Dispatch From VFS HQ – Stock Market Update

As with most people in Washington State, I have been self isolating most this week working from home, and watching the financial headlines roll through like thunderstorms. I have spent so much time in my office chair this week I am looking for backup chairs in case my main steed fails.

This market drop and has been sudden and spectacular. Record breaking volitility, massive economic shutdowns, and pandemic fears make data driven investing extremely difficult. I have been asked by several friends over the last few days for market opinions, and gladly respond to anybody who cares to hear my amateur-status opinion. In past months, you could have looked at invest.vfsystems.net to get my rough view of the market, but in this enviroment, its moving too fast for that data-view of the world. So please feel free to email me any time you have market questions – I am full of free advice and opinions.

In summary, I do believe this will be a more significant event that the 2008/09 great recession. The worldwide supply and demand shock in this highly levered world is going to cause severe economic damage and change. Perhaps this quote from Warren Buffet is the most appropriate now:

Only when the tide goes out do you discover who’s been swimming naked.

The tide went out very quick in this case, and indeed, a lot of companies are scantily dressed (I am looking at you Boeing).

Having said all that, I thought I would post these thoughts, giving you an overview of what I have seen this last few weeks and what I am thinking:

GDP Estimates – It was fascinating to watch the GDP estimate revisions for 2020 come out this week. On Monday, Goldman Sachs forecast a 5% drop in Q2 GDP, then a 4% rise in Q3 GDP. When I saw that I knew that was still way too optimistic. As of this writing at the end of the week, Goldman is now down to -24% (!) Q2GDP and looking negative all year:

Ouch!

To be fair – nobody knows – past data is pretty much useless now, so everybody is just guessing. But it cant be good.

The Speed of the Market Drop – Speaking of data, the speed of this drop is what was most unique about this downdraft. My investment models look at economic data and predict expected prices based on that data. We have no precedent for such a sudden global economic stoppage. And the economic data we have is in many cases too old. For instance, Housing Start data came out on Wednesday this week, and the survey was for February, which by now is ancient history. The number was down slightly from the all time high. Typically Housing start data has been a good predictor of slowdowns, but because of the speed of news we wont see Housing start data tank until we get the March numbers in late April. So I have some work to do to figure out how to get more timely data or otherwise deal with fast moving markets.

Investing By Hand – Because the market is moving faster than my data, I took my investing strategy off autopilot, and am now investing largely on untested theories and headlines in this turbulent market. This is extremely dangerous. However, I am working to repair my models, and every day I think I get better data to help drive decisions in this new environment. I am gravitating to strong companies I know, with smart management. Going into this crash I was fairly defensively positioned, and as this market has dropped, I have gotten more defensive. My model is still fairly positive on the market, but again, the lack of timely data makes that opinion near worthless. The most important thing is to keep my emotions in check and look at the data coming in rationally.

Bet Against Commercial Real Estate – One non-data related trade I made was to by a Sept 2020 70 strike price put on the VNQ. The VNQ is the Vanguard REIT Index. This was a trade I had been thinking about, but was triggered largely by the news that our local high end mall was closing for two weeks. This mall, like many malls, has been increasingly opening restaurants in place of stores closing due to the retail apocalypse. As the coronavirus hit, all the stores and restaurants immediately emptied out. When this local mall closed, it was enough for me to act on my thesis that the impact to commercial real estate will be devastating from this point forward. We already had too many restaurants opening. We had massive building of commercial offices built downtown (now and in the future to be empty due to working from home). Finally, in our town we have had thousands of new hotel rooms built in high rise hotels built in the last couple years alone. I am confident in the next few months, we will find out which hotel chains have been swimming naked.

Regarding working from home, yes I think people will return to offices after all this. This event has caused me to use on a regular basis teleconferencing software, and I must admit, it works pretty well and once a home office is set up, you can be at least nearly as productive as in the office. I think businesses can adapt to this new paradigm on an ongoing basis. Yes I believe employees still need central meetings periodically, But I think this will kick off a large shift of offsite rotation. Maybe this will lead companies to reducing office space needs by 1/3? If so, that is a lot of nice empty office buildings.

In summary, I do not think this market drop is over. In 2008/09, the market dropped by ~55% peak to trough, and as of this writing we are down ~32%. I see no reason why we shouldn’t drop less than ~55%, and I think there are a lot of bad headlines coming our way in the next few weeks.

With the lack of data, I think many people are having to invest on emotion. I was talking with a neighbor, and we agreed at this point it may best to close the markets for a couple weeks because of the trillions of dollars being traded purely on headlines and emotion. Lets take a couple weeks to gather data, get a bearing on the economy, then re-open the markets. Maybe that’s not possible with global markets, but I feel that would help.

Regardless of the Coronavirus’s ultimate health toll, I don’t see this as a quick economic recovery. With a 2020 government deficit now projected to be over 3 trillion after all the stimulus being discussed, I think the economic impact of this event will last for years. In the coming days, we will see many corporate losers, surprise bankruptcies, as well as a few winners in this new digital economy. And I still don’t think we are near the market bottom.

Blazor and WordPress

As I mentioned in my previous post, I have been tinkering with Blazor, seeing how it will fit into my application development pattern. When I first saw that Blazor web assembly can run on Linux servers, it occured to me that this might be the best tool to be able to build applications that run inside WordPress. So one of the first things I did was to see if I could get that working.

Naturally it wasn’t as straightforward as I was hoping, and I ran into a few pre-release issues with Blazor that slowed me down, but I think I have done enough to see that Blazor will be my tool of choice to build apps inside WordPress.

As you might of figured out, this blog runs on WordPress, and it runs on a Linux host. WordPress is a great tool to through up a reasonably good looking ‘brochure’ website quickly. A Brochure site gives your company or product a Web presence and acts as an online version of a business card. WordPress comes with a simple registration/login system, and a zillion plugins to make site development productive and efficient. I have been using AngularJS inside WordPress to build applications, and that has worked pretty well. But I made the decision to wait on migrating to full Angular until I learned more about Blazor. After using Blazor a bit, I have decided I will not be moving to angular X – and start migrating my angularJS code to Blazor.

So here is my first application written in Blazor for WordPress. the dottet box below is a little app that pulls the most current weather forecast for Seattle from the US Weather Service (this may take a while to load):

Loading Blazor App……

Adding this application to WordPress was much simpler that I expected. All had to do was publish the application from Microsoft Visual Studio to a file on my development machine, then FTP the files up to a folder I added in the WordPress root directory. Then I just added the following script to this blog post:

After a few failed attempts (which really helped me understand some concepts of Blazor and Web Assembly), it all came together in my head and magically appeared on the page. I must admit the first time I got this working I felt the same way Dr Frankenstein felt

The Frankenstein analogy is not too far off, piecing together disparate technologies to create a web application platform, is somewhat amazing. My favorite feature of this approach is I wrote the application in the familiar confines of Microsoft Visual Studio, all in C Sharp, and no javascript. It’s a thing of beauty.

If you haven’t had a chance yet to look at Microsoft.net Blazor, check it out here. It is still in pre-release until May of 2020, but its worth experimenting with now. The more I work with it, the better I feel the dark days of javascript front end scripting frameworks and packages and transpiling are behind us. This is such a better model.

Blazor – First Look

I have been anxiously anticipating the release of Blazor – Microsoft’s new .Net component framework that should help free developers from Javascript hell.

Blazor is a new tool for .net developers to allow running C# in the browser, inside web assembly.

What I most like about it is, it is such an clean and simple architecture from the developer’s point of view. Writing a blazor app is very similar to writing your typical MVC/Razor app, that runs on the server. I have always felt that MVC/Razor was ultimately the wrong model – very anti-client/server since all the data/template rendering happens on the server. Until now, there has been no way to run c# in the browser, and have the browser pull the data and assemble the page.

Because MVC/Razor does all the work on the server, JavaScript has been the only option to run in-browser code and pull data popularizing the single page application (SPA) model. From a C# developer’s point of view, Javascript is a terrible language. Its not strongly typed, its interpreted (not compiled), and until recently it has been difficult to debug. Because of all this, frameworks such as Angular, React and Vue have become popular to help hide the mess that can be created by JavaScript. In my opinion, this has in many ways made the problem worse, because additional libraries and packages need to be installed to support frameworks, bloating the code and slowing development time thru trying to orchestrate all this 3rd party code.

