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Money matters: A brief(ish) history of Stocks (Part 2)
Graham Macdonald
MBMG International Ltd.
{From last week: It’s generally accepted that the
Dutch East India Company or Vereenigde Oostindische Compagnie (VOC) was
the precursor of the modern public company. It was a co-operative
arrangement when, on 20 March 1602 the prime companies of Holland merged
to form the VOC, with six chambers, each with a 75-member board of
directors, of which an executive board of 17 members was elected. The
original paid up share capital was 6,424,588 guilders. The key to success
in the raising of capital was the decision taken by the owners to open up
access to a wide public and to accept shareholders as part-owners. Thus
the shares were sold rapidly, mostly at a nominal value of 3000 guilders,
and they were tradable (i.e. any Dutchman could buy and sell them). This
last feature was the real innovation.}
The share price was not set by the government of the
country but by an independent joint-stock corporation interested in
profit. The company shareholders (the term actually came into use after
about 1606) had to produce the subscribed capital in four instalments
called up by the VOC between 1603 and 1606. The shareholder received a
receipt (Part) for the payment to the nominal value of the share (just as
was to become customary at the British East India Company over 100 years
later when that institution’s structure was democratised).
A share certificate documenting payment and ownership
such as we know today was not issued but was instead entered in the
company’s share register. Purchases and sales of shares were effected by
a new entry in the VOC’s share register in the presence of two
directors, who needed to confirm the share transfer by signature. Thus the
Amsterdam Kontor of the VOC became the “first stock exchange in the
world” by trading in its own shares.
The VOC’s start-up capital was never increased apart
from a few small adjustments to 6,440,200 guilders. The company covered
its short-term capital requirement by issuing bonds with a term of 3 to 12
months. Later, after 1655, capital was taken up for longer terms so that
loan capital increased at times to 10-12 million guilders.
Not only did the “Vereinigte Ostindische” make
history as the mother of all joint-stock companies, but so did its shares.
Even before all shares had been placed, its price was 10% to 15% above par
(the world’s first IPO) and by 1622 its price was 300% higher; in 1720
at the height of speculation its price was 1200% (and we think that
today’s PE ratios are scary?). When the company’s difficulties became
public in 1781, the price slumped to 25%. The dividend was on average 18
(read ‘em and weep)% per year and the highest dividend was paid in 1606
at 75%. Shareholders did not receive their dividends regularly and were
not always paid out in cash but partly also in spices, company bonds or
state bonds (in specce dividends do still exit today). Soon the
shareholders were popularly known as the “pepper sacks of Amsterdam”,
although they never got to see a proper balance sheet. Corporate
malfeasance, corruption, inadequate accounting standards - does any of
that sound familiar?
The demand for stock was of course a reflection of the
commercial success of the company. Within 65 years the VOC had become the
richest private company the world had ever seen, with over 150 merchant
ships, 40 warships, 50,000 employees and a private army of 10,000
soldiers. It helped to finance the blossoming of Dutch civilisation:
Rembrandt, Vermeer, Frans Hals, Vondel, Grotius, Spinoza, the largest
publishing operation in the world in the 17th century with numerous
authors and poets, some forgotten today, all the painters architects and
above all the patrons. However, after 198 years of existence, the most
significant company in the history of world trade was dissolved on 31
December 1799. As a result of mismanagement, debts of 110 million guilders
had been run up and these were taken on by the Dutch state.
The idea quickly caught on and the maritime powers of
the day, Madrid, Amsterdam, Lisbon and London were soon home to other
publicly traded companies (the British East India Company mentioned above
was a joint stock company that preceded the VOC by 2 years but was a
poorer example of open market capitalism being limited to 125 shareholders
and a capital of ฃ72,000).
Stock trading followed the patterns established by the
commodity markets over 300 years earlier in Bruges, where commodity
traders used to gather inside the house of a Herr Van der Bourse, and in
1309 they had institutionalised this until now informal meeting and
started the “Bruges Bourse”.
