Family Money: The Alternative View

By Leslie Wright

“Volatility” is a word that no one who follows the financial markets can easily avoid these days, and it’s a word with understandably unsettling connotations for most investors.

I wrote last week about how equities outperform bonds which outperform cash investments over time, but are more volatile in the short term.

What this means, simply, is that markets can and often do go down as well as up - sometimes quite steeply in either direction - which with a ‘long’ position in equities (meaning you’ve bought and are holding some) can mean the value of your holdings can go down - at least, for a time - and you’d lose money if you cashed up your investment at that point.

Alternative investments quite simply invest into instruments that differ from the usual strategy of buying stocks or bonds and holding onto them in the hope that their value will increase.

Keeping your options open

One example is options, which are the right to buy (called ‘put’ options) or the right to sell (called ‘call’ options) stocks or other assets (such as currencies or commodities, for example) at a fixed price for a pre-determined period, and for only a marginal deposit. If you guessed right and your asset goes up (in the case of holding put options) or down (if you’re holding call options) you exercise the option, and keep the difference between what you paid on margin and the current respective selling or buying price of the assets in question.

So by using this investment technique you can in fact make money in a falling market as well as a rising one. You can also protect your ‘long’ position against losses you might incur if you guessed the market wrong.

Here you would have bought ‘put’ options to cover a proportion or even all of your stock purchases, which if the market went up as you hoped, you would let lapse, losing only the “deposit” you’d paid for the options. However, if the market had a downturn, you’d be able to exercise your options and make a profit from them which would offset the losses you would have incurred with your ‘long’ position.

This is what in the investment industry is called taking a ‘hedge’, and how many of the simpler hedge funds work: covering their exposure in direct equity holdings with reverse options.

However, either way, you’d be covering a loss with a profit or a profit with a loss. It doesn’t take a great brain to work out that while this technique reduces your potential loss, it also inevitably reduces your profit, whichever way the market goes.

How then can you offset that erosion of profit? By doing a dog-leg investment strategy, which involves covering your options with other options. Before your head spins too much, let me explain.

Let’s assume you’ve bought some stocks and covered the potential risk with call options in the same market. You then buy a smaller amount of put options in either a non-correlated market or asset class, whereby if the first market moves positively and you thus stand to lose your deposit on the call options, the market or asset-class which is not correlated to the first market may well have moved in the other direction, thereby enabling you to exercise your put options and make a profit, which offsets the cost of the call options.

It’s like taking out an insurance policy, for which you’re paying a relatively small premium in the hope you don’t have to collect on the policy, but having the peace of mind that it’s there if events transpire such that you need to collect on it.

You will of course also have made a profit from the original assets you’d covered with the call options, so generally speaking, you’d make a profit in at least one if not two of the dog legs. (You inherently can’t make a profit on all three.)

This strategy works especially well in markets where short-term volatility is commonplace - emerging market equities, commodity futures, currency trading, the TMT sector (technology, media, telecommunications) of the stock market. The higher-risk end of the markets, in other words.

Since this hedging technique works best with large amounts of money - more than most amateur investors can bring to bear - a whole slew of alternative investment funds (known generically as ‘hedge funds’) using these sophisticated techniques has sprung up, and developed into a significant arm of the investment industry. These funds enable small investors to play with the big boys.

There have of course been some unmitigated disasters - the LTCM debacle some three years back being a prime example, which nearly crippled the US banking industry and eventually had to be bailed out by the Fed to the tune of over $2 billion.

This caused a major re-think by both hedge fund managers and regulatory bodies, and has resulted in a clean-up of the whole hedge fund industry. London has led the drive to ensure better regulation and greater transparency both as regards the way this class of funds is managed and the charges they are allowed to take from the assets under management.

Some alternative investment funds - of which there has been an ever-increasing number floated on the market, especially in recent troubled times - have been holding their own this year, with a few even exceeding their targets during the first half of 2001.

This performance record is a testament to the managers themselves, since the crystal balls that investors assume all investment managers have were very cloudy in the first quarter of this year, and started to clear only in the second quarter. Indeed, things are still rather opaque and shadowy.

