HEADLINES [click on headline to view story]:

Money matters

Snap Shots

Modern Medicine

Heart to Heart with Hillary

Beyond the Beach

A Female Perspective

Money matters: Big is Best? Part 2

Graham Macdonald
MBMG International Ltd.

The currency and taxation arrangements of many expatriates are extremely detailed. To our mind, private banking hasn’t grown to reflect that - it still remains the case that banks will just propose investing client funds into equity markets when deposits become sizable, just as they would have 100 years ago.
UBS launching their range of Absolute Portfolios and funds is a big step forwards, but it’s more of a step into the 20th century than the 21st. The banks would argue that in local branches no-one else can provide this service to small account holders today - that may well be true - for sure the internet has not yet even begun to offer advantages that can compare to local personal service.
The bank also argues that their biggest clients don’t need a holistic service - investors with US$100 million or upwards may well employ their own tax lawyers and other specialist advisors and, therefore, simply come looking purely for fund management services in isolation.
However, the vast majority of our clients, with investable assets between US$50,000 and US$5,000,000 require a personal, tailored, efficient, holistic solution. We believe that the onus is on us to select the best banks, the best portfolio managers, the best custodians, the best trading platforms. These are all very different skills and therefore require different providers. You may choose a TV, video and DVD player from the same manufacturer but private banking equates to also buying your car, fridge, laptop and washing machine from the same company too!
Specialization generally allows focus on core skills - we believe that private banking was once an extremely useful local service but in this day and age has become outdated and much better alternatives are available.
We’re not sure whether the idea of a single provider purporting to offer a wide range of specialist skills amounts to corporate arrogance (clients must deal with us because we are XYZ Banken Geschaft) or corporate complacency (we don’t do a very good job, but it is good enough for most people to continue to come to us rather than find better alternatives), but either way it distresses us that so many people are so willing to settle for so much mediocrity.
In the 21st century better alternatives are available and as more and more clients take advantage of these, private banking will, hopefully, be forced to sharpen up its act. UBS launching the range of Absolute Return portfolios and funds is one of the first signs that this is happening. We’d recommend as essential reading Michael Lewis’s excellent “Liar’s Poker” as evidence of how private banks’ self interest invariably prevails in the conflict of interests between the banks’ own trading desks and their private banking clients.
UBS strengths
That’s not to say that there aren’t positives to the UBS offering - the marketing here is excellent and the materials extremely well put together. UBS is a huge multinational conglomerate that leverages their brand extremely well. However, we are extremely concerned about some of the UBS Absolute Return Portfolio’s weaknesses.
UBS Absolute Return weaknesses
- Lack of impartiality and suitable experience/skillset at portfolio construction - UBS Global Asset Management effectively operates as 5 investment divisions :
Once you make it to the top of one of those divisions you get placed in charge of asset allocation. This means that your preparation for deciding how much allocation is suitable to stocks, how much to bonds, how much to alternatives, how much to property and how much to deposits could be made by someone whose experience and qualifications are based upon knowing whether Microsoft is a better buy than IBM or not - a very different skillset from intimate knowledge of something like commodities. Also, if you’ve spent 30 years working in equity departments you’re invariably going to be biased towards equities as your understanding and familiarity is higher. This leads to sub-optimal portfolio construction.
- There is also a lack of pre-eminence across asset classes. We don’t believe that any one organisation has the skills across every asset class, let alone every sub-class. This creates 2 problems:
a) Their investment to certain sectors doesn’t yield results that are as good as they could be;
b) They don’t have exposure to sectors where they lack skills - they might miss out on the most attractive sectors because they know that their skills in this area are weak.
Independent, impartial and personal
Whereas MBMG’s portfolio managers regard every type of market as offering an opportunity and we’d want to have access to whoever has the best skill set in that market place, UBS is well placed in that they do have excellent skills in alternatives, strong skills in equities, reasonable skills in bonds and deposits. However, their performance indicates below par skills in property. More importantly they only cover a fraction of the markets that exist and therefore constantly run the risk of missing opportunities and when they do capture the opportunities, there is always the risk that someone else is doing it rather better. There might be 10 sector property funds of which 9 are doing a better job than UBS but they can only use their own fund.
MBMG has, in essence, 5 core portfolios and UBS 3 - in their material they only mention 2 portfolios that relate to the 2 best performing of the 3 funds - it would appear that the worst performer has been swept under the carpet and forgotten about. If that’s the case, this strikes us as somewhat misleading. This is a new discipline for UBS, as they started offering these portfolios as private client portfolios in 2004 and made them publicly available in June last year. We’ve monitored the public portfolios closely as UBS’s marketing machine has ‘encouraged’ use of them.
However, thus far, we have chosen not to take exposure because our concerns are:
a) They’re too new to be fully tested - i.e. it’s maybe too early to form an opinion;
b) They’re new within UBS, the asset allocation process there isn’t sufficiently mature - i.e. we’re not sure that they know what they’re really doing yet;
c) The weaknesses referred to above;
d) The relative performance hasn’t been compelling.
It’s very difficult to talk about overall portfolio performance here - we do have standard portfolios which we use as a benchmark BUT virtually every client portfolio that we put together tends to be unique - just our ‘standard’ portfolios performance in every currency would, however, run to War & Peace. However, by using our core investment advisors, Miton Optimal, and just using GB Sterling, we can state that over the last three years an average portfolio has always been in the top decile and is usually first, which is why Miton Optimal has been recognised as the top fund performance manager by S&P, Lipper and Multi-Manager.
Continued next week…

