Blessed by the Potato

I don’t really get it — there is a lot of fear and doubt out there about hybrid cars, a lot of people saying things to detract from the new technology. Some of it is pure bullshit, like the CNW study or the crap about the Sudbury moonscape. Some of it is selective accounting looking at the purely financial side of things, such as comparing a nicely equipped mid-sized car like a Prius to a bare-bones compact, or assuming that the price of gas won’t go up over the next 15 years, or that you’ll only own your car for 7 years at which point it will be worthless.

I can understand why some companies (cough, GM, cough) who are losing out on sales to hybrids might have an interest in sowing FUD, but I’m surprised that so many people out there seem to take it up without a second thought (how many times have I heard “oh, but the batteries will have to be replaced every 5 years”?!). Hybrids are a very promising technology and a vital step on our path to electric cars, and while rare until very recently on the ordinary streets of Canada, aren’t really all that new.

One of the latest rounds of fear-mongering focuses on the electromagnetic fields (EMFs) produced by hybrid cars, getting international attention in a recent New York Times article “Fear but few Facts on Hybrid Risk” which was linked to by the Consumerist. To quote from the article:

Kent Shadwick, controller of purchasing services for the York Catholic District School Board in York, Ontario, evaluated the Toyota Prius for fleet use. Mr. Shadwick said it was tested at various speeds, and under hard braking and rapid acceleration, using a professional-quality gauss meter.

“The results that we saw were quite concerning,” he said. “We saw high levels in the vehicle for both the driver and left rear passenger, which has prompted us to explore shielding options and to consider advocating testing of different makes and models of hybrid vehicles.”

I sent a message to Kent Shadwick, asking if he’d share his data so I could see what he considered “high” and whether that was a static (DC) field or a time-varying field measured. He did respond, and promptly, but only to say that he hasn’t shared the results anywhere, and that they hired an outside company to take the measurements using a rigourous procedure. He also said that he was looking into shielding solutions.

I have to say that this is really disappointing, and I think it shows the real lack of a decent science education in the general public that the New York Times ran this piece without even being able to say what the fields are or how that compares to the geomagnetic field, let alone whether there’s any risk from that. The field, if you will forgive the pun, of bioelectromagnetics is so controversial and so lacking in standards that it means virtually nothing to have one person say that something is “concerning” without knowing what their threshold for concern is. Some people are concerned by static fields that are weaker than the Earth’s magnetic field; some aren’t concerned about static fields at all until we get beyond the MRI level. Likewise with time varying fields: some people think that virtually any exposure should be eliminated, others think nothing of using microwaves up to the point where they cause protein denaturation or other fields up to the point where they start to heat the tissue. I have no idea what Kent Shadwick might find concerning, so even if he does have a respectable position with the school board (not some random nut falling asleep at the wheel) and even if he did hire qualified people to take good measurements with the proper equipment… his “concern” is not really newsworthy to me unless I know how his threshold of concern compares to mine.

Plus all this concern about magnetic fields in hybrids is really only part of the issue.

The question asked is always about the risks — we know, for instance, that ionizing radiation is something that can cause cancer and other health issues. However, if you have a broken arm or get a nasty bump on the head, you can be sure you’re popping in for an x-ray/CT no questions asked because there is a big benefit to those diagnostic tests that far outweighs the small inherent exposure. It’s really all about risk-benefit ratios.

So for the hybrid car issue, we have the question “what are the fields?” and we don’t even have a good answer to that, from which point some people fall into hysterics (up to selling their car). The real issue is then several steps removed: the Prius may have higher magnetic field exposures than other cars, and those fields have an unknown but probably small effect on human health, and that might outweigh the positive aspects of the technology.

One example used to show that pulsed magnetic fields can effect biology is the FDA-approved bone growth stimulator. I had the pleasure last week of listening to Arthur Pilla’s (one of the inventors of the electromagnetic bone stimulator) plenary talk in San Diego. He talked about the first use of the bone stimulator on a woman who had a fractured tibia just below the knee that hadn’t healed for 9 years, despite multiple bone grafts, etc. They had this theory that an electromagnetic stimulator might be able to stimulate bone growth, but they also knew that the fields would not be restricted to just the break, and that the knee itself would also be exposed. There was a real concern that the bone might grow wildly out of control and completely fuse the knee, but since this woman’s only other option was amputation, they gave it a try. The stimulator only caused bone growth where there was a break. My point is that it’s not quite so simple to say that induced currents will have an effect on tissue; they may have an effect on some tissue some of the time.

