It's a Rich Full Life

Surround yourself with smart people

Tonight I spent a couple hours with one of our company advisers, sharing with him the terms of a deal that we are on the cusp of doing at work. The deal is an important one that will cascade into something bigger, and truly revolutionary to our strategy.

The cool thing was after an hour of thinking what the best strategy was for the company, he saw something even better, which we hadn't seen. Now there is no assurance that we will get this done the way we now see it, but we can approach it with a new perspective that wasn't considered. Plus, I have the confidence to know that another smart person agrees that it is the best path to take.

The meeting cost me $50 on drinks, and he was doing it as a favour from friend to friend. That's the power of an advisory board, and if you don't have one, your only a question away from having one.

Consider it.

The soft sell leads to friends and maybe customers

Today was a busy day for my partner Don and I. We spent the better part of our day meeting with a new client that has one of the best products in their industry, if not the best. The next meeting was to present our product to a great team who we have known for years.

In both cases, I had the overwhelming feeling that they will/would be great partners for our business. It is uncommon for us to have such big meetings squeezed together into the same day, at least out of town, and it led me to wonder how we got here.

In both cases I looked back to how our relationships took root. One was a simple sales call that I made 2 years ago. It didn't turn into anything at the time, and I accepted that for what it was. I don't believe in the hard sell, and was more interested in staying in contact and simply being thankful for the chance to get to know someone new. Finally securing their business is really the icing on the cake and if it had turned out that we remained friends only, I would have been happy with that.

The next meeting, where we still don't have the business, has evolved from literally years of networking. I have know the President of the company for over 10 years, when we were both in different industries. Since then, my network has grown to include their VP of Technology, who I met 5 years ago through a business group we both belong to. In both cases I have been an enthusiastic fan of their product, and only lightly shared with them how ours and theirs could come together nicely. Today we presented a solution that I believe will bring tremendous benefit to their existing product line. They were very impressed, but I have no idea if it will firm into a business relationship.

My lesson today is that you never know when or where business might come your way, and if you spend your time getting to know people, and even helping them with things that don't directly benefit you, you may still get the chance to grow your business. If it doesn't work out as such, you still are left with a valuable friendship or trusted acquaintance. And that's pretty damn good too.

Parity not Charity

I was lucky enough to be invited to attend an event tonight that was the first of it's kind in Canada. Dining with Diversity, is a program sponsored by the Edmonton Chamber of Commerce, Edmonton Economic Development Corporation and Ruth's Chris Steakhouse. I am sure there were others sponsors, and of course there were many nice staffers from the Chamber on hand to make everything tick.

As I mentioned, this was a first of it's kind in Canada and is based on an event that was started in England called Dining with a Difference. Essentially it was a nicely appointed, but casually structured event that was intended to bring awareness to Edmonton employers about the great opportunity they have in employing people with disabilities and thinking about them as consumers, on equal footing with the non-disabled community.

What I think I enjoyed most of the evening was the format of having one table captain, a representative member of one of the disabled communities, at each table. That person was to invoke discussion about our pre-conceived notions around disabled individuals, even forcing us into interesting discussions on things like labels, biases, etc. Our table captain Colin did a good job creating discussion, but he didn't have to try too hard as I was lucky enough to sit with some amazing and inspirational business and community leaders who all shared their thoughts like we had known each other for years.

My takeaway was that is there is potential in nearly everyone to contribute. In fact it's simpler than that; everyone should be considered equal when it comes to having the opportunity to find employment. There was never discussion around "making jobs" for our disabled community, but simply considering them for opprtunities that they can easily do, disability or not. My favorite line used tonight by a couple of our hosts was that most in the disabled community are looking for Parity and Not Charity. (There was a photog walking around tonight and I will link to pictures later if they come available. I have attached an interesting statistical powerpoint you should take the time to flip through).

Dining With Diversity Statistics

View more presentations from Chris Labossiere.

A stellar article on Oil

This is the single most interesting article on Oil I have ever read. I am a layman, and yet my gut has told me lately that the number one financial play that anyone might be able to make is investing in oil at these levels. Oil means so much to us in Alberta that we can not ignore the impact it is having on us right now, and the next 5-10 years.