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: Have camera - will travel and shoot for food

by Harry Flashman

Want to travel all over the world, taking photographs of gorgeous women on tropical beaches? Many amateur photographers wonder just what it is like to be a professional and be paid for doing what amateurs do for no pay at all. What a wonderfully idyllic existence. Unfortunately, I must burst your bubble I’m afraid. Pro shooting is a sure-fire way to get stomach ulcers.
Let’s take the Overseas Trip to start with. I’ve been there, done that, and my first was to the Solomon Islands to principally shoot some beachwear fashions. Air tickets paid for photographer and model, accommodation free and arranged in resorts all over the island groups – this was going to be one giant paid holiday. Well, it was – on paper!
Before going on an overseas shoot you have to very carefully choose your equipment. And take enough to cover all emergencies. For that trip I took two Hasselblad medium formats and a 35 mm camera. A whole bunch of lenses and a Polaroid back, some filters and many, many rolls of pro film, all kept under refrigeration and then stored in a special “cool” bag. A large flash and there was also a large Italian tripod. Nothing was left to chance. Nothing could go wrong – go wrong – go wrong …!
Of course you have to record all the serial numbers of every piece of equipment you are going to take, and make several copies. One to give to Customs as you leave, one to give to Customs when you arrive at the tropical paradise and another when you return to your own country. Forget to do this little paperwork can see you paying import duty on your own equipment on which you have already paid taxes, because you are carrying much more than the ordinary person would be carrying. You are now into the “commercial quantities” bracket – especially with film stock.
The first problem we had was the special screw that fits in the tripod head and screws into the base of the camera just vanished. No-one keeps a spare of those – and certainly no-one had a genuine large Italian one in a one pelican coastal town in the outer Solomon Islands. Fortunately, the model could speak Pidgin English and between us we managed to get a screw of the right size and pitch and made a replacement.
Hasselblads are the best cameras in the world in my opinion and they never break down – break down – break down …! Oh yes they do! Both of them suffered a malfunction and by three quarters of the way through the idyllic week I was rapidly going bald! Fortunately we had brought the 35 mm camera along – but the refrigerated pro film was medium format – not 35 mm. Fortunately again we managed to find the only pro photographer resident in the Solomon Islands, an underwater guy, but he had 35 mm pro film. I happily paid whatever he wanted!
Of course, when you are shooting fashion overseas you take the garments with you and they just tumble out of the suitcase freshly pressed and immaculate. No, you have to take an electric iron with you, but some of the locations were so far from civilization that there was no electricity. Ever wondered why you see so many tropical beach shots where the model has obviously waded out to sea in her good gear and is standing there in wet clothes? It’s because they couldn’t iron the creases out!
By the end of one week, you are totally exhausted. You have got up early for seven days to get that magic morning light. You have spent the major part of the day trudging through tropical paradise undergrowth, loaded down with photo gear to the next location, in time to set up for the magic late afternoon light. You then spend the evening getting everything ready for the next day – including ironing fashion clothes, some of which the model will drop in the mud the next day.
Who’d want to be a Pro? Mind you, all that drudgery didn’t stop me when I was asked to go to Fiji and shoot a travelogue the next year! Who wouldn’t want to be paid to take photographs in a tropical paradise?