The idea quickly spread around Flanders and neighbouring counties and
“Bourses” soon opened in Ghent and Amsterdam. The commodity traders
hadn’t actually come up with the idea themselves - les courratier de
change in 12th Century France managed, regulated and ultimately traded or
brokered the debts of agricultural communities on behalf of the banks. By
the middle of the 13th Century Venice bankers also began to trade with
government securities (so successfully that in 1351 the Venetian
Government outlawed spreading rumours that were intended to lower the
price of government funds - again there’s a ring of familiarity there).
Pisa, Verona, Genoa and Florence (all independent city states not ruled by
a duke but a council of influential citizens, which is why they were able
to do so) also began trading with government securities during the 14th
century.
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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]
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Snap Shots: Special filters - inexpensively
by Harry Flashman
 Special
Effects Photography is in the realm of the special effects filters, and
can be a very expensive way of finding out what you like or dislike, but
the same effects can be done very cheaply, and producing these filters
makes for a great photographic project.
One of the nicest special effects is what is called
“center spot soft focus”. Now this just means the center is in focus
and the edges are nicely soft and blurred. This effect is used by portrait
and wedding photographers all over the world to produce that wonderful
“romantic” photograph. And it is all done by filters.
You can make these very easily. You will need one can
of hairspray, a one baht coin and a clear piece of glass or plastic
(perspex) about 7.5 cm square. This piece of perspex needs to be as thin
as possible to keep it optically correct. Put the coin in the center of
the perspex and then gently wave the hairspray can over it. Let it dry and
gently flick the coin off and you have your first special effects filter
– the soft focus center-spot.
Another way is to use a piece of stocking (pantyhose)
material. Stretch it over the lens and tie it on with a rubber band. Cut a
small hole in the middle and your second soft focus center-spot is ready.
Now to use this filter. If you have an SLR (single lens
reflex) camera or a digital, you actually look through the lens when you
are focusing and what you see is what you get (the WYSIWYG principle). Set
your lens on the largest aperture you can (around f5.6 or f4 is fine).
Focus on your subject, keeping the face in the center of the screen. Now
bring up your magic soft focus filter and place it over the lens and what
do you see? The face is in focus and the edges are all blurred! Try some
different f-stops as well (it makes the center spot larger or smaller) and
record the details in your trusty notebook!
You can also use these filters with any compact point
and shoot camera, but it is a little more hit and miss. The reason being
there’s no WYSIWYG with compacts. What you have to do is position the
center of the filter over the lens and, while keeping it there, bring the
camera up to your eye, compose the shot and then shoot. Takes some
fiddling and manual dexterity and take a few shots as you are really
flying blind.
Another one is the Super Sunset Filter. This one will
give you that wonderfully warm “tropical sunset” which will make
people envious that they aren’t over here to enjoy such spectacular
endings to the day. To produce the warm glow, just take off your
sunglasses and place one side over the lens. It’s that simple! Just look
at the difference yourself, with and without the sunnies. The camera will
see it the same way.
The next one is the super-cheap polarizer. This time
you need a pair of polaroid type sunglasses. Holding the sunglasses in
front of you, slowly rotate the glasses while looking at reflections in
the water for example. When the reflections disappear, note the degree of
rotation and then hold the polaroid glasses over the lens at the same
angle. Once again, you will get a very similar result to the way your eye
sees the scene.
Soft romantic effects can be produced in many ways, and here are a few
tried and true methods, and super inexpensive as well. The first is to
just gently breathe on the end of the lens just before you take the shot.
Your warm breath will impart a “mist” to produce a wonderfully misty
portrait, or that early morning mist look for landscapes. Remember that
the “misting” only lasts a few seconds, so make sure you have the
camera pre-focused and ready to shoot. If you have control over the
aperture, try around f4 as well.
Modern Medicine: The Ganglion (gang-glee-yon) and the bible
by Dr. Iain Corness, ConsultantA
ganglion is a strange ‘lumpy’ thing that generally is found on the top
of the wrist, though it can be underneath or even at the base of a finger.
