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Money matters:
Graham Macdonald
MBMG International Ltd.
Nominated for the Lorenzo Natali Prize
If Tolstoy were an investment manager…
In meetings with colleagues, clients or suppliers you’ve
probably never stopped to wonder - are they hedgehogs or foxes. That’s unless
you’ve ever read Isaiah Berlin’s tongue-in-cheek literary essay, “The Hedgehog
and the Fox”. But this could make a big difference to the eventual outcome of
discussions if you understand which kind of animal you’re dealing with.
Berlin was moved to write the essay by realizing that, unlike
most people, Leo Tolstoy didn’t fall into one of the two categories identified
by ancient Greek poet Archilochus: “The fox knows many things, but the hedgehog
knows one big thing.”
This doesn’t pre-suppose that wide-ranging knowledge is
better than concentrated knowledge. After all, it may be that the fox, for all
his agility, is defeated by the hedgehog’s simple solitary defence of rolling
into a spiky ball. Hedgehogs see the world through a single defining idea. They
include Plato, Dante, Hegel, Nietzsche and Proust. Foxes’ views are shaped by a
wide variety of experiences. Foxes include Aristotle, Shakespeare, Goethe,
Balzac and Joyce.
Tolstoy, however, was different. Superficially he didn’t fit
either group. Berlin believes Tolstoy had the skills of a fox but was
constrained by his belief in the need to behave like a hedgehog.
George Washington was an archetypal hedgehog - the one big
thing he knew was that America’s future lay to the West, in its development of a
continental empire. It may be that the key quality of successful political
leaders is singularity of purpose.
Over the past 10 years or so economists have developed the
single-mindedness theory or SMT. This states that those most able to focus on
the smallest number of issues gain greatest political power. Hitler, Reagan,
Thatcher, Stalin and De Gaulle (in fact just about any politician that has an
-ism named after them) all stand out as hedgehogs. The ultimate 20th
century hedgehog was probably Albert Einstein whose pioneering work on
relativity was the result of an obsessive focus, but be careful not to confuse
hedgehogs with one-trick ponies.
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Fox
characteristics
Hedgehog tendencies
Tell the
time
Build the clock
Tactical and
reactive
Visionary, strategic and proactive
Move quickly, opportunistic
Cautious, longer term
Seeking out individual strands
Seek defining patterns
The best three US CEOs also make compelling reading:
1 - Revolutionary automotive pioneer, Henry Ford - Hedge/Fox
2 - Leading financier, J Pierpont Morgan - Hedge/Fox
3 - Wal-Mart’s co-founder Sam Walton - Hedge/Fox |
The early success of ‘Chainsaw Al Dunlap’ at Scott Paper, who
streamlined operations through widespread cuts and layoffs to improve
shareholder value and ultimately sold the firm to Kimberley-Clark, may have
given the impression of a hedgehog. However, his total inability to understand
and adapt the use of this blunt instrument failed dismally when he took over at
Sunbeam. Dunlap was both ignominiously fired and sued by shareholders with whom
he eventually had to settle for $15 million. Dunlap is now banned from serving
as an officer of a public company again and last year was voted the CNBC 6th
worst CEO of all time.
Interestingly, the worst three were all examples of vulpine
success catapulting foxy rainmakers or wheeler-dealers to the peak of
organizations where their lack of a strategic perspective caused catastrophic
problems:
1st - Unrepentant ex-Lehman boss, Dick Fuld, who today still
doesn’t understand the big picture - Fox
2nd - Countrywide Financial’s obsessive debt-buyer, Angelo
Mozilo, who totally failed to appreciate big picture risk - Fox
3rd - Disgraced Enron CEO, Ken Lay, successful as a foxy deal
maker who fell apart when more strategic big picture vision was needed - Fox
Foxiness or hedginess has nothing to do with the relative
quality of ideas; it concerns how they are applied, their timeframe, breadth of
data and specific role.
Jim Collins, in his book Good to Great classes Walton
and Ford as hedgehogs because, like Morgan also, each had a very clear strategic
view of what their customer wanted and painstakingly tried to meet those needs.
