Mbmg International

[Naam]

"we should have a long chat about that sometime - with respect I totally disagree. By starting from liqudity, currency and REAL risk (i.e. what size of drawdown can you withstand?, for what duration? etc) you can create a clear and meaningful risk profile. From there you can decide whether a matrix of assets fits within that or not. The key though is understanding asset risk. It's my personal opinion that too many professional and personal investors don't - for instance what's the risk with a stock - 100% loss. We all know that but how many investors factor that in. The risk that all stocks in the world can go bankrupt at once is such a negligible fat tail that it probably isn't reasonable to assume that a diversified stock portfolio has 100% risk but it's probably closer to that than the 20% V-a-R that many portfolios assume."

Gambles,

there are three self-established commandments i follow:

1. "don't touch stocks, not even with a long barge pole!"

2. "don't touch stocks, not even if they look extremely tempting!"

3. "if for unexplicable resons you seriously consider to buy any stock, sit quietly in a corner and wait till the attack subsides!"

my reasons are rather simple. i am a planner. all my life i have been a planner who plans well ahead. not for a year or two but for many more years. looking back i am very satisfied with the results of my planning. but i can't plan any return on stocks; neither dividends nor capital gains. i consider investing in stocks a gamble. if i want to gamble i fly to Macau or Vegas and put my money on red or black.

for my planning i need rather fixed parameters. these parameters are available when buying bonds. the only risk i run is that the debtor defaults. in case of a default or bankruptcy, assuming i did not do my homework and did not sell in time with an acceptable loss, i still hold the "recovery value" which is virtually never zero. i am getting paid that recovery value or in case i accept a restucturing i still own a tangible value. in a bankruptcy a shareholder's value goes to zero, nada, rien, nothing, mafeesh, nichts, niente, muffat, zilch. however, i admit that bonds do not have the chance to achieve, like stocks, huge capital gains except during a crisis (which occurs once or twice in a decade). in this context i'd like to mention that i am not always a conservative investor but take sometimes rather high but calculated risks when i consider the potential reward adequate.

and please don't tell me "in the long run", because in the long run we are all dead. those investors who bought 'Nikkei'-stocks in 1989 are still waiting for "the long run" to come. the same applies to the majority of investors who bought stocks at markets worldwide during the bubble ~10 years ago.

[Gambles]

"we should have a long chat about that sometime - with respect I totally disagree. By starting from liqudity, currency and REAL risk (i.e. what size of drawdown can you withstand?, for what duration? etc) you can create a clear and meaningful risk profile. From there you can decide whether a matrix of assets fits within that or not. The key though is understanding asset risk. It's my personal opinion that too many professional and personal investors don't - for instance what's the risk with a stock - 100% loss. We all know that but how many investors factor that in. The risk that all stocks in the world can go bankrupt at once is such a negligible fat tail that it probably isn't reasonable to assume that a diversified stock portfolio has 100% risk but it's probably closer to that than the 20% V-a-R that many portfolios assume."

Gambles,

there are three self-established commandments i follow:

1. "don't touch stocks, not even with a long barge pole!"

2. "don't touch stocks, not even if they look extremely tempting!"

3. "if for unexplicable resons you seriously consider to buy any stock, sit quietly in a corner and wait till the attack subsides!"

my reasons are rather simple. i am a planner. all my life i have been a planner who plans well ahead. not for a year or two but for many more years. looking back i am very satisfied with the results of my planning. but i can't plan any return on stocks; neither dividends nor capital gains. i consider investing in stocks a gamble. if i want to gamble i fly to Macau or Vegas and put my money on red or black.

for my planning i need rather fixed parameters. these parameters are available when buying bonds. the only risk i run is that the debtor defaults. in case of a default or bankruptcy, assuming i did not do my homework and did not sell in time with an acceptable loss, i still hold the "recovery value" which is virtually never zero. i am getting paid that recovery value or in case i accept a restucturing i still own a tangible value. in a bankruptcy a shareholder's value goes to zero, nada, rien, nothing, mafeesh, nichts, niente, muffat, zilch. however, i admit that bonds do not have the chance to achieve, like stocks, huge capital gains except during a crisis (which occurs once or twice in a decade). in this context i'd like to mention that i am not always a conservative investor but take sometimes rather high but calculated risks when i consider the potential reward adequate.

and please don't tell me "in the long run", because in the long run we are all dead. those investors who bought 'Nikkei'-stocks in 1989 are still waiting for "the long run" to come. the same applies to the majority of investors who bought stocks at markets worldwide during the bubble ~10 years ago.