After reading this article, I feel much better about Alberta's position in the long-haul, even if in the short-term we will see some serious blood on the street. Without exaggeration, I feel that we are at a crossroads that will whip-saw our psyche, and leave many without a proverbial pot to piss in. Hopefully most of us can wait out this storm.

The Article is here:

http://www.getreallist.com/the-sleeping-threat-of-low-oil-prices.html

An enlightened excerpt on Alberta is here:

The Canadian tar sands were until recently the great black hope for non-OPEC supply, with a production cost for older projects in the range of $28 a barrel. However, Shell chief financial officer Peter Voser says the company’s current cost is around $38 per barrel. But the cost of new tar sands projects is much higher: According to an analysis by Merrill Lynch, it doesn’t pay to invest in new tar sands projects until oil sells for about $80 a barrel. I have seen other recent estimates putting the cost at closer to $90 a barrel. More than $90 billion worth of projects in the tar sands have been postponed since oil prices started their sharp decline.

Accordingly, the government of Alberta just announced a one-year repeal of its revised royalty structure, which went into effect at the beginning of this year. The royalty rate will be cut from the current 15%-25% to a maximum of 5% as an incentive to encourage junior oil and gas explorers to resume their investments.

This is no surprise to me, as the Stelmach provincial government has twiddled with the royalty rates no less than four times in the last two years, much to the dismay of tar sands producers seeking a clear investment outlook. As I wrote a year and a half ago in “Tar Sands: The Oil Junkie’s Last Fix,” “If the royalties on the tar sands were allowed to rise to anywhere near the normal levels for oil—around 40%, not 1%—the entire industry would cease to be. The profit would vanish, simple as that.”

The slowdown in tar sand production casts further doubt on the expectation that it will ever rise from the current 1.5 mbpd to 5 mbpd by 2030. I have estimated that it might peak at 3.5 mbpd by 2030, but the confluence of macro factors now pointing to serious energy shortfalls and a global economy on the brink in the 2012-2013 time frame makes me doubt we’ll reach even that.

Good luck to us, and godspeed to our oil and gas industry.

Warren Buffet - The Snowball

I have always been a big fan of Warren Buffet's. I didn't know a whole bunch about him except that he was hellishly wealthy, the World's most successful investor, and folksy in his approach to things.

Since starting to read his biography this last weekend, I have been amazed at just how simple, yet powerful his take on everything really is. He is a rare human indeed, probably cut from the same idealistic cloth as truly world-class phenomenons who NEVER bend from their principles. I am thinking of people like Mother Theresa, or the Dalai Lama. That pure in his thoughts and ideals. What makes him cool beyond belief is his unending love of making money, not for the wealth, but because he knows that is what he is meant to do.

His quirky shunning of the elite lifelstyle that goes with wealth is really fascinating. His gut instinct, and willingness to partner with and believe in people is even more intriguing. I can't recommend this book enough, and hope to take even a small list of lessons from the book. Read it.

On a side note, ssince his companies inception, he has written interesting and inciteful letters to his shareholder partners. I have been a fan of these for some time and recommend that you take some time to read these here.

I speak Geek but I may not understand it.

I know, that's a stupid title, but it's the first thing that came to mind when I was sitting to pen this post. You see, last week I was invited by Darren Barefoot at www.Capulet.com to attend the "Bloggers" open-house being hosted by the marketing and management team of the new Future Shop here in Edmonton. I can't imagine why I might have been invited, since this blog is only read by my kids and employees, neither of which have any say in the matter.

So, when I received the invite, I dismissed it as a disingenuine attempt to use social media tools to simply advertise the store. I am not a "tech" blogger, or even an "Edmonton" blogger.  Forget that I received my first ever "Schwag" gift as a blogger, I wasn't going to fall for that!

Well, in the spirit of honesty, I have to say that it impressed me. And for the record, I normally hate the Future Shop experience. I could talk about the new concept, cool new products, and size and scope of the store, but that has been done much better here. I was mostly impressed by the Manager Chris. He struck me as sincere and genuinely interested in providing great service, but not aplogizing for wanting to make money. I respect that, and he presented it with some class. I normally haven't associated Future Shop with class, but in fact their tactless grabs at my money, especially in the useless, overpriced warrant department. Who needs a 3-year warranty on a $99.00 cordless phone, but I digress.

So Chris impressed me on our tour, but that is not what really sold me. It's when I returned 4 days later with my family to browse the opening specials, particulary in the hunt for a new TV. That night, within 2 minutes of entering the store, there was Chris. I certainly didn't expect him to remember me, and even though he gave me the impression that he did, he may well not have. Regardless, he greeted me personally, thanked us for coming, and offered his help. There were a dozen TV's available at the front door on a "door-crasher" special, and I asked if they were good units, and he not only said yes, but silently put one off to the side while we browsed the store. On our return, all of the TV's were gone but he "protected" one for us. Beyond that, his TV department manager introduced himself personally and offered us his help.

I know that none of this might sound special, but in today's retail environment, it really impressed us. I respect good leadership, and sincerity, and he embodied this in spades. Granted he made us feel special, but I suspect that he would do that for every customer, which gets my nod.

Plus my kid LOVED their new musical instrument department, which let her play hands-on with the electric guitars, drums, synthesizers, etc.

Control Thy Shit

I have been reading incessantly about the financial crisis facing the World. Nothing has caught my attention more than the reaction of the market on Friday when the bailout package was signed into law. My initial reaction was that the Dow would charge ahead and the lemmings would continue to buy into the problem. Neither happened, and that is very foreboding. The market is a fickle wench, and she decided that the bailout was not a solution, but simply a symptom of how great the global financial crisis has become. I am prepared for something much, much worse than what we have seen.

So, why am I still sitting here and not selling my house for $0.50 on the dollar, and moving my kids to our cabin, to teach them how to live off the land? Well, here's why.

I made the very difficult and costly decision 3 years-ago to leave the corporate world and start our company, ProTraining and ProExams, with my partner Don. Both of us were making significantly more in salaries and perks as senior executives in larger firms. Both of us have paid the price in quality of life for the last three years. We have bootstrapped our company to where it is today:

• Nearly 200 unique clients who pay us in a recurring revenue model
• Clients from probably 50 different industries
• Revenue sharing models with Licensing bodies. No matter what happens to the economy, doctors, real estate agents, pilots and lab techs will still have to write their licensing exams
• ALL profits reinvested in future revenue growth, and great people. Nothing kept for ourselves, in fact we have learned to live on much less.

So, this decision, made perhaps for different reasons at the time, will protect my family from what might be a very long and sever economic correction. It has not been lost on me that when I was a Senior Vice President for a public company, that many people might have considered that success, but I saw that as having one customer. And if that customer chose to fire me, I was up shit creek without a paddle. Now, if one customer fires us, the blow will be softened by the other 200, and the 5-10 news ones gained per month.

The moral to the story, Control Thy Shit. Start a business, or at least put yourself in a position where getting fired would at least open a door for you. Have something on the side, be ready with a business idea if you can't afford to leave your day-job. Start building something now, because this might get real bad, real fast.

Crisis of Confidence

Do you think that the events of today's stock market are limited to affecting Americans? If you do, I think your about to get a rude awaking.

Forget the obvious effect that a stumbling US economy has on our commodity based economy. That will certainly hurt us, but I think Alberta has a nice funnel of infrastructure and energy projects to keep things busy. The real issue will be in consumer confidence and banking confidence. The harsh reality that is the current US banking situation will immediately have the Canadian banks reviewing and tightening their credit policies.

Most everyone who owns a home, me included, have taken some of the significant increase in their home value and parlayed it into something else. Maybe for you it's a recreational property, or an income generating investment, or worse a new car or furniture. Well, the banks are going to get real nervous as they start to see the same two things happen in Canada that has happened in the US:

1. Steep declines in the value of homes. Even in red hot Edmonton, we have seen a large drop over the last 12-18 months in the value of our homes
2. Pressure on bank policies relating to a healthy balance sheet

Banks in Canada have always been more conservative than their US counterparts, and usually that is a good thing, but if they start to tighten their lending policies even a little, many Canadians will be shocked when their mortgage comes for renewal and they realize that their house is not worth what it was, and their bank is not willing to extend their mortgage backed line of credit.

I don't profess to be an expert on these things, but I have to agree with Ben Bernanke who said today that the economy and it's key institutions have gotten too loose with their monetary policies, and are not prepared for this "100 year storm". Even our Canadian mortgage policies have loosened to where many Canadians have bought homes with little or nothing down. That can lead to a mortgage crisis not unlike the US.

I think it's time to "batten down the hatches" as they say and get ready to weather this storm. If you're lucky, and have some money to play with, it will also be a good time to buy some blue-chip investments. If you like to spend money that you don't have, then at least don't blame anyone but yourself.

FOREX Trading vs. Therapist

About a month ago I said to myself that I needed a hobby that didn't include work or the internet. I decided that I would try and learn about the currency trading markets. You might think that's work, but for me it's fun. Getting rid of the internet hasn't happened, as I have learned that information is everything with currency trading and you will need to be in front of your computer for periods of time to evaluate and execute on your trading strategy.

The problem with this new "hobby" is that it is more addictive than a crack-cocaine / crystal meth milkshake. Sitting watching the graph bounce up and down minute by minute can cause a bit of a hypnotic trance. So it has been good for my stress levels in the short term as it is a fun distraction, but I can see it dragging a guy down a dark and long path of no sleep, caffeine addiction, non-existent sex life and failure to recognize your children.

I have changed my trading strategy today to a "range-trading" one, where I will make smaller sized buy/sell  trades with longer range outlooks. That means that I can step away from my trades for a day or two and not have to hover over my computer every minute. This might help me get laid more. Although Mrs. Rich Full Life has been patient with my trading activity, human interaction with one's spouse can only be a postive thing.

In case you care what I think about the market right now (and you probably shouldn't - really), I have been very bullish on the USD/CDN, which means that I see the CDN dollar taking a bit of a breather and falling into the $0.95 range. My short-term (one week) target is to see the USD start to reach $1.025 - $1.03, mostly from a falling price of oil and the shine coming off the commodity markets for a while, which will force the CDN down.

Anyways, have to go and take a shower. Those simple life tasks can be such a distraction from this damn chart.

The Gambler

I want your opinion. And it might matter to me in a big way.

I have to make a sizable RSP purchase in the next few weeks to combat a tax problem that I have created for myself by selling an investment property this year. I have been much more pragmatic lately with my investments, and that includes holding a sizeable percentage of my portfolio in 30-day GIC's. I have been out of the self-directed game for some time, and trust my financial guy for all of my retirement investments. I still am holding onto a chunk of Waste Services Inc (WSII) stock outside of my RSP's but that's because I have lost so much money on it. I am determined to either go down with the ship, or wait what seems like 10 years to get back to even (just joking, I actually think their a takeover target, which is why I am holding).

With this big purchase coming soon now though, I have taken an active interest in what I should be buying. Here is what I know for sure:

1. I will be buying something that is NOT valued in Canadian Dollars. I think that the economic slow-down will be more widespread that we have already seen, and Canada has been insulated from it more than almost any other economy. BUT, as others slow, our commodity based economy will suffer. With that, goes the CDN $ and I want to take advantage of that.
2. I want to take advantage of these bad times, buying into a sellers market, but I refuse to risk my investment on a new, unproven stock play. (New tech is out)

So, my eyes have been on the Microsoft / Yahoo news. Since the announcement of Microsoft offering $45 B for Yahoo, the stock of Microsoft has fallen to a near one-year low of $28.00. This has taken $40 B off of Microsoft's market cap, and will actually hurt the Yahoo offer, which was half cash and half stock.

Now, Yahoo's board has rejected the Microsoft as too low, and the market obviously told Microsoft that they didn't like the deal in the first place. So now, onto the bet.

1. Microsoft could forget the deal, and we will see an immediate jump in the stock price
2. Microsoft holds pat, and Yahoo agrees to the original terms Then I see the MSFT stock not going anywhere fast, but not losing much more than the value already lost
3. Microsoft keeps chasing, and could continue to harm their share value.

I am a betting man, and I am thinking that this might be the time to push all of my chips in. Options 1 and 2 I can live with. Even the second option doesn't scare me. I actually believe that they would do something with Yahoo. Plus, trading at 16 times earnings, they have some room to play with this deal. There is no arguing the combination would have a lot of angles to spin off of.

Option 3 would be bad. Or option 1 and 2 with significant Department of Justice resistance, but I just don't see it. What do you think?