But that ignores the plethora of small, successful innovations, changes and
developments that these three leaders were constantly absorbed by. Maybe the
reason that they are regarded the best of all time - by CNBC at any rate - is
because they are essentially the business equivalents of Tolstoy, not obviously
in one camp or the other. Perhaps the key to their success lies in their
combination of skills and perspectives. While Lay, Mozilo and Fuld staggered
around blindly, Walton, Morgan and Ford implemented domestic supply-chain
management, business reorganization and automated manufacturing, at the same
time as mastering rapidly changing technologies, demands and situations.
Few are able to emulate Tolstoy by adding hedgepiggyness to
their innate foxiness or vice versa and such scarcity makes for an exceptionally
valuable commodity. In our industry, the best long-term strategic investment
managers are the giant hedgehogs such as Mark Mobius - whose great awareness was
the inevitable outperformance of emerging markets - and the best short-term
equity managers are active bottom-up foxes like Peter Lynch - who by his own
admission had no big picture economic understanding but found attractive equity
opportunities like a talented pig hunting truffles.
However, an investment portfolio is analogous to a business -
it needs a leader who understands both the big picture and all the smaller, more
complex ones. The specialized skill set of asset allocation is the province of
that endangered species, the foxy hedgehog. If you see one, do your utmost to
preserve it.
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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]
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Snap Shots: by Harry Flashman
Shapes, patterns and contrasts
 Sometimes
the commonest or simplest items can produce eye-catching photographs. No
difficult shots, no special effects, no exotic lenses, just great shots
by the simple technique of keeping one’s eyes open.
The secret to all this is to remember repetitive
shapes, contrasting shapes, contrasting colors and shadows. In other
words, these types of images rely totally on vision and composition.
Remembering that the ‘rules’ of composition are
merely there to be broken, and very often a dramatic shot comes from
trying something different.
The secret of great photography is not just in
correct exposure and placement in the frame. You will get plenty of dull
photographs that are perfectly exposed and with the subject at the
intersection of thirds. You need to remember contrast!
Contrast in photographic composition is an effective
means of directing the viewer’s attention to the center of interest.
When I speak of contrast, I am referring to both tonal contrast, as in
black-and-white photography, and color contrast as it relates to color
photography.
In B&W photography, contrast is the difference in
subject tones from white-to-gray-to-black or from the lightest tone to
the darkest tone. In color photography different colors create the
contrast.
Tonal contrast is generally expressed as high
contrast which has extreme black and whites, or low contrast which has
nothing but graduated greys. The photograph used this week is an example
of very high contrast, so much so that detail is blown out, but this is
not designed to be a portrait, this was designed to be a photograph that
hits you between the eyes.
Now you can wander around all day looking for a girl
in a white swimsuit on a white sandy beach, or you can manipulate a
photograph to produce that image. If you have an advanced digital
camera, you can program it to record black and white only and then go
from there, but if not, no fear, your software will allow you to do this
post camera. First convert the color shot to grey scale, then play with
the brightness and contrast, and you will very quickly produce a shot
like the one used here.
Now high contrast should not be confused with high
key. A high key black and white shot is one where the photo shows mostly
light tones. Conversely, a low key shot is one that has mainly dark
tones. Low key and high key pictures convey mood and atmosphere. Low key
suggests seriousness and mystery and is wonderful for Halloween
photographs. However, high key creates a feeling of delicacy and
lightness. A portrait of a blonde in white against a white background is
an example of high key.
High contrast gives very black blacks and very white
whites, and usually with nothing in between. Low contrast, on the other
hand, still has blacks and whites, but everything is predominantly grey,
giving a flat scene which still has tones, but in which highlights and
shadows have very little difference in densities. In other words, all
tones within the scene are very similar in appearance. However, remember
that if you are shooting in automatic mode, the camera will be set to
deliver 18 percent grey, and not black.
