On rotation

January 28, 2008
  1. Vart tog den söta lilla flickan vägen by JustD – Swedish rap. First heard this song from some Scandi friends while I was at school abroad. Was going through my mp3s the other day and stumbled upon it – it’s quite catchy!
  2. I want your sex by George Michael – I really should stop admitting to listening to this kind of music

Canada: Telecommunications blackhole

January 23, 2008

It never ceases to amaze me how backwards the Canadian Telecommunications industry is. In other countries, the industry is being opened to more and more competition, while in Canada, there was actually serious talk about 2 of the top 3 players merging  (Bell and Telus). This would have resulted in only 2 players, meanwhile the UK has 5 MNOs and plenty of MVNOs. Not to mention how expensive wireless service is and the ridiculous 3 year contracts.

Now I just read on a blog by Larry Borsato that Rogers is bucking the trend of most of its contemporaries and actually increasing prices. Also see Mark Evan’s blog for a good piece on it.

Back in my banking days, I used to arrange financing for European cable cos such as NTL/Telewest (now Virgin Media), Liberty Global and Auna/Ono. The thing about cable was that while they required heavy capex investment, their EBITDA margins were always strong (~ 40%). I decided to take a look at Rogers Cable’s margins and compare them to US and European companies, to see if there was any justification for increasing prices, or if this was just a money grab.

Company                                            Q3/07 EBITDA margin
Rogers Cable                                              39.0%
Virgin Media Cable                                    39.5%
Liberty Global Int.                                    40.7%
Time Warner Cable                                   35.7%

Rogers margins look pretty healthy. They are doing better than Time Warner in the US and inline with Liberty Global and Virgin Media.

I stripped out Business Solutions and Retail (ie. DVD rentals) from Rogers for a better like-for-like comparison with the others. I wasn’t able to strip Business out of Virgin Media, but unlike Rogers, Virgin’s business unit has respectable margins and won’t skew the results as much.

Quick book review: ‘The Lazy Investor’ and ‘Stop Working’

January 21, 2008

I was given Derek Foster’s ‘The Lazy Investor’ and also his first book ‘Stop Working’. I found the books to be so similiar to each other that he should have just released a 2nd edition of ‘Stop Working’ rather than a whole new book.

The books touched on a few things I found interesting, mainly how to buy shares outside broker (thus saving costs) and also how to setup DRIPs (“dividend reinvestment plans”) and SPPs (“stock purchasing plans”). Outside of that, I don’t think he offered anything new.

Foster dubs himself as Canada’s youngest retiree (without an inheritance or lottery win). His plan to retire early can be summed up like this:

  1. Invest part of your income each month
  2. Stay away from stock brokers, advisors and RSVPs
  3. Invest the money yourself into high yield dividend stocks
  4. Reinvest all dividends back into the stocks
  5. When your portfolio is large enough, retire and live off of the dividends – which have better tax treatment
  6. Your portfolio doesn’t need to be big so you can retire early… just live frugally in your retirement

I think his advice is too simplistic and can be dangerous to the niave investor. First, he downplays the risks, while high yielding stocks, such as utilities, are often less risky, they are not immune to risks. Not only can their market value be hit, but their dividend yield can too – in which case the retiree has suddenly lost a portion of their income. Secondly, while he says he is not an expert or a financial planner, the fact is he seems to have a knack for picking stocks, something the average investor will not have.

On notice: Bandwidth caps

January 21, 2008

I just signed up to Time Warner Cable’s ‘All the best’ package, including cable, broadband and a phone line. I chose them over Verizon as Verizon’s online ordering system was buggy and Time Warner doesn’t require a contract – a big bonus for us as we haven’t established a credit rating in the US yet and would probably have had to pay Verizon a big deposit in order to enter a contract.

Shortly after signing up with Time Warner I read that they are trialing a tiered pricing system based on bandwidth usage in Texas. Apparently, Time Warner will offer plans priced for up to 5, 10, 20, and 40 gigabytes per month with middle-tiered plans costing about the same as users currently pay now. The explanation for the new pricing plans is one I’ve heard before, that power users, representing 5% of users, consume as much as 50% of network capacity downloading vast numbers of large files, such as movies, videos, and songs. The network operators blame these 5% for any slowdowns. I just don’t buy this statistic and would love to see some actual numbers to back it up. Everyone I know seems to be downloading music or movies, even my 50+ year old parents, these ‘power users’ are no longer the minority. This trend is only to continue, with Apple announcing movie rental over iTunes, the average user is going to be using more and more capacity.

When asked to comment on Time Warner testing tiered pricing, Verizon said they have no plans to cap bandwidth and that cable companies are proposing bandwidth caps due to the limitations of their networks! I love it. If Time Warner starts capping my bandwidth, I’ll be moving to Verizon.

Bandwidth caps, you’re on notice.

On notice: Clowns

January 16, 2008

In news that will surprise no one, kids hate clowns, and so do I. They scare the crap out of me. A study at the University of Sheffield found that all kids between ages of four and 16 dislike clowns, with the olders ones even finding them scary. There is nothing more scary then seeing a clown where one shouldn’t be… like in a forest… alone.

Clowns, you’re on notice.

Fashion blogs

January 7, 2008

One of my favorite fashion blogs (well actually the only one I really visit) is the The Sartorialist, which is Scott Schuman’s blog. Basically he roams around and takes pictures of people with great fashion. This sort of site is quite trendy at the moment, I’ve been hearing of more and more of them.

A friend of mine, Helena, just told me she’s doing the same thing at Youth League and the Spies. It’s pretty good, check it out.

Happy new year

January 2, 2008

Hey anyone who is reading this, happy new year! Below is a cool pic I got from Gizmodo of the firework celebration in Oslo. There isn’t a government funded fireworks show, so everyone just goes crazy in their backyard creating an impressive display. I spent New Year’s eve in Prague one here, and it was much the same thing… actually a bit dangerous as fireworks were going all over the place, and not always up!

Oslo new years