Blazor finally replaces all this mess. To do this, they had to wait until all the modern browsers support WebAssembly. Today, the only ‘modern’ browser not supporting it is Internet Explorer 11, and hopefully with the demise of Windows 7 traffic using IE 11 should diminish. There is even an answer if you do need to support older browsers – Blazor Server. Blazor apps can also be written to run on the server, so the codebase can be the same whether you decide to run it on the client or the server. Very elegant.

Using a sample provided by Microsoft, I downloaded, compiled and ran the app in my browser in under 5 minutes. Browsing thru the code, its very readable and understandable. within an hour I was able to customize the demo to call my own API and retrieve data from display it – all without javascript. Contrast that to setting up an Angular app, which could take an hour or two by the time you assembly all the pieces to get the code to run. This article has a great overview of Blazor and the code in the demo. Note that when you first run a Blazor app, it takes all the compiled code (that traditionally runs on the server), and downloads it to the browser. So the first load of the page takes a little time, but once the app is loaded its very fast. One current limitation of Blazor is because the code is running in the browser, inline debugging, setting of breakpoints does not easily work from within Microsoft’s Visual Studio, so this is a step backward in productivity as compared with server development. However, because Blazor consumes class libraries, you can debug class libraries as per usual, prior to implementing them in Blazor. Also, the Blazor team has stated that getting debugging working is a top priority.

Blazor client is still in preview until May of 2020. I think this will be a huge boon to productivity, and I am starting to develop Blazor apps now in preparation for releasing after May. Already it is such an improvement over the JavaScript framework model. As of now, I think the future is bright for client side application development.

My Raspberry Pi

I have been tinkering with home automation projects over the last few years, messing around with a variety of platforms.  I started with a Wink hub and other assorted wifi enabled products,  and pretty much glued everything together using IFTTT.  This has worked OK, and I have learned a lot over the years.  Recently, with my work with the Hue API, I did my first integration that involved writing code, and running that code out at Microsoft Azure.  That was a great next step, but the stage is to run a fully programmable local hub that can manage my devices locally (IOT on the edge).

The first step I needed to decide on was what platform to run. I am a Microsoft Windows centric guy, so I was leaning towards building off Windows, but I didn’t see anything I liked.  However, now that Microsoft has released the dotnetcore programming library that allows running C# on Linux, that opened up more possibilities.  Over the last few months, I finally settled on Raspberry PI, a perfectly adequate machine that you can get for under $100.   It also runs on very low power.  I put a power meter on it – and it runs consistently at around 4.2 watts – which is about the same as my desktop PC when it is sleeping.

My first project I settled on came about because of a previous hardware purchase.  A while ago, I got a 2 terabyte USB drive at Costco, with the plan to plug it into my router to provide all my PC’s access to a shared large drive.  Unfortunately, when I plugged it into the router, it only recognized like 300mg.  I theorized that is because the drive is formatted in exFAT to accomodate the large number of bytes, and the router probably doesn’t support that file format.  Now  I probably could of futzed around for awhile and figured out a good workaround, but thats when I decided to take the plunge and get my first Raspberry PI and use that as my network attached storage.

I received my Raspberry PI from Amazon got started. The hardest part was probably just setting up my work area to start tinkering.  I didn’t want to have to swap monitors or keyboards,  so I had to dig up an old monitor, mice and keyboard.  The raspberry Pi has a HDMI port for the monitor, but unfortunately my monitor didnt support HDMI, so I had to dig up an adapter for it.  I also had to buy an 8Gg micro SD card, which delayed me a bit.  Once  I got my workarea and hardware setup, I just followed the instructions that came with the Pi and I was running Linux  in 15 minutes(!)  The Pi runs Raspian, which is a flavor of Linux recommended for the PI, and it is more Windows like than I was expecting.

