|
Money matters:
Graham Macdonald MBMG International Ltd.
Investment picks for 2009 - what to look out for
Look at 1929 to 1932 - a four year
losing streak that saw the Dow Jones fall 89% from 381.17 on September 3rd 1929
to a low of 41.22 on July 8th 1932.
2008 has been one of the worst years in living
memory for many investment classes. So where do we go from here? What can
investors expect in 2009? With a slightly flippant look, please see our thoughts
for the rest of this year.
Equities
“You know until you see the light, there ain’t no end, no end in sight…” - Steve
Lukather, David Paich, Simon Phillips, Mike Porcaro and Bobby Kimball of Toto
As many regular readers know, we have been negative on equities since 2007
and continue to be wary. Historically, around 70% of all years since records
began have been positive for equity indices and 30% have been negative. The
chart below shows the extent of the negative years.
Although we are skeptical about selective use of historical precedents to
predict the future, we continue to believe that the history of the Great
Depression contains the best clues as to how the current devastation might play
out. As the Spanish philosopher George Santayana said, “Those who cannot
remember the past are condemned to repeat it.” This is good advice even now.
We should therefore recognize the possibility that the effects of the current
crisis may linger for quite some time to come and there may be no respite for
equities in the year ahead so cautious opportunism should be the prevailing
modus operandi.
In 2007, with the Dow at 14,164, we expressed concerns that a correction could
drag the DJIA below 7000 to a range as low as 3500-5000. This remains our
expectation - the Dow dropping below 7000. UK and European equity markets should
fare little better. The outlook for the Australian market could be even blacker
than for other developed markets. Asian markets should bounce back more quickly
and more strongly once the bottom has been reached and, while it is far from
clear that we are currently anywhere near the bottom, keep a sharp eye out for a
time to get back into Asian markets.
Property
“Get out and get what you can ... No time to understand” - Ian Anderson, lead
singer, Jethro Tull
The property bubble of the last two decades has dwarfed all other bubbles.
But like all bubbles it has burst.
Falls approaching 20% in UK and US property markets in 2008 could be the thin
end of the wedge and we would continue to look to sell (at almost any price)
rather than buy property in UK, USA, Australia, Spain, Ireland, Greece and
Portugal among others, where holding or buying property looks like an extremely
risky proposition.
Anyone determined to hold onto property should consider insuring the value of it
with Two Seasons Property Protector which is designed to go up in value by the
extent that property falls in value, BUT ‘costs’ only around 5% of the property
value (e.g. in return for paying a one off ‘premium’ of $50,000 you can ‘insure’
a $1,000,000 property).
Opportunities may start to appear in Asian property markets in 2009. Japanese
REITs as well as Thai residential property linked with land both merit
consideration.
Fixed Interest
“I can’t get no … satisfaction” - Keith Richards & Mick Jagger of the Rolling
Stones
Rates are now mostly at historic low levels. For the foreseeable future we
expect muted further cuts. Treasuries may no longer be a safe haven. For the
first time since the Great Depression there is systemic default risk across
major developed sovereign debt markets as well as in smaller developing markets.
Corporate debt will yield opportunities but the longer the recession drags on,
the farther away these opportunities remain.
However, there are still opportunities in certain funds that spread the currency
risk such as the Asian Century range of funds which do not exactly set the world
on fire but do offer better returns than most banks out there.
Commodities
“The candle blew out long before the legend ever did” - Bernie Taupin (for Elton
John)
Commodities have corrected from the speculative bubble that drove them to
such levels that in June last year we warned of air pockets and recommended that
investors follow our lead selling out of this asset class. The immediate
direction of industrial commodity prices will remain under pressure driven by
gloomy economic news. Longer term themes like food and water look to be a
better play.
Precious metals
“Got Brass… in pocket” - Chrissie Hind, the Pretenders
Precious metals have a great deal of potential to rally now. We believe that
every portfolio should hold gold as a hedge against the failure of other asset
classes and the continuing depreciation of most major currencies.