They start being about the size of a pea and often you can only notice a
ganglion if you bend your wrist downwards and up it pops. However, the lump
often gets bigger with constant, strenuous use of the hand and shrinks at
rest.
They can be painful if they push on nerves, though in
most cases, the patient brings the lump to the doctor just because they know
it shouldn’t be there! Or it wasn’t there before. And the large ones
look unsightly.
The ganglion actually connects with a small sac which
holds some thick lubricating fluid between the bones in the wrist. For many
reasons, the sac can become larger and a ‘balloon’ extension forms and
forms the pea sized lump which is pushed up under the skin. So inside your
ganglion is the clear gel-like material, which is usually used as a joint
lubricant.
In the good old days, when the doctor was a god-fearing
soul, he kept a large bible on his desk. The treatment was to place the
wrist on the desk top and without announcing his intentions, the doctor
would strike the ganglion with the heavy bible, bursting it and another
‘cured’ soul would leave the consulting room. Well, at least without the
lump they came in with!
These days, we are a little more scientific than that,
and an X-ray is often taken to rule out arthritis or a bone tumor. Sometimes
even an MRI or ultrasound scan needs to be done to find a small ganglion
hidden under the skin or between the bones.
There are various forms of treatment offered, which can
range from the very conservative “do nothing and wait and see”, through
to a splint to stop movement at the wrist and finally surgery.
My own experience is that the “wait and see” approach
generally accomplishes very little, and the ganglion continues to grow. The
patient arrives expecting ‘something’ to be done, and being told to
“wait and see” with no guarantees, takes quite some convincing.
By letting the gel fluid out by bursting the sac seems to
work well in the majority of cases, and especially in the short term. This
can be done with a large bore needle, although sometimes the gel fluid is
too thick to come out. In this case, multiple punctures of the cyst and
pressure over it will cause the discharge of the contents, and a pressure
bandage for a few days to stop immediate refilling of the cyst will work.
Some practitioners will also inject a sclerosing agent, or hydrocortisone,
but there is no clear-cut agreement on this, though I found that a small
amount of hydrocortisone injected after aspiration seemed to work well.
If there is a recurrence (which unfortunately does often
happen) then operative removal of the cyst and its sac becomes necessary.
Some orthopedic hand surgeons will do this via an arthroscope, though open
operation is also carried out in some centers.
According to the Mayo Clinic in America, surgery may be
recommended if the other treatments fail. This surgery is done as an
outpatient procedure. During surgery, the cyst, along with a small amount of
surrounding tissue, is removed. There may be tenderness, discomfort and
swelling at the site following surgery, but normal activities can usually be
resumed in two to six weeks. Surgery offers the best chance of removing the
ganglion, but even then, the cyst may return. However, my experience is that
recurrences after this are very, very few.
Learn to Live to Learn: We are all individuals
with Andrew Watson
I often have this discussion with students about what
on earth it is they are expected to learn and what on earth it is I am
trying to teach them. It’s basically a philosophical discussion. Now,
writing this is a risk in itself, because this acknowledgement could be
taken in at least two opposing ways. Firstly, you could argue that if
students need to ask this question, then the objectives of the lesson
are not clear, and that the aims ha ve not been properly articulated.
I’ve seen fossils deliver lessons where this is the only conclusion
that can reasonably be arrived at, down a tedious and inevitable
intellectual cul-de-sac.
Secondly, and the view which I prefer, is that these
kinds of questions are a natural and an essential part of encouraging a
student to demonstrate inquisition, imagination and individuality in
searching for their own personal truth, their way of understanding. I
hasten to add that this isn’t some leftish, earth mother claptrap.
