How much will cost you to fuel your new car in Canada?

Versión en castellano: ¿Cómo impacta tu bolsillo el consumo de combustible del carro que eliges?

Thinking on buying a new car? Different car models have different gas consumptions. Depending on your selection you will have a lower or higher environmental footprint, but as well, some additional cost to cover or savings to pocket. The following model will compare the gas consumption of two cars of your preference and will give you an idea of how much it will cost you in one year.

This model is using data provided by Statistics Canada:

Historical Gas Prices

Car Fuel Consumption

Evolution of the financial analyst

 Ernesto Hontoria

Versión en castellano: Evolución del analista financiero

Maybe I should not write about this because it reveals that I'm getting old, but I can't resist the temptation to tell what I think is a trend in the evolution of the financial analyst’ role. In my current position, I often educate young analysts in data search and interpretation, young people who often ask me how to progress in their careers.

Let's start by saying that in the years that I have been working in finance, I have witnessed how the position of the financial analyst has evolved following the technological changes experienced in the work environment. This evolution implies a change in the attributes that the financial analyst must meet to be able to skillfully carry out their tasks, and which, of course, weigh heavily when looking for jobs.

Allow me to make clear two points: The first one is that Excel is still a mandatory reference for financial analyst. The second is that it is no longer a differentiating factor. If 10 years ago companies were looking for analysts with solid financial knowledge and with moderate experience using spreadsheet, today's job demand assumes that financial analysts must have clear concepts and be able to handle Excel well. It is not conceived today a financial analyst who does not master Excel. They are asked at least to have skills in managing pivot tables, vlookups, hlookups, and in many job applications they are also asked to know how to program macros, something that – in my experience - few analysts master.

Until a couple of years ago my main concern when recruiting a financial analyst was their level of mastery of Excel, even more than his knowledge of financials’ concepts, which I presumed all they had. Recently my perspective has changed, not because Excel is no longer indispensable in the work environment, but because most analysts have become quite skilled with this tool and it is no longer a differentiating factor when recruiting them. Every day there are more graduates of business schools with good knowledge of the tool, and the factor that differentiates them is the use of new data visualization tools, or the ability to understand the management of more complex databases, and to understand statistics.

The situation has changed drastically in the last 15 to 20 years. If before it was difficult to get statistical data to make comparisons, nowadays companies have more data than the human mind can assimilate. A good financial analyst must be able to interpret them. It is no longer enough to say that sales rose 3 or 4 percent in the month of April. The analyst must be able to quickly interpret the mountain of numbers that are available to him in the company's databases, to determine which products, or combination of them, produced the growth in sales in April, what profile the consumers have, what profitability was obtained from the different items.

In fact, the challenge goes much further. In many companies the aim is to achieve real-time analysis, analyze sales (and consumers) at the same moment that the transactions are taking place, understand trends and predict the future.

The amount of data that companies generated and collected exceeds by far the ability of Excel to handle it. Several years ago, my father-in-law sent me an article that predicted the unavoidable death of Excel as the predilected tool of financial analyst, due to the obvious limitations of the tool to manage the exponential growth of available data. The prediction of the article has not come true and far from it, the popularity of Excel has continued growing, as well as its ability to handle data has continued to increase, although not as fast as the available data has done. On several occasions I have taken Excel models to the very limit that the tool allows, and I have had to appeal to the use of other applications.

Picture taken from Internet

Fortunately, new tools have emerged that expand the portfolio of products available to financial analysts, tools designed for massive data management (Big Data). It is the knowledge of these new tools that is becoming the differentiating factor when recruiting financial analysts. After all, the challenge for many companies is how to convert the mountain of data at their disposal into useful information that allows them to make the right decisions.

Today's challenge is to discover patterns, understand trends, and act before a competitor does. It is not an easy task. Large amounts of data require a minimum of statistical knowledge, their processing requires better technology, faster processors, better data visualization tools and handling techniques, and most importantly, analysts prepared to understand what they are doing, to correctly process the data, and verify it. Analyst should prevent their bosses to commit blunders when trying to interpret big amount of data. The situation has changed and with it the profile of the position.

Related post: The Role of the Financial Analyst

Quarantine ravings: A Jobless World

Ernesto Hontoria
(versión en castellano)

Without a doubt, the current pandemic is going to have consequences in the working environment of many people. Companies and workers who have managed to keep daily activities remotely, have demonstrated that the technology is sufficiently developed to allow teleworking; something that was already happening in many companies. Don’t be surprised if after this pandemic there would be even more flexibilization in the work environment to allow more people to work from home, more days a week, than they already had before all this started.

But the ravings of the quarantine that I want to bring you today is more futuristic than that. Economists have been debating for some time now, how society will work in a not too far future, when artificial intelligence begins to massively displace from their jobs those who today depend on a salary.

Uber - Driverless truck

The thing is not that far. Self-driving cars (or driverless cars) are nowadays a technological reality that perhaps in the next decade will eliminate the jobs of countless drivers. A couple of years ago, a driverless truck traveled 200 kilometers to dispatch 2,000 cases of beer[1]. But artificial intelligence goes far beyond vehicle self-piloting and goes faster than we think. How many translators are behind each phrase translated by the Google translator?

