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Money matters

Snap Shots

Modern Medicine

Heart to Heart with Hillary

Let’s go to the movies


Money matters:   Graham Macdonald MBMG International Ltd.

Dumb Investment of The Month - without profits funds?

Obvious contenders for Dumb Investment of This Month are the various artificially sliced and diced credit vehicles such as CDOs, CDSs, SIVs that have brought about the credit crunch because the market had no reliable basis for valuing them.
MBMG long warned against the eventual impact of these financial time bombs. French bank BNP spoke up last year admitting that the artificial value ascribed to these assets bore no resemblance to the realizable value of the sum of their parts. The realization that bank balance sheets were overvalued brought on the sub-prime crisis. The banking sector was no longer able to borrow against these suddenly worthless assets heralding the credit crunch.
Our client portfolios had no exposure to sub-prime or to western commercial and residential property or lower quality fixed interest. We had very little exposure to equity markets which suffered in the fallout.
We also warned against artifice in investment. Encarta suggests some of the following synonyms for artifice: pretence, ploy, trick, lie, sleight of hand ruse, deception, deceit.
Transparency sounds a lot better to us than any of those. Investors should demand full transparency right now and not the glossy allure of expensive marketing materials for opaque schemes (DIoTM notes that the quality/cost of marketing materials is often inversely proportionate to the quality of the fund itself).
In particular we’re very wary of artificially priced investment funds. There are plenty of examples of this - with profits funds retain some of their surplus investment returns during good times to fill in shortfalls during bad times.
In the example here the profits in the crooked shaded areas of over-performance are held back and used to cover losses in the black shaded areas. The straight line represents the published price of the fund. However that only represents the true value of the fund at the brief points where the crooked and straight lines actually intersect. When the crooked line is above the straight line the price of the fund is actually less than the fund is really worth and therefore investors are effectively buying into the fund at a discount. They can never realize the discount but it is held back to protect them against any losses if markets fall. This was the case a year ago and was a good time to buy or hold with profits for anyone who wanted some participation in equity upside with protection against the downside.
However when markets have fallen like now then the asset value of the fund may now be much less then the fund price - in which case you are actually paying a premium to either buy or even hold this kind of asset. You’re simply being overcharged because of an inefficient market pricing mechanism. Therefore it makes no sense to buy or hold with profits funds at this time.
This applies to individual with profits policies and to traded endowment funds. At the very best you will now have several years of underperformance before eventually moving back into surplus. At the very worst the discrepancies in pricing may lead to you being refused the right to take your money out without paying a penalty resulting in you losing very heavily on a ‘safe investment.’
At least with profits allow you to make a reasonable estimate of how overvalued the fund price is because the underlying assets themselves are generally liquid. With specialist assets (like specialist property funds buying assets such as student halls of accommodation within open ended fund structures) it can be impossible to say. However, the price of these funds, where the capital value of the asset hasn’t been adjusted for prevailing conditions, would appear to be as much as 100% over valued currently compared to genuinely market-priced structures such as listed property or real estate investment trusts - i.e. the underlying asset values may be as little as $50,000 for every $100,000 invested into such funds.
This is a time for certainty rather than speculation. The fact that many of these artificially priced funds show a constant month on month or year on year return isn’t a source of comfort to us - it’s a cause for concern. It merely means that the current fund price may have become a long way separated from the value of the underlying assets.
Any investment right now that doesn’t have a clear relationship between the underlying asset value and the fund price could face real problems ahead. In the above examples, TEP or student accommodation funds could easily fall by 50% or more in value in the same way that sub-prime assets already have. Some of these may be well-managed and may thrive despite the current situation. Others patently won’t and therefore, even more than sub-prime, these are our current dumb investment of the month. If you are holding any assets where the pricing is less than transparent, we can provide an overview of the risks facing that particular asset. Where these risks are too high hopefully you can still get out … before it’s too late!

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

Experimentation

I received a letter the other day from reader Ian Sherratt who had read the item on time exposure, and decided to give it a go. Here is the letter, and his photograph.
Dear Harry,

Ian Sherratt’s ‘smiley moon’.
Funny that you should write your recent article on time exposure shots. I’ve just bought a new box of digital brains (Canon G10) which gave me a chance to practice on the “smiley” moon the other night. FYI: 15 secs. at F ?
It was my first real attempt at anything other than “auto” settings. It’s a pleasant feeling to think that you actually contributed in some small way to getting an acceptable result. I am sure you know what I mean.
Best regards,
Ian Sherratt
Thank you, Ian, and you will see that I have cropped your original shot somewhat to give more emphasis on the two stars and the moon.
Of course, Ian Sherratt, with his new digital Canon G10, was able to preview the shot to see if he really had got the shot he wanted. And, of course, if you didn’t get it, then you just try again! For many this is the best thing about digital photography. No more agonizing wait at the photo processors to see if you did get “it”.

