Telus (TSE:T) has announced 2 very important news today: 1) It’s cutting 1,500 positions across Canada, and 2) It’ll give a dividend of 44 cents a share early January (up about 5% from last quarter’s dividend).

Let me do some analysis here…

Historically, Telus has always paid dividends to its stakeholders – almost every quarter. For this year (2015), Telus as paid $1.64 in dividends (if we’re counting December as part of this year). Next year’s combined dividends will amount to at least $1.76, an increase of 12 cents a share from this year. That doesn’t seem that much, considering the Canadian inflation and everything.

But, when Telus has 602.40 million shares, the increase of 12 cents a share amounts to about $72.3 million, which is more or less the same amount of money it would take to maintain 1,500 positions (assuming they are paying $50k/employee). Yes – I agree with you – that’s a very low move (ethically).

Ironically, Telus has dropped $1.80 today alone, which is slightly more than the total dividend that will be paid to its stakeholders next year. Not a very good omen!

Moving on to Telus’ performance as a stock, it isn’t that bad: it is experiencing record highs every few months ever since it completely recovered from the financial crisis back in 2013. However, considering that the stock is valued in Canadian Dollars, and that the CAD has dropped over 30% since 2013, then the stock’s current value in the world market is about USD $30, slightly less than the average stock price of $31 USD back in 2013. So, that’s not really a home run, especially when you take into consideration that the Canadian telecommunication market has been closed for the last decade under Harper’s Conservative government (by the way, I’m not taking a side here, I’m just stating facts) and was not open for any outside competitors. We’ll see if that changes under the new Liberal government, and if it does, expect Telus’ luck to run out quickly.

A friend of mine running a profitable cigarette business in the United States called me on the phone and told me that he had bad reviews on Yelp, and that he called them and asked them to remove those reviews. Their answer was “Sure – but you’ll have to pay us to hide these reviews”. My friend asked my opinion on whether to pay Yelp or not for something they officially ban (manipulating reviews) – at that time, it struck me that Yelp’s business model is based on extorting money from small businesses in order to remove bad reviews. Not only that, I seriously doubt that those bad reviews are actually written by real people (since the true identity of the reviewer is not revealed, and I suspect that these reviews are written by Yelp’s employees).

Here’s how I think Yelp’s business model is based on:

  • Yelp’s employees add a company to their directory.

  • Other Yelp employees badly review that company.

  • A Yelp employee calls the company (if the company doesn’t call first), and tell them that they have a bad review that can be removed for x amount of money.

  • The (usually small) company unwillingly pays the money.

Of course, Yelp has its own stinky advertising as well, but it doesn’t bring in as much money as extorting money from poor small companies. Yelp’s main business model reminds me of the story of the Swiss thugs that used to extort money from the the poor citizens for protection (from them, of course) back in the 13th century. Of course, whatever I think, Yelp’s business model is worth about $2 billion now, even after taking into consideration the 70% dip in Yelp’s pricing during the past 12 months.

You see, Yelp with its current business model is more of a scam and less of a business: generic bad reviews written by anonymous people such as the members of their Elite Squad (who are unsurprisingly conveniently located in the same city, and who are all girls in their late teens/early twenties and who are seemingly partying all the time) who may or may not exist and who may or may not have had any experience with the place that they’re reviewing with the sole purpose of extorting money form poor, hard working Americans and Canadians who are the real backbone of North America.

This business must go and people should completely ignore their reviews as they mean nothing. A review written by someone who doesn’t want to reveal his true identity on a website that is notorious for its shady practices amounts to nothing.

