Blessed by the Potato

Superior Plus Propane is a bit of a weird company, with 5 seemingly unrelated businesses all running under the one banner. They have just announced a new deal that is just as complicated as they are.

SPF will be taking over the Ballard corporate structure, including its $800 million in tax losses, while Ballard creates a new corporate umbrella, New Ballard, that will take everything else from Ballard (the fuel cell stuff, the assets and liabilities, and $41 million of SPF’s cash for their trouble). SPF has, in the same breath, announced that they will convert to a dividend-paying corporation at the end of the year. This means that they are going to give up 2 years of the tax holiday on income trusts, and the wording of the release suggests to me it’s because they have something they want to take over, and the growth limitations are holding them back.

It seems to be a great deal for everyone involved: SPF just got $800 million in tax losses they can claim in future years (which should be worth something like $160-$240 million in future cash/tax savings: they won’t pay tax for ~7 years thanks to that) for the low, low price of $40 million. Ballard got some (presumably much-needed) cash in a very tight credit market, and they gave up something they aren’t likely to need any time soon to do it. Investors in SPF who pay taxes (i.e.: not me) will benefit, as they are going to keep the distributions the same (the current payout ratio is about 80%, so they need some income growth going forward to get it down to the 70% range when they eventually start paying taxes), but now they will be eligible for the dividend tax credit for the investors.

As crazy as this deal sounds, it might become more commonplace as long as there are trusts to convert with cash, and companies afraid of trying a debt issue that have tax liabilities they can sell, so this could mark the first of many such deals to come.

So this deal makes SPF start to look attractive to me at it’s current $10 price and 16% yield. I am concerned about certain parts of its business: the propane part should be fairly steady, and makes up about a quarter of their business. Half comes from the ERCO sodium chlorate part, which is a chemical used in the bleaching process for the pulp & paper industry. I honestly don’t have a very good handle on what might be coming down the pipe there, which scares me a bit, but I think an assumption of zero growth/zero decline is probably fair. Another quarter comes from dry wall and natural gas/electricity reselling, which is not something I want to own right now, what with all the drop-offs in new home construction. Of course, the question is how much of the negative news in a third of their business is already priced in? At a 16% yield, with a distribution classed as a dividend, and a 7-year tax holiday, I think I’m happy with it. I will have to see what the morning brings though, as I don’t think I would still be buying at much above $10.

“What the fuck is this shit?!!!” I exclaimed as I woke up and saw the weather. Three inches of wet, heavy snow.

In October.

There were a great many trees that still had their leaves — many of which were still green when we got hit with this snowfall. With all that extra foliage to hold onto falling snow, there was a lot of damage from fallen trees and branches. We look to have lost the small lilac bush in our front yard. Plus, the power was out for about 2 hours last night.

This is insane, heavy snow before Halloween. I can recall a few flurries in past Octobers, but this is the first time in my life that there’s been heavy snow on the ground before the leaves have even finished changing. I suppose there are a number of factors underlying this weather insanity. Global weirding is probably one culprit.

But I think the largest part of the blame belongs to Shoppers Drug Mart & Zellers. I went there last week, and was greeted by a wall of wrapping paper and bows. That’s Christmas stuff. Christmas, as in, the holiday at the end of December. This is October, and there are but three allowed holidays to consider: Thanksgiving, “harvest”, and Halloween. Halloween is, of course, the biggest, best, and last of these. It’s one of the most commercial, with the coolest props and the best candy. Some stores (i.e.: costume stores) stay in business just due to what they manage to sell for Halloween. It’s also an ancient and magical holiday that deserves our respect and reverence, because otherwise it will mess us up.

So when Halloween sees shit going down like Zellers putting out their Christmas shit early, and Shoppers Drug Mart taking away the candy, before Halloween has had its night, it gets — to put it mildly — uppity. “You want some Christmas shit?” the vulgar, drunken spirit of Halloween asks. “Here, have yourself a merry little white Christmas, you winter-loving assholes.”

And we get snow.

Nothing seemed to be going right for me this week, especially when it came to electronics.

First, my home desktop broke down with no video, the problem appearing to be a combination of the motherboard, video card, and possibly power supply, so I went and ordered a whole new computer for myself as a bit of a birthday present.

Then, the DVD burner on my work computer died (I still have a DVD-ROM on that system, so the situation isn’t too dire).

My laptop pulled through, but it crashed a number of times the next day, including some very strange video errors that made me think the video card on it was dying, too.

Then my new computer arrived, and after putting it together, it wouldn’t boot with my old hard drive (one of the few parts I kept from the old computer). I spent all day trying to get the drivers right and repairing windows and slipstreaming, and just nothing. So after giving up the next day, I did a fresh install of windows, only to find that the brand-new PC-Cillin 2008 disc I picked up doesn’t support XP SP3. (Fortunately, Trend Micro upgraded me to 2009)

At work, I use a piece of hospital equipment for my research, but only get it when it’s not being used to treat patients, which is generally the middle of the night. It’s tough to find volunteers to participate in my study even at 11pm and 1am, but I managed to fill all four time slots last night: 11pm, 1am, 3am, and 5am (ending at 7am), the first time I’ve managed to book 4 people for a single night. Things were finally looking up: this one busy, hellish night was going to pay dividends in getting me that much closer to finishing my thesis. Then, halfway through the first person, my equipment broke down. Just gave an error message and stopped working. Then I’m left cancelling all these people, trying to get a hold of them in the middle of the night so they don’t waste their time coming in, in addition to not having my equipment and losing out on all that time…

So tonight is our Halloween party. I talk to my mom on the phone beforehand, and she mentions that she’d like me to print some of the photos I took of the trees changing colours. My camera, which she got me for xmas last year, is just fricking great. It takes amazing pictures, a few of which I’ve printed as 8×10’s and framed. So of course, praising the camera today has cursed it, and at the end of the party I set the camera on a bookshelf to take a timer shot with Wayfare and I in it… and the camera falls off the bookshelf and hits the floor. I’m thinking it’s no big deal: I’m not generally too gentle on my equipment, since I figure it’s got to be made to handle the rigours of everyday life, and a 4′ drop is not that serious. Nope, the camera’s dead. The motor that focuses and retracts the lens when it shuts down won’t operate, so it can’t focus on anything and I can’t retract the lens to shut it down.

Fortunately, my parents got the extended warranty from Black’s when they bought it for me (it must have been a freebie, since they never bother with extended warranties). I should hear back soon if it can be repaired…

Well, after my computer died, I tried really, really hard to keep my same install of Windows, to save me from the hassle of setting everything up again, tracking down all the programs I’d need to install, etc. However, after nearly 24 hours at it now, I’m giving up and creating a new install. I’m a little bit afraid that the new install won’t work either due to the SATA hard drive (I don’t have a floppy drive for the “f6″ step).

My old install would blue screen briefly then automatically reset when I tried to boot it in its new home. It would go to safe mode, but the CD drive wouldn’t work, which just added an extra layer of headaches to the process. From safe mode, I tried to replace all of the system drivers I could, but had no luck in getting it to boot normally.

So, I tried doing a “repair” install from my XP disk. Unfortunately, that didn’t work, and moreover, wouldn’t even let me into safe mode again (damn, I knew I should have taken the second chance to backup my drive!). Knowing that my XP disk was service pack 1, which didn’t include any SATA support, I tried following these instructions to create a new CD that was current to SP3, hoping that might do the trick. I found out right away that just _any_ CD burning program wasn’t up to the task, and had to get a trial version of Nero.

One additional wrinkle is that two files from my XP CD wouldn’t copy over. At first I thought they were inconsequential: I could make a CD that would boot, but wouldn’t install Windows, giving me an error to insert the Windows disc into drive A. Finally, I found this page that explained how to recreate the WIN51IP file that wouldn’t copy (it’s just a text file). 6 coasters later, and I have a working SP3 install disc…

…and still no joy. Even repairing from SP3 left me bluescreening on the first reboot attempt. So, figuring I could use more hard drive space anyway, I picked up a second hard drive, and am now going through the process of a fresh install. At least starting at SP3 will save me some patching time, and leave my computer a lot less vulnerable to the big, scary world when it first connects to the internet, so not all of that time screwing around with slipstreaming was a waste.

Well, as you’ve all read by now, my desktop computer mysteriously died while I was away, and I’ve decided to replace it by building my own from parts again. This not only saves me a bit compared to a new computer (e.g.: from Dell), but also lets me keep my old hard drive (which I hope is still working), so aside from a few driver headaches, I don’t have to spend hours installing and updating a new system, then finding all my old settings and files, etc. It makes the change fairly invisible to me.

I ended up going with an AMD Phenom 9750 quad-core processor — I was kind of excited to see that they had made it up to quad cores now. The AMD option seemed to offer more bang for the buck, though I’ve always gone with Intel in the past (and that’s also what Netbug recommended in the previous post). To run it, I went with a fairly basic motherboard from MSI, with the AMD770 chipset (the most basic chipset that supports the quad-core Phenom and the DDR2-1066 memory). I was fairly ambivalent about video cards, and RAM (4GB, no fancy memory fans or anything).

I did a fair bit of comparison shopping and review-hunting, as I’m wont to do, and ended up on NCIX’s site looking for this stuff. At first glance, their site was pretty amateurish and hard to search. I almost didn’t buy from them because of it, but then I discovered a few crucial details that put them over the top: they have some pretty kick-ass sales (including one on a video card in my range that not only knocked $30 off the price, but also got free shipping for the whole order), and they also don’t charge sales tax for Ontario orders (they’re BC-based), so that kind of cinched it for me.

However, the motherboard I wanted was out of stock there. I started to surf around, looking for other options, looking for reviews of the other options, etc., when I realized I was falling into a dark obsessive-compulsive hole that would swallow my whole afternoon. So instead, I found a $20-off coupon for Newegg.ca which covered the shipping, and ordered the MSI motherboard from them. Newegg.ca is a much more professional site: it’s cleaner, easier to search, and has more information, including customer reviews. However, their prices were not wowing me: they were competitive with local stores, but only before you considered shipping (which, at $16, was no bargain — good thing for that $20 off coupon!). I nearly lost my shit when I got the shipping confirmation by email: it was being shipped by UPS.

With a US starting location.

I was immediately thinking of cancelling the order, afraid that I would get stuck with some ridiculous brokerage charge, and was already composing the letter full of righteous anger that NewEgg Canada should pull this kind of thing on me. Fortunately, a quick web search turned up that NewEgg has cut a deal with the United Pirate Service, and will be paying the customs bounty for us; if they do show up and try to extort it from us, then we can pass the bill on to NewEgg. This is, apparently, spelled out in the fine print of the purchase details that I accepted, but who ever reads that stuff?

More to the point, why can’t anyone else cut a deal with UPS (or DHL) to have those bogus brokerage charges covered? Why isn’t that sort of thing illegal under NAFTA or something? Why don’t more US merchants offer the bestest and cheapest shipping option: USPS-Canada Post?

To conclude: NCIX: looks a little sketchy on their web design, but they rock. Newegg: smooth, but add in the shipping charges before you compare prices.

As for the computer itself? Well, I’ve got it all together now… but am still using my laptop. Unfortunately, my plan to use my old hard drive and avoid going through all the hassle of a fresh install doesn’t seem to have worked so well — Windows blue screens halfway through startup, apparently a common problem with motherboard upgrades. I tried the fix of uninstalling my hard drive controllers (and virtually all my other drivers), but that didn’t fix the issue, so I tried a “repair install” — but that requires getting my hard drive drivers onto a floppy… and not only do I not have the hard drive drivers (or I would have installed them while I could still boot to safe mode), but I don’t even have a floppy drive in the computer any more! So it’s looking like I’m going to have to do a fresh install of Windows after all, and I’ll probably have to use another computer (Wayfare’s?) to get the data off my drive…

Wayfare and I just had a rather monumental life experience, for which we received numerous lovely (and generous) cards of congratulations. What I found incredible was that we received somewhere in the neighbourhood of 60 cards, and there were only two pairs of similar ones. I’m amazed at how many unique cards there were, and since I doubt all of our friends and family conspired to pick different cards, it must mean that there is an extraordinary number of cards out there on the market.

I figured I’d geek out and do a quick combinatorics calculation to figure out how many that implies, however I find I can’t recall how to do the math any more. It’s kind of a sad point that I’m passing the halfway point in my PhD and I can’t remember how to do a high school math problem without opening up a book or Googling it.

So, even with just 59 unique cards, one can pick a set of 58 in 59 unique ways if no repetitions are allowed. However, repetitions are allowed, which leads to something like 10^80 possible combinations. I still can’t think of how to figure out how many cards that implies are on the market, but it does seem to tell me that it was pretty extraordinary that people chose such unique cards! It also makes me a little sad about where my math abilities are going to.

Well, it looks like the initial euphoria over the massive bailout plan last weekend has faded already, and the market has given up much of the gains today.

My computer’s problem looks to be much more complex than just a dead video card: possibly the power supply, motherboard, CPU, or multiple combinations thereof are fried in addition to the video card. So I’m going to do some more troubleshooting tonight, but it seems like I’m looking at needing a new computer: either I can take Wayfare’s (which is virtually identical to mine from a hardware point of view) and get her a new one, or get a new one for myself (she doesn’t game, so a new one for her might be a bit cheaper). I think I might try to hold off and continue to use just my laptop and work computer (and game on the Wii) for a few months, then maybe hope that I get computer parts for xmas.

The company that partially funds my research stipend had some bad results in their clinical trial, and have moved surprisingly quickly to terminate my student support. It looks like they’re gearing up to go bust, which has wiped out the stock I held in them, too. This is bad, but could be very bad. Since they hold all the patents for what my supervisor invented (and I continue to research), it means I might not be allowed to continue my research if they liquidate the patent rights and we don’t continue to enjoy our investigational license. The stock’s at about 8 cents today, so if anyone has $800,000 or so to lend me, I could stage a hostile takeover, keep it a going concern (though realistically, once I started buying up shares in a hostile takeover, the price would go up — better lend me $2M just to be sure). Maybe if I pretend I’m a bank with bad loans, one of the world governments will give me a few million?

And Stephen Harper, against all sense, won the election. Ok, it wasn’t the best time for the Liberals to flog their Green Shift plan; but what’s he going to do with another minority government? He just dissolved parliament, breaking his own election law, because he couldn’t work with a minority government. Now that he has another he’s going to pretend it’s all hunky dory and a mandate from Canadians? I was also really surprised at some of the Ontario ridings that elected Con MPs — they should have known better.

Update: After further troubleshooting, I found that my CPU is fine, my RAM is fine, and I think my hard disk/DVD-R is fine. My video card is shot, my motherboard is shot, and my power supply is unknown. So I think I’m looking at a new computer here :(

I’ve soured against gift cards in recent years, and have tried to turn back the stigma against cash gifts by thanking people profusely for the “universal gift card”. The government did a world of good by not letting companies forcibly expire the easily-misplaced interest-free loans, but in these tough economic times, that won’t necessarily stop a company from going bankrupt and not honouring them. I was reading a completely unrelated article about the mess we’re in when I noticed a little blurb about Linens ‘n Things going bankrupt this week, and that they might suspend their gift cards. “Hey!” I said to myself, “we just got a Linens ‘n Things gift card!”

I have no idea if they can do such a thing here in Ontario, but I’m hoping to rush right out to use it up soon anyway.

Well, I just got back from my vacation, and was all keen to get back to using my “real” computer, only to find that the video card was dead (it may also possibly be a problem with the power supply — I’ll check that out in the morning). I’m not quite sure how to take it: on the one hand, it’s a real bummer, and I don’t need the expense of a new video card now, especially since that one was just over a year old. On the other hand, that was an off-brand ATIx1650 (made by ASUS), and for some stupid reason the ATI drivers wouldn’t work with it, so I was stuck with the ASUS version of Catalyst 6.2 or something like that (and have run into problems with games that wouldn’t work with the old drivers).

I’m on the fence about what to do: my computer is now 5 years old, and might need to be upgraded in the next year or two (if it couldn’t handle StarCraft 2, my next anticipated must-have game, it would have been upgraded then). So, I could let this prompt me to upgrade early, but I really don’t have the cash for that right now. That means just replacing the video card (and possibly adding another gig of RAM as long as I’m at the store and tinkering), but then I’ll have a new AGP video card that I can’t use on a new system (which will almost certainly be PCI-e). Dilemma, dilemma.

Anyhow, I am completely behind the times on what a good video card is in the ~$100 range. Anyone know what I should look for?

Well, it seems to be a theme here lately that I try to reassure myself that the equity world is not ending. Since asking when will we hit bottom?, there has been a terrible week on the market. So again I have to wonder, how low can it go? How bad can it be?

The credit crisis is, obviously, nasty. There is a lot of fear out there. And we are probably heading into a recession, a nasty one from the looks of things.

However, the stock market is down something like 40% now, over 15% this week alone (down over 20% in the US S&P500). We’re just about back to where we were in the trough that followed the tech bust when stocks were not exactly overvalued. So how bad can it be? Have we really wiped out 6 years worth of growth and value? Are earnings going forward going to be 40% less than what they were last year?

I’m profoundly unqualified to answer those questions with any certainty, but my feelings are that we must be getting near the bottom of this market. I don’t think we’re heading into a depression; I don’t think owning pieces of large companies is going to go out of style and become a worthless hobby. Still, it’s hard to psych yourself into buying stocks.

However, I’m also more fearful than I have been previously. Credit is becoming less available, which makes me think that my LoC is not sufficient for my emergency fund, and that it’s time to start keeping some cash outside the market.

Also, huge daily drops like this feed on each other due to the leverage in the margin buying. People who borrow to buy stocks have a limit on how much they’re allowed to borrow. Once a stock falls too much, they can be forced to sell some in order to bring their loans (margin) back into balance, which can then drive stocks lower in a positive feedback cycle that feeds on itself. However, it’s got to stop at some point. At some point, the market will recover (though that might be 10+ years from now).