Neon sign.
The second shot this week is of a neon sign, and again was taken with a digital camera, so the photographer could see straight away whether the end result was satisfactory. It was actually one of three exposures (called “bracketing”, with one half stop difference between each exposure). In this instance, it was the lighter of the three which worked out the best, but all were satisfactory.
In general, sensible bracketing will give two usable images, so do check in your camera’s manual (you have read it, haven’t you) if you can select auto-bracketing. As an aside, also see whether your camera has a grid pattern for the viewfinder. It will help you get rid of sloping horizons and toppling buildings.
Getting back to night photography, recording neon signs is actually very easy, provided you turn off your flash, be that remote or the on-camera one. The illumination provided by flash is much stronger than the light produced by neon lighting, so with a flash shot you will wash out the colors, and show just the glass tubes of the sign.
You can safely allow the neon tubes to dictate your exposure settings, and then set the bracketing for one half stop above and below that indicated by the exposure meter in the camera. Provided that the shutter speed can be hand held, then do the different settings with the f stop. You do not have to worry about depth of field, so you can shoot as wide open as you can, to give yourself an acceptable shutter speed. The neon shot here was hand-held at 1/15th second, using the camera’s own image stabilization system.
As reader Ian Sherratt has found - experiment and put fun back into photography.


Modern Medicine: by Dr. Iain Corness, Consultant

Early detection

There has always been discussion about the advantages of early detection, as far as cancer is concerned. Unfortunately there are still people who say that if you get it, you’ve got it, and you’ve had it. I am not one of those. It isn’t over until the fat lady sings, as they say.
These days there is enough clinical evidence to support the fact that the end results for all cancers show an improved survival rate with early detection and treatment. The same cannot be said for late stage cancers, I am afraid.
In the UK they have actually been studying early detection with the National Cancer Director Professor Mike Richards indicating that work is well underway to catch more cancer cases earlier and improve the longer term treatment for cancer survivors.
Professor Richards said, “Cancer treatment in Britain has improved vastly in recent years and we are now beginning to see the impact on our survival rates. Recent cancer mortality figures for under 75’s show that nearly 9000 more lives will have been saved in 2007 compared with 1996 and we are on course to meet our target of a reduction of at least 20 percent in cancer death rates by 2010.”
The NHS in the UK, despite its many shortcomings (waiting lists being just one of them), does keep good statistics, and it is statistical analysis which can keep us heading in the right direction. UK Health Minister Ann Keen said, “I welcome the first annual report which details the excellent progress the NHS has made in improving cancer outcomes and services. This is evident in the reduction we have seen in mortality rates and improvement in one-year survival rates. The challenge now is to keep up this momentum and ensure that we continue to make further improvements. We are committed to providing cancer patients with the best possible services to taking action to prevent cancer in the first place and to detecting it at the earliest possible point. The HPV vaccination program, extensions of the bowel and breast screening programs and a new national awareness and early diagnosis initiative will help to make this a reality.”
With breast cancer screening, Jeremy Hughes, chief executive of Breakthrough Breast Cancer said, “Breast cancer is the UK’s most common cancer and we have been concerned for some time that women remain unaware of the full range of breast cancer signs and symptoms. At the same time not all women invited to breast screening attend. Breast awareness and screening are key to detecting the disease at the earliest opportunity and we know that the earlier breast cancer is diagnosed the better the chances of successful treatment. Breakthrough looks forward to working with the government to help improve cancer awareness and detection which we hope will improve survival rates.”
With that sage advice, have you, my women readers, had a mammogram and do you regularly practice breast self-examination?
On the common male cancer of the prostate, much work is also being done there, in the field of early detection and grading of tumors. Progress on reducing the mortality rate is firmly linked to the research agenda. Critically important is the need to develop a new generation test capable of distinguishing between aggressive and slow-growing forms of prostate cancer. This could form the basis for a screening program and would enable treatment to be focussed on those men for whom prostate cancer presents a serious risk to health.
Medicine is an ever evolving science, and even though we are currently trying to develop these new screening tests, does not mean that we have nothing at this stage. It may not be the gold standard, but the PSA, and particularly serial PSA’s, can give a usable guideline, especially when correlated with DRE (digital rectal examination) and ultrasound. Some researchers say that the important factor to watch is the rate of change of PSA, rather than the simple PSA level, and I would agree with that. Again a very good reason to get your PSA checked with your annual check-up (which you do have each year, don’t you).
All males of over 50 and women of over 40 should consider annual examinations. Earlier if there is a poor family history!


