Blessed by the Potato

“Gas prices go up at midnight” is something I’ve been hearing a lot on 680 News when I’m in Toronto. I find it a little hard to understand since the gas stations never had any kind of schedule before — sometimes changing prices several times during the day. Lately however, all the stations over a very large region seem to have exactly the same price, and, apparently, timing of price increases. On PEI, that makes sense since they have regulated prices with pre-announced weekly price changes, but there’s no such thing in Toronto…

For those following along with my adventures in investing, May was a fairly interesting month. I last left off lamenting about Migao, which was in the pits for no real reason I could understand. It recovered a bit since then, and then there was an earthquake in China and Migao said that they hadn’t suffered any damage but were shutting down for a day just in case. Not fully trusting that, I bailed, realizing a slight loss. Since then it’s continued to rally, but oh well, I’ll be watching good old POT and wishing I was smarter instead.

Not quite trusting the spike in oil prices, especially since it seemed to be partially driven by temporary(?) violence-related supply issues in Nigeria, I didn’t end up buying any XEG after my update last month, and that ETF continued to rise impressively. Oh well, at least I got a some benefit of oil’s run up from my ownership of the TSX-Composite on the indexing side of things. Speaking of indexing, I’m still proceeding with the currency neutral US index largely out of fear and uncertainty of what might happen with the Canadian dollar. My index holdings are now up to 5% of my overall portfolio, and keep growing as I plow my new savings and dividends into them.

GE has slid a little further since I bought it. I still think it’s a good long-term value, and am tempted to buy a bit more to “dollar cost average”. However, the commissions and moreover, exchange rate fees to buy this US stock make me less inclined to give that a try for “just” a further 6% drop. This is exacerbated by the fact that the Canadian dollar has dropped in the past few days, so in Canadian terms, GE is only down about $1 from where I bought it (vs. the $2.10 it’s down nominally). I’m also tempted to cost-average into YLO.UN, as it’s dropped another buck to the $10 range and is now yielding over 11%. I’ve already done this once before, and YLO is already a pretty hefty portion of what I own, so I’m pretty hesitant to buy more. However, there is nothing I can find that contradicts my view that this is a quality company with a safe yield and a sound, stable business.

Finally, the banks are still declaring new writedowns and uncertainty about their future profitability abounds. However, we appear to be past the worst and this might be the time to buy. I’ve always had a preference for Canadian banks, but the risk discount seems to have gone out of them with recent rallies. In the US however, Bank of America (NYSE:BAC) and Citi (NYSE:C) are both still looking pretty beat up. Yes, they both have some uncertainties in terms of how much more money they stand to lose, whether their dividends will be cut, and if/when they will return to taking in money hand over fist. Of course, that’s kind of the point when going out shopping for value bargains: I’m essentially going to be gambling that the market is over-stating the risk and thus driven the share price of these banks below what they’re “actually worth”. I can’t say whether that’s the case yet, as I still have a lot more reading to do on that matter, but that’s what I’m looking into right now.

A bird (which I think is either a grackle or a swallow) has set up a nest in my next door neighbour’s bathroom exhaust vent on the side of their house. It made for some interesting lazy bird watching as the bird flew right by my office window going on its feeding rounds. As the baby birds get bigger, you can hear them chirping as the bird brings food back on his/her rounds.

Unfortunately, not all has gone to plan, and one of the baby birds fell out of the nest and died. Unfortunately, it didn’t fall all the way out of the nest, and now this dead baby bird is hanging by its leg off the vent cover on my neighbour’s house. To add insult to injury, the baby birds are now getting big enough that it doesn’t look like mommy can fit in the vent tube with them all at the same time now, so instead of climbing in to feed them, she stands on the convenient perch made by the dead bird and just sticks her head in to feed the other birds. Sick.

Oh, I forgot to mention that the Vibe I rented in Victoria had a 120 V AC power port on the front dash, which I thought was a pretty neat feature. No more having to buy all kinds of car adapators for various electronic gizmos (phone chargers, laptops, ipods, etc): just use the regular wall-socket version while in the car!

Well, conference season is in full swing, and I’ve only got a few days back home here before I’m off again. I’d apologize for not keeping up my usual tri-weekly posting frequency during this madness, except that the site’s traffic and the number of people asking “Oh, do you have any pictures from Victoria?” indicate that no one is reading it any more.

My presentation in Victoria was not as good as it could have been: just as I was getting up on stage, the organizer told me I had to cut my talk down to 6 minutes (from the 9 it had been originally scheduled for) which put me into a bit of a panic. So things were rushed and I sounded nervous and it just wasn’t as smooth as I would have liked.

I don’t recall if I mentioned it in the other post or not, but Victoria is such a home to small cars that it even has half-sized parking spots for Smarts and Minis! The weather was fantastic for the whole week, very mild and partly sunny. For the end of the afternoon on the last day the clouds or haze that had been covering the Olympic mountains in Washington finally cleared, and I got this picture of the snow-capped peaks over the shoulder of the BC legislature.

