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Money matters:
Graham Macdonald MBMG International Ltd.
Beware false profits, part 2
Water Stress Indicator
In terms of supply there are between 9,000 and 14,000 km3 of
renewable, useable water available annually. Total global water consumption
(water withdrawals plus rain-fed agriculture) is currently running at around
6,000 km3. In terms of water supply and demand, therefore, there is no scarcity
of water right now. But in the next few years the gap between supply and demand
will shrink on a global basis. One interesting fact to note is that the supply
of fresh water on the planet is no larger today that when humans first walked
the earth.
Global renewable and available water resources per year
Given the rising demand and fixed supply of water it should come as
no surprise to see that water rates are already rising faster than inflation. If
one looks at the US, as an example, the average annual price increase of water
has been 6.3% since 1989, which is about the same price increase as crude oil,
but with a much lower volatility (4.2% for water compared with 42.9% for oil).
This is partly explained by the fact that oil is continuously priced in an open
market whereas the price of water is mainly administrated or politically priced.
Private participation is less than 10% in the water industry vs. more than 70%
in the oil industry.
What with the positive supply and demand fundamentals driving water usage, it
should not come as much surprise to see that many analysts have predicted
exploding growth for the water industry in the near-term future. However, the
real situation to date has been more one of lower but very consistent growth, as
historically the total water industry (in the US) has experienced mid-single
digit rate growth - in the 5% to 6% range. Growth might not be explosive going
forward, but at the same time it is hard to imagine any kind of reasonable
future scenario in which this industry will be characterized by anything other
than very steady and sustained growth, and very attractive long-term business
opportunities. At the same time investors in this business need to understand
that most sectors are not growing at 15% to 20% a year.
A very illustrative fact is that in any randomly selected five-year period over
the last 25 years, water utilities dominate the list of the best performing
industry groups in the U.S stock market on a total return basis. Why? The simple
answer is that water utilities have always done very well in good times and bad.
When compared to almost any other industry, the water industry has a very
compelling business model - with the most persistent demand, and probably the
most predictable future.
Consider the following facts
* There is no substitute for water and users typically cannot
postpone purchases - in other words, the demand for water tends to be very
price- inelastic.
* The utilities that get water to the end user are natural monopolies with huge
barriers to entry.
* Demand is generally unaffected by inflation, recession, interest rates, or
changing preferences - all of those factors that significantly affect demand for
other commodities.
* Water has a history of strong and consistent growth under all market or
economic conditions - demand doesn’t change much with changing economic
conditions.
* The price of water does not reflect real economic value - water is worth far
more to us than we actually have to pay for it, and hence there is room and the
necessity for huge price increases in the future.
Investing in water stocks is a very compelling story, but the downside is that
many of the stocks appear to reflect this good news - i.e. valuations are hardly
cheap. It is, however, a very diverse industry, with many very profitable
companies that are not dependant on the business cycle for their earnings, hence
one should buy water funds when equity markets come under strain.
The final word
on the subject
“You think we have bad fights over oil. Just wait until we start
fighting over water. It’s predicted in the Koran,” Anonymous Jordanian quoted in
The Washington Post, 28 Mar 91.
“The wars of the twenty-first century will be fought over water” - Ismail
Serageldin, World Bank Vice President for Environmental Affairs, quoted in Marq
de Villiers’ Water, 2000.
Joanne had preceded this with an excellent piece on oil and she followed this
with an article about global warming that taken together constitute a
mini-series of some of the best investment ideas of the last couple of years.
There is very little in the basic stories that has changed since Joanne penned
her words. Something else that hasn’t changed is that such thematic investing is
best considered in the light of an overall portfolio - a matrix of different
asset classes that perform in complementary ways when affected by different
stimuli.
This is why the MBMG client portfolios are showing gains year to date when most
investments have lost money in 2008. Whether or not to buy water is an asset
allocation decision that becomes meaningless if made in isolation because of the
impact that it has on the overall beta performance of a portfolio. Finally we’ve
seen in the last few months a welter of new fund launches within the water
sector as every fund management marketing department has woken up to the
opportunity and rushed a new offering out of the door. However, the kind of
specialist expertise that Pictet have acquired over the last decade isn’t thrown
together as the marketing machines might hope. When bombarded with the latest
research supporting a brand new water offering, we might be supportive of the
underlying philosophy but we have to say “beware of false profits”. In other
words, go with those that have a proven track history.
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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]@mbmg-international.com.com
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Snap Shots: by Harry Flashman
Still Life photography ain’t easy
One very common misconception in photography is that
Still Life work is simple. Unfortunately, no! However, one of the most
amazingly creative and satisfying aspects of photography can be Still
Life shooting. The ability to position and light a subject to produce a
pleasing result can fill up an entire day. In fact, the pros can take a
couple of days to get a still life shot just right. That’s right. A
couple of days! No exaggeration.
 Still
life food - flash and daylight.
You see, there are so many aspects to be covered in still life
photography. It is not just a case of placing the subject on a sheet of
paper and pushing the button. Still life photography teaches you every
important aspect of the artistic side of photography, as well as honing
up your basic photographic skills.
The first good thing about still life shots is the subject doesn’t
complain and tell you to hurry up and “Is my mascara smudged?” You can
also just pick up the subject and move it in any direction to suit the
shot. You don’t have to ask for permission. Oh yes, there are many
advantages in having a silent subject!
Let us begin with lighting. The secret to all still life shots is to
have two light sources. This can be daylight plus flash, two flashes,
electric lights, daylight and a mirror - but you need two. One to
basically light the subject and the other to light the background.
Lighting the background isolates the subject from the background and
makes your subject the “hero” in the shot.
The other secret in the lighting is to produce a diffused light source.
With un-diffused light, you will get far too many distracting shadows,
which with small table-top objects can ruin the overall effect. You can
diffuse your lighting by shining it through some scrim cloth,
transparent net curtain material or through some frosted plexi-glass -
the sort of material they have over fluoro lights, for example.
The next important item in still life photography is your own eye. You
will find there are even books on the subject, but what you have to do
is to look at your table-top and arrange the items in a manner that is
pleasing to your eye. Do you want them overlapping, or at some distance
from each other? Generally there is one dominant item - bring it to the
foreground and then arrange the supporting items after that. Some
overlap generally works well.
Having got that far and you are now pleased with the composition, you
then have to look through your camera. Help! It doesn’t look the same as
it did with the naked eye! What’s gone wrong? It is because of the
differences between the lens and your eye’s focal length. You now have
to look through the camera and adjust the table-top items to produce the
pleasing composition you saw with your own eye. Yes, this takes time,
and now you can begin to see why the pros take so long!
After you have the composition to your satisfaction - you have to light
it. This is where daylight or tungsten light becomes easier than flash -
at least with the sun’s (filtered) rays or diffused tungsten you can see
what you are going to get. (In the pro studio, the flash units have
tungsten “modelling” lights so that you can get the idea of how the
flash will illuminate the subject, before popping the shutter.)
Generally, I light the background first, then bring in the foreground
(subject) lighting, carefully noting “spill” of one light source into
the area of the other. Again, this can take hours! In fact, you can
change the whole look of a table-top scene just with the balance of
lighting used.
Remember too, that the exposure settings used in the camera depend upon
the foreground lighting (not the background), and for most situations
(but not all) the background can be brighter than the foreground, to
“wash” it out a little. But again this is experimentation.
No, Still Life photography is not easy, even though it sounds
straightforward. Perhaps it is easier to help the model fix her mascara
after all!
Modern Medicine:
by Dr. Iain Corness, Consultant
I can see clearly now …
I bumped into one of my old friends in the hospital a couple
of weeks ago. It turned out that he had a problem with his eyes when he was
in Italy, and he was worried that the solution he stored his lenses in may
have been contaminated.
Now, this can happen, and if you get any sort of eye infection, you have to
very rigorously clean and disinfect both the contact lenses, and the natty
little container that you store them in each night.
You do take your lenses out each night, don’t you? Even with all the
advances in lenses, the ophthalmologists still recommend you give the eyes a
rest each night. After all, contact lenses are still ‘foreign bodies’.
As you can see (pun intended), it isn’t just a case of bunging some in and
forgetting about it. Quite the reverse. With all our organs that can go
wrong, go wrong, go wrong, did you know that eye problems are some of the
commonest reasons for a doctor visit? And for those of you who wear contact
lenses (like me) there are even more eye problems for us to get, despite the
common use of contact lenses these days.
There are many types of contact lenses, the old hard ones were made of a
material called polymethylmethacrylate (PMMA) which is rigid and does not
let oxygen through, but the newer ones have a material called siloxane which
is gas permeable. These hard lenses are the most trouble free, although the
most difficult to look after. Sounds topsy-turvy, I know.
The second type of lens is the soft contact lens, of which there is a
“permanent” style and a disposable type. These are made of
hydroxymethylmethacrylate (HEMA) which contains between 30-60 percent water
and are gas permeable. However, soft disposable lenses give the most
problems, but are the easiest to look after, in direct contrast with the
hard lenses. Again sounds weird, I know.
The commonest problems with all contact lenses is infection, and since the
lens is a foreign body, there is a good reason to get an infection
immediately. For those of you who leave your lenses in the eyes overnight,
you have an increased risk of infection by a factor of 10. Take them out
every night, you have been warned!
Infection is not to be thought of as something that just happens and when it
does you just pop in a few eye drops and get better automatically. Bacterial
infection can be sight threatening and the cornea (the clear bit in the
centre that you look through) can be destroyed in 24 to 48 hours. There is
also a parasite that can get into the eye of contact lens users who have
rinsed their lens with contaminated water, or who have worn their lenses
swimming in contaminated water.
One very common problem is “losing” the lens in the eye, both the hard and
soft types. The most important thing to remember is not to panic. The lens
cannot go “behind” the eye. It just rolls itself up under the lid. Try to
avoid rubbing and it will reappear in an hour or so. Just like the stray
dogs in your soi.
The other very common problem is eye irritation. This is caused by material
under the lens or damage to the lens itself, such as splitting or tearing.
If you take out the lens and you find it breaking up, do not put it back in
- you run the risk of damaging the cornea. If you are like me and you wear
your “two week” contacts until they fall apart - remember you are running a
risk!
Lens care is the most important feature and you should always wash your
hands before removal or insertion. The lens container should be scrupulously
clean and the storage/cleaning fluid should be fresh, and never use water.
Look after your lenses, take them out at night, change them frequently and
remove them immediately if there is any irritation or redness. “See” you
next week!
 Heart to Heart with Hillary
Dear Hillary,
I am told that foreigners can’t own property here. If that’s the case, how come
I see so many realtors advertising that you can? Is it some sort of a ‘come in
sucker’ or what. I’ve been told there’s lots of scams in Thailand. Is this just
another one?
Per Plexed
Dear Per Plexed,
I presume from your name that you are a foreigner, and possibly Scandinavian.
Yes, there are many scams here, almost as many as there are anywhere else in the
world, though I must say the number of million dollar offers from Nigeria seem
to be dwindling. Looks like I’ve missed out again. Oh dear!
Now to your real question, and remember that Hillary is just a simple Agony
Aunt, and not a lawyer - the realtors are not telling porky pies, as there are
many ways that foreigners can own property in Thailand. I do know that
condominiums can even be bought and registered in a foreigner’s name. Houses
with land is a different story, but there are many ways that you can purchase a
house, with tenure in your name. Just go to one of the better real estate
companies (one which has been around for a decent length of time, preferably
longer than five minutes), and ask them. They will be able to put you right.
Tell ‘em that Hillary sent you. You never know, I might score some commission
here. Scams in Thailand, come on!
However, if you want to find out about a real scam, the following was sent in by
a reader from Malaysia:
Over the last month I became a victim of a clever scam while out shopping.
Simply going out to get supplies has turned out to be quite traumatic. Don’t be
naive enough to think it couldn’t happen to you or your friends.
Here’s how the scam works:
Two seriously good-looking 20 to 21 year old girls come over to your car as you
are packing your shopping into the boot. They both start wiping your windscreen
with a rag and Windolene, with their breasts almost falling out of their skimpy
T-shirts. It is impossible not to look. When you thank them and offer them a
tip, they say ‘No’ and instead ask you for a ride to McDonalds.
You agree and they get in the back seat. On the way, they start undressing. Then
one of them climbs over into the front seat and starts crawling all over you,
while the other one steals your wallet.
I had my wallet stolen July 4th, 9th, 10th, twice on the 15th, 17th, 20th, 24th
and 29th. Also August 1st, 4th, twice on the 8th, 16th, 23rd, 26th, three times
on Saturday and very likely again this upcoming weekend. So tell your male
friends to be careful. Keith.
Dear Hillary,
I think you were being a little unkind to the chap calling himself Uncle Bill a
couple of weeks ago. So his spelling wasn’t perfect, but I’m sure you must have
had a slip of the pen every so often. Nobody’s perfect. This is an advice
column, not a spelling bee. Keep up the good work, though, I always enjoy your
column, even though sometimes you are obviously in a bitchy mood and something
sends you off.
Uncle Bob
Dear Uncle Bob,
Has this column become the Old Uncles club newsletter or something? Bob, my
Petal and champion of the uncles’ cause, if I can try and get the spelling right
in English, then I expect the same of the people who write in. If they can’t get
it right I don’t mind, but I will correct them where I see something wrong. Is
there something wrong with that? I don’t think so, but thank you for the nice
words, as well as your bitchy ones. Do I get in a mood? When “something sends me
off?” Don’t be silly, Uncle Bob. I don’t need a reason.
Dear Hillary,
I have heard about golfing widows, but at least golf is played in the daytime,
so the golfing husbands are home in the evenings. My problem is that I am
turning into a cricket widow. Cricket matches seem to be played at any time of
the day (or night) in all countries of the world, and he is always off to some
pub to watch another match. I am not interested in sport, or else I’d go with
him, but I am getting lonely left at home. What should I do? Tell him it is
cricket or me? (I’m afraid he might go for the cricket.)
