Fadi El-Eter

High speed trading is the “trading du jour” nowadays. Every bank is now running to implement its own system of high speed trading, simply because this method of trading incurs no loss whatsoever. High speed trading consists of a computer software (running on very powerful servers that are hosted in premises that are very close to the stock exchange) that executes many successful trades per second based on some complex algorithms. Obviously, this method is a panacea for any investor, but few can afford it.

Investors, obviously, are not the only ones who dream about this method – it seems that banks are dreaming about it too, and that’s why many banks, including some very prominent US banks, have already implemented this method.

According to those who benefit from high speed trading (or high frequency trading), this method has two “great” advantages to the market’s ecosystem:

• It greatly improves liquidity.

• It lowers the transaction fees on smaller investors because the total number of transactions every day is very high and stock exchanges don’t need to raise more money from investors to cover their costs.

While these two advantages are OK – let’s see if the method is worth it when we consider its disadvantages:

• It’s run by bloodsucking investors who couldn’t care less about the overall health of the market – they’re just there for the money.

• It has resulted in several technical crashes – every technical crash we have heard of since high speed trading was invented was because of this method.

• It makes trading less fun, and gives an unfair advantage to wealthy investors with more powerful machines who have more proximity to the physical location of the stock market.

• It creates a sense of distrust in the whole system since more and more decisions are being made by machines rather than by humans. Machines, by the way, do not understand the companies they are selling and they are buying stocks for.

High speed trading isn’t something that someone should be congratulated for, it’s a parasite that is slowly, but surely, draining the money from the pockets of small investors and destroying the trust in the US financial system. As such, high speed trading should be banned, before we reach a point where companies do not have real investors anymore!

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 fadi.el-eter.com.

No – I didn’t make a mistake while typing the title of this post – I really meant “get” and not “pay”. In my last post, I revealed that (most) banks do not charge an cash advance fees if your credit card is in a credit position. Now that this was explained, do banks give you interest on your money if your credit is in a credit position?

For example, let’s assume that you owed $1,000 on your credit card, and just before traveling on a vacation for a month, you made a payment of $10,000 (you mistakenly added a 0) and thus now the credit card company owes you $9,000. Now, after returning from your vacation, should you expect a few dollars of interest credited to your credit card?

The short answer to this question is No. Never ever expect to get interest on your credit card and always expect to pay interest on your credit card (if, God forbids, you couldn’t afford to pay your full balance on time). Now you might think how come? Well, here are a couple of reasons:

• Credit card companies are not banks (although the two are often confused with each other since banks are the ones issuing credit cards).
• Even if the above is true (which is not), this is not a savings account, or a preferred checking account – the terms that Visa, MasterCard, or the likes send you either explicitly state that they are not required to pay you any interest on your money under any condition or do not mention the interest on credit issue at all.

Now the question is, should you get interest on your credit card if the credit card company owes you money? I don’t think so – as stated above, credit card companies are not banks, and if you feel that your credit card is suddenly in a credit position, then all you need to do is to withdraw money from it (no – you wont’ be charged a cash advance fee) and put them in another account that pays you interest. In any case, interest these days is so low that it’s not even worth thinking about.

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 fadi.el-eter.com.

Cash advance fees – we all hate them! Sometimes we withdraw money from our credit cards (often it is a very small amount) to cover for purchases in stores that do not accept credit cards, and we are dinged with the most inhumane fees ever. Banks charge at least $5 for every cash advance you make, that’s excluding interest and other hidden charges that their creative minds can come up with.

Cash advance fees are a must if you withdraw cash from your credit card – but what if your credit card was in a credit position (for example, you made a payment larger than your money owing or you had a large refund on your credit card) – will you be charged a cash advanced fee in this situation?

According to my small experience on this matter, you are not charged a cash advance fee if your credit card is in a credit position as long as you don’t withdraw a larger amount than your current credit with the credit card company. For example, let’s say that you owed $500 on your credit card, and then you made a payment of $1,000. You then withdraw (at an ATM or online) $500, you will not be charged a cash advance fee. However, if you withdraw a $501 (just $1 larger than your current credit), you will be automatically charged a $5 cash advance fee.