Now to contrast in color. This is where an artist’s
color wheel comes in handy. By picking colors from opposite sides on the
wheel, you immediately have stunning contrasts. Blue and yellow is a
classic example. Another is bright red against a luminescent green
background.
Cold colors (bluish) and warm colors (reddish) almost
always contrast. Cold colors recede, while warm colors advance. Light
colors contrast against dark ones, and a bold color offsets a weak
color.
Color contrast is an effective compositional element
in color photography, just as tone is in black-and-white photography.
Colors with opposite characteristics contrast strongly when placed
together. Each color accentuates the qualities of the other and makes
the color images stand out dramatically. Color contrast is enhanced when
you create the contrast of detail against mass. An example is a single,
bright, red flower in a clear, glass vase photographed against a bright,
green background.
Modern Medicine:
by Dr. Iain Corness, Consultant
Stop Smoking - when you’re ready!
World No Tobacco day has just passed, with the World Health
Organization exhorting everyone to stop smoking. If only it were that easy.
Cigarette smoking is so much part of our societies, it is difficult to
imagine life without tobacco.
However, when you think about it, rolling up dried plant
leaves and sticking them in your mouth and setting fire to the end of it
sounds like a pretty silly proposal, particularly when you know it is
dangerous (and let me assure you, it is). Remember that the ‘Marlboro man’
died of lung cancer!
Unfortunately, when you start smoking, it becomes very
difficult to stop smoking. This is because smoking is not just a habit like
chewing on a pencil when concentrating. Smoking is an addiction. What you
have to realize is that nicotine is more addictive than heroin. I know
that’s probably hard to believe, but that really is the crux of the matter.
You take nicotine into all of your metabolic pathways until you “need” to
have nicotine to be able to function. Nicotine becomes part of your
metabolic chemical chains, and they don’t work properly without it. Now you
can see just why you feel so dreadful when you go without cigarettes
(nicotine) for any period of time.
To give up cigarettes there are many, many ways, ranging
from acupuncture, hypnosis, the I Ching, acupressure, Nicotine Replacement
Therapies (NRT), chewing gum, patches, nasal spray and many others all the
way through to Cold Turkey. Hop onto the internet and you are besieged with
offers, all of which will make it ‘easy’ for you to stop smoking, and all of
which will cost you money!
Interestingly, all of the above methods need the smoker
to become committed to ceasing cigarettes. The success rate really hangs on
that commitment. Leaving aside hypnosis and acupuncture, about which I know
very little, but the good books tell me do not enjoy high success rates,
let’s look at the other methods. The majority rely on Nicotine Replacement
Therapy (NRT). All the gums do is to make nicotine available for you in
measured doses - much like cigarettes do. You get the craving, you chew the
gum. Patches are slightly different. They deliver the nicotine slowly over a
12 or 24 hour period and are supposed to stop the craving before it happens.
But often do not.
After stabilizing on the NRT it is time to bring the
dosage down, which is the next hurdle at which many fall. The end result can
be cigarette smoking plus NRT - a potentially fatal combination. I strongly
believe that NRT should only be done under close medical supervision. Too
much nicotine can kill too!
So what is the best way? It’s called Cold Turkey. The
proof is in the numbers. There has been enough research done and the prime
factor is that the quitter has to be committed to the concept of becoming a
non-smoker. Doing it (quitting) for somebody else, because you lost a bet,
because you are being nagged into it by your wife, girlfriend, boyfriend is
doomed to failure, I am afraid. This is something which requires your total
commitment. 100 percent all the way.
It also isn’t easy as your body cries out for nicotine
and your brain tells you to “Go on, one won’t hurt you!” The acute
withdrawals will last two weeks, and those are the make or break two weeks
if you are to become a non-smoker. It is worth it. Smokers have a much
higher incidence of all cancers - not just lung cancer.
I admit that those who go Cold Turkey may go through a
rough time with withdrawals initially, but 90 percent are still non-smokers
after one year. The same cannot be said for the others. The “hard” way is
ultimately the best way.
You have to make the decision to quit. You set the day.