So now that I was semi comfortable with Linux, the next big steps were to attach my USB drive and get Raspian to recognize it.  I also needed to figure out how to set up a share so that my windows machines can see the storage, and I decided  I wanted to have my Pi run FTP, so I  can have my security cameras stream local copies of  video recordings to the drive. Getting thos all to work of course mostly involves googling various keywords til you find a solution, and I was amazed at all the support out there for Raspberry Pi.  I found step by step instructions on mounting an external drive, setting up a network share (using Samba), and installing FTP and getting FTP to recognize the external drive.  Getting FTP to recognize the external drive was probably the most difficult, as there are a couple FTP packages supported by Raspian.  But thanks to Ryan Fitton’s post I got it to work.

So now everything is up and running just as I had hoped.  Every machine on my network can see the storage, and my cameras are streaming copies of images to the drive.  The next step on my roadmap is to start building out the Pi platform.  Getting a dotnetcore program to run on my Pi will be the next step.  After that.. the sky is the limit.

,

The Deficit, Repo Markets, and the Stock Market.

One of the most under-reported economic stories of 2019 was the problems with the Repo Market and ‘Not QE’.  This article does as good as job of any as explaining whats going on.  This is a complicated topic, which is why it hasn’t been covered outside of the financial press, but it seems to me this will have huge implications in the coming years.

Starting in October, largely due to all the government securities being issues, the Fed stepped in and became a net buyer of Treasury securities. Wall Street & the banks treat treasury securities like liquid assets – the problem now being there are so many treasury securities in the market, the appetite is dwindling. Banks are stuffed with treasury securities, foreign interest is stalled. It seems everyone who wants to own a treasury bill has one.

Prior to this, starting in late 2017, the Fed had been (slowly) trying to drain off all the debt it added over the last 10 years. One could argue this was a major factor in the stock market ending down in 2018, with its low in December when the Fed raised rates, and signaled more to come in 2019. In January, the Fed reversed course and signaled lower rates, juicing the stock market to new highs. Now that the Federal Reserve is keeping rates low, they added fuel to the fire by injecting (printing) more money into the system, which has the effect of ending up in the stock market directly. It would seem this is what might be fueling the recent highs in the market.

Another longer term ticking time bomb is all the retirement assets accumulated by baby boomers. As boomers quit accumulating wealth (or die), and they become net sellers of financial assets, that money will be passed back into the economy, flooding the economy with all these T-bills that have been hoarded in these retirement funds. I think this may finally lead to the inflation that has been long predicted by economists when government runs large deficits. Once that money leaves the hands of old savers, and into younger spenders, a lot more money will be chasing the same goods which is a recipe for inflation.

Historical economic theory would assume that rising federal debt would lead to higher interest rates, as supply of debt exceeds demand. So far that hasn’t happened. I think this has been distorted by the huge Baby Boomer appetite for savings, and recent Fed policy is distorting markets by ‘hiding’ this debt on the balance sheet. And because it appears to the public and politicians that ‘deficits don’t matter’, there is no appetite to reign in all the federal debt. So far, its working. But I believe deficits do matter. How long the government can continue to print paper to cover these debts is anybody’s guess. At some point one can assume markets will care? And what will happen when markets do care? That is a question that will be have to be answered sooner or later.

Azure Oddity

I have been working a lot in Microsoft’s Azure platform, and for the most part it has been a relatively smooth transition. Lots of new things to learn, a fair bit of code refactoring and adapting to the new cloud environment.

Recently, I ran into a odd problem at a client of mine that runs on Azure. My client came to me regarding a January email that was supposed to go out at the beginning of the month, and the January email showed December data.

So I dug into this, and verified the report was scheduled to run on the First Wednesday of every month, and verified that the emails were inserted into our outgoing mailbox a minute after midnight on Wednesday January 1st. I spot checked a few of the emails, and indeed they did have (incorrectly) December information. I looked thru the code, and the sql server stored procedure and still could not find a reason.

Finally, I looked at the job run log and found the problem:

The job that was supposed to run at midnight was kicked off at 11:59:57 by Azure’s job trigger. When the report runs, if checks to see the current month year of the run to choose its data, and in this case, it was December.

