Blessed by the Potato

I’ve long been a user of Trend Micro’s Internet Security largely because it worked without eating up an unreasonable amount of system resources, wasn’t too intrusive, and because it was cheap (just $20 a copy as a UWO student, and each license could cover 3 computers). But beyond inertia, I didn’t have any particular devotion to it.

My new laptop came with a subscription to McAfee, and I figured that would be fine: all the big anti-virus programs are pretty competitive in terms of protection offered, since it’s not an area they can afford to fall on their face over. However, the other aspects have just been terrible. A lot of restart-nagging for updates, but worse is the subscription nagging: I once every week or two it pops up asking me to renew now, even though I still have over 6 months left on my subscription! And the pop-ups don’t have little X’s in the corner to quickly dismiss them. You have to click on a drop-down menu and select close to get rid of it. I just got two renewal ads tonight, so I’m thinking of blowing it away and starting over with something else (likely Trend Micro), it’s simply inexcusable to start nagging me about renewal that far in advance.

But there are other issues too:

• Details are buried 3-4 menu levels deep. Great McAfee, you found a trojan and saved me: but on what file? How do I know it’s not a false positive and something important is about to break?
• It’s slow. I know full system scans can take a while and slow you down, it’s just a fact of life with antivirus. But usually there’s a bit of a trade-off: a scan will only take an hour or so, or it won’t noticeably slow you down. McAfee’s scans are taking 4+ hours, and I can barely use my computer in the meantime. That’s worse than any other antivirus I’ve used.
• At a friend’s work a recent McAfee update appears to have upped the firewall sensitivity, and killed the network.

In short, McAfee sucks, and I’m to the point now where even for free with it already installed and running on my computer, I don’t want to use it any more.

Aside from the one a week and a half ago, I haven’t ranted on hybrids & EVs in a while. Nelson had a post at SPF talking about the GM Volt that kind of opened the door though, so here I go. There are a lot of nits to be picked: it’s less of a back-of-the-napkin analysis than a wave-your-hands-in-the-air-and-throw-a-dart analysis. He didn’t even use a spreadsheet! …But that’s not the main point. The point is, the Volt doesn’t seem to offer compelling value, even with the subsidies.

First up, in general efficient hybrids make a lot of sense. I’ve shown this again and again: you make the extra cost of the upgrade back several times over over the life of the car, which can lead to tremendous savings, though of course that always has some factors that can change the balance like gas prices or your driving habits. I made the ridiculous spreadsheet for you to figure it out yourself more precisely.

EVs make a lot of environmental sense: more efficiency, lower emissions, yadda yadda yadda. But it’s not clear yet if they’ll be financial slam-dunks like the efficient hybrids, in part because the first few models are only just hitting the showrooms now. They’re going to cost more up front, but require less maintenance and use cheaper power (especially off-peak). There are some other trade-offs, most notably range anxiety. They’re not going to be the car for everyone, but they don’t have to be — no single car is.

To help combat the big range anxiety factor, plug-in hybrids (PHVs) were developed: you could run off electricity for your daily commute, but still have the gas engine for longer trips.

The Chevy (GM) Volt is the first PHV to hit the market, with the plug-in Prius to follow later in the year. Now, I haven’t yet had a chance to see a Volt in person, but everything I’ve seen from the very first announcement has suggested that GM created it to fail.

Why not? They created their previous hybrids in a way that suggests they were trying to fail: the mild hybrid stop-start system was the cheapest upgrade from a regular car out there, and yet the least economical since it provided hardly any gas savings. Then the two-mode system was developed for the largest of the large SUVs, and it’s complex, expensive, and only offers modest efficiency improvements. But hey, you can tow with it. Basically everything was geared to sell more large SUVs: either hybrids that didn’t work whose sole purpose seemed to be so GM could shrug and say “oh noes, no one wants to buy hybrids. Guess we’ll just build SUVs” or hybridized SUVs, so they could say “well, the American consumer really wants an SUV.” If you’ll allow me to indulge in a bit of conspiracy theory thinking, GM was behind a lot of the anti-hybrid FUD spread in the early days, with ties to the CNW report. Many of their executives certainly didn’t hide their disdain for new technology and saving fuel. And of course, this was the company that took perfectly functional electric cars and crushed them. They wanted very much to just keep building gassers and hoped hybrids and EVs would go away never to return.

So the Volt was announced at a time of desperation: gas prices were spiking upwards, and consumers were running away from fuel-gobbling SUVs. The Volt announcement had the air of vapourware: less of a “look at this awesome car we’re putting together that you can buy any day now” and more of a “please don’t run out and buy a Toyota, Honda, or Ford… just hold on for a few more years and we’ll have something for you!” The initial specifications (which I am too lazy to look up now and link to) were clearly unrealistic. The concept versions at autoshows were the antithesis of practical: square, blocky corners with no aerodynamic properties. Huuuge long engine compartment, tiny passenger/storage compartment. Basically, designed to look like a muscle car or land yacht of old. They joked that it would be more aerodynamic backwards. The initial estimates for efficiency were laughable: no way was it going to hit those targets.

