Doom and Gloom?

From time to time we’re accused of being too gloomy and continuously preaching Doom and Gloom. We resent this slightly in that we try to highlight the negative and positive aspects of
what’s happening in the world - it’s just that at the moment there’s far more negative stuff that we feel the need to write about because the outlook for equities is in general so rocky and equities have a disproportionate impact on the economy and most people’s investments. If sometimes we get evangelical about the 5 asset class message, it’s because of the fact that while some sectors are bad, there’s always some good news somewhere. For sometime now, commodities have been an area that have afforded opportunities. In part this is because the supply and demand curve for many commodities has skewed the traditional backwardation effect (the fact that in real terms commodities tend to get cheaper over time because extraction, refining and production methods become more efficient). It’s also a feature of the fact that as physical, deliverable items commodities have to be traded in a way that creates massive disparities in the market allowing for exploitation of these over and above any increase in the price of the underlying commodity itself.
However, today we’ll just look at the first aspect - the upward pressure on commodity prices. Jim Rogers - founder of the Rogers International Commodities Index, co-manager of the Quantum Hedge Fund with George Soros when it was launched in 1973 (every $1,000 invested at launch was worth $3mn by 1998, when Rogers left to ride his motorbike around the world and set up his own commodity funds), world expert on commodities and author of “Hot Commodities”, “The Investment Biker” and “Adventure Capitalist”, widely regarded as one of the best analysts and asset allocators in the World - believes that the rise of China (all US-based analysts are still obsessed with trying to estimate the point at which China will become the world’s number 2 economy whereas many non-US-based analysts are looking beyond that!!) and the change in the status of the US Dollar as a reserve currency is having a profound impact on global demand. Jim Rogers has for some time stated that the bull market for stock and bond markets is over and that investors should get into the long-term bull market in commodities which will extend to 2014-2022.
Recently, he repeated these views to the Credit Suisse Asian Investment Conference in a keynote speech yesterday. Rogers’ research indicates that the shortest commodity bull market has lasted for 15 years while the longest was 23 years. The commodity fund index set up by Rogers on August 1, 1998 has increased by 243% since then, whereas the S&P index over the same period has risen 43%, with a strong negative correlation to equities - whenever commodities are in the ascendancy stocks and bonds are in decline, and vice versa. Rogers believes that the big bull market for bonds was in the 1980s and 1990s and peaked out in 2003 and has been treading water around the peak since then preparatory to an impending long decline - We’re not sure how the conference will ultimately respond to Rogers’ exhortations - “I would urge all of you to go home and sell all your bonds. I know some of you are bond managers - I would go home and look for another job,”.
Not that equity investors or mangers should feel any more comfortable - at least in the West. Rogers believes that application of time tested criteria (P/e ratios, dividend yields, price to book ratios) shows that Western stock markets were overvalued, similar to the 1970s with big trading ranges. Stock pickers might be able to exploit this successfully, but anyone brought upon buying and holding is likely to be in for a prolonged period of disappointment; as Rogers says about stockpicking “most people are not very good at this. They need to have a secular bull market when markets are rising all the time to make a lot of money,”.
Rogers believes that commodities are neglected as an investment class, because of a lack of information and understanding - he feels that this is reminiscent of attitudes towards stocks and mutual funds some 30 years ago (today there are 70,000 mutual funds available to the public to invest in stocks and bonds compared with fewer than 50 commodity funds).
Rogers then turned his attention to China and to the Greenback - changes in global demand for commodities are taking place against a backdrop of the rise of China and the change in the status of the US Dollar as the world’s reserve currency - “It is amazing how many people do not understand the rise of China - China is the next great country in the world......I know they tell you that they call themselves communists in China - but I tell you they are among the world’s best capitalists right now,”. As a result of this structural change, increased demand for commodities, particularly oil, will emanate from both China and India - China’s per capita consumption of oil is a fourteenth of that of the US and one tenth that of South Korea and Japan.
Set against this increased demand, many of the world’s major oilfields are in decline. Demand is increasing and supply is tightening; prices are destined to rise.
But what of impending US recession? - the shift from the US being a creditor nation in 1987 to being the biggest debtor nation in history with debts of $13 trillion will also have major repercussions for global demand - “What is terrifying to me is that our foreign debt increases at the rate of one trillion every 15 months.” As a result of this, Rogers believes that Asian
countries, now among the world’s biggest creditors, will start to dump Dollars and instead buy real assets such as oil, gold and other commodities.
Who are we to argue?

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]@mbmg-international.com.com

Snap Shots: by Harry Flashman

Promote yourself – get a portfolio

At least once a month I get asked if I could take a photo of someone’s wedding, or a golf tournament, or a charity event, or someone’s daughter or take a shot of some products to be sold on the internet. At least once a month I turn down these requests, and then answer, “And no, I’m sorry, I don’t know of anyone else who might be able to do it for you.”
All this means is that there is scope for some enterprising young photographer to make a little money on the side. The clients are out there with a need that is not being met. So is that you?
Up till now you have been an amateur, with no paid assignments that you can show to prospective clients. You may not have photographed products for an internet catalogue, or someone’s daughter as a portrait, or shot a golf tournament. But it isn’t really too difficult. If you are a keen amateur then you’ve got the photographic eye, you just need some experience.
At this stage, clients will still not be beating a path to your door, where you wait, camera in hand and flash all primed and ready. What you have to do, while waiting for the path-beating clients, is get yourself a portfolio. Something you can show to clients. A mini ‘showcase’ of your talents.
Back in the pre-digital days, we all produced portfolios with individual transparencies mounted on heavy card. The trannies were a minimum of 6x6 cm, and 5x4 inch were even better. You lugged a portable light box around that you plugged into the power supply in the client’s office. Showing your wares was a hassle.
Not so any more. In the digital era, it’s a breeze. You store your good shots in your computer in Photoshop or whatever, and when showing your work, you just email suitable samples to the clients. Well, those people you hope will be clients!
So what should you have in your electronic ‘virtual’ portfolio? Go back to my opening paragraph where I stated “photo of someone’s wedding, or a golf tournament, or a charity event, or someone’s daughter or take a shot of some products to be sold on the internet”. That is a reasonable start. I’d also throw in a couple of food shots, as there are always restaurants looking for someone clever enough to make their food look appetizing.
So how do you go about getting these shots, when nobody has given you a commission yet? Again this is simple. You pretend to yourself that you have been asked to cover a golf tournament, so you put together your shot list which would include golfers teeing off, putting, someone in a bunker, a ball beside the pin in the hole, a nice shot of a pretty caddy. Starting to get the idea? By the way, nobody will complain about you being there, especially if you offer to send them a couple of shots. And, you never know, they might ask you to do some more – that is how I got my first commission.
Now offer to do a wedding at no charge. OK, so you just used up a Saturday afternoon, but you now have some more portfolio items. And I will wager that someone at the wedding will want to buy some shots from you as well. Do the same with some food photographs and product shots, and you are on the way to putting together a working portfolio.
Now some of you will be saying, “But I don’t know the best way to shoot food, or product, or weddings or whatever,” but this is no giant hassle either. There are more ‘how to’ photographic books published than just about anything else, other than cook books and personal advancement. This how you learn. Countless thousands of photographers have learned the same way. You read, you try for yourself and you review your results. It actually does not take long. Once you can produce consistent results, you are almost there.
The final steps? Display your photographs in a gallery, and advertise in this newspaper. Then they will ring you, instead of me!
Best of luck in your new career.

