Who said Halloween is "dead"??

Who ever said halloween is dead (at least from the perspective of trick-or-treaters) is obviously not living Surrey. My wife and I fielded between 130 and 140 kids yesterday. I would say that close to 80% were below the age of 6-7 which means plenty will be back next year as well. I only counted 5-10 that weren't in any sort of costume.


All week I had been asking co-workers what their experience had been with the level of kids coming on halloween. I was told by most that halloween had died down and that most kids don't go out or go to the mall to trick-or-treat. Your kidding right? The mall! Where is the halloween spirit in mass commercialization. Wait a minute, this is halloween right, a holiday that bears no real resemblance to anything religious (link here) and yet is observed by most western and latin countries around the globe. In any event, we didn't buy much candy which forced me to make an emergency trip to the local Safeway.


Now we have too much candy, but at least we know for next year.


My 2 thoughts anyways...

Get spooked!

For those looking to get a little “spooked” I have a couple of Vancouver Halloween activities that might fit the bill.

Haunted Forest Scream Train (Bear Creek Park, Surrey): An excellent opportunity for to take your younger siblings unless you are faint at heart yourself. A trick for this train ride is to sit with your back to the front. I went with my wife and another couple and facing the front of the train, I could see all the actors’ scaring participants further up the train. Overall it was great to see the effort and a chainsaw provided most the entertainment. The ride takes about 10 minutes to complete. Weather is not really a factor as you are sheltered in both the line-up and in the train (line-up was about 30 people deep when we went but moves quickly). The only suggestion I would have had was to have more actors or ask them to “jump” in and out of the bushes versus simply running along the train. Then again, I don’t think I am the ideal demographic this ride is targeting. Admission (Night time): 12 and Under $5.00, Adults $7.50.

Potter’s House of Horrors (12530 72nd Avenue, Surrey): This is definitely more up for those looking for a scare. The green thumbs of Potter’s have transformed their 9000 sq. ft. greenhouse into an amazing labyrinth with mechanical ghouls, tons of actors, and gruesome props. We called ahead and were told their was no line-up to speak of. Plenty of parking and most of those outside of the actual labyrinth are in character as well. We were Halloween “hopping” with the same couple but for some bizarre twist of fate I was forced to go first through the maze. This worked to my favor in some respects as I would actually pass some of the actors (I seem to have large strides) but got “spooked” more than a dozen times as they could see us coming around the corners. Not for younger kids in my opinion as there is a lot of gore and violent images used as props within the maze. Admission: 12 and under $7.00, Adults $10.

First NFL Trip

Football is an American pastime. It is also a reason to park your truck in a parking lot to have a BBQ, dance with a marching band called the Blue Thunder, and scream “sack the back” when your team is on defense. I was fortunate enough to enjoy my first football game (ever) in Seattle on Sunday 21, 2007.

A good friend of mine has been the root of my pestering since I moved to Vancouver. I had been asking him to join me in viewing a BC Lion’s game but our work schedules never seemed to coincide and I am not one to go to a game myself. Fortunately for me, he did me one better and asked if I would want to go to Seattle to see the Seahawks play the St. Louis Rams. Our trip started close to the border at the Best Western at 8:45am.

A bus had been chartered for the trip and had made one previous stop prior to picking us up. All told, 45 people were looking forward to seeing the Seahawks and those organizing the annual trip also did not disappoint. Coffee, doughnuts from Tim Hortons, chips, and candy were a plenty along with bottles of water and pop. Seattle is roughly a two-hour drive from Vancouver but roughly depends on border waits. With the dollar above parity with the US, the wait times coming back are the ones you have to consider. Traveling to the US was a breeze as buses are separated from regular vehicle and commercial traffic. The border guards boarded the bus and did a minor check of our passports and containers but nothing that delayed us more than about 10 minutes.