Cricket Widow
Dear Cricket Widow,
If you make life difficult for your sport mad mate, then he will go and it will
be an ‘away’ game every night. What I’d do is ask around to see if any of his
mate’s wives would like to come over for a hen session. Even if you are not
interested, a night out at the pub might also be fun. Let him watch while you
gossip with the other women there. That is much better for everyone, rather than
sitting fuming at home.
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
You Don’t Mess with the Zohan: US Action/Comedy – Starring
Adam Sandler and Rob Schneider. Zohan is an Israeli commando who fakes
his own death in order to pursue his dream: becoming a hairstylist in
New York. I thought it quite funny. Mixed or average reviews.
Burn: Thai Thriller – All you ever wanted to know about “SHC” –
Spontaneous Human Combustion. As you certainly know, that’s the familiar
medical condition wherein a living human being suddenly bursts into
flames. Director Peter Manus examines this serious human malady, and
perhaps will show how you can inoculate yourself against this happening
to you. Perhaps diet has something to do with it.
Bangkok Dangerous: US Action/Drama – Directing twins Danny and
Oxide Pang return to remake their popular 1999 thriller about a ruthless
hitman (this time Nicolas Cage) who travels to Bangkok in order to carry
out four crucial (for him) murders. During the course of his jobs, the
triggerman falls in love with a pretty local girl, Hong Kong actress and
pop singer Charlie Yeung (or Young) in a quite affecting performance,
while also forming a friendly bond with his young errand boy, nicely
played by Thai actor Shahkrit Yamnarm.
A fairly decent, if cliché ridden and predictable, action flick, shot in
some interesting locations in Bangkok. You should be happy with it if
you like a somewhat low-powered action shoot-em up action picture.
Makers of the movie are saying that they were shooting the film in
Bangkok during the 19th of September coup d’état two years ago. Filming
stopped, but only for six hours. They are fond of claiming that they
fired the only shots in the coup.
The Coffin/Longtorai: Thai Horror – Ananda Everingham as a
claustrophobic architect who participates in coffin rituals to gain a
new lease on life. It has much going for it, with a stellar cast and a
fine director, but I was mightily confused. It didn’t seem to be the
movie that director Ekachai Uekrongtham set out to make. The script won
a prestigious prize from the Rotterdam Festival, but the movie hadn’t
been made yet, and to get the necessary funding he had to change it into
a horror flick, making compromises along the way.
The beautifully shot opening sequence of the burial ritual at the temple
gives an idea of what the film could have been. And although this is the
director’s first English language film, it is shown in Thailand only in
a Thai-dubbed version, with English subtitles which don’t jibe with the
movement of the lips. The result for me is simply awkward.
WALL·E: US Animation/ Comedy/ Family/ Romance/ Sci-Fi – It’s a
work of genius from the first frame to the last! Robot love on a dead
Earth, and the cutest love story in years. There’s virtually no dialogue
for the first 40 minutes; you’ll be enthralled. Reviews:
Universal acclaim. There’s a terrific Pixar cartoon before the feature.
Boonchu 9: Thai Comedy – A continuation of this popular Thai
comedy series. The son of the original Boonchu is a happy monk who is
defrocked by his mother and sent to university in Bangkok. There he
meets up with new “friends” – two homeless kids, who, as friends will
do, drug him and mug him.
Boys Over Flowers: Final/F4 Final: Japan Romance/Comedy – Wildly
popular film in Japan, based on a top selling manga, featuring five
popular Japanese idols, following the travails of a working-class girl
at an elite prep school who must contend with a four-man clique of
“rich, gorgeous guys” from extremely powerful families. (Thai dubbed
with no English subtitles.)
The Deaths of Ian Stone: US/UK Horror/Thriller – On an otherwise
ordinary night, the young Ian Stone encounters a mysterious creature and
is forced into the path of an oncoming train. Rather than facing certain
death, Ian finds himself reborn into a new life that feels strangely
familiar. After his second death, it becomes apparent that Ian is being
hunted by an evil presence, and will be forced to die every day until he
can solve the mystery of his own life. Rated R in the US for violence,
some drug content, and brief language. Generally favorable reviews.
Virgin Territory: US/UK Comedy/Romance – Hayden Christensen plays
a Don Juan who revels in seducing the beauties of 14th-century Florence
while the black plague decimates their city. Laughably incompetent
lewdness. Rated R in the US for sexual content, nudity and some
language.
Death Race: US Action/Thriller – The most twisted spectator sport
on earth as violent criminals vie for freedom by winning a race driving
monster cars outfitted with machine guns, flamethrowers, and grenade
launchers. The previews are the most repulsive imaginable, and have
convinced me I don’t wish to see it. Mixed or average reviews.
Tevada Tokmun: Thai Comedy – Some Academy Fantasia 4 winners in a comedy
about the misadventures of an angel and a monk.
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