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Archive for April, 2008

So it’s the 2008 NHL playoffs.  The Calgary Flames went down in 7.  The Ottawa Senators went down in 4 straight.  And the Montreal Canadiens took seven games to take out the eight ranked Boston Bruins.

And now the Habs are down 2 games to 1 in their series against the Flyers.  Each of the last three seasons we have seen a Canadian based hockey team make it to the Stanley Cup, so the Canadiens are our last best hope. 

Every time I get my hopes up, they’re dashed.  It happens in hockey and football.  Not so much baseball, though.  I guess my preferred teams are forever doomed to always come in second.  Mind you, on a golf tournament, you can make a lot of money if you come in second every time.  Hey, even the number 2 ranked tennis players still make plenty of endorsement money.  But on the other hand, who remembers the name of the second man who walked on the moon? No one, that’s who.

Sigh.

BTW, Buzz Aldrin was the second man.  That line above was a joke.

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Financial things

This past week I’ve been taking care of a whole bunch of financial things.  Funny how it all comes together at the same time.

  1. I got my tax refund for the US (well, I got the return from the accountant, it still has to be processed).
  2. I remembered my login ID to get my paystubs for my Canadian tax return, so now I can send that in.
  3. I got my money out of my TD Waterhouse account and closed the door on that cesspool forever.
  4. I opened up an account with Everbank and bought a New Zealand currency CD and the check I sent them 5 weeks ago finally got there and funded my account.

Weird how everything just fit together in this particular week.

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Tuesday, April 22 is turning out to be an absolutely fantastic day!  I don’t want to overstate it, but man, everything’s coming up Cool Spot today.

First, today I had to take my driver’s test.  For the past 6 months I have been putting off getting my US driver’s license.  Well, today was the big day, the day of the test.  I went down to the Kirkland office and took my test.  It didn’t look good to begin with (more in another post) but I passed the test.  I even totally nailed parallel parking.  In fact, it was one of the best parallel parks I have ever done in my life.  So I know have a (temporary) Washington state driver’s license.

And if that weren’t enough, as I was driving away, I turned on the radio (I turned it off for my test) and one of my favorite songs was playing.  "Oh," I said, "that’s some really good timing."  But that’s not all.  After that song finished, the next song that came on was another one of my favorite songs.  Two in a row!  Can you believe that?  I never get two in a row on most normal days, so this was a treat.

But wait, the story gets better.  As part of our team’s move to a new building within Microsoft, there is no cafeteria.  So, to make it up to us, twice a week they have free lunches (hot lunches) brought in.  So today, I got a free hot lunch!  Chicken, potatoes, and bread (I love free bread, ask my co-workers).  That was a fortuitous sense of timing to get my license and free lunch on the same day.

But wait, the story gets better.  I got home from work today and checked my mail.  I opened it up and had a letter from TD Waterhouse.  Could it be…?  I opened the envelope up and inside was a check for the full amount of shares I sold two weeks earlier!  This means I am free of those guys forever!  I was overjoyed!  I have been waiting for this day for 18 months!

But wait, the story gets even better!  In my mailbox was a letter from my accountants who were handling my taxes for the US.  Because Microsoft moved me down, they would pay my accounting fees because moving countries is complicated from a tax perspective.  My accountants had filed an extension for me so I could review the tax form.  I read it over and found the line that mattered.  Not only am I getting a refund, it’s the largest tax refund I have ever gotten in my entire life!  Sweet!

What a good day to be Cool Spot.

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I recently started thinking about getting into real estate investing.  This has been an interest of mine for some time but I always put it off to concentrate on stocks.  But just last week, I decided to browse Craigslist, just for fun.

I ended up checking out a condo in the Redmond area where I live.  I thought it was a good price.  I got pre-approved for a loan and it turned out that I would have had a tenant right off the bat (I’d buy the property for investment, not to live in).  But something was nagging at me.  My investing instincts were tingling.

I stumbled across a pretty good research website called RedFin.  You can plug in the area you want to research and it brings up all the properties for sale.  It turns out that this condo, in terms of cost per square foot, is incredibly expensive.  In fact, it was the most expensive condo in the Redmond area.

