Family Money: Sitting in Judgment - (Part 1)
Managing director of Westminster Portfolio Services (Thailand) Ltd.
The threeyear global stock market slump has focused
attention on the ability of fund managers and other investment
professionals to manage money effectively. Central to the debate is how to
Most investment funds are measured against a benchmark,
usually a stock market index. If a fund beats the benchmark, it gets
trumpeted in the fund managers’ advertising, as in: “Fund X
outperformed its benchmark in four out of the last five years!” The
implication is that benchmarks are there to be beaten, otherwise what a
lousy fund it is that you’ve chosen.
But we should be sceptical of claims of
benchmarkbeating performance. To flatter investments fund managers have
always manipulated variables, from time frames to the actual benchmarks
used. Why compare your UK equity fund with the FTSE350 index when the
FTSE100 makes it looks better? For instance, Fund X may have outperformed
an index in four out of the last five years, but it could equally have
underperformed the same index in 6 out of the last 10 years. Fund Y may
have beaten its peer group average by 10%, but the group as a whole has
lost 30% over the past five years. Given that cash deposits showed a
positive return of 20% over the same period, Fund Y can hardly be said to
have been a good investment. Relatively better, maybe, but not good. And
If benchmarks can be manipulated, should we instead
judge all investments against more solid neutral benchmarks such as cash
and government bonds? Perhaps we should go to the opposite extreme and
assess all funds and investments against major stock market indices such
as the FTSE100, S&P500, and MSCI World? The inability of most fund
managers to beat these indices over the long term has brought into
question just how effective (or complacent) the retail fund industry has
become. Perhaps investors should follow the example of the hedge fund
industry, and focus on “absolute returns” – the ability of an
investment to make positive returns regardless of wider market conditions?
Pinpointing winning funds and getting the timing right is extremely hard!
When looking to invest in a fund, among the first
questions to ask are which benchmark is being used, and is it an
appropriate one? How does it compare to, say, the major stock indices or
the return from cash deposits?
Some benchmarks can be terribly confusing. Fund
managers usually pick benchmarks that match the investment style of a
fund: a broadly diversified large-cap US equity fund is more aptly
compared with a similarly broad index like the S&P500, while a
smaller-company fund will be matched with a smallcap index. A fund that is
looser in its investment style might be measured against a whole-market
index – for instance, the US Wilshire 5000, which is based on 6,500 US
stocks and loosely replicates the entire US stock market; the S&P500
represents only 75% of market capitalisation.
But even if a suitable benchmark is used, you’d be
wise to track wider measures too. Some fund management houses may claim to
have come out consistently on top of their peer group, which sounds
impressive until you find out that their peer group amounts to just a
handful of funds, each of which, including the supposedly stellar one,
performed averagely against a wider benchmark. Outperforming a benchmark
that itself is underperforming the total market is not much to boast
about. For instance, if a large-cap stock fund returned 20% in 1998, that
sounds good – but the S&P500 returned 29% that year.
Perhaps the fundamental flaw with looking for
benchmarkbeating performance is that, on average, it is almost always a
mirage in the long run. One fund analysis company looked at how the best
performing US equity funds for 1991 performed in subsequent years. Not one
of them replicated their strong early performance. The most consistent
performer, 10th in 1991, could only manage 993rd 10 years later. Most of
the rest fell even further down the performance tables. Consistently,
research has shown that a fund’s past performance bears almost no
relation to future performance.
(Continued next week)
Personal Directions: Yes we can. No we can’t. Well, maybe we can...
By Christina Dodd,
founder and managing director of Asia Training Associates
“Yes we can, but - wait a second - we need to put it to
the committee and let you know once they’ve come up with a decision.”
“When will that be?”
“I’m not sure, perhaps next week. Someone will get in
touch with you...”
Heard any of this before? What does it tell you?
Loads of indecision and huge doses of its equally
disruptive partner - procrastination - exist in many businesses today, despite
the fact that we all realize and acknowledge how difficult it is do business
with these negative and counter-productive characteristics at play.
The simple fact of the matter is that many of us find it
difficult to be decisive and to make a decision! No matter whether it is a
simple decision or a more complicated one. This behavior can literally
“drive people up the wall” if they are on the receiving end of it and it
is the kind of behavior that can lead many customers to “make a decision”
to change to another supplier or another bank or another gas station!
A rare quality indeed is the one where a decision can be
well thought out and delivered in a timely fashion with confidence and
commitment. An even rarer quality is the one where a decision can be made in a
short space of time, to a deadline and under stress, and be a decision that
hits the spot and gets the task at hand completed. Phew! Where are these
decision makers? They do exist - I have actually met some - and those
companies who are fortunate enough to have them on staff have an invaluable
resource to say the least!