Heart to Heart with Hillary

Dear Hillary,
These chocolates are for you. Sorry I had to get one of your staff members to deliver them for me. I’m really a bit shy.
Mike
Belgian chocolates

Dear Mike,
Aren’t you the sweetest little Petal! Yes, the staff delivered them unopened to my office. (They know I would have killed them if they had.) Belgian as well. You have some class, Petal, which is more than I can say for that Mistersingha and his Mars bar or whatever. Thank you again, Mike. I am pleased to you read and enjoy the column.

Dear Hillary,
Re Archie’s letter he is quite correct in what he says. I am a U.K. citizen living in Thailand and my wife is a Thai who has never visited the U.K. As a pensioner I applied for my wife and was told, no problem, and was sent a form. As well as returning the form they required the following:
National Insurance No.
Wife’s passport
Marriage certificate (they have to do the translation)
And if applicable - Divorce paper or death certificate of spouse
These all have to be notarized (I did this with Barry Kenyon at Immigration). It took me a full nine months before it was completed, but they pay you from the date you register plus an extra three months. They will not go back to the day you are married unless you register from that date. On completion my wife also received her National insurance No. But don’t give up it takes a lot of hard work and perseverance. If you have paid the full stamps it will be worth about 50 pounds a week to you. The place to apply to is:
The Pension Service,
Tyneview Park,
International Pension Centre,
Newcastle upon Tyne
NE98 1BA
England
For an application form Tel. 191 21 87777
Hope this is of some help Hillary.
Peter

Dear Peter,
This has been of great help, and although really outside of my sphere, you have given the contact details for all the previous writers to find out for themselves. Thank you, on behalf of all the Thai spouses who might just get a little more spending money each week!
Dear Hillary,
Here we are at Xmas time again and here we are spending heaps of hard earned cash buying useless Xmas and New Year cards, and sending them off to people who never contact you at any time other than Xmas. Why do we bother carrying on with this charade? Surely people realize by now that they are being conned by the stores. The original idea of Xmas spirit has long gone.
Scrooge

Dear Scrooge,
You really are the milk of human kindness, aren’t you! I wonder why people would even bother to send you a card at Xmas, you are such a misery bag. For the rest of us, Xmas is a time when we can remember friends and acquaintances and just send a quick note to say, “You are not forgotten.” If it is the cash that you object to, then you can always make your own cards or send an email, but I don’t suppose you have a computer and 60 baht in the internet cafe for an hour would be far too much. I hope you enjoy your Xmas! On your own.

Dear Hillary,
Is it possible to meet a Thai girl who does not want to drive a snow plough through your wallet? Every time I think I have found “the one” it ends up that I will be lucky if I have one baht left in the bill-fold. They start out alright, looking after you very well, so you keep going back to the bar, then you make the big decision and take them away from there to give them a better life and everything is rosy for a while, then comes the hand out for this and for that and a new fridge for her mother and then a big lick to pay off father’s land mortgage. It doesn’t end till the money ends, then they’re gone! This has happened to me three times so far and I have been so badly burned I don’t think I’ll bother trying again. Do any of your readers have a suggestion, or perhaps even you yourself Hillary?
The Victim

Dear Victim,
I do feel sorry for you, Petal, but there’s a very basic fact that you seem to be missing, especially since you have gone down this road three times already. Why are you continuing to go to the same places looking for a long-time mate, when you are lining up at the short-term holding pens? You are going to the marketplaces where they sell affection but you are looking for enduring love. You are trying to buy a Mercedes in the motorbike shop! Unfortunately for you, there is no “marriage market” even though there are places that seem to promise this. Love and affection are never sold. Start looking elsewhere, Burns Victim, and you will find there are some wonderful girls out there, hoping to meet a nice man like you to fall in love with - not to fall into bed with. Get the message, Poppet? You don’t buy cheese in a hardware shop.