Note that some banks may charge you a cash advance fee either way – even if your credit card is in a credit position and you withdraw a smaller amount than the one they owe you. Additionally, note that it takes a few days for payments and credits to be posted – so if you make a payment of $1,000 and then you immediately withdraw $500, then it’s very possible that you will be charged a cash advance fee, since the bank didn’t have the time to account for your $1,000 payment.

A word of advice: Banks tend to be very finicky when it comes to cash advance fees and the reason for this is that they really don’t have full control over it (it is mostly controlled by credit card companies such as Visa or Mastercard) – so don’t waste your time negotiating these fees (e.g. trying to waive a cash advance fee after making a cash advance).

Unless you have slept through the day yesterday, I’m sure that you were annoyed, as much as anyone else, with the news all day on Facebook becoming public. The IPO, to say the least, was disappointing to Facebook executives, as the stock closed just 0.61% higher than the opening price.

Apparently, the FB people prepared for the worse, as there were many buy orders in the case the stock was about to drop below the $38 level. I’m sure that the stock was going to close on the negative the first day of its listing, but there was an invisible hand lifting the stock everytime it tried to near the $38 level (there was a point where the stock reached $38.01 around 11:54 AM, take a look at this:

In any case, the stock closed $38.23, making the market cap of Facebook to be worth $81.74 billion. Now, let us answer 3 questions:

– How much is a Facebook user worth to Facebook?
– How much is a Facebook user worth according to the market?
– How much is a Facebook user really worth now that Facebook has a market cap of $81.74 billion?

Now since we know that Facebook has 900 million accounts, we can make an easy calculation to get all the above.

Value of a Facebook user according to Facebook: Since Facebook priced its IPO at $38/share, and has 2.14 billion shares, this means that Facebook, as a company is worth (according to Facebook) $81.32 billion. This means that the value of each user according to Facebook is $90.35.

Value of a Facebook user according the market: The market determined (wink wink) that Facebook is worth $38.28 a share, making the company worth $81.74 billion, which in turn makes each user worth $90.82. Nearly 50 cents over Facebook’s valuation (that number will change considerably).

Real value of a Facebook user based on the FB’s market cap: The calculations above assumed that the 900 million accounts that Facebook has are actual users. If you are a programmer you know that an account is not necessarily equivalent to an active user. An account might be a test account by a user, a dormant account, a never used account, etc…

Assuming that Facebook is telling the truth that it has 900 million accounts, and assuming that 50% of these accounts are test/spam accounts, this means that Facebook’s real users are 450 million. Assuming 50% of these users are kids, then this means that Facebook has 225 million adult users. Assuming 20% of these users have deactivated their accounts permanently, this means that Facebook has 180 million active adult users, which means that the value of each Facebook adult active user is $454. I am not going to judge whether that number is low or high, I leave the judgement to you. Just keep in mind that if you find yourself a bit strapped on money, then you are worth about 12 Facebook shares!

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 fadi.el-eter.com.

If you’re constantly reading about Sony, as a company, you will know that it has been losing billions every year for the past four years. In fact, Sony lost a record $6.4 billion in their fiscal year that ended on March 31^st, 2012. But why is that?

I can think of several reasons of why Sony is losing money:

Sony has become a dysfunctional company: One of the big problems with Sony that it’s a huge company and fragmented company, and it takes an incredibly smart person to manage it properly. In a not so distant future, Howard Stringer will certainly be named as one of the worst CEOs and executives in the history of Sony. Howard became Sony’s CEO back in 2005, and in 2 years, he turned Sony from a profitable company into a money bleeding, dysfunctional company. Thankfully, he is now replaced by Kazuo Hirai, who will hopefully re-align Sony with its previous mission, and ensure that Sony gets back to the helm when it comes to technological advancements in the electronics industry.