Oh, and by the way, YELP, as a stock, has no future, so avoid it like the plague. Unless, of course, you would like to short it.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

August 19, 2015 | In: Opinion

The Education System Is Broken

“1791 was the year it happened. I was 24, younger than you are now. But times were different then, I was a man at that age: the master of a large plantation just south of New Orleans.” – From “Interview with a Vampire”

Every couple of days I can’t help thinking about the completely broken, irrational, and abusive education system that we have around the whole world. I also can’t stop myself from reiterating, in my mind, the above quote. “I was a man at that age…”

How many men out there, especially in the developed world, can claim that they are men at the age of 33 (let alone 24)? How many? The developed world (and countries satellite to the developed world) has less and less men, and it’s all because of this broken education system that we have. Here’s why:

- You start going to the nursery at the age of 1. You spend a couple of years there.
- You then spend a couple of years in pre-school.
- You then go to school for about 13 years, until you’re 17-18.
- You then spend a few years in the university, and you typically finish when you’re 23-24.
- You then decide that it might be a good idea to have a masters degree, so you spend 2-3 years trying to get one (hopefully while doing some work on the side).
- You then decide to continue doing a PhD, and then you spend about 3-4 years doing a PhD.
- You’re now about 30 years old, you’re probably not married, and you probably don’t have any work, and you are most likely up to your ears in debt.
- You spend about 3 years trying to get a real job.
- Now, at 33, your life begins, and you can work towards building something for the future (a family, etc…) Oh, and try to completely forget about that cotton plantation that Louis (Brad Pitt) had at the age of 24; you will never have it!

Of course, the above can vary from one person to another, but the common factor that delays one person’s life is always education, which, for some reason, has become more of a goal and less of a mean.

Now, I don’t want to get philosophical about this whole thing, but I’m highly positive that a person is ready for life at the age of 16, and not at the age of 30-33. In school and especially in university, we are taught a lot (and I mean a lot) of garbage. Wrong history (written by the victors and twisted minds), outdated geography/biology/physics, advanced mathematics that we will never use unless we want to become mathematicians, super-deep literature (in at least a couple of languages) that we will never need in real life, and a lot of other garbage.

At the prime of our youth, we are stuck studying, unproductive to the society that we are in. Most of us become somehow productive in our late 20s or early 30s. That’s horrible as it highly diminishes the value that each of us can bring to the world by taking away at least 10 years of our most productive period in life. Not to mention that in younger ages, our ideals are much firmer than in later ages, where the line gets thinner between what’s wrong and what’s right.

The current education system steals our youth (not to mention our parents’ money), encourages procrastination of our real life, reduces our ambitions, increases our dependence on our parents, and reduces our fertility rate (it’s a no brainer that someone who is 23 is much more fertile than someone who is 33).

We don’t have to memorize whatever Socrates or Shakespeare wrote, we don’t have to learn every theory that Archimedes, Pascal, or Newton came up with, we don’t have to learn the highly twisted and the mostly fake history of each country on our planet, we don’t have to know where Swaziland is or what the exact distance between the moon and the earth is (which I don’t believe anyway). We need to learn how to read and write in order to communicate with each other, we need to know the basic mathematics (and basic geometry, algebra, and probability), we need to learn the basic physics and biology, we need to know where the major countries affecting us are, and where our country is, we need to know the history of our country and some other countries (not all of them). I don’t see this taking us 13 years to learn, I don’t see them even taking us 5 years. We can learn everything else that we need after we finish our formal education.

Each year, countries around the world spend trillions on education – that’s taxpayer’s money. Most of that money should be spent elsewhere, perhaps in creating projects that will employ hundreds of millions of young, productive people.

Each year, many higher degree students accumulate more debt learning instead of doing something productive and saving money.

This whole system disworks in a very wrong way and it should be corrected. It’s not doing us any good any more – in fact, it is draining our lives and our pockets. Hopefully the time will come when we get rid of it in favor of a more practical and logical system.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Greece… This beautiful country on the Mediterranean is now the topic du jour, again, and again, and again… Will they stay in the Eurozone, will they leave? The same question has been asked for the past 5 years now. Yes, that’s 5 years already. Each year the question is asked several times, with a huge market drop the month it’s asked, then followed by a couple of months of good market performance (yes, someone, somewhere is playing the short-long game very successfully).