Let’s go to the movies: by Mark Gernpy

Now playing in Pattaya
Happy Birthday: Thai Drama/ Romance – Starring Ananda Everingham. Looks like a real weepy love story.  This time Ananda is a travel photographer who travels around Thailand with his guide/girlfriend, until she has a terrible car accident and ends up in a hospital in a coma, while Ananda waits endlessly at her bedside for her to wake up.  From the previews, I have to say it looks perfectly tedious, despite the fact that I’m a fan of Ananda.
The Day the Earth Stood Still:
US Drama/ Sci-Fi/ Thriller – I enjoyed this!  If you like sci-fi thrillers, you should too.  Of course, you have to be willing to accept a lot of the “aliens invade Earth” conventions.  I did, and found it a lot of fun.  And as for Keanu Reeves, he’s perfect for the part of the alien!  Absolutely perfect, because he really is an alien himself!  I think all of us have always known that.  Think about him in any movie he’s ever been in.  He is not human!  He’s truly an alien himself, a little spooky, but accessible, and lovable!
This is a remake of the landmark film of 1951 with Michael Rennie, Patricia Neal, and Sam Jaffe, directed by Robert Wise.  This time Keanu Reeves plays Klaatu, a mysterious alien who travels to Earth with a simple mission: to save the planet.  He lands his vast space ship in Central Park, New York, and tries without success to announce his plans to the world via a speech at the United Nations.  He’s taken into custody instead.  Thus rebuffed, he goes to his backup plan: He will destroy everything on earth, then re-populate our planet with clones of the current species.  All, that is, except humans who he feels are responsible for Earth’s destruction and must be permanently eradicated.  He unleashes swarms of dust size robots who sweep through New York and the surrounding area dissolving everything in their path.  As mankind fights to survive, one female scientist tries to convince Klaatu to stop the earth’s destruction and give us all a second chance.
Transporter 3:
France Action/ Crime – I’ve seen it, and I can attest that it’s an action movie – meaning that there are a lot of explosions, car crashes, and men being violent and assertive.  And it’s all quite brilliantly done, and seasoned with just the slightest bit of plot and humor.  If that’s what you like, this is for you.  It stars Jason Statham, returning again as Frank Martin, a former British Special Forces soldier turned mercenary, whose specialty is delivering risky items in a timely fashion.  In this third installment, Frank, just relocated to Paris, awakes to find a bomb strapped to his wrist which threatens to blow up should he try to remove it.  Mixed or average reviews.
Ong-Bak 2:
Thai Action/ Adventure – With Tony Jaa, who also directed.  I’m not sure what the reception will be to this film, for it’s rather difficult and really not too much fun to watch. It’s quite dark, and exceptionally violent.  Not for children!  But it’s extraordinary in many respects, and approaches almost every aspect of an action film in a new way.  And it seems a terribly personal film for Tony Jaa, in which he apparently is trying to exorcise some inner demons.  I think it’s a fascinating attempt.
Beverly Hills Chihuahua:
US Comedy/ Adventure/ Family – You must know fairly well at this stage whether or not you and your child enjoy talking animal pictures. (It’s not an animated movie.)  I found this one amusing with parts quite a lot of fun.  It’s certainly well done of its kind.  It’s a Disney comedy in which a pampered Beverly Hills Chihuahua finds herself accidentally lost in the mean streets of Mexico.  Alone for the first time in her spoiled life, she must rely on some unexpected new friends to help her to find her way back home.  Critical reaction seems very mixed, with people either loving it or hating it.  Overall, mixed or average reviews.  If this is your cup of tea, you should enjoy it well enough.
Twilight:
US Vampire love – It’s quite well done overall, and I rather enjoyed it.  Robert Pattinson is indeed a handsome, smoldering devil as the vampire.  It’s a complex story, in three volumes so far and more to come.  Mixed or average reviews.
Teeth:
US Comedy/ Horror – Directed by Mitchell Lichtenstein (son of Pop artist Roy).  Dawn, a high school student, works hard at suppressing her budding sexuality by being the local chastity group’s most active participant.  A stranger to her own body, innocent Dawn discovers she has a toothed vagina when she becomes the object of violence.  More enjoyable than I thought it would be, it is still pretty sick and unpleasant, and bites off more than it can chew.  Mixed or average reviews.