Naam,

You have a great remarkable insight and a far smarter take on the dangers of stocks than many professional advisors and personal investors but even I feel that you err a little too far on the dark side - stocks are an asset class with a particular volatility, drawdown risk and, by way of return upside. Too many investors are blinded by the upside and don't see the risks. I fear that you might be blinded by the risks. But opportunity cost loss is rarely quite as serious as actual loss - especially in the long term (you forgot about those investors who bought the Dow in 1929 and were flat 45 years later!)

cheers,

Paul

Edited February 23, 2010 by Gambles

[Naam]

Naam,

You have a great remarkable insight and a far smarter take on the dangers of stocks than many professional advisors and personal investors but even I feel that you err a little too far on the dark side - stocks are an asset class with a particular volatility, drawdown risk and, by way of return upside. Too many investors are blinded by the upside and don't see the risks. I fear that you might be blinded by the risks. But opportunity cost loss is rarely quite as serious as actual loss - especially in the long term (you forgot about those investors who bought the Dow in 1929 and were flat 45 years later!)

cheers,

Paul

it's not "risk" i am concerned Paul and repeat that my main concern is about missing parameters and factors which i need for extrapolations, the latter being the core basis of my evaluations. stocks are driven up and down by investors' sentiment and voodoo like technical analysis and even by theories which Signore Fibonacci aired 800 years ago. let me make it clear that i don't deny that voodoo works. it is a fact that many investors believe in voodoo, respectively the voodoo presented by anal-ysts, and therefore the results are in many cases positive. stock investors react irrational as stocks can double or halved in value within a relatively short period without the company doubling or losing 50% of its business. it's all about expectations and i call it gambling for gains in the future based on assumptions. my professional background demands many facts and accepts only few assumptions.

to sum it up:

-a stock investor assumes either capital gains or a steady income by dividend. both are assumptions, he knows nothing.

-a bond investor knows exactly the value of his coupons at established payment dates and he knows the value of his asset at maturity. his only assumption is that the company will not default.

[Gambles]

Naam,

You have a great remarkable insight and a far smarter take on the dangers of stocks than many professional advisors and personal investors but even I feel that you err a little too far on the dark side - stocks are an asset class with a particular volatility, drawdown risk and, by way of return upside. Too many investors are blinded by the upside and don't see the risks. I fear that you might be blinded by the risks. But opportunity cost loss is rarely quite as serious as actual loss - especially in the long term (you forgot about those investors who bought the Dow in 1929 and were flat 45 years later!)

cheers,

Paul

it's not "risk" i am concerned Paul and repeat that my main concern is about missing parameters and factors which i need for extrapolations, the latter being the core basis of my evaluations. stocks are driven up and down by investors' sentiment and voodoo like technical analysis and even by theories which Signore Fibonacci aired 800 years ago. let me make it clear that i don't deny that voodoo works. it is a fact that many investors believe in voodoo, respectively the voodoo presented by anal-ysts, and therefore the results are in many cases positive. stock investors react irrational as stocks can double or halved in value within a relatively short period without the company doubling or losing 50% of its business. it's all about expectations and i call it gambling for gains in the future based on assumptions. my professional background demands many facts and accepts only few assumptions.

to sum it up:

-a stock investor assumes either capital gains or a steady income by dividend. both are assumptions, he knows nothing.

-a bond investor knows exactly the value of his coupons at established payment dates and he knows the value of his asset at maturity. his only assumption is that the company will not default.

Naam, Please understand that I'm no blind equityphile but it's equally blind not to recognise that there are times when it's highly probable that the market will compensate for greater the lack of certainty in equity returns (e.g. dividends = similar rate to bond coupons and expectations of capital gains are high). Yes, that may not be for you and yes this is still a calculated risk (rather than a gamble) but at the right time for the right investor then equities may be a part of the solution of creating a diversified portfolio. Overall though I do think that too many investors overstate how high the equity premium actually is over bond investing and there are a lot of investors who would do well to become better acquainted with the bond markets. When comparing chalk and cheese the true test should be suitability for the immediate purpose - too many professional and private investors end up either eating chalk or trying to write with cheese.