The Prius wasn’t available, but I did end up renting a car for my day off here in Victoria and took a trip up into the mountains of Vancouver Island along with two of my colleagues from work. We managed to save a bit of money on the rental just by asking nicely for a deal “What do you have available at the government rate?” I asked, and we got a mid-sized car with unlimited mileage for the cost of compact. Upgrades like that are pretty common at Budget, but I felt pretty good about my negotiating, and then we had a bit of conversation about negotiation. My supervisor is skilled in the art, sometimes taking weeks to wear down a salesman to nearly cost. I said that I can usually manage to get 10% off if I work at it, and that’s usually a workable margin for almost any business; he said that he once bought a rug for only 10% of the price (90% off).

We first headed up towards Nanaimo, but it was raining and we didn’t quite want to stop there. Instead, we powered on through to Coombs, and stopped at the old country market with the goats on the roof. Yes, it’s got a living grass roof and goats live up there. It was quite a neat market with a tonne of ice cream (that I somehow managed to pass on), as well as some tourist souvenir type stuff, and a number of unique items that my supervisor says the shopkeeper orders in when something catches his fancy, and usually in large lots. This time, there was a whole pile of bamboo cutting boards. There’s also a restaurant and bakery inside, so we pigged out to fuel up for the next stop.

Then we continued on to our real destination: Cathedral Grove (MacMillan Provincial Park), one of the last standing old growth forests on Vancouver island. Seeing the huge cedar and fir trees was pretty incredible. What was even more incredible is that somehow, there aren’t any mosquitoes on Vancouver Island. I want to live here already.

Here’s a picture of what’s called a nurse tree: an ancient cedar has fallen, and the nutrients in its roots have served to feed a new generation of trees on top of it. What’s neat is that if I aim the camera lens down the length of the fallen tree, the perspective can make it look like it’s a path through a mature forest.

There’s a lot of moss growing on these trees. For that matter, there’s a lot of moss growing on some of the houses on Vancouver Island – they really ought to have steel roofs, or something else other than asphalt shingles. Here’s a branch up high where so much moss has grown around it and sort of merged a few branches to make it look just like a bear licking its paws!

Since I’m a very amateur photographer, I sometimes like to play with the settings on my camera to see what happens. Here’s a close-up shot of a blackberry blossom with and without flash:

My supervisor took the time to educate us on a few of the finer points of forestry as long as we were romping about on the trail. Here’s a stump that shows evidence of improper cutting technique. Ideally, this tree should have had a wedge taken out of one side, and then a cut come across cleanly from the other side to right where the wedge was cut. In this case, the logging was undercut and missed the wedge, so you can plainly see a lot of wood tissue that snapped off due to the forces of the tree put on that small area. It wasn’t a clean cut at all, and apparently that kind of stress break is not only bad for the value of the timber, but is also a dangerous, less controlled cut, and the lumberjack who cut that could face fines.

Here’s another pair of images taken with different camera settings. This time, I was adjusting the ISO and the colour balance (auto vs. cloudy) and you can clearly see how much of the lushness and depth of the greenery was restored by adjusting the colours.

“Imagine,” he says “having to hike through here, that kind of underbrush full of poison oak as you chart or prospect, and then on top of that you have to average 15 miles per day or you miss your float plane back out.” Then, pointing to the reeds below “And as if that wasn’t bad enough, picture how much water must come rushing through here in a big rainforest dump that it’s bent the reeds over like that along the ground.”

From a distance, this splintered tree looked like a mess of mossy boards; I thought someone had tried to build a lean-to type shelter to live out here and the forest was taking it back. As you can probably see, it’s actually just the way a fallen tree trunk has splintered.

This massive tree was at one point blocking the path, and was nearly as tall as I was. You can see where they had to cut through it to open the path up. Even though that tree was never cut standing upright, the loggers put in a neat looking wedge-type cut, like the previous stump should have had. My supervisor wonders if they were just in the habit of cutting their trees like that so they did it anyway, or if they were in the habit of cutting fallen trees like that to hide their bad cuts…

The largest tree in the Cathedral Grove is seen here, with another impressive fallen log in front of it. What’s interesting is that this same fallen log was there at least 50 years ago as my supervisor visited it as a kid. These trees not long live for hundreds of years, they also take hundreds of years to decay after they fall, perhaps due in part to the ability of cedar to resist insects and to a lesser degree, fungus. The bark has been worn to a glass-like finish over the years from all the people climbing on it to get pictures in front of the largest tree.

The weather changed every few minutes on the drive back, with bright, sunny skies very suddenly leading to rain as we ducked into another valley, reminding us that we were in a rain forest. It was something else to see mountains wrapped in clouds, and even one peak that had a bit of snow still. Since it’s so hard to capture the magesty of distant mountains in a picture (since the contrast with the sky is generally poor), I’ve left this one as a fairly high resolution, so you will have to click here to see it.

Finally, we’re back to the hotel, and oddly enough the housekeeping staff has picked up my dirty laundry from the corner to which I banished it until repacking time and folded it neatly. Weird.

The conference begins in earnest at 8 am, so I’m off to bed now.