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Money matters: Commodities – The bull of the 00s? (Part 1)
Graham Macdonald
MBMG International Ltd.
There is a story behind the performance of the commodity
sector in recent times and opinion is that the market environment is comparable
to the 1970s when the world experienced a huge growth in commodity prices. Gold
in the 1970s, consumer stocks in the 1980s, tech stocks in the 1990s. Where will
the next super-bull market of the 2000s appear? More and more people are now
sharing our view that the answer is in commodities.
The history
In the 1970s: Equity markets reached terrible bear market
lows. OPEC nations limited production of oil and inflation was high as the money
supply grew at unimaginable rates. Commodity infrastructure had been ignored
during the stock market days of the 1960s. In this environment, which also
sounds familiar to today’s environment, commodities exploded. One could have
made immense profits by buying up gold and commodity related stocks and
ultimately selling when commodities went parabolic in the late 1970s.
In the 1980s: Legendary returns of the decade were found
in equities, primarily consumer stocks. To buy in at the bottom in 1982 an
investor had to have great courage, as equity markets were not popular, the
general public liked to invest in commodities, such as gold, that had already
reached a peak and was beginning to fall back.
In the 1990s: The ultimate place to invest was technology
stocks. The leaders of the last ten years include Dell, Cisco, America Online,
and CMGI. All of these stocks exhibited stellar trough to peak gains of several
thousand percent. Everyone today is well aware of the monumental extremes of the
final gasps for breath of the tech bubble as it topped, but it took great
shrewdness to buy virtually unknown tech stocks in the early 1990s. The US
economy was in a recession and the equity markets were still uneasy over the
dramatic 1987 correction.
The commodities growth model
If we look at a textbook example of how things have
previously worked in commodities: 1) There is over-investment during the boom
phase (the 1970s for many commodities). 2) Eventually much excess productive
capacity comes online which floods the markets with supply and causes the bust,
and prices plummet (1980). 3) With low prices, few new production or
distribution systems are built and gradually demand grows large enough to
eclipse current supplies and fully utilise the now decaying infrastructure laid
in during the earlier boom phase, and the commodity price is forced up as demand
exceeds supply (the 2000s). 4) A new boom occurs, culminating in a speculative
commodity bubble (2010?), and the cycle begins anew like a phoenix rising from
its ashes.
How techs wrecked commodities
For most of the last two decades, investors have shunned
commodities and natural resources, initially because many got their fingers
burnt after the last boom in the late 1970s, then because the cult of the equity
- and technology-mania - made it unfashionable to invest in anything other than
shares.
During the massive stock-market super-bull of the late 1990s,
one of the worst commodity busts in history was occurring. In inflation-adjusted
real terms, commodities prices hit their lowest levels in at least 80 years in
the late 1990s.
This creates huge structural problems. When everyone dislikes
an investment class and views it as redundant next to technologies, it cannot
capture the necessary capital to grow and expand. With commodities in general
viewed as useless relics during the 1990s, commodity-producing infrastructure
decayed around the world.
Prices of commodities plunged to such abysmal depths that it
just wasn’t profitable to invest in producing them. Over time this created our
present situation today, where commodities demand is booming but the capacity
just isn’t there yet to supply this increased demand. While the 1990s tech
bubble voraciously sucked in almost all capital like a financial black hole,
commodities infrastructure was starved nearly to death in a capital famine.
The capital-investment famine in commodities in the 1990s
helped create the enormous commodities-investment opportunities today.
Commodities demand is growing all the time, but supplies are generally low since
big money hasn’t poured into producing commodities since the 1980s. This
creates a perfect economic foundation for the commodities bull of the 00s. When
rising demand chases a supply that is low or growing slowly, the only possible
free-market solution is rising prices.
Next week we’ll start with a look at current demand.
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]
Snap Shots: Professional lighting for good portraits
by Harry Flashman
Portrait photography is one of the most lucrative areas
of photography in the world. Photographers love taking photographs of
people. People love great portraits of themselves. 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 some of 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 Nadar’s portrait of Rossini taken
many years ago, and you will see that the lighting is as I suggest. And
Rossini is not square on to the camera!
Modern Medicine: Gout diets. What’s out, what’s in?
by Dr. Iain Corness, Consultant
Gout is purely the name of a condition,
referring to a recurrent form of arthritis, and which generally affects just one
joint - most commonly the joint in the big toe. This arthritis, or inflammation,
occurs in association with high uric acid levels in the blood.
It is a condition that is still being researched, and there
is still no complete agreement on the preventive treatment for this condition.