Private and
Venture Equity
“You take me up, oh ho, you take me up to the higher ground” - Tom Bailey, The
Thompson Twins
Venture Capital (VC) might never be a more attractive proposition than it is
now, thanks to a dearth of liquidity, especially in historically inefficient VC
markets such as here in Thailand. The mai’s (Market for Alternative Investments
- part of the Stock Exchange Thailand) innovative matching SME venture
programmes and the Peak XV Venture Fund offer opportunities to investors willing
and able to exploit this.
Hedge funds and alternative assets
“I wish I knew you, I wish I knew you before” - Amy MacDonald
People sometimes confuse non-mainstream investments with genuine hedging
strategies. The hedge fund class overall fell in value far less than traditional
equity or property funds last year and anyone unfamiliar with individual sectors
such as managed futures missed out on making around 20% in 2008 while low
volatility liquidity funds yielded 0.5%-1.0% each month in a range of
currencies. Luckily, it is not too late to join this asset class - strategies
providing liquidity and a genuine hedge should continue to strongly outperform
in 2009.
Overall Picture
“I’ve seen the future, brother; it is murder” - Leonard Cohen
The global economy could struggle even more this year than last and western
property markets, listed equities and certain corporate debt instruments may be
the biggest victims. Illiquid strategies are best avoided and could be the
year’s horror stories. Sovereign debt no longer seems to justify the risks and
cash remains an important asset class allied to an active brief to seek out the
definite opportunities that are still out there.
|
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
Mastering DOF
|
Taken at f4 |
Taken at f16 |
What’s DOF? Quite simply, it is Depth Of Field, and mastery of DOF
really is the second rule of photography in my opinion. Before you ask,
the first rule is to walk several meters closer to the subject!
The Depth Of Field in any picture can often make or break the entire
photograph, but knowing how to manipulate the depth of field improves
your photography instantly!
The term DOF refers to an optical one and depends solely on the lens
being used and the aperture selected. Altering the shutter speed does
not change the Depth of Field.
Depth of Field really refers to the zone of “sharpness” (or being in
acceptable focus) from foreground items to background items in any
photograph. This is different from what the eye sees, as the eye can
instantly focus on near and far objects, giving the impression that
everything in your field of vision is in sharp focus. The camera,
however, gives you a slice of time.
The first concept to remember is “1/3rd forwards and 2/3rds back.” Again
this is a law of optical physics, but means that the DOF, from
foreground to background in your photograph can be measured, and from
the focus point in the photo, extends towards you by one third and
extends away from the focus point by two thirds.
For those of you with SLR’s, especially the older manual focus SLR’s,
you will even find a series of marks on the focussing ring of the lens
to indicate the Depth of Field that is possible with that lens.
Take a look at this week’s photograph, and look at the background. It
has been made into a soft blur. How did I change this DOF sharpness?
Answer, with a flick of the wrist!
You see, for each focal length of lens, the DOF possible is altered by
the Aperture. The rule here is simple - the higher the Aperture number,
the greater the DOF and the lower the Aperture number, the shorter the
DOF. In simple terms, for any given lens, you get greater front to back
sharpness with f22 and you get very short front to back sharpness at f4.
For example, using a 24 mm focal length lens focussed on an object 2
meters away - if you select f22, the DOF runs from just over 0.5 meter
to 5 meters (4.5 meters total), but if you select f11 it only runs from
1 m to 4 m (3 m total) and if you choose f5.6 the Depth of Field is only
from 1.5 m to 3 m (1.5 m total).
On the other hand, using a longer 135 mm focal length lens focussed at
the same point 2 meters away, you get the following Depths of Field - at
f22 it runs from 1.9 m to 2.2 m (0.3 m) and at f5.6 it is 1.95 m to 2.1
m (a total of 0.15 m).
Analysis of all these initially confusing numbers gives you now complete
mastery of DOF in any of your photographs. Simply put another way - the
higher the Aperture number, the greater the DOF; the smaller the
Aperture number the smaller the DOF; plus the longer the lens, the
shorter the DOF, the shorter the lens, the longer the DOF (just remember
the ‘opposites’ - the longer gives shorter).
Now to apply this formula - when shooting a landscape for example, where
you want great detail from the foreground, right the way through to the
mountains five kilometers away, then use a short lens (24 mm is ideal)
set at f22 and focussed on a point about 2 km away.