Sony’s business model does not work: Sony loses money on its TV business, while Samsung makes a lot of money on this business. Why is that? Is it because Sony buys some important parts from Samsung at more than reasonable prices? If that’s the case, then maybe Sony should rethink its alliance with Samsung or invent a new technology where it doesn’t have to buy parts/pay royalty from/to Samsung. I’m sure that if Sony focuses on inventing a new technology then people will adopt it. The blu-ray media format is a great example on how Sony can still force the market to adopt its technology.

Sony stopped being innovative: For some reason, I feel that time stopped for Sony in 2006, they have stopped being innovative ever since. I’m talking about everything, from their smartphone business to their TV business. The last real innovation that Sony had was the blu-ray media format, preceded by their gaming console, the playstation. All the innovations they had in their products every since were not theirs.

Sony has huge competition from Samsung: For some reason, Bloomberg mistakenly mentions Apple as one of Sony’s main competitors. That’s not true. While Apple is one of Sony’s competitors, it is far from being the main one. Samsung is Sony’s main competitor. Samsung, a company that used to produce very ugly phones a few years ago, and was unheard of in the TV business, is now the dominating brand in the TV business, and second only to Apple in the Smartphone and the tablet business. Samsung is competing with Sony at every level now: TVs, laptops, tablets, smartphones, blu-ray players, etc… Sony’s biggest nightmare is Samsung.

The gaming business is not as before: One of Sony’s most important product is the playstation, and the economy built around the playstation (games sold, subscriptions sold, etc…). However, that business is experiencing a major slowdown because many people are electing to play games on their smartphones or their tablets, and not on a dedicated console, which substantially changes the rules of the game for Sony and other companies in the gaming industry, such as doomed Nintendo.

Now the question is will Sony go out of business?

The straight answer is No, not for the foreseeable future, Sony is too strong to fail, too big to fail, and it still has many cards under its sleeve. I do believe though that Sony should experience heavy restructuring in order to get back on track.

Here’s what I think should be done:

Sony should re-haul its customer service and review its pricing in Sony shops: In case anyone from Sony reading this, you guys have probably the most arrogant staff on this planet and that’s the number one reason that most people do not like to buy from your shops. The number two reason is that your prices for your products are more expensive than the rest of the market. The number three reason is that your after sales service sucks. For example, try to return anything to a Sony store, and for some reason they try to con you into paying a 10% restocking fee. Buy a Sony product from Best Buy, for example, and they won’t charge you anything if you return it.

Sony should get rid of most Sony shops: Most Sony shops are unnecessary and do not bring added value to Sony. In fact, most Sony shops generate losses for Sony. Sony should get rid of these shops that have lost money consistently.

Sony should review its smartphone products: The Sony Xperia S was a very promising product, and I thought that it would be a worthy competitor to the Samsung Galaxy SII and the Apple iPhone, but it wasn’t… Here’s why according to my personal experience:

I have bought a Sony Xperia S phone the other day from the Sony store. I returned it for three reasons:

• It uses a micro sim and I just don’t want to be locked into this standard. Why not have a place that accepts the two types of SIMs (I’m sure that’s not hard to develop).
• It was locked with a certain carrier network, although they hadn’t any plan to offer with that carrier. It’s not that I had to pay extra money to unlock it, it’s because that unlocking is not a good idea. I’ve done it before and it tends to make your phone do odd things.
• Its interface was very similar to the Sony Ericsson that I currently have since 2010.

Why can’t Sony learn from Samsung when it comes to smartphones?

Sony should review its tablet business: The local electronics store has too many “open boxes” of Sony tablets. It seems that people are buying these tablets and then returning them, which means that Sony is not satisfying the public with its tablet. I think because this tablet overheats, has a huge battery consumption even when on standby, is smaller than the main Samsung tablet, and has an ugly interface. Oh, and the tablet seems to be made out of plastic.

