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Money matters:Early winter is here (Part 7)
Graham Macdonald
MBMG International Ltd.
Over the last few weeks, we’ve covered some of the
reasons why the US and global economies are in such bad shape. We’ve
touched on how that would affect businesses and therefore share prices in
general. However, every company is an individual and while the removal of
around $ 1 trillion of trade from the global economy every year would have
widespread effects, some businesses may be unaffected or may even thrive.
Insolvency practitioners, bailiffs and repossession agents may be the
obvious calls. Historically, in austere times, breweries tend to perform
quite well and you might expect video rental stores and pizza delivery
companies to benefit at the expense of cinema chains and restaurants as
the world tightens its belt.
In general, we would expect the damage to be widespread. Although US and
Western corporations are in reasonable shape, their share prices are
predicated around the expectation of increased profits going forwards that
most would be simply incapable of delivering.
Owning stocks is a claim to a future stream of free cash flows, i.e., the
cash that can actually be delivered to shareholders over time after all
other obligations have been satisfied, including the provision for future
growth. If that future stream of cash flows is better than currently
anticipated the stock price should rise, if it’s worse, the price should
fall or at least rise by less than the average rate of share price
increase.
The long-term earnings growth for the S&P 500 has been 6% annually. In
other words, in general it is factored in that earnings will grow at a
rate of 6%. This is true regardless of whether one looks back 10, 20, 50
or 100 years. Given that the average historical price/earnings ratio for
the S&P 500 is 16.3 we can see that it is currently expected with stocks
trading at p/e ratios still in excess of 20 that growth will be much
higher than 6% per year. In the cold light of day a return to expectations
of 6% long term earnings growth would require a fall in the value of US
stocks of the order of 25%. A sustained expectation of low growth, no
growth or negative growth would each require a correspondingly higher fall
in average share prices.
“The S&P 500 still appears to be moderately over-valued vs. its long-term
historical trend. This would suggest investors should expect less than
normal returns. Whilst average ‘up cycle’ has been about 30 years (since
1870), the average bear market has never been less than 10 years in
duration. The bear market that started in 2000 could thus extend to well
beyond 2010.” - Lombard Street Research (June 2005)
Additionally, we remain unconvinced that the asset values recorded by
Western companies are as attractive as they seem. Any companies holding
real estate assets may need to revalue these downwards if a real estate
crash goes hand in hand with a recession (as is often the case). A real
estate correction would cause a further deterioration in sentiment,
economic conditions and share prices.
According to estimates by The Economist, the total value of residential
property in developed economies rose by more than $30 trillion over the
past five years, to over $70 trillion, an increase equivalent to 100% of
those countries’ combined GDPs. Not only does this dwarf any previous
house-price boom, it is larger than the global stock market bubble in the
late 1990s (an increase over five years of 80% of GDP) or America’s stock
market bubble in the late 1920s (55% of GDP). In other words, it looks
like the biggest bubble in history.” - The Economist (June 16, 2005)
“Once stocks fell, real estate became the primary outlet for the
speculative frenzy that the stock market had unleashed. Where else could
plungers apply their newly acquired trading talents? The materialistic
display of the big house also has become a salve to bruised egos of
disappointed stock investors. These days, the only thing that comes close
to real estate as a national obsession is poker.” - Robert Schiller,
Professor of Economics, Yale University, author of “Irrational
Exuberance”.
This has allowed people to live beyond their means, as they have serially
extracted equity from the increased market appraisal of their homes, while
simultaneously increasing their overall level of debt, and would be a
further liquidity crunch, which would cause further deterioration in
economic conditions.
Furthermore, post Sarbanes-Oxley we remain sceptical of both recorded and
forecasted numbers. We highlighted the discrepancy between actual numbers
and ‘street’ numbers in an article entitled “Sell USA - Buy Thailand” some
time ago and these fears remain. The general perception of the standards
of ethics within US corporations following the various scandals may be
best highlighted by the following apocryphal joke that is doing the email
rounds. Almost certainly it is without any substance, but people can
relate to it and almost want to believe that it’s genuine:
Young Kenny moved to Texas and bought a donkey from a farmer for $100.00.
