Blessed by the Potato

I haven’t had a round-up post for a while, so let’s correct that now. Things have been pretty busy with me the last little while. Though the market has been volatile, which should be presenting opportunities, I just haven’t managed to find the time to do any real analysis for active investing. One depressing case-in-point was Armtec: I started working on a post called “Is Armtec Going Bankrupt?” on Sept 29, thinking that perhaps the answer might be “no.” I meant to finish my research on the company over that weekend, but instead found myself crawling under the car and reading Ready Player One (BTW: a good read, way more fun than annual reports). “Oh well,” I figured when the weekend came and went and I hadn’t finished my analysis yet, “I’ll just do it next weekend.” Unfortunately the market doesn’t always let us take our time with these things: the next week it was up about 100%. D’oh! Now of course, I hadn’t yet made up my mind on the company, so it’s just as likely I would have done all that reading, decided not to buy, and then had it go up 100% anyway… but I think I would have preferred that outcome to the one where I maybe might have ended up buying it on the Tuesday, and made out like a bandit by Thursday, but didn’t because I just couldn’t be bothered to get off my butt and do some DD. Ah, well, c’est la vie.

The post-doc weight loss progress has been underwhelming, but not an entire write-off. It’s been almost two months and I’ve lost a little over 2 pounds. It has ever-so-helpfully been mentioned that that could just be measurement error, which is true, so we’ll see how I make it through the difficult Halloween then post-Halloween-candy-sale then xmas-and-Boxing-Day-candy-sale gauntlet coming up.

Futurama has a great thing called the “Parade Day Parade” to consolidate all the parades which, in the 31st century New New York, would otherwise eternally tie up the streets in gridlock after accumulating a millennium’s worth of events to hold a parade over. So with all the bloody marathons and charity fun runs, I’m not surprised that conflicts are starting to arise. I don’t know what the fascination is with running along commuting routes or through downtown Toronto. Surely some of those races could be moved to the burbs, or better yet, a dedicated running trail. I guess it’s marathon brain taking over: once you run a truly suicidally stupid distance like 40 km, you must start to think you are a car, and try to plan race routes on streets.

Michael James has a good, short post asking what predictions are profitable. It’s not good enough sometimes to know what’s coming, but also to know without the rest of the market having already priced it in.

CC has a post up showing that the recent market volatility is not “unprecedented”. There have been plenty of cases of high volatility in the past. Note that much of the volatility is intra-day (I was scratching my head for a while as to how there could possibly be more 5+% days than 3+% days, until I noticed that difference in the legend).

Dave Chilton tackles the RRSP vs TFSA question. He takes a bit longer to cover it than I do in my book, but is also a little more thorough, with some humour as well. Short answer? Sounds similar to mine: TFSA is pretty good, but the RRSP is better if you’re in a higher tax bracket now (and expect to be in a lower one at retirement). Both is better yet. Oh, and don’t blow your refund.

Preet admonishes those who convert to market timing after stocks falter in the Globe: “Please. The fact that the market has already fallen should be proof enough that you have no authority to suddenly become a market timer. If you were good at it, you would have taken your money off the table before the decline.”

Then after saying something so clever and catchy, Preet goes on to try to deny the Canadian housing bubble, dragging out some of the flimsiest explanations. “Looking at debt-to-income is only part of the story. You need to see what that debt was spent on. […] A lot of that debt is mortgage debt. Housing has done well, so on the asset side, we are doing much better.” was one of the worst. I haven’t dug up the citation, but I’m sure I heard that from the Americans a few years ago. If house prices go down, the debt doesn’t go away without pain. And it’s backwards: ask not what was used to secure the debt, but what has fuelled the rise in the asset itself (answer: debt).

An x-ray tube was stolen in Markham, but the report has basically no details. I can’t even tell if it’s a Beryllium-7 source, or a regular x-ray tube with a Beryllium window (or if the radioactive Beryllium-7 part is a mistake or a minor component). I couldn’t find any information about it at the CNSC website, but then I wouldn’t necessarily expect to yet. A stolen (sealed?) source (if it’s even a source) isn’t a radiation accident, just an accident waiting to happen. (Edit: the York Regional Police release says that it’s also dangerous if broken, which suggests it is a sealed source and not just a x-ray tube).