Sony should become innovative again: I’m talking about Sony’s products across the board… TVs, smartphones, laptops, etc… Sony’s products are all nice but none of them is innovative. Even their latest PS Vita will soon prove to be a flop (Sony’s wise marketing has chosen to create a gaming product that competes with smartphones). Here are some ideas: 1) Drop the PS Vita idea – it’s expensively priced and it doesn’t make sense as people who want to play games on portable devices will most likely use their smartphones, 2) Make your laptops thinner and faster – the laptop market doesn’t have a winner and you can clearly become one if you have winning products, 3) Think about holograms as a TV replacement. If not, make your TVs lighter and with a better picture. Also, how about inventing a 3D TV where you don’t have to wear glasses to watch 3D movies?

Sony should shakeup its upper management: Sony did the right thing by replacing Howard Stringer, but I’m sure he wasn’t the only person responsible for Sony’s misfortunes over the past years. Others in top management must’ve been making the wrong decisions too (especially those in marketing). Get rid of them.

Again, Sony will not go out of business, at least in the foreseeable future. But it has two options at the moment, either regain its former glory by becoming more competitive and innovative (as well as cutting unnecessary costs), or continue weakening every day… I hope they go with the former option. I love Sony products, and I’m sure that there are many others who love them as well.

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 fadi.el-eter.com.

One of the stocks on the top of my watch list is AAPL. I have been closely watching this stock for over 2 years now, I have written about it many times, and i think that the quick descent from the peak of $644 achieved last month (back in April of 2012) is a first warning for investors. I’m saying first because I believe that the stock will peak again just after next quarter, only to decline rapidly afterwards, and forever. This means that Apple will continue to fall until next quarter, where it’ll be lifted temporarily by sales that beat expectations, and then continue its descent. Why is that, you might think. Well, I have discussed most of the reasons in my post published back in December: Apple: The Beginning of the End but I will discuss them again, while taking into consideration the recent developments in the smartphone and tablet industry…

Samsung Will Be Releasing the Galaxy S3 this Month

I have checked the Galaxy S3, I wasn’t very impressed, maybe because my expectations after the Galaxy S2 are now very high. Nevertheless, the fact of the matter is that Samsung is very aggressive when it comes to marketing and product release strategies as it’s pushing more and more excellent smartphones to the public, and thus increasing the pressure on Apple. Apple, on the other hand, is lame and very passive in its response to Samsung: Lame because it’s trying to sue Samsung because they know that Samsung produces superior products, and passive because it’s not trying to do something better than Samsung. Apple’s long awaited iPhone 5 was called iPhone 4S (as in Samsung Galaxy S) and was technically a big disappointment, although not a single website cared to admit this fact.

Blackberry will reclaim some of its market lost to Apple

If RIM plays its cards right, then it’s very possible that the Blackberry phone will regain some of the market share lost to Apple. The latest Blackberry phone that RIM is advertising looks like the iPhone, but it’s exactly what Blackberry lovers and Blackberry deserters were craving for, and that’s what they’ll get. I’m sure that RIM will price the new BlackBerry phone reasonably and will stuff it with features to match (if not exceed) the latest iPhone.

The number of players in the smartphone industry is growing every day

Any company watching Apple becoming the largest company by market capitalization will probably think: “Hey, I can do what they’re doing and I want a piece of that pie too”. Let me list the number of major players in the smartphone business (by alphabetical order):

• Apple
• HTC
• LG
• Microsoft
• Motorola
• Nokia
• RIM
• Samsung

The above list is expanding. I think that HP, Dell, even IBM might join it at one point or the other.

The smartphone market is becoming saturated

Let me ask you a question, you bought an iPhone last year, why do you want to buy another one this year? And why do you want to buy another one in 2 years from now? Unless the iPhone is built using cheap material that disintegrates in a year or so (or unless it breaks in a year), then there’s no reason for you to buy another iPhone every year. The American market is already completely saturated with Apple products, and I think the rest of the world will follow soon. Even if the public opinion about Apple products remains unchanged (which will not be the case), sales will start going down at one point or the other, and this is when you see a big headline saying “Apple failed to meet analysts’ expectations”, and this where you will see a big slump in AAPL.

iPhones are so 2007

Let’s be honest with ourselves. What has changed in the iPhone since 2007 besides the aesthetics and a few gimmicks here and there that you will never ever need? Even the box art is now outdated and ugly. A note to iPhone marketing team: you’re not selling Pepsi, box art needs to be changed at least every year (learn from Samsung, a company that you’re trying to ban its products in every country and for every imaginable and non-imaginable reason).

iPhone has lost is visionary

Despite of what the media is trying to feed us, Steve Jobs is much, much better than Tim Cooks. All the great products were released under Steve Jobs and no new product was released under Tim Cooks. That’s a fact! Tim Cooks may be a great CEO, but he’s not a visionary. The only characteristic that both Jobs and Cooks share is their low appetite for risk, and that’s why Apple has a growing cash reserve that will soon be equivalent to Greece’s national debt. Going back to the point of this point (Huh?), without its visionary, Apple no longer has anything to offer on the long run, and may very well become the next RIM.

The iPad is lame

This is not an opinion. iPads are a complete ripoff when you compare them to other tabs. I won’t do a technical and price comparison here, but you can do it yourself. Start with the processor, move to the cameras (I have an phone that dates back from 2005 that has a higher resolution than the iPad’s front camera), and then compare the prices. I bought a Samsung Galaxy Tab 10.1 32 GB for $389, the latest iPad that has less specifications was selling for $519. I don’t know how much it’ll take for the public to discover that the iPad is a huge ripoff.

Apple did not build an empire with iTunes

Judging from the sales of the iPhones and the iPads, you might think that iTunes would be a bigger business than Microsoft itself. It’s not and it never will be. The iTunes business constitutes only 6% of Apple’s total revenue which means three things:

1- Apple is not taking the iTunes seriously
2- Many people buying Apple’s products do not care about iTune and just want free stuff
3- The products on iTunes are lame

The point of what I’m saying here is that Apple cannot rely on iTunes as a cash cow to sustain its business, should Apple’s sales start declining (and they will).

So yes, Apple’s stock will continue to fall. It will reach a peak though in the next quarter, but it’ll be all downhill from there.

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 fadi.el-eter.com.

I watched today a very nice video on Bloomberg, about a plan to build an underwater hotel in Dubai for a total cost of $120 million. Apparently, that wasn’t Dubai’s first attempt to build an underwater hotel; the HydroPolis hotel that was planned back in 2006 never made it beyond the initial planning phase.

I’m sure that I wasn’t the only person who was curious enough to want to know what will be the rates of this hotel (and the rates of the HydroPolis hotel, for that matter).

So, what are the rates for this underwater hotel?

OK, from what I’ve read, the hotel is planned to cost anywhere between $50 million and $120 million and it’ll have about 40 rooms (half which are underwater). Assuming that the project will go overbudget (which is very normal for these types of challenging projects) by 100% over the maximum planned cost, the final cost of the hotel will be $240 million. Before calculating the daily rates of this underwater hotel, we will also need to know the monthly costs. I expect these costs to be around $1 million (including maintenance costs, and salaries, servicing the debts, inflation-as-cost, and other costs).

Now, usually, for projects in this area, investors expect their capital back in 10 to 15 years. Let’s assume that they want their money back in 10 years. Now we have all the parameters to calculate the rate of a single room in this hotel.

– Step 1: Let’s calculate the total monthly costs: $240 million / 10 (years) / 12 (months) + $1 million = $3 million
– Step 2: Let’s calculate the rate/room (assuming all rooms have the same rate): $3 million / 40 (rooms) / 30 (days) = $2,500

Now, of you might be thinking that the above cost is the cost to break even, you’re right, but that’s breaking even in 10 years. After the 10 years are over, if the room price is still the same (it’ll most likely be more), then the only costs will be the maintenance costs (actually less than that because all the debts will be paid out by then), then the break even rate for the room will be about $833.33 ($1 million / 40 (rooms) / 30 (days) = $833), which means that each room will be making about $1667/day, which means that the hotel will be netting $24,338,200/year (there are no taxes in Dubai by the way).