The farmer agreed to deliver the donkey the next day. The next day he
drove up and said, “Sorry son, but I have some bad news, the donkey died.”
Kenny replied, “Well, then, just give me my money back.”
The farmer said, “Can’t do that. I went and spent it already.”
Kenny said, “Ok, then, just bring me the dead donkey.”
The farmer asked, “What ya gonna do with him?”
Kenny replied, “I’m going to raffle him off.”
The farmer said, “You can’t raffle off a dead donkey!”
Kenny said, “Sure I can. Watch me. I just won’t tell anybody he is dead.”
A month later, the farmer met up with Kenny and asked, “What happened with
that dead donkey?”
Kenny said, “I raffled him off. I sold 500 tickets at 2 dollars a piece
and made a profit of $998.00.”
The farmer said, “Didn’t anyone complain?”
Kenny said, “Just the guy who won. So I gave him his 2 dollars back.”
Kenny grew up and eventually became the chairman of Enron.
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The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can accept
any liability for any errors or omissions in the above article nor bear any
responsibility for any losses achieved as a result of any actions taken or not
taken as a consequence of reading the above article. For more information please
contact Graham Macdonald on [email protected]
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Snap Shots: Making your photographs different
by Harry Flashman
There is an unfortunate tendency for photographers these days to attempt
to make their photographs ‘different’ by fiddling with the image
electronically using Photoshop or one of the other post-production
software applications. I say ‘unfortunate’ because I believe this takes
away from the creative eye that should be exercised when you take
photographs.
Photography is still really all about the art of “seeing”, no matter
what kind of camera you use, film, digital, SLR or compact. Successful
photographers are ones who have discovered a “different” way of seeing
the subjects they photograph.
One example is British photographer Bill Brandt, famous for
photographing nudes by using a wide angle lens on the camera. This gave
a very distorted figure, but one that became “arty” and produced fame
for Brandt. Whether you find Brandt’s viewpoint aesthetic does not
matter – the important fact to remember was that it was different.
Now I am not suggesting you screw the fish-eye on the front of the
camera and rush out to the nearest go-go bar, but you should stop for a
while and consider something unusual, compared to your “standard” way of
taking shots.
You see, it makes no difference whether you have an SLR with multiple
lens choices, or just a humble point and shooter with a fixed lens, we
eventually get into a “habit” while taking photographs. Habits include
the lens you stick on the front of the camera. I will wager that you
have a favourite lens that stays on the camera body, and the others are
only used when you cannot get the subject in the frame and have to use
an alternative. And habits certainly do die hard, even if it is just
always taking shots in the horizontal (landscape) format.
What I am suggesting this weekend is to give some time to a new or
different ways of doing things. Many times it is impossible to predict
what the final result may be. You may have discovered a radical new
approach, a highly individualistic way of presentation. The end result
may not be to everyone’s taste (like my idea about Bill Brandt’s work),
but you will never know till you try.
To get you going, here are a few ideas you might like to explore. The
first I will call the child’s eye view. Our viewpoint is generally
around 1.5 meters from the ground. That’s where our eye level is and
that is the viewpoint we use in 99 percent of our photos. Now imagine
you are a three year old child. Your viewpoint on life is very much
closer to the ground. You spend more time looking up at the world. It
would certainly be worth re-viewing some items from this very low
viewpoint. OK, I know you will end up looking up people’s noses – but it
just might work. You won’t know till you get the pictures back from the
photo-processor.
The opposite end of the spectrum is the “Bird’s eye view”. This takes
some more thought and planning – and sometimes a step ladder as well,
but again you will get different shots. Ever noticed how many rock bands
have photographs taken from above, with the members of the group looking
up at the camera? Ever wondered why? It is because you end up getting a
very powerful shot – and a different, memorable shot. Try standing on
walls, on top of cars, or the aforementioned step ladder. Just don’t
drop your expensive camera or fall off! It is actually quite easy to
become unbalanced looking through the viewfinder when up high.
