More on endowments

Following our recent article about the Ivy League super endowments, we’ve been asked whether this is a uniquely US concept. The answer of course is no; universities and other institutions around the world manage huge sums of money in various way for a number of different requirements. This year we’ve already touched on the ultimate super-endowment, the managed wealth of the Roman Catholic Church and several times over the last few years we’ve featured the successes of some Oxbridge endowments.
We’ve pointed out that previously being the guardians of a college endowment that is nearly 700 years old doesn’t necessarily reduce the pressures to achieve short term performance but it does perhaps provide a greater perspective about what the long term really means. For instance, the investment committee at Clare College, Cambridge, meeting only a very few times each year to make strategic decisions about the allocation of assets in the college’s endowment fund which now stands at well over $100 million (still a minnow compared to the combined $50 billion of Harvard and Yale - notwithstanding the use of the US definition of billion, that’s still a huge difference in scale). In fact, Clare is one of the smaller colleges and smaller endowments among the 31 Cambridge colleges with less than 700 undergraduate and graduate students. Clare College was founded in 1326 by Lady Elizabeth de Clare, granddaughter of King Edward I. Also, each college has its own endowment, managed in its own, idiosyncratic fashion, and the university has a separate one.
Some holdings of the Clare College Fund, including parcels of commercial property, have been in the portfolio for several years. When it comes to the stock market, the decision-making process is essentially simple but extremely impartial and enlightened. Do they want to be in the markets: yes or no? If yes, they don’t stock pick themselves but delegate this or take representative holdings (such as ETFs).
This allows them to concentrate on a few large global markets, avoiding regions that seem overpriced. This avoidance of over-priced risk has tended to yield extremely consistent out-performance during bear markets. While the fund does not disclose its performance figures regularly, Donald Hearn, Clare’s bursar, estimated that the portfolio’s value fell by a cumulative 7 percent in the bear market at the start of this millennium. This was during a period in which major stock indexes in the United States and Britain generally lost at least a quarter and up to half of their value - the Standard & Poor’s 500-stock index, for example, falling by more than 30 percent during that period and the NASDAQ fell by more than 50%.
The fund’s advisers and Donald Hearn are led by a Clare alumnus. He is former investment banker Andrew Smithers, an economist and the principal of Smithers & Company, which is a consulting firm whose clients include fund managers and other professional investors. Andrew acts as consultant to the fund and tends to look at mean reversion as a basis of calculating value - if an asset is undervalued relative to where long term history indicates that it should be then it is likely to be on the radar screen as a buy. Conversely if it looks overvalued and is held within the portfolio then it will be highlighted as a potential sale. Mean revision may not carry any guarantees in the short term but, over the longer term, all assets so far have essentially tended to follow this pattern.
The fund’s advisers have long argued that major stock markets are severely overpriced, especially in the United States. By their calculations, fair value for the Standard & Poor’s 500 is significantly below its present level. As a result, the fund has owned no American stocks for some considerable time, although typically stocks might comprise around 31% of the portfolio, with a realistic minimum and maximum around much higher or lower than that depending on equity market values, and a theoretical ability to allocate 100% or nothing at all to equities.
If all markets were currently at fair value, a neutral allocation for the fund would be as much as 70% to equities, including private equity, with a neutral allocation to property comprising the balance. However, as fair value recedes from these markets, then cash and bonds acquire greater fair value and become increasingly significant with the fund. The fund had held large equity weightings until 1999 when it sold them down significantly because of its view that the markets had seriously over-reached themselves.
Smithers’ core belief is that markets tend to reach a valuation extreme, then move to an extreme in the other direction, the S&P 500 ought to fall not just to its fair value (the best part of 50% below current levels) but will fall through that level. His views are partly based around Tobin’s Q, a measure devised by James Tobin, a Nobel Laureate in economics, that compares a market’s valuation with the estimated cost of rebuilding the component businesses from scratch, which is used alongside other valuation tools. Tobin’s Q is conceptually simple: It holds that the stock market is worth the replacement cost of its constituent companies and that investors should buy only when the price is considerably less.
“We take the tack that we are not good enough at stock picking or market timing to take detailed decisions like that... I wouldn’t claim we’re going to get it right every single year, but we have had a strong run for a long period,” Hearn recently said.
Our view is that over reliance on Tobin’s Q, like over reliance on any single strategy can cause an investment to miss out on opportunities and while we recognise that the fact that the Clare endowment is impartial about asset classes, only buying when it sees there being value and is active and adaptive in its asset allocation, the limitations of its more restrictive methodology means that it is only able to target an annualised return of around cash + 2.5% per year through the economic cycle, rather less than the Ivy League results and significantly less than the MitonOptimal approach which is available to all expatriate investors.
 