Modern Medicine: by Dr. Iain Corness, Consultant

Irritable Bowel Syndrome and how to pacify it

Irritable Bowel Syndrome, or IBS since we like acronyms, is an interesting condition. It is not a disease, and in fact tests for abnormalities come back reported as ‘negative’. Does this mean that IBS isn’t really in the bowel, but all ‘in the brain’? Unfortunately, there is a school of thought in medicine that says that if all the tests come back negative, the condition is not real, only imagined. This is however totally wrong. There are many conditions for which we did not know (or had not developed) the right tests. Until the last couple of decades, we did not have a definitive test for HIV – but the people had the ailment, even though we couldn’t identify it. We doctors must never forget to treat the patient, not the test results. (I thank my eldest son, Dr. Jonathan Corness, for that sage little homily.)
Getting back to IBS, I repeat that it is not a disease, but can be a very debilitating condition, characterized by some of the following (but not necessarily all) symptoms: cramping pain in the stomach area, painful diarrhea or constipation (now that’s confusing), mucus in the stool, swollen or bloated belly, increased gas and the feeling that you are unable to totally empty your bowel.
If IBS is not a disease, what is it? It is a functional disorder, which means that the bowel doesn’t work as it should. What appears to happen is that the nerves (called Auerbach’s Plexus from memory) and the muscles of the bowel are extra-sensitive. For example, the muscles may contract too much when you eat. These contractions can cause cramping and diarrhoea or rapid bowel movement during, or shortly after, a meal. Or the nerves can be overly sensitive to the dilating of the bowel (because of gas, for example). Cramping or pain can be the result.
Any condition that does not have some nice finger-pointing in the right direction test result is then too often put into the ‘psychosomatic’ pigeonhole. “It’s caused by stress,” say the non-medical ‘experts’. In actual fact, emotional stress will not cause anyone to develop IBS. However, if you already have IBS, stress can trigger the symptoms, just as it can for a myriad of medical conditions. Stress does not cause the problem, but it can make it appear worse. In fact, the bowel can overreact to all sorts of things, including food, exercise, and hormones (women with IBS get more problems around the time of their menses).
Food and drinks that tend to cause symptoms include milk products, chocolate, alcohol, caffeine, carbonated drinks, and fatty items. In some cases, even eating a large meal will trigger symptoms.
Another complicating factor is that the symptoms of IBS can also mimic other gastro-intestinal problems, which is why in the ‘work-up’ there may be a barium enema or lower GI (gastro-intestinal) series. Barium is a thick liquid that makes the bowel show up on X-ray. Another examination is a colonoscopy. This is where the doctor inserts the ‘black snake’ into your bowel via the anus and can look through the small camera on the tip.
Although there is no ‘magic bullet’ to cure someone of IBS, there is treatment that will help. This includes dietary changes, anti-spasmodic medicine and stress relief if you are a highly stressed person. As a starter, fiber (found in bran, bread, cereal, beans, fruit, and vegetables) reduces IBS symptoms - especially constipation, because it makes stool soft and easier to pass, but you have to identify the ‘triggers’. (And it ain’t Roy Rogers for those old enough to remember the celluloid hero!)