For those who do have choices of lenses, or do have zoom facility in the
point and shooter, you can try using the two extremes that you have,
even though you may think that the lens choice is unsuitable for what
you are photographing. After all, remember Bill Brandt! It is even
worthwhile taking the same subject matter with both of the two opposite
extremes – wide angle and telephoto.
Try another viewpoint this weekend and you might be amazed.
Modern Medicine: Applied consumerism – being an informed patient
by Dr. Iain Corness, Consultant
I shudder to think how many expats have arrived in my office,
pouring a bag of colored pills on my desk, and saying “What ones do I have
to take?” This action tells me that there has been a breakdown in
communications, and secondly, the person is not an ‘informed’ consumer.
We are in a consumer oriented age. In the western world, advice is no longer
taken at face value. “Take these tablets three times a day until finished”
is not acceptable these days unless there is a patient information (PI)
leaflet inside, and the patient has been advised that if his toenails drop
off he should stop taking the medication immediately and consult his
litigation lawyer post haste.
These PI sheets are a two edged sword in my view. Whilst it is important
that the patient knows what they are taking, and why, listing every known
side effect is somewhat off-putting, and can actually be counter-productive
by making the patient stop the medication because they are afraid that
something disastrous might happen to them. If the number of people who have
taken the medication is squillions, while the number of catastrophic side
effects can be counted on the fingers of one hand, what is the likelihood of
getting an adverse effect? Not high. Put another way, did you know that one
of the side effects of aspirin can be death, and yet aspirin is still one of
the safest and best drugs on the planet?
So what do you really need to know to be an informed consumer? The first
item is to know why you have been prescribed any particular medication and
what it is supposed to do for you. Is the pink tablet the painkiller or the
antibiotic, for example? The next important item is to know how often and
when the medication should be taken. Before or after meals? At night or in
the morning? These instructions can have enormous bearing upon the
absorption of the medication. And on the likelihood of your getting a
reaction or unwanted side effect, and on how long it will take you to get
better.
The next important issue is that of reactions and side effects. You need to
know the most likely side effects. If 20 percent of the folk who take this
tablet get nausea, you need to be informed. If, however, less than 0.1
percent get a rash, then this is not such an important issue. I have always
taught medical students that they should present the main issues only, but
cover the rest by saying that if the patient has anything untoward happen to
them which they think could be related to the medication, then stop taking
the tablet and consult the doctor again.
Another important issue for the patient consumer is inter-actions. Some
medications can affect the way the oral contraceptive pill does its job, for
example. The informed consumer needs to know this! The wise doctor will tell
you. The even wiser consumer will ask! Especially if you are on any
medications at all, and that is including herbal medicines.
The other aspect of your treatment that should be known by you is how long
it should be before you begin to feel better. If you know it is going to be
six weeks, then you know not to start fretting after one week. If it is
supposed to be one week and you’re still in trouble three weeks later, then
you will know to return for another consultation.
So be a wise consumer. If you are unsure, then ascertain what the tablets
are for, when and how to take them, the most common side effects and
inter-actions and how long it should be before you are better.
 Heart to Heart with Hillary
Hi Hillary,
Like your article a lot, it is the first thing I read when I looked up
Pattaya Mail every Fri., keep up the good work. Glad to hear a success story
between farang (American) and a Thai wife, so just want to add one of my
own. I met my husband in Pattaya 18 years ago. To make a long story short,
now 18 years later we’re still happy married with two great kids (16 and 14
year old sons). We just came back from a trip to Thailand in late Nov. My
younger son likes Thailand so much he said that when he grows up he will go
back to Thailand and open a restaurant and call it “Bangkok Bill”. I
couldn’t believe how much Thailand has changed (for better/for worse) in the
past 18 years. Stay well, it is not often that someone as witty as you come
along.