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]@mbmg-international.com.com

Snap Shots: by Harry Flashman

Digital - the final nail in the film’s coffin?

“It’s not the cough that carries you off - it’s the coffin they carry you off in!” Boom! Boom! So just what has that introduction got to do with digital photography versus film? Nothing at all, but I liked the verbal imagery!
Now here comes the real stuff. I have spent the last three months working with an assortment of digital cameras. Not one roll of film through my trusty and venerable Nikon FM2n in all that time. That is almost a world record from my end. And it (almost) spells the end for the Nikon.
There are many reasons for this, but not all of them are associated with “instant” replay. However, that factor, if nothing else, makes me swing towards digital. Being personally in many ways an ‘experimental’ photographer (“I wonder what I’ll get if I slow the shutter speed right down and move the camera during the exposure?”) has meant that I had to shoot several frames, varying every factor I could think of, then wait for D&P (developing and printing for those not old enough to remember print film in its hey-day)!
With the digital ability to see straight away what I got has meant that I do not have to wait for any gut-wrenching time to see if I did get the result I wanted. In commercial terms, this meant not having to set everything up all over again for a re-shoot. Sales of ‘Quikeze’ plummeted.
The digital evolution has continued to produce amazing results (by the way it is ‘evolution’ at this stage, the ‘revolution’ was more than 10 years ago now). Probably one of the more outstanding developments has been the recent addition of anti-shake technology. This has been a boon to the aging population that does not have the vice-like grip any more, but it goes much further than that.
What this has done has opened up new borders in photography. It used to be that the hand-held shutter speed was roughly the inverse of the length of the lens. So if you wanted to use a 250 mm lens, then you had to use a minimum of 1/250th shutter speed. At these faster shutter speeds, you were then stuck with having to use wider apertures to get the correct exposure and thus drastically reducing the depth of field that was possible. Now you can hand-hold at 1/60th with the 250 mm lens, meaning that you can reduce the aperture by two complete f stops which will mean a much greater depth of field. Now when you are photographing charging lions, you have a greater chance of getting them both in focus before you get eaten. But think of the great shots your relatives will get when they download the memory stick.
Memory stick, or memory card, brings me to another advantage that digital has over film. Get a decent sized chunk of memory, and they are not all that expensive, and you can get 1000 images on it before it is full. And you can download after one, three or three hundred photographs. A huge advantage over film where you were stuck with 36 unless you had one of the tricky 72 shot magazines, and if you wanted to see just the first half dozen, you had to hope the laboratory staff knew how to cut film in the dark. A precarious situation at times. I have lost more than one image through staff allowing light on to the unprocessed negative.
Now the digital picture is not all a collection of plus signs. In my three months I have found many problems, but most have been related to the equipment, and not the digital principle. My pet bugbear has been the almost universal over-complication. The manufacturers seem to work on the idea that why make do with a simple rotary knob or button, when they can produce an electronic menu, and then have the user scroll down through several pages, just to turn the flash off, for example? Technology gone mad!
There were other annoyances, but ones I could get around or put up with. The new dawn has come into my camera bag!

Modern Medicine: by Dr. Iain Corness, Consultant

Christmas Disease - Too much plum pudding?

