Chan's Personal Blog

Two weeks ago I saw the movie, The New World starring Colin Farrell. I saw the trailer for it initially and thought it'd be okay. It looked like a movie where European explorers land in America and begin exploring the new world. The story revolves around the love story of Pocahontas. The trailers did show some war scenes, so I thought, okay, a chick flick but with a little action. Once in a while, we have to rent a chick flick to appease the ladies, so we thought this would be the best of a bad situation .

The first half hour of the film was fair enough, and then it went down hill from there. After that, you will honestly see Colin Farrell frollick in the fields with Pocahontas for about an hour. Then, when Pocahontas loses her lover, she then frollicks with another dude for another hour. We get a few skirmishes between the natives and the Europeans, but that's about it, no epic battles.

There were also a lot of wierd scenes in the movie. For example, there's a sequence where you see a pot cooking something over a fire, then you see chickens in the field, and then you see frollicking in the fields, then the scene cuts to black. I normally would expect these random sequences low budget, black and white independent films. I joked that there must be some hidden symbolism in these scenes.

In either case, you know a chick flick is bad when even the ladies hated the movie. The New World is without a doubt the worst movie of the year. Two thumbs WAY DOWN.

Last year's worst movie for me was Alexander, and the previous year's was Daredevil. What's common between all these crappy films? Colin Farrell was in all of them. Alexander sucked because they jump around in time to tell the story. For example, one scene will be 3 years ago, and another will be 10 years in the future, etc, so the movie didn't flow at all. In addition, there was no character development of the enemies that Alexander fought. There was no background about them at all. For all I know, Alexander invaded Babylon because he didn't like the beards that the Babylonians had.

Before you label me as someone who blindly hates Colin Farrell, I did like the movie S.W.A.T.

Anyway, save yourself and avoid The New World like the plague!

The last 14 days in the stock market has been a major house of pain. The Toronto Stock Exchange (TSE) fell more than 800 points in this short period of time. Nothing made sense at all. Positive economic data caused the market to dive. The reason for this? Investors were afraid that the government would raise interest rates to try to cool down the economy. If an economy grows too fast, then you get inflation problems. On top of that, they feared that commodities (like steel, gold, copper, etc) and housing were bubbles that were about to pop (just like the dot com bubble). So, interest rates have been aggressively raised this last period, and everything has come crashing down. Investors have actually been hoping for negative economic data in the hopes that the government would think that the economy is slowing, and they'd stop raising interest rates.

You're probably asking why are higher interest rates bad for stock markets? Well, for companies that have debt, they end up paying more interest on their debt, and this cuts into their earnings and profits. It becomes more expensive for them to operate, and their company will grow slower. For consumers, debt costs more money as well. If you have a mortgage or a car loan, those things now cost more because of higher interest rates. That's less money in the pocket of consumers, so they'll spend less. Consumers spending less means that companies will be making less money from consumers. For the investor, it means low risk investments like money market funds or GICs have a higher yield. This means that you can now invest your money with no risk, and get higher returns, so why bother risk the money on the stock market. So, money tends to flow out of the stock market which brings down stock prices.

Anyway, this is what happens when interest rates go up, and commodity prices dive. Here's the one month chart of what happened to the Toronto Stock Exchange:


The blue line shows the TSE's price, while the red line shows the 50 day average price. As you can see, the TSE is far below the average price now.

The last two weeks have been very humbling. My stock portfolio went from +32% to -10% just like that. This is probably the worst decline in the stock market since the 9/11 terrorist attacks. We've never seen 14 straight days of declines like this in a long time. Every single stock that I watch went down day after day. Even red hot sectors like the ethanol stocks were taken out and shot.

So what do we do when the markets are killing everything? Do we panick and sell stock? Do we throw up our hands and surrender and pull out of the market? No! If a store was throwing a sale, you go and buy more stuff! That's exactly what I've been doing this week. I've been looking at a lot of high quality stocks that are on sale, and I've been picking more up because other people have been panicking and selling.

That's why, if you've read my articles on mutual funds, and you're interested in picking some up, NOW IS THE TIME TO BUY! I can't guarentee that this is the bottom. I can't guarentee that the TSE won't drift lower, but as far as I'm concerned, everything is way too cheap now, and now is the time to be shopping. I want you to go out and buy Canadian equity funds if you haven't already. Don't miss this sale!

This week, I picked up more shares of the RBC Canadian Equity Fund because it had come down a lot in price, and I highly recommend you to pick some up (if it matches your risk profile).