So ok, there might be some small risk with hybrids (though probably not). On top of that the benefits have to considered (fuel efficiency, emissions, safety…) One colleague off-handedly said that even if magnetic fields cause cancer, you’d probably be better off with a Prius because you’d be exposed to less gasoline from the gas stations and escaped vapours in your garage… another possible carcinogen. To save less fuel than switching to a hybrid would net, some people will tailgate (draft) semi trucks in their blind spot. That’s a behaviour with a definite and immediate risk — not of possibly getting cancer 20 years down the road, but of getting instantly killed by a tire blowout or sudden stop with zero space for reaction time. Of course, the risk of being turned into a red smear on the pavement is not a new type of risk to drivers.

The benefits of a Prius vs. a comparable conventional car are real and material. The risks are unknown, but probably negligible. Unfortunately people have such a fear of the unknown that they can blow it out of proportion in their decision making, and focus on their fears rather than the overall picture. Back to the York Catholic District School Board: as a scientist, I was a little disappointed that he wouldn’t share his results so that I could come to my own conclusions; however, I understand why he went to the effort of measuring the fields and looking into solutions — for an individual driver, the risk-benefit ratio is pretty clear: just buy the hybrid. For a school board fleet however, there are unions to consider, and a union will fuck up a school board over a perceived threat to its drivers, whether or not that’s a real concern or a valid trade-off (after all, it’s not the union members who are saving on gas in a fleet purchase situation, so in their minds the risk-benefit works a little differently).

The title of the article was spot-on: Fear, But Few Facts.

I don’t know why there is so much misinformation and so much fear being spread about hybrids out there. I wrote Hybrid Cars: The Benefit of My Research (the 2nd link down in the static pages on the bar to the right) to try to distill some of my research over a year ago. Some of that information is starting to get out of date, but I don’t think that anyone has ever read it anyway, so I’m not sure if I should bother updating it with things like this.

Another nasty day on the stock market today, and a new-found 52-week low for the Dow. Back in January/February I was buying up “values” like crazy on dips like this, but these days I’m finding it harder to stay positive that the end of the bleeding is near, and that things might at least stabilize even if not turn bullish in the near future. After watching “A Crude Awakening” I’m even worried that we might truly be on the cusp of the Second Great Depression. That despair itself might help indicate a market bottom, but since I only have a bit of “dry powder” cash left I think I might be sitting out any more buying for a few weeks or months until I see a real gem.

It was an added psychological blow today when I saw that my capital for the year to date was down over 10%. The real story is not quite that bad, as distributions and dividends have made my overall return a less than 5% loss — beating the S&P500 and the Dow for these 6 months, but not the TSX. Unfortunately, my worst two performers were my most recent buys and the two companies that I thought I snatched up at real bargain prices: GE and Yellow Pages (each down about 20%). I am tempted to be greedy and dollar-cost average or “double down” into either one at this point, but am having real trouble trusting my value-trap avoidance senses, especially after how they’ve performed in the last 2 months. I could be really greedy if I thought that this was the market bottom (or close enough to it) and get some leveraging going, which has been something I’ve avoided as being outside my risk comfort zone.

A guy I used to work for is a big believer in the power of leveraging to multiply returns. Unfortunately, today’s market downturn triggered a margin call for him and that is a very unfortunate, very painful situation to be in. He still thinks that I should maybe look into getting a 5-10% leverage… but is now suggesting that I wait a few months before taking that plunge.

Anyhow, Netbug asked in a recent comment about how to get into the stock market in the first place, so maybe in a few days I’ll do up a post on that, though I’ll probably talk to him via other channels directly, and let that experience guide me in setting up a template (plus it’ll give me a chance to search the other personal finance blogs, as I’m sure CC or MDJ has a post of that sort in their archives.

Here, we have a kitchen lit by 78 W of CFLs.

Whose messy kitchen that is exactly is unimportant. Now, 100 W of halogens.

If that doesn’t convince you, you should know that CFLs now have the John Scalzi Seal of Approval.

It wasn’t quite an apples-to-apples comparison, but you can easily see how the fluorescents for less energy give off a ton more light than the two little halogen spots above the counter. The near dusk light from the window and the camera’s colour settings make the quality of the halogen light, IMHO, look much better in that picture than with the CFLs, but in real life the CFLs are only slightly less desirable in terms of colour output, again IMHO.

