Canada

"Gutterson was one of the first Americans to attend the London School of Economics. He and his father and brother made fortunes in the late 1920s stock market boom. He remembers flying over to London, and throwing parties in the Waldorf Astoria in New York. Later he lost much of his fortune in the crash of ’29 but he still walked away with a million dollars. He bought Webber Pharmaceuticals in Canada, who specialized in vitamin E. His was a different mentality from the Munks’. The Guttersons were in love with the idea that the Munks were an old family, even though we had no money. At the wedding the rabbi made a speech about the"

"Through a cousin of mine, we hired a bunch of guys from Hungary who had worked in some electronic factory and who were all part of the 56 exodus. Once we went to a trade show at a hotel in Houston with six or eight Hungarian guys in three Clairtone trucks. The unions from Chicago wanted to stop us unloading and setting up our displays on the weekend. These American union guys came out and said, “You're not supposed to move products. That job belongs to one of our state unions.” And the lead guy, Bertie Hahn, said, “You just try and stop us.” The Hungarian guys were water polo players, all at least six feet tall. No one was going to get in their way, either Saturday or Sunday. We were the only stereo and hi-fi display in the whole weekend trade show. Those guys would die for Canada. They hated Hungary. They hated Russia. In Canada they had a job, they had profit sharing, they had stock options. And we all made money. It was a fantastic time!"

"The first strategic scheme, securitized mortgages, had enormous potential. Under Canada’s National Housing Act (NHA), the government guaranteed approved builders’ mortgages that paid an interest rate in the range of 8.5 to 9 percent. Munk recognized that European investors were highly attracted to securities that carried a Canadian government guarantee. Furthermore, the European market indicated that those investors would be prepared to buy in at a return equal or close to 6.5 percent, more in line with government bonds at the time. By offering lower-cost funds to Canadian builders, Munk could obtain the capitalized value of the 2-percent per annum cost differential, which amounted to 20 to 25 percent of the equity value of the projects financed under the arrangement. He could then offer part of that ownership interest to investors concerned with inflation as well as yield. It would be a unique, hybrid financial instrument, with a Canadian government guarantee of both principal and interest."

"When I married Melanie I said to her, “Darling, we may have a lovely house in London, and an English country place and a Swiss ski chalet, but our home is Toronto. That’s where we're going to bring up our kids. If you marry me, just remember that.” I wanted to be sure that my children weren't nomads. Georgian Bay and Toronto, that’s where we belonged. There was never any doubt that I would come back, once the foundation was safe. I couldn’t come back with all the negative publicity and with all the debts. So, I had to come back, but I had to be prepared for a couple of bad years. That meant that I had to come back to Canada with success behind me."

"Desmarais has never become a public politician, though he has been encouraged to do so; yet he understands politics because it’s a part of the power game, and interacts well with politicians, keeping in touch with all who matter. Since the Duplessis days he has made a point of ensuring some personal contact with every Quebec premier, whatever his political stripe, and every Canadian prime minister."

"The roots of the inflation problem lay partially in the ’60s, when the administration of President Lyndon B. Johnson fought the Vietnam War and his domestic war on poverty without increasing taxes to finance these efforts. The resulting inflationary pressures — too few goods being pursued by too many dollars; government competing with consumers and industry for goods and services because of the war; government overspending — drove up prