages of participating in a regular exercise program?

A: Can’t think of a single one, sorry. My philosophy is: No Pain. Good.

Q: Aren’t fried foods bad for you?

A: You’re not listening! Foods are fried these days in vegetable oil. In fact, they’re permeated in it. How could getting more vegetables be bad for you?

Q: Will sit-ups help prevent me from getting a little soft around the middle?

A: Definitely not! When you exercise a muscle, it gets bigger. You should only be doing sit-ups if you want a bigger stomach.

Q: Is chocolate bad for me?

A: Are you crazy? Hello - Cocoa beans - another vegetable! It’s the best feel-good food around!

Q: Is swimming good for your figure?

A: If swimming is good for your figure, explain whales to me.

Q: Is getting in-shape important for my lifestyle?

A: Hey! ‘Round’ is a shape!

Well, I hope this has cleared up any misconceptions you may have had about food and diets and remember, “Life should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways - Chardonnay in one hand - strawberries in the other - body thoroughly used up, totally worn out, and screaming - Woo Hoo! What a Ride!”

And now the REAL situation

George, my dear old friend, with the suggestions above, you won’t be a dear old friend much longer. A dear departed old friend more like it. However, you are not totally incorrect when you mention the 100 percent vegetable diet for a longer life. Even Dr. Spock turned vegetarian in his later years and lived to be 95, but he got his vegetables from the garden, not pre-processed via the cow, or distilled in the vineyards. However, laughter is always the best medicine, and I enjoyed my dose today.

Dr. Iain


Learn to Live to Learn: The role of the IBO

by George Benedikt

It gets a bit tricky here. The IBO examine schools that apply and a successful process of authorization results in the school being allowed to deliver their curriculum. However, it is not whole school accreditation, only a curriculum authorisation, unlike for instance the Council of International Schools accreditation, which goes into every conceivable aspect of the day-to-day running of the school, from governance to bus policy.

The IB diploma curriculum hexagon

This means that a school can, in effect, pretend to be an ‘IB world school’ and espouse the philosophy during authorisation, only to dispense with it upon receiving authorisation. Obviously disreputable, schools such as these will use the IB logo, which is a hallmark of excellence, as a recruitment and marketing tool and lure parents, teachers and students to the school under false pretences.

The crunch really comes when the school receives an inspection from the IBO, which happens about every five years. Because the IBO authorise curriculum only, they can only threaten to withdraw this and whilst they have an outstanding record of providing great assistance and support to their advocates and representatives in schools (such as directors of IB programmes), they are unwilling and unable to get involved with the internal machinations of an ill-run establishment.

The bottom line is, if a school chooses to ignore the IBO’s philosophy, then they risk loosing the authorization.

So when visiting an ‘IB’ school, ask whether they have experienced any difficulties with the IBO – there’s any easy way to do this. You can ask to see a copy of the last inspection report. Clearly, as a potential customer, you might feel quite justified in requesting such access. Don’t take anything for granted. If a school has had more than one inspection in the last two or three years, it will be because something has been going seriously wrong and as a parent and student you want the whole picture.

As I have written previously, accreditation and authorisation bodies are the parents’ friend and will want to hear from disenchanted parents and students.

Next week: “Adopting the Diploma Programme” and “Problems in IB schools”

IBO mission statement

The International Baccalaureate Organization aims to develop inquiring, knowledgeable and caring young people who help to create a better and more peaceful world through intercultural understanding and respect.

To this end the IBO works with schools, governments and international organizations to develop challenging programmes of international education and rigorous assessment.

These programmes encourage students across the world to become active, compassionate and lifelong learners who understand that other people, with their differences, can also be right.


Heart to Heart with Hillary

Dear Hillary,
I will be coming to Thailand in December and I like to rent motorbike and ride all over your beautiful country. I arrive Chiang Mai and go Bangkok after two weeks. Is possible? Yes or no? Where do I get the bike? I do not need big bike as I am small man. I ride Vespa in Paris, so I am OK in the saddle. Is it with insurance and can I ride with French license? Thank you.
Pierre.
Dear Pierre,
You have certainly got plenty of questions, especially for a small man, as you so quaintly put it. I really think that you should sit down on the seat of your trusty Vespa and think again, Pierre. I have been to Paris and seen the standard of hair-raising driving there - but, Pierre my Petal, it is nothing compared to the driving in this country. When you ride a motorcycle here it is not a case of “if” you have an accident, it is “when” you have an accident. You don’t meet another Vespa coming up the Champs Elysee the wrong way, now do you? The gendarmes would not allow it. Here it is a different story. Going the wrong way down a one-way street is normal in Thailand. This country has one of the highest road tolls in the world, and that is just one of the reasons why. Forget it Pierre. Take a tour bus.
Dear Hillary,
This is a real problem for me, and I do hope you can help (don’t treat this lightly please, as I have nobody else I could possibly ask, and I definitely couldn’t ask my husband). One of my former women friends in the UK, from the same village as me is coming to Thailand next month, with another couple of her girlfriends. We are all in out 50s, so we’re not scatty teenagers. She shocked me when she wrote and said they wanted to see a “sex show” while they are here. Do you think it’s proper for me to take them to some of the more outrageous places, or what? I’m really blown away by this. What do you recommend, Hillary?
Sex-pot
Dear Sex-pot,
There is nothing to worry about, my Petal. Everybody knows we don’t have sex shows in Thailand. The nice man from the Ministry of Fun told me so, and so did the nice policeman. If you’re really worried, get your husband to take them.
Dear Hillary,
I love coming to Thailand, it is really such an exciting place to visit. There are only a couple of downsides for me. Bartering and tipping. Can you give us some pointers on how to do it, and how much to leave as a tip? If the establishment charges a “service” fee, should you tip as well? What do you do as someone living there, for example? I believe that the wages are not high for some of the people in bars and restaurants and they need the tips, but I do not want to throw money away either? What’s your tip about tipping?
Tippy
Dear Tippy,
Half the fun of coming here on holiday is the bartering side of buying. Don’t get too hung up about it. They will give you a starting price and I generally come back with about 40 percent of that. The shopkeeper will then come down a little, you go up a little and so on. Keep smiling, it’s a game remember! If you find you are haggling over 20 baht, convert that to your home currency (30 British new pence or 50 cents US) and see if it is worth the hassle of continuing. Don’t leave something you want for the sake of 50 cents!

Tipping? There are two situations here - service charge or no service charge. If the establishment adds on 10 percent (the usual amount), then as far as Hillary is concerned - that’s the tip. There are some places that no doubt pocket the service charge, but that’s not anything of our doing, nor can we change it. That is something between the employees and the owners to work out. However, if Hillary feels that the waiter or service provider has gone well beyond that which could be expected, then I reward with a little extra something for that person, irrespective. You know the sort of things I like - a little fawning, grovelling and lots of compliments. In an establishment that has no standard add on service charge, then it really is up to you. Small change left over or up to 10 percent is quite acceptable. The Thai people are grateful for anything you leave them. It all adds up by the end of the day.
Dear Hillary
I see so many old and ugly expats here running around with beautiful young girls that it makes me sick. Do they think these girls actually like them? It’s only their money that they’re after.
Young and handsome
Dear Young and handsome,
Look forward to the day when you are old and ugly too, young man. If you are clever and have put some money aside, then you too might have a beautiful young girl to look after you too. Time to live and let live. Are they doing anybody any harm? Does it matter that they are keeping several herds of buffalo in luxury? No!


PC Blues - News and Views: The patents war

For reasons which entirely escape me, the USA permits software to be patented.

In historical times, enlightened rulers would grant a patent to someone who had invented a new process. This encouraged development. In the dark ages, inventers would keep their process secret, forcing users to come to them, and pay them. The costs of travel stifled progress.

With a patent, the process was made public, and anyone could operate the process so long as they paid the patent holder a fee. This is something like the modern ‘franchise’.

If you consider a piece of software to be a process, in these terms, then it is reasonable to patent software. In olden days, the only processes conceived of were physical, or chemical processes, and it was to these that a patent applied.

A key feature of a patent was that the process was original. If you could show that the process was well known to practitioners of the craft, then you could block the patent. The King was not out to encourage existing processes, only novel ones, ones which made ‘progress’. On the other hand, it was not necessary to show that the process was useful. Whether or not the patent was commercially viable was of no concern to the King.