The question hasn’t changed, but the circumstances did. Greeks have experienced austerity, and, according to the polls held last Sunday, they haven’t yet developed a taste for it. So they voted against it. Or was it a vote against something else?

Last Sunday, there was article in the New York Times titled that “Greeks Say No to Austerity” which made me think how much influence a title can have on the readers’ minds. The title could have been something like “Greeks Don’t Want to Pay Their Country’s Debts”, which is also true, and it would have had the opposite results on the readers’ minds, but instead, the New York Times elected to stick with the former title, making it look as if the Greeks were doing the right thing by voting against something bad (everyone hates austerity and everyone thinks it’s bad). I might be mistaken, but it seems to me that all the global powerful media is lobbying for a Grexit (a new term coined for Greece Exit [from the Euro]), and they’re doing so by further inciting the Greeks to stand against any compromise that will solve their country’s debts. I do have an idea why, but that idea is full of conspiracy theories and I don’t want to share it as I might be very wrong…

The Euro was a bad idea from the get-go, everybody knows it: the economies are not the same, and the people are definitely not the same. There’s nothing that binds the people of Europe together, except for 2 things: That they are on the same continent, and that they share, to some extent, the same religion. That’s it! The Germans don’t care about the Greeks and don’t feel that they are responsible for supporting them through their tax dollars euros. The Greeks on the other hand, believe that they have done the Eurozone a favor by joining it but it didn’t work out and now the rest of Europe must pay.

So, is there a way out of this mess?

The only way out, in my opinion, is forgiveness, relaxed restructuring, and, of course, abandoning the concept of austerity. Something that Europe will be very hesitant to do but that must be done. Any alternative compromise will take us to square one in a couple of years, and with even dire consequences.

The bottleneck to any solution right now is that the other PIIGS are watching what’s happening, very, very closely. Greece is just the tip, the very tip, of the Iceberg. See for yourself:

I think there’s something cooking in the oven for Greece now, something really bad, with a very sour taste that will stick in every Greek’s mouth for decades. The Greeks are depressed, and it’s always easy to manipulate depressed people. Ironically, the now holier-and-richer-than-thou Germany is a great example of how the depressed can be manipulated.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

There are some companies who like to intimidate their clients. Here are few examples:

- Every time I watch a Disney Movie, I am forced to watch a few minutes of what will happen to me if I ever decide to buy a pirated copy of the movie that I’m about to watch and that I already paid for. In my opinion, this is dumb. I don’t like Disney for this practice, especially since the only people who watch all these threats are those who bought the movies legitimately: pirated copies of any movie don’t even have these warnings (which makes this whole warning even dumber)! We all know the laws so you don’t need to remind us everytime.

- While trying to buy a new phone off ebay, I noticed that one of the sellers had this warning: “All unauthorized payments are reported to the FBI. No Exceptions”. Really? So, the FBI now have nothing to do except tracking a scammer overseas who bought one of your phones for $500 with another person’s credit card and then the credit card owner charged back?

- While waiting in the line in a bank, I saw a teller literally interrogating a client because he withdrew some of his money from 3 other banks before and he wanted to withdraw some more. The guy explained to her that he was traveling and that each bank had a cap on the amount of cash withdrawn per client (I’m sure that she knew about this rule – some banks won’t give you more than USD $1,000 in cash if you don’t book that cash in advance), but she kept on for like 15 minutes until the branch manager came in, asked the same questions again, and finally allowed the person to take his own money.

- While trying to pay the bill for a mobile phone overseas, I was amazed by the rudeness of a so called “customer care representative” who literally told a client (who asked the same question a couple of time) that she (the client) is stupid and if she asks the same question again she will call security.