Modern Medicine: Are shopping centers deafening your children?

by Dr. Iain Corness, Consultant

Deafness is an increasing problem in Thailand, a fact which is being acknowledged by the various noise abatement bodies in this country (and yes, amazingly there are some).
For some reason, noise seems to have become part of the local ‘culture’. How many times have you heard people screaming into their telephones? At volumes so loud they really don’t need the phone at all. Go into shopping centers and be physically assaulted by noise levels so great they approach the threshold of pain. I personally experienced one promotion for children that had passers-by holding their hands over their ears, whilst two screaming and amplified emcees exhorted the children to crowd around the stage (and its boom boxes). The damage to the hearing of young ears could be horrendous! Even walking down the street your ears are assaulted by not just motorcycles but slow moving promotional vehicles with mobile boom boxes to tell you all about the newest shopping center, where you can shop in comfort, other than unrestricted noise!
What does not seem to be understood by the public at large, however, is that hearing, like eyesight, deteriorates over time. However, damage the hearing early in life and when the hearing loss through aging is added to the hearing loss from noise exposure, you are guaranteed of increasing deafness as you get older.
Having been involved in industrial hearing protection in Australia for many years, we had to convince a reluctant workforce that it was necessary to wear hearing protection, if the industrial noise level exceeded 90 decibels (dB) for a 40 hour week. In auditory terms this is known as a ‘noise dose’ of 1.0. If the noise level experienced by the unprotected ear was over 120 dB, then the ‘safe’ exposure was measured in minutes. And as an example of 120 dB, that is the level reached by an ambulance siren – or a rock concert. Other examples are the hammer drill that you use to drill holes in concrete which operates at 114 dB or a headset for personal listening at full volume, so the ‘safe’ level here is 15 minutes a day. Even a hand drill operates at 98 dB, so the unprotected ear should not be exposed to this level for more than two hours.
The noise induced deafness characteristically affects the hearing at 4 kHz first, and that is towards the upper musical ranges, and it goes on from there. If this noise induced hearing loss begins early in life, then the chances of the person ending up clinically deaf by the time he or she is 50 years old is very high.
So what can be done? Various research papers from around the world have managed to quantify the risk, and others have managed to show that the risk is perceived by older children and young adults, but they are not likely to do much about it. In some ways I can agree with them. Why bother going to a rock concert if you have to sit quietly to hear the music?
The Canadian Journal of Public Health looked at this problem last year and reported that 74 percent of rock concert attendees thought it was likely or very likely that noise levels at music concerts could damage their hearing, but only three percent wore hearing protection.
Dr. Jeannie H. Chung and co-workers from the Harvard Medical School found that only eight percent of young adults thought hearing loss was a very big problem and yet most respondents had experienced tinnitus or hearing impairment after attending concerts (61 percent) and clubs (43 percent).
So we know the problem exists. We know the relative ‘safe’ levels of noise exposure, but is wearing ear protection the answer? Quite frankly, this is a classic example of the ambulance at the bottom of the cliff, rather than the fence at the top of the cliff. Preventive action needs to be done at the noise source. It is time for us to start shouting at the regulatory authorities! And keep your children away from noisy shopping center promotions!