The all-too-common scenario of not being able to make a
decision or of procrastinating until you “drive people to murder”, is
nothing new and you might ask, why should we draw point to it? Well, to my
mind attention needs to be drawn to it so that we can understand the important
part it plays in forming the “mark of a business”, as to how that business
operates and whether or not that business achieves. It is the basis of good
business that leads to successful business.
On a personal level, it forms the mark of a capable
individual, someone who has got it together and is able to cope with all sorts
of situations that may arise. By the way, it is okay to go to pieces
sometimes, as we are only human, but there are times when having someone
around who can cope with making tough decisions in awkward moments is an
So many people I know have lost precious time and precious
money waiting for decisions to be made. Most of us I’m sure have quite
literally agonized over a situation where no decision has been forthcoming and
we’ve lost sleep, worried ourselves sick, lost tempers with loved-ones,
cancelled other engagements because the decision might come through at the
same time and what if you were unable to take the call! We have all been
affected by indecision or a lack of decision-making at some time or another
and so we all know first-hand the frustration that comes with it.
A few weeks ago I was taking a group of rather senior
managers through a workshop and the time came to form groups. Fifty percent of
them had no problems with this basic task, but the other fifty percent took
much longer in making the decisions of who would go where - and this was
despite the fact that certain conditions had been set to make the task simple.
As we proceeded, having eventually formed groups, the time came to select a
group leader to represent them for the duration of the program. Well, this was
a real adventure for some and the looks of exasperation on their faces was
quite surprising. It was almost as if they were begging me to choose their
leader for them. To decide their leader would involve making another decision!
It is extraordinary how we behave when it comes to making a
decision - to being put on the spot and having to come up with something.
What goes on inside our minds when a decision has to be
made? How strong and accurate are our powers of being able to analyse a
situation and to measure it accordingly to produce the correct response, or an
acceptable response? What is the real issue here?
I think a lot of our problems with decision-making lie in
the fact that a lot of us are afraid of the acceptance factor. Will the
decision be accepted by those whom it will affect? If we know someone is going
to be pleased to receive something from us, then we are very happy to go about
our way to make sure they get it. We have no fear of rejection. The task is
easy and causes no anguish, poses no threat. But if we know that someone is
not going to like what we are about to give them, then this opens up a whole
different set of emotions which may cause us to hesitate and procrastinate
because we are afraid that the outcome will not be accepted.
In the simple activity of forming groups, those
participants who found it difficult to decide which group they would be in
were probably afraid that their colleagues might not accept or like the
choices they were about to make. When it came to selecting a leader, this
emotion also raised its head and fuelled the fire of indecision. The
acceptance factor is hard for some people to come to terms with and to
overcome, and needs to be dealt with on an individual level.
Some people believe that you have either got it or you
haven’t when it comes to ability and when it comes to having the ability to
make decisions. I believe that there are a great many things that we are
capable of learning, a great many abilities that we have but just don’t know
how to use. Through coaching and personal and professional development, humans
can astonish and amaze each other with their skills - it is all the desire to
achieve and perform better, and the method and level of application.
For more information on this and other subjects of personal
and professional development, please contact me at [email protected]
Until next time have a wonderful week.
The Doctor's Consultation by Dr. Iain Corness: Cholesterol control - is it really the answer?
by Dr. Iain Corness
Sometimes I find it amazing that there are still folk out
there who are not convinced that diet and cholesterol are the key factors in
heart disease. However, I should not be too hard on these people, after all,
it took the medical world 81 years to accept that fact.
The cholesterol story began in 1913 with a Russian
pathologist called Anitschkow and his pet rabbits. (No, I am not making this
up!) Way back in the days of button-up boots and before the advent of
ballpoint pens and cling wrap, Anitschkow demonstrated that raised cholesterol
levels produced hardening of the arteries supplying the heart muscle (the
coronary arteries). That really was 1913 and Anitschkow’s work was done on
his bunny rabbits, but medical science was not convinced that what happened to
Bugs Bunny would actually happen to us. After all, we are not really large
However, his work was not in vain, because 47 years later a
huge study was done in America (the Framingham Study by a Dr. Kanel) and the
initial results were published in 1960. This appeared to show that cholesterol
and heart disease were intimately connected. But the medical world is
notoriously slow to react to change, I’m afraid, and Kanel’s words fell
onto some stony ground. But there were a few believers. (I actually met Dr.
Kanel in the early 1970’s and I am glad to say he convinced me.)