In Charlottetown, we found that Little Christos is open again. This used to be my favourite pizza place when I was a kid — pizza worth driving 2 days in from Ontario for. Unfortunately, they closed down about 10 years ago after coming out with their own line of frozen pizzas for the grocery store (which perhaps cannibalized their restaurant business). While it was good, it wasn’t quite like I remembered. The story is that the son of the original guy is running the place, with all the original recipes… and over a decade does dull the memory a bit, but nonetheless I couldn’t help but feel that the pizza I had this week was a lot cheesier and a lot less fluffy than the ones I remember. I also recall the pizzas having more sauce, and a bit more spice to them — but then, lacking in sauce can just be a variation thing even with the original recipe. Talking with the staff, they say that sometimes the pizzas just don’t quite rise up as much, and that the fluffy thick crust with the really large bubbles was their signature back in the day. It might be upselling, but she said that next time I should order a large since the smalls and mediums don’t rise as much in the oven.

Little Christos aside, PEI always seems to be at the forefront of pizza technology. Garlic fingers, for one, are an awesome and incredible invention that for some reason is quite slow to spread to Ontario (though we do load up on them when we’re at Pizza Delight in Penetang!). Dipping sauce also got it’s start out there, AFAIK, and is now way more popular in Ontario than it ever was out there, helped no doubt by the switch from “donair” to “creamy garlic”. This year, I saw in the Greco pizza place fridges for their pizza slices. Rather than having the pizzas that you order by the slice sit under hot lamps or wither at room temperature for hours on end, they throw them right in the fridge to “preserve freshness” and then heat them up again when ordered (which you have to do anyway with the heat lamps or room temperature displays). If you think cold pizza is even better than fresh (which is a particular breed of insanity that only seems to affect females in my experience) then you can even get it cold, right out of the fridge. Will this trend catch on and move west to Ontario? I kind of doubt it, since it seems kind of sketchy and would require a lot of equipment and changing of displays — Greco may have done it partly because they co-branded with Capt. Submarine, and turned their former pizza-by-the-slice display into a sub topping/prep area; the “pizza fridge” looks to my eye like the same fridge they used to store their bottled pop in, just with some new decals. Nonetheless, I’ve got to hand it to them for their clever ideas, and if I see chilled pizza taking off in Ontario, I’ll know that it was out there first.

Another not-quite-pizza invention is the bread bar from Piazza Joe’s. I wish I had thought to take a picture of it, but it’s basically a very large open grill where you can toast your selection of a number of different types of bread and top with a selection of spreads. It seemed to me like a huge waste of energy: this giant grill pumping out heat non stop when a couple of toasters could do almost as good a job. It was, however, a neat and entertaining way to get your pre-dinner bread, and it was nice to have a selection of breads with everything from white sandwich bread to sourdough baguettes. The bread bar idea has now been implemented in the Cornwall Pizza Delight, so it’s spreading…

In other news, I’m back in Ontario. The trip went well, but the internet over the dial-up really sucked balls. I haven’t read the Liberal Green Shift plan yet, but hope to soon and to share my comments with both of my readers. Stay tuned! The Canadian Capitalist has posted his take on it and there’s a small discussion going on over there.

“Be greedy when others are fearful.” Is the mantra of Warren Buffet, and I’ve been trying to take advantage of stocks that I think might be undervalued during the turmoil in the market this year. Unfortunately, it’s been pretty tough, and I’ve grabbed a few falling knives: GE and YLO.UN are two that stick in my mind (aside from the banks, that is). Both were hit pretty hard this week to find new lows today. While I have plenty of each, I do still have my last bit of “dry powder” to double-down or dollar cost average into one. I liked each of them at the point where I bought them (GE at $32.50 and YLO.UN at $11.50), and don’t really see the potential return from either one being all that different today… nonetheless, I find it’s hard to feel brave and invest in much right now. I’m still rolling my dividends/new money into the index funds, though unfortunately that happened at the beginning of this week rather than today. But other than that I find it very easy to second guess myself and very difficult to be greedy while others are fearful.

I think it’s because I’m getting a different “vibe” from the market right now than I was from the sell-off in January/February when I did much of my buying. It could be because I’m in PEI and not watching the news, but there doesn’t seem to be blood in the streets or the stench of fear in the air. Bear Sterns isn’t going under, there isn’t a panic that banking as we know it might be ended forever, which almost makes me wonder if the sell-off is for “real” reasons in the fundamentals or outlook rather than an emotional over-reaction. That of course makes me afraid of potential value-traps — especially since my previous “values” haven’t done so well in the last few months, which can really eat away at one’s confidence.

However, as the interest rates drop, having some cash sitting in my high interest savings account looks like a poorer and poorer idea. While I do like having it there as an emergency fund and/or car payment fund (which might be needed in <2 years, so shouldn’t really be in the stock market), the dividend yields of some companies looks very appealing to get paid to wait for a recovery in banks, or GE, or YLO…

For now, I think I will continue to be patient and sit on my dry powder, and see if the market makes a new low beyond what was seen in March, and maybe buy then.