Netbug has been glued to the development logs of Windows 8. I’m a bit slow, still loving XP on my main computer, and I have no intention of getting my hopes up for a product that may be years out, may bear little resemblance to the work presented now, and will likely be a disappointment no matter how low I set my expectations. However, the proposed task manager improvements do look neat.

New firmware has come out for the Kobo, which overcomes some of my criticisms from before: it adds the ability to annotate passages, search within a book, and my personal favourite, a low battery warning when you hit 10% and 5% of battery life remaining. It also lets you change which parts of the screen are receptive to page turns. I’ll try installing it later tonight!

There are days that I think Human Resources departments are a plague on our species, threatening to consume all productivity beneath layers of impenetrable, arbitrary bureaucracy.

Then there are days when I think that is a charitable description.

Lately we’ve been battling with HR’s notion of “new” employees. I’ve been working where I am for over 8 years now, yet since I had over a month without a contract at the end of my grad school/research assistant contract and the beginning of my post-doc, suddenly I’m a “new” employee, and have to go through the whole new employee rigmarole. Similarly, we get a group of talented summer “students” to work with us regularly each summer, for years now. Again, they’re not really new employees, yet have to go through the whole intake process each year. For employees that are only with us for 2 months (~40 working days) it’s ludicrous that HR takes 2 full days of their time away from us for non-productive paper-pushing purposes. Proportionately, HR gets more of our summer students’ time each year than most people get for vacation.

Orientation is a big one, taking up a full day. Oddly enough, it’s not about spatial orientation at all, which in this maze of a century’s worth of additions might be useful. It’s not even held at this site. They only introduced the full-day orientation requirement a few years ago, so I didn’t have to take it when I first started; no one who’s worked here for any length of time has. Yet our summer students have taken it several times. Yet each year, they have to take it all over again, supposedly because HR “couldn’t” let them work without it — what if they had an accident and didn’t know how to fill out the WSIB forms? A strange rationale, given that the orientation day for summer students doesn’t take place until about 2/3 of the way through the summer, and most employees have never taken it. Supposedly critically important, yet not so essential to actually do in a timely manner. Same for my new contract: my mandatory, useless-sounding orientation isn’t until two months after I started. What if I had an accident (or whatever peril they think the orientation is solving) in that time? And note that this is not the actually useful safety stuff like WHMIS, lab safety, radiation safety, or fire safety courses, which are either run online so they can be finished immediately (and with a minimum of pain) or outside of the HR bureaucracy entirely.

Another intake requirement is a clean TB skin test and health review. This is a very sensible intake procedure, but how valuable/hypocritical is it to only screen people when they start their jobs? Suddenly I’m a big risk if my contract lapses and I spend a month at home in my underwear studying, but as long as someone’s contract is still good they can romp through the jungle or sleep in a Guangdong chicken coop and nobody bats an eyelash. It seems to be less of a genuine concern for infection control than a form of security theatre: checking the right boxes on the form has become more important than the goal behind the creation of the policy.

But what really got me mad was my particular HR nightmare this time around. First off, my contract was late. The wonderful and helpful and competent people in my department reminded HR that it was late and they were dropping the ball, again and again. After a few pokes they finally said they’d get it to me by the end of the week. Then that week came and went. Another promise to get it to me by the afternoon. Another few days, another few promises. “By the end of the day today, for sure.” They’d say, only to say it again the next. Finally I got my contract, a full month after my start date, and almost two since my department sent them all the info they needed to fill out the contract (and, BTW, this is not a terribly unusual contract. I’m not exactly asking to be paid in Reese Pieces and Star Wars action figures here, or negotiating IP rights).

And it was wrong.