Commercials started being aired on TV for a car that hadn’t even been invented yet. It was clearly just another exercise in marketing.

But then the financial crisis hit and GM went bankrupt, and suddenly it seemed like they had to actually make the Volt.

In the end, it is a plug-in hybrid. But that’s about all I can say: instead of taking an Atkinson-cycle engine to get Prius-like efficiency when running off the gas engine, they just grabbed an off-the-shelf Otto cycle 4-cylinder and plopped it in there. Once the initial charge runs out, it gets far worse fuel economy than a Prius — about the same as a regular gasser. It’s expensive, far more expensive than promised in the vapourware state. I don’t have the exact Canadian numbers to work with, but it looks like it only breaks even vs. a gasser, and that’s after the government subsidy. In the end, a Prius or other efficient hybrid would be the smarter choice (or perhaps a true EV like a Leaf, though I don’t yet have the specs for that, either).

It’s ugly, and that’s coming from a Prius driver. It’s small, seating only 4 because of the T-shaped battery, and from early reports has poor visibility and trunk space. It’s not terribly efficient. I just can’t get away from thinking that this damned thing was made to fail. It has all the hallmarks of being cobbled together at the last minute, and doesn’t seem to be a very worthwhile effort. As much as I believe that EVs, hybrids, and PHVs are the way of the future, so far I’ve found little to recommend the Volt.

But just because the Volt doesn’t have the efficiency to be worthwhile doesn’t mean that’s going to be the case for EVs in general, or PHVs for that matter. And hybrids already make both financial and environmental sense.

One of the concerns that just won’t go away is the batteries: now with plugging-in the batteries are going to go through deeper charge/discharge cycles. Plus they’re bigger and more expensive, so the question people ask is what’s the risk of a battery failure? For Toyota, the last reported figure was less than 1 in 40,000 odds of a failure in the 2nd gen battery packs (currently on 3rd gen). These things are basically going to last the life of the car, and have a lower failure rate than an equivalently expensive part in a gasser (like a transmission going, cracking a cylinder head, etc.). Cabs have gone over a million kilometres with no serious degradation in battery life, and the first of the first gens are now about 15 years old and haven’t started dropping like flies from pure calendar age. The batteries are not a risk factor, and even then the cost is not steep since more are piling up in scrap yards from collisions than are failing otherwise. Ford recently announced their numbers and they’re even better: the odds of a battery failure are 1 in 8.5 million.

Now as incredible as that is, that’s for tried-and-true Ni-MH batteries, like the ones in the Rav4EVs that are also still going strong in deeper-discharge EV mode. The Volt has a new Li-ion battery pack, so we have yet to see if those figures will carry over (plus of course, the GM quality factor).

Before I get to the rest of the links, an important reminder about the Canada Learning Bond for low-income families to help fund their RESP from MSB. If your net income is below $41.5k, and your child born in 2004 or later, the government will just give you money to help fund the child’s RESP — not even a matching amount like the CESG.

Larry MacDonald reports on more wariness towards stocks by younger investors. Of course, given investor psychology, it’s probably coming at the wrong time.

Spreadsheet fever hits Preet, as he gives mutual fund investors a tool to estimate how much of their return is sucked away by fees…

The housing bubble has started to get a few more mentions, perhaps because it’s a slow news period. Including:

3 of Rob Carrick’s 12 new year tips are variations on “don’t buy a house in this ridiculous market”.

Almost all of Canada’s banks have now also started to publicly fret about the state of the housing market. “There’s no question that the warning signs around the Canadian housing market have been visible for more than a year,” Mr. Downe [BMO CEO] said. The banks have mentioned that they did a stress test of their finances if house prices declined by 25%. Ideally, they should be doing these kind of stress tests regularly for risk management reasons — but the fact that it became newsworthy may be of note.

Plus, 2 segments on BNN on Wednesday, and another on Thursday (11th and 12th of January).

Nelson of Financial Uproar infamy has a guest post (is there anywhere he doesn’t guest post?) that spends a quarter of the word count on non sequiturs and still manages to be an excellent description of how easy passive investing can be (I needed a whole book to get the concept across!).

This is why I’m focusing my job search on non-academic positions, though that hasn’t gone so well so far, either.