Qwest field is something of a marvel to see. Unlike its immediate counterpart Safeco Field, it is an open structure but with only the field exposed. The front end rises high with steel art on the outside and a giant led screen inside facing the field and allow those in the upper bowls to get a close up of the game. The large parkade the faces the off-ramps as you drive into town have huge pictures of the Seahawk player. Once is of the quarterback and the other couldn’t tell you not being a huge fan. To get to the field is a bit of a chore as you are asked to drive in a large circle through the mounds of people crossing at ever corner before you can make it to large parking lot fronting the stadium. The parking lot itself is a furry of activity as many have been camped out since the morning with trucks parked end-to-end, bbqs a blaze, and tvs hooked to portable satellites viewing multiple games in the league. I have never been witness to a real tail-gate party but can understand the appeal when you are amongst friends and those who love the sport.

The line up moved swiftly inside with some minor drops of rain from the sky. This did not bother me one bit as I was already started to feed from the buzz around me. As we made it through the gates I could hear the marching band “the blue thunder” start to make their way in from the parking lot through the front gates and position themselves on the stairs. I asked a Qwest field employee to take a picture of me and my buddy in front of the band only to realize after the picture was taken that this individual was legally blind!! Needless to say he took a great photo regardless of this minor handicap.

We proceeded to our seats but made a detour after seeing the many adorning fans wearing the Seahawks apparel. Call it novelty or simply fitting-in, but a couple of caps and some gifts for my family later and we were in our seats for the opening kick-off. I have to say that it feels great to shop in the states as I paid for everything with my Canadian MasterCard knowing I would get a deal. Our seats while in the upper bowl had a great view of the field and were sheltered from any rain that might decide to fall. The weather held up though and provided for an entertaining game.

The Seattle fans are die-hards and cheer for each and every play. The sounds is almost deafening and not being to anything larger then a concert (where everyone is chanting in unison) 50,000 fans is a bit hard to handle at first. The cheers are just as large as the “boos” and everyone around me seemed to know exactly who was carrying the ball at any given point in time. There is also no real downtime expect for between quarters and a small intermission. I say small because we went to do some additional shopping for family (greedy for the exchange rate) and we ended up missing a Seattle touchdown the first minute in the 3rd quarter. Final score for the game was 33-6.

The ride back was largely uneventful until we hit the 1 mile mark from the border. I faced this exact point before when you are asked to make the choice of going to the Peace or Pacific border crossing (Highway 99 or Highway 15 for Canadians). I was coming back from dropping my brother-in-law off in Portland where he is studying Chiropractics and ended up waiting 3 ½ hours starting 1 mile from the border with my wife and cousin. This time around the wait was only 2 ½ hours but wasn’t as bad considering I didn’t have to drive and was able to catch a nap on the way in.

Definitely a memorable trip.

My 2 thoughts anyways.

Enough with the Retirement Statistics

How often have you been to a workshop, seminar, or address from your respective company where they do the following exercise, "OK everyone who has been with the company for 0-5 years stand-up (about 10% of those in attendance stand up), OK everyone who has been with the company for 5-10 years stand up (about 30% of those in attendance stand), and so forth. The kicker comes when almost half of those in attendance stand up for the 20 to 30 years of service announcement demonstrating how many people could be leaving the organization in the next 5 to 10 years.

Like John Stossel from 20/20 would say, "Give me a break!". I have done this exercise for the 4oth time now and I find this pointless. We all get that large corporations are facings succession planning issues with close to half their workplace retiring in the next few years. The challenge - brain drain from the company and no one to pick up the pieces. So, the major question here is what we choose to do about this people "crunch". What we find is many companies are choosing to focus more on the stats because the alternatives are much to costly to pursue. Lets examine some options:

• Job Shadowing (Internal) - A good option as it promotes from hiring within which can build loyalty. Minimal training as far as corporate culture goes and hiring within the business unit means objectives of the organization are also easy to grasp. Now for the bad - the domino effect. Anyway you look at it, you now have a position to fill somewhere else within the organization. If that position is filled from within, you are forced to find someone for the other hole you have created. Given this, many employees will also be hesitant to pursue such an opportunity given that their current job may not be back filled essentially leaving them to pick up the additional work. This is because many employers do not want the hassle of bringing someone else in to back fill when the term associated with job shadowing is often 6 months or less.
• Job Shadowing (External) - This would follow a competition whereby the previous employee is asked to stay and transfer knowledge. A good option as it diffuses the domino effect. Outside "blood" to the organization can be beneficial in new ideas, best practices, and a new outlook given previous experience elsewhere. Also, by having the previous employee stay while the new recruit adjusts, others can see why that individual may have been chosen over others (especially inside the organization). The bad - costs associated with training. Most organizations, like any business, realize that it often easier to keep employees rather than train new ones. Assimilation within the company, buy-in to corporate values and philosophy, and understanding business unit objectives all take time and money to implement. External employees can also face hostility from others in the business unit, especially when entering a managerial role. Companies are still faced with costs associated with overlap between someone coming in and the current employee till residing in the position. This often effects how much knowledge a company can retain given the budget allowed.
• Hiring Retirees - Has many advantages as you can move forward with filling positions but you also have a new functional employee who can help the business unit and take on some of the workload. The challenge here is this often takes creating a new position and thereby adding to the budgetary woes of the corporation. This is also often "band-aid" solution as the retiree often will come back on their own terms and schedule. They may become more interested in their own work versus transferring knowledge to the business unit. The terms of their return need to by crystallized.
• Regular Hiring: What about the tried and true practice of simply hiring when someone leaves? No overlaps means no extra cost, right?. The problem here is, at least for many employers, the talent pool is quite shallow (pun intended). With the amount of choices out there and the hunger to replace the baby boomers, people have their pick of positions. The environment for hire has to also be as appealing as the job itself. Training plan, support network, capability with the business unit and organization. This means that is their is a lack of the previous details, many will leave soon after coming in. Why not, when the supply of jobs is great. This means more costs to the organization with having to go back to the hiring process.

As you can see, costs plays a major role in filling the voids within an organization. This is why is often easier to talk about the problems versus trying to resolve them. Unfortunately, many will not have an option of waiting it out before others in the organization leave do to increased workloads because of non-hires and morale issues. So lets stop with the "years of service exercise" and start talking about how we are going to combat the problem.

Calculating Value: An Art Not A Science

Calculating the net worth (value) of a company is often a fickle business. Companies like PriceWaterhouseCoopers and other large accounting firms have made a living off such valuations because they are often so difficult to calculate. Some compare this to nothing more than "crystal balling" or taking numbers from the air. Why should anyone argue with this when you read the latest business-related news? Take the recent eBay example (link) where executives have finally admitted that they overpaid for Skype (an Internet Telecoms Company) purchased by eBay over 2 years ago. The company made a offer of 4.1 billion, of which is now looks like they paid 1.4 billion too much. It is easy to criticize such a transaction when you are dealing with such large dollar values but let me try to demonstrate to complexity of such valuation and projecting future cash flow.

The complexity of projecting future cash flow can be as simple as the following example. Many of us have walked into a bank to ask for a mortgage on a new house we wish to purchase. I did so recently on my home I purchased in Surrey. Part of the calculations a bank uses is you annual income (your pay cheque), liquid assets (cash, or something that can be converted to cash relatively quickly - usually in less than 6 months - mutual funds, stocks, etc), hard assets (other homes), rolling stock (vehicles), and long term securities (GIC's, RRSPs). If the calculation were simple, the bank would simply add up the value of all these income deriving lines minus all you costs (debts) you would then have a straight forward net worth calculation. However, life is often never that simple.

