BlueNote's Journal

Where are you and where are you going?
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BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

My Day in Pictures -- Thus May 29, 2014



ImageIMG_20140529_080640 by bluenote_ere, on Flickr

Another beautiful day to be alive (and biking)!



ImageIMG_20140529_183742 by bluenote_ere, on Flickr

See if you can find the worst car park job of the day in the picture above.



ImageIMG_20140529_211223 by bluenote_ere, on Flickr

Poor Charlie's Almanac is an awesome book. I suspect Charlie Munger is an INTP or ENTP MBTI personality type judging by his vast scope of knowledge and insatiable curiosity about just about everything. It's going to take a while to finish this book. It's intellectual and broad, at the same time folksy and humorous. The guy learned darwinian natural selection in his seventies. Stoicism, Darwin, Branding, Plato, ethics, accounting are just the tip of the iceberg. I feel like I need to take months of mathematics and science courses to get his point on physics being a cornerstone mental model for life. The topics are interesting and all over the place I love it.



A great friend of mine came over and we grabbed a pizza for dinner, a good day all around.

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

Bike Stuff

I got a bike stand for my bike. I bought new. I couldn't find a free one or a decent used one on craigslist or kijiji. It works great for me and cost about $120

Brake Squealing:

Recently both the front and back wheels squeal when braking.

I cleaned the back wheel with a 3M green scrubby using car soap and water which fixed the issue.

The front squeal is still with us, haunting our dreams and annoying the fine people of Toronto.

I have tried the following steps to remedy the issue:

1. clean with a wet wipe
2. Toeing in my original brake pads
3. sanding my original brake pads
4. replacing the brake pads with new
5. cleaning with a green scrubby using car soap and water (with oomph)
6. Using sand paper on the rims
7. applying a tiny bit of fluid film to the rims (marginally effective but reduces braking power)

Tomorrow I am going to try my Mr. Clean magic eraser on the rims, I think I have isolated this to a rim problem now because I get the same problem when using toed in new pads.

I also had to repair my bike on my way home from work with my little repair kit. My chain fell off and got lodged between the frame and the pedal crank shaft. I am not good mechanically so this was a proud moment.

Stock Market

Can't say I like my options right now. Market appears overpriced by most metrics (p/e, CAPE etc.) Not many good dividend growth stocks at the right price.

Researched small cap value investing. Very interesting area but not my cup of tea because i don't have the time to devote to this. However if I was able to invest into a large enough group of Net-Net stocks I would probably throw some money into this area. The portfolio diversification should reduce the risk substantially enough for me to likely make excellent returns. They aren't very common in the US market but you do see a good amount in Canada compared to the US. Ben Graham used this technique successfully during and after the great depression.

EdithKeeler
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Joined: Sun Sep 01, 2013 7:55 pm

Re: BlueNote's Journal

Post by EdithKeeler »

Just want to say how much I like the pictures! Especially love the one with the clover, I guess it is? (May 28)

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

@Edith: I thought I would try a more visual approach glad you enjoy it . There is a wide variety of vegetation on my bike ride. The city seems to let it grow naturally occasionally mowing it down. There's probably some clover in there though.

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

Does anyone who knows anything about derailleurs and bike gears know if this part should be swinging down lower?

It seems too high which seems to be interfering with smooth gear changing to the lowest gear. I have tried adjusting the 'b' screw which has absolutely no effect whatsoever. Do I need to shorten the chain to get the derailleur arm to swing lower?


Image2014-06-17_09-55-45 by bluenote_ere, on Flickr



Saving and investing


BTW I am still saving at least 50% of my take home, more when you count the massive tax return I received from my RRSP contributions (like a 401k in America).

I don't know if the market is really overvalued right now. If you look at P/E ratios it appears overvalued historically. People are ringing the bubble bell because of this. However compared to bonds the yield on stocks are decent. I always look at the earnings yield on potential buys vs 10-20 year government bonds. Here is a very good and thought provoking article on the subject, requires some knowledge of stock valuation.

Gilberto de Piento
Posts: 1942
Joined: Tue Nov 12, 2013 10:23 pm

Re: BlueNote's Journal

Post by Gilberto de Piento »

Does anyone who knows anything about derailleurs and bike gears know if this part should be swinging down lower?

It seems too high which seems to be interfering with smooth gear changing to the lowest gear. I have tried adjusting the 'b' screw which has absolutely no effect whatsoever. Do I need to shorten the chain to get the derailleur arm to swing lower?
I'm no expert but I'll jump in.

This is a good guide for getting your chain length right: http://www.parktool.com/blog/repair-hel ... gth-sizing Make sure the chain is the right length first.

