Money matters:
Graham Macdonald MBMG International Ltd.
Where do we go from here? Part 1
2008 was an appalling year for many investors - what can
we expect in 2009? The world may already be in one of the deepest recessions
in recorded history but, as we stated recently, the investment marketing
industry still seems to be booming - “The key is time in the market not
timing the market,” announced one of the pearls of wisdom to cross our desks
last week. This actually struck us as an extremely clever marketing ploy
with a level of psychological subtlety that is not immediately apparent.
What does all of this mean for an investor who currently has a portfolio
which may well have been incorrectly positioned for 2008 and have suffered
some significant losses? What should an investor do in that situation?
Portfolio Repair - How to go about it?
Establish credentials - Ask yourself this question: “If an advisor or
manager did not foresee the events of last year why would they be better
able to choose a path ahead now?” In a recent exchange on CNBC, Jim Cramer
epitomised the desperation and impotence that many people feel by giving his
support to the nomination of Timothy F. Geithner as Treasury Secretary. This
was not because he thought that Geithner was a capable man who could or
would solve the problems facing the US economy but because he represented
continuity. Cramer described Geithner as being qualified to understand the
severity of the current crisis because he was “the co-pilot who crashed the
plane” (the plane being the American economy). Luckily two of CNBC’s better
anchors, Melissa Francis and Becky Quick, picked up on this and made the
points that we would also have done:
i) Most people now understand something of the severity of the crisis but
prefer their planes to be piloted by someone who can demonstrate both
competence and experience.
ii) More of the same is not a recipe for a solution when “the same” is
precisely the polices that led us into the current difficulties.
iii) It is intellectually lazy and dishonest not to look for better
solutions now at the levels of both macro policy and individual portfolios.
For your own portfolio, the best take is likely to be from advisors or
managers who have avoided the downturn rather than those who have been taken
by surprise. Any manager who has lost money in the current crisis for
clients has a vested interest in recommending stasis.
We tried to think of any other industry where having been sold a product
that is supposed to go forwards at a certain average speed but which, since
you bought it, has only gone backwards at around three times that pace. The
sales people not only try to sell you more but use the very failure of the
product to fulfil its stated purpose as the precise reason to do so. The
subtle and clever (some might say manipulative) part, is the way that this
approach implies that as long as you hold and even buy more of assets that
have been devastated during the last year, your original asset allocation
decisions can still feel vindicated.
Selling at a loss is admitting to having made a mistake; something that
human beings do all the time but are often reluctant to admit. The ironic
part, in our experience, is that those who admit having made mistakes are
far more likely to learn from them and, therefore, less likely to repeat
them than those who choose to live in denial.
Similarly, portfolio managers who were positioned to make money last year
are, in many cases, still actively adapting their portfolios to the ever
changing global economic landscape, whereas last year’s losers are tending
to sit tight. We are not suggesting changing direction every five minutes
but the more volatile the economic backdrop, the greater vigilance and
responsiveness is required. As Martin Gray who, along with Scott Campbell,
is our lead portfolio manager, recently told What Investment Magazine:
“I am a buyer on the downside and I wait for things to happen. Of course, if
they don’t happen, you have to be prepared to admit that you made a mistake
and get out. But the core strategy is to build up positions steadily in
falling markets, then, light the blue touch paper and wait… The cash
weighting has been there for two years, and we went into that through doing
primary research rather than waiting for the external analysts to tell us to
sell. That is a big advantage to conducting your own research… Generally
speaking, the themes that I am following are on a 1-3 year basis. Some may
be shorter term than that, but I am not a trader… At the same time, we are
not wedded to any particular benchmark or asset allocation model or sector
strategy. I roam where I can to get the best return for the fund.”