Rgds,

Paul

[Naam]

"Naam, Please understand that I'm no blind equityphile but it's equally blind not to recognise that there are times when it's highly probable that the market will compensate for greater the lack of certainty in equity returns (e.g. dividends = similar rate to bond coupons and expectations of capital gains are high). Yes, that may not be for you and yes this is still a calculated risk (rather than a gamble) but at the right time for the right investor then equities may be a part of the solution of creating a diversified portfolio."

highly probable = assumption

may be =assumption

right time for the right investor = assumption

summary: a bird in the hand is better than two birds in a bush.

all afore-mentioned of course in my [not so] humble personal opion.

[Gambles]

"Naam, Please understand that I'm no blind equityphile but it's equally blind not to recognise that there are times when it's highly probable that the market will compensate for greater the lack of certainty in equity returns (e.g. dividends = similar rate to bond coupons and expectations of capital gains are high). Yes, that may not be for you and yes this is still a calculated risk (rather than a gamble) but at the right time for the right investor then equities may be a part of the solution of creating a diversified portfolio."

highly probable = assumption

may be =assumption

right time for the right investor = assumption

summary: a bird in the hand is better than two birds in a bush.

all afore-mentioned of course in my [not so] humble personal opion.

Dear Naam,

sometimes yes, sometimes no...depends on the condition of the bird-in-hand, how far away the bush is, how well you're armed and your bird-catching abilities. One problem is that most professional and private investors at times overstate their bird-catching abilities......

I totally respect your [not so] humble personal opinions, but I just feel that there is a bigger picture as well. This is an interesting and important topic but I'm feeling so exhausted on this now and it's getting late so I'll happily let you have the last word and I'll try not to answer back !

all the best,

Paul

[onnut]

Has anyone any experience with this firm of financial advisors based in Bangkok and Pattaya ?

I only have good things to say about Phil from MBMG.

Cheers

likewise! But, Phil has set up on his own now. He has an office in Silom, or did when I last spoke with him.

Phil did my health insurance and looked after me very well. Even brought in a few beers when I was stuck in the BNH for a week.

[eljeque]

(you forgot about those investors who bought the Dow in 1929 and were flat 45 years later!)

25 years

The MGMB supporters here from the early part of this thread have the following number of posts

First Supporter 13,

Second Supporter 2,

Third Supporter 2054,

Fourth Supporter 1,

Edited February 25, 2010 by eljeque

[astral]

I was very unhappy with the way these people dealt with my account.

Firstly, they hi-jacked it from the personal broker who I started with.

Then they dumped me in some managed fund and did nothing else.

I am now back with the personal broker and things are on track again.

[Gambles]

I was very unhappy with the way these people dealt with my account.

Firstly, they hi-jacked it from the personal broker who I started with.

Then they dumped me in some managed fund and did nothing else.

I am now back with the personal broker and things are on track again.

Dear Astral,

I'm extremely sorry to hear that. Every successful business needs to heed the views of all of its clients so I'm very sorry that you have had any dissatisfaction and I've sent you a detailed PM about this as I believe that this is the appropriate way for us to discuss this and to achieve a full resolution of all concerns and issues that you have.

It seems clear to me that while you may have mandated your broker to obtain a particular service from us we declined to do so as we are not and never have been equity managers. We prefer to delegate that specialist expertise to those who have far better skills than we do in this area. Subsequently we were given the go ahead to set up and advise a managed portfolio in the style in which we specialise. This portfolio was actively managed and performed to specification so well that its linked core portfolios have been recognised by Thomson Reuters Lipper as the best performing investments of their kind on a number of occasions.

We will not accept mandates for individual equity management. We do not provide individual equity management as we made clear to your broker. I'm sorry that we don't provide this service but we prefer to stick to what we know and if we can't help we say so rather than trying to do what we're not good at. We provide managed portfolios based around asset allocation as we made clear to your broker. We'd rather do a limited number of things exceptionally well than a wide range of mediocre services.

However from what you say this was not the service that you required.

I'm sure that your broker was acting in good faith but that there have been unfortunate and inadvertent misunderstandings between yourself and your advisor.

It's impossible for us or anyone else to hi-jack an account. There is a clear documentary trail from yourself to your broker to us that I'd be very happy to share with you.

Happily it appears that these haven't upset your relationship with your broker and that he can now offer all the services that you do require. We still do not however provide individual equity management and would still have to respectfully decline such a mandate again today.

Very best regards, Paul

[wordchild]

I was very unhappy with the way these people dealt with my account.

Firstly, they hi-jacked it from the personal broker who I started with.

Then they dumped me in some managed fund and did nothing else.

I am now back with the personal broker and things are on track again.

Doesnt sound like they made much effort to get to know their new client!

I wonder how much commision they managed to charge during your brief time with them.

There maybe some good ones, but the evidence i have seen (from friends and colleagues ),makes me believe the best advice is to stay well clear of Thai based advisors.

[Gambles]

I was very unhappy with the way these people dealt with my account.

Firstly, they hi-jacked it from the personal broker who I started with.

Then they dumped me in some managed fund and did nothing else.

I am now back with the personal broker and things are on track again.

Doesnt sound like they made much effort to get to know their new client!

I wonder how much commision they managed to charge during your brief time with them.

There maybe some good ones, but the evidence i have seen (from friends and colleagues ),makes me believe the best advice is to stay well clear of Thai based advisors.

Thanks for that informed comment.

Actually, in this arrangement the client primarily deal with the broker and the broker with ourselves. This was the first time that we had entered into such an arrangement and I believe the last. We believed that we were helping both the client and the broker, both of whom I continue to respect, but the communication difficulties of 3rd party involvement mean that this form of execution service isn't something that we'd want to pursue. Frankly it wasn't a good experience for us although it was interesting and I suppose flattering for us to be asked to perform adminsitration services for a small, new broker but this isn't an arrangement that we would accept today.

The actual commission that we retained for this would have been zero as effectively the broker paid us a fee for our support services.

There are good and bad advisors the world over. The real key should be to improve standards everywhere as frankly this is and needs to remain a vitally important added value service for almost all individuals.

Have a good weekend,

Paul

[wordchild]

I was very unhappy with the way these people dealt with my account.

Firstly, they hi-jacked it from the personal broker who I started with.

Then they dumped me in some managed fund and did nothing else.

I am now back with the personal broker and things are on track again.

Doesnt sound like they made much effort to get to know their new client!

I wonder how much commision they managed to charge during your brief time with them.

There maybe some good ones, but the evidence i have seen (from friends and colleagues ),makes me believe the best advice is to stay well clear of Thai based advisors.

Thanks for that informed comment.

Actually, in this arrangement the client primarily deal with the broker and the broker with ourselves. This was the first time that we had entered into such an arrangement and I believe the last. We believed that we were helping both the client and the broker, both of whom I continue to respect, but the communication difficulties of 3rd party involvement mean that this form of execution service isn't something that we'd want to pursue. Frankly it wasn't a good experience for us although it was interesting and I suppose flattering for us to be asked to perform adminsitration services for a small, new broker but this isn't an arrangement that we would accept today.

The actual commission that we retained for this would have been zero as effectively the broker paid us a fee for our support services.

There are good and bad advisors the world over. The real key should be to improve standards everywhere as frankly this is and needs to remain a vitally important added value service for almost all individuals.

Have a good weekend,

Paul

would love to hear your former clients version of your story!

[Gambles]

I was very unhappy with the way these people dealt with my account.

Firstly, they hi-jacked it from the personal broker who I started with.

Then they dumped me in some managed fund and did nothing else.

I am now back with the personal broker and things are on track again.

Doesnt sound like they made much effort to get to know their new client!

I wonder how much commision they managed to charge during your brief time with them.

There maybe some good ones, but the evidence i have seen (from friends and colleagues ),makes me believe the best advice is to stay well clear of Thai based advisors.

Thanks for that informed comment.

Actually, in this arrangement the client primarily deal with the broker and the broker with ourselves. This was the first time that we had entered into such an arrangement and I believe the last. We believed that we were helping both the client and the broker, both of whom I continue to respect, but the communication difficulties of 3rd party involvement mean that this form of execution service isn't something that we'd want to pursue. Frankly it wasn't a good experience for us although it was interesting and I suppose flattering for us to be asked to perform adminsitration services for a small, new broker but this isn't an arrangement that we would accept today.

The actual commission that we retained for this would have been zero as effectively the broker paid us a fee for our support services.

There are good and bad advisors the world over. The real key should be to improve standards everywhere as frankly this is and needs to remain a vitally important added value service for almost all individuals.

Have a good weekend,

Paul

would love to hear your former clients version of your story!

Really?

No problem - I can't reveal details of this particular case for reasons of client confidentiality but please arrange to come over and let me show you generally what we do and how we do it. With that information at your fingertips you could write a very informed commentary on here (whether you like it or not). Please PM me and let's arrange to get together and do that. I'm very keen to promote transparency - I'd even like the idea of a seminar or symposium where TV readers could grill willing participants from the financial community about the industry and its practices. I'm keen and ready. There's too much talk about the problems in this industry but also too many misconceptions, too much misinformation and too little action and too little genuine understanding. Meanwhile please let me know when you'd be free to come by and catch up.

The last that I hope to say on this topic is that clearly the problem here is that in this instance 3-way communications didn't work. Such communication is a very well-established business practice - e.g. when trustees are mandated to act for beneficiaries but in this case, despite the respect that we retain for the client and his broker, a tri-partite arrangement just didn't work to the satisfaction of all parties. We looked at this closely at the time and again just in the last few days, we have paperwork that shows what we were instructed to do and we believe that we executed it thoroughly. However the outcome was a transaction that didn't work for any of the 3 parties involved and as a result this was the first and last instance of such brokerage business that we transacted. We're not prepared to do something unless we can see how we can add value (that's not being snooty, just that as a business model we wouldn't be in our 16th year here unless we undertook business that's valuable both for our clients and ourselves - short term profits are no way to build a long term business and we prefer to focus on what is sustainable).

All the best,

Paul

[leeriley]

I have not visited this particular post for some time, so I was surprised to see the addition of numerous comments, since my last sojourn. Just to make things clearer, I know both Paul Gambles and John Robinson quite well, and worked along side of them assisting with administrative tasks, over a period of approximately 8 months. In all honesty, I have never thought much of financial advisers in Australia. It just so happens, if you are familiar with the Australian market, that Aussies are addicted to real estate. People who, years ago, purchased a property to raise a family, now purchase with a speculative eye to significant returns. This, combined with low levels of stock, causes an increase in real estate prices, to the point that many families are now committing themselves to mortgages lasting beyond 25 years. With prices buoyant and always on the increase, Aussies can be forgiven for favouring real estate as in investment. However, I digress. My comments are more to do with the integrity of the guys I know. Does the industry need to change? Absolutely! I know Paul and John would be the first to say that. The current rules are, however, the rules. I spent a lot of time talking with John and Paul about what good investment strategy consists of. Paul always said that there is no crystal ball. Paul and John always stuck to the safest and most transparent investments they could source, and quickly rejected anything that, 'didn't quite add up'. In short, I always admired Paul's tireless work, often extending to 12 and 14 hour days. There were many occasions where he would be researching until the small hours and replying to clients questions. John often made comment of exactly this feature of Paul's character. Did Paul want to earn income for all his work? Absolutely! It was the motivation that mattered though. Paul and John always had their clients interest as a priority. I know of instances where John advised a client not to invest in a particular vehicle and the client decided to invest, regardless of John's advice. The client subsequently lost money. These comments are posted as personal observations on the integrity of individuals I have worked with, who became friends as a consequence. I now live in Sydney, Australia. I have nothing to benefit from my comments here but given what I know of the people working at MBMG International, if you are looking for a team of competent, hardworking investment advisors, with personal integrity, have a chat to Paul and John. The coffee is crap but the heart and soul is there. PS> Paul, when are sending me the cash for complimentary comments? Cheers to all the gang. Lee Riley. If anyone doubts my word you can always contact me at [email protected] or on my personal mobile phone @ +61 424 99 99 75.