On the other hand, when shooting a portrait where you only want to have
the eyes and mouth in sharp focus you would use a longer lens (and here
the 135 is ideal) and a smaller Aperture number of around f5.6 to f4 and
focus directly on the eyes to give that ultra short Depth of Field
required.
Master it this weekend, and just remember that these optical laws hold
good for all cameras, be they film or digital.
Modern Medicine:
by Dr. Iain Corness, Consultant
The Rabbit and the Ferret
I have just returned from having a gastroscopy, that
wonderful diagnostic procedure where, by the wonders of modern technology,
your friendly gastroenterologist can actually send a camera down your
oesophagus (esophagus if you come from the left hand side of the Atlantic
ocean), into your stomach and then a sharp right and into your duodenum. In
this case, my duodenum.
Now this was not a procedure that I decided to have upon a whim, or having
nothing better to do one Friday morning. On the Thursday evening I had eaten
some wonderfully spicy Spanish prawns, but before I had finished the main
course, I had this intense burning feeling in the area we doctors describe
as the epigastrium, but you would probably know as the ‘solar plexus’.
I excused myself and went to the toilet where I spat out what seemed like
liters of mucous that were coming up my oesophagus as the burning pain
continued unabated. I tried drinking some cold water, but not only would it
not go down, but it came straight up again. Resorting to the finger down the
throat, I was again unsuccessful, other than renewing the mucous tsunami.
Now I know my own body reasonably well (I’ve had it a long time), and I was
fairly confident in my diagnosis of oesophagitis, but since the symptoms
were still there the next morning, it was time to talk to the
gastroenterologist.
The time was set and I was told to change into the hospital gown and taken
through to the procedure room. There I had the choice of sedation or local
anaesthetic. I chose the local, preferring to know exactly what is happening
to my body at all times.
The actual procedure isn’t too bad. A little uncomfortable perhaps, but with
the local anaesthetic in the throat, the flexible tube and camera slips over
relatively easily. Dr Thitima kept up a running commentary on the state of
my never before viewed anatomical insides, which are inflated to allow
proper vision, and I was relieved to hear that my problem was only an ulcer
where my oesephagus went into the stomach. It could have been worse. Ulcers
are fixable.
Procedure over, you go to the recovery area where you are then monitored to
make sure everything is right before you get dressed. It was during this 10
minute wait that the problem with the ferret began.
For those who are not knowledgeable on ferrets, they are a domesticated
animal originally used for hunting rabbits, though some are kept as pets.
The California State Bird and Mammal Conservation Program found that by
1996, approximately 800,000 or so domestic ferrets were likely being kept as
pets in the US. Goodness knows how many pets there are in the world now,
though some states in Australia prohibit ferret keeping, along with public
nudity and selling deep-fried prawns on the beaches.
But back to my ferret. As opposed to poor old coyote, who never quite
manages to nail Bugs Bunny, a ferret will pursue and catch his rabbit in its
warren. While lying on the stretcher, a strange gurgling effect began
happening in my insides. This is known as ‘borborygmi’ (that’s why my
medical course took six years - the first four years were learning to spell
the big words) and I could follow the gaseous gurgles as they ran through my
small intestines. Like a ferret after a rabbit, they turned left and hopped
around the spleen, encircled the kidneys, turned hard right at the bladder,
sidestepped the appendix and bolted into the large bowel, where it all
seemed to go quiet.
I dressed and suddenly I knew I had to break wind. Or the ferret had caught
the rabbit, or something similar. I hastened to the toilet, anal sphincter
at maximum closure, and in the confines of the stall was able to let the gas
go. I was afraid of flying round the room backwards. As (Sir) Mick Jagger
sang in ‘Jumping Jack Flash’, “It’s a gas, gas, gas!” It certainly was.
So that’s what to expect if a gastroscopy is ordered for you. Some
discomfort, a quick diagnosis and a gaseous ferret unleashed. Now you know.