So why did I do further research?  It turns out that I know how to analyze investments pretty quick.  I want cash flow from my properties, not capital appreciation.  That means that my tenant has to cover mortgage payment, taxes, insurance and condo fees.  I knew that off the bat which is why I researched it further.  It came naturally to me to decide to do that, so I wasn’t tempted to make this bad investment.  Basically, it comes down to violating two principles:

1. I’m Terry Zink (the Great), I’m incredibly good at getting a good deal.

2. I’m Terry Zink (the Great), and I have the patience necessary to wait for a good deal.

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The Blame Game

Today a co-worker popped into my office and somehow the topic got onto the high price of grain in the 3rd world.  I remarked, somewhat tongue in cheek that it was because the Democrats demand that all of this biofuel research, grain (specifically, corn) is going into biofuels and food for developing nations is going up (supply is reducing and therefore price is increasing).  It really underscores my opinion on environmentalists – that they want to save the earth and end up harming humanity.  They mean well but they’re incompetent.

I then said that it’s not just Democrats, it is also Republicans.  It took both houses of Congress to pass laws requiring development into ethanol.  My friend then commented that if it weren’t for Bush, we wouldn’t be in the economic mess that we’re now in.

This is something that I hear over and over again.  Yet no one ever seems to be able to prove it.  "Oh?"  I asked, "how so?"  I must confess that this was a bit of a trap because I knew what he was going to say.

"You’re kidding, right?" he asked.  I shook my head and urged him to continue.  What sort of things did Bush do that caused the economy to go into a tailspin?  "Well, for one, he pushed through tax cuts which caused the economy to go into a recession."  He was referring to the bear market of 2001-2002.  Indeed, Bush did pass tax cuts during that time.  My friend explained that these tax cuts led to a deficit which made the economy bad.

I was ready for this.  "Deficits are good for the stock market, and the stock market reflects the economy.  Go back to 1962 and calculate the correlation between the budget deficit and the corresponding gain on the S&P 500."  I then explained that there is a negative correlation between budget surpluses and subsequent stock market returns.  In other words, budget deficits are good for the economy.

Now, my readers, you’re going to say "What?  That’s impossible."  You don’t need to believe me.  All you have to do is get the budget deficit as a percentage of the GDP and then get the percent gain on the SP-500 for that year.  Put them in two columns in Excel and then calculate the correlation coefficient (=correl(A1:A50,B1:B50)).  The relationship is inverse, meaning that higher budget deficits lead to higher stock market returns.  Try it yourself and see.  If you believed the opposite, it means you were wrong.

I explained this to my friend.  The higher deficit did not harm the economy.  I then explained that if you’re going to say Bush caused all these economic problems, you had better be prepared to back up your position with facts.  This should not be interpreted as me supporting Bush on everything.  Far from it; I’m no pro-gov’t guy no matter what the party.  Rather, if you’re going to assert something, you better be able to prove it.

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My worst fears have come true.  For the longest time I resisted selling my shares in TD Waterhouse.  The rationale is that the day after I sold them we’d have a major rally in the market and I’d miss it because they’d take 2-3 weeks to send me my cash and by that point I would have missed the huge gains in the market.  Ergo, I decided that I’d stay in the market and figure out some other way to transfer the account.  That strategy proved unworkable as changing the account over is impossible.

So, last Monday, I sold everything.  I caught a nice little bounce and figured I’d sell now when the goings was good.  Well, today (Wednesday) we got a huge rally in the market.  Take a look at all of the positoins that I had to sell:

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Take a look at that.  Everything is up huge.  NOV and TNH are now back to even from where I bought them (I sold at a loss).  I deliberately held onto them even though they were showing big losses because I learned my lesson – don’t give up because stocks go down if you believe in them because they bounce back.

POT would now be up 100% had I held it for a week longer.  PCU is looking alright as well.  PCP = meh, that stock’s an underperformer.  But the point is that the very thing I feared would happen, happened.

You know, the next time someone says "don’t worry because most of the things you worry about never happen" I’ll say "That’s only for people who don’t have good reason to worry and aren’t good at predicting the future."

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Thinking ahead

We recently moved buildings at work from the main Microsoft campus to a business office 5 miles further south.  The layout of the place is quite confusing and for the first two weeks everybody was wandering around wondering where all the offices were like conference rooms and other co-workers.

Everyone, that is, except me.  For you see, during those first few days I wandered around the office just getting my bearings.  I would simply go for a walk in order to figure out who was sitting where.  I had the best sense of direction out of everyone by the time the first week was over.