In the world of software, things are strange to the outsider. To many of the practitioners it is an art or a craft. To software companies, it is a commercial product, and they are in business to make a profit.

I shall describe things from the novel end first - where a new process has definitely come to light.

Some years ago, a cryptography algorithm (RSA) was developed from a deep understanding of features of number theory together with the ability of modern, fast, computers to manipulate the necessary numbers in sufficiently short time. Indeed, the algorithm to do the necessary manipulation of numbers was, itself, a novel method, known as the Fast Fourier Transform.

Here we have several steps. First, the necessary mathematical theory is developed: theorems are proved. Second, algorithms are invented, and (third) implemented on computers. Fourth, the algorithms are brought together in a novel way, to achieve something not expected by a) the mathematicians, or b) the inventors of the algorithms.

Should the mathematicians receive a patent for their theorems? History says ‘No!’.

Should the inventors of the algorithms receive a patent? USA says ‘Yes!’.

There is, in fact, a major step between a theorem and a practical implementation of it. Often, a theorem merely says that something is possible - it gives no indication of practicality. Also, the constraints of a computer, with limited word length, memory and file space, are severe constraints on the implementer. Finally, an efficient algorithm is worth money to the people who use it. An algorithm which enables something to be done in one tenth of the time of another on the same computer, will enable ten times the work to be had from the capital investment that the computer represents. The development of the Fast Fourier Transform algorithm is a case in point. It enabled things to be computed which could not previously have been done in the lifetime of the existing computers! (Implementations of the FFT algorithm are patented. Different implementations are separately patentable.)

If you agree that software should be patentable, then the fourth case (the algorithms are brought together in a novel way) is merely a variant on the third case. Bringing algorithms together is what all software programmers do. All software is larger algorithms built out of smaller algorithms, down to the microcode of the computer processor. The most useful algorithms are supplied along with the compiler/interpreter as run-time libraries.

The RSA algorithm was certainly novel, but an effective implementation relied on the FFT algorithm. Any useful implementation of the RSA algorithm would require an efficient implementation of the FFT algorithm. Any user of the RSA algorithm would therefore have to pay licence to the owners of the RSA patent, and to the owners of the FFT patent (and all subordinate patents!). How this chain of payments is managed is nobody’s business.

For Really Useful Algorithms, the patent system might be appropriate, but in its general form, it is a nightmare.

As a software designer, I put algorithms together in novel ways. In some cases I invent new algorithms. In others I (probably) re-invent old algorithms. What I do NOT know, is which algorithms have been patented. Note that this is very much a commercial decision. If I know of an effective algorithm (to do something my process needs), which is patented, but cheap to licence, I should specify this in preference to a more expensive algorithm. Alternatively, if I know of an effective algorithm which is not patented, I should specify this in preference to one which is licensed.

A second-order commercial feature now appears. What should my company do if I know of, or invent, an algorithm which is not patented. I may take the view that this is what is called ‘prior art’ - any practitioner would know of, or invent, such an algorithm. My company’s patent lawyers may not agree with me, however, and wish to patent this algorithm. I therefore have a duty to notify the company whenever I consider an algorithm to not have a patent.

If you look at the specification for HTML, which is what is used to make up many web pages, you will find a TAB tag (or some such). This allows the writer to specify the order in which fields of a form, or other features of the web page, are selected when the viewer hits the TAB key. Micro$oft are trying to patent this. Micro$oft obviously takes the view that this feature of the specification has never been patented, and that they must therefore patent it. Now, there is no novelty in this whatsoever. It is part of a public, international, specification. Not only that, but browsers, Internet Explorer among them, already implement this feature. The US Patent Office is probably ignorant of this prior art, and may well give Micro$oft this patent. All other makers of browsers will then be liable to pay Micro$oft for implementing part of a specification!

So, should processes which form part of a national or international specification be patentable? One is inclined to say ‘No!’. However, one must not be absolute on this. One should be more careful, and say that when use of a patented process is necessary to satisfy a national or international specification, this use becomes a free use, but only where it is being used for this purpose.

Micro$oft have tried before to patent prior art. Sometimes they got their patent, but have not exercised it, and so the patent has not been challenged. At present, they are trying to licence part of the SenderId standard, but under terms which will require users to acknowledge their right to other dubious patents - hence the current furore.

