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Family Money

Personal Directions

The Doctor's Consultation by Dr. Iain Corness

Agony Column

Camera Class by Snapshot

Family Money: Clarifying the Currencies’ Conundrum - Part 1

By Leslie Wright,
Managing director of Westminster Portfolio Services (Thailand) Ltd.

Many people avidly follow the exchange rates wondering whether to arrange a remittance now or wait till next week, in the hopes that their base currency will have strengthened in the meantime, or the local currency weakened. They hope to make a windfall profit on fluctuating exchange rates. Indeed, many investors follow rising and falling currency movements as if they were the be-all and end-all of investing.

In fact, trying to second-guess currency movements is pure speculation, and more suitable for the likes of George Soros than Joe Average.

The Universal
Currency Marker

People behave as if currency movements happened by themselves, but of course they don’t. Nor are they fixed like stars in the sky. But they do move around an arbitrary fixed point, which I like to call the ‘Universal Currency Marker’ or ‘UCM’ for short – rather like the stars seem to revolve around the Pole Star.

But Polaris doesn’t always appear to be in the same place either, due to the slight wobble in the earth’s axis, called the precession of the equinoxes, which brings the imaginary line through the earth’s poles back in line with the same point every 10,000 years or so. Thus a couple of decades ago we entered the Age of Aquarius whereby at each equinox that imaginary line is now pointing towards the constellation of Aquarius, and will do so for quite a few years to come.

But this article is about currency movements not astronomical fluctuations – although sometimes currency fluctuations can seem astronomical!

When it comes to currencies moving up or down against each other, one should really be thinking of them moving against this arbitrary fixed point – the UCM – whereby each currency moves independently of all the others against the absolute – the UCM – and only seems to be moving against other currencies.

Thus if Sterling and the US dollar were both strengthening at the same time, it is highly unlikely that they would both rise at the same rate. Hence Sterling might seem to be strengthening against the dollar while the dollar would seem to be weakening (slightly) against Sterling. Only by comparing the movements against a fixed point (the UCM) can you see what is really happening.

Similarly with smaller more volatile currencies such as the Thai Baht. If the dollar were weakening in absolute terms, the Baht may not have moved, but would appear to have strengthened relative to the dollar. Similarly, if the dollar were moving up against Sterling, but not as much as Sterling against, say the Euro, the Baht’s movements – if any – would be magnified. It all gets very complex when there are more than two currencies involved, and why trying to second-guess currency movements is rated as Risk Level 7 on the standard 1~10 risk scale (where 1 is cash in the bank in your base currency; 5 is emerging market equities – e.g., Thailand, Korea, Mexico, Argentina – and 10 is setting up your own business).

Volatile & Risky

So trying to second-guess which way any particular currency is going to move is fraught with danger inasmuch as currencies are both volatile and, as described above, risky to play with.

They are also subject to political and market manipulations which are beyond the control of the average investor. A government may wish for the local currency to strengthen to ease its international balance of payments; or it may wish quite the opposite depending on what currency the debt is in (dollars for example).

Rumours can be put out about government moves to prevent speculation on the local currency, which may have the effect of strengthening the currency at just the right time.

Then market forces come into play as well, forcing the currency up or down depending on the tide of sentiment for strength or weakness. Other currencies are strengthening or weakening all at the same time, but relative to the UCM, although it seems to the average observer that they’re moving against each other rather than to an arbitrary fixed marker.

Your base and
spending currencies

You should therefore be thinking not of speculating but safety when it comes to currencies. Basically, you should be thinking in terms of just one or two currencies: the money you earn or get paid in (your base currency) and the money you spend – e.g., Sterling and Thai Baht. Any third currency should be pegged relative to one or the other of these, not regarded as an entity moving on its own (although in reality it is, in relation to the UCM.) Following – or trying to follow – the daily fluctuations of three or four currencies is a game for high-risk speculators and currency hedge fund operators who hope to make money by arbitrage on tiny differences in currency exchange rates in different locales noted to the third place of decimals. Not a game for second-guessing by amateurs! If you guess right you can make a nice windfall profit; get it wrong and you can lose a small fortune.

Next week we shall examine how currency movements affect your investment funds – and why it is a fallacious argument that you should have your investments denominated in a weak currency in the hopes of a windfall profit if and when that currency strengthens against your base currency. This unsound theory is behind many investors’ thinking when choosing which currency to denominate their funds or portfolios in.