Neither do I intend contesting the concept that two and two can only
ever be four, although “chaos theory” holds otherwise. What I’m
getting at is this: anyone brought up in English speaking environments
in the seventies and eighties, who was there at the birth of “Life of
Brian”, that classic Python satire of politicised religion, will
remember the marvellous scene where Brian implores the assembled throng
to realise that they are “all individuals”. He goes on; “You
don’t have to follow me. You don’t have to follow
anybody!” This exhortation is at least subversive and probably in
essence, pretty revolutionary. Which is why the “‘W’omans
stwung” him up.
In order for people to flourish as individuals, they
have to be encouraged and allowed to become so. Therefore, in my view, a
good teacher should encourage subversion to an extent, confident in the
strength of his or her own character and professionalism, whilst
trusting in the systems and structures of the organisation, which should
provide a safe environment for students to explore and establish their
own borders. Of course, it doesn’t always happen. Maybe it rarely
happens, for many of the reasons regularly documented in this column.
Maybe it’s the quality of teaching, maybe the quality of Principal,
maybe the lack of structure, maybe cultural issues. Whatever. Sometimes
it doesn’t work. So then what?
Well, being allowed to become an individual is
closely associated with the rights of an individual. It appears to me
that in order to preserve and ultimately develop individuality, it is
necessary to assert your rights. And what better way than by asserting
your rights as an individual parent and fee payer?
I was recently sent an email from a teacher working
in the UK, which must resonate strongly with many fee paying readers. He
called it, “10 ways for parents to raise standards” and he was
quoting Margaret Morrissey, of the National Confederation of Parent
Teacher Associations (in The Observer Newspaper, 11/9/05).
1 Talk to other parents about any areas in which you
would like to see the school improve. Working together is easier. Other
parents might have different ideas about how to achieve your objective.
2 Present your ideas to the Parent Teacher
Association. Make it clear that you and other parents want to help the
school to raise standards further. Try to avoid sounding critical of the
school’s existing methods. Don’t use malicious gossip as a weapon.
3 Join the governing body, get involved with the
Parent Teacher Association or just go in to help tidy the classroom from
time to time. You’ll get a better rapport with the teachers, know more
about what’s going on and be in a better position to offer positive
suggestions.
4 Ask about coming in to listen to children read, to
talk to pupils about your job or about mentoring children. Pupils often
respond better to help from an adult who is not their parent.
5 Ask the school or PTA to set up a home/school
learning website that will tell you more about the methods the school
uses to teach your child - and what you can do at home to reinforce
that. A website can help parents - particularly those who are working
full time - to keep more closely in touch with what the school does.
6 Organise fundraising to pay for extra-curricular
activities or specialist classes after hours. Positive commitment is
likely to enthuse both pupils and staff.
7 For particular problems about your child’s
education, first raise informally any concerns with your child’s
teacher. If the informal approach doesn’t work, set out your concerns
in writing, first to the teacher, then to the head of year then the
headteacher. Don’t pretend to speak for others.
8 Pause to consider if the school might not be suited
to your child. Some will be good, but operate in a way that doesn’t
match your child’s needs. In this case, although it’s difficult, the
best option might be to move your child elsewhere.The next step if you
are still not satisfied is to complain to the governing body.
9 If the school is failing badly it might be
necessary to complain to the Department for Education. Clear evidence of
what is wrong is more likely to get a response than vague claims.
Substantiate claims with documentary evidence.
10 Never be aggressive. Going in fighting, however
tempting, will substantially reduce the chances of the school listening
to you and could cause problems for your child.
Well that’s something to begin with, then.
[email protected]
Next week: Man Near The Top
 Heart to Heart with Hillary
Dear Hillary,
With all the rain we have been having recently with flooding and
landslides and such, do you think it would help if all the beer drinkers
agreed to dispose of as much flood water as the beer they drink each
day? It would have to benefit the environment, surely. What do you
think, Hills?
The Flood Planner
Dear Flood Planner,
What a novel suggestion, but please don’t call me “Hills”! Now
what did you want the beer drinkers to do? Get down and actually drink
the flood waters, or what? You should be much more specific, my Petal.