Heart to Heart with Hillary

Dear Hillary,
After the recent month long ecstasy of the World Cup, I am left with a dilemma. My lady, who before never had the slightest interest in football, has developed an unbelievable passion for the game. I believe it started when Germany played their first game, and she took a fancy to Bollock (I do hope I’ve spelt his name right), the German captain. Even now the World Cup is over, I am being woken from my alcohol induced slumbers at two and three o’clock in the morning, to my darling watching the football channel and asking me if I’m sure the World Cup is over. Even her previous hobby of sleeping appears to have taken a back seat to football. Hillary, do you have any ideas how I could dampen her enthusiasm for the beautiful game, as I fear that come the new football season, watching the premiership football at my local watering hole with the lads on Saturday and Sunday nights will never be the same again.
Wayne Looney
Dear Wayne,
Your letter is interesting, for it shows the lengths some people will go to hide the true reasons for their queries. It is not the fact that you get wakened from your alcohol induced slumber that is the problem, it is the nagging worry that your football mad darling will want to come with you to your weekend watering hole and spoil your “fun”. This is where you and your mates use the football matches as the excuse to neglect wives and family and perhaps indulge in a bit of dribbling and ball play with the bar girls. With your darling now so engrossed in the game it will be difficult for you to get her to play Left-Right-Out at weekends, so you really do have a problem, my Petal. Perhaps the answer is for you to install a satellite TV that shows the Bundeslega, so she can follow Bollocks and other ball kickers, even if she can’t follow the commentary, but make sure the watering holes doesn’t show the German league, or you will have blown it.
Dear Hillary,
My girlfriend wants me to get her a credit card. Do you think this is a good idea? I am worried that she will go mad with it in the first month and I will be left with a huge bill to pay. Do Thai women work this way? I really do need help here. I have an ordinary credit card myself, nothing special, and I just use it for when I need some quick cash out of the ATM.
Credit Card Charlie
Dear Credit Card Charlie,
The rich get richer and the poor get poorer. I think those were the words of an old song, but a quick glance at the financial pages of any newspaper will show they are still pertinent today, my Petal. What brought this to mind was an article I read the other day on platinum credit cards. You know, the expensive ones, not your ‘ordinary’ card.
Now I have never been in the situation where I would be eligible for one of these platinum beauties. You have to show that you have a very high income before you can upgrade from the ordinary cheap plastic variety, up to a silver and then a gold card. To aspire to a platinum card requires an income that has so many zeros after the first number that I run out of fingers counting. No, the banks don’t need to keep one aside for me, or you, it sounds.
However, if I were able to get one of these cards, the banks would then shower me with additional goodies. Extra discounts will be made available to me, special low prices on goods, and the bank will, for no charge, give me extra services and travel planning, booking, insurance and assistance. I will even get the internet cheaper! Will somebody please tell me why?
If I have this super abundant financial status, I can afford to pay full price quite easily. I can pay for travel bookings and assistance. Just the same as I currently have to, because I haven’t got an astronomical income. Surely this is absurd! If I am rich, I can get the same goods and services cheaper than I can if I am poor! The poor pay top price, but the rich get a discount. The banks are certainly making sure that the rich get richer, while the poor get poorer.
It certainly is a topsy-turvy world that we live in. The poor pay more taxes than the rich. In fact, the super-rich don’t pay taxes at all (though, to be fair, they do have to pay the sharp accountants who ensure their tax-free status). The poor are lucky to get any credit cards at all, while the rich are showered with them. Please do not get me wrong, I am not jealous. Money isn’t really all that important. It is merely the lack of it that is the problem! However, perhaps one day the bank will make a mistake and send me a platinum card, and then watch me become the discount king! But for your problem, Charlie, I would suggest that you tell your girlfriend she should apply by herself for a card. Don’t get involved. Unless you like being a big spender!