You tell all your friends that you are now a non-smoker - and you stick to
it! After two years your lungs are pink and clean again. It is worth it.
Heart to Heart with Hillary
Dear Hillary,
I read in a Thai website that all that Thai women are
interested in is money, money, money. Is this really the case? I am in a long
time relationship with a Thai woman, but she is a lot younger than me. Is she
interested in me, or money? If it’s money she hides it pretty well. Who should I
believe?
Jim
Dear Jim,
No, my Petal, Thai women are not just interested in money.
For example, I am also interested in Belgian chocolates and French champagne.
Women, and not just Thai women, are interested in finding a mate who can support
them and their children (and the family in Thailand), and that includes
financial as well as physical support. Why should any woman be interested in
marrying a pauper? Would you? There are not too many couples you could call
Romeo and Juliette in the world, but there are thousands of successful
marriages, which exist for the mutual benefit of both parties. I am not saying
that ‘romance’ is dead, but likewise a union based on an unreal expectation is
also headed for the scrap heap. If you and your lady are happy as you are, with
the money you have or haven’t got, then just enjoy life and don’t spend time
worrying about what other people write into websites.
Hi Hillary,
I don’t have a relationship problem, I have a wardrobe
problem. I’m a very happy single man, I’m well off, get my pick of the ladies
any time I want, so why am I writing to you? My only problem is that after a
couple of nights, the ladies all want to move in with me. Some of them bring
over not just a change of clothes, but a whole wardrobe full. I have no
intention of settling down - and why should I? Like I say, I get my pick, so why
spoil it. You must have heard the saying ‘why buy a book when you can join a
library?’
Larry the Librarian
Dear Larry,
You certainly have got tickets on yourself, haven’t you
Petal. But I suppose you’ve got good reason to be as you are. I mean, just how
lucky are you? You get to wake up with the most adorable man in the world, in
your opinion - yourself. Time to change your name to Narcissus, though I would
suggest you take all the mirrors down in your bathroom, or you might find
yourself falling in love just like the long departed Narcissus. Poor Narcissus
saw his reflection and fell in love with it, and could not be away from it, and
pined to death looking into the pool. Meanwhile the nymph Echo who fell in love
with Narcissus also pined away, just like your ‘lucky’ ladies who try and leave
their clothes in your wardrobe. However, I am certainly glad I haven’t been
picked as this week’s ‘lucky winner’!
Dear Hillary,
After saving hard for the last three years, I have been on an
extended holiday here in Thailand for the past six weeks. I have enjoyed your
beautiful country very much, but I will be going back to my own country in two
weeks time. What made it even better was I had a beautiful guide and
non-complaining companion up-country girl who I found in a bar in Pattaya who
has been with me for all that time. I know all the stuff about bar girls, but
she has been constantly with me for the six weeks, and she has been great. I
have looked after her well in return including a weekly allowance of 15,000 baht
for her to spend on anything she wants. I don’t ask. It’s hers for services
rendered, if you know what I mean. I would like to give her something when I
leave for her to remember me by, and can you suggest something that she will
like. Please keep the suggestions within a reasonable budget. I am not a Cheap
Charlie but it is the end of my holidays.
Jason
Dear Jason,
What do you really expect me to say, my Petal? Are you
mad? Or have you been drinking too much local brew? You want her to remember
you, so why not buy her a house, a car, a motorcycle and a year’s free
veterinary treatment for the family buffalo? You’ll be able to get all that for
under five million. And since you don’t want to appear as a Cheap Charlie, throw
in a house for Mamma and Papa as well. That’s another 800,000 baht as houses are
cheap up-country. Chris, come down from the clouds, you have had the services of
what we call a ‘mia chow’ (rented wife) for the past six weeks, for which you
have already paid 90,000 baht for the six weeks which is well above the going
market price. She will remember you by whatever you have bought her until it has
been converted into folding currency (“He was the nice farang man who bought me
this gold chain which I am now taking to the pawn shop”). Enjoy what is left of
your holiday and spend your money on yourself.