But as most alternative-investment specialists well know, it is the proven capacity of well-positioned, intelligently allocated multi-strategy portfolios to perform well even in difficult and volatile market conditions that differentiates alternative investments in general from traditional investments. And it is the ability to capitalize on volatility differentiates that sets certain hedge fund managers apart from others.

One of the best performing strategies in the hedge fund world over the past three years has been options arbitrage. This is a very sophisticated investment technique, and I shan’t bore you with the details of exactly how it works. Suffice it to say that arbitrage looks for tiny differentials in different markets - for instance, the US Dollar may be trading at 120.65 in Tokyo, and 120.50 in London - and takes advantage of them, using a variety of options offsetting each other. The end result is it makes money if applied correctly - which at the end of the day is what any investor is looking for.

It is no secret that market volatility tends to benefit the performance of hedge fund managers much more than it does traditional money managers, but this is not to say that all hedge fund managers are equally adept at taking advantage of this benefit. Quite the contrary.

Depending on the strategies the managers employ, the markets they’re in, or the discipline (or lack thereof) of the managers themselves, volatility (in either direction) can have strikingly different effects on the performance of hedge fund managers. And one of the biggest challenges they face as asset allocators is to gain as much insight as they can into the different ways that volatility affects different managers and different strategies.

The better they understand the dynamics of volatility, the greater their ability to structure and weight their portfolios accordingly, particularly in the kinds of environments we’ve seen over the past year, and are likely to experience in the foreseeable future.

The many faces of volatility

It is worth emphasizing - obvious though the point may be - that volatility can be an elusive phenomenon to analyse.

You have to differentiate, for instance, the factors that trigger volatile surges from volatile dips.

Even in the traditional major stock markets, much depends on investor sentiment, which is a difficult animal to analyse let alone quantify.

In smaller emerging markets, volatility can be caused by institutional buyers suddenly flooding a market and driving it sharply upwards, and then taking profits, which drives it just as quickly down again.

Or, in some cases, doing quite the reverse with ‘short’ selling techniques, as happened to Sterling in ’92 and emerging Asian countries in ’97. (That is why some countries are so anxious when Mr George Soros or his minions appear on the horizon.)

You need to draw a distinction, too, between volatility that is triggered by random events (a geopolitical crisis, for instance) and volatility that can be linked to structural patterns and can therefore be analysed historically.

And one has to bear in mind that the factors triggering volatility in one market - the currency market, for instance - may have absolutely no effect on another market, such as commodities.

Analyses of this kind serve yet another valuable purpose: they provide a strong test for non-correlation, enabling us to see whether assumptions managers make about non-correlation are borne out by what is actually happening in various markets and in all the strategies they manage.

All of which explains why, in light of recent market conditions, many hedge-fund managers have been focussing a great deal on volatility. More specifically, they use their accumulated experience to create “stress test” volatility scenarios in different markets.

The objective, simply put, is to enhance their ability to recognize under what conditions volatility is likely to develop, but even more important, which strategies are at risk and which are best positioned to take advantage of it.

But fund managers and portfolio managers are not seers or soothsayers. They can’t read Alan Greenspan’s mind or control what happens in the Middle East, the Balkans, or China.

But what we investors can do is to educate ourselves to alternative investment techniques, and apply what we learn to our asset allocation strategies.

Traditional money managers can use volatility as an excuse for below-target performance. As asset allocators for alternative investments, hedge-fund managers don’t enjoy that luxury.

Leslie Wright is managing director of Westminster Portfolio Services (Thailand) Ltd., a firm of independent financial advisors providing advice to expatriate residents of the Eastern Seaboard on personal financial planning and international investments. If you have any comments or queries on this article, or about other topics concerning investment matters, contact Leslie directly by fax on (038) 232522 or e-mail [email protected] Further details and back articles can be accessed on his firm’s website on www.westminsterthailand.com

by Mirin MacCarthy

So Long, Old Friend

Quitting a habit, any habit, can be like ending a long relationship. It’s a sad affair, even if everything in your head and heart begs you to slam the door and nail it shut! However necessary, however overdue, the loss of such a friendship is deep and hard, not just on you but sometimes on everything one else around you.