Then adjust the derailler: http://www.parktool.com/blog/repair-hel ... derailleur

Pull on the cable itself rather than using the shifter to get onto the smallest cog. If it won't go on or bounces on and off it is probably that your limit screw isn't letting the derailler move outboard far enough.

If you can't remember the last time you changed the shift cable change it. Change the housing at the same time. I like to buy 5mm housing and ends in bulk. A lot of shifting problems are sticky cables.

Good luck! Rear deraillers can be a pain.

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

my bike

My brakes on my bike barely squeal anymore. I don't know why but I am happy squealing has subsided.

@ Gilberto thank you very much for the links and advice I will take them under advisement. I suspect chain length may be the problem however it's not worth the trouble to fix because my bike seems to be functioning pretty much properly otherwise. I can still gear down to the lowest gear it just grinds a lot.

Fat Bike

Has anyone ridden one of these types of bikes in the snow and ice? I am considering getting one for my winter commute.

Image*SURLY* moonlander complete bike by Blue Lug, on Flickr

Calorie Counting

I am trying to lose weight through dieting by reducing my calorie intake below my normal daily requirements and exercise. I am not going to try anything off the beaten path though just plain old reduction in calories while maintaining the generally recommended macro nutrient proportions and micronutrient recommendations. It's all very sensible, I count calories with the "my fitness pal" app and it tells me how many I have left in a day. It's almost like you have to eat healthy food for this to work because calorie dense good generally doesn't provide near the satiety as does a similar volume of calorie dense food (like butter vs celery).

2 questions

1. How the hell is anyone supposed to get 3,500mg of potassium a day. I ate two bananas and an avocado and I am not even half way there today. Beans might be my salvation!

2. How do I only eat 2,300 MG of sodium a day? I always go over, I like to salt my food. Food tastes way worse to me without a little salt. I have extremely good blood pressure levels and am healthy on most metrics other then weight so I am not too worried. However I'll need to think about the salt thing.


I find the diet industry to be full of kooks, charlatans and heavily biased people, it's just chalk full of them and I say that without trying to be funny. It's almost impossible to avoid these folks who sell or give away dieting information that really has little to no scientific merit as if it were the next origin of the species or something. Sometimes they won't cite studies at all, they just name something scientific sounding and say that it's based some science like evolution (see paleo for example). I think that's what people call pseudo science. Anyways that's the end of my rant.


investments

Its almost time to run my monthly stock screen again. Last time I barely turned up any results. I may be missing some good deals but it's probably better in investing to avoid large losses then to take more risk to get a little more return. My system is designed with long term risk control first and returns second.

sky
Posts: 1726
Joined: Tue Jan 04, 2011 2:20 am

Re: BlueNote's Journal

Post by sky »

keto phasing into paleo is the diet true path

not that I would know

he says drinking a homebrew beer

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

June 21, 2014

Health

I lost about 5lbs this week through calorie counting. A lot of the initial weight loss is probably water.

My system is to eat about 500 fewer calories a day then my body requires while otherwise maintaining proper nutrition. In terms of nutrition I follow the guidelines in the myfitnesspal app, I may need to double check that they represent current best practices but they seem reasonable.

I also exercise by riding my bike to work. I am thinking of also starting some resistance training and getting some kettlebells for that.

June 2014 BlueNote stock screen


ImageUntitled by bluenote_ere, on Flickr

Note: These stocks and metrics provided are just for informational purposes and aren’t reccomendations. I screen using a litany of factors including ROIC, ROE, M* Moat, Industry and many others.

CSX fell of the list because it’s price went up to M* Fair Value. Procter and gamble fell of the list because it is just too close to call when looking at a standard fast graphs chart. PG is probably one of those great company at fair price situations and I would like to make it a core part of my portfolio so I will keep my eye on it.

Baxter is a newcomer to the list. The funny thing about Baxter is that it coincidentally popped up in my quantitative screen at the same time Dividend Mantra also made it his most recent buy. The fact that I knew about this in advance may have had some effect on me through the social proof mental model but it didn't have had an affect on my screen which because it is a cold heartless algorithm. Therefore I am not worried about the possible bias because it wouldn't matter either way as Baxter is clearly the best pick my system could generate for my portfolio (I already own too much HCP and BHP to add more right now.)

I will be buying up some Baxter shares because my investing strategy is partially based on the ideas in the book “The Future For Investors” by Jeremy Siegel. In that book Healthcare/Pharma, Energy and Consumer Defensive sectors are shown to outperform other sectors in almost all long term scenarios. I have no Healthcare sector exposure right now so this will get my portfolio into a good position on those three sectors. Also the valuation is good, safety scores are excellent and the dividend growth history is solid. BAxter is planning on spinning off part of the company into a new stock. As per the aforementioned Jeremy Siegel book I will be keeping all spin off's generated from my holdings so it should be interesting to see how well this goes.