Why am I so confident that the markets will eventually move back up? There's a number of reasons. Today, the government hinted that they're going to stop raising interest rates and killing the stock market. They have sufficiently slowed the economy. Furthermore, 30% of the TSE consists of natural resource stocks (ie coal, copper, gold, oil, natural gas, etc). Hurricane season is about to start, and if one hits the Gulf region of America, natural gas and oil prices go up because supplies are disrupted. We also have the Iranian nuclear problem as well, and everytime their president says "Death To America!", gold prices move up. Lastly, we have a number of tax cuts from the Conservative government kicking in, most importantly, the GST tax cut. These cuts will stimulate the economy, and that's good for business.

So, if you haven't done this already, go out and pick up some Canadian stocks through mutual funds. The stock market is throwing a sale, take advantage of it! As Jim Cramer (investment specialist) always says, "buy weakness, sell strength."

Well, today was the first day in the new engineering building for our department. The morning was spent unpacking and setting things up. The department manager ordered lunch for everyone, so I got a free lunch today. In either case, while people were eating and talking, I heard an interesting story.

On the weekend, someone had broken into one of our staff member's office in this new building. The people came through an outside window. It must have taken some effort for them because our offices are on the second floor, so they had to climb up onto this floor, and walk along the ledge of the building. They found one of the windows were slightly open, so they used a crowbar to pry the window open and they came through that way. They had to pry the window open because these windows have a crank that you have to use in order to open or close them.

In either case, campus security happened to have someone patrolling the building, and they heard a loud noise on our floor. They came running to our floor and caught the guys breaking in. It turned out they were students breaking into the building. They claimed they were only here to take some chairs from the office.

Anyone, it's very likely these guys were students and they knew when we were moving to the new building with all of our stuff. They probably knew that all the moving would be finished on Sunday, and no one would be in on Monday, so they had a prime opportunity to break in. Thankfully, campus security doesn't take holidays and caught them. I've always wondered how effective campus security could possibly be, but hey, they've shown their worth right here.

Anyway, it's kind of concerning that we already have security issues with the new building. We'll just have to remember to seal our windows every day before we leave I guess.

I was reading through the National Post this morning and came across this article entitled, "Social Sciences' Serious Image Problem."


All I have to say is, publishing papers called Studies in Doorology, or Cheese as Class Indicator definitely doesn't help people consider social sciences as a so-called hard science.

I think social sciences definitely has an image problem. From experience, I know that a lot of my friends from university would take courses in social sciences to boost their GPA because those courses were considered extremely easy to score an 'A' in. This is a very attractive prospect especially students who needed to maintain a certain GPA.

Furthermore, our department had certain guards against this perceived artifical GPA inflation. Our graduation GPA would only count senior courses within our program, so social science courses would be omitted from the calculation.

I remember when I was talking with one of my professors about grad school, and I was concerned about my GPA while applying into grad school. I had taken some fairly difficult computer science courses and my GPA was obviously lower compared to other students that took easier routes. My professor remarked that if he had two students, and one student took Basket Weaving 101 and got an A+ in it, and the other student took Advanced Computer Networks and got a B+, he would take the Advanced Computer Networks student.

So, there is a definite bias against social sciences in academia, or at least in the hard sciences.

Guffaw!

On Wednesday we had our first board games night for the year at my boss' house. It had been a while since our last one because everyone was either super busy with school (me) or everyone was addicted to World of Warcraft (everyone else).

In either case, we started off with the game Flea Circus which is a quick and easy game, perfect for starting or ending a games night. It's also a good starter game because people can easily join-in the action as they arrive.

Once the last of the people arrived, we had 7 people. We decided to break out Shadows Over Camelot which is a co-operative 7 player game. You assume the role as one of the Knights of The Round Table, and you move throughout the land fighting evil and finishing quests. The twist to the game is, one person plays as the traitor and their goal is to screw over the knights. This adds an interesting dimension to the game because you end up second guessing everyone's motives, and you accuse others of being the traitor. Everytime you accuse someone as the traitor, and they turn out to be loyal, bad things happen. If you don't find the traitor by the end of the game, bad stuff happens. So, the traitor and loyalty cards are dealt out at random at the beginning of the game; there is the potential that there's no traitor at all, so you have to be careful who you accuse. Anyway, this is a fairly epic game which takes a few hours to finish.

Then at 10:30pm, we hear a knock on the door. Graeme goes and answers it and goes, uh Chan, there's a bunch of girls at the door for you. I thought, haha, that's pretty funny stuff. And then, I heard Sarah's voice. It was Sarah, Bethany, Laura, and Alicia at the door, and they were just 3 hours late for games night .

The girls originally said they couldn't come because they had wedding stuff to plan, but here they were. So, they broke out Cranium while we were still in the heat of battle in Camelot. That's quite the contrast of games. On one side, we have careful sober strategizing, and on the other, you have the a bunch of gleeful giggles.