Yes, I’m assuming full occupancy in my calculations but I’m sure that any couple in the world will want this experience, at least once in a lifetime.

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 fadi.el-eter.com.

Everytime I have a meeting with someone in a Canadian bank the first question they ask me: “How come you don’t have RRSPs with us?” My immediate answer to this question is: “I don’t know, can you tell me about the benefits?” So s/he usually says the following:

• It’s a great way to maximize your tax refund.
• It’s a great way to save money.
• It’s like a retirement fund.
• You can use up to $20,000 (or was it $25,000) towards buying your first home, without paying any taxes.
• You can get the money whenever you want.
• RRSPs are an excellent way to invest your money.

Of course, they usually forget to say the most important reasons:

• We make tons of money out of RRSPs from people like you, sucker.
• The government thinks that you can’t save money on your own.
• The government thinks that it’s entitled to control your money.

Let me debunk each of the points that the bank claims are reasons of why a Canadian should go for an RRSP:

It’s a great way to maximize your tax refund

Yes it is, you will get a big refund, but it’s not like you won’t have to pay taxes on that money saved in your RRSPs. You will be taxed the year where you withdraw your money, and, with the direction that we’re heading, I’m sure that the tax rate will be higher in 30 years from now (I think then the minimum will be 50% to support all these welfare programs and bureaucratic agencies in Canada).

It’s a great way to save money

Not it’s not. It’s actually a really bad way to save money. Your money will be locked and in some cases you won’t be allowed to withdraw it from the bank without paying a penalty. That penalty can be as high as 10% of the original amount – so, if you contributed $10,000 to your RRSPs and you need the money in a year, then you will be only getting $9,000 (assuming, of course, your investment had 0% return in that period – which is very likely). Of course, that’s the bank’s penalty, you will then have to add the $10,000 (not the $9,000) to your income for the current year, which means that you will most likely fall into a higher tax bracket, which means that you will have to pay even more taxes on the money. Unless you’re a complete moron who spends everything s/he makes then RRSPs are a real bad idea.

It’s like a retirement fund

No it’s not. It’s more like a beggar’s fund. The government assumes that when you grow old your expenses are less and you’ll be living like a monk in a remote cave somewhere, spending only $1,000 or $1,250 every month. So, they think that you will only withdraw about $15,000 every year from your RRSP, which means that your taxes will be very low. But, we all know that in Canada, with $1,250 you will barely break even by the end of the month (especially if you’re paying rent or you have mortgage). So, with this beggar’s fund (that is mistakenly referred to as a “retirement fund”), you’ll be guaranteed to eat mac and cheese for the rest of your life. How cool is that? I’m sure that’s not what you had in mind for your golden years, or did you?

You can use $20,000 to buy your first home

There are many, many deductions that you can benefit from by buying your first house (or home), and you cannot deduct the same thing twice. Even if that’s not the case (which is not the case, as it is the case – a double negative!) the amount of taxes on $20,000 is $6,000 to $10,000 (if you at the highest tax bracket). A smart way of managing this is by adding $20,000 to your RRSPs the year before you intend to buy your home an then retrieve it the next year. You’ll save up to $10,000 in taxes, assuming, of course, there is no penalty for withdrawing your money that early, or if the government actually allows you to do this.

You can take the money from your RRSPs whenever you want

Yes you can. But there’s a catch for taking your money out, as you usually have to pay a penalty. Canadian banks seem to agree that 10% of your initial investment is a reasonable penalty fee if you want to take your money out in the first period.

RRSPs are an excellent way to make money

I remember I had a friend at my previous work who had a lot of money put in his RRSPs. I asked him, how much money have you made so far on your RRSPs? He told me that he lost about 10% of it so far. You see, what banks do is that they suggest mutual funds as an investment vehicle for your RRSPs. Mutual funds, as we all know, are a really bad way to invest your money, as you are always at the mercy of the fund manager, who really couldn’t care less about you.

RRSPs are bad, really bad, and if you think they are good, then maybe it’s because you’re naive enough to still think that banks actually care about you.