Beyond the Beach: “The British Abroad”

An interview with Peter Upton, Director of the British Council in Thailand

Caspian Pike
And so to Bangkok. For the tenth programme in the series, Andrew Watson visits the Head Office of the British Council in Thailand, in Siam Square. Having travelled far and wide over the past two months, with the question of cultural identity seemingly never far away, “Beyond the Beach” discovers an organisation which projects a hugely positive side to “The British Abroad”. So much for perfidious Albion!

Peter Upton talks about the role of the British Council, both here in Thailand and Worldwide.
Established by Royal Charter as an independent organisation in the UK sixty years ago, the British Council is a massive presence worldwide, with a network of 218 offices. There’s been a British Council presence in Thailand since 1938. Founded on the belief that “the culture, creativity, languages and way of life of a nation can be shared abroad as a means of strengthening mutual understanding and collaboration,” they are throbbing hubs of creative and educational activity. Their espoused intention is to enhance the reputation of the UK in the world as a valued partner. Lofty ideals, you might think? Altruistic aspirations? Well, what about putting them into practice?
It is left to Peter Upton, Director of the British Council in Thailand, to explain how their mission statement is consistently and impressively implemented across a range of initiatives.
Peter Upton maintains a ridiculously busy schedule; the British Council, we learn, is a huge operation. He’s an egalitarian, enlightened leader. The office is open-plan; there are no doors to hide behind. He believes in encouraging his team to express themselves with creative élan. It’s an obviously happy place, with a pervading sense of purpose.
Moving around the aesthetically alluring interior of the building, Watson makes the point that a lot of British people don’t seem to know about the extraordinary work that the British Council does. Part of the reason for this, Peter Upton explains, is that the various projects are primarily aimed at indigenous populations. Also, the majority of employees are from the host country; another deliberate policy. It’s definitely not some kind of ‘expat’ club.
Typically tongue in cheek, Watson and his guest take tea together, indulging in that quintessentially British pastime, whilst Peter Upton gives some examples of how his organisation translates rhetoric into action. How do they achieve objectives such as, “projecting creativity and creating opportunities to connect with the latest skills, ideas and experience?” The answers are illuminating and through Peter Upton’s evident passion, often inspiring.
The programme changes direction a little as BYB explores the man behind the job. Peter Upton is refreshingly apolitical and speaks with humility and enthusiasm about a journey which has taken him across the world; an odyssey which has consistently embraced ‘Internationalism’ by uniting culture and education. Back in the office, he talks about the future of the British Council, which seems to be as bright as the outrageously orange furniture on which he is seated. I was left feeling that this guy is in the right job.
It’s an engaging show, a logical progression from last week’s piece with Chris Wright, the “Twenty first century Guru”. I’m thinking to myself, “What have the BYB team got in store for us next?” I’m looking forward to finding out.
Catch Andrew Watson’s interview with Peter Upton, Director of the British Council in Thailand, “The British Abroad” on Sunday, at the following times:
Sophon at 8:00am - Midday - 4:00pm - 8:00pm and Midnight.
Chonburi at 9:40am - 2:00pm - 8:40pm and 40 minutes after midnight.
Jomtien at 9:00am - 12:30pm - and 9:00pm
Sattahip at 8:00am - 1:30pm - 5:00pm - 8:00pm and 11:00pm

A Female Perspective: A difficult time

with Sharona Watson

Sharona and her sisters; together again.