A Thai wife in USA
Dear Thai wife in the USA,
Hi to you too. Thank you for your kind words, and indeed I do try and stay
well, and follow the ‘middle road’ as far as life is concerned. I certainly
will not die from too many chocolates, or drown in champagne, but it is nice
to dream. You certainly don’t need advice from me, Petal. Yours is a success
story too, so just you and your husband keep doing what you’re doing. You
are on the right track. I shall await the grand opening of “Bangkok Bill”,
just tell your 14 year old to put some bottles of champagne down now.
They’ll be just right by then!
Dear Hillary,
I have been visiting Thailand regularly for the past 10 years and during the
last three visits I have made in the last 12 months I have become friendly
with a charming lady from Chiang Mai. We exchange emails, and she seems to
have a very good command of English (though I have to admit that her written
is better than her spoken). She seems to be very genuine, and often says how
much she misses me, and how she thinks I am handsome, which is something the
British ladies forget to say, so you can see why I keep coming back.
Unfortunately she has fallen sick and can no longer work. She tells me she
is now behind in her rent and will be kicked out if she doesn’t pay by next
week. She said she is very sorry to ask me for money this way, but I am the
only person she can turn to, as her family is too poor. I have sent her some
money, but not as much as she asked, as I think that 20,000 baht a month is
probably tops for monthly rent. How can I check on this? I don’t want to be
seen as stingy, but with her making the effort on her side, I think I have
to make some effort too. I ask for an answer before next month’s rent is
due, Hillary.
Gentleman George
Dear GG,
What an amazing coincidence. Your initials are the same as a horse, and
probably the back end of it too, Petal. Were you aware that there are people
in this country who write letters for these girls? Were you aware that there
are books published so these girls can write to their “boyfriends” with this
month’s tale of woe? This month it will be rent, next month her brother will
fall off his motorcycle and the month after that, her mother will need an
operation. And talking about rentals, just where is your darling staying in
Chiang Mai for 20,000 baht a month? The Phuping Heights luxury apartments?
Canter off into the distance as soon as you can, GG.
Dear Hillary,
There is a waitress in a restaurant here that I cannot get out of my mind.
She is so petite and sweet natured, and I have never seen her frown at
anyone, no matter how demanding the restaurant customers can be. I know her
name because she wears a name badge, but I have never been able to just get
her on her own for a quiet chat. I have been wondering if I could approach
the management and ask them to help? I am going out of my mind. Help me,
Hillary.
Jim
Dear Jim,
You poor darling. You really are smitten aren’t you. However nice the
management may be, I somehow don’t think they’re going to play match-maker
for you. No, Jim, you are going to have to do this all by yourself. A small
bunch of flowers left at the reception desk for her with who it is from is a
good start. Then next time you are in for lunch or dinner you can ask her if
she got the flowers. You have by this shown your interest and it is then up
to her whether she returns it. This is not an easy task either, my Petal.
Thai ladies can be very “proper” and it is not so easy to woo one over. You
should read the book “Bangkok Angel” by Mike Smith, an Englishman who did
exactly what you are going through now with a waitress from the Huntsman Pub
in the Landmark Hotel in Bangkok. It took Mike years and thousands of
pounds, but for him it was all worth it. Read it and learn!
Psychological Perspectives: Sexual dysfunction, like sexual enjoyment,
is psychological in nature
by Michael Catalanello,
Ph.D.
At its best, sexual activity is one of
the most powerfully enjoyable and satisfying human experiences available.
Likewise, when sexual problems develop, it can become a source of emotional
distress and unhappiness like no other.
With the current widespread availability of modern medical remedies for
sexual dysfunction, such as Viagra and Cialis, it is easy to forget that
psychological processes typically play an essential role in problems
involving sexual performance and satisfaction. A study appearing this month
in the International Journal of Stress Management published by the American
Psychological Association underscores the importance of “performance
anxiety” in the development and maintenance sexual difficulties.
Experts have traditionally divided the human sexual response into four
stages: desire, arousal, orgasm, and resolution. While problems could occur
in any of these four stages, the first three appear particularly prone to
the development of sexual dysfunction. Problems which appear initially in
one phase may progress to affect another phase or phases of the sexual
response cycle.
