Blessed by the Potato

For those that don’t know her, I’ll introduce the Cat to you slowly, as her immense adorable factor may cause brain damage if you take it full-force unprepared. It is for this reason (and also because, like her human, she is a bit misanthropic) that she hides whenever someone comes to the door, so very few people have seen her in person.

Here we see her in her natural habitat – in a box. Smelling things.

Shoppers Drug Mart has decided to strike back at the Ontario government’s plan to rejig how pharmacies are paid by cutting hours in many London-area stores. London was probably chosen since Deb Matthews is both a local area MPP and the Ontario Health Minister, rather than because of its long history as a test market. This is a classy move.

Shoppers has been the darling of many a Canadian investor’s eye: they’ve been growing like crazy the last few years, and pay a dividend to boot. However, even before this, I wasn’t too keen on the SDM story. I used to love Shoppers as a consumer. They were open late or 24 hours, they had, like, everything, and it was all reasonably-priced. Then a few years ago they started jacking the prices up; just last week I went in to get some half-priced Easter candy, picked up some OTC drugs too, and came home… I was checking what I bought, and even though I paid the price I usually pay, I found the packages were half the size of what I got from Pharma Plus last time — they’re now charging twice as much as Pharma Plus! Since this wasn’t just candy but expensive medicine, I took it back, and went to Pharma Plus instead. Yes, their Optimum program is one of the better loyalty programs out there, and yes their stores are bigger and better and stocked to the gills with everything and (until now) open later… but I don’t think I’ll be going back unless there’s a blockbuster sale sometime. This is, of course, years after we stopped going to Shoppers for actual prescription drugs because their dispensing fees were ridiculous — again, double what many other drug stores charge (and what my drug plan covers!).

Plus a lot of that juicy growth has been in expanding the square footage of their older, smaller stores. There aren’t many of those left, and with almost half as many SDMs in Canada as there are Tim Horton’s, I can’t see a whole lot of growth left for ex nilhio locations. So that pretty much leaves their high-margin beauty and cosmetics business as the only place left to continue growing. I think that actually will work out fairly well for them, but it’s not the rock-solid recession-proof pharmacy business that investors are being sold on.

I should say that I do have a bid sitting open for SC, but at $35.50 I don’t expect to get filled since the panic over the drug plan rules seems to be fading. At its current price ($38) I think it’s probably a decent enough buy for the low-growth long-term story, but I’m not convinced it’ll shoot the lights out of the broader market index, so I might as well buy that.

So I forgot that after I got a real webhost I also signed up for Google Analytics, and it’s been a little sobering to look back on the stats now. I get, on average, 7 unique visitors per day. Considering one of them is probably me (since I no longer access the backend directly, as my real webserver is with some company with server farms and probably my old dog Schwartz frolicking, because he totally went to a farm like my parents suggested when I was 11 and not put down like they told me when I was 22, and if he went to a farm it was probably a server farm; and not a decrepit Windows ME system under my desk), that’s just 6 people who visit the site per day. True, many (uncountably many) people may be on the RSS feed now that it actually works, while others may only check every few weeks since it’s not like I post all that often anyway… but I also know that I wake up to 20+ spam comments caught in my filter every morning afternoon. The average length of my posts is about 800 words, so that’s roughly 133 words per visitor.

I thought I had more “real-world” friends reading than that, plus the odd internet person (or chatty AI)… apparently not. Though there have been more than 6 people that have commented in the past on particular posts, it doesn’t appear as though they stick around. So, guessing at the identity of my 6 readers, here are 133 words for each of you:

Wayfare: “She tries to get me to write, and I try to get her not to edit.” I know you must feel in some way obligated to read, if only to check in and see if I was killed in a horrible fiery wreck on the 401. Still, I know you like all the rants here. It’s tough getting this worked up about major (and admittedly, minor) issues and then writing about it for the internet, and mistakes are bound to creep in. I’m glad you use the comments section for corrections. Please send me adorable cat pictures, as I know I don’t have nearly enough for your tastes, and our cat is way cuter than all of Scalzi’s put together (which, as a 3-headed 12-legged monster cat, probably wouldn’t be all that cute).

Netbug: You got me into this whole WordPress thing, then abandoned your own for Twitter. I just can’t do Twitter, man… I can barely get this 133 word gimmick to fit in this one-off post, so a 140 character limit all the time is a serious straitjacket for me. Can you start doing movie reviews on Twitter? I’ve seen some awful movies recently that someone really should have saved me from: The Box, Amelia (actually, both of those I saved myself from after the first fifteen minutes or so). I’m reminded that I should start writing about the upcoming StarCraft2 launch to help get you psyched for it, because if you let me down on SC2, man, Ima gonna be pissed. I’m even carefully timing my graduation so I will have more play time!

Ben: I find it a sign of the times that we seem to be more up-to-date on each others’ lives by reading each others’ blogs than we ever were when we lived in the same city. Speaking of up-to-date on each other’s lives, what’s going on with the housing search?? You put that big blog post up, I put a big messy comment in reply, and then nothing except pictures of meat! (There are a lot of meat pictures on your blog!) Inquiring minds want to know! Also, I have no idea what the deal is with wine, so many of the “descriptive” words used make no sense to me, yet somehow you describing a Pillitteri Chardonnay (a liquid) as “Like a mouthful of oaky buttered toast” makes the world a stranger, better place.

Michael James: I feel bad, actually, that you read this blog. You’ve got an interest in personal finance, and I do occasionally have a post on finance which, IMNSHO, I totally rock. I even have graphs sometimes, and I know you must have a great love of graphs because you so often have such awesome ones on your own blog, and nobody graphs like that just because they think it’s a useful way to convey information. I’ll try to make more graphs (and good ones too, not just graphing alleged cookie ninja attacks vs university exam schedule). Still, I can’t help but think that I somehow tricked you, that every time another post arrives in your RSS feed, and you see it’s not finance related — let alone full of awesome crazy — you shake your head… Sorry.

Spambot: They say flattery will get you everywhere, and I’d say that it’s partly true. When you come in here and post a message about how awesome my blog is and asking for “more information on that topic”, it makes me feel good, in a really vague way. I start to convince myself that you might actually be a real person that likes my writing… until you post ten of the same message daily. That ruins the effect, Spambot. Plus, sometimes, you go and start what I can only assume is swearing in Chinese, and it’s not appreciated, even from a nascent distributed-computing sentience that hasn’t yet properly learned nettiquette. Also, it’s not cool to post more per day than I do, or to make money from my blog when I’m not. Fuck you.

Unknown reader: I don’t know who you are, you’ve never commented. This whole Web2.0 thing is supposed to make it possible for people to provide feedback and make the web all interactive, but that doesn’t mean you’re obligated to. I respect your decision to remain silent and anonymous, and thank you for your readership anyway, and hope I’ve helped entertain or educate you. Besides, I hardly ever comment on other peoples’ posts, even though I read a lot out there. You wouldn’t think it from a guy who goes around blogging and trying to get readers for his blog, but I’m actually kind of shy myself, even on the great anonymous supertube network highway, and sometimes compose comments on other posts, just to delete them without posting. So I totally get where you’re coming from.

In conclusion, I suppose I should be glad I don’t have more readers, because otherwise I’d be up all night looking at what crazy google terms you used to land here, and have to write minor monologues to each of you…

Ok everyone, I’m going to start a weekly feature here. You’ll probably find it dry as toast, especially if you only know me via the site. Unfortunately, until you guys start clicking on some ads, I really don’t care what you think (kidding! I kid… though some non-spam comments at least would be nice. I’ve got an ego to feed here, folks.).

First up, I’ll share my change for the better progress for the week, then later share some links and random thoughts that I didn’t manage to turn into full posts earlier in the week.

Workout: Considering it was the first week, I’m rather disappointed in myself. The weather was bad, so I only went out biking twice, and not very long for either trip (one of which was to Shoppers); I only did my basic workout three days — I was busy, and sore the day after the first day, but still, I was hoping to do better the first week!

Diet: Creme Eggs, half price at SDM. ‘Nuff said.

Links:

SMBC, what keeps you up at night?

TVO’s the agenda had a sober discussion about climate models. If you have an interest in global weirding and have no idea what a climate model is, it’s a decent little introduction, but if you already have a clue, I’m not sure it’s worth the time commitment. There are four other parts I haven’t had the chance to watch yet.

The Ontario government announced changes to how the government will pay for generic drugs, and that will likely lead to pharmacies becoming less profitable. Shares in Shoppers Drug Mart dropped 12% on the news, and there’s some discussion at Canadian Money Forum as to whether this represents a buying opportunity. Personally, I thought it was overvalued before, so it’s still not a screaming buy in my mind, but I have put in a bid that will get filled next week if it takes another ~6% haircut.

Finally, I’ve been revisiting Freddie Mac. The preferred shares are still trading for pennies-on-the-dollar (and the C$ is at par), and from the more recent results (yes, I’m months late in getting around to reading them), John Hempton’s estimates are looking pretty good (though I didn’t see that pretty graph of defaults, losses, and reserves — they don’t seem to be as interested in producing slick figures under conservatorship). The biggest risk here still appears to be political. Unfortunately, that risk is huge, as so far the US government has shown every intention of setting Freddie Mac up to fail: crushing penalty interest (which none of the bailed out banks that caused the mess had to pay), and even refusing to allow them to pay off some of the loan with their tax loss pools or cash on hand. I’m torn between greed on the one hand, and prudence on the other. My best guess is that there’s a ~20% chance that Freddie Mac might actually pull through and pay back the junior preferred — of the 80% guess at the chances of failure, I’d say 75% is the political risk, and only 5% chance of failure comes from John Hempton’s numbers being wrong at this point (i.e., that the GSE is actually insolvent and can’t possibly earn its way out if given time). Not great odds, but if it happens the payoff is $25, if it fails, the cost is $1.30. That’s a pretty damned good expected payout, and if I had a hundred such bets I’d put all I had into them, safe in the knowledge that I’d be better off from the ones that did make it. Unfortunately, I don’t have a hundred such bets to make, I have just the one (and Fannie is a correlated bet so it doesn’t count as a second). So, as Warren Buffet says, when it’s raining gold, do I reach for a bucket, or just a thimble? Or, should I focus on not losing money, and only gambling as much as I can afford to lose here (i.e., what I already have invested and no more). For now, I’m sticking with the thimble: even though these are very illiquid securities, there will probably be more opportunities to buy as clarity emerges.

My laptop is a death trap, I must finally come to admit it.

I mentioned the woes I’ve had with this hot, heavy A70 before, specifically the annoyance of having to resolder the power connector thing. The heat it generates must be melting the solder, because I’ve had to redo that joint every 6 months or so after it went the first time, which is really terrible considering the light usage that laptop gets: I haven’t gamed at all on it in the last few years, and my day-to-day computer needs are met by my desktop, so it’s really just for weekend email — i.e., maybe 40 days of actual usage between rounds of having to fix it. Finally, our technical wizard, Lynn, replaced the pin with a bigger copper one he made himself (and, I am convinced, enchanted with ancient runes of power), cleaned up the other two pins, and resoldered it all for me. It’s been a year since that repair and the power connector hasn’t even come loose (the first stage of failure).

I can’t believe he didn’t win the staff award, again, at our annual research day. The judges are on crack for shutting him out.

Anyhow, I digress. In addition to the power connector problem, it’s also a computer that’s prone to overheating and crashing. As it’s aged, normal everyday tasks like surfing the web and checking email seem to tax it more and more, so now it’s overheating and dying after an hour of that, even. On top of that, the power cord now has a small fray in it (and seriously, don’t show this to my insurance company edit or to Wayfare):

Man, this computer is a blazing inferno waiting to happen.

However, it still runs fine: although I can tell it’s using more CPU resources to get the job done, the job still gets done (and still faster than Wayfare’s brand-new netbook). Since I don’t use it much, and don’t need it, I don’t have any plans to replace it in the next year or so, though if I have a job in the fall I will likely find this Boxing Day to be very tempting.

PS: the fray is on the DC output part, which is moderately less dangerous than if it was on the cord going to the wall outlet.