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Money matters: The Long and Short of it (part
2)
Graham Macdonald
MBMG International Ltd.
The short positions are obtained through “borrowing” the
stock. The manager borrows the stock from its broker at an agreed price and then
places a sell order to liquidate it. Putting it more simply, the manager sells a
stock that it does not own. In closing his short position, if the manager could
buy the stock from the market at a lower price than the price the broker agreed
to lend in the first place, he will make a profit.
A short trade could be demonstrated using Microsoft
Corporation back in March 2004. Although Microsoft is a giant software company
that dominates its industry, the bearish sentiment was sparked by a negative
catalyst. The markets started pricing in the news emerging from the European
Competition Commissioner who completed a draft of his decision in the EU’s
antitrust probe against Microsoft Corporation. The expectations were that a
negative decision would lead to having the world’s largest software maker
fined as much as 500 million euros, a figure around 2% of the company’s annual
sales.
A long/short manager, picking up this negative catalyst,
taking a short position by short selling the Microsoft Corporation for an
average price of $28.50 a share from January 23 to 26, could have closed his
short position by buying shares from the markets on March 23 at a low of $24.15
a share to deliver them back to their broker. This would have led to an 18%
profit over 2 months, during a period when the overall direction of the markets
was negative, with the S&P500 index registering a loss of 5.4% for the same
period.
If used wisely, the ability to sell short provides managers
with a great tool to control the market risk that they are exposed to.
Successful long/short managers have been able to deliver double digit absolute
returns over the tough times of 2001 and 2002 by controlling their market
exposure. Coupled with such hedging abilities, the inherent ability to use
leverage gives long/short managers the upper edge compared to the traditional
long only managers.
Managers may also use leverage in order to have higher
exposure to both long and short positions in order to enhance returns. For
instance the manager above could have taken short exposure to Microsoft to the
extent of 100% of the amount of his portfolio and long exposure to Google to the
extent of 200% of his portfolio. This would have created a 100% net long
position (the same as a traditional fund in terms of delta risk) BUT the return
would have been over 210% instead of just under 100% for the same level of risk.
In reality many long short funds would actually try to
achieve the same level of returns as the traditional fund (in this case just
under 100%) but look to reduce risk (in this case the risk taken by the long
short fund that achieve the same return as the traditional fund would have only
been around 47% of the risk taken by the traditional fund). Long short, even in
this basic example allows you to take the same risk and more than double your
returns OR achieve the same return but at less than half the amount of risk.
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: Ringing in the New Year
by Harry Flashman
New Year is always a momentous time, and one that you
should try and capture on film. However, so much happens at New Year that
there is no way you can get it all on one tiny negative, and there is more
to New Year than just a pic of yourself in a paper hat! Photographing New
Year takes time, patience and lots of film, so be prepared.
 For
most people it is a case of eating and drinking, and generally to excess.
So here’s the first New Year photography problem. If you try to enjoy an
event, and photograph it at the same time, the results will not be what
you want. Unless of course you want 30 degree horizons and other
photographic signs of insobriety. So Rule number 1 - if you are going to
photograph New Year, leave your own celebration until 1 a.m. They’re
still celebrating in Delhi, so you haven’t really missed anything.
What you must do is sit down beforehand and work out a
‘shoot’ list. These are the shots you have to take to make a
reasonable photo album record of the event, because that is precisely what
you are going to produce - a photo album.
The first shot should say what the event is. In this
case being New Year, you would look for and photograph a sign somewhere
which proclaims Happy New Year 2005, so look for it and snap away. Take
two shots, just in case one isn’t quite right.
The next shot has to say the location. If you are
having the celebration at one of the restaurants, take a shot of their
sign. Let’s imagine you are at the Captain’s Corner, then a shot of
the illuminated sign outside is the way to go. Set the camera on ‘A’
for auto, turn off the flash and you’ve got that one.