Personal Directions: Change Your Negative Self- Conceptions to Improve Your Situation

By Christina Dodd,
founder and managing director of Asia Training Associates

I have in the past drawn on the works of the Sri Aurobindo – a great Indian visionary whose words cater as much to mysticism as management theory. I always find it quite amazing when I get emails saying that I have “gone off the track” – but the reality is that by utilizing such other resources as this that I am giving you an example – practical – of thinking outside the box. Today, I have modified a very long article and put it into a perspective from which we can all draw insight from whatever perspective you are reading it.

Today I will start with a fable:

There was a client that a consultant was doing work for. The client seemed difficult and demanding to the consultant, though true to his needs. As a result the consultant developed the idea in his mind and emotions that the client was a difficult and demanding person. From that point forward that client did in fact appear to act in a difficult and demanding way to the consultant.

On the surface it seems like the consultant had the right perspective of the situation. Yet, if we look a little deeper, we will see that the consultant’s view was false. He had clung to his own false self-conception. The more he believed it, the more it came about; i.e. the more the client acted as the consultant perceived the client would act. On the other hand if he shed that negative conception, the client would have stopped such behavior. It is a subtle wonder truth of life.

How can we prove that in this case? Well it turns out there is a happy ending to this story. The consultant was advised to and, in fact, did give up his negative self-conception of the client. He decided not to view the client in an adversarial way. He decided to shed any notion, whether a thought or a feeling, that the client was in any way difficult to deal with. When the next meeting took place between the two, the consultant was quite surprised when the client exhibited completely the opposite behavior! The client was quite mellow, more relaxed, easy to work with, even open-minded and fair. The interactions between the two were so pleasant that they began to talk of other social-related things related issues at work. The situation had been completely reversed. The lesson was simple; give up your negative self-conception, and life will respond positively in kind. It is a miraculous wonder of life that never fails.

On the world scene a perfect example of negative self-conception involves the two leaders at odds in the Middle East crisis. Their negative self-conception of one another resulted in the other person taking actions that precisely mirror the pre-conception of the other leader. Again, despite any difficulties they might have had in the past, if they were to give up their negative self-conceptions of one another, life world respond positively in accordance with their higher conception. The other person would have taken actions or otherwise acted in a way that reflect the new higher conception. (By the way sometimes it’s better to have NO self-conception of the other; enabling greater possibilities in the field of life.)

One other example. A woman had a pushy, gossipy, and insensitive boss. The more she saw this behaviour; the more she felt that was just his nature and that was how he would always act. One day she decided to give up this negative conception. The next time they were together she was amazed when the boss suddenly turned completely sweet in his behavior, showing concern about her work conditions, and even began to act in a carefree and playful manner, so at odds with his seemingly normal rigid nature. The reversal seemed like a miracle to her.

This connection between the inner and the outer is as result of the underlying unity of consciousness that exists in the universe; including between our inner beliefs and conceptions and the outer world that manifests. When we change the inner, life on the outside tends to respond positively in kind, in ways that mirror our higher inner views, understandings, attitudes, and conceptions.

So we must each ask ourselves what are the negative self-conceptions of others that we must shed?

Without too much difficulty each of us should easily be able to come up with a few good ones! Once we have identified them, we need to make a little experiment. We need to give up our predilection, and then see what happens; how “life responds” to our changed view. It will seem like a miracle when the other person suddenly becomes very different than our original self-conception. To do this well we need to shed not only our negative thought about the person, but also and especially the negative feelings involved. That will the added power and support to our endeavor at reversal.

By the way, this same idea of shedding one’s negative self-conception applies just as much to situations and circumstances we are involved with or relate to as they do with other people. Give up the negative self-conception, and watch life respond in kind!

So what are we waiting for? Let’s start the experiment now. You may be quite stunned by the instantaneous benefit that results from your effort.

A few weeks ago I gave you some homework – here is some more!

Before you go to sleep tonight make a commitment to yourself – in the very quiet and deep chambers of your mind – to wake up in the morning with an open and free view of someone around you whom you have always seen in a negative light. It could be anyone in your life. It could be the man who presses the elevator button, it could be the girl in the convenience store, it could be your husband or it could be your wife. Make a clear picture and imprint in your mind that today you will think of only the good things about that person. You will be regarding them for the very first time as if you are opening the door to a room that has been locked and sealed off for an eternity. Look only for the good in them – try to see them as if you are seeing them for the very first time. Then begin to feel the results – but give this your utmost and dedicated commitment!