To be continued…
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.comm.com.com
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Snap Shots: by Harry Flashman
Inexpensive professional portraits
Do
you have a professional portrait on the wall at home? Your wife, your
kids, or even a family group. It was not a cheap exercise, as portrait
photography is one of the most lucrative areas of photography in the
world. People love great portraits of themselves. Photographers love
taking photographs of people. A great portrait is then satisfying for
both the photographer and the sitter, so this week let’s look at a few
studio style tricks we might be able to adapt for the weekend
photographer who does not have banks of studio lights and other such
paraphernalia of the pro photographer.
To start with, let’s get the techo bits out of the way. You should
choose a lens of around 100 mm focal length (135 mm is my preferred
“portrait” lens) or set your zoom to around that focal length. If you
are using a wide angle lens (anything numerically less than 50 mm), no
matter what you do, the end result will be disappointing. That is of
course unless you like making people look distorted with big noses!
The second important technical bit is to set your lens aperture to
around f 5.6. At that aperture you will get the face in focus and the
background will gently melt away - provided that you focus on the eyes!
Perhaps a word or two about focus here as it is very important in
portraits. I always use a split image focus screen and focus on the
lower eyelid. This makes sure that the eyes will be exactly in focus. If
you are using Autofocus (AF), then again you should make sure you focus
on the eyes and use the ‘focus lock’ so you will not lose it.
Next item is the general pose itself. Please, please, please do not have
your subject sitting rigidly directly face on to the camera. This is not
a passport/visa run photograph. It is to be a flattering portrait. Sit
the subject in a chair some distance away from a neutral background, and
turn the chair 45 degrees to the camera. Now when you want to take the
shot you get the subject to turn their head slowly towards you and take
the shot that way. You can also get a shot with them looking away from
you. Nobody said the sitter has to actually look at the camera.
Now let’s get down to the most important part - the lighting. We need to
do two things with our lighting. Firstly light the face and secondly
light the hair. Now the average weekend photographer does not have
studio lights and probably has an on-camera flash to work with. Not to
worry, we can get over all this! The answer is a mirror and a large
piece of black velvet.
Take the black velvet first. You will need a piece around 2 metres
square and the idea is to place the velvet close to one side of the
subject, but not actually in the photograph. You get as close as
possible and the black will absorb much of the light and allow no
reflection of light back onto that side of the subject’s face. Hang the
velvet over a clothes drying stand or similar to make life easy for
yourself.
Now the mirror. This device will give you the power of having a second
light source for no cost! Now since you are firing light into the
subject from the top of your camera, you position the mirror at about
30-45 degrees tilted downwards, placed behind and to the side of the
subject, pointing basically at the sitters ear. The side you choose is
the side opposite the black velvet. Again, you must make sure that the
mirror is not in the viewfinder.
What you now have is a primary light source (the on-camera flash), a
secondary light source lighting the hair and adding to the light on one
side of the face, and a light absorber to give a gradation of light
across the subject’s face. Take a look at the portrait of model Patti
Hansen taken by the famous photographer Richard Avedon. Note principal
light, hair light and the model at 45 degrees to the camera.
Modern Medicine:
by Dr. Iain Corness, Consultant
How’s your NOF?
I have often mentioned just how we doctors love acronyms.
However, it is probably one of the worst aspects of modern medical practice.
Yes, worst, because mistaken acronyms can be dangerous. Take PD, for
example. That can mean Provisional Diagnosis, Panic Disorder, Parkinson’s
Disease or even Police Department. Another is GS, which stands for Gleason
Score (a way to grade prostate cancers), but unfortunately also stands for
another 15 items, including the Gardner Syndrome, Griscelli Syndrome,
Gitelman Syndrome and Gorlin Syndrome. Take your pick, and hope it fits the
situation.
However, returning to your NOF, the subject of this week’s column, this
stands for Neck of Femur, and fracturing your neck of femur (fracturing your
hip) is very prevalent as we get older.
Over the past six years there have been approximately 420,000 hip fractures
in the UK. Many of these people will have been permanently disabled, most
will have suffered a dramatic reduction in their quality of life and more
than 80,000 people will have died as a consequence of their hip fracture.
Hip fractures alone cost the NHS £2.3 billion per year.