In either case, Patrick turned out to be the traitor (shakes fist at him), but he didn't do a very good job of getting us killed in the game. His "evil action" that he did against us actually caused us to win the game.

So yeah, biggest turn out on games night so far this year. Good times. See you all at the next games night.... on time .

This week we're packing up our offices and moving to the new Engineering/Computer Science Building (ECS) at UVIC. For those who come by and visit me at work, you can find my new office on the second floor of the ECS building.

We had a tour of the building today, and the building is absolutely amazing. It has the biggest lecture halls on campus now. Most of the desks in these halls have ethernet ports on them, so you can plug your laptop in and get internet access.

The sixth floor features a breathe taking view of the ocean. I don't think there's many places on campus where you can see the ocean.

Another great feature about the building is that there are a lot of wide open spaces with tons of lounges available. They put in a lot of money to furnish these lounges with very comfy leather chairs and such. The building also features wireless internet access, so the lounges are perfect for relaxing and internet surfing.

The funniest story I heard about the building was about the first floor's stairs. The walls to these stairs are all painted red and there was a LOT of debate about what colour it should be. Apparently there were people that were deeply opposed to the colour red because the colour conveys strong negative emotions. What the heck? This is the part of university that I really dislike, people afraid of offending anyone even over the stupidest things. If you're offended by a particular colour on a stairwell, you really shouldn't be in university at all.

Another cool thing about the building is that they have CO2 sensors all over the place. The sensors show you how much CO2 there is in the air. On average, it's at 442 PPM. If you breathe on it, you release a bunch of CO2 to the sensor. Patrick was able to get the sensor to reach 800 PPM. I managed to get a high score of 1250 PPM. Woot!

Oh, and on a side note, a while back I saw Brian Phillips (G2K) on campus, and he was one of the electricians that worked on this new building. Good job sir.

Anyway, it's great that we're moving into a shiny new building on campus. It's going to be pretty sweet. Drop by some time and I'll give you a tour of the place. E-mail me if you need specific coordinates to my office.

Here we go again with the next installment of the Newbies Guide To RRSPs. If you are just joining us, check out Part 1, Part 2, and Part 3. In this article, we will continue to build on our knowledge of mutual funds which was covered in Part 3.

For this installment, we will cover the different classes of mutual funds including: money market funds, fixed income funds, Canadian equity funds, international equity funds, and sector funds. I will then present a quiz that you can take which will determine how your money should be spread out amongst these funds since there are many to choose from. The quiz takes into account your current financial situation, your financial goals, and your tolerance to risk (pain). Based on the information you provide, the quiz will tell you what kind of investor you are. There are six major kinds of investors: very conservative, conservative, moderately conservative, balanced, growth, and aggressive growth.

Most of the examples and funds that I talk about will be from Royal Bank of Canada (RBC) since I'm fairly familiar with their funds. Full disclosure, I do hold a number of their funds. I will be referencing their mutual funds which can be found here. By clicking on the name of each fund that's listed at the RBC fund site, you'll get information about each fund. It should be noted that most of them have initial investment requirements which is how much you have to initially put in inorder to buy one of these funds. It's usually $500 if you're doing it through an RRSP account, and $1,000 if you're doing it outside of an RRSP. So lets dive in.

The average annual returns that I present below are based on RBC Funds. These numbers will vary across different banks since not all mutual funds are created equally. If a bank has a crappy mutual fund manager, then annual returns can suffer.

Money Market Funds

Risk: Extremely Low
Average Annual Return Over 10 Years: 2.9%

The first class of mutual funds are money market funds. These are the safest mutual funds that you can buy, and there is close to no risk. It's practically impossible to lose money in these funds unless the government is overthrown and a revolution occurs. A money market fund makes its money by buying treasury bills (t-bills) from the government. A t-bill is essentially a short-term loan that the government issues. Think of it as an IOU from the government. A t-bill basically lends money to the government from 30 days to 91+ days, and they give you interest for the loan.

The annual return of these funds are dependent on the prime rate which the Bank of Canada controls. As interest rates rise, you'll make more money in money markets.

The advantage of money market funds is that you'll never lose money on them. They're an extremely defensive investment choice, and it's great for investing money that you can't risk losing or screw around with. Whether the stock markets go up or down, it is unlikely to affect these investments. The disadvantage of these funds is that the annual return is fairly low. Low risk means low returns. However, if the stock market crashes, you'll be laughing at everyone else if you're in money market funds. If you prefer to see a consistent +3% every year as opposed to -50% during the dot com bubble crash, this is for you.