I know Christmas was last week, but actually Christmas Disease has nothing to do with Santa, but everything to do with Stephen. Stephen Christmas, that is. Stephen, a young British lad, was the first patient with a bleeding tendency recognized to have a different form from “classical” haemophilia (or hemophilia if you come from the left hand side of the Atlantic Ocean).
His condition was studied by researchers Biggs, Douglas, and Macfarlane 55 years ago, who discovered that young Stephen was missing a different coagulation factor than the more usual one (which is known as Factor VIII). They named Stephen’s missing factor as Factor IX, and his condition later became known as Christmas Disease.
Just to confuse the issue, we also call Christmas Disease by other names, including Factor IX deficiency, hemophilia II, hemophilia B, hemophiloid state C, hereditary plasma thromboplastin component deficiency, plasma thromboplastin component deficiency, and plasma thromboplastin factor-B deficiency. There’s probably more, but Christmas Disease has a much nicer “ring” to it. (Probably “Jingle Bells” at this time of year!)
From the diagnostic viewpoint, it is very difficult to differentiate between classical hemophilia and Christmas Disease (my editor does come from the left hand side of the Atlantic, so I will use ‘hemophilia’ to humor him). The symptoms are the same, with excessive bleeding seen by recurrent nosebleeds, bruising, spontaneous bleeding, bleeding into joints and associated pain and swelling, gastrointestinal tract and urinary tract hemorrhage producing blood in the urine or stool, prolonged bleeding from cuts, tooth extraction, and surgery and excessive bleeding following circumcision. (Why we have to chop bits off ourselves I do not know - I am quite sure any rational person would not like it, given the choice. Why stop with the prepuce? May as well lop the odd ear off as well. And please don’t write in, I am aware of the religious belief.)
Christmas Disease covers around one in seven cases of the total haemophilia incidence and is around 1/30,000 in the general population. This disease is also male dominated, being called a sex-linked recessive trait passed on by female carriers. This means the bleeding disorder is carried on the X chromosome. Males being of XY make-up will have the disease if the X they inherit has the gene. Females, who have XX chromosomes, are only carriers if either X has the bleeding gene.
Haemophilia has been noted in history for many years, and Jewish texts of the second century A.D. refer to boys who bled to death after circumcision (not an ideal way to go - see my remarks above), and the Arab physician Albucasis (1013-1106) also described males in one family dying after minor injuries.
In more recent history, Queen Victoria of Britain’s son Leopold had hemophilia, and two of her daughters, Alice and Beatrice, were carriers of the gene. Through them, hemophilia was passed on to the royal families in Spain and Russia, including Tsar Nicholas II’s only son Alekei.
Initially the medical profession thought that the bleeding tendency was caused by a structural defect in the blood vessels, but in 1937, a substance was found that could produce clotting in the blood of haemophiliacs. This was called AHG, or ‘anti-hemophilic globulin’.
However, in 1944 researchers found a remarkable case where blood from two different hemophiliacs was mixed, both were able to clot. Nobody could explain this until 1952, when the researchers in England working with Stephen Christmas documented there were two types of hemophilia. They called his version Christmas disease. So it became obvious that there were two factors at work and when the different bloods were mixed, they supplied for each other the missing AHG’s.
The actual names were assigned to these AHG’s by an international committee in 1962. Factor VIII deficiency became known as Hemophilia A, and Factor IX deficiency as Hemophilia B or Christmas Disease.
And a Merry Christmas and a Happy New Year to you all.
Dr. Iain.