The complexity even with obtaining a mortgage arises from the following where in finance the two things are often true: first a dollar today is worth more than a dollar tomorrow; and second (related) their is no way to guarantee the sensitivity of future markets. The first speaks to the buying power of money. This buying power is in its simplest form is a function of inflation. As inflation goes up, the value of goods you buy conversely rises (goods like houses). However, since your wage and income does not also go up with inflation (usually a function of a bargaining agreement or a contract), the amount of goods you can purchase with the same dollar you had yesterday goes down. This is why you often see the Bank of Canada often intervening in markets by raising interest rates. As our economy is based on borrowing money, the bank is essentially trying to curb spending (or borrowing money to spend) to reduce inflationary pressures within the country. The bank you are applying for a mortgage to also knows this and wants to ensure that you wages along with other goods will service (pay the loan) for the long haul when the value of that dollar is questionable. They essentially want a good cushion (along with someone with good credit). The second related concept to this is sensitivity. As no one knows exactly how the markets will fluctuate, we have to make an educated guess based on where our economy is going. Also known as speculation, this is how many people make money of the stock market or real estate (buying low to sell high = profit). To aid in this, the bank often discounts ("takes away") some the value of your assets to account for the loss of buying power as describe above. For example, you current assets maybe valued as following when applying for a mortgage: house (75% of appraised value), mutual funds (60% of current market value), vehicles (50% of current value), rental income from homes (50% of current income) and so forth. The higher the certainty that the value of a assets will retain that value (or go up) the higher the valuation for that assets. Cash in the bank would be valued at 100% as it is cash that is not affected by external market pressures. However, mutual funds are affected by stock fluctuations; real estate is affected by the supply and demand as well as affordability; and vehicles are affected by their age, usage, make, model etc. Unfortunately, a bank is the worst form of conservatism where your valuation comes second to their interest in giving you a favorable interest rate on your bank account.

As the above example shows, even simpler transactions can produce complications when trying to foresee into the future about what your dollar will be worth. Imagine trying to do this with a billion dollar company. And to demonstrate how much these valuations differ consider the following: With oil & gas companies for example, their valuation is looking to purchase is often a function of potential (estimated) oil & gas reserves; with a drug company like Pfizer, the valuation is tied up in research and the potential for a new better drug on the market; or a blue-chip company like Lockheed Martin, their valuation is in long-term contracts they have arranged to provide artillery to the US army. The real difference comes with those companies based on the Internet. Their are no hard assets (few buildings), often no real contracts, and no established stream of revenue (most are often in the start-up phase and are dependent on debt to get going). Even those that have been in the industry for some time (like Google) are still considered unpredictable given the rate at which technology has been evolving (a phenomena known as disruptive technology-automobile replaces horse, digital photography replaces film, etc). Google is considered the best search engine on the Internet (and valued at $600/share for it) but it could be replaced tomorrow with something better.

Finally, back to the central argument. eBay gambled on telecoms technology but didn't know how exactly to value the company. Revenues were only at $60 million but eBay paid 683 times too much. eBay was trying to value potential cash flows and that's where all rules went out of the window. The best experts have challenges trying to project future growth and often end up valuing the intrinsic value of the company (what is worth to the competition). In my experience when trying to value such companies you should keep two things in mind: your time horizon short given the technology life-cycle; and second create some sensitivity in the analysis. Even for the business cases I currently author, I will include a Net Present Value (or net worth) of the project at several different discount rates (6%,8%,10%). This illustrates the sensitivity of such cash flows to small fluctuations in the discount rate. The lower the rate, the more sure you are that the cash flows are going to stay the same. This conservative approach, unfortunately means that most projects don't get off the ground. As an organization though, you have understand what your objectives are for investments and what is an acceptable risk. For eBay, a company founded and based on the Internet, the risks tolerance is obviously much higher then there would be at a bank.

My 2 thoughts anyways...

Isn't that Some Sad Shit

Like Chris Rock would say, "Itsn't that Some Sad Shit". Recent article in theglobeandmail (link). OJ can't even afford a real rolex anymore, and if he could, the Goldmans would have took it. But instead they have to return it. What gets me is that the watch still costs $100 (appraised value). So in my opinion not can he not afford a real rolex, he paid to much for the fake he was wearing.