So back into the process we go, another three days until I get a corrected contract to sign. It’s now two days before the last day to get paid for the pay period, and I’m rather desperate to get everything approved. Due to not getting paid for almost 4 months*, and another client stiffing me for the freelance work I did to fill the time while I was off, I’m pretty damned desperate to get paid at this point (the emergency fund is long gone, the various reward points have been spent on groceries and gas, and the line of credit is about half drawn). I wasn’t ever really that close to the brink — not like I was going to starve or miss rent or anything — but I found out that yes, I am in fact allergic to debt, and it was making me itchy. And I legitimately didn’t want to wait another month to get paid due to their incompetence.

There are some final hoops to jump through. They need a void cheque and my SIN (again, not a new employee), and some tax forms signed. A copy of my driver’s license. Pretty standard stuff, anyway. Plus some other stuff (a quick online privacy course, an information form, signatures, signatures, signatures). But when I went in for those final hoops, thinking this was finally over, they wanted my physical SIN card, not just my number. My card, unfortunately, was stolen years ago. I never replaced it because I have never needed the physical card before. I’ve worked for the government and they didn’t need to see the physical card — only the number is needed to process you through for taxes, etc., and I’ve long since had that memorized. But no, this lady wasn’t going to let me get paid until she saw my physical card. “But I’m not exactly a new employee, don’t you have that photocopy in my file from the last time you hired me?” I said, and “You don’t really need the physical card to pay me, you should only need the number.”

“Well, we require the physical card here.” she said in a tone so flat I became certain that she was indeed a zombie, or some kind of low-powered robot.

“Can you at least get my pay process started with the number and I can come back with the card later?”

“Nope. You can’t get paid until I can photocopy the card.”

Fuck off. That part was under my breath. “But you guys have already held up my contract for a month, and now I have to wait another month for the government to mail me a card I don’t legally need?” She told me that once I applied for a new card, I’d get a letter/receipt that would act as a temporary card. So off I went to spend half a day in the government building to get my SIN card replaced.

At this point I really have to give a shout-out to my supervisor and the admin people in my department, who really went to bat for me harassing HR to make sure that they didn’t drag their feet for a few more weeks so that I could get paid that pay cycle. Unsurprisingly, with a month of back-pay to put into one bi-weekly period, too much tax was withheld, but I’m beyond caring about details like that at this point. I’ll get it back in the spring.

Back to the TB skin test: HR assigned me a date to go in and get it done, with no input from me. Whatever, I’m not going to raise a stink about getting it redone, and go. I just want to get paid. The day they give me is a Friday. The physician injects me with the subdural agent that will, in time, react with TB if I have any. Then, only after they inject me, do they ask “so, what time are you free on Monday to have that read?” Umm… huh? I’m not going to be in the city on Monday. At all. “But it has to be read within 72 hours!” Wouldn’t that have been a good thing to mention, say, before injecting me? Sheesh.

I’m an understanding guy, and I comprehend the value of policies and procedures, but there has to be a balance between having policies, and iron-clad arbitrary rules enforced by unthinking HR zombies.

What gets me though is not once was there an apology. At no time did they even attempt to sympathize with me for what they had put me through, or even slyly acknowledge that their rules were ridiculous in my situation. No “what are you gonna do, those are the rules?” shrug. If anything, they seemed to take delight in their obfuscation.

* – where 4 months comes from: almost 2 from just not being employed, 1 from HR being late on my current contract, and 1 because somewhere along the way my previous contract ended up paying me at the beginning of the month, so even though I worked and did get paid for my final month as a grad student/RA, getting paid up front (and not knowing that’s how it worked) threw my budgeting all off (I was expecting one more paycheque before having to draw from my emergency fund). Though I suppose that one was my own error in budgeting, it still contributed to the cash-flow short-fall. As a budgeting aside, my old contract’s pay schedule was messed up. I have a PhD, and was never able to figure out in advance when I was going to get paid. It averaged out to monthly, but sometimes it was the beginning of one month, then the end of the next, and sometimes then the beginning of the one after that, so the time between pay periods could be 3-4 weeks or 6-7 weeks. One time they did legitimately miss paying me due to (guess what) a HR SNAFU and it took a full extra month for me to figure out that it wasn’t just a really long pay interval but an actual problem (by the time I did get caught up, it was almost 3 months between pay periods). So having an emergency fund of a few months’ worth of expenses is not just for job losses, but also potentially having a perfectly stable job and a perfectly unstable HR/payroll department.