Learn to Live to Learn: with Andrew Watson

Another Year Over

At this special time of year, for this particular brand of western festivity, I’d like to wish you all the very best. “It’s always New Year somewhere in the world,” I tell my multicultural classes, who recognising my proclivity for platitudes, nod in ironic approval. Yet it’s true of course, that the wonderful diversity of humanity on earth has produced so many belief systems that it is possible to follow them around the globe via annual parties. My particular favourites are Chinese New Year in Hong Kong around February, Songkran in Chiang Mai around April, Rosh Hashanah in Jerusalem around September time, followed by the western version of New Year in a European capital.
Since 18th February, we have been enjoying the Chinese calendar year 4704, the Year of the Fire Pig. I’m a dragon. Mark your 2008 calendar for 6th February when the Chinese lunisolar calendar gives birth to another year, a transition filled with red couplets, lanterns and bags of emotion.
Readers won’t need any introduction to Songkran, of course, although what I have always found rather wonderful about this festival (quite apart from the uproarious indulgence) is the sanctity of the rituals, rituals which are common to many cultures. In particular, the use of water as a metaphor for spiritual cleansing, manifested by the humble washing of somebody’s hands or feet and the ritual “bathing” of images of the Buddha. In a meditative moment beyond the chaos of water fights, the stillness of a temple is set in stark and welcome relief.
When I lived in Jerusalem, the Principal gave the most marvellous and moving Easter assembly which mirrored the sanctity of the Songkran experience. He invited 10 students from the crowd up onto the stage and sat them facing the audience. A bowl of water, soap and a towel sat in front of each chair. Some of the students were high achievers, but the majority were not. It was an even spread. He asked the students to remove their shoes and socks and set about washing the students’ feet. During this time, the only audible sound was the gentle slosh of water. By subjugating himself in front of his students and inverting the assumed hierarchical structure, the Principal’s simple, humble and almost holy act affirmed the fundamental equality of all humanity under God. It was extremely moving. Consider an alternative; the “I’m big, you’re small, I’m the teacher you’re not and there’s nothing you can do about it” way of doing things, which sadly, is all too common in all kinds of organisations, especially, perversely, in schools, where in my view, it has no place at all. In response to this, “We are all each other’s teachers and all each other’s students” is a fundamental statement of equality and the premise on which I base all my interactions with students.
Rosh Hashanah is literally translated as “head of the year”. 13th September this year made it 5768 in the Jewish calendar, a number which if nothing else, indicates a paradox between humanity’s attempts to “manage” time and nature’s irreversible charge to infinity. Other than the shape of an earthly day and lunar or solar year, all other methods of measuring time are inventions of humanity.
Of course, at this time of year, Hanukkah happens. Also known as the “Festival of Lights” it is an eight day Jewish holiday which (as all Jewish holidays) is rooted in historical fact. It commemorates the rededication of the second temple in Jerusalem in the second century and is observed by the ceremonial daily lighting of candles on a special eight part candelabra, or “Hannukiah”. There is an extra light called a “Shamash” (which means “Guard”) which is traditionally placed higher than the others and in a distinct location. Two minutes from where I lived in the centre of Jerusalem, there was a historic and romantic residential area of narrow alleyways and low level white stone villas called Nachla’ot. It was a magical place at Hanukkah; every window would be lit with Hannukiah and it was like walking through a great temple. Golden light shone from every house, creating improbable patterns on the white stone walls, rendered Prussian blue by the night.
And so to Christmas and the western New Year. The strategic decision to unite an essentially pagan festival with the celebration of Christ’s birth is relatively new; a winter festival has been a quintessential festival of the year for many cultures for millennia. By placing Christmas in December, the early Church enticed pagan Romans to convert to Christianity without losing their own winter celebrations. A case of pragmatism meeting idealism, you might say, or politics perhaps? Dan Brown wasn’t the first to make allusions to the prominent gods and goddesses of religions whose birthdays were celebrated on December 25th, including Mithras, Sol Invictus and Ishtar. Jesus Christ, according to which evidence you prefer, was born in either May or September.
For all the rampant consumerism of 21st century Christmas, it is the spiritual epiphany of this time of year which resonates most strongly with me. It is a time for reflection, for introspection, a time of celebration and a time of thanksgiving. I don’t think you have to be a believer in Jesus as Messiah to be able to recognise that he was (or is) a special person, to whom we might look for lessons in humility and love.
Thus, as I look back over the past twelve months, I’d like to publicly recognise a few people who have made this year a special one for me and my family. James and Anita Abraham, you are special people, full of strength, compassion and faith. Paul Strachan, your friendship has become a central part of my being. Dan Dorothy (our editor), you are steadfast, an unyielding light in the darkness. Peter Malhotra, thank you for your enduring support, sense of fun, loyalty and friendship. And thank you to all of you reading this, critics, friends and foes alike. I honestly appreciate all the feedback you send and the time you take to send it. I wish you all health and happiness for the New Years, all of them. And in closing, to those “non-believers” such as students who tell me, “I don’t believe in God,” I say, “Indeed, you do not. But God believes in you.”
Next week: The day the wall came down