The EU decided against patenting software some time ago. Unfortunately, the EU Council has overturned that decision, and the future looks cloudy. The US has tried to export its policy on patenting software as part of its Free Trade Agreements: its trading partners probably have very few patents, and will end up paying heavily for this.

Whatever the theoretical rights and wrongs of patenting software, the practicalities of the US patent system make it a horror to be shunned. It will be expensive to undo the past ten/twenty years of such patents, but it will surely be more expensive to let the process continue.

Don’t let it happen here.


Psychological Perspectives: Advantages and disadvantages to the use of social stereotypes

by Michael Catalanello, Ph.D.

Pattaya is a delightful place to live for a variety of reasons. Frequently cited local attractions include the friendliness of the Thai people, delicious Thai cuisine, beautiful women, colorful nightlife, local culture and traditions, low cost of living, comfortable climate, luxurious resorts … the list goes on and on.

One of Pattaya’s most attractive features, in this writer’s opinion, is the rich diversity of ethnic and cultural backgrounds represented within the local population. While so-called ethnic Thais remain the clear majority, we locally encounter a number of Thai minority groups, as well as groups of foreign nationals from around the globe, many of whom lovingly consider Pattaya their adopted home.

We are fortunate to live in a community which, though ethnically diverse, seems relatively free of serious ethnic and racial tensions. At a time when such tensions seem to violently erupt regularly in so many other regions of the world, the relative calm and serenity we enjoy is particularly refreshing. While it is tempting to think of ours as a tolerant and progressive community, it is not uncommon to hear comments revealing, often subtle, yet unattractive ethnic, racial, and gender stereotypes which exist, even among seemingly educated and enlightened individuals.

There are many examples of stereotypes that could be cited. Women are considered poor at math. Athletes are intellectually inferior. Italians are emotional – or is it romantic? White men can’t play basketball. Visiting “farangs” can occasionally be heard making disparaging comments about the intelligence and sophistication of the natives.

Stereotypes spring from our natural tendency to categorize people and draw conclusions about them based upon their membership in some group. Although the word “stereotype” is often used in a negative context, it is worth remembering that forming inferences about people based upon their membership in a social group actually provides us certain benefits.

Experiments by social psychologist Neil Macrae and his colleagues have demonstrated several advantages resulting from the use of stereotypes. Subjects provided with some stereotype label, such as “artist,” were generally better able to recall traits listed in connection with the person so labeled, as compared to subjects who were not provided with the label. Furthermore, they performed better on a simultaneous task, suggesting a more efficient use of cognitive resources resulting from the use of labels. The researchers also found that the beneficial effects appeared even when subjects were not consciously aware that they had been exposed to the stereotype labels.

Unfortunately, there are also huge drawbacks to the categorization of people using stereotypes. Numerous studies have demonstrated that, when information about a person is inconsistent with the stereotype, we are less likely to perceive or remember that information. If we are introduced to an African American as an intellectual and basketball enthusiast, for example, those of us exposed to the popular African American stereotype are more likely to register and remember his athletic inclinations, rather than the fact that he had achieved intellectual prominence.

In addition, stereotypes may include incorrect and often demeaning generalizations about groups of people which are, nevertheless, founded upon some prominent historical event. Thus, the sneak attack by the Japanese upon the United States during World War II may have influenced many Americans of that era to form an impression of the Japanese as sneaky and unable to be trusted. European colonialism may have influenced people living in developing countries to view Europeans as a particularly aggressive people, insensitive, and disrespectful of the cultures of other nations. Viewpoints like these are obviously flawed, because they assume an unrealistic degree of homogeneity about populations that are, in reality, more heterogeneous in their attitudes and behavior than our stereotypes suggest.

Perhaps the most objectionable consequence of stereotypes, however, occurs when they are used as a rationale for discrimination and social injustice. It is this practice more than any other which may be responsible for giving stereotyping such a bad rap. Unfortunately, the space required for an adequate discussion of discrimination, will require us to revisit the topic in a future column.

Dr. Catalanello is a licensed psychologist in his home State of Louisiana, USA. He is a member of the Faculty of Liberal Arts at Asian University, Chonburi. Address questions and comments to him at mscat@ asianust.ac.th