The higher the concentration of serum uric acid (SUA), the
more likely you are to get an acute attack. The ‘normal’ range for SUA is
taken as less than 0.42 mmol/L (called ‘milli moles’ per litre), but if your
concentration is 0.54 mmol/L then you are five times more likely to get gout.
Basically what happens is that with high concentrations of
uric acid it crystallizes out into the joint, leaving very sharp, needle-like
crystals crunching inside the articular surface of the joint. Very painful!
The typical gout sufferer is male in his 50’s, overweight,
high blood pressure, carnivorous and consumes large quantities of alcohol. Is
that you?
Gout affects almost four million men in the USA. It has long
been thought that purine-rich foods and a high protein intake are risk factors,
and sufferers are advised to avoid meats, seafood, purine-rich vegetables, and
animal protein. But this advice was based more on the theory of how excess blood
uric acid can occur, rather than actual clinical studies.
One of the newer studies began on over 50,000 men from health
professions in 1986. Food-frequency questionnaires were sent out at baseline,
and in 1990 and 1994. Weight, medications, and medical conditions were recorded
every two years.
The participants were assigned to groups according to the
total intake of meat, their consumption of seafood, purine-rich vegetables,
dairy products, low-fat dairy products, total protein, and animal protein.
During the study, there were 730 new cases of gout during the
12 years of follow-up. Most of them were aged 55 to 64.
When total meat consumption was analyzed, the risk of
acquiring gout was 1.41 times greater in the high meat eaters; in other words,
eating more meat was a risk factor for gout. Similarly, high seafood eaters were
1.51 times as likely to develop gout.
In contrast, gout was less common in those taking more dairy
products. Men who drank two glasses a day of skim milk, or ate a serving of
low-fat yogurt more than twice a week, halved their risk of developing gout.
In this study at least, purine-rich vegetables and total
protein had no influence on the chances of getting gout.
This large study confirmed that a diet high in meat and
seafood increases the likelihood that a susceptible person will develop gout. It
also showed that milk proteins increase the excretion or uric acid in the urine.
So, to avoid developing gout, try to limit your intake of
meat (beef, pork, lamb, and offal) and seafood, while increasing your intake of
low-fat dairy produce (skim milk, yogurt).
This is all very important, as the long term outlook is not
good for the unrepentant gout sufferer. Constant high levels can lead to uric
acid ‘stones’ being deposited in the kidneys (producing renal problems) and
even discharging lumps (called ‘Tophi’) around joints, on the forearms and
even on the outer ears. Really a most bleak and depressing future, and not one
I’d like to have.
Note too, that it is low-fat milk that is being proposed, as
high fat milk introduces the cholesterol problems again! It really is a fine
line that we must all tread!
Learn to Live to Learn: ‘A’ Levels: The Nuts and Bolts
with Andrew WatsonWhen
considering A Levels as an option, whether it be from a parent, student or
school point of view, you want to know what the options are and what the
subjects involve.
At the heart of A Levels is the reassurance that they are one
of the most recognised global pre-university courses. They claim to be ‘proof
of academic ability’ and enable successful students entry into universities,
higher education institutions and military schools. Proponents also maintain
they are equally important for young people moving into employment and this is
true to an extent.
When I was going through A Levels, it was noteworthy that a
number of high achieving students were actually lured into lucrative jobs and
careers, primarily in the city or insurance, before they had even taken their
exams.
How much attention employers pay to your A Level results when
the qualification is superseded by diplomas, undergraduate and postgraduate
qualifications is open to question. However, there can be no doubt that they
provide in depth study of a subject area at an early age, which can provide a
head start to university life.
A Levels actually come in different shapes and sizes. In the
United Kingdom, origin of the programme, different education boards set their
own A Levels examination and they are actually in competition with each other.
They have exactly the same value in admitting students to universities. It is
also accepted as an entry qualification by universities of the European Union,
on a par with the French Baccalaureat, the German Abitur, and the IB diploma.
A Level examinations are usually taken after 13 years of
education and are based on approximately 360 hours of teaching, normally over a
two year period. A Levels are highly specialised and a student will normally
take three subjects, although occasionally exceptional students take four or
five.
There are five passing grades (A – E). Minimum
matriculation requirements for university are at least two pass grades.
University courses for which there is not strong demand might accept students
with these grades, but typical UK university entrance requirements are closer to
three passes at grade C for academic courses in established universities. Very
popular courses will often require higher grades.