The believers continued the research and it was in 1994
that the Scandinavian 4S study proved the concept and the need to lower
cholesterol, to in turn reduce heart disease, became universally accepted.
That’s 81 years after Anitschkow pointed the scientific finger at
Since the 4S study, the world has been looking at different
ways of reducing cholesterol, from diet all the way through to some special
drugs called ‘statins’. Now considering that all drugs have a certain
‘risk’ attached to them, for my simple mind, we should at least start with
dietary measures. Non-dangerous stuff! I have given you the 10 Dietary
Commandments before (from Australian Cardiologist, David Colquhoun). Cut out
this article and laminate and stick on the refrigerator!
1. Eat bread every day, preferably multigrain.
2. Eat some fruit every day.
3. Never eat cream or butter again.
4. Eat more fish and eat less meat.
5. Use olive oil every day.
6. Eat some vegetables every day.
7. Eat a handful of nuts every day.
8. Use more fresh herbs and garlic.
9. Have a glass of wine with food every day.
10. Eat in a relaxed way and enjoy your food.
Now all that looks fairly easy and the glass of wine with
it all suits me down to the ground, I must say. However, note that that was a
glass of wine, not a bottle of wine! It is also a diet that is very easy to
follow in Pattaya, where fish and fruit abounds. Just look at Thai food and
how it fits in - herbs, garlic, vegetables, little meat, more fish, no dairy
products, substitute rice for multigrain and you have a wonderful recipe for a
healthy cholesterol reducing diet.
So what’s your cholesterol level? Do you have to do
something about it? Until you know your level, you won’t know what your
relative risk is. Have it checked!
(Hillary has been away this week, so she has sent in
some of her favourite letters from previous columns.)
My doctor has told me I have to give up drinking for my
health’s sake. Unfortunately I work in the public entertainment
industry, so this is a bit hard. What do you suggest I do?
It’s easy. Change your doctor. Always remember
that the definition of a true alcoholic is someone who drinks more than
their medical advisor.
I am 17 years old and have just arrived from Down Under
and I was wondering if you think there would be any jobs in the bar and
entertainment industry for someone like me? I have experience in bars and
worked for a while in McDonalds after school. I have met a young lady here
and I would like to stay here to go with her. Is this going to be easy, or
should I look at something else?
You certainly have come down in the last shower,
haven’t you my petal. That line of work is very hazardous for foreigners
in this country, and experience at asking someone if they’d like some
fries to go with that is just not good enough, I’m afraid. I’m afraid
I think the romance will be a “to go” item. Never mind, you’ll soon
be old enough to drink in Oz as well. Better luck next year.
They are doing alterations in my office building, and
there is a little man coming in every day with a jackhammer and it sounds
as if he is drilling his way through to Singapore. It is going on forever
and it is giving me a giant headache. What can I do about this? Who should
I complain to? Is this normal in this country?
You do have a bunch of questions, don’t you petal.
No it is not normal. Most people when going to Singapore just catch a
plane. Honestly, though, just talk to whomever ordered the work. Can the
alterations be done at night? Can you take a week off work? In the
meantime, wear ear muffs and smile a lot. Get a perverse pleasure out of
making them think you like it.
I have provided for my wife for the past six years of
our marriage. She has never had to want for anything. I am a model
husband, good looking, never play up, only drink in moderation, in perfect
health, a witty intelligent companion, and considered by everyone as a
“good catch”. This week she calmly announced that she wants a divorce.
I can’t get it out of her as to why - just that she wants a divorce.
Why, Hillary, why?
It’s probably because she has found after six
years that she is married to a smug, self-satisfied, arrogant, pompous
twit. I think I’d divorce you too, but it wouldn’t have taken me six
I am an American who was over your way in December last
year. I went out with a girl from a bar. She really seemed to like me and
I took her to Phuket and everywhere around Thailand for the month I was on
holiday. I helped her out with some money to get some surgery done before
I come back this year (she wanted to have her nose re-modelled). Since
then I have been writing to her, but she has never replied. Do you think
she has got my letters, or what? Could you see if she did? Her name is Noy.
Sorry, but I think you’ve been led up the garden
path by the carrot. Hillary gives advice to the lovelorn, she is not a
Missing Persons Bureau or the Pattaya branch of the Pinkerton’s. I think
your Noy will have moved on by now. Sorry, but there’s a lot of Noy’s
I suppose you must get letters like mine all the time,
but you are the only person I think I can turn to in this situation. I
came to Thailand last year for a holiday and met a wonderful girl. I had
never met anyone like her before. (The girls here in the UK just ignore me
because I am only 5 foot 5 inches tall, but in Thailand I fit in
wonderfully!) I am coming out again this year, but when I wrote to my
girlfriend and told her to expect me at Xmas she wrote back and said it
was not really suitable and she could be away up country. Hillary, am I
getting the cold shoulder? What do you think?