 Heart to Heart with Hillary
Dear Hillary,
I took a friend over to Thailand on a bit of a working holiday over Xmas. Well,
I was working and he was playing but he enjoyed himself very much. That was so
much that he came back again on his own for the New Year, and used me as the
excuse, which I wasn’t happy about. He told me he took up with the same girl
from the bar we used to drink at, and she seems a nice enough sort of girl, but
the problem is the chap is already married to a really nice woman in the UK.
They’ve been married for about 15 years, she’s stuck to him through all the bad
times and now things are looking better and they have two kids and a nice home,
and now he tells me he wants to give it all away and move to Thailand to be with
his “girl friend”. How do I get some sense into him? He’s going to lose
everything he’s ever worked for all his life, if his wife doesn’t kill him
first.
Neil
Dear Neil,
It’s a common problem, my Petal. The English lads come over here for a holiday
and everything seems to be free and easy. (Well not quite ‘free’, but very
reasonable.) The holiday ‘romance’ is so much fun, the Thai girls are so easy to
get along with, no wonder they think that this is so much better than at home
with the married relationship going a bit stale and the kids being demanding.
What they conveniently forget is that the free and easy bar girls are just doing
their job, making tourists believe in fantasies. And it is just that - a
fantasy. If it wasn’t a fantasy, why does Hillary get so many ‘broken heart’
letters every week? How do you get some sense into him? It’s difficult, Neil, it
really is. Getting someone off Thai bar girls is harder than getting a confirmed
20 year smoker off the ciggies. There are plenty of books for them to study,
such as Stephen Leather’s Private Dancer, or even this weekly column, but will
they believe it? That’s the problem. They all think “their” girl is different,
and some of them are - some have blonde hair! But beneath it all, they are
working in the bar to make money. Bigger money than they could make at the Tesco
check-out. It’s a financial relationship, not a ‘love’ or even a fun
relationship, as your friend will eventually find out. Show him this letter,
Petal, you sound like a nice caring guy.
Dear Hillary,
A couple of weeks ago you told some poor chap who had gone out to Thailand to
see the girl he was pretty sure he was going to marry, that he should just like
it or lump it when the girl in question had gone off with some other guy to
Chiang Mai. You also came up with the sweeping statement that “90 percent of
those guys never show up again”. Of course, when you are saying it’s OK for them
to go off with someone else who just happens to be there at the time, and bad
luck for the poor sod who had gone out to see her, no wonder. You are excusing
very poor behavior, my Petal Hillary. I reckon you owe him better advice than
you gave him.
John
Dear John,
You are guilty of quoting me out of context, Petal. You are conveniently leaving
out my statement, “If you’re here for a good time, then go out with the
good-time girls. If you’re looking for your life’s partner then you don’t begin
in a bar.” He was looking in the wrong place, that is what I was trying to tell
him. If you want to buy some cheese, then you don’t find it in a hardware shop.
Can I be any more plain than that? That’s the best advice he could possible get.
Dear Hillary,
Following on in the vein of that naughty man: ‘unbeliever’, may I ask the thorny
question, ‘Are you actually a lady of the female gender?’ Your approach in your
column seems very masculine to me; why don’t you publish a visual image inside
your ‘heart’ at the top of your column, unless you look like Claire Raynor or
Marge Proops? Are you going to give me a literary lashing for my cheek, wearing
only thigh-length boots, a thong and nipple tassles (sic), like Madame Whiplash?
Ooh, I hope so.
Submissively yours, John Thomas.
Dear Submissive John Thomas,
May I ask the thorny question, ‘Do you really have a John Thomas?’ What have I
done to engender doubts on my gender? Your approach seems very British to me,
being so disrespectful to my sisters in The Sun and The Daily Mirror, such
newspapers known for their consistent high standards. Or should I say,
standards. And who are you referring to in the thigh-length boots? You or me? By
the way, before you get too excited with your verbal imagery, it’s ‘tassel’, not
‘tassle’, Petal. I will publish my photograph the day you get photos of your
John Thomas published in these pages.
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Defiance: US Drama/ Action. I thought this a superb war
drama and thriller with a lot of thought in it – a must-see in my
opinion. Based on a true story, this is an epic tale of family, honor,
and vengeance in World War II. The year is 1941 and the Jews of Eastern
Europe are being massacred by the thousands. Managing to escape certain
death, three brothers take refuge in the dense surrounding woods they
have known since childhood. There they begin a desperate battle against
the Nazis.