For example, medical schools in the UK often require grades
of AAB and the highly selective universities of Cambridge and Oxford ask for at
least AAB. Cambridge International A Levels are taken throughout the world,
sometimes as the national examinations of certain Commonwealth countries (such
as Singapore and Mauritius), sometimes within international schools and
sometimes in bi-lingual government schools alongside the national exams.
Cambridge International Examinations (CIE) has offered A
Level qualifications for over 50 years, which is perhaps one of the roots of the
‘antiquated’ accusation. If they are seen as slow to adapt by some, then
perhaps it is because they seem to ‘tack’ on different requirements in
response to other market forces.
For instance, the holistic IB diploma and its community
action service (CAS) programme quickly spawned what can be described as A Level
imitations. For instance, the ‘half-way house’ of ‘AS’ Levels which
allows students the opportunity to study a broader range of subjects, take
staged assessments during an A Level programme of study and get valuable
performance feedback prior to the final assessment.
The subject content of each of the A Level syllabuses has
been divided into two parts: the AS syllabus content which is expected to be
covered in the first half of the course, and A2 which is the second part of the
syllabus.
The structure of the international A Levels allows
co-teaching of students following both AS and A Level routes and allows students
to choose from three main options:
Option 1 where students take all A Level components in the
same examination session at the end of the course of study - usually at the end
of the second year.
Option 2: Follow a staged assessment to A Level by taking the
AS qualification in one examination session and the final part of the assessment
in a subsequent session.
Option 3: Take the AS qualification only, at the end of
either a one or two year course.
For an ‘equivalent’ CAS programme, look to the
‘International Award’, which also goes by another name – The Duke of
Edinburgh award (DofE). DofE was an incredibly popular part of the
extra-curricular offering when I was at school and some schools in the region
run the programme. However, because it is ‘tacked’ on and not a compulsory
part of any curriculum, a great deal depends on the enthusiasm, qualifications
and capacity of those actually running the programme.
This ‘tacked on’ aspect also means that it has no
‘academic value’ or course related validity. Successful completion of the
Bronze award has been equated to the equivalent of one IGCSE but put in these
terms, many students simply wouldn’t bother with it.
If DofE is done properly, it’s great. If not, it can be a
shambles. Look to the Regents School for an example of an excellent
international award programme.
As with any course of study, standards are a constant source
of concern for parents, students and universities.
Next week: How standards can be maintained - and the AP.
I encourage you to send your thoughts, experiences and
suggestions to me by email at this address: [email protected]
 Heart to Heart with Hillary
Hey Hillary,
My name’s Stuart, I’m making a documentary with my girlfriend about
British ex-pats who emigrate to Thailand in seek of a new lease of life and
new prospects in love. The problem is I have a Serious lack of Western
female perspective. I thought you might be interested in helping out and
relating a little wisdom? I’ve read through most of your articles and you
know your stuff about cultural relations and the problems associated with
setting into a foreign environment. It would be great to take up a half hour
or so of your time, if you’d be willing.
I will be in Pattaya this weekend if you’re around or I
could make a trip down from Bangkok at a later date if that would be more
convenient. Anyhow, let me know your thoughts. Chocs a definite possibility!
Stu
PS: Motherly use of the word ‘Petal’ all the time. Hillarious. Your
(sic) not a scouser are you? My ma calls me that all the time.
Stu!
Dear Stu,
You are a young lad, aren’t you. Did you honestly think that “Chocs a
definite possibility” would be enough to get Hillary out of her armchair?
Only a “possibility”? Stu, my Petal, I would need more than that. Now a
real gentleman (though they tell me they are very rare in Scouserland) would
have attached the request to the chocolates. A ploy much more likely to
engender a beatific gaze over your needs. In fact, there was a famous chap
who used to send in his “Nil” tax return to the antipodean tax
collectors attached to a bottle of champers each year. In appreciation of
his magnanimous gestures, after a few years of these, they investigated him
and jailed him for tax offences. Tax people are like that. Regarding the use
of Petal, my Petal, it is an appellation used all over the world, not just
by your long-suffering mother, and in fact I picked it up from a New
Zealander, if the truth be known.
If you really want some western female perspectives you
should contact the Pattaya International Ladies Club, a group crammed full of
western ladies, who would no doubt like to assist, particularly if you were to
donate something (not my choccies) to one of their favorite charities. You will
find contact details in the Clubs section of the paper. Best of luck, young Stu.