For more information as to how we at Asia Training Associates can help improve your personal or corporate communications, contact me by email at [email protected] siatrainingassociates.com - and until next time, have a great week!


The Doctor's Consultation

by Dr. Iain Corness

One of our readers wrote from Chiang Mai with some queries regarding antibiotics, the compounds that revolutionized the delivery of medicine and lowered death rates all over the world. However, like all powerful things, a degree of caution must be used.

She wrote, “My concern is multiple about antibiotic use. First of all, there is general ‘folk wisdom’ that if you have a GI upset for more than a couple of days you should take an antibiotic even if the culture reveals that the cause is not bacterial. I can’t tell you how many times I’ve been told that and so has my husband.

“Secondly, the local physicians tend to prescribe antibiotics for everything! And sometimes more than one type for a given illness. You have a cold? Six antibiotics. Well, not quite, of course, but almost.

“Third, antibiotics act almost immediately. Take one, you’re well.

“My husband was also advised to take Cipro as a preventive whenever he travels.

“Another friend was advised by her tour company to bring Cipro with her from the U.S. ‘in case of illness’. What illness, they didn’t say.

“Finally, most folks quit taking the antibiotic as soon as their symptoms are relieved.

“Could Dr. Iain explain a couple of things for lay readers:

“1. How do antibiotic-resistant strains of bacteria develop?

“2. Why you should take antibiotics only for bacterial infections, not viral infections, and how to tell the difference.

“3. Should you take strong antibiotics such as Cipro as a prophylactic measure?

“4. Why you should take all of the prescription and not discontinue it as soon as your symptoms are alleviated.”

First off, thank you for your concerns, and concerned you should be! Dealing with your questions - in order:

1. Antibiotic resistant strains develop when successive colonies of a bacterium grow in a medium where small amounts of antibiotic are evident. The concentration is not enough to kill the germs, so the successive families grow up with resistance.

2. A virus is not checked by antibiotics, only bacteria. It is difficult for non-medically trained people to know if their ailment is bacterial or viral. It may even require blood tests to show this.

3. You should not take strong antibiotics such as Cipro(floxacin) as a prophylactic measure. All that you are doing is promoting antibiotic resistance.

4. The reason that you should take the entire course, is that until you have knocked every one of the blighters for six, you can end up only partially eradicating them and producing an antibiotic resistance, as per question number 1.

As you can see, the end result of indiscriminate antibiotic use is to produce ‘superbugs’ that have become resistant. This is why we began with penicillin that we thought would cure everything, but quickly the bugs developed resistance. So then we ‘invented’ amoxycillin, but again resistance appeared. So we added clavulanic acid to the amoxycillin, but the same thing happened again. So we invented bigger and stronger antibiotics - but got bigger and stronger bugs.

And that is where we are at present - growing antibiotic resistant bugs. Non-medical advice to take Ciprofloxacin, for example, as a preventative is totally wrong. Antibiotics should be taken for specific bacterial infections. The antibiotic for one germ in not necessarily the one that is used for another infecting organism.

While I know that you can buy antibiotics over the counter in this country, this is not good medical policy, in my opinion.


Agony Column

Dear Hillary,
We are often in Thailand but the main thing that completely confuses me is the subject of tipping - when and how much? If the establishment charges a “service” charge, should you tip as well? What do you do, as someone living there, for example? I believe that the wages are not high for most of the people in bars and restaurants and they need the tips in addition to their wages, but I do not want to throw money away either? What’s your tip about tipping?
Penny

Dear Penny,
The first important consideration is Service Charge or no Service Charge. If the establishment adds on 10 percent (the usual amount), then as far as Hillary is concerned - that’s the tip. There are some places that no doubt pocket the Service Charge, but that’s not anything of your doing, nor can you change it. That is something between the employees and the owners to work out. However, if Hillary feels that the waiter or service provider has gone well beyond that which could be expected, then I reward that person with a little extra something, irrespective of whether there is a service charge. You know the sort of things - a little fawning, groveling and lots of compliments. In an establishment that has no standard add on Service Charge, then it really is up to you. Small change left over or up to 10 percent is quite normal. Thai service people are grateful for anything you leave them. It all adds up by the end of the day, but look after your pennies, Penny!
Dear Hillary,
You are often telling people that they should learn Thai if they are living here for some time. I have retired here, but at my age (70), I find it very difficult to learn a new language at my time in life. Is there any quick way of doing this, or do you have any special tips for people trying to learn the Thai language?
Linguistic Len