There are a few reasons we get a fracture of the NOF and the first is
because our bones become more brittle as we get older, as the calcium levels
become depleted. This is called ‘Osteoporosis’, or the fragile bone disease,
and affects the whole skeleton but it commonly causes fractures to bones in
the wrist, spine and hip. There are over 70,000 hip, 50,000 wrist and
120,000 spinal fractures each year in the UK. And these are mainly the older
generations (and these are the generation that includes pensioners, of which
a large number come to Thailand to retire, and get their fractured NOFs
treated locally).
One of the other reasons (with women) is the dwindling hormonal levels that
come with the menopause, which affect the calcium metabolism.
Finally, there is the design of the neck of the femur and hip joint itself,
which beggars belief from the engineering point of view. When you fall on to
the hip, the very thin NOF is easily sheared off. If you subscribe to the
celestial theory of our development, then God was certainly not an engineer,
despite building our world in a record setting six days.
Returning to the inherent problem, what we have to do is treat the
osteoporosis. Evidence has shown that half of future hip fractures would be
prevented if everyone was treated for osteoporosis after their first
fracture. Unfortunately, it is not quite that simple.
The metabolism of calcium is not such that if you start to drink gallons of
high calcium milk every day you are cured. Getting the calcium from the
stomach to the bones is complex, and whilst calcium supplements have their
place, they are not the be all and end all.
What should you look for in a calcium supplement? According to the pundits,
look for two things. First, your calcium supplement should contain vitamin D
- and most calcium supplements do contain this vitamin. Women with
osteoporosis often have vitamin D deficiency.
Second, find the pill or tablet that will be easiest for you to take. Do you
prefer a chewable tablet over swallowing a large pill? Pay less attention to
the type of calcium - calcium citrate versus calcium carbonate - and whether
it’s a brand name or generic.
The day-to-day difference of how much calcium you absorb from different
supplements is so small, as to be inconsequential, compared with your
consistency in taking the supplement.
There are also Bisphosphonates. Like estrogen, this group of drugs can
inhibit bone breakdown, preserve bone mass, and even increase bone density
in your spine and hip, reducing the risk of fractures. These may be
especially beneficial for men, young adults and people with steroid-induced
osteoporosis. They are also used to prevent osteoporosis in people who
require long-term steroid treatment for a disease such as asthma or
arthritis.
Finally, weight-bearing exercise is very important for building bone
strength. The less active you are as you age, the more frail you become and
the greater your risk of falls and fractures. The good news is checking bone
mass density for those at risk is easy and painless.
Heart to Heart with Hillary
Dear Hillary,
Happy belated Valentine’s Day.
Big D
Hillary loves you Big D!
Dear Big D,
Happy belated Valentine’s Day indeed! Only a few days late. You are forgiven, my
wonderful Petal. You restore my faith in humanity, in men and in romance. You
have never let me down, over all these years. The rock I can depend upon. Thank
you Big D. And some ‘virtual roses’ coming your way. In the meantime I am
enjoying the Ghirardelli chocolate squares and the lovely heart shaped box I
shall keep on my dressing table with my night wrinkle creams inside. On second
thoughts, it might not be large enough, but I will find a good reason for it to
stay close to my heart at night.
Dear Hillary,
One of our nicest local hospitals has a quaint custom practised on out-patients
called Packaged Medical Charge. Apparently for this ones weight and blood
pressure are measured. However, the results do not appear to be used anywhere in
later medical evaluation and the doctor will always retake my blood pressure.
This alleged service used to cost 50 baht and was gradually screwed up by 300%
and then surprisingly dropped to the current level of 150 baht. Hillary, I am
being gouged. I have paid B. 4,150 for these non contracted services over the
last 3 years. Can I sue the hospital for extotrion (sic) - or whatever - under
the newly enacted consumer protection legislation?
Singhawater
Dear Singhawater,
Are you related to Mistersingha, by any chance, my Petal? Now to your query as
to whether you can sue “One of our nicest local hospitals” “for extotrion (sic)”
- I’m afraid I am not abreast of this legal jargon. “Extotrion” is way out of
Hillary’s territory. Or did you mean to write “extrusion” (coming from the Latin
“extrudere” - to thrust out), failure in which seems to worry many of my
writers, known for gobbling down Vitamin V by the handful. I think you should
consult a legal man and be guided by his advice. In the meantime drink more
Singhawater with your spirits.
Dear Hillary,
My Lord FitzLady of Walking Street, also known as Peasmold Gruntfuttock, has
been invited to a fancy dress party and wishes to attend as a humpbacked whale.
Peasmold wonders if he can borrow your costume or, if not, your Head Girl rig
and tutu.
Mistersingha
Dear Mistersingha,
Give you one centimeter and you take a kilometer! After being kind to you
(following the Lindt chocolate bar), you come back with references to humpback
whales which are not appreciated. They are a protected marine animal (other than
from the Japanese), and I am a protected land animal.
Dear Hillary,
Thanks to your regular promotion of chocolates and champagne as being on every
girl’s wish list, I am currently fitting out a shop in preparation for selling a
great variety of the worlds best chocolates together with a vast selection of
French champagne. My chocolates are hand made and comprise of dark and milk
chocolate, some filled with familiar tastes such as caramel and marzipan, and
others with all natural cordial cherries imported from Belgium. Other
ingredients include sweet, creamy, fresh butter, delicious whipping cream, pure
cane sugar, fresh roasted nuts, pure flavourings and the freshest fruit purees.
My champagne stock includes Kraemer Brut Cuvee Close, Grande Annee which is aged
for a minimum of five years, Bollinger and, of course, Dom Perignon 1985
vintage.
Forget diamonds and pearls, no girl can resist these treats and she will be
putty in any man’s hands should he buy them for her. Perhaps your luck will
change Hillary, and you will become putty in Mistersingha’s hands.
Minnie Mouse
Dear Minnie Mouse,
It would need a crate of Vintage French champagne to turn Ms. Hillary into putty
in that wretched Mistersingha’s hands. A bottle of Bolly from Mistersingha? A 20
year old bottle of Dom? You’ve got to be joking, Petal. He can’t even come
across with his promised bottle of Babycham, not even 20 days old!
However, I do agree that your choccy and champers shop sounds absolutely divine.
Tell me where it is, and I’ll spend many hours window shopping. Send me a free
trial sample and I’ll even let you apply my personal crest above the entrance,
with “By Appointment to Ms. Hillary, the Queen of Chocolates and Champagne.” Oh!
I can taste the fizzy bubbles already, my Petal. Don’t let me down, like that
dreadful Mistersingha person!
Dear Hillary,
My girlfriend did come from a bar, but she tells me that she only goes back
there these days to have a chat with her old friends. The problem is I am away
for 11 months of the year and only get back at Xmas. How do I find out if she is
not back working there?
Thomas
Dear (Doubting) Thomas,
When you are out of the country for 11 months out of 12, she is hardly ‘your’
girlfriend, Petal. It is a one month romance, Thomas, she is free to do what she
wants for the other 11.
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Bolt: US Animation/ Comedy/ Family – John Travolta voices
Bolt, a canine TV star convinced of his superpowers who sets out on a
cross-country journey to find his owner. Generally favorable reviews.
Watchmen: US/ UK/ Canada – Action/ Drama/ Fantasy/ Sci-Fi/ Thriller
– A complex, multi-layered mystery adventure, set in an alternate 1985
America in which costumed superheroes are part of the fabric of everyday
society. Rated R in the US for strong graphic violence, sexuality,
nudity, and language. Early reviews: Generally favorable.
Best in Time: Thai Romance/ Drama – Romantic drama centers on a
young vet who struggles to forget his first love, but when he meets her
again years later she doesn’t seem to remember him at all. A love story
by the director of Iron Ladies and Metrosexual.
Power Kids: Thai Action/ Comedy – Five ass-kicking kids fight it
out with a terrorist attempting to seize control of a hospital.