Dear Hillary,
My wife always forgets when her visa runs out and it always
ends up with me paying for overstays. I even said I would handle it if she
wanted, so that this did not happen all the time, but she asserts her
independence all the time and calls it interfering if I say I’ll take charge
of it. This has happened more than just a couple of times too.
Visa Valerye
Dear Visa Valery,
You have come to the right person as yours is an easy problem
to fix (permanently). Your wife wants independence above all else, so give it to
her. Let her overstay and let her pay for the overstays at the 200 baht a day
going rate. With any luck it will cost so much they won’t let her back in and
all your future woes are fixed at the same time.
Dear Hillary,
My boyfriend (who comes from London like me) generally has a
few drinks with the lads after work. The other day he came home very late and
very drunk. He said the bar they use as their local bought him a birthday cake
the other day, and the girls all made a big fuss of him. Is this the usual thing
around here, or have I got something to worry about? I have no real reason to
suspect him as it only happened the once, it’s more that I think I need
reassurance.
Worried GF
Dear Worried GF,
You have nothing at all to worry about, unless he starts
having birthdays every week. The girls in the bar are happy to celebrate
anybody’s birthday, especially if they get a drink and a slice of cake too.
That is the way things are done round here, so stop worrying immediately. What
you should do next year is arrange the party in the bar yourself, then you get
some cake and drinkies as well.
Dear Hillary,
I’m from America and I am not used to going into a bar to
be propositioned. I don’t want to have someone ask me where I come from. It is
my business only if I am married. I don’t want people to know how much money I
make. How many children I have is my affair. Why doesn’t someone tell these
girls in the bars that not everyone wants to tell them personal details? All I
want is a quiet beer!
Charlie
Dear Charlie,
What are you worried about? These girls aren’t from the CIA
or the IRS, they are just doing their job as well as they can and you’re lucky
they can converse as much as they can. If you don’t want the girls to talk to
you then don’t drink in beer bars. You can buy a bottle of beer and sit alone
in your room or drink in more up-market watering holes!
PC Blues - News and Views:
Novell fires a broadside
Part 2
To recap from last week: Micro$oft has a website
explaining why Windows is better than Linux. Novell, which makes
NetWare, and was once the leader in networking, and which, incidentally,
owns the patents to UNIX (despite SCO claiming otherwise), has created a
website explaining why Linux is better than Windows. Novell has also
recently bought SuSE, the German Linux distribution company, and so has
several axes to grind in this marketing war.
Ignoring the merits of their arguments, it is worth
noting the areas thought to be of interest, so this week let us go back
to the beginning again, and look at the various differences of opinion.
It is important to remember that Novell has a proprietary interest in
this, and so their views are liable to bias.
The first claim by Micro$oft is that Linux and
Windows are equally vulnerable to security attacks and breaches. A
survey reported that 92% of those queried had never had their Linux
system infected with a virus. On the other hand, I have personally been
on the receiving end of an intrusion both on Linux and on Windows
systems. The company running Windows was thrashing around in agony for
three days, and had to send most of its affected staff home while the
system was cleaned. On the company running Linux, the intrusion was
detected within half an hour, and limited to three machines. The cleanup
took half a day, delayed largely by the need to gather evidence as to
what actually had happened, so as to ensure it could never happen that
way again (this information is fed back into the open source community
for exactly that purpose).
One of the consequences of a security breach is the
need to patch the system so as to ‘block the hole in the security’.
Micro$oft takes a curious view that any costs arising from this exercise
need not be included in the Total Cost of Ownership (TCO*). These costs
can be significant, as Novell point out, highlighting a case where the
company involved had to go to the board of directors to approve an
ADDITIONAL $10 million to complete the installation of one patch.
(*TCO was described last week, but I’ll reiterate
it here in case you missed it: To tabulate TCO, start with the cost of
the CD, or for windows, the notional cost of having Windows pre-loaded,
and you add in the cost of administering and maintaining the software,
and the cost of training everyone to use it, and end up with a magic
number you can argue about).
Here is a Novellty. M$ claims that because of the
distributed nature of Linux (no central supplier, etc) it is difficult
to receive, or even be aware of, security patches. [This is absolute
rubbish, as I know.] Novell’s reply is to note that M$ will refuse to
guarantee fixes for security issues in Internet Explorer beyond those on
Windows XP. Now, Micro$oft is entitled to stop supporting old software
if it wants: those customers who don’t like it can go elsewhere. But
this issue has nothing whatever to do with knowing how to find out about
the need for security faults and fixes.
Performance and reliability: disputes over this
subject are as useful as guessing at the accuracy of the measure of TCO.
They are interesting to sales staff, I suppose.