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Prince of Persia: The Sands of Time
is rescheduled for June 10.
The Ghost Writer: (Scheduled) France/
Germany/ UK, Drama/ Mystery/ Suspense/ Thriller: – Stars Ewan McGregor
and Pierce Brosnan. This one I am really looking forward to seeing. It’s
the latest from the great director Roman Polanski, who finished editing
the movie while in a Swiss prison. Similarities between the main
character and former UK Prime Minister Tony Blair are clearly
intentional. A successful British ghostwriter agrees to complete the
memoirs of a former Prime Minister. As the ghost works, he begins to
uncover clues suggesting his ghost writer predecessor may have stumbled
on a dark secret linking the PM to the CIA – and that somehow this
information is hidden in the manuscript he left behind. Was the Prime
Minister in the service of the American intelligence agency while he was
Prime Minister? And was the ghost’s predecessor murdered because of the
appalling truth he uncovered? This atmospheric and suspenseful political
thriller, resonating with topical themes, is a story of deceit and
betrayal on every level. Generally favorable reviews.
Sex and the City 2: (Scheduled) US, Comedy/
Drama/ Romance – One that I am not wildly looking forward to, but it’s a
hugely successful series in some circles, so maybe you are. The girls
this time take off to and take on the United Arab Emirates – one of your
favorite locales, right? Well, it’s not even shot there; they used
Morocco instead. Generally unfavorable reviews.
Frozen: US, Drama/ Thriller – A typical day on the
slopes turns into a chilling nightmare for three snowboarders, when they
are stranded on the chairlift before their last run. As the ski patrol
switches off the night-lights, they realize with growing panic that
they’ve been left behind dangling high off the ground with no way down.
With the resort closed until the following weekend and frostbite and
hypothermia already setting in, the trio is forced to take desperate
measures to escape off the mountain before they freeze to death. Once
they make their move, they discover with horror that they have much more
to fear than just the frigid cold. Rated R in the US for some disturbing
images and language; 15+ in Thailand. Mixed or average reviews. At
Pattaya Beach only.
Robin Hood: US, Action/ Drama – Robin Hood as
gladiator, brought to life by director Ridley Scott, and starring
Russell Crowe, all grunting and scowling. It does have impressive
visuals and some great sweeping battle scenes, and strong performances,
by Russell Crowe, Cate Blanchet, William Hurt, Max van Sydow, and Mark
Strong among others. But it took me a long while to get interested in
the main characters during the back-story, and the 1199 AD events of
King Richard on his last crusade. However, after the story got going, I
got involved. It’s loud, noisy, and confusing in the modern way of
showing battles, where clarity is sacrificed for jittery, jumpy editing,
and you are left with visual impressions, not information. I appreciated
much of the craft, but I didn’t have much fun. Mixed or average reviews.
Sin Sisters 2 / Poo Ying Ha Bap 2: Thai, Erotic –
Soft porn for Thai males. A bit of torture, a bit of bondage, and the
usual violence. The first Thai film to be awarded the quite restrictive
20+ rating – only for those over 20, and ID’s are supposed to be
checked. Story has something to do with five attractive girls who find
themselves trapped in an unfamiliar place where a strange voice tells
them that one of them must sacrifice her life in a diabolical ritual.
And to survive, each of the other girls needs to describe all her sins
and sexual experiences, in detail, to satisfy the devilish voice and
presumably the males in the audience. The first “Sin Sisters” has been
called one of the worst movies of all time. “This movie is even more
sinful,” says director Sukit Narin. Not at Major Cineplex. Remember the
20+ rating – bring your ID.
Ong-Bak 3: Thai, Action – Tony Jaa in the
historical martial-arts conclusion of the two-part prequel to the
“Ong-Bak” movie that made him a star in 2003. Rated 18+ in Thailand.