We’re back at it: looking to move again, just two short years after the last go-round. A strange smell has been coming out of the A/C the last few months, which has driven Wayfare into an allergic/asthmatic reaction (my nose also gets runny when the A/C is blowing, but I don’t mind it if I get cool air in exchange). Unlike our previous house, there’s no visible mould, and no visible water getting in, either. It might not be mould — it could be some other allergen like mouse dander, or asbestos, but mould’s the working hypothesis*.

Our best guess as to the source involved the clogged/mis-levelled gutters, which created an uncontrolled waterfall right on the side of the house where the A/C is every time it rained. But after getting that fixed the problem has only gotten worse. While we’re pretty sure our landlord would fix it if we asked (like he fixed the gutter and the water leak on the other side of the house last year) — which is a trait very much unlike our last landlord — we just don’t have any idea what the problem might be, and if we can’t keep him focused on specifics, nothing will get done.

I’m loathe to move: the location is perfect, and we (or more properly, Wayfare and her parents) have put a tonne of work into the house fixing all the minor things that were wrong with it. But if you can’t breathe the air, well, that’s no good. The final straw though was when sewage backed up into our washing machine. I don’t think that any blame can be ascribed to the house or the landlord for that one, but it was just enough to make us throw our hands up in the air and decide that yes, we should move.

Once again, we dove into the housing search. We found a lot of houses were listed with realtors this time around, though we had a bit better luck with getting them to return calls and set up appointments. Still, some disappointments: a few that never called back, one that called back and didn’t seem to know how paging and calling back worked (“Who is this?!” “Umm… you just called me.”). Overall communications were quite poor, which I still find surprising since a realtor’s job is basically to communicate with people. There was one townhouse complex I was curious to see: it’s a small complex, I’d guess no more than 10 units total, and 3 of them were on the market at the same time — made me think we’d have a good chance of low-balling a bit. Yet we couldn’t get in to see any of them: one realtor just didn’t return our calls and emails, another returned my email but then took a few messages to get the concept of wanting to set up an appointment to see the place, by which time a few days had passed and my visit to Toronto was at an end… and he wouldn’t set up an appointment with less than 24 hours notice. At least 3 places went off the market before we could get in to see them.

For the houses that we did see, we were pretty disappointed: one with obvious black mould, another that wasn’t in very good shape (carpet in the basement that could not have been more recent than the mid-70’s, a really bad paint job, and what looked like booby-trapping: toothpaste on the handle of the bathroom drawer, a sanitary napkin in the storage area of one of the bedrooms… ick), and one that we think maybe someone died in (reeked of mothballs and possibly mould as well; tiny kitchen, smaller than many apartments; 6 bedrooms, but each was tiny, and no living room; and the new wood/laminate flooring in the basement had been laid down incorrectly, so it dipped and sagged with every step).

Then we came across what was basically the perfect house: a bit bigger than what we had now, and newly renovated so we wouldn’t have to do any of the crazy work we did on the current house to get it livable. The main issues were the location (further from the subway than we’d like, but nothing can be done about that) and the price (quite pricey for the size and location, and at the absolute top-end of our “we’ll just never eat out again” rent budget). For the price we could attempt negotiations, which I did. In the end, we only got 2% off the price, but that’s still better than nothing. What was interesting though is that we also offered for a November 1 possession — we hadn’t yet given our 60 days notice to the old landlord, so even then we’re going to have a month of overlap. The new landlord though fired back initially at the negotiation attempt, saying that she was already “giving” us the equivalent of 2 months rent by letting us wait until November to take possession. That point didn’t fly with me though: first off, it was already mid-September, so there was zero chance she was going to get someone to take it for Sept 1 (maybe a mid-month possession of Sept 15). And even then, for a detached house the renter pool tends to be like us: looking for more time before moving in (though on the flip side, perhaps to stay for longer), so I don’t think she can even count “giving” us October as a loss — it was very unlikely (but not impossible) that she’d ever find someone for an October 1 possession.