The question of interoperability is discussed.
Novell’s summary of the progress towards a common base set of
interfaces, libraries and standards is a reflection on how bad it used
to be (not that bad, as I remember). By contrast, and not remarked on by
Novell, is the persistent rumour that M$ deliberately change and
obfuscate their interface specifications so as to exclude open source
software from Windows platforms. M$ certainly does not want
interoperability between Windows and Linux.
Fragmentation: when UNIX escaped from AT&T, many
years ago, it fragmented. There are Darwinian diagrams, showing where
the descendants went, and how long they survived. I believe the subject
was even taught at university as a minor option. Some fear that may
happen to Linux: some encourage that fear. I very much doubt it will
happen. Novell is, of course, adamant that they will be true defenders
of the Faith, along with a number of other well known companies, such as
IBM, Intel, and others.
Patents are discussed. The matter of software patents
in the States is a mess, and not likely to improve in the foreseeable
future. Do not import that mess here! However, I can’t see any alleged
patent holders successfully upholding their claims against the
world-wide myriad of users of Linux. Novell offers to use its own
patents in counter suits, should the need arise, so we can all sleep
soundly.
Psychological Perspectives: Film Festival to shatter AIDS-promoting myths
by Michael Catalanello,
Ph.D.
The year 2004 will soon be history. AIDS
will accompany us to the year 2005 ... and beyond.
We know how HIV is transmitted. We know how to prevent
transmission of the virus. In Thailand, an average of two new transmissions
occur each hour. Nevertheless, Thailand is considered a bright spot
compared to other regions of the world.
We now have antiretroviral medications that enable
people with the virus to live long and high quality lives. HIV is no longer
necessarily a death sentence. Yet people with the disease continue to die.
It probably serves little purpose to recount numbers of
infections, numbers of deaths. We’ve all seen and heard the staggering
statistics. The numbers have no more meaning. They are like background
noise. We no longer flinch.
It’s tempting to think that the spread of HIV is under
control. It is tempting to think the virus does not circulate in my social
group. It is comforting to imagine that this virus can affect so many
others in my society, but not affect me.
It is reassuring to imagine that those who have become
infected are in some way inferior to me. It is calming to assume that a
vaccine or cure is on the horizon.
These are the attitudes and beliefs which permeate our
society and culture. These attitudes are the product of our ignorance about
the disease. Most alarmingly, it is attitudes like these that promote the
continuing spread of HIV, according to the experts.
Public awareness programs can help break down ignorance
and reduce prejudice, discrimination and stigmatization. They cast light on
aspects of the AIDS epidemic that at present remain hidden. They raise
important issues for us to ponder. It is through knowledge and increased
awareness that we can combat the disease.
What about the human side of the issue? Because of the
stigma, we are usually unaware of a person’s HIV+ status. Stigma also
impedes open discussion of AIDS issues. This contributes to making the
problem virtually invisible to us. It keeps HIV/AIDS out of our faces. We
feel more comfortable that way.
Perhaps we would rather not come face to face with Luk
Nam, an 11 year-old girl in a group home in a Bangkok slum, because her
parents both died of AIDS-related diseases. We’d rather not see her
summoned to be an emotional support to her younger sister who is HIV+ and
near death. No one wants to be exposed to the sight of a small child dying.
We might prefer not to meet an elderly Thai couple in
Sanpatong district in Chiang Mai, struggling to produce a modest income to
support themselves and their grandson, orphaned as a result of the
AIDS-related death of his parents. Experiences like these shatter many of
our prejudices, our popular misconceptions, our cultural myths about the
disease. These experiences are available to us by means of powerful
documentary films dealing with AIDS-related issues.
Many of us would prefer not to reflect upon the stark
realities of the worldwide AIDS epidemic, and questions it raises about who
we are as a people, our values, the societies we have created, our future
on this planet.
On World AIDS Day, December 1, the people of Pattaya
have an opportunity to take a step to increase public awareness of HIV/AIDS
related issues by attending the AIDS Mini Film Festival, sponsored by Asian
University.
I invite the readers of this column to join me on
Wednesday at 1:30 for an informative afternoon of great films… no
speeches, just great films. Bring a friend.
Please see the associated story on page 33 of this
issue. For more information or to register, call Asian University at 0 3875
4450 Ext. 2800.
Dr. Catalanello is a licensed psychologist in his home
State of Louisiana, USA. He is a member of the Faculty of Liberal Arts at
Asian University, Chonburi. Address questions and comments to him at [email protected]
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