Street Fighter: The Legend of Chun-Li: US Action/ Sci-Fi – Adapted
from the popular series of “Street Fighter” video games first
released in 1987, followed by a sequel in 1991. Undercover Interpol
agent and female fighter Chun-Li (Kristin Kreuk) seeks justice after she
discovers that her father has been murdered. Shot mainly in Bangkok.
Valkyrie: US/ Germany Drama/ History/ Thriller/ War – A
well-crafted, thinking-person’s action movie about the attempt to
assassinate Adolf Hitler by rebel German army officers in 1944, starring
a restrained and excellent Tom Cruise as the aristocratic German officer
who led the heroic attempt to bring down the Nazi regime and end the war
by planting a bomb in Hitler’s bunker. Directed by Bryan Singer (X-Men,
Superman Returns). I was impressed by the supporting cast that
includes Bill Nighy (fresh from his chores as lead vampire in
Underworld: Rise of the Lycans), Tom Wilkinson, Terence Stamp, and
Kenneth Branagh. Actually, I think the less you know about the details
of the story as you go in the more interesting it will be. Mixed or
average reviews.
Outlander: US Action/ Sci-Fi – Full-bodied Sci-Fi escapism that
should satisfy your cravings for both action and Norse mythology in one
fell swoop. During the reign of the Vikings, Kainan (James Caviezel), a
man from a far-off world, crash lands on Earth, bringing with him an
alien predator known as the Moorwen. Though both man and monster are
seeking revenge for violence committed against them, Kainan leads the
alliance to kill the Moorwen by fusing his advanced technology with the
Viking’s Iron Age weaponry. Mixed or average reviews.
The Curious Case of Benjamin Button: US Drama/ Fantasy/ Mystery/
Romance – with Brad Pitt, Cate Blanchett, Tilda Swinton. The
extraordinary tale of a man, born elderly in 1918, who ages backwards
through the 20th century. Received Oscars for best art direction (and
set decoration) – the sense of time and place, and the attention to the
details of the period settings, were mind-boggling; and for best
achievement in makeup – which indeed was wizardry; and for best
achievement in visual effects – which was richly deserved. Very much
worth seeing for the marvels of filmmaking art. The screenplay is by
Eric Roth, who wrote Forrest Gump, which this reminds me of.
Generally favorable reviews.
My Bloody Valentine 3D: US Horror/ Thriller – It’s an unpretentious
gory and senses-assaulting slasher film, and an effective mix of
old-school horror stylings and modern 3D technology. The effects are
good. Congratulations to the cineplexes here for getting the glasses
and showing us what it’s really like! Rated R in the US for “graphic
brutal horror violence and grisly images throughout, some strong
sexuality, graphic nudity, and language.” Mixed or average reviews.
Push: US Action/ Thriller. The deadly world of “psychic espionage”
where artificially enhanced paranormal operatives have the ability to
move objects with their minds, see the future, create new realities, and
kill without touching their victims. It has a convoluted script,
and despite director Paul McGuigan’s visual flair, it’s really hard to
follow. Generally negative reviews.
Underworld: Rise of the Lycans: I thought this quite terrific of its
kind, and for the most part an amusing and enjoyable foray into a mythic
medieval world, except for the excessive whippings. Rated R in the US
for bloody violence and some sexuality. Mixed or average reviews.
Luang Pee Kub Phee Ka Noon: Thai Comedy – A swindler hides out in a
monastery by becoming a monk. With the popular Mum Jokmok and the usual
stable of TV comedians.
Confessions of a Shopaholic – US Comedy. An unfunny movie shrilly
told, and probably the most ill-timed and appallingly insulting movie in
recent memory. Generally negative reviews.
In Limbo
Slumdog Millionaire: US/UK Crime/ Drama/ Romance – The Oscar
best picture and best director – and six other “best”
awards. At the present time not to be shown in Pattaya; playing at only
one cinema in the whole of Thailand! The Apex in Bangkok. But we can
hope!
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