Of course, this strategy had some drawbacks.  My boss (ie, the head boss) would see me wandering and ask me if I were lost.  The response from me was always in the negative, but now whenever I go past his neck of the woods he always asks me if I’m lost.  This happens every time.

But the next time I thought ahead.  I was heading down that way to look for someone else today when I came by my boss’s office.  He asked me “Terry, do you not know where you’re going?”

To which I very cleverly replied “Not all who wander are lost.”  I thought that was a pretty good comeback.

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Real estate

I went looking at real estate, just for fun.  For you see, yesterday I was browsing Craigslist and I decided to check out the condominiums.  I stumbled across one that seemed like an incredibly good deal that was just listed that day (ie, Saturday).  So I made the decision to go and check out the open house the next day.

I went to check it out and here’s what I found:

  • It’s not a 1-bedroom apartment, it’s a studio.  I don’t think I’d like living in a studio because it’s too small.  My brother can live in a cubby hole, but not me.  I’ve got too much junk.  Well, not really, but I like the open spaces.
  • The community is nice.  Man, is that community nice.  Seriously.  I drove in and there was a man-made lake with sprinklers in the middle and a dock around the edges.  It’s lake-front property without the natural lake. 
  • The facilities are nice. It’s got a pool and exercise facilities.  Good for a person with limited stuff like a bachelor or bachelorette.  Not me, mind you, but someone else.

Having seen all this, the conclusion is that I wouldn’t want to live there but I am interested in acquiring it as an investment property.  To wit, I started looking at mortgage rates.  If I financed the whole thing myself it would cost $830 per month plus $150 condo fees.  If I wanted a property manager, they charge ~10% of the monthly rent.  So I’d have to charge 830 + 150 + 83 = 1063 per month.  That’s not unreasonable but not within the average rent for studios in the Redmond area.

So, I need to lower the monthly payment.  The only way to do that is to take out a smaller loan.  The only way to do that is to put down a bigger down payment.  Oy, that’s a lot of money.  Urgh.

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In a recent edition of Investor’s Business Daily, they had a cover story on the 3 main candidates’ positions on the War in Iraq.


Troop deployments

McCain – Pullout now imprudent and dangerous
Obama and Clinton – Would withdraw 1-2 brigades a month after taking office; leave small force behind to target al-Qaida

On the troop surge

McCain – “We can now look ahead to genuine prospect of success”
Obama and Clinton – Surge has not led to significant political progress in Iraq

Maintaining alliances

McCain – We must respect the collective will of our democratic allies
Obama and Clinton – Must rebuild ties with Europe, other nations after Bush administration

Meeting with hostile nations

McCain – U.S. should work with allies instead
Clinton – No meetings without clear agenda on the way forward
Obama – Would meet with Iran, Syria, others, without preconditions


In the area of the country where I live, the left coast, the general consensus is that the war in Iraq was a mistake, President Bush is a moron for ever entering the war, withdrawal should occur as quickly as possible and that the rest of the world now hates the US (and liked the US before Bush took office?).

I tend to be a bit of contrarian.  The very fact that most people I know hold the position above naturally causes me to be skeptical that position is correct.  I’ll leave aside the first 3 points and address the last one, that the rest of the world hates the United States.

The implication that statement is that because the rest of the world hates the United States (more than they did before), they are less likely to work with the US in combating terrorism on an international basis.  The alliances with France and Germany are a perfect example of this because they believe that the US was being belligerent in going into Iraq and should have shored up more international support.  Thus, the result of the Iraq war is the international community is less likely to cooperate with the US.

Yet I believe not only is that position inaccurate, it is completely wrong.  Prior to the Iraq War, the middle eastern world had a far different view of US military resolve than what Americans thought.  Whereas Americans believed in their own military strength, the middle-eastern and central Asian powers perception was that the Americans would not stomach a fight for long.  The pullout from Lebanon after the Beirut attacks in 1994, Iraq "pause" in 1991, pullout from Somalia in 1993 and lack of response after terrorist attacks during the 1990’s led to the perception that the US might talk big but wouldn’t actually commit to an extended battle.  Thus, in the days after September 11, it became crucial to get the middle-eastern powers to cooperate in the fight against terrorism.  This required the sharing of intelligence.