It’s curious to me that the scheduler is that imprecise. For years networks have had a common time synchronization service which pretty much guaranteed times across servers, but apparently there is a discrepancy between Azure services. I will have to get use to the idea that these cloud services provided by Azure my be loosely coupled, and these services may be more autonomous than my previous windows network world.

My work around for this is simple. I can delay the run of this job a couple hours, so the job will run at 2:00am instead of midnight. My assumption at this point is 2 hours should be safe. But in this brand new cloud world, there is always something to surprise you.

2019 Solar Year In Review

Time for my 5th annual solar power progress report.  This is the fifth year of my solar production experiment (for the full story click here), and so far things are still OK.  For 2019, the panels produced 3525 kilowatts of power, down almost 2% from the previous year.   Below is a chart of my 4 years of production by month:

I do believe I am starting to see degradation in the panel performance, as each year production seems to average down.  However, as shown in the chart – our summer in the Pacific Northwest was much cloudier than normal, hitting my peak production months pretty hard.  I forecast an increase in production in 2020, as the weather was abnormally bad during those summer months.

Payback Update

As I have mentioned in previous posts, I had originally penciled out a 6 year payback when I made the decision to move forward with this plan.  Last year after detailed analysis I knocked it back to 10-13 years payback.  This year I have dug a little deeper and have a much better payback analysis.  

My current payback analysis shows I should get my original investment amount back sometime in 2028, which works out to a 13 year payback.  This analysis assumes two major factors:

  • Drop in Incentives.  My installation incentives do appear to expire on 6/20/20.  This will be a huge hit to my return, although I had factored this in to the original estimate.  If I had one more year of incentives, that would have moved my payback to around 8 years, so it is a significant hit.  I believe there are incentives for new installations in 2020, but if you are considering installing panels,  make some rough calculations and make sure you do a payback analysis.  
  • Electricity rates stabilizing.  My current payback analysis assumes that electricity rates will stabilize, rather than continue dropping.  This drop in rates over the last 5 years is probably most responsible for me not meeting my original payback estimate. I have given up with any assumption that electricity rates will increase, all I can do now (from a producer point of view) is hope for rates increasing).

This year I did a projected rate of return for the first time.  Assuming my panels keep producing roughly the same amount of power through 2030, my rate of return on this investment will be around 1.03% a year.  While that is low, its not a disaster.  Also, at the end of the the payback period I will still have functioning panels and the meter infrastructure from the original investment.  So if was to upgrade my panels in 2030, and start the investment process all over again, the installation would be much cheaper and I would get a significantly better payback.

Solar panel prices dropped a bit more in 2019, down to $0.77 a kilowatt, and I look for continued drops throughout the 2020’s.

Power Use Report

Last year I started recording my power use, as I often get asked what percentage of my use do I generate.  In 2019, my power use was down 4.2% from the previous year.  I attribute this to two factors – less air conditioning during the summer, and a full year of a new energy saving refrigerator.  In 2019, my solar installation generated 47.64% of the overall electricity I used.  

I still think residential solar / utility scale wind and solar is the power model of the future.  However, given the current incentive structure I am not sure its economically feasible in many locations in the northwest.   So if you are considering an installation, it will be important for you to estimate your annual production correctly.  If you have any questions regarding a payback analysis, feel free to leave a question in the comments and I can get back to you.

 

My Hue Lighting Experiment

A while ago, I bought a Hue light and bridge to experiment with. Hue Lights are a smart home light that can be automatically turned on and off via a timer or event trigger. I decided to start experimenting with Hue, because they have a pretty easy API to use that allows fully flexible integration with other sorts of devices or data.

I could of gone the simple route and just used IFTTT.com to integrate my hue lights with other devices. For a few years now I have been using IFTTT.com, and for the most part I could handle all my geeky smarthome needs using IFTTT. However, I don’t find it as flexible as just coding it myself. IFTTT does have the ability to use its custom language platform, but after looking at it I decided I didn’t have the energy to learn another proprietary language/structure, so I have decided to do more with building my own custom logic in C# and using Microsoft Azure. I will still use IFTTT for most the simple things, but my goal is to start integrating everything into my own custom platform to manage devices.