- Other countless examples…

I just can’t believe the mentality that many of the businesses have out there. How do they believe that intimidating their clients is good for their business and its continuity? And why do they even bother to have a department for “customer support” when they mainly offer their clients direct or indirect threats?

On the flip side, I think any business treating its clients with respect, dignity, and friendliness will thrive because most companies don’t!

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Every now and then, you hear voices fighting to maintain Internet privacy. They want the Internet to remain private. Well, it’s either that these guys know nothing about the Internet or they completely misinterpret the term Internet Privacy, because technically, there is nothing private about the Internet.

Let me explain. When you visit a website, any website, your traffic goes to your ISP and then is transmitted across different servers before it eventually reaches the target website. Now, during the process, at least your ISP and the target website record the details of your visit. And, although the target website doesn’t know exactly who you are, your ISP does.

Even if you use VPN to ensure your privacy, you really don’t have full privacy. If you don’t believe that, then ask any system administrator about this (he’ll tell you the harsh truth).

But why do people want to be anonymous when they are surfing the Internet anyway? Is it because…

  • …they are saying/doing obscene things that they don’t want anyone to know about?

  • …they are members of an online army (these people typically write comments on news article/blogs and they pretend they’re Americans, and then they ask each other to like their comments)?

  • …they engage in other illegal/shameful activities?

I can’t think of a single legitimate instance where one actually needs to browse the Internet anonymously.

I think it’s time for people to accept that there is no such thing as Internet privacy and to start acting responsibly when using the Internet. Hopefully that day will come when people must login with their real IDs to do anything on the Internet.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

In case you haven’t heard that already, Best Buy decided to close all FutureShop stores in Canada. 50% of the FutureShop stored are to be rebranded as Best Buy, while the rest are closed indefinitely. In my opinion, that move was very expected. Let me tell you why…

A couple of weeks ago, I went to Centre Laval with my family (Laval is an island about 30 minutes North of Montreal). Centre Laval is a retail compound where you can find a store of nearly any retail chain operating in Canada. My wife took my daughter to a pet store so that she can see some animals, while I wandered around. About 30 minutes later, I called my wife and told her that I’m waiting for her in Best Buy. 10 minutes later she called me and asked me where I was because she was at Best Buy. I looked around, and it didn’t take me long to realize that I was in FutureShop, and not at Best Buy. Yes – that’s how similar these 2 places are – owing to the fact that Best
Buy owns FutureShop.

At that time, I asked myself, what’s the point of having a Best Buy and a FutureShop within a walking distance of each other (often the walking distance is a few minutes), when they belong to the same company and when they sell the same stuff for exactly the same price? Not to mention, of course, that in both places, the employees outnumber the clients by around 10 to 1 (there was around 20 employees in both places and there was only me and another shopper). When I saw my wife, I told her that FutureShop’s days are numbered, and so are Best Buy’s. In a few months, Best Buy will have no choice but to start restructuring its business in Canada and it will have to close all its under-performing stores (I would say about 70% to 80% of its stores)

But what about Staples which is mentioned in the title of my post? Staples, in my opinion, is slightly in a better position than Best Buy’s but it will also have no other option but to close the majority of its brick and mortar stores in Canada. There are many reasons for this: Bad store management (I noticed that most managers in Staples are mean, despite the fact that the employees are not), Amazon’s expansion, and the declining Canadian Dollar. The major advantage that Staples has is that it caters for businesses (unlike Best Buy which typically caters for super-frugal individuals) – but that advantage cannot be used as a case for keeping the brick and mortar stores, since most businesses buy online. At one point, Staples will discover that its online business is subsidizing its brick and mortar stores, and when they discover that, they will start closing stores like crazy…

I am worried about the retail sector in Canada, which provides employment for many Canadians. The thing is, as my barber told me when I asked him if I was losing hair, “we can’t stop progress”.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

Back in 2008, the term “Too Big to Fail” was coined in the US – affirming that the US government will never let large organizations fail because of the potentially huge negative implications on the economy. Indeed – the US government helped many large companies regain their balance and stand on their feet. Granted, the US government’s response could have been better and more broad, but one has to admit, there was a response (and it worked)!