Otherwise, not much new with me. Weight’s holding steady (not good, but not terrible). Just barely hitting one job app per week — I really need to quit it with cover letter writer’s block. The 2nd week of flag football went well, with more of our team showing up, and a slower rate of play due to the other team constantly consulting a playbook (I thought having a playbook was supposed to speed up your planning). In fact, I got so many breaks with all our spare players for subbing in/out that I started to question even going: having no subs last week was exhausting, but having enough to only play 50% of the time didn’t feel like exercise at all, and the commute down twice as long as my on-field time.

It’s perhaps far too early to speak of bottoms, but with the news full of stories of the recent Carnival cruise ship-wreck and subsequent 16% sinking in share prices, it may be worth doing a bit of work to see at what level buying in the face of panic may be warranted.

First up, before deciding how much to discount CCL, we should have an understanding of whether it was appropriately valued to start with. At 14X P/E for a discretionary vacation provider, it was perhaps a little rich going into the mess on an earnings basis, but pro-forma book value was $30/share, giving it some support. But if we say $29 would have been a more fair starting place before the ship got grounded, then it’s clearly not bottomed yet — a 16% drop only takes it to that price.

For the current circumstances, to be conservative we should assume no insurance coverage (due to the possibility that it was an at-fault accident) and that the ship will not be able to be repaired, representing a $500M loss. It’s tough to say what the liability will be for each of the passengers (~4000), but perhaps $50k each is a good upper bound, plus another $2k for the next group of ~4000 to compensate them for having to change their trip plans/flights at the last minute, plus $1M for each death (6 confirmed with ~20 missing, call it $25M). $733M immediate hit to book value, or about $1/share.

On top of that, it’s fair to assume that people will be less likely to book cruises for the next few years, so revenue may decline by say 10% for the next 3 years. If costs are fixed (assume that they are, again to be conservative), that goes straight to a decline in earnings. So I’ll plug into my little model $1/share in earnings for each of the next 3 years, returning to $2.40/share afterwards. In fact, that appears to be a much, much larger potential hit to the value than the loss of the ship and liability from the accident, which is a shame since it’s a lot harder to estimate. Add in a healthy fudge factor, and I wouldn’t be interested until it hit something like $21-25 – a 1/3 decline from Friday’s price. Until then I think I’ll just watch.

My record is fairly spotty with this sort of thing: 1-1-1 to date (BP a clear win, the Canadian banks w/ ABCP came out all-right, and TEPCO was a disaster).

Another perpetual motion machine scheme has cropped up, this time stealing its name from a popular carnival ride, the gravitron. What made this one come to my attention was the fact that they are looking to hire a post-doc to run some calculations for them.

Now, I need a job, so I’m tempted to apply (though I have no desire to go to BC — perhaps I could work from home in Ontario?). If they’re going to waste their money to get someone to tell them precisely why their idea for a generator doesn’t obey the laws of physics, I suppose I’m as good a person as any to be the recipient of that money. On the other hand, perpetual motion machine pumpers tend to be flaky at best, and fraudulent at worst, so I’d have to negotiate for cash up front.

Their description of how it works is full of unit errors (using Watts for both power and energy, then comparing one to the other), and lots of dubious explanations. Rather than trying to work out where they’ve gone wrong on the physics (hey, they might hire me to do that!) let’s instead look at the economics. They say that it’s not a perpetual motion machine, because:

The Gravitron is not a perpetual motion machine, that is, it will not work indefinitely. The neodymium magnets that make up the magnet track will lose magnetic energy over time, and at some point will no longer have enough magnetic energy to lift the neodymium spherical magnets from the bottom to the top, at which point they will need to be replaced or remagnetized.

Ok, so let’s take that at face value: their not-a-perpetual-motion-physics-defying machine is just a really neat way to turn the energy in the magnetic field of a neodymium magnet into electricity. Well, obviously you can’t round-trip that or it’s again going to run into the perpetual motion problem, so the machine is going to extract less energy than it would take to re-magnetize the neodymium magnets when you’re done. The only way to work the machine then is to run it until you “drain” the neodymium magnets, throw those away, and buy brand new, fully-magnetized magnets to extract the energy from those anew. The question then becomes how much energy do you get, and how much does a replacement magnet cost?

Without spending too much time looking up the properties of neodymium and how to calculate the energy density of its magnetic field, Wikipedia provides this figure: an energy density of ~500 kJ/m³, or in electricity terms, 0.138 kWh per cubic meter of neodymium. A ballpark figure for the cost of electricity is 5 cents/kWh, so in order to be economical, they’d have to be able to source magnets at less than a penny per cubic meter. I don’t think so.

A former classmate says on facebook:

Here is some free advice to all inventors out there: if you have to include an explanation on your web site why your invention isn’t a perpetual motion machine, you’re probably trying to invent a perpetual motion machine.

When I told Wayfare I was thinking of applying, since hey, if nothing else I need to do some mock interviews to get some practice, she said: ‎”When I say you need to do a mock interview, I don’t mean an interview where you mock the interviewers.”