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 fadi.el-eter.com.

Canon, one of the largest makers of cameras and printers, recently reported less than estimated profits, a result that raised a few eyebrows here and there. “Will Canon go out of business?”, some investors whispered…

Let’s examine Canon’s main two products:

Cameras: When was the last time you bought a camera? When was the last time you saw someone buying a camera? And why do we need dedicated cameras when all smartphones nowadays are equipped with high resolution cameras? Obviously, the camera business cannot be sustained on the long run and at one point, all those big camera manufacturers will find themselves selling cameras only for professional photographers. The Canon “Rebel” model should be the only one that Canon should continue making, while it should drop all the other non-professional models.

Printers: We all know that all companies lose money on printers (please, don’t try to convince yourself that a wireless printer that sells for $49 costs only $49 to make). The thing is, most companies make money on ink cartridges, that often sell at a price higher than the printer itself (so it is sometimes wiser to buy a new printer everytime your run of ink – yes, it’s that stupid). However, we all know that everyone’s going green (e.g. less printing is happening), and that everyone now has a smartphone and/or a tablet (so there’s no need to print that document anymore, just send it to my tab or smartphone). In conclusion, people will be printing less because of two main reasons, which means that people will be buying less printers and, more importantly, buying less toners – and this is already happening.

It’s clear to see that Canon’s main business model needs to undergo a major transformation in order to withstand the major changes that are imminent in its main markets. Failing that, Canon will definitely post a continuing decline in profits (and maybe an increase in losses) in the next several quarters until it reaches the bankruptcy point.

Canon still has time to salvage itself – the same way RIM and Kodak did. Better use that time wisely and carefully plan for the future. The best thing to do is to learn from Samsung, a company that transformed itself from a minor, non-important player in several markets to a major player in these markets.

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 fadi.el-eter.com.

Canadians doing business with the US and receiving checks from there often wonder how much time it takes for US checks to clear. In order to answer this question, I need to explain two concepts in the Canadian banking system: hold time and clearing time…

Hold time: Let’s say you received a check from the US for $5,000. You go to your financial institution, and you deposit the check. The teller will tell you that since it’s a US check, they will deposit it for you but they will hold the funds for 10 business days (the number of these days vary from one bank to another) during which you can see the $5,000 in your account, but you can’t do anything with them. The hold will be released after 10 days. However, if the teller knows you, then s/he can make the funds available immediately. (That’s why it’s always good to have a good relationship with your bank).

Clearing time: Once the check is deposited, the clearing time is the number of days it takes for your financial institution to capture the funds from the US financial institution. The clearing time varies depending on your bank and the other bank.

So, after differentiating between the hold time and the clearing time, how much time does it take for US check to clear in Canada? Well, as stated above, it depends on your bank and the sender’s bank:

– If your bank is one of the Big 5 (BMO, CIBC, National Bank, RBC, TD) and the other bank is a top US federal bank (BofA, Chase, Citi, Wells Fargo, etc…) then the check can take as little as 2 days to clear. Sometimes, the check can clear on the same day! Yes, that’s how interconnected the Canadian and the US banking systems are!

– If your bank is one of the Big 5 and the other bank is a Mom and Pop bank (and there are many of them in the US), then the check can take up to 7 business days to clear.

– If your bank is one of those small Canadian banks, and the other bank is a top US federal bank, then the check can take up to 7 business days to clear.

– If your bank is one of those small Canadian banks, and the other bank is a Mom and Pop bank, then the check can take up to 10 business days to clear (sometimes even more).

A couple of tips on dealing with US customers:

• Always ask for certified checks
• Always ask for an email confirmation from your clients telling you that they have sent the check (trust me on this one)

What if the check bounces, and the funds were already released?

In this case your account will be debited for the amount of the check + a fee (usually $20).

What if the check bounces, and you have closed your account?

In this situation, the bank would have paid you the money without getting any money from the US bank. The bank will try to get the money from one of your other accounts. Failing that, the bank will sue you to get its money.

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 fadi.el-eter.com.