Fast forward to 2015, and here’s what the Canadian government did when Target announced that it was exiting the Canadian market leaving nearly 17,600 families out of steady income: nothing. Canada did nothing to prevent a company from making a decision that will have a disastrous effect on the lives of nearly 50,000 people (that’s about 0.15% of the total Canadian population). The only thing that the Canadian government did was to “accept” Target’s incentive for creating a $60 million fund to pay generous severance packages for all of its employees (Target’s employees, that is!) Other than that, the Canadian government was just a spectator in this tragedy, and did absolutely nothing – no effort whatsoever to keep about 17,000 families from falling into poverty and potentially becoming a burden on the country’s social care program!

So, what could have the Canadian government done?

They could have done many things – such as extraordinary tax incentives for a specific period (such as 5 years) – they could have offered to become a temporary partner in the business by putting money there – they could have worked with Target to find another solution that will help keep the company on Canadian soil.

So, why didn’t they do any of that?

Usually, the Canadian government doesn’t interfere with the private sector – especially when the parent company is a US company. Additionally, doing any tax incentives may result in other similar companies (such as Walmart Canada) asking for the same treatment – something that the Canadian government can’t afford and something that shouldn’t be done.

But the Canadian government should have done something. It shouldn’t have let this to happen without a fight – an honest fight! Yet it did nothing. Yes – we know that major companies are going to be jealous and are not going to accept any “special” treatment for Target Canada, but up until 2015, and as far as I know, it’s still the Canadian government that runs this country, and they can decide whatever they want to protect the country’s interests as well as the interests of its citizens.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

I love Target – I said it before and I’ll say it again. I was really saddened to see it go, and the fact that I’m pretty sure that Target’s decision is irreversible and that Target will never return to Canada for the foreseeable future makes the whole thing even more saddening.

Target claim that the reason why they’re exiting Canada is that they can’t foresee profitability until at least 2020 (5 years from now), and their $1 billion loss was the maximum price that they’re willing to pay to remain in Canada. Of course, they’re stating facts, but the question is, what were the reasons that led to this situation?

I, for one, can think of 10 reasons that caused this:

  1. Target expanded too fast: The main reason why this happened is that Target created over 130 stores in less than a year! This caused some serious pressure on Target’s cash flow since some stores were under-performing.

  2. Target had a problem with their supply chain: This problem is directly related to the first problem: Target just couldn’t quickly establish a reliable supply chain that will ensure that all of its stores are, well, well supplied!

  3. The Canadian shopper is frugal: Canadian shoppers are very frugal – and I’m stating a fact here. People are willing to drive long distances to save a few pennies per liter for gas, for example! Canadians were only buying Target’s deals (Target was actually losing money on some of these deals). Canadians are not interested in buying items at a premium (and by premium I mean 2 baby pajamas for $18 – yes, many Canadians find that expensive and are willing cross the border in order to save a couple of dollars on those pajamas)

  4. No online shopping: Many Canadians like shopping online – and almost all Canadians use retailers’ online stores for price comparison before deciding where to buy their items from. Target didn’t have a store. The only thing that they had was a flyer that was updated every week. In my opinion, that was very, very lame!

  5. The Canadian Dollar: Most items at Target are imported, in US$. Which means Target would have had to quickly increase their prices because of the weakening Canadian Dollar or risk even greater losses. This will be a deterring factor for Canadian shoppers who are definitely not very well prepared for this rapid inflation.

  6. Target’s staff is expensive: I’ll make this simple: compare Target’s staff to Canadian Tire’s staff. The differences are just too many. Target’s staff is probably the best in the world among retailers, and best means the most expensive. Of course, the staff’s overhead is manageable had the company been making money, but since the company was losing money, the staff became a contributing factor for its impending doom!