For the obligatory rent-vs-buy analysis, this house last sold at $X, and then was significantly improved by the landlord (new kitchen, a few new windows, upgraded electrical, new washer/dryer, new A/C). So if we were to buy it in the current condition, it would likely cost $1.2*X. Yet the price-to-rent is 225 times X (270 times the estimated current “value”!). If we assume that we took a fixed-rate mortgage at 3.5% and never had rates increase on us, that rent increases 3% every year, that we stay there for 10 years (for calculating transaction costs), no CMHC req’d, and that zero maintenance needs to be done over that 10 years (since almost everything is new now) — in other words, assumptions that are about as favourable to the owning case as I can make them without having to rely on boom-times price appreciation — it would still cost about as much to rent as if we managed to buy it for $X — it’s like getting the renos for free. And of course, the actual cash flow impact is less (the mortgage payment alone would be more than rent; even though some is principal repayment, there’s less flexibility there). If I assume what is, IMHO, a more realistic scenario (rent only increases 2%, and the mortgage rate averages 4.5%), then opting to rent is like getting this house for 30% less than what we’d have to pay to buy it now.

So yeah, we’re happy to take the rental option and not have to deal with owning in this market.

And one other source of savings for the renter we haven’t discussed before: life insurance. Since we don’t have a mortgage or dependants, we don’t really need life insurance at the moment, but would if we borrowed. Oh, and: lawn care is included. That’s like another $700/year benefit.

Here are the before/after pictures of the kitchen, to give you an idea of how thoroughly renovated the house is:

* – Yep, it’s mould. The work guys just had the wall boards off, and I’m told it’s back there.

The Prius has been a terrific car for me, giving me almost zero trouble since buying it (only needs oil changes twice a year, and only one rattly panel as a manufacturing defect).

That is, until this weekend. On the trip up to the cottage I heard a strange whooshing noise, kind of like a window being open a crack: a non-specific change in the way the airflow around the car sounded. Then it stopped. When we got to the cottage I found out what the source of the mystery noise was: the oil access door had broken and been grinding against the road.

For those that aren’t intimately familiar with Prius anatomy, the underside is covered in plastic panels that help improve the airflow under the car, which in turn improves fuel economy (and there is a debate as to whether it helps keep out or trap wintertime salt, which may improve/hurt the long-term life of the underbody in the Canadian climate). It also helps insulate road noise (making the car as awesomely quiet as it is) and also importantly in northern climates, helps to insulate the engine compartment (retain heat). But, as you can imagine, you can’t work on an engine that’s hidden by panels, so there’s a small access door to open for oil changes. This has a very rudimentary hinge in the plastic: just a creased spot in the plastic panel where it bends. It’s then held on by a few (3?) plastic fasteners. If you’re familiar with this type of plastic hinge (in cheap plastic storage boxes perhaps) then you’ll know they have a nasty habit of shearing, and the cheap plastic fasteners aren’t of much help if the hinge gives way. It’s a real falling-down point on the Prius design (the whole panel should be removable, not on a hinge, or the hinge should be stronger/more flexible).

When I looked under the car, that door was held on by just one of the plastic fasteners, and the plastic had been ground away by contact with the road so the door was now some 2-3″ shorter. It was a bit of an adventure to get that last fastener off so I could drive the car. Here’s our improvised cottage jack to get the car up high enough for me to reach under, and then a picture of the hanging access panel itself. It’ll have to be replaced, and since the door hinges on to the larger piece, likely the whole larger piece will have to be replaced. Ugh.

I can’t say for sure at this point if this is a defect under warranty or not, but I think it should be. I’ll keep you posted when I finally get my butt into a dealership to figure it out, but it does sound like it’s already a common problem (on a model that’s less than 3 years old) and likely only to become more commonplace. Some DIY fixes have been proposed over at PriusChat. I’ve found a TSB for the US that indicates this part has been redesigned. I can’t find any information on whether this applies to Canadian owners.