I was doing my due diligence on Williams (WPZ) and unfortunately it’s MLP legal entity status creates major tax headwinds for me because I am a Canadian. Therefore all US MLP entities are off the table unless severely discounted (30-40% at least). Americans should definitely take a good hard look at this MLP. I would definitely take a position in it if I were an American (Safe, 20% discount to FV, wide moat, decent dividend increase history).

Hopefully my system can shake out another worthy BlueNote stock next month.

Gilberto de Piento
Posts: 1942
Joined: Tue Nov 12, 2013 10:23 pm

Re: BlueNote's Journal

Post by Gilberto de Piento »

Fat Bike

Has anyone ridden one of these types of bikes in the snow and ice? I am considering getting one for my winter commute.
I have ridden a pugsley a little but I haven't owned one. They have become really popular in the upper midwest but in my opinion are a fad for most of the people who bought them.

What are your winter riding conditions usually like? Fatbikes work better than other bikes on fluffy snow but are no better than a mountain bike on ice (unless you get studded tires). I winter commute on a 29er mountain bike with fenders and 700x35 nokian studded tires. It doesn't float on snow at all but since the problem is usually ice it works well enough. The studded tires help a lot but it still requires skill to ride in bad conditions. A fatbike may be more forgiving.

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

Winter Bike

I am going to get a used mountain bike and winterize it. The winter will probably depreciate the bike rapidly therefore I will get an aluminum frame/forks which should prevent the whole bike from becoming a rust bucket.

Health

I continue to lose weight through calorie counting, its been a bit of an up and down ride but so far so good.

Savings

I've been reading YMOYL (Your money or your life) and created the graph they depict in the book showing my income, expenses and a line for investment income.

I don't know if it is exactly accurate but according to Mint and my brokerage account it looks like this right now:

Imageimage (1) by bluenote_ere, on Flickr

Stop Working Here's How you Can, by Derek Foster

This guy bills himself as Canada's youngest retiree at 34. Says he did it with what is basically a dividend growth strategy. The book is basic but has good advice. It's what is lacking in the book that makes me think it is mediocre. Also he makes judicious use of large font, thick margins and line spacing to make what would be a thin book into a novel sized book. Since he wrote the book he has come out and said that he made a large risky bet on Phillip morrisback in the 90's which paid off well and accelerated his early retirement, no mention of that in his book. He also caved during the '08 stock bust and sold all his holdings. I don't consider this guy to be in the same league as Jacob but he's definitely achieved something noteworthy as a result of enterprise and frugality.

jacob
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Re: BlueNote's Journal

Post by jacob »

Even steel---the frame---won't rust. Your main concern is the drive train. If you want to avoid rust, clean it often, but which I mean almost or even daily, depending on how salty the roads get.

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

jacob wrote:Even steel---the frame---won't rust. Your main concern is the drive train. If you want to avoid rust, clean it often, but which I mean almost or even daily, depending on how salty the roads get.
Thanks, Toronto seems to use a lot of salt so I'll probably have to clean the drive train almost every day.

Chad
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Re: BlueNote's Journal

Post by Chad »

BlueNote wrote:He also caved during the '08 stock bust and sold all his holdings. I don't consider this guy to be in the same league as Jacob but he's definitely achieved something noteworthy as a result of enterprise and frugality.
This doesn't make a lot of sense if you are a dividend investor. If you are buying the top tier dividend companies (Exxon, Phillip Morris, etc.), and one would assume any dividend investor is as they are on every dividend list, there is no reason to sell in a downturn. These companies almost never have a hiccup in dividends, so if you are retired and living off of dividends you don't even notice the downturn. He seems a little shaky.

henrik
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Re: BlueNote's Journal

Post by henrik »

BlueNote wrote:My brakes on my bike barely squeal anymore. I don't know why but I am happy squealing has subsided.
Mine are quiet now too, but I had to replace the pads to achieve it (the old ones were not worn out at all, probably just some weird material). Maybe I should have waited it out as well:)

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

$435,778

That's my best estimate of all the income I have ever made (before any taxes or other adjustments).

There is an exercise in YMOYL that asks you to calculate this number as honestly as possible. I used my tax returns to calculate 95% of it plus a rough estimate of chore money, paper route money, gifts etc. from when I was a kid.

Essentially they want you to know the money was made but not to dwell on it.


Imageimage (3) by bluenote_ere, on Flickr

That's a tidy sum but nothing spectacular. I spent 6 years in "higher education" but worked part time to pay the bills. I then spent a little more then a year in Japan teaching english which was fun and I was able to save a bit there. My income really took off when I started my career in accounting/finance over the last 2 years.