It’s sickeningly violent, and I really object to the extremes to which
Jaa goes. But, aside from that, the picture is fascinating. Tony Jaa is
a true artist, and has expanded the form of the martial arts film in
unforeseen ways, incorporating not only many strands of martial arts
disciplines, but also many strands of Thai culture, and its dances and
rituals and meditational poses. He again incorporates traditional palace
dance forms into this film, probably to the dismay of action junkies. I
think his films are exceptional works of art. Not at Pattaya Beach.
Shrek Forever After - 3D: US, Animation/ Comedy/
Family – The further adventures of the giant green ogre, Shrek, living
in the land of Far, Far Away, this time in 3D (at Pattaya Beach). Still
a fun movie for the family – at least I was solidly amused. The story:
Now domesticated and bored, Shrek makes a pact with deal-maker
Rumpelstiltskin to get the real ogre feeling once again, but is duped
and sent to a twisted version of Far, Far Away. With the voices of Mike
Myers, Cameron Diaz, Antonio Banderas, and Eddie Murphy. In 3D at
Pattaya Beach, 2D and Thai-dubbed only elsewhere. Mixed or average
reviews.
The Losers: US, Action/ Crime/ Mystery/ Thriller –
After being betrayed and left for dead, members of an elite Special
Forces black ops team root out those who targeted them for
assassination. Loud, fast, and unrelentingly violent – but it’s also
funny and well-acted, which will make all the difference for some action
fans. Mixed or average reviews.
A Nightmare on Elm Street: US, Fantasy/ Horror/
Thriller – A group of suburban teenagers share one common bond: they are
all being stalked by Freddy Krueger, a horribly disfigured killer who
hunts them in their dreams. As long as they stay awake, they’re okay.
Critics have not been kind to this remake, saying that it lives up to
its title in the worst possible way. Rated R in the US for strong bloody
horror violence, disturbing images, terror, and language. 18+ in
Thailand. Generally unfavorable reviews. Not at Big C.
Iron Man 2: US, Action/ Adventure/ Sci-Fi/
Thriller – Directed by Jon Favreau, starring Robert Downey Jr. It isn’t
quite the breath of fresh air that “Iron Man” was, but this sequel comes
close, with solid performances and an action-packed plot. I was
particularly impressed with the work of Mickey Rourke. If you enjoy
action movies, you should like this one; it has the requisite sound,
fury, and flash. Mixed or average reviews. Thai-dubbed at Big C.
Ip Man 2: Hong Kong, Action/ Biography/ History –
The second in a trilogy of semi-biographical martial arts films based on
the life of Ip Man, a grandmaster of the martial art Wing Chun. One of
his students was Bruce Lee. Thai-dubbed only, not at Pattaya Beach.
Sam Yan: Thai, Comedy – Usual regurgitation of
tried and true Thai slapstick comedy. A dead passenger on a bus returns
to haunt the driver, and two other tales. Rated 18+ in Thailand. In Thai
only.
Staying happy in Paradise - the Counseling Corner:
Stuck in the Blues
Richard L. Fellner
You feel drained for a long time. You can’t really
enjoy everyday life, or you retreat from others? If you are in such a
state for more than two weeks, you probably belong to the millions of
people suffering from depression.
Unfortunately due to its usually slow development,
and out of feelings of shame, it often takes long and valuable time
before affected persons look for assistance.
So quite frequently, secondary complications such as
chronic pain, sleep disorders, sexual disorders, psychosomatic diseases
or alcohol abuse start to cause additional burden, and the body becomes
more sensitive to pain and infections.
Depression is usually caused by a combination of
genetic predisposition, triggering environmental conditions and previous
personal impacts.
However, the feelings of dejection and hopelessness
can be treated: as a psychotherapist, I am pleased whenever people tell
me how surprised they are about how much better they feel after just a
few counseling sessions. What’s striking about depression is that
prospects for an improvement are hardly noticeable for sufferers anymore
- even if these prospects would wait ‘round the corner’. Often enough it
takes a good friend who encourages to seek help.
Richard L. Fellner is heading Counseling Center
Pattaya in Soi Kopai and offers consultations in English and German
languages after making appointments at 0854 370 470.
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