In the fallout of feeling forty, now that the euphoria of celebration has settled back into routine, I can focus on things which really matter. Even though I have no worries about dealing with anything which fate throws at me, whatever I have to do takes time, planning and energy. I feel like I’ve woken up the morning after a great party (which I’ve done literally a few times in the past few weeks) and found debris everywhere. Bottles, plastic plates stained with the remains of a variety of foods, cigarette butts rocking around the bottom of half drunk beer cans, the stale stink of drink.
In such circumstances, the first thing I do is open all available windows and doors and let the sea breeze sweep the fustiness away. I find a great ‘morning’ CD, ‘The Lighthouse Family’ or Bill Withers and throw it on. Out come a series of black bin bags and off I go. When I start, I can’t stop until it’s finished. And when it’s finished, I’ll sit with a book and a cup of Arabic coffee and read in solitude, whilst the waves wash peace into my soul. I think of the conversations I’ve had and the people I’ve met during the course of the party and then slowly, my mind fills with the things I have to do.
The school summer holidays for children seem so long; at least six weeks, often two months. I can’t understand why they last so long. Living so far away from family and friends, long spaces like this present many difficulties. We would love to visit everyone but those we would wish to see live across the globe, from Canada to South Africa, to Australia. You have to pick and choose. Those we don’t see this year will be at least a year older next time we see them. Children will be unrecognisable, the passage from childhood to adulthood an immediate transformation, testament to the lost years. Photographs, home movies, even telephone calls, MSN, Skype, are not enough. There’s nothing quite like holding the ones you love in your arms. For all the pleasures of living in Thailand, I do miss some special people, very much.
So this summer, at massive expense, we are visiting my family for the first time in five years. When I saw my favourite sister (of three) at the airport, my heart overflowed and the tears spilled down my face. She hardly recognised my children. Last time she had seen them they were nine and one; now they are fourteen and six.
It’s incredible to see the changes that have happened in the country even in the relatively short time that we’ve been away. The airport is no longer a scrum; people used to barge you out of the way. I was happily surprised to find the airport experience almost enjoyable. On the other hand, as we drove through a suburb of our home town, it’s reassuring to see that some things always seem to remain the same. The routine pace of life hasn’t changed. The culture is so embedded that it will take generations before it is possible to detect a difference. There’s an old Yemenite quarter where all my elderly extended family and relations still live. Some of them haven’t seen me for twenty years. So it’s almost unbelievable that when I took a stroll around the area, they recognised me immediately. Great aunts, great uncles, long lost cousins; suddenly they had congregated together to welcome me back home. I felt like an explorer returning from a great journey. Maybe even like a ‘prodigal’ daughter. It reminded me of my roots and the very strong sense of community which surrounded me as I grew up. Yet, the landscape around the low-rise ramshackle Yemenite area has altered beyond recognition. Where I remember fields, orchards and grape vines, there are now high rise apartment blocks, shopping centres and roads.
When all my close family came together, it was remarkable how quickly we slipped back into the same dynamic we had as children. I’m the second of four sisters and we all have completely different personalities. The eldest has always adopted a bossy, maternal role; I’m the naughty one, the third is driven and the fourth (whom I get on with best) is quiet, sensitive and thoughtful. Our lives have taken on very different directions and if there’s one thing we have in common, it’s our strong sense of independence. Or, as Andy calls it, ‘stubbornness’. We have had to be strong in our lives, for reasons that I won’t go into just now, except to say that our shared experience has generated a sense of mutual respect for what each of us has achieved. It hasn’t been easy and there’s nothing like coming home to remind you of this.
There’s something else as well. Every time we come back here, there’s terrible violence. I don’t want to dwell on it in this column, for two reasons. Firstly, my husband is writing about it elsewhere. Secondly, I think the best way to deal with the kind of extremism that is all around us is to get on with your normal lives as best as you can. It’s a difficult time. Like I wrote last week, it’s important to maintain a positive mental attitude (PMA). If spending time in a war zone can do anything good for you, then it helps focus the mind and heart on what’s important. So no matter where I might be, war or no war, I am happy to be with my family whom I hardly ever get to see. I know what I believe; I believe in the sanctity of human life and I will do whatever I can to stop the suffering of people wherever they are and whoever they are. Recently, I couldn’t understand why I was chastised for stopping to help someone in Pattaya, who had fallen off their motorbike. Even when I was being falsely accused of being responsible for the accident, it didn’t alter my determination that I would do the same again.
Next week: Back to Life
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