One of my close friends just gave up coffee recently, and we just don’t know what to do with her yet. Presumably the rest of us will get used to the idea in the same way we accommodate those who have given up cigarettes, cigars, meat, and alcohol, and the never ending list of individuals who are at one time or another on slimming diets. But somehow, I thought coffee was one of those little addictions which was still socially acceptable, and a luxury we could yet afford.

A few weeks ago our friend proclaimed that coffee was making her nauseous and she couldn’t face one more cup without embarrassing herself all over the table at our crowd’s favourite luncheon restaurant. What? Just as it was becoming the most fashionable beverage on the globe? What would life be without coffee? I would have forgiven her if she’d been ‘preggars’ and this little glitch in our social get-togethers would solve itself in 9 months. But this woman is way beyond her child-bearing years, thus her goodbye to an old friend could be final.

Like the English penchant for a ‘cuppa’ (meaning tea), coffee is an accompaniment for so many of life’s events. Since those first rancid cups drained in college dining halls, for me, coffee has been a part of some of the most wonderful moments I can remember.

Coffee and conversation, coffee and love, coffee and reading, coffee and desert, coffee before dashing to work, the coffee break at the office; in many societies, coffee is a companion. In some of the most beautiful cities in the world, the cafe invites us to sit and contemplate, search for inspiration, rest our weary feet, or gather with our friends to chat and gossip. And now we are reminded that too much coffee isn’t good for us.

My friend is right. An overload of coffee makes the heart palpitate, and too many cups of that friendly beverage could make her downright irritable on occasion. Her decision to stop for good was a triumph of willpower, and evidence of her astonishing discipline and devotion to a healthy diet. She has found a resolve which seems to brighten her day. Unfortunately, the rest of us are sulking in a state of belligerence. What gives her the right to make all the rest of us caffeine junkies look bad? The very thing which makes her feel good makes her coffee-crazy comrades feel worse! As she prepares her boiling water in the kettle and substitutes leaves for grounds, we are betting that she will eventually realise that the most expensive green tea on the planet is no substitute for the comfort of a cheap French roast. Tea’s antitoxins won’t comfort her heart (although they may allow her heart to last longer). We sniff, and say that the turning over of this ‘new leaf’ won’t last long.

Of course the group pessimism expressed toward our friend’s new resolve is part of human nature. Like other friends who have renounced smoking, booze, lost 20 pounds, participate in running marathons, have found evangelical religion or vegetarianism, we see their self-improvement efforts as a mirror to our own failure (even if we think those folks are nuts). In countless ways, we all view other people’s lives as reprimands. They way they choose to live, dress, their taste in movies, books, lovers, are not simply indications of their preferences, but sometimes a slap in the face in reference to our own. An acquaintance changes jobs, for instance. Not only has he or she changed, but you are reminded that you, slug, have not!

We still invite our tea-drinking friend to join us when we get together. She’ll be back on the old black juice soon enough. We know that the left over baggage from that old relationship still lingers on, beckoning her home.

by Lesley Warner

by Marion

Has there ever been a ship which has gone through as much misfortune, misadventure and miscarriage of the truth than the brig called the Mary Celeste? This small, 30 metre boat has had scientific papers written about her, web sites dedicated to her, starred in a book, even though the name was mis-spelled as “Marie” Celeste, and even linked to extra terrestrial beings. Not even the Titanic legends go that far!

Mary Celeste was built in 1860 in Nova Scotia, Canada, and was christened the Amazon. From the start, this was not a lucky ship. Her first captain passed away within 48 hours of her original dedication and on her maiden voyage the ship damaged her hull after hitting a fishing weir. Although she later survived a fire and a collision in the Straits of Dover, her fourth captain accidentally grounded her on Cape Breton (which coincidentally was the name of the freighter grounded off Pattaya a few weeks ago - Pattaya Mail Vol IX, No. 24). Eventually, the Amazon was purchased for $3,000 at a New York salvage auction. After extensive repairs she was put under American registry and renamed the Mary Celeste.

The new captain and part owner of Mary Celeste was Captain Benjamin Spooner Briggs, aged 37, a well experienced master. In November 1872 the ship departed from New York with Captain Briggs, his wife, young daughter and a crew of seven. The ship was carrying 1700 barrels of raw alcohol bound for Genoa, in Italy. Just prior to leaving, old friends Captain Briggs and Captain Morehouse, the captain of the English cargo ship Dei Gratia moored at a neighbouring pier on New York’s East River, had a pleasant dinner before the Mary Celeste set sail. And it is at this point that the mystery begins.

On December 5th the Dei Gratia crew spotted a two-masted brig sailing rather erratically in an area of the North Atlantic between the Azores and the coast of Portugal. Morehouse was more than alarmed to discover that the mystery ship was none other than his friend’s Mary Celeste.

Captain Morehouse ordered a boarding party and it is at this point that the wildly differing stories about the Mary Celeste begin to emerge. One story is that the ship was in fine order, food still cooking on the stove, half drunk cups of coffee and even a phial of oil balanced on the sewing machine. Some reports claim that the hatches to the cargo were broken open and the casks of alcohol broached. Yet others say the sails were torn and there were signs of hurried evacuation. A bloody sword even gets a mention in another tale. However, one fact remained the same - there was no sign of Captain Briggs, his wife and child or any of the crew. The other agreed upon fact was that the last entry in the ship’s log was November 25th, more than a week previous.

So how did all these tales eventuate? Well, Sir Arthur Conan Doyle in 1884 was the one who began the speculation theories with his story on the boat, titled “J. Habakuk Jephson’s Statement.” His conclusion was that the boat had been involved in a racial war and was taken over by black-power activists. This was about as accurate as his spelling - having called the ship the “Marie” Celeste, instead of its correct “Mary”. The redoubtable knight was also paid thirty pounds for his tale, a goodly sum in those days, so it comes as no surprise that there could have been some embellishment!

But Sir Arthur’s explanation was nothing compared to some of the others. Alien visitation being put forward to explain the sudden departure from an otherwise sound ship, to being magnetically dragged into the Bermuda triangle, or even a drunken mutiny by the crew being but a few.

So before we too become carried away by flights of fancy, let us look at some actual “hard” evidence. There exists the statements from Captain Morehouse and his sailors, plus the records from the Court of Enquiry that was held in British Gibraltar, after the Mary Celeste was brought into port there by a skeleton crew from the accompanying Captain Morehouse’s Dei Gratia.

Oliver Deveau, the Chief Mate of the Dei Gratia, was in charge of the boarding party. He found one pump out of order, and only used the other on his way to Gibraltar. He found the fore hatch off and also the lazarett hatch off with a great deal of water between decks. The clock and compass were spoilt and destroyed respectively. The Court record states that he found no beer or spirits in the ship, and the cargo had not shifted. There were also no steaming mugs of tea, ships cats, everything in supposed pristine condition. Certainly there were no half eaten breakfasts, and no phial of oil balanced on the sewing machine.

There is much speculation in the fictional accounts about a bloodstained sword; however, in the court record the Mate Oliver Deveau states he did not see any blood anywhere. The court record actually says that the sword had been cleaned with lemon, and the result was iron citrate, not dried blood. Another wonderful story blown away.

The truth of the matter is a simple storm and the damaged pump. Fearful for their lives the Captain and crew abandoned ship, to be lost themselves to the perils of the sea in a small dinghy. There was no real “mystery”.

Mary Celeste has not been the only vessel found abandoned. In April 1849 the Dutch Schooner Hermania was found dis-masted but otherwise sound, with the Captain, his wife, child and crew missing, and in February 1855 the Marathon was another vessel found abandoned but in perfect order. However, they were not the centre-point of a Sir Arthur Conan Doyle yarn, were they!

by Anchalee Kaewmanee

At the first sign of a problem or dilemma, this combination is always on the scene with the most efficient solution, and never deserts a friend in need. The Taurus personality is practical, industrious, and worldly, while the Gemini inner nature is analytical, versatile and quick-witted. Highly perceptive and observant, very little ever slips past those who are born into this Sun/Moon sign. Since they are natural detectives, they always spot superficiality and deceit. An inner restlessness spurs them on to explore and investigate the world around them, and a jest for life keeps them forever fascinated by novelty and exotica. Finding something (be it a lover, a profession, or a lifestyle) that holds a special interest and satisfies that inexhaustible supply of curiosity can be difficult. Whenever boredom sets in, and it usually does rather quickly, the Taurus-Gemini is ready to run off or to something new, often abandoning or undermining current goals. This can often throw their close associates into a state of confusion if they are of signs which are less mercurial and more rigid.

Both signs of this duo are Spring signs, so people born into this combination rarely lose their fresh and youthful appearance. Likewise, they may often behave childishly. There is as tendency to repeat the same mistakes or patterns of behaviour. A concentrated effort should be made to stop and re-examine some past actions, and determine where the fault occurred. Self-examination and reflection does not come naturally here, but should be cultivated. It is better to profit from experience rather than to allow oneself to be controlled by the whim of the moment. Unlike most Taureans, the Moon sign in Gemini will not co-operate to hold emotions inside. Bottling up feelings until the cork blows from the bottle is just not Gemini’s style. Gemini is expressive, and communications with others is one of the primary needs. Staying socially active is vital in order to share feelings and ideas with others. A drawback may be that people of this sign can be too aware of the world around them and may develop attitudes which are critical or become rather meddlesome. Best not to stir up trouble or find too much fault. Searching for perfection in one’s self or others is dangerous; if things don’t measure up under such intense scrutiny, disenchantment may set in. Nobody likes a critical bore.

The Sun in Taurus and the Moon in Gemini produces people with many fine attributes, and they are capable of realistically applying new and innovative ideas in almost any field. An inherent flair for analysis and detection may attract them to psychology. Sigmund Freud was a Taurus-Gemini. Writing, research, and technical careers are also good possibilities. The main problem will be one of focusing on a single fields of endeavour, since so many areas will undoubtedly be open to this group. It is wise to examine all the options and then make a commitment to one area of expertise and master it. A ‘jack of all trades, master of none’ can find himself dissipating all those talents which could have been put to great use.

In relationships, this combination tends to be slightly aggressive and somewhat temperamental. As with all Moon in Gemini natives, rapid mood changes are prevalent; elated one moment, and dejected the next. This is hard for a partner to understand. A need for constant variety in love can be a major problem here, although the Sun in Taurus can ease the fickleness which is so characteristic of the Gemini lover. This Sun/Moon combo will have a lot of love affairs.

by Richard Brunch

From Bangsaen Bob: I have a locally assembled computer that I simply cannot get fixed. It was purchased with a one year on site warrantee which was not honored by the person that sold it to me. It continues to crash (lock up) for no apparent reason. It has an Intel 300 MHz Pentium II main processor with 64meg of Ram and about 7 gigabyte of free disk space.

One shop told me that I needed a new hard drive so I bought one. It worked in the shop, but would not boot up at home. After I stewed a while, I took it to another shop. This time they told me the problem was caused by the video card, so I replaced it. Alas it still locks up time after time. The local computer genius at my company told me I needed to replace the motherboard. But, he did this for my computer at work, which also locks up about 5-8 times a day, and it did not make any difference. Any suggestions?

Computer Doctor replies: Plenty! Unfortunately you haven’t really given me enough information to go on; nonetheless I will make a few assumptions and recommendations. I imagine the computer is 3 years old or more and as such will have a Slot 1 processor. Should the motherboard prove to be faulty finding a new Slot 1 motherboard is no easy task and you will be buying into obsolete architecture which really is not cost effective. Processors and motherboards now use FCPGA architecture and support modern ATA100 hard disks. I am assuming your operating system is possibly Windows 98, maybe ME; with either, 64Mb is inadequate in the real world, 128Mb is a realistic minimum, and this also depends on the applications you are running. Your disk size and free space are I think adequate. Video cards, and I do not know whether this is PCI or AGP but in any event these can cause the computer to hang. You may have replaced one problem card with another. The fact that your home computer and office computer both have the same problem is a little suspicious although this could be coincidence. Are both computer similarly hardware and software specified? Do both computers hang at the same spot, for instance saving a Word document? Are you running any applications that are not mainstream? Some shareware and freeware applications are notorious for creating problems. Some power management issues could also be affecting the system. It really is difficult to be more specific and realistically I would need to see the beast to give best advice. The problems you are experiencing could equally be caused by faulty hardware or software. If you wish to discuss please contact me directly.