This may come as a shock, Jason my petal, but
unattached Thai girls can have more than one boyfriend. Whilst you may be
pining for your Lek, Noi or Toy, she may be pining for her Jack, Jacques,
and Jorgen as well as her Jason. You have to remember you are here for
four weeks. She is here for 52! Relationships over here are a bit like
Snakes and Ladders - you just went back several places!
Camera Class: It’s in the bag! Or even the case!
If you are a true photography enthusiast, you will have a
little more than just a point and shoot compact camera. You will have an SLR (or
two), some lenses, some filters, a flashgun and even a tripod.
So what should you really aim to have? And why? The following
is a list of what Harry Flashman carries, which should be a reasonable guide. My
equipment has been enough for me to photograph professionally in many countries,
so should be considered adequate for a ‘serious’ amateur.
Firstly, you do need a good camera - a 35 mm SLR (single lens
reflex) at least. The first pointer is to select a good brand. There are many to
choose from, but if you look at the pros who are out shooting oodles of feet of
film every day you will find the same names on the camera cases. I make no
secret of the fact that I use Nikon - bulletproof and quality lenses. Others
such as Canon, Pentax, Olympus, etc., are also excellent brands, all of which
have interchangeable lenses too, so your basic system can be enlarged upon over
a period of time, and your original lenses will still be good.
The SLR is the centre of your equipment. It is this camera
that will allow you to be creative in your shots. It is this camera that will
win you awards and recognition. It will be expensive, so choose wisely. For my
money, the ideal “starter” SLR would be a Nikon FM2n. A mechanical camera
that allows you to make all the decisions. Yes, I do have one. No, it is not for
sale. Despite the digital advances, you will learn about photography by using a
Now you look at lenses. The “standard” lens that will
come with your SLR will most likely be a 50 mm. Buy firstly a wide-angle lens.
Around 28 or 24 mm is good, or even 20 mm for very dramatic shots, but the
distortion problem can be a little much at this wide angle. The next lens you
should buy is around the focal length of 135 mm - the ideal lens for portraits.
Remember that you are wanting to produce sharp photographs.
The camera is only as good as the piece of glass the light comes through. This
is why I use “prime” lenses which are optically perfect - no zooms. Zoom
lenses also make for lazy photographers. Instead of walking in to compose the
subject, the photographer zooms in. The depth of field is lost, the flash is too
far away and the chance of a perfect shot is lost.
What else? A good quality flash, ‘dedicated’ to your SLR
is the best, and another reason why I use all the same brand equipment, or top
of the line gear that adapts to my camera system. (My flash is an old Metz 45
CT1, which is still perfect today - despite the scratches.)
Other equipment includes filters, and I will publish a
separate article on this subject - but do use adaptor rings to bring all the
filters to the same size. With my system, all lenses are brought up to 62 mm at
the outside. Again a cost saving as you do not need one polarizer for the
standard lens and another for the telephoto.
Another important item is a good quality tripod. An often
ignored reason for having and using one is that it slows down your photography
and makes you think about composition and just what it is that you are trying to
capture. Not just a grab and gone to the next shot situation. I will write about
tripods in the future too.
What else do I carry? Spare film, colour and B&W. “Gaffer” tape, a
piece of flash cable around 5 metres long and a mini-tripod that can sit on
tables or other surfaces. Very handy at night. Oh yes, almost forgot - a shower
cap (the kind you get in hotels) to cover the camera if I am caught in the rain!
Recipes from Rattana: Fish- UK style
If there is a national dish for the UK, then Fish and Chips
has to be a prime contender. However, there are some little UK trade secrets in
cooking the humble fish, and this week I reveal them. The principal one is
beer! This is used in a beer batter, and clever cooks will naturally drink the
leftovers while cooking the chips!
Ingredients Serves 4
Potatoes 700 gms
Fish fillets (firm white) 1 kg
Vegetable oil for frying 2 litres
Malt vinegar (for serving)
All-purpose flour 1 cup
Salt 1/2 tspn
Pepper 1/4 tspn
Eggs, separated 2
Beer (lager or pilsner) 1 cup
In a large bowl, mix the flour, salt and pepper. Add the egg
yolks and beer and stir to combine. Beat the egg whites to moderately stiff
peaks and fold into the batter.