  7. Canada is no longer interesting for American retailers: American and international retailers are exiting the Canadian market in droves. This is possibly related to the US economical rebound (yes, there is a rebound): all the retailers right now want to focus all their efforts on the US market (and that is something that Target’s CEO mentioned in the letter announcing the end of Target Canada).

  8. The stockholders wanted to leave Canada: Many stockholders were against the move to Canada in the first place, and so every time the company was posting losses in Canada they (the stockholders) were putting pressure to exit the Canadian market. Maybe this is a bit shortsighted, but stockholders can’t wait for a decade or so in order to see some mediocre positive results.

  9. Some Canadians were unwelcoming: I hate to say this – but some Canadians were very unwelcoming to Target. In fact, some wished that Zellers (really, Zellers?) would come back to replace Target (Target took over almost all Zellers’ locations in Canada).

  10. Canada is overcrowded with retailers: Walmart, Costco, The Bay, etc… are all established in Canada for a long time now and so Target has to compete with all of them, and Canada is a relatively small market. In fact, it is a very small market. This makes this market a very un-lucrative market.

Of course, the last 2 points are not very strong – but they still are contributing factors. If you think of any more reasons why Target exited Canada, then please add them in the comments section.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

If you haven’t been living under a rock these past few weeks, you probably have noticed that the Canadian dollar is falling rapidly, despite some spikes here and there (and these spikes are caused by speculators, and not by tangible factors).

Ever since Saudi Arabia fixed the oil price at $77, the Canadian economy became in peril. Why? Well, first of all, and regardless what anyone here in Canada thinks, the Canadian economy is not a diversified economy, it’s an economy that is highly dependent on oil (from oil sands). And, in case you don’t know, oil has to be above $60 for Canadian oil companies to make any money. Granted, oil is now hovering around the $80, so these companies are still making profit, with no reason to panic, but it’s a fact: profits are down.

The federal government has made some serious decisions affecting the Canadian economy for nearly a decade now based on 2 assumptions: USD/CAD Parity and high oil prices. Both of these assumptions are no longer accurate, which means that the debt will start growing, which means that the Canadian economy will no longer look attractive for mega investors, which means that the Canadian dollar will no longer mean a “bull” dollar, which means that we’re heading for inflation.

Inflation, of course, will cause everything to become more expensive, especially fruits and vegetables which are mainly imported from the US (in USD). This means that the purchasing power of the CAD will drop (because everything else will follow), which means that, at one point, the Bank of Canada will start flattering the idea of increasing interest rates.

A 1% rate increase will be insignificant to stem the inflation that is heading our way. 4% or 5% would be a start, and such a rate increase will create another problem: high mortgage rates. Most of the people I know, who have mortgages, will literally become bankrupt if the bank increases their rates by a mere 2%. Imagine what will happen if the rate increase is double that number (4%), and you will get an idea what will happen to the Canadian economy.

So, the Bank of Canada will have another option, leave the current rates unchanged and allow the Canadian dollar to freefall, probably until it reaches the $1.5 level (which is a sustainable level). Once that level is reached, which can happen in as little as 2-3 years, the Bank of Canada can start intervening slowly to stem further drops in the value of the CAD. Of course, this will create a mortgage crisis (which, from my perspective, is unavoidable), but it won’t be as hard as if it’s done now since there are many Canadians who make their monies directly or indirectly out of the US, which means that they will be able to afford the higher mortgage payment in CAD (A mortgage payment of $2,000 made in 2017 will be more or less like a mortgage payment of $1,400 made today).

The Bank of Canada has to choose between the lesser of 2 evils – and the lesser of the 2 is to let the Canadian dollar float, which seems to be what they’re currently doing.

If you have a large purchase in Canadian dollars at a fixed low interest rate for a long term, then now is probably the best time to do it.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on

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