Doc English, the Language Doctor: Teaching Listening

Hello! Welcome back to the column that tries to switch your children on to learning English. This week we look at ways of developing your child’s listening skills.
Last week we looked at ways of creating a communicative need (or reason) for children to speak in English at home. I suggested creating English ‘zones’ in the house (where English is the only language spoken), or a daily ten minute ‘English Time’ with your kids. In fact, any opportunity that you spend with your child has the potential to become a lesson in English. The trick is to be patient and to reward your child’s every effort, not to over-correct their mistakes and to gently introduce new grammar and vocabulary at an even pace. Pay attention to what your child is trying to say, rather than how they say it. Show interest in the subject they are talking about and ask them questions. This will encourage them to experiment more with the language.
This week we look at ways of improving your child’s listening skills. Just like babies, older children and adults need to listen to a lot of English before they can build enough knowledge of the language to speak it confidently. You can help develop your child’s listening skills by providing plenty of listening practice on a daily basis. Talk aloud while you are doing things together and constantly explain what you are doing, how and why you are doing it. For example, when shopping, explain what you will buy. Describe a product (colour, shape, etc.) and its function (to eat, clean, use in the kitchen, etc.). Ask your child to find the item for your shopping basket, based on your description. Train your children to listen and learn by modeling speech and language patterns (talking) and by and asking your child questions as you carry out your daily routines together.
Back home, before carrying out a listening activity I find it’s best to get the children to sit comfortably and ensure that I have their full attention (not easy sometimes!). Teach your child the importance of:
1. Good ‘Sitting’
2. Good ‘Listening’ and
3. Good ‘Looking’
Children’s understanding will be greater if they are looking directly at you when you speak. They can pick up visual clues to what you are saying from your facial expressions, gestures, tone of voice and intonation so use these to your advantage. Don’t just rely on words to carry the message across. Remove any distractions, such as toys and other family members! Reward your child with a sticker if they manage the three steps each and every time you sit down to learn together.
A good way to develop listening skills in early learners is through a method called ‘Total Physical Response’, or ‘T.P.R.’ for short. Basically, it works just like the game ‘Simon Says’. Make it a regular activity and your child will soon learn all the commands they will need to understand to survive during their first few English lessons at school. Play TPR every day. Ask your child to ‘Stand up’, ‘Sit down’, ‘Get a book’, ‘Open the book’, etc. Dedicate 10 minutes every day to this activity and make a game of it. Provide some kind of reward if they do it well. If your child responds incorrectly, don’t criticise them. Just smile, model how it should be done and then try again the next day. Repeat daily until they get it right.
Many children’s songs provide a great way of developing listening skills, as many involve a physical response. Check out the many songs and stories at: http://www.bbc.co.uk/cbeebies. The Holey Cokey is my personal favourite. As well as teaching simple commands, it also helps children learn the names of parts of the body. It’s good fun too.
If the children are older, try using more complicated instructions in longer and longer sequences. For example, you can ask them to; ‘Stand up, run to the window and open the window!’ If you have more than one child learning English, make them compete against each other to see who can complete the activity quicker.
For older children, I find that teaching using Talking Books (usually available on CD from larger book shops) can be a good way of developing listening skills. Talking Stories are also available on the internet, some with text and some without. Provide your child with questions to answer whilst they read, to ensure they follow the story closely. Questions could include ‘Who are the characters’, ‘What happened in the beginning / middle / end of the story?’, etc. Providing your child with questions will ensure that they become active listeners (and not passive) during each listening exercise. You might also try Children’s Radio. http://www.bbc.co.uk/cbeebies/radioplayer or BBC News and Radio online for non-fiction news stories. Children can also make their own talking books using a microphone and then listen to their stories to help them self-correct their own speech.
When you are teaching your child a new word, be aware of the speed that they can follow speech in English and their limitations; try not to speak too quickly and provide a visual clue if you can (such as a picture flashcard). Try not to ‘Ummm’ and ‘Errr’ and don’t use words with too many syllables at first. Don’t use too many words at once or too many idioms. Speak a little slower than you normally would and speak clearly, pronouncing end consonants and not trailing off towards the end of the sentence. As far as you can, use normal speech with natural intonation and normal grammar patterns. Don’t be tempted to skip grammar and speak ‘Thinglish’ (Thai/English mixed together) as this won’t improve your child’s understanding in the long run and it will also reinforce errors. You can allow your child to talk using ‘Thinglish’ at first, but you should suggest gentle improvements to their speech over time to improve their fluency. If your child does not understand you the first time, don’t be tempted to SHOUT! It’s not their hearing that’s the problem – just the way you are presenting the new vocabulary.
When you are reading to your child, you should remember to ask questions frequently to check that they are listening and following the text. Ask them to describe what happened in the story, or point to the illustrations and see if they have listen and that they understand who the main characters are, or what they are doing.
Next week we focus more on developing Speaking Skills. I hope you enjoyed this week’s column. Practice ‘Active Listening’ yourself. Remember that ‘A good listener is not only popular everywhere, but after a while he gets to know something’. Listen to your child and they will learn to listen to you.
That’s all for now folks! Remember, you can send your questions or suggestions to me via the Pattaya Mail, or you can email me at [email protected]. I hope to hear from you soon!

