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.


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:


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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