Trim the fish fillets to uniform size. Dip the fish into the
batter, coating them well and allowing the excess to drain off.
Heat about 5 cms of oil to 375ฐF in a deep-fryer. Now
add 1-2 pieces of fish to the hot oil and fry until crisp and golden brown
usually around 5-7 minutes, gently turning the pieces once or twice as they
Drain on paper towels and fry the remaining fish in the same
way. Arrange the fish on individual plates, each with lemon wedges and malt
vinegar and tartar sauce as condiments.
Wine Column: Katnook: Cream of Coonawarra’s Crop
By Ranjith Chandrasiri
Few other areas in Australia can rival the complexity and
richness of Coonawarra’s soil and climate. Four and a half hours drive
from either Adelaide or Melbourne, this “odd” piece of land - widely
known as the cigar-shaped Terra Rossa, owns a completely level soil which is
distinctively red in colour and crumbly to touch. Forty-five centimetres
under the crimson soil rests a bed of pure limestone with a constant table
of pure water flowing just 1.5 metres beneath it.
quality control: senior and chief Katnook Winemakers Wayne Stehbens (right)
and Tony Milanowski assessing recently fermented juice.
of passionate labour: the Jimmy Watson Trophy, Australia’s most coveted
award for wine was awarded to the Katnook Estate in 1998 for their Prodigy
A lush climate comparable to the Mediterranean makes for
long but cool hours of sunshine during the ripening period which allows
grapes to develop intense flavours while retaining good acid levels.
Coonawarra’s overall climate; lengthy warm summers, cool autumns, and cold
winters is often compared to that of Bordeaux’s.
These idyllic growing conditions have been utilized
mainly for fruit growing as early as the 1860s. In fact, no other land could
better suit this purpose. The Scottish entrepreneur John Riddoch was fully
aware of this when he began buying land at Katnook - aboriginal for “fat
land” - after purchasing other properties nearby. In 1890, Riddoch formed
the Coonawarra Fruit Colony, established administration headquarters in
Katnook, and sold off the land in ten-acre blocks.
Riddoch planted 140 acres of his own vines. His first
vintage in 1895 was a low key event in a nearby nursery shed. His second,
with a much greater volume of fruit and attended by established winemaker
William Salter was made in his woolshed at Katnook a year after. By the
1900s, the area was already producing large quantities of an unfamiliar kind
of wine which was largely Shiraz, low in alcohol but brisk and fruity.
In 1967, the Yunghanns family purchased the Katnook and
in 1969 planted their first vines. The family renamed the property Katnook
Estate and formed the Coonawarra Machinery Company, known today as the
Wingara Wine Group. In 1980 production of wine under both the Riddoch and
Katnook Estate labels commenced in the Katnook woolshed just as John Riddoch
did 84 years earlier.
Katnook Estate’s limited released wines today are
widely known for their great intensity of flavour, made with fastidious
attention to detail. Grown in the enviable Terra Rossa area, the wines
possess concentrated flavours, fine balance and integrity of regional
varietal character - hallmarks of the estate’s range of Chardonnay Brut,
Riesling, Chardonnay, Sauvignon Blanc, Merlot, Cabernet Sauvignon, and
Shiraz. Katnook Estate wines’ excellence and superlative quality have not
“Few Australian cabernets better Katnook for purity of
varietal character, style and potential longevity,” said wine expert Ralph
Kyte Powell. More so, Katnook’s 1999 Cabernet Sauvignon vintage was
praised as “Possibly the finest non-flagship cabernet in the country” by
the Australian Gourmet Traveller wine panel June/July 2002. This same
vintage was awarded “Blue-Gold Medal” and considered among the “Top
100 Wines” at last year’s Sydney International Wine Show, and awarded
“Silver Medal” at the London Wine Challenge 2002.
Previous vintages of Katnook’s Cabernet Sauvignon were
equally successful. The 1998 and 1997 were awarded “Silver Medal”,
International Wine Challenge 2000 and “Gold Medal” and “Jimmy Watson
Trophy” 1998 runner up respectively.
Another favourite is the Katnook Estate Chardonnay with a
1999 vintage that earned a five-star rating in the Decanter UK in June, 2002
for being “... intensely complex and layered ...” This vintage was
likewise awarded “Blue-Gold Medal” at the Sydney International Wine Show
2001. The 1997 vintage was highly regarded as well.
Ranjith Chandrasiri is the resident manager of Royal Cliff Grand and
founder of the Royal Cliff Wine Club, Royal Cliff Beach Resort, Pattaya,
Thailand. Email: [email protected] or [email protected] Website: