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David Winters shares investing strategy
April 20th, 2010
By Ora Morison
Value investing is a bit like hockey – “you skate to where the puck is going to be,” David Winters, CEO of New Jersey-based Wintergreen Advisers, told students taking a Value Investing course at Ivey.
During a presentation to students on March 23, Winters captured his company’s investment strategy nicely using a Wayne Gretzky quote.
And Winters said he believes the puck is sliding away from American markets.
“The future is beyond North America. We need to be trolling for value everywhere,” he said.
One example of Wintergreen’s investments with a global reach is Nestlé.
“Nestlé is well-known, but not necessarily well-understood,” he said, as he doled out Nestlé Crunch bars to the students in front of him.
Winters explained that Nestlé’s ability to significantly raise prices in a short period of time makes the company a very attractive investment.
“We live in a world where your dollar buys less. That’s why we’re obsessed with companies that can raise their prices,” he said. “There are very few investors who will think about [the price of] chocolate bars going from 20 cents to $2. We’re interested in companies that have the ability to change over time.”
Of course, investments in Nestlé and other global companies are exposed to volatility from foreign and emerging markets and business risk related to political, economic, and social instability. Winters also discussed the fact that foreign companies are not subject to the same disclosure and reporting standards as American companies.
“If a country doesn’t have a good legal system, we don’t want to do business there,” he said.
Still, Winters is adamant about the potential for good investments in the global market.
“Today, there is so much to do. There are a lot of big, liquid companies out there,” he said. “We have a wish-list of companies that we would love to buy, but they are trading too high.”
Buying at a discount, or with a large margin of safety, is a key principle to value investing and is incorporated into Winters’ “Trifecta,” a term used to describe the three important qualities that must be present in any of Wintergreen’s investments.
First, the company must have good management with a long-term outlook. Second, the business must be performing strongly with improving economics. Third is the attractive price. After some inevitable but humbling mistakes, Winters now strictly adheres to the principles of the Trifecta.
“Stay focused and work hard,” said Winters in closing. No doubt this resonated well with students as they were preparing for their final valuation project as part of the Value Investing course.
(The writer, Ora Morison, is an undergraduate student at the Richard Ivey School of Business who attended David Winters’ presentation on March 23 in George Athanassakos’ Value Investing class)
Riding the wave of change
By Ora Morison
November 5, 2010
Twenty-five-year-old councilor-elect Mathieu Fleury was not even alive when his predecessor Georges Bédard was first elected to represent Rideau-Vanier ward.
Fleury won last month’s election to become Rideau-Vanier’s new councilor by a mere 88 votes, but it was enough to and put an end to Bédard’s career on council, which began back in 1974. Bédard served three consecutive terms before stepping down in 1980 to work for the public service. He returned as councilor of Rideau-Vanier in 2003 when Fleury was 18.
Now fresh out of university, Fleury surprised a lot of people, including maybe even himself when he beat out the experienced incumbent.
“People now call me a politician, which is something I still don’t consider myself,” Fleury says. “I just feel like the average Joe who wants to help.”
Fleury completed a master’s degree in human kinetics at the University of Ottawa in April. He was born and raised in the Ottawa and is bilingual, an important skill in a ward where one in three people is francophone.
Fleury’s previous work experience includes an internship at the Ministry of Sport as part of his degree requirements, and a job as head lifeguard at the Plant Recreation Centre. Fleury will continue to lifeguard there until December 1, when he officially becomes a councilor.
Fleury first raised the idea of running for council over dinner with his girlfriend of five years, Lai Hoang. Hoang is also a lifeguard and the couple met while working at the pool.
Hoang says she wasn’t sure about the idea at first because she knew Fleury lacked experience, but ultimately she supported him.
“His passion for the community was enough,” Hoang says, to convince her he would be a good candidate.
“Youth are often unrepresented in the democratic process,” Hoang adds.
She thinks Fleury will be important in shaping policies that affect young people and would have been an asset on council when the U-Pass was proposed.
Fleury seems to have the respect of people his age. William Poelstra, 21, works as a lifeguard under Fleury’s leadership at Plant Recreation Centre.
“He’s awesome,” Poelstra says simply.
Poelstra says he enjoys working with Fleury because he is organized and friendly.
Others are not so sure about Fleury’s leadership.
Stephanie Bowen lives in the Lowertown area of Rideau-Vanier.
“He has a lot of energy and enthusiasm,” Bowen says, but she knows some people are worried Fleury will make mistakes because he lacks experience.
Fleury acknowledges his background doesn’t appear to have prepared himself for municipal politicss.
“Look, I’m a human kinetics grad, what do I know about politics?” he says jokingly.
“I think traditionally it was very narrow-minded on who can run,” Fleury says. But he says he thinks his unique background will allow him to bring a new attitude to city politics.
Athletics have been a huge part of Fleury’s life and he frequently uses sports analogies to describe the kind of attitude he would like to see councilors adopt.
“In sports, you may lose a game, but you see what you learned from that loss. I felt like that was missing on council,” he says.
Fleury played hockey and soccer as a child and now plays touch football and ultimate Frisbee with the Ottawa Sport and Social Club. Sports have taught Fleury what teamwork can achieve and he says he wants more cooperation between councilors.
“When you play on a team, if you play forward or defenseman, although you may disagree with what the coach says, you go forward and you play with the strategy,” he says. “In the end we’re all working as a team.”
Fleury may be brimming with enthusiasm, but Councilor Rick Chiarelli cautions against offering simplistic solutions to longstanding problems.
Chiarelli was in his teens when he was elected school board trustee for Nepean and says he made many mistakes as a young councilor.
“When you’re in your first year, any solution you can think of is probably one that someone else has thought of before and for some reason it wasn’t adopted,” Chiarelli says.
Chiarelli says his advice to all of the “newbies” on council is to channel their energy and enthusiasm into learning the job for the first two years.
“There’s nothing good you can do in your first two years that will be remembered when your standing for re-election, but anything bad you do or say will haunt you,” he says.
But Fleury seems to understand he has a lot to learn. Residents say during his campaign Fleury asked them for ideas on how to solve problems in the ward instead of immediately prescribing his own solutions.
Nik Baksi lives in Rideau-Vanier and met Fleury when the candidate stopped by Baksi’s home to ask about his concerns.
“It feels great to be listened to,” Baksi says. “I think that Mathieu won by engaging the people of Rideau-Vanier.”
Fleury campaigned door-to-door in an effort to show he was more dedicated than the incumbent Bédard.
Blake Batson is an Ottawa political blogger who volunteered on Fleury’s campaign.
“He worked harder than Georges Bédard,” Batson says. “There were times I tried to set up meetings with him and he told me point blank he can’t. He was out knocking on doors.”
And there will be no rest now that the election is over.
Fleury spent the first week of November balancing his work as a lifeguard with city council training sessions, and he expects the challenges to continue.
“It will be a big learning curve for me,” he says.
Head over heels for Canada
Getting stood up for a date is bad enough. Imagine paying more than $1000 and waiting years before meeting your spouse – only to be dumped when the day finally arrives.
Marriage fraud is devastating to Canadians duped into sponsoring a would-be partner’s application for immigration. These people believed they had found a soul mate and were helping them come to Canada, only to find out their loved one was only interested in immigration, not in a relationship.
One Canadian woman who married an Indian man and sponsored his immigration described how her husband would barely speak to her once he arrived in Canada, according to a CBC report.
“He came to my house and told me, ‘I don’t want you. I just married you to come to Canada,’ ” the woman said at a town hall meeting designed to give victims an opportunity to discuss their individual cases.
Fraudsters take advantage of Canadian immigration laws designed to reunite families from other parts of the world. The Immigrant and Refugee Protection Act permits Canadians to sponsor their foreign spouse, common-law or conjugal partner for immigration to Canada.
Marriages for the sole purpose of facilitating immigration are illegal, but difficult to detect. These illegal unions are often called ‘marriages of convenience’ where an immigrant pretends to be genuinely interested in a Canadian and dupes them into sponsoring an application for immigration. In other cases, the Canadian is aware of the fraud and accepts payment to fake a marriage and sponsor the immigrant’s application for permanent residence in Canada.
Madona Mokbel, a senior communications officer at Citizenship and Immigration Canada, said her department received approximately 49,500 applications for permanent residence of foreign partners in 2009. Twenty per cent of these were refused.
“We estimate that the majority of refusals of spousal sponsorships are for non-bona fide relationships,” Mokbel said.
But many fake marriages make it past detection at this stage and Canadians pay the price.
Sponsors and applicants sign an agreement stating they understand the mutual obligations involved in sponsorship for immigration. The process requires the sponsor to pay at least $1040 depending on the applicant, but the sponsor could be on the hook for a lot more.
Mokbel said the sponsor must sign a binding agreement with the Minister of Citizenship and Immigration promising to support the applicant for three to 10 years following their arrival in Canada.
Canadians who are abandoned by their partner after the immigrant arrives in Canada could be left with a lot more than a broken heart. If and immigrant ever requires social assistance, their sponsor must repay the cost to the government. This responsibility continues to exist even when the relationship ends or the sponsor’s financial situation deteriorates.
And its not only individual victims who are affected. Canadians at large are impacted by marriage fraud. An investigation by CIC and Canada Border Services Agency show marriage fraud is sometimes linked to the sex trade, narcotics trafficking, embezzlement, mass production of fraudulent documents, human smuggling and corrupt clergymen.
Marriages of convenience that are not detected by CIC usually end within six months of the immigrant’s arrival in Canada. Deceived sponsors are left devastated. Groups such as the non-profit Canadians Against Immigration Fraud offer support services to these victims.
The group has petitioned Minister of Immigration and Citizenship Jason Kenney for amendments to the Immigrant and Refugee Protection Act to root out marriage fraud and protect Canadians.
Mokbel said CIC currently relies on the experience and expertise of its staff to detect marriage fraud. The CIC website states their officers interview applicants, review documents and performs site checks to determine whether or not a marriage is genuine.
The website warns sponsors and visa applicants against marrying for the purpose of immigration, saying the couple could face criminal charges if discovered and the visa applicant may be deported.
Over the past two months, Minister Kenney has attended town hall events in Brampton, Vancouver and Montréal to discuss marriage fraud directly with those who have been affected by it.
CIC also launched the survey “Marriage fraud – Have your say” in September to gather ideas from Canadians on how to address the problem.
A report issued almost three years ago in December 2007 by CIC advisors calls for more training for investigators and the creation of specific positions dedicated to investigating fraud. This report also suggested creating programs to reach out to communities that practice arranged marriages.
In an arranged marriage, a couple’s relationship does not begin until after marriage. Communities that practice arranged marriages worry this makes their custom look suspicious to CIC officials when one member of the couple is a foreigner.
Kelli Fraser, another spokesperson for CIC, said officials are trained to take into account other cultural practices, including arranged marriages, when reaching their decision on the bona fides of a relati
Liberal Express rolls into Haldimand County
Article and photos by Ora Morison
OPP leave Haldimand for G8 and G20 Summits
Article by Ora Morison
Businesses undertake challenge
Article and photo by Ora Morison
Dan Megna brings fine dining to Haldimand
Article and photo by Ora Morison
The Oracle of Omaha: Ivey’s Value Investing trip to visit Warren Buffet
Article by Ora Morison
Published on Richard Ivey School of Business website
Warren Buffett may be known as one of the world’s greatest investors, but he’s still generous in sharing his time to play host to a group of Canadian students.
The financial genius known as the “Oracle of Omaha” opened his headquarters to a small group of Ivey MBA and HBA students during a visit last week in his hometown of Omaha, Nebraska.
“Ask anything you want to ask, and take as many pictures as you want,” says Buffett.
The students’ visit began with a tour of Nebraska Furniture Mart, a Berkshire Hathaway subsidiary and discount retailer of everything from La-Z-Boy recliners to Apple products.
Later, the students gathered in a large conference room where Buffett answered questions on topics such as ethics, financial innovations, and waning American global dominance.
“Happiness isn’t getting what you want,” he says. “It’s wanting what you get.”
According to Buffett, this happiness is essential in the manager of any company worth Berkshire Hathaway‟s investment.
“I ask myself, “Do they love the business or do they love the money?,”
Buffett says he doesn’t want to work with anyone who doesn’t love the business.
On the ride to Piccolo Pete’s, where the students lunched with Buffett, he pointed out the duplex where he lived with his wife and first child, in the days before he took his first job in New York.
“The only difference between you and me is the plane,” says Buffett, referring to his private jet. He explained that, otherwise, everyone in the room was among the luckiest in the world – healthy, educated, and given numerous opportunities. Buffett reinforced his well-known view that money doesn’t bring happiness – it’s loving what you do that that will make you “tap dance to work” every day.
Following the typical Buffett meal – New York steak or chicken Parmesan and root beer floats – each student was photographed with Buffett beneath the restaurant’s giant disco ball.
Students said they were impressed with Buffett’s generosity and humility.
Buffett offered up the extra space in his Cadillac and drove four students from the question-and-answer session to the restaurant. From behind the wheel, he asked the students where they were from, what they were studying, and what they wanted to be doing in 10 years. He then gave personalized advice, recommended books to read, and asked follow-up questions.
Students also learned the story of Rose Blumkin, better known as “Mrs. B.”, the founder of Nebraska Furniture Mart. After emigrating from Russia, Mrs. B. opened a small furniture shop based on her motto to “Sell cheap and tell the truth.” Mrs. B.worked until she was 103 and her son, 90-year-old Louie Blumkin, continues to manage “the Mart”. Recognizing a passion for selling fairly priced furniture, Buffett concluded the managers of Nebraska Furniture Mart met his criteria. He so respected the honesty of Mrs. B that, in 1983, Buffett closed a deal to purchase Nebraska Furniture Mart for $60 million with a simple handshake.
Taking a seat at his table at Piccolo Pete’s, Buffett started his meal with a bowl of cream of chicken soup and a tall glass of cherry coke. While eating his chicken Parmesan, he chatted enthusiastically with the students seated nearby. Taking a break from the formality of the earlier question-and-answer session, he fielded questions on the Olympics, favourite restaurants and his other interests.
Turns out, Buffett watched a few Olympic events, but prefers the summer Olympics. His answer to what he does for fun was “work”, explaining he enjoys his work and doesn‟t plan to stop. However, Buffett does make time to play bridge online – up to 12 hours each week – to keep his mind sharp.
The investment icon easily transformed into a grandfather figure, putting students at ease with his humour and easygoing nature and answering even the most mundane questions with interest and wit.
(The writer is an undergraduate student at the Richard Ivey School of Business who participated in a trip to Warren Buffett’s headquarters in Omaha, Nebraska on February 26. The trip was organized by George Athanassakos, Professor of Finance, who heads the Ben Graham Centre for Value Investing at Ivey, and was open to MBA and undergraduate students enrolled in Ivey’s Value Investing courses.)
Grease is the word for audience sing-alongs
By Ora Morison
Just your neighbourhood swim instructor
Article and photo by Ora Morison