A person who experiences a problem in the desire phase typically
experiences a lack of interest in having sex. He or she might not
experience sexual thoughts or fantasies, and would be unlikely to initiate
sexual activities.
A man experiencing difficulty with the arousal phase, as one might guess,
would have difficulty achieving or maintaining an erection, making it
difficult to engage in sexual intercourse. A woman would experience
difficulty with the physiological responses which are needed to prepare her
for sexual intercourse, such as the increased secretion of vaginal
lubrication.
Problems in the orgasm phase are experienced by men as premature
ejaculation, ejaculating too soon; or retarded ejaculation, taking too long
to ejaculate. The female counterpart is known as inorgasmia, or having
difficulty achieving orgasm.
Difficulty achieving orgasm is not rare among females, as I have pointed
out here previously, and is not necessarily an indication of sexual
dysfunction. In fact, as the pioneer sex researcher Alfred Kinsey
demonstrated, sexual behavior is generally so diverse in its human
manifestations that abnormality can in no way be considered a sign of
pathology. Clinical psychologists often find it useful to consider
emotional disturbance as a useful indicator for treatment, rather than
targeting some sexual behavior that happens to fall outside of the
mainstream.
Psychological problems may occur as a consequence of sexual dysfunction,
and/or contribute to the development sexual dysfunction. Experts believe
that performance anxiety plays an important role in the development of
sexual dysfunction, particularly among men, although women with orgasmic
dysfunction may also experience performance anxiety.
Sexual dysfunction may occur for any number of reasons; including problems
in the relationship, attitudes toward sex, drugs or alcohol, anxiety,
stress, fatigue, etc. A man who has experienced difficulty achieving an
erection might subsequently entertain concerns over whether or not he will
be able to achieve a sufficiently strong erection to permit sexual
intercourse. Experts propose that performance anxiety may occur as a result
of efforts at “willing” an erection, rather than permitting it to occur
naturally as a product of sexual enjoyment. Anxiety may be increased with
thoughts of imagined dire consequences of failing to perform adequately.
Losing his erection at the point of vaginal penetration, when it is most
needed, could serve to reinforce a man’s fears, increasing his anxiety
level further.
Similarly, a woman who has difficulty experiencing orgasm might begin to
entertain thoughts that her partner might become tired, and lose interest
in continuing the session. She might excessively monitor her own arousal
level, and feel an urgent need to experience an orgasm in order to satisfy
her partner. She may, likewise, imagine dire consequences of not responding
as she believes she should. The resulting anxiety interferes with her
sexual enjoyment, and on and on in a vicious cycle.
Psychological treatment for sexual dysfunction typically aims at reducing
the person’s anxiety level by identifying and changing the thought patterns
implicated in contributing to the problem. Building a warm and mutually
supportive alliance between the partners also can’t hurt. If each partner
can learn to give and receive unconditional acceptance of the other during
lovemaking, anxiety levels can diminish, and performance and enjoyment can
increase. Just as they can interfere with sexual excitement, psychological
factors can also enhance enjoyment, thus contributing positively to a
couple’s relationship.
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Dr. Catalanello is a licensed psychologist in his home State of Louisiana, USA, and a member of the Faculty of Liberal Arts at Asian University,
Chonburi. You may address questions and comments to him at [email protected], or post on his weblog at
http://asianupsych.blogspot.com
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A Female Perspective: The Passage of Time
with Sharona Watson
Something really beautiful happened last
week. Andy was in London when we received news which filled us with
happiness. For the first time, we were asked to be Godparents. Obviously,
the couple who asked us are really great friends. The best thing is that the
father is Christian and the mum is Muslim. Put that combination alongside
her new Godparents and little Hannah, a beautiful little girl, will have
love from people from the three monotheistic religions!
 Little
Hannah – pure beautiful innocence.