So my first ‘Hello World‘ application using the Hue API and Microsoft Azure platform was to turn a light on every morning, varying the color of the light by the weather forecast for the day. So if it is supposed to rain the light will be blue, if it is to be sunny the light will be yellow.

There were numerous hurdles to doing this, primarily because I was trying so many new things. Learning the base Hue API for internal access was by far the easiest, I was able to run commands from my local network in under an hour. After that, I tackled the logic to call the weather API, which also turned out to be pretty easy. It turns out the National Weather Service has an API that you can call to get the days weather –
https://www.weather.gov/documentation/services-web-api. Pretty simple authentication, and once I got past that I found the endpoint to call and in an hour or so I had logic built to pull the days forecast. Thinking I was close to achieving my goal, I was feeling 90% done with my project. Of course, as with most programming projects, it turns out the last 10% of the project consumes 90% of the time. Here is where it got complicated:

  1. Hue remote API access.I want this program to run out at Microsoft Azure, so that I don’t have to have my PC have to wake up at 6AM to run the job. So I had to configure my Hue bridge to take requests from outside my home network. Hue uses OAUTH to communicate security credentials, and my understanding of OATH flow was not that current (I am an old username / password guy..) so I had to first re-conceptualize the whole authentication / refresh token flow and figure out how to support it. Once I figured all that out I had to figure out how I wanted to store my tokens, so I had to build a subsystem to manage that whole process. I made this work more complicated than I needed to of course, because I made it flexible to handle future APIs that use Oauth. So I burned several hours getting an understanding of the workflow, and building out all that. But now I think I have a platform ready that will make my next Ouath integration easier.
  2. Azure Functions and .NetCore.  This is a great example of how software projects go way over deadline. Because I am in charge of the scope for my little experiment, I decided to expand it a bit. I wanted to set up a new Azure function to handle all my future IOT needs. Microsoft’s Visual Studio now comes with a nice template to build Azure Functions for Azure, so I decided to use it. I also decided to build it using .Net Core, which is the newest and most efficient .net framework. .Net Core allows to run .net on Linux machines, so in the future if I want to run these or other programs locally on a Raspberry Pi, that sets me up to do that in the future. It turns out I seriously underestimated the time it would take to build this out using .Net Core. The biggest hurdle was all my utility class libraries are built in .net Framework 4.7, which is not compatible with .Net Core. So I had to reinvision my future architecture for my class libraries. I experimented with .Net Standard (a compatibility standard), and threw that out. I ended up just standing up parallel utilities in .Net Core, which at this point I will use for all my IOT projects. I think it was the right thing to do, but this probably tripled the time I had budgeted for this project. Once I got all this build out and plugged into the new Azure functions project. I was easily able to publish this project to Azure, and my project was live! Each day at 6AM the program wakes up at Azure, and turns the light on in my house.

My first few days of testing happened to be rainy, so the light was always blue. I got tired of that pretty quick, so I decided to add logic to vary the color of the light by ‘raininess’. Using this code, I now can vary the light color by approximately the forecast for the day:

string shortforecast = p.shortForecast.ToLower();
int rainScore = 100; 
rainScore += (shortforecast.IndexOf("rain likely") >= 0) ? 155 : 0;
rainScore += (shortforecast.IndexOf("chance of rain") >= 0) ? 100 : 0;
rainScore += (shortforecast.IndexOf("occasional showers") >= 0
           || shortforecast.IndexOf("slight chance rain showers") >= 0            
            || shortforecast.IndexOf("light rain") >= 0          
             ) ? 50 : 0; 
if (rainScore == 100 && shortforecast.IndexOf("rain") >= 0)
        {          
             rainScore += 25;
        } 
int sunScore = 100; 
sunScore += (shortforecast.IndexOf("sunny") >= 0) ? 155 : 0; 
sunScore += (shortforecast.IndexOf("sunbreak") >= 0) ? 100 : 0; 
sunScore += (shortforecast.IndexOf("partly cloudy") >= 0) ? 50 : 0; 
if (sunScore == 0 && shortforecast.IndexOf(" sun ") >= 0)
      {
         sunScore += 25;
      }

I then build the color for the hue light of the rain and sun intensity. Note that I am using one of these ridiculously expensive color hue lights (around $50), which gives me the flexibility of using a vast array of colors.