As far as I know, beer drinkers do take in large volumes, but they also
have to let go of large volumes, judging by the steady line-up outside
the gentleman’s loo any time I have ventured out to the local watering
hole. Even if they drank the flood waters, they would later be returning
them to the overflowing drains, wouldn’t they? I think you will have
to work on this project a little longer. Perhaps another couple of beers
in the meantime, sitting somewhere dry, will produce the answer.
Dear Hillary,
What a sad person you are. Listening to all these even sadder people
dragging out all their dirty washing. I don’t believe there are really
that number of sad-sacks left in the world. Would you like to confirm
me?
Doubter
Dear Doubter,
Or should that be Doubting Thomas? I’m really not sad, Petal, I enjoy
life, and when I can help people, then I do. But remember that many of
the writers are not looking for advice, like you for example, but use
this column as a forum where they can get some vicarious (nice word)
pleasure from seeing their own words in print. Hope you have enjoyed
your 90 seconds (or 2 column centimeters) of fame. Now run away and
play, that’s a good boy!
Dear Hillary,
All these people who write in and complain about your advice and then go
on to try and give you advice, need their own heads read, I reckon.
Can’t they see that it is entertaining, but when you need to be real
you do give the good advice. The poor old lonely bloke a few weeks ago
for example (sorry I’ve lost the paper), but I’m sure you’ll
remember it. I’m surprised that there are so many people with nothing
better to do than be bitchy. I love you, Hillary! Chocs and champs next
time we meet.
A Fan
Dear Fan,
Thank you very much for your lovely letter (but next time stick it to
the bottle of bubbly and the chocs and I’ll be even more happy). You
are correct, there are many people who spend their time complaining
about everything and everyone (and not just at Hillary, if you read the
letters to the editor page). These people really should get off their
high horses before they slip off and break a leg. There’s too much fun
in the world, my favorite Fan, to waste time with noisy complaints and
getting upset about nothing. Now, having got that off my chest(s), where
was that last chocolate?
Dear Hillary,
We have some people coming over at Xmas and they have heard that clothes
are cheap in Thailand and they keep telling me they are bringing an
empty suitcase so that they take all their new clothes back with them.
The problem is that both of them are around a size 18, or just about
twice the size of the local women. They are really going to stand out
here. I have been looking around the fashion shops before they come, but
the clothes establishments (even the designer shops) just don’t stock
size 18, and “one size fit all” just doesn’t work in this case. Do
you know of any places that sell larger sizes? If you don’t, how do I
tactfully break the news to them?
Christian Dior
Dear CD,
I am honored! A famous designer writing to Hillary. And wanting my
advice on fitting dresses to models. It’s just a pity the models in
question are so large. Though what you have to remember is that Thai
ladies are sizes six to ten, with most around size eight. The overseas
ladies are much larger by comparison, though they do not seem so out of
place in their own countries, do they? However, fortunately, Hillary has
the answer for you and your friends, Petal. What you (and they) have to
do is forget about buying size 18 clothes off the peg and have clothes
made while they are over here in December. The clothes will still be
much cheaper than they can have made in their own country. Advise them
that they should bring a couple of their favorite dresses with them and
have them copied here. All they have to do is to choose the material and
the tailors will do the rest. Tell them that the quality of tailoring is
so much better, and go from there. They will soon see that they are not
going to fit into the local sizes anyway! And I’ll let you know what
size I am going to need for my next champagne party dress!
Psychological Perspectives: Crisis in France: Understanding violent behavior by groups
by Michael Catalanello,
Ph.D.
At the time of this writing, violence
continues to erupt in nearly 300 cities and towns across France.
Destructive rioting that originated on October 27 in
Paris’s suburbs has spread, recently turning deadly, as a 60-year-old man
was reported killed. Thousands of cars have been torched during more than
two weeks of nightly violence; two churches and three schools were
firebombed, according to news reports. Even police, attempting to quell the
violence, have come under fire, leaving thirty-six officers wounded, two
seriously.
The sudden, widespread appearance of mob violence like
this raises some interesting questions about human behavior. Why would so
many people suddenly resort to such extreme, destructive behavior? What
forces are at work in episodes like this?
The general wisdom that has emerged in news commentary
associates these ugly incidents to frustration experienced by ethnic
minorities over poverty, racial discrimination, high rates of unemployment,
their low status in French society, and related injustices. The violence
was reportedly triggered by the accidental electrocution of two teens as
they attempted to elude police. It subsequently seemed fueled by the
unfortunate comments of France’s Interior Minister, who characterized the
rioting immigrant youths as “rabble.”
While frustration over long-festering injustices might
seem to be a reasonable factor leading to this explosion of anger-fueled
violence, is it sufficient to account for the extreme behavior exhibited by
the members of these mobs? What light might psychological research shed
upon these troubling events?
Psychologists have demonstrated that groups have a set
of dynamics that do not exist when people are acting individually. Do you
recall the feelings you experienced as a member of a crowd at a sporting
event, a music concert, or a political rally? Perhaps you felt a sense of
excitement and power, a sense that you were a part of something bigger than
yourself. Members of groups have been shown to be aroused, meaning
that they are more physically activated, excited, primed and ready for
action.
Researchers have also theorized that a person generally
feels less personal responsibility as a member of a group, than as an
individual. For example, a person is less likely to offer assistance if he
encounters an emergency situation as a member of a group, than if he
witnesses the same emergency while alone. In addition, a person seems
capable of performing acts as a member of a group that he or she might
never even consider performing as an individual. It’s as if
responsibility for behavior becomes diffused within a group
situation.
Like the rioting in France, episodes of looting, police
brutality, rioting at sporting events, military massacres of civilians and
lynchings are actions that are performed almost exclusively by groups. It
would be difficult to imagine these activities being performed by
individuals. Psychologists Leon Festinger, Albert Pepitone, and Theodore
Newton coined the term, “deindividuation” to describe a process
whereby people lose a sense of their own identity, adopting instead the
norms of behavior of the group which make these activities possible.
Deindividuation occurs most easily when certain
conditions are in place. The size of the group is one important factor.
Vandalism performed by a large group hides the vandalism of an individual.
Participants become faceless in a rioting mob. Darkness serves the same
purpose, hiding the identities of the individuals performing the violent
acts. It is noteworthy that the rioting in France occurred predominantly or
exclusively at night and in groups. Larger crowds are capable of greater
atrocities because they afford greater anonymity to their members.
Psychologist Philip Zimbardo hypothesized that crowded
cities create conditions of anonymity for the inhabitants, thus making
antisocial acts more likely to occur. To test his hypothesis, he abandoned
two cars with their hoods left open. One car was left on a busy New York
City street, and the other in Palo Alto, a comparatively smaller city. As
predicted, the New York vehicle was quickly and repeatedly vandalized; a
total of 23 times over three days. By contrast, the car abandoned in Palo
Alto was never touched, except when a passerby stopped to lower the hood
when it started to rain.
There is no doubt that violent behavior by crowds of
people is a complex phenomenon with multiple causes or influences. The
apparently longstanding injustices suffered by ethnic minorities in France
must certainly be considered an important factor leading to their decision
to participate in these violent acts. There is, however, more involved than
injustice.
The French, after all, do not have a monopoly on injustice, and rioting
is not a common response to such conditions. Further, it is not unheard of
for groups to choose to respond to injustice using nonviolent means.
Psychologists and other social scientists are actively exploring issues
like these. Perhaps as we advance our understanding of group behavior, we
will develop means of reducing the potential for violent and destructive
acts like those we are witnessing today in France.
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Dr. Catalanello is a licensed psychologist in his home State of Louisiana, USA, and a member of the Faculty of Liberal Arts at Asian University,
Chonburi. You may address questions and comments to him at [email protected], or post on his weblog at
http://asianupsych.blogspot.com
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