From Harry Millar, Jomtien: I know there are many free e-mail services about like Hotmail and Yahoo but these are all web based, do you know of any that are POP3 based? Thanks in anticipation.

Computer Doctor replies: The one I can recommend is at www.tfz.net There is an easy sign up process and once signed up you can collect your POP3 mail using your normal e-mail client like Outlook or Outlook Express. You will, however, need to use your ISP’s SMTP server for your outgoing mail.

by Duncan Stearn

An old Thai chronicle observed that foreigners were very tall, hairy and evil smelling but the females were quite beautiful, despite the fact they were large and round. The chronicle concluded with the matter-of-fact statement, “they do not grow rice.” Not much has changed in the couple of centuries since that observation was penned.

However, it’s also interesting to look at the way some writers have viewed the Thailand looking glass.

1940: An element of racial superiority is evident in this comment by Frank Clune from his 1940 publication ‘To the Isles of Spice’. Referring to the clean kampongs of Java, he wrote that they were, “revelations in cleanliness after the untidy, dirty, dog-ridden, flea-strewn, mud-hut villages I saw last year in China and Siam [Thailand] - especially the latter country. The influence of European overlordship has been beneficial to the hygiene of the Javanese...” Somehow, I doubt that their Dutch overlords were particularly concerned with the ablutions and general cleanliness of their Javanese subjects. He clearly felt that Thailand could have done with a spot of European ‘overlordship’.

1959: “‘When you’ve been here as long as I have,’ said the young man who met us, ‘you’ll find it much like any other city. Except for the traffic. The traffic is worse than anywhere I’ve ever been. Buses come at you like juggernauts. Samlors dodge under your wheels. Taxis are liable to make sudden right-hand turns across your track and...well, there is too much traffic for the width of the roads and everybody interprets the traffic laws as he or she sees fit. The policemen, except one or two good ones, just smile cheerfully and wave everybody on. You’ve never seen such chaos. Fortunately, nobody can travel fast enough to kill themselves or anybody else. But in the suburbs and the country...’”

That excerpt was from a book titled ‘Land of the Lotus Eaters’ by Norman Bartlett and first published in 1959 and, need I say it, describes traffic in Bangkok at the time.

1970: ‘In Bangkok, many travellers keep alive by selling little white pills (probably aspirins) in a routine as bizarre as it is cynical. Thai employer introduces traveller to an unsuspecting, trusting village audience, as, say, Dr Schweitzer from Harley Street. Traveller recites Shakespeare or dirty limericks to the crowd, while enthusiastically waving a little bottle of white tablets. Thai accomplice ‘translates’ this into an exciting sales blurb. The tablets sell swiftly, and traveller reaps a fat commission. Variations on this theme can be played to native communities throughout India and the Far East. When it comes to exploiting innocent primitives, hippie nomads can be as ruthless as governments.’

That excerpt was from the book ‘Play Power’, a travelogue written by Australian enfant terrible Richard Neville.

by C. Schloemer

Good points: affectionate, obedient, good with children, superior intelligence, sense of fun

Take heed: good guard, tendency to “over-guard”, deserves a large garden

The Rhodesian Ridgeback is a handsome, muscular, medium-sized dog of the hound group, with a short tan-coloured coat, pendulous ears, and a long, un-cropped tail. The breed is named after the line of hair, shaped like the blade of a broadsword, which grows in the reverse direction along the back, with two crowns at the shoulder, and the point towards the tail. This ridge is very distinctive marking. Although the ridge may appear to be a superficiality, created for the show ring or as a conversational point, in fact it is far from recent, and has come down through the centuries by the way of the African Hottentot Hunting Dog.

The Rhodesian Ridgeback is of a quiet temperament and rarely barks; it enjoys spending hours curled up lazily in the corner of a room, stretched out in the summer sun, or will be quite content resting at its master’s feet. Although its exploits as a hunter of African game first brought it recognition, the breed was developed as a dual purpose dog: as a hunter and a gentle guardian of the families of the early white settlers. More and more people are discovering the tranquil nature of this breed. It has a most affectionate disposition and desire for human companionship. And if you worry about your valuables, he is just the dog to guard them!