The fact is that during this pandemic (most likely with no intention to) some developed countries are unconsciously testing what some economists anticipate could be the solution to the economic problem that the development of artificial intelligence implies. Direct state subsidies to workers who lost their jobs because of the pandemic, reflect the basic idea of ​​a universal minimum wage, in a society where jobs have been hijacked by machines and artificial intelligence. A universal wage to ensure that people, even without jobs, have money to spend and maintain the movement of goods and services. Without that demand of woods and services the system would completely stop. It is in other words, a direct subsidy to keep the blood of our economy running and to avoid revolts and revolutions.

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[1] https://www.nytimes.com/2016/10/26/technology/self-driving-trucks-first-mission-a-beer-run.html

COVID 19 Cases by day in Ontario

This chart has been done in Excel with numbers published by the Provincial government of Ontario. Link:https://data.ontario.ca/dataset/confirmed-positive-cases-of-covid-19-in-ontario/resource/455fd63b-603d-4608-8216-7d8647f43350

The Evolution by day:

Another interesting link:
https://coronavirus.jhu.edu/map.html

COVID 19 in Ontario By City

Please select the city in the yellow cell. 


Data in this file was downloaded from an official site of Government of Ontario. It is based on confirmed positive cases of COVID-19 in public health units of Ontario

Thinking in selling and buying a house in Ontario?

If you are planning to sell your current house to buy another one (big or smaller) in Ontario, here is a file that I created to help me to understand my negotiation ranges, and can help you to analyze the financial impact and take a better decision. 

You need to fill the yellow cells with the information from your own situation. You can save the file for yourself and play with different scenarios in order to understand the financial implications. In my case, I wanted to understand what the incremental cost of my monthly payments under different scenarios would be, and what would be a maximum price I can offer for a new property. 

Hope this file can help you, and please understand that it is not my intention to replace the advice of your mortgage analyst or financial advisor.

Investment Strategy

Ernesto Hontoria
(versión en castellano)


It had been a couple of weeks in which the dynamics of work had prevented me from having lunch with my new colleagues. Today, however, we did it again. We have lunch together and a nice conversation around Henry's investment strategy. I will explain his strategy but, although it may seem infallible, do not get too excited that my friend has found it is not lucrative so far.

Henry's strategy is to buy shares that he thinks are below their real value. For doing this, Henry follows the capital market daily and every time the price of a stock falls dramatically, he reviews the news to find out why the price has fallen so much. He looks stocks that lose more than 20% of its price in few days. From his news analysis, he determines whether the market, that is, the people who negotiate with that stock, is overreacting or acting rationally, and based on this judgment he buys or not the stock. If -in his opinion- the price of the stock has fallen more than it should, meaning that the people has overreacted to the news, he buys the stock, waits for the price to recover and then sells it again, obtaining a profit.


He had already explained us his strategy in a previous lunch’s conversation. Indeed, I asked him on that occasion, to share with me every time he finds one of those 'bargains' to look as well. He did so, and couple of weeks ago, he gave me the name of a company in the uranium business whose price had plummeted for a news that change nothing the conditions in which the company or the industry operates.


It was a company that extracts and trades with uranium in the United States, whose price on the New York stock market had fallen by more than 40%. The collapse of the price seemed related to the refusal of the government of that country to impose import tariffs on that element. Apparently, the industry’s lobby groups, which had been pushing for protections and barriers to secure the internal market, had collided with a resounding denial of the Trump administration.


Although the news did not change at all the current conditions in which the company operates (the company has to compete against the same competitors, in exactly the same conditions as always), it did affect the projections that some investors might have of its future. Certainly, the refusal of the authorities to impose new tariffs did not make the situation worse for the company, but it probably eliminated the hopes that many shareholders had for a more favorable future for their business. Henry was convinced that once investors swallow the bitter pill of their disappointment, the company's action would regain its value.


Since his argument seemed reasonable, I decided to look at the company numbers. In a matter of minutes, I completely ruled out investing in it. My reason: the company had more than four years losing money. Surely investors were betting that the US government would impose tariffs and the company would soon see the light at the end of the tunnel. Put it simple, the stock price reflects the expectations of the investors in the future of the company, not just its present conditions. The price before the crash was reflecting the investors' expectations about coming regulations favorable to the company's future, and the new price was the adjustment of those expectations.


In any case, what we discussed during lunch today was some new ideas Henry has in mind to perfect his technique. He wants now to use artificial intelligence to correlate the news in the media with the fluctuations of the stock market and allow virtual intelligence to recommend him which stocks to buy. He had made hypothetical estimates of what percentage of failures against successes could he tolerate, and how the gains of the successes would cover the losses of the failures. In his model loses are more frequent than successes. I suggested him to incorporate in his analysis the financial results of the target companies. I think that without the financial information his exercise is very similar to put artificial intelligence to guess the numbers that will come out in the lotus.


Basically, what Henry wants is to guess a future result based on past observations. So far, it has not worked either in the lottery or in the stock market, perhaps because we have not had enough computing power to analyze all the variables that could affect the results. Of course, the computing capacity is increasing rapidly, and maybe at some point it will be possible to predict human behavior quite accurately and, through it, how the capital market will react to different news. But I fear that for now Henry has no chance of incorporating all the variables in his artificial intelligence model. I did not want to discourage him, because I enjoy his lucubration about how he will become millionaire. After all it is a simple lunch conversation.