Your next shots are the ones that will say ‘who’
was at the New Year’s party. These are the ones that show all the
guests, but please, please, please don’t line them up in a row like a
group of soldiers on parade. Have a look at the social pages and you
generally see those types of shots every week. 46 people in a row and the
photographer is backed up in the next street to try and get everyone in.
No, what you want are candid shots of groups of people relating to each
other. People face each other when talking. Look for people greeting each
other, hugging, kissing, shaking hands and be ready to snap them. This is
where the camera is still on ‘A’ and now you can turn the flash on.
Try not to miss anybody, even Aunt Ethel sitting tipsily in the corner.
You can always ask another family member to go and chat to her just for
the photograph.
As the night wears on, you will get plenty of photo
opportunities, and people will often get up to do the awful karaoke thing.
Again, this is where you are ready and record it all.
Now here’s a tricky little shot - the ‘magic
moment’ is 12 midnight - so include a shot of a watch or a clock right
at the exact moment. Now, do you wait till 12 midnight to get it? Of
course not. You set your watch or the wall clock to the midnight hour and
snap it, because when the real midnight comes, you are going to be busy.
Come midnight and you will get all the physical
interactions, Auld Lang Syne being sung and people with linked arms
enjoying themselves. At this time you will be busier than a one armed
paper hanger.
The other event that happens on the stroke of 12 is the
fireworks. There should be lots going off and try to get some star-bursts.
Remember how to do these? Time exposure and no flash. Leave the shutter
open for 30 seconds and you’ve got it all.
Happy New Year from Harry Flashman! Now go and have a beer! I am!
Modern Medicine: What are your New Year health resolutions?
by Dr. Iain Corness, Consultant
This is that time of year when we make all
those resolutions that we have absolutely no intention of keeping, but it all
sounds good at New Year parties! Well, that’s the truth, isn’t it?
However, there are a few resolutions that if you follow or
abide by them you will get even more New Years to celebrate. Interested? You
should be - I am offering you up to 10 more years, but like all great offers,
there are some conditions that apply!
The first resolution, for all cigarette smokers out there, is
to give up the weed in 2005. It is no use trying to deny it. We have shown, more
than adequately, that cigarettes are the greatest killers of mankind, even
including Osama bin Laden. All smokers are on borrowed time. End of story. And I
don’t care if your grandfather smoked 60 a day and lived to be 123. The big
numbers that have been examined in studies all over the world say it all -
smokers do not live as long as non-smokers. Smokers get all kinds of cancers
much more than non-smokers, and that’s all kinds - not just lung cancers.
Smokers get more heart attacks than non-smokers. Do you want me to go on? In the
face of all the evidence, continuing smoking in 2005 is just plain dumb. So how
do you give up? The best method remains your positive desire to give up and then
go Cold Turkey. Forget the rest.
The next resolution is very easy. Take 100 milligrams of
aspirin every day. Once again, the big numbers prove the hypothesis. Your
chances of having a heart attack are very much less by that simple expedient of
100 milligrams of aspirin a day. You can either buy 100 milligram tablets, such
as Cardiprin, or take quarter of an ordinary 500 milligram aspirin tablet, which
is 125 mgm. Close enough.
Another easy resolution is to get more exercise - daily. This
is a resolution that will tone up your cardiovascular system and reduce your
chances of having that final coronary occlusion (or as it is often called, a
coronary conclusion!). You don’t need to go to a gymnasium, pump iron, take
steroids or wear those silly strappy singlets either. Half an hour of brisk
walking, or fifteen minutes of exercising each day will do. (I use the Canadian
5BX system and spend 11 minutes a day because I do it quickly!)
Since you are what you eat, or so it is said, your next
resolution should be to look at exactly what you do eat. Cut down on animal fats
(where you get your cholesterol from) and increase your intake of fish is a good
start. Eat ‘Asian’ twice a week, fish twice a week, and sensibly for the
other three days.
How’s the alcohol intake these days? Fuzzy heads in the
morning? Then perhaps you should include alcohol reduction in your resolutions
too. Four ‘standard’ drinks a day for men and two for women (sorry girls,
but you don’t handle alcohol as well as we do!). Plus at least one AFD
(alcohol free day) per week.
What is a ‘standard’ drink? That is taken as 10 grams of
alcohol - equal to one glass of full strength beer (285 ml), one small (100ml)
glass of wine, or one measure (30ml) of spirits. One can of regular beer
contains about one and half standard drinks, while a bottle of wine contains
about seven.
Happy New Year, and stay well in 2005.
Learn to Live to Learn: Inclusion
with Andrew Watson
Much has been written in this column over the
past few weeks about the ‘need’ from a parent and student perspective, and
the ‘desire’ on a school’s part, to remain ‘inclusive’.
Whether these two aspirations are reconcilable is open to
debate. In a well-managed school you might very well think that they should be.
In a school where there is uncertainty about what the term ‘inclusion’
really means, one can expect to find uncertainty and a lack of provision within
the timetable for the maintenance of such an estimable goal.
Assertions from schools who claim to be inclusive could
justifiably be met with questions such as, “What does ‘inclusive’ mean for
you? How do you remain inclusive throughout the curriculum you offer? And “How
do you do what you say you do?”
The English National Curriculum (ENC) provides a good
starting point for understanding what is meant by ‘inclusion’ in education.
Very simply, it means “providing effective learning opportunities for all pupils”.
If we take a moment to unravel this statement then it becomes
clear very early on how central the idea of inclusion must be to all aspects of
planning in an educational institution, because the curriculum must meet the
specific need of individuals and groups of pupils.
From an economic standpoint, in a private international
school setting, this comes down to giving you what you are paying for. One of
the biggest issues in international schools is delivering a national curriculum
to an international student body, many members of which might very well enter
the school with little or no experience of or proficiency in the language of
instruction.
A child may acquire basic interpersonal communication skills
(BICS, Cummins 1985) within one to three years. However, it takes five years or
longer for a student to reach the stage of academic language fluency.
As a parent, you will want to know what provision is made for
students who have to acquire a certain level of specific language skills whilst
being expected to learn (simultaneously) subjects containing an extraordinary
amount of specific vocabulary. And if you are a parent who has placed a student
in an international school, with their hefty enrolment and term fees, what are
your expectations upon entering such an arena?
If there is a properly maintained EAL Programme, then this
will nurture your child from social language through to academic fluency whilst
in the meantime, they will be taken out of subject specific lessons in order to
develop their language fluency. However, if this is the case, then perhaps
inevitably, they are losing invaluable time from their academic timetable.
So what provision is made for this by the school?
A proper EAL programme will include extensive coordination
between subject teachers so that any student taken out of lessons for an EAL
programme will learn specific subject vocabulary. Equally, when they are in
class, subject teachers must be aware of the level of language competence of every
EAL student in their class and adapt each lesson accordingly. This is what is
meant by being ‘inclusive’. It means leaving no stone unturned, of creating
individual plans if necessary in order to ensure that the student receives that
to which they are entitled.
EAL provision can and should go further by providing language
support in the classroom for students. Here are some critical questions for
parents: Are you charged extra fees for the inclusion of your child? Whether
these fees are for Special Educational Needs (SEN) or another branch of
educational provision within the school day? Should you be expected to pay
extra? Especially if the school follows a National curriculum such as the ENC,
which demands that policies of inclusion are at the centre of its educational
philosophy!
Schools can’t have it both ways. They can’t claim to be
delivering the ENC and marketing themselves as such, and not provide the level
of curriculum provision stipulated within the ENC. To charge you extra for
withdrawing your student from other lessons seems like a scam!
Stealth charges for SEN provision are contentious at best.
Even within these areas, how can you be sure that your child is actually
receiving the ‘extra’ provision you are paying for? Where is the evidence of
testing and reporting?
In an international school setting, there is the possibility
of doing something quite exciting, and turning a potential problem into an
opportunity.
Instead of rigidly enforcing the ENC, a school can adapt even
the nature of their institution, so for instance, instead of calling itself a
“British School” it could call itself, “British-style”. This allows the
school to create its own identity and at the same time helps to create an
environment where it can justifiably proclaim, “we do what we say”.
If this means that ‘inclusion’ entails educational
provision otherwise regarded as ‘optional extras’ being provided through
curriculum choice and teacher delivery as part of a whole school philosophy,
then it would appear that there is less room for parental doubt and definitely
less justification for ‘stealth taxes.’
A Happy New Year to you all!
Next week: Where is Religious Education?
 Heart to Heart with Hillary
Hi Hillary,
Only me. Just to let you know the Belgium chocs (liqueurs) and champagne
will be with you shortly as promised. My flight is booked, the only problem
I have is finding a room at my favorite hotel, Lek Second Road. But, my
problems are inconsequential (I do not think I have ever used that word
before) compared to the mail in your column. Have a great Christmas, and a
wonderful new year.
Mr. looking for an honest car dealer. (Now that is optimistic in any
country)
Dear Mr. looking for that honest car dealer,
You really do sound like a nice man, and someone without ‘unreal’
expectations. Thank you for not asking me to find you a car, though I must
admit I have been asked to find even more impossible items. Like Bob, the
chap from England, who wanted me to get a message and some money to his lady
friend called Nit who worked in a bar in Soi 7. Only problem was that he
couldn’t remember the name of the bar, but he did supply a very good
description of his girl - small with lovely dark brown eyes and long black
hair wearing a black T-shirt and jeans. Since that narrowed it down to
around 100 Nits who wanted the Xmas largesse, I had to give up and I spent
his 100 baht on a large packet of chocolate biscuits to console myself. Keep
up the advanced English classes, I am impressed with your use of
‘inconsequential’. You do get a gold star this week. And Happy New Year
to you too, Petal.
Dear Hillary,
A distressing signal from dear old pater back home in the ancestral pile.
“The battlements are crumbling, the turrets are wobbly and Daisy, the
Friesian, is dry!” What can I do? Do you have a cunning plan (up your
bodice) Hillary?
Mistersingha
Dear Mistersingha,
Not even Baldrick would bother with a cunning plan that could be used to get
you out of your predicament. However, I do not blame you entirely, my
posturing Petunia. You see, the real problem stems from your father. It was
he who did not teach you to honour your commitments, and even though I have
tried (Petal I certainly have tried), you steadfastly fall at the first
hurdle. That hurdle is the one where you promised Hillary champers and
choccies, about at least one year ago, and then when they did not arrive you
gave excuses, and now pretend that the promise was never made. It is time
you faced your responsibilities and did something about yourself. It’s not
a cunning plan, it’s not conniving, it’s not conning. It’s being
honourable, Mistersingha. I wish Daisy, the favourite Friesian, all the best
for New Year.
Dear Hillary,
I am an attractive Caucasian girl with my fair share of
rich male boyfriends. I am taken out to expensive restaurants where I am
wined and dined. At the end of the evening my partner always gives me a
gift. My problem is that I am sick and tired of receiving the usual diamond
bracelets, gold watches or precious stoned pendants. I would die for a box
of chocolates or a bottle of champagne. Hillary, I am aware that you are
able to procure these simple gifts from your many male admirers. I need to
know how you do it. I was hoping that we girls could get together one night,
frock up in our best evening attire and strut our stuff along Walking
Street. Are you willing to share your tactics with me?
Minnie Mouse
Dear Minnie,
Hello Minnie, and I am glad to see you are letting us all
into the secrets of your life. And what a spoiled little coquette you really
are. The reason you don’t get choccies and champers is quite simply
because you are too easy with your favours. Hillary could get cartloads of
Cartiers and diamonds from De Beers too, if she were to let her standards
slip. No, young girl, keep them at arms length, don’t be an easy mark or
lay, down too quickly. Tell them firmly that it’s chocolates and champagne
at least, nothing else. I am sorry too, that I can’t get together with
you, but the night air is not good for me these days, and all the champagne
makes my head spin. And while I remember, don’t bother going out with the
Mistersingha chap. He reneges on all his deals, and the cows (cash and
milking) have run dry. By the way, why don’t you try and meet up with
Mighty Mouse, now there’s a man of words and action. He is the local agent
for de beers round here. He handles Kilkenny beers, Heineken beers, Tiger
beers, Kloster beers and even Singha beers. I think you would definitely get
on well together! Happy New Year!