Daniel Craig, Liev Schreiber, and Jamie Bell star as brothers who turn a
primitive struggle to survive into something far more consequential - a
way to avenge the deaths of their loved ones by saving thousands of
others. Directed by Edward Zwick (Blood Diamond). Rated R in
the US for violence and language. Mixed or average reviews, but I
thought it riveting, and I highly recommend it for anyone who wants to
see something substantial and provocative as well as exciting.
High School Musical 3: US Musical – A continuation of the hit
musical series. The kids are now seniors. Again, terrific singing and
dancing. Mixed or average reviews.
Red Cliff Part 2: Hong Kong War/ Action – The second and final half
to John Woo’s magnum opus Red Cliff, and an epic on a grand scale
as only the Chinese can do. Produced and directed by John Woo.
The Elephant King: US/ Thai Drama/ Romance – Filmed for the most
part in Chiang Mai. A domineering mother (Ellen Burstyn) dispatches her
young, introverted son Oliver off to Chiang Mai to do everything he can
to lure his reckless, older brother back home to the U.S. to face
pending fraud charges. Oliver finds the intoxication of Chiang Mai hard
to resist – as he falls deeply in love for the first time, his older
brother Jake slips deeply into despair, and the seams of their
relationship begin to come undone. When the true extent of Jake’s
decadence and self-destruction is revealed to Oliver, he is forced to
decide whether he will save his brother’s life or his own. Rated R in
the US for sexual content, drug use, language and some violence. Mixed
or average reviews.
The Fatality: Thai/Taiwan Mystery/ Horror – An unsuccessful man in
Taipei commits suicide, only to wake up in the body of a coma victim in
Bangkok. His new life is almost perfect – he now has a stable job, a
healthy body, and a beautiful wife, but as the two souls fight for
control of the body they start developing supernatural powers over life
and death itself, leaving havoc in their wake. A Thai-Taiwanese
co-production.
Blue Sky of Love / Fah Sai Jai Chuen Ban: Thai Drama – A supposedly
comic view of the bloody events of 6 October 1976, when student protests
created a revolutionary period in Thai history. It’s the story of a
university girl who leaves her comfortable life in Bangkok to join a
Communist Party army in a remote forest.
Yes Man: US Comedy – Jim Carrey as a man who signs up for a
self-help program based on one simple principle: say “yes” to everything
for an entire year. Mixed or average reviews.
Quarantine: US Horror/ Mystery/ Thriller – A television reporter and
her cameraman are trapped inside a building quarantined by the US
government after the outbreak of a mysterious virus which turns humans
into bloodthirsty killers. It has the single hand-held camera style of
such recent movies as Cloverfield. Some people find this leads
to heightened reality; others find that the constant jiggling of the
picture and rough-shod editing gives them a headache. If you can put up
with it, you will find this to be a quite frightening movie, as I did.
Rated R in the US for bloody violent and disturbing content, terror, and
language. Mixed or average reviews.
The Happiness of Kati: Thai Family/ Drama – Based on the
best-selling novel by Ngarmpan Vejjajiva. Not enough believable
conflict in the script to make it a compelling drama, but it is
well-acted, and beautifully and lovingly photographed. Best described
as a loving tone poem of a film to a certain Thai way of life and
living.
Australia: Australia Drama/ Adventure – Set against the
backdrop of World War II, this is Baz Luhrmann’s epic, sweeping tale of
an English woman (Nicole Kidman) who inherits a sizable cattle ranch
“down under.” With the bombing of the city of Darwin on the horizon,
she teams with a cattle driver (Hugh Jackman) to save the ranch. Mixed
or average reviews.
Madagascar: US Animation/ Family – A delightful animated film.
Bedtime Stories – US Comedy/ Family/ Fantasy – Adam Sandler in a
family comedy about a hotel handyman whose life changes when the lavish
bedtime stories he tells his niece and nephew start to magically come
true. Generally negative reviews.
|