Compounding

If I had half that money saved into a portfolio of the type of stocks I like to invest in I could probably get at least a 3% starting yield or $6,500 a year tax free. That would be tough to retire on but not impossible. I could live in a small apartment in a less expensive area with roommates, buy groceries intelligently, ride my bike or walk everywhere. Add to that a dividend growth factor of say 7% and my dividend income would double about every 10 years . By the time I was 65 I would hopefully be making 52K per year. If we discount that 52K back to today at an inflation rate of 2.5% (52K/1.025^31) that's about $24K per year in today's dollars. Let's also assume the portfolio value grew along with the dividends, that means I would have (217.5K * 2^3decades) $1.7M worth of fractional ownership working for me.

Let's take this to my 85th birthday and assume that I die then, which is probably pretty close to actuarially correct. If all my stocks kept up the average 7% dividend growth and valuations remained fixed to my yields I would be making 208K per year in dividend income ($59k in todays dollars). I would also have $6.8M in stock in my brokerage account. Maybe this is all just wishful thinking but it is interesting to think about. Compounding of this nature isn't easy to get but I don't think it's that hard either. The main problems would likely be psychological, ie not spending the principle, not panicking during all the crashes and not getting greedy and going outside of your competence and safety zones.

spoonman
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Re: BlueNote's Journal

Post by spoonman »

I very much enjoyed reading this post. I've run through similar calculations and reached more or less the same conclusions.

$6,500/year is a nice chunk of change. It wouldn't be difficult to retire on that kind of income if you go abroad. I think Jacob spends $5000/year on himself right now, so you could in theory pull it off in North America as well.

BlueNote
Posts: 501
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Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

Tired

I have been getting really tired of my job lately. I find it boring and repetitive with occasional bouts of urgent mostly useless work on top.

They gave me a raise at work the other day and I immediately thought of it like a lottery ticket rather than something I earned. This could be the influence of all the stoic literature I have been consuming over the last couple of years. I can't control a raise but I can control my efforts and the attitude I bring to my job. The problem is I don't think I can totally control my attitude either, especially when the work doesn't fit great with my personality.

Stock Market

The prices of securities have come down a little bit over the last week or two. My stock filter shows the following candidates for my FI portfolio:

Ticker Name
BAX Baxter International Inc.
BHP BHP Billiton Ltd.
BBL BHP Billiton plc
DE Deere & Company
XOM ExxonMobil Corp.
HCP HCP Inc.
UTX United Technologies
WMT Wal-Mart Stores Inc.


I own HCP, BAX and BBL and would like to diversify my portfolio a little more before adding more of those positions.

DE is cyclical and I am a little skeptical of their business franchise. I think their franchise is based mostly around the network of maintenance cenres they have developed for farm equipment. I wouldn't consider this a core holding but it is a solid company with a decent dividend history.

Retailing giants have come and gone throughout history (Woolworth's, Kmart etc.). What makes Wal-Mart so different? The structural advantages of great locations, scale (low prices), and the best retail logistics system around give them somewhat sustainable competitive advantages. Still I don't know if I would get into bed with this company knowing the industry has a history of has-beens that also had great locations and scale.

That leaves us with Exxon and UTX. Exxon is a goliath, they consistently earn high returns on capital despite oil prices being cyclical. They are a great company with long history of share holder friendly polices. UTX is probably a little outside my circle of competence right now so I am going to research them further.

Therefore Exxon would be my first pick right now as a core holding for my dividend growth portfolio.

spoonman
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Joined: Thu Mar 28, 2013 4:15 am

Re: BlueNote's Journal

Post by spoonman »

Exxon is definitely a juggernaut, it is its own country. I've been a happy shareholder since 2010.

Is it possible for you to change positions where you work? That was one of the nice things about my job (I'm using the past tense already), it allowed me to switch teams and projects every year or so, which kept things somewhat fresh.

BlueNote
Posts: 501
Joined: Sat Jun 08, 2013 6:26 pm
Location: Toronto, Canada

Re: BlueNote's Journal

Post by BlueNote »

spoonman wrote:Exxon is definitely a juggernaut, it is its own country. I've been a happy shareholder since 2010.

Is it possible for you to change positions where you work? That was one of the nice things about my job (I'm using the past tense already), it allowed me to switch teams and projects every year or so, which kept things somewhat fresh.
I think Exxon is probably fair value right now, but it's so well followed that it would only rarely become excessively undervalued. Something like the valdez oil spill would probably have to happen before a significant discount to fair value occurred. It certainly wouldn't hurt to have it in my portfolio right now and I may buy some in the coming days. Even if the stock market plunged or they had to shut it down for years I would be pretty comfortable owning Exxon Stock.

It's possible to change positions which is something I am looking at. In fact a colleague of mine quit recently and someone who worked with him was trying to get me to apply because he was worried they'd put in someone with less experience which would suck for him.

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