So for now my experiment is complete, and I am enjoying a quick glance at the light to see the days weather forecast. This has been an interesting (though over budget) experiment, leading me to even more ideas for the future. Please don’t think I am an idiot for spending $50 for a light that changes color based on the weather – I consider this is an experiment and the first step in building out a fully integrated smarthome.

Expedia – After The Drop

In September I made an ill-timed move into Expedia stock, just in time to see the stock drop by 30% in November. The drop was primarily due to a bad earnings release – revenue number lower than expected and and EPS miss by $0.43 a share. In addition, the market is spooked by Google getting into the vacation rentals space in this already competitive environment.

So what to do now? Do I bail or buy on the dip? Arguably, its too late to bail on the stock:

6 month Expedia stock price

So I need to see if it makes sense to add to my position – because if I liked it at $132 I should love it at $94. Looking at the forward estimates does’t paint a great picture:

For the last year for Forward Twelve Month estimates (FTM) have been consistently dropping, at even after the drop the forward price earnings growth (PEG) metric is historically high. So that explains the nervousness about the stock.

However, if you believe the nervousness that Google will keep squeezing Expedia is overdone, and they can stabilize EPS growth, I think there is some opportunity here. Short term I think the drop is overdone. This is still a stock that is growing earnings at 50% per year, with a PE below market. Not that I am super bullish on this stock long term, I just think its OK to play for a bounce on this. So in my case, I added to my position in late November to get by cost basis break-even lower. I think this will be a short term (1-2 month) trade, with the assumption that I will lighten up on my Expedia holdings after a month or so, and take the short term tax loss on my initial purchase. My valuation and technical model is positive on this stock for the month of December, so I would guess the majority of the bounce will happen in the next 30 days. After that, I will have to wait and see because my model doesnt forecast past 30 days.

Long term, I am not sold that Expedia will dominate the travel world, but I think its worth a 30 day trade to assume that everybody who was going to sell has already sold.

Another Microsoft Access Bungle – ‘Query is corrupt’

Another example about how little Microsoft cares about its Microsoft Access product appeared to me today when a client of mine ran into a problem with their Microsoft Access database. Suddenly they started getting ‘Query is corrupt’ messages in the application.

Since I hadn’t made any changes to this application in a long time, I did the usual compact and repair assuming that would fix it. After trying all my usual tricks, I finally went to google where I found the culprit.

According to this support article from Microsoft, this problem was introduced by an office security update that was automatically installed on my clients computer. Comically, the article provides a byzantine workaround to fix the problem:

If you encounter this issue before the fix is available, the recommended workaround is to update the query so that it updates the results of another query, rather than updating a table directly.

For example, if you have a query similar to:

UPDATE Table1 SET Table1.Field1 = “x” WHERE ([Table1].[Field2]=1);

You can create a new query (Query1) defined as:

SELECT * from Table1;

And update your original query to:

UPDATE Query1 SET Query1.Field1 = “x” WHERE ([Query1].[Field2]=1);

I applied that fix to the various spots in my application where I update tables, and that got me through the day. Since someday somebody will stumble across this code and think I am an idiot, I made sure to reference the article in my comments as to why this is coded so ugly.

What amazes me about this is the casual approach Microsoft is taking to fixing the problem. Their plan is to fix it December 10th, almost a month after introducing the problem. My question is, how many small businesses are running mission critical Access apps, and don’t have any Access developers on hand. I know of a few companies in that situation, and I guess once they download this update, they will have to find a workaround.

Curiously Access users on the Office 365 platform will get their fix on November 24th. That is still 2 weeks out, and it may foretell that customers running older versions of Office software will be considered second tier customers.

I have said before that I have concerns about Microsoft’s ongoing commitment to Microsoft Access. This latest development only reaffirms my position that even though there are still many active Microsoft Access applications out there, Microsoft must think they are not important.