Let’s go to the movies: by Mark Gernpy

Now playing in Pattaya
Aliens vs. Predator: Requiem: US Action/Horror/Sci-Fi – In this sequel, the two species of monsters continue their epic battle on earth. A Predator scout ship crash lands in a Colorado town, and the Aliens on board manage to escape and kill all of the Predators except one. This last remaining Predator is the star of the movie, for whom we all must root, as he tries to destroy all the Aliens as well as the horrific Predalien that was spawned at the very end of the last film. You must remember him: he burst from the chest of a Predator, and as we all know Aliens take on certain characteristics of the host (such as bipedalism, as seen in Aliens that come from humans). Thus a ‘Predalien’ is simply an Alien that resembles a Predator. Remember, there will be a quiz on this! Rated R in the US for violence, gore, and language.
Konbai The Movie: Thai Romance/Comedy – Usual low-class Thai comedy with the usual stars, mostly from television.
Yen Pe Le Semakute: Thai Low Comedy/Action – With Jaturong Mokjok. Though the film is directed by Poj Arnon, responsible for the groundbreaking and award-winning Bangkok Love Story, this is a far cry from that excellent film. This is just an ordinary low-class comedy with well-known television and movie stars.
National Treasure: Book of Secrets: (see movie review on this page)
I Am Legend: US Action/Drama – I think the first two-thirds is fascinating and a great movie, with a superb Will Smith, surprising in the depth of his acting; then it degenerates into a typical zombie/vampire flick. The number one film in Thailand at the moment. Will Smith plays a scientist responsible for releasing a terrible virus that was unstoppable and incurable. Somehow immune, he is now the last human survivor in what is left of New York City and maybe the world. He spends his time trying to make contact with other survivors, working on a cure to the virus using his blood, and killing vampires. There are some fantastically eerie sequences of an empty New York City covered with weeds that I find spooky and haunting. See it! Generally favorable reviews.
The Warlords: Hong Kong Action/War – A heroic tale of the breakdown of the friendship between three blood brothers when one kills another to steal his wife, and the third seeks revenge. Starring Jet Li and Andy Lau, it’s one of the most solid Chinese films I’ve seen in some time. Beautifully photographed and directed, fine performances, a wide sweeping story. Seems to be taking China by storm, and becoming a hit in many parts of Asia. Unfortunately, here it’s in a Thai-dubbed version only.
His Dark Materials: The Golden Compass: US/UK Adventure/Fantasy – A grand, rich fantasy, beautifully done, remarkably detailed. I was enchanted and captivated by it. Strangely, it has gotten mixed or average reviews, and is something of a flop in the US, but a hit internationally. See it anyway — it’s very enjoyable, and eye-popping!
Alvin and the Chipmunks: US Animation/Comedy/Family – After years of exposure on TV, the tiny trio makes their unimpressive live action big-screen debut in this family comedy about the singing chipmunks. The reviews pretty much agree that it’s mediocre and immediately forgettable: the characters are under-whelming in their appeal, and lack the charm of their previous television incarnations. And, though cutely rendered, the film suffers from a surfeit of potty humor and rehashed kids’ movie formula. Mixed or average reviews.
Pong Lang Amazing Theatre: Thai Low Comedy – A down-on-his-luck theatre owner tries to rescue his old, haunted theater from oblivion with one last show. Crude and crass, it’s only for those who like such things.