Dear Hillary,
Do you find this social habit of kissing everyone three
times a turn-off? I think that social kissing is really disgusting. People
are just making an excuse to slobber all over you. It is unhygienic! How can
I avoid it?
Henry
Dear Henry (Kissinger?),
Are you kidding me? All you have to do is to grab the other person first and make kissy-kissy noises beside their ear, while
muttering, “Don’t get too close to me, I’ve got a social disease.”
They will leave you alone after that. Happy New Year!
Psychological Perspectives: Gender and sex roles
by Michael Catalanello,
Ph.D.
Americans and possibly other foreigners
in Thailand usually notice distinct differences in the public behavior of
the sexes. It is not unusual, for example, to see either female or male
couples walking hand in hand and at others times with arms around each
other. In American culture this is rare, and usually associated with
homosexuality. In Thai culture these couples would not necessarily be
identified as homosexuals. Such signs of friendship and affection between
members of the same sex are considered the norm.
Likewise, foreigners may notice a difference in the
attitudes of Thais toward those whose behavior and lifestyles do not
conform to the traditional male and female sex roles predominant in other
cultures.
Some individuals we might ordinarily classify as male
are routinely seen in Thai societies dressing and behaving in traditional
feminine roles, even using the feminine polite word, “ka,” rather than
its male equivalent, “krap.” Females, too, are occasionally seen
behaving more like men, although this seems less common in my own
experience. The Thais seem accustomed to and accepting of such behavior,
while reactions of Westerners may range from mildly curious, to
uncomfortable, to outraged.
A reader from the U.S., currently residing in Pattaya,
commented that the attitude of the Thais seems more balanced and healthier
than the attitudes of his countrymen. He goes on to suggest that these more
progressive attitudes might be associated with a lower rate of sex crimes
in Thailand. On this point I have no data at the moment; however, the
former point is worth considering.
Attitudes toward what is considered socially acceptable
behavior are learned through our experience with others in our society, a
process referred to by social scientists as socialization. What is
considered acceptable behavior for males and females may vary, not only
from culture to culture, but over time. Even the categories “male” and
“female” are constructed by our society. This notion may come as a
surprise to many, but consider a few facts.
Babies are identified at birth as either male or female,
with all the known differences in anatomy. There is rarely guesswork
involved. Occasionally, a child may be born with ambiguous “equipment”
and society demands that these children, too, be assigned genders, rather
than being assigned to a third or fourth category. Occasionally cosmetic
surgery may be performed on the child in order that it may better conform
to one of the two genders.
Most of us grow up in acceptance of our assigned gender
and experience little difficulty. Many, however, develop discomfort with
their assigned sex, describing an experience of being a male “trapped”
in the body of a female, or visa versa.
Upon reaching puberty, most people find that they are
attracted to members of the opposite sex. Many, however, find that they are
attracted primarily to members of the same sex. There is now convincing
evidence that our sexual preference is established before birth. Some with
homosexual orientations experience distress over the expectation in many
societies that heterosexuality remain the norm. Researchers also tell us
that future sexual orientation is detectable in play preferences long
before the arrival of puberty. This, of course, is related to the notion of
two, and only two genders.
In this age of modern medicine, those who feel
uncomfortable with their assigned sex often wish to undergo drastic medical
and/or surgical procedures to “fit” into our established male or female
categories. These procedures are expensive and often excruciatingly
painful.
I have often wondered if those not conforming to the “male” and
“female” roles we have established would feel quite so anxious, or
undergo such extremes of expense and physical suffering if our societies
generally embodied more of the attitudes of acceptance of diversity of
appearance and behavior displayed by the Thais toward their own.
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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