Dear Linguistic Len,
If it’s not tips about tipping, it’s tips about talking (Thai). What next? Len, Petal, I know it is a problem I really do, but if you are retired and not working, then there is one quick (but none of them are easy) way to learn. It’s called Total Immersion and Hillary’s language teacher friends all tell me it is the quickest. Go and stay in a village up country in a little local hotel where they don’t speak English, so you are in the situation that you have to speak Thai or starve! I am told that in six weeks you will have picked up reasonable Thai and you are on your way to complete mastery of the tongue. You will also probably have picked up a small language teacher. Lots of luck and “Chok dee, Kha”.
Dear Hillary,
Some days when I read your column you really can be terribly bitchy. Why are you like this? These people are only asking for help. They don’t need you to bark at them.
Charles

Dear Charles,
Hillary get bitchy? What a terrible thing to say, Charlie boy! But I do get bitchy when I have to answer ridiculous obvious questions like yours. I agree though, you certainly do need help, but I doubt if you’d like the rubber room and the funny sleeveless tight jacket. Best to steer clear of me till next week.
Dear Hillary,
I am 17 years old and have just arrived from the great land 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?

Adam
Dear Adam,
You certainly did come down in the last shower, didn’t you, my Petal. That line of work is very hazardous for foreigners in this country, and experience in asking someone if they’d like some ‘fries to go with that’ is just not good enough, I’m afraid. I also think the romance will be a “to go” item too. Never mind, you’ll soon be old enough to drink in Australia as well. Better luck next year.
Dear Hillary,
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?
Headache

Dear Headache,
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.


Camera Class: Studio Portraits - without a studio!

by Harry Flashman

Taking portraits is fun for two reasons. When you have produced a great shot it gives the photographer a lot of personal satisfaction. The person whose portrait it is will also enjoy the end result. A win-win situation.

However, and I’ve said this before - great pictures don’t just happen. Great pictures are ‘made’. So let’s look at some pro tricks that can be adapted for use by the amateur, who does not have banks of floods, hairlights, backlights, cycloramas and the like.

To start with, let’s get some of the techo bits out of the way. You should choose a lens of around 100 mm focal length (135 mm is my preferred “portrait” lens) or set your zoom to around that focal length. If you are using a wide angle lens (anything numerically less than 50 mm), then the end result will be disappointing, no matter what you do. Unless you like making people look distorted with big noses!

The second important technical bit is to set your lens aperture to around f 5.6. At that aperture you will get the face in focus and the background will gently melt away - provided that you actually do focus on the eyes!

Perhaps a word or two about focus here as it is very important in portrait photos. I always use a split image focus screen and focus on the lower eyelid. This makes sure that the eyes will be exactly in focus. If you are using Autofocus (AF), then again you should make sure you focus on the eyes and use the ‘focus lock’ function so you will not lose it.

Next item is the pose itself. For some reason known only to the village headmen, Thai people like to stand rigidly to attention when having their photos taken. Do not do it! Please, please do not even have your subject sitting directly square on to the camera. This is not a passport photograph we are going to take. It is to be a flattering portrait.

Here’s what to do. Sit the subject in a chair and turn the chair at 45 degrees to the camera, so the subject is not facing directly at the photographer. Now when you want to take the shot you get the subject to slowly look towards you and take the shot that way. You can also get a shot with them looking away from you.

Now let’s get down to the most important part - the lighting. We need to do two things with our lighting. Firstly light the face and secondly light the hair. Now the average weekend photographer does not have studio lights and probably has an on-camera flash to work with. Not to worry, we can get over all this! The answer is a mirror and a large piece of black velvet.

Take the black velvet first. You will need a piece around 2 metres square and the idea is to place the velvet close to one side of the subject, but not actually in the photograph. You get as close as possible and the black will absorb much of the light and allow no reflection of light back onto that side of the subject’s face. Hang the velvet over a clothes drying stand or similar to make life easy for yourself.

Now the mirror. This device will give you the power of having a second light source for no cost! Now since you are firing light into the subject from the top of your camera, you position the mirror at about 30-45 degrees tilted downwards, placed behind and to the side of the subject, pointing basically at the sitters ear. The side you choose is the side opposite the black velvet. Again, you must make sure that the mirror is not in the viewfinder.

You now have a primary light source (the on-camera flash), a secondary light source and a light absorber to give a gradation of light across the subject’s face.

Experiment with the positions of each, but you will be surprised at how much life this will give your portraits. Takes a little setting up, but it is worth it.