Once, before Hannah was born, the four of us were walking down a path
towards Tewkesbury Abbey in England. We were arm in arm, it was a beautiful
summer’s day (not many of them in England!) and we were heading for a
church. Chris, our dear friend, a Christian, said, “Look at us, if only the
whole world could see us now! Celebrating our differences, united by love.
Jew, arm in arm with Muslim, arm in arm with Christians”.
Actually, Chris has a tendency to get carried away and then Andy trots along
behind him, which is when Sofia and I tend to go off shopping. Now she
really knows how to shop! But that’s another story. The thing is, that day
was one of those days when time seems to freeze. I cannot think back to it
without smiling and I feel a bit sad as well, knowing that we are so far
from our dear friends and family. “Nostalgia,” Andy jokes, “it’s not what it
used to be!”
This year I feel the passage of time very much. I’m going to be forty. One
of those landmark years when you start thinking about lots of things, such
as what you did in those years and more importantly, what you are going to
do in the future. I’m a very positive sort of person so I don’t think of the
past in terms of regrets. Every experience teaches as something, whether
it’s a good or bad experience. Then we move on to the next stage of our
lives. Being away from family and friends can be painful, but growing up in
Israel, you always live with the possibility that today might be your last
day, so this makes you try your best to enjoy it. So when we do see people
we love very much, we try to make time slow down a bit, so we can freeze
some more moments which will last forever. There is a famous joke in Israel:
one person says to another: “Are you an optimist or a pessimist?” and the
person replies, “I’m an optimist of course! I know that today will be better
than tomorrow!”
I think that when you are young, people who are forty seem really old. I
remember my uncle talking to me on his fortieth birthday, telling me how it
all flashed by. Tragically, he only had another ten years to live. It makes
you think doesn’t it? If you knew when your time was, you’d probably change
a lot of things about your life, wouldn’t you? It all comes back to
savouring the moments God has given you.
I have to say, I don’t feel old. Sometimes though, I look in the mirror and
my looks tell me something different. Grey hair, for instance. Mind you,
that’s not age which sent me grey, it’s being married to Andy. I should be
careful though, or he’ll tell me that it’s being married to me that sent him
bald!
If I look really closely, my grey hair has turned white. There are wrinkles
on my face where there weren’t any before. My legs don’t run as fast as they
should. My back is complaining about the burden it has to carry. Andy, bless
him, tells me I look just as beautiful as they day he first saw me, but I’m
not sure whether to believe him or not. It’s not like I’ve developed a fear
of growing old (apparently this is known as “gerascophobia”), it’s more like
I’m having a series of conversations with myself, about what is happening
every day. My soul feels young. After all, there’s nothing I can do about
the passage of time, so I may as well just enjoy it!
As a parent, it’s easy to get swallowed up sometimes, by tiredness. I am
ashamed to think of occasions when I wished for time to pass quicker,
especially when these moments included my children. Let’s face it, I’m not
going to be having any more kids, so this is the last time as a mother, that
I will ever have a child who’s six years old, learning to read, learning all
those wonderful things about life, asking all those fantastically beautiful
and innocent questions like, “Mummy, why does God have so many houses?”
Time doesn’t seem so kind to women as it does to men. Sean Connery is in his
mid-seventies now and still looks great. You can’t imagine a seventy-five
year old woman having that kind of sex appeal can you? I’m not one of those
who goes for plastic surgery, although I can understand why women (and some
men) want to go through it. As our friend Chris says, “You can’t truly love
anyone else until you love yourself first”. He’s right.
There are so many pathways through life that I don’t think you can judge
someone else just because they are different. So, it’s true that some people
seem to get old before their time. They seem tired of life and their faces
are angry and they speak ill of other people. It’s as if they are trying to
cheat in the game of life, which is really sad. In the end, like Karma, they
end up being the victims of their own negative feelings. I feel compassion
towards such people and I learn from them, because the last thing I want to
do is look back on my life with anger. “Be happy!” This is what I am going
to tell my Godchild, little Hannah.
Next week: More Good News!
[email protected]
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