But this is not what happened.  None of the middle eastern powers like Saudi Arabia, Syria, etc, was particularly cooperative.  They were more concerned with incurring the blowback as a result of sharing intel with the Americans, and this is the reason for the Iraq war.  The United States wanted to demonstrate to the rest of the Arab world that it was a dangerous, unpredictable elephant who was willing to go to extreme measures in order to extract co-operation.  They went into Iraq to change the psychology of the region.

And it worked.  While my leftist friends insists that everyone hates the US, that may be true but it’s irrelevant.  Every single middle eastern power (except Iran) has aligned itself with the US and is sharing intelligence with US intelligence agencies.  This allows the US to disrupt the financial support originating out of the those countries which supports the terrorism networks.  This was not the case prior to the Iraq war.  While it may be true that the US coerced cooperation, they still got it.

So, while the war may not have been managed well (I think that question has been settled), the fact is that the US is in a stronger position now than it was before in terms of international cooperation from the countries whose assistance is needed most.

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This morning, a friend wanted to go to McDonald’s to get some breakfast so I tagged along.  While I was there I figured that as long as I was there I may as well get something to eat.  I had a Sausage-and-Egg McMuffin.

About an hour later it didn’t really agree with me.  It started churning in my stomach.  This is the second time in about a week when something I ate was refused by my digestive system.

I’m beginning to wonder what the deal is?  I don’t normally get sick from foods.  I used to think I could eat mostly anything, but I clearly have to rethink that assumption.  So here’s my theory: I stopped eating lots of junk food.  I consume mostly water and fruit juice and only occasionally have soft drinks like Coke and Pepsi.  I don’t have a lot of sugary food either.  When I have junk food that I don’t normally eat, my stomach refuses to process it because it doesn’t recognize it. 

Now, it doesn’t apply to everything that is not good for me.  Eating a hamburger and fries from a fast food joint is okay as long as I don’t do it very often.  But having a milkshake or something I don’t normally eat is bad news.  So much for that.

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Man, do I hate TD Waterhouse. 

Two weeks ago, I phoned them up and asked how to change my account over. They replied I couldn’t; because I have a joint account I can’t switch from a Canadian to a US account.  I had to open up a new account with TD Waterhouse in Canada and then transfer my Cdn account to that new Cdn account, which would only be in my name.  Then, I had to transfer it over.

I scoffed at this because changing from a Joint to individual account is fricking impossible.  However, they took my change of address to make me now a US resident.  But today I wanted to sell all of my shares.  Everything.  The market is rallying and I’ve gotten a nice little bounce so it’s time to sell.  But when I logged in, I couldn’t sell (I tried 4 times).  So I phoned up TD Waterhouse and asked them WTF?  It turns out that they switched me over to a US residence (which I did on their advice on assurances I could transfer my account, which I couldn’t).  But because I was now a US resident, I am now unable to trade using my web account!  In other words, they told me to do something that didn’t work and broke existing functionality!

I sighed.  I then gave them instructions – on Monday morning, sell all of my positions at the market.  All of them.  First thing, sell!  I don’t care anymore if I lose some commissions, I am so sick and f**king tired of these guys that I need to get my money from their claws.  The fees I pay are worth it.

The worst part is that I still have to send in a couple of forms to them otherwise I’ll take a tax hit.  Also, it’s going to take probably 2-4 weeks to get my money.  They’re going to send it regular mail, which is transported via horseback.  But, the bright side is that I am so much closer now to getting my money out of there that in two months this will be behind me.

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Today’s the day I wanted to sell everything in my account.  Here’s what happened when I logged in and tried to sell:

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Is it any wonder I hate these guys?

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If you are reading this post, you have no doubt been redirected from my Facebook page to this blog.  This is because if I were to put this in a note in my Facebook profile somewhere, it would show up in people’s individual Home page feeds and the entire note would be displayed.  This is going to be a lengthy post and I didn’t want the entire thing cluttering up your home page news feed.

As you can tell from the title of this post, it would appear that I am leaving Microsoft to join Google.  It’s actually only a few miles down the road from where I live.  I did not make the decision to write this post lightly, but I thought that now was the perfect time to post this.  For you see, today is April Fool’s Day, and this is an April Fool’s Day joke.  I am not actually going anywhere, I was merely having a little bit of fun at your expense!

Had I waited an extra day or posted it early, the joke would not have worked out so well.  That’s what I meant when I said that “now” (ie, April 1) was the perfect time to post this.

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