Goldmans are mad because after the civil suit OJ hasn't paid a dime for all the legal woes and judgements that were passed. Essentially, the law of the state is that he got have his previous wages garnished (NFL pension) or money that he has already made. Its only new dollars that they are entitled to. So OJ did the only thing he could do, he stopped working.

Now OJ isn't broke by any means, unless you call living in a mansion, golfing everyday, and throwing the occasional trip into Las Vegas only to get caught stealing your own shit broke. No, thats called stupid.

My 2 thoughts anyways....

I'm leaving..and I'm taking my football!

If you have been following the paper you have witnessed the jockeying in Alberta over a recent report on royalty rates. Issued by an an independent panel of experts, this report revealed that Alberta is missing out on billions of oil royalties and should be able to raise rates without effecting the industry. The industry is crying bullshit, as many including mammoth industry giants Encana, threaten to curb spending in the Alberta economy by up to $1 billion dollars. Alberta's premier is now asking everyone to simply "calm down" as they work towards a resolution, a knee jerk reaction to the oil-foundation of the Albertan economy.

This reminds me allot about the football games I used to play in with my friends. These games were purely recreational, but you wouldn't be able to tell by the way we argued for every single yard. A couple individuals, specifically, were often on opposite teams and represented the crown and defense for every argument ever made (depending who had the ball). The trump card in all of this we the fact that one of these individuals owned the football. When the argument would get to a certain level, this individual would say that he was leaving the field if he didn't get the call. "Oh, and by the way, that's my football and I'm taking that too." There was a always a few on his team that supported his argument (usually the receiver) but many could care less and actually just wanted to continue playing (with the opposition obviously opposing the call). Never mind that it only took several calls to get everyone together on a rotary dial phone (we didn't have the luxury of MSN or email). Dial to fast or didn't complete a full circle and you have to start all over. The call lasted 1 minute, but making the call took 2 minutes with all the mistakes. Anyways, most the time, the opposition would simply allow the call so we could continue playing rather then send someone else home to get their football or quit the game altogether.

The oil companies are performing a similar maneuver in the face of an unfavorable call. If the oil companies collectively represent my friend with the football; a few of his supporters represent the special interest groups that support him; and the rest of the players represent Albertans, you might as well be playing this scene at our old elementary school. Oil companies are threatening to pull out of the game and take the only thing that would keep the province going, money. They obviously have a few supporters in form of special interest groups but rest of people affected, Albertans, stand to benefit collectively on a larger scale. Investment into health care, roads, schools just to name a few. Alberta already has the distinction of the only province with no net debt or provincial tax, but services otherwise are still suffering. Simply drive the roads and you will understand.

So what's the solution. Lets visit us in our younger days on the field again.

1) Someone else buys a football: Firstly, no one will pitch-in for the cost. Second, if another is readily available their is no incentive to buy another. Speaks to diversifying available resources and the economy.

2) Have a neutral party call the plays: There was no such thing as a neutral party. Everyone wanted to play so being assigned to one team or another and arguing for the opposition is effectively suicide. Besides, the argument would still be there given the stake of the game and lack of a paid official that both parties have paid to be there (hey we could barely afford a second football).

3) We quit playing football: This would often happen as we went through fazes where we abused one sport for awhile and then would switch to another. Much like the up and downs in the market but here the difference is our dependence on fossil fuels. Again, this also speaks to diversifying the economy.

In the end, the outcome in Alberta is going to be similar to the outcome at our football games. Someone will make a concession or realize asking the only individual with the game ball to pullout is like asking everyone to go home without the satisfaction of a win. Time, energy, and effort was wasted and in the end everyone leaves empty handed. Everyone that is, expect the individual with the ball, who realizes the next time he calls, you will still show up to play.

My 2 thoughts anyways....