Learn to Live to Learn: with Andrew Watson

The characteristics of the pioneer

Ah, the pioneer. There’s something terribly romantic about being the first to do something, breaking new ground and leading the way, venturing into the unknown. To be an innovator, trailblazer or a groundbreaker is to come close to a kind of immortality. Around London, houses are dotted with blue plaques marking the residences of people who demonstrated the characteristics of the pioneer. It’s a nice touch. Better, I suppose, than being rendered into popular consciousness via a biscuit, like Garibaldi or Trotsky (his chocolate assortment) or even perhaps, as a road. I used to wonder whether people thought about the name of the street they lived on in London, “Alleyn” Road for example, or “Trevor Brooking” Way.
Last week I wrote about the “Third Culture Kid” (TCK) a well established latter day phenomenon in research and one of increasing relevance to us here in Thailand. The TCK not only ventures into a new physical environment but also a new emotional and technological place. They are settling a previously unoccupied place in the cultural landscape of the globe, opening up new possibilities and ways of understanding their brave new world. TCKs are in the vanguard of creating and developing a new global reality for a group of highly mobile, well educated, mostly privileged young people. The Global Nomads website, (www.gng.org) one of the places where TCKs congregate, actively pursues and promotes the kind of ideas articulated in the IBO leaner profile.
Unwittingly, because they typically find themselves in a situation over which they have little control, the TCK has become the subject for thought, research and development, as they open up new realities in the context of their lifestyle and situations. The TCK constructs new ways of understanding and dealing with constant change personally, locally, regionally and globally. They demolish out-dated modes of living from their self-constructs which have little or no relevance and attack ethnocentrism, xenophobia and racism. In this way, mobility is more easily achieved.
It can be argued that TCKs inhabit what lawyers might refer to as an ‘intellectual space’, which before Useem, had been a barren environment. Equally, International schools can be seen as their natural home, where they are nurtured and educated in a manner which reflects and informs their understanding of global reality. Shaped by their environment and their education, TCKs cannot fail to act in a manner consistent with their evolution and third culture status, whether they are conscious of it or not.
Having spent a large part of my life in Kibbutzim, I perceive that there are real parallels to be drawn between Kibbutzniks and TCKs. Kibbutzniks will have heard of other kibbutzim in the same sense as students have heard of other International schools. The way of life, systems and structures will be familiar and they embrace each other’s existence with familiarity. They have in common the need to find what Schaetti (1996) calls, “integrity and direction” and the desire to forge identity. Like the Kibbutznik, the TCK demonstrates great courage in leaving behind the familiar, embracing what is new, enduring the path to acculturation and learning, “to cherish the life of the world” (Mead in www.ca.usf.edu, 2005) and “celebrate diversity” (Walker, 1999). It could be argued that pioneers in the history of immigration in counties such as the US and Israel, Fail (2002) has bred individuals who relate strongly to their national identity. I assert that TCKs do the same in fiercely defending their identity and feeling pride in their role as TCKs as Schaetti (1996) testifies.
However, Pearce (1998) maintains that any change in the validating system will bring a sharp increase in dissonant experiences and that rejection of alterity (the unfamiliar or markedly different) is a defence of identity. But I would strongly argue that the TCK, like the Kibbutznik pioneer, breaks through the barrier of rejecting alterity and then moves beyond it to a plateau of a new validating system which incorporates dissonant experience. I would further argue that internationally mobile children actually learn to embrace alterity, partly because as a coping mechanism it works out (almost by trial and error) to be considerably easier if you develop a positive mental attitude towards it. It seems reasonable and logical to expect the TCK to reject narrow identity as Schaetti (1996) does in “Phoenix Rising” because their multi-cultural reality has become more important. Almost as if it were a rite of passage, the TCK has to forge his or herslf an identity, because it is not something they have inherited. That is the essence of the pioneer in TCKs.
Pearce (1998) identifies two psychological concepts in exploring how a child develops cultural identity; symbolic interactionism and social constructivism. For the TCK, the former (from Mead 1934 in Pearce 1998) has similarities with Vygotsky’s zone of proximal development (in Bruner 1986 in Pearce 1998). If TCKs can be seen as inevitable products of their education and experience, then the role of International schools, as the natural habitat for TCKs, becomes critical.
Given the exponential development in communications and technology over the past fifty years, it is, I submit, no coincidence that this period has witnessed commensurate growth in International schools (over 1,700 listed on the International-schools.com website). If “culture” can be understood as a meaning system by which life experiences are understood, so it follows that International schools should be expected to produce a new breed of Internationalist - the TCK. Given the multifarious variety of Internationals schools, what might seem surprising, is that so many TCKs feel a sense of shared experience.
International schools purport to have particularly high expectations for their charges, which are often translated into slogans such as “Creating Tomorrow’s Leaders Today” or “For the Leaders of Tomorrow”. This is both exciting, because TCKs seem admirably equipped for leadership in the 21st century but also worrying, because bold statements of intent by schools often lack the pedagogical persuasion, vision or interest to put their promotional promises into practice. I have seen more than a few children in my time in education who have been taken into schools for their fees, but have not received the tender loving care that they need and indeed, which they deserve. When this child is a TCK, feelings of being very lost and isolated can be accentuated as they search for an identity. A great deal of unnecessary suffering might be avoided if the characteristics of the TCK were better understood.
Andrew Watson is a Management Consultant for Garden International Schools in Thailand.
Next week: Education – a political narrative?