Size: The desirable weight is: dog 36.3 kg, bitch 31.75 kg, with a permissible variation of 2.3 kg above and below these weights. A mature Ridgeback should be a height of 63.5-68.5 for dogs, and bitches should reach 61-66 cm.

Exercise: This large, sleepy and apparently slow-moving animal, with its characteristic love of lazing, contrasts sharply with its action when alerted. In a flash, it can turn into a blurred streak of rhythmic motion, and is a pleasure to watch when it overtakes a rabbit or a squirrel in full flight. This is a pet which deserves a large garden to run in, and a master who will give it a good walk everyday.

Grooming: Daily grooming with a hound glove, coupled with good nutrition and lots of exercise, will keep the Ridgeback’s coat healthy and gleaming.

Origin and history: Long before Europeans settled in South Africa, the members of the Hottentot tribe had the Rhodesian Ridgeback as a companion who accompanied them on hunting expeditions. This animal has since been called the Hottentot Hunting Dog. It had a distinctive characteristic of which was the ridge of hair growing in the reverse along its back. During the 16th and 17th centuries, Dutch, Boers, Germans, and Huguenots migrated to South Africa, and these people brought with them their own European hunting dogs.

It is probably by chance the settler’s dogs were crossed with the tough Hottentot Hunting Dogs and the superior quality and vigour of the offspring were quickly recognised. The presence of the ridge identified the most desirable dogs. This blending over 200 years of the best qualities of many European breeds with those of the Hottentot Hunting Dog formed the immediate ancestor of today’s Ridgeback, which has many of the characteristics usually associated with other hounds.

by Apichart Panyadee

Silver tray with forged hallmarks and discrepancies of style and date

The oblong tea tray in the photo illustrates the kind of deceit which was practised in the 1980’s. It appears to be mid-18th century; the hallmark is for London 1745 with the makers mark SW. On the face of it, this is a magnificent George II 20 inch tea tray. The experienced eye, however, is uneasy. Examining the tray in all of its aspects, the following points can be noted:

1. Gadroon borders are rarely, if ever, combined with chased decoration.

2. The band of flat chased decoration is too dense and tightly packed to be contemporary with the mark.

3. There are no co-ordinating stylistic factors between the dolphin feet, (not visible) the border, the band of chasing, and the armorial.

4. Armorials were not generally enclosed in drapery cartoushes in 1745.

5. The quality of engraving is poor for the purported date.

6. Hallmarks are more commonly found on the underside of the trays, where as in this case they have been struck among the decoration to disguise discrepancies.

7. The hallmarks are in an unnaturally straight line.

8. The maker’s mark is that of Samuel Wood, a caster and cruet frame maker who rarely employed chased decoration.

9. The shape of the shields around the three hallmarks varies and there are minute discrepancies in size.

Shape of shields around hallmarks varies and there are discrepancies in size

Research in sale categories showed that this same tray had been previously sold with a different maker’s mark and the authentic date 1875. But had the substitution of marks not been noticed and if the tray had been sold as George II, rather than late Victorian, it could have brought as much as four times its proper price. The questions to ask, after forming an initial impression on style are these: do the hallmarks agree with your initial impression of date? Are all the marks there? Are they distorted in any way, or in an unusual position? Are there any subsidiary pieces lacking the correct marks? Are there any signs of wear, such as patches or rough soldering where separately made pieces have been attached?

by John D. Blyth, P.O. Box 97, Pattaya City 20260

Some Background

The railways of Britain, starting in a very small way with some coal-hauling lines in North-East England, suddenly gained an impetus in the 1840s, when financiers, not all of good repute, suddenly saw railways as a sure way to make money; thus came the ‘Railway Mania’ of that decade, with the famous George Hudson at the back of many of them. Many lines of the era were a great success, the Great Western with its broad gauge being one, and the London & Birmingham another, with the Stephenson’s reply involved. When the 20th century dawned, the rail map of Britain looked much as in my childhood, but there were still over 100 companies, and some amalgamations were taking place.

Pre-Breeching: one of the earliest diesels - hydraulic locomotives on trial at Newton Abbot, Devon, in May 1958.

Came the 1914 war, and the government took control of the railway network, and saw its complexity, and afterwards the politicians stepped in to make order out of chaos. Full nationalization was looked at and shied away from, and the main system and many quite small ones were ‘grouped’ into the four big companies, best known, even now, by their initials: ‘L.M.S’, ‘L.N.E.R.’, ‘G.W.R’, and ‘S.R.’ In general they did a good job, and provided a good service, but not all of them found it easy or even possible, to make a profit. Government loans were quite common - some may not have been repaid, even today.

In 1939 another war started, and government control was again the order, but although the railways were just as vital, there was less money to keep them going, and their condition at the end was perilous; the government of the day kept control; fate was decide that this should continue as in 1945 a Layout (Socialist) Government was elected, committed to State control of all main industries, the railways included. Thus was formed British Railways, just 16 days old when they gave me a job at a small country junction station not far from home, called Ash Church, which will crop up again next week. Fate was to decree that most of my career should be spent in the London area on lines of the former ‘G.W.R’ (Great Western).

Doctor Richard Breeching (later Lord Breeching)

By the late 1950s the financial position of British Railways was very serious indeed, for State control does not mean oodles of money! - Indeed, ‘cut, cut, cut’ was the order of the day. The less so as there had been another change of Party in power, with a Transport Minister with no love of railways (as was Ernest Maples, a leading light in a firm involved in the building of the new ‘Motorways’; the latest toy for the car-loving public). It was he who made the decision to bring in outsiders to sort out the railway problem, so entered Doctor Richard Breeching, top man at the even bigger Imperial Chemical Industries, to run our railways for us. There was some comment at his salary, which, paid by a destitute railway, was the same as I.C.I. had paid him. It was a lot of money, how could he be worth it? Staff at ‘ground level’ noticed little or nothing - until the closure notice went up for their own station; at my own (middle management) level we were a bit worried: an outsider, no railway experience; what could he possible do for us? The idea of ‘railway experience’ is not, sadly, ‘old hat’, and in the modern world it is thought that any fool can run a railway. To me, the background goes far to making the man.

One very close to Breeching in his railway career has commented that at the time there was simply no one within the railway to do this job. I disagree. That very man had the ability, but sadly not the seniority. I knew one more who could also have done it well. Both had railways in the blood - Breeching did not!

When the new master arrived many of us were trying to get to grips with the fruits of the 1955 Modernization Plan, whereby a lot of money was sunk into bringing the system up-to-date - ridding ourselves of steam traction, modernising stations and signalling, building new marshalling yards, etc. Electric traction on all main lines was an early objective, soon sunk by the cost of the ‘interim’ diesels, and that pre-historic monster, the unbaked freight train (maximum speed 25 mph!), was to stay with us for a long time. One region was chosen to try out diesels with hydraulic transmissions instead of the more common electric system - the Germans seemed to have done well with the former, but it was long before it all came out that they only used a locomotive for 16 hours daily, whilst we wanted 22. In 1968 steam traction finished, and about the same time we went for fully-braked trains throughout, unerringly going for the old and feeble vacuum system, rather than the higher-pressure air-brake, far superior for high speed trains and really heavy freights.

But what was Breeching up to his first few months with us? We were too busy to ask, and his absence of railway ‘feeling’ was obvious from the fact that he was simply not seen - no visits, no inspections - NIL. He was writing the ‘Breeching Plan’! Which quickly had the approval of the Minister and the Government. It was a real shocker, the accompanying map looking more like a skeleton than modernized railway. The appendix set out, in many pages, the lines, station, etc., that it was intended to close - not just modest branch lines, but many stations thought to be important on the main lines; alternative routes were also suspect, that for closure not always being the best choice. Eventually there would be no railway in Cornwall, west of Swansea, nor along the North Wales Coast to Holy Head between Newcastle and Edinburgh, and not much of consequence north of Edinburgh or Glasgow.

Small wonder he was accused by the press of having an axe in his kitbag, with which to tear down the buildings, up-root the track - and behead the staff. My own early experience was as a relief station master in the Gloucester Division; it is absorbing to realize that of the 26 stations I recall working at, there is just one remaining open for traffic; this, almost at my back door when my home was there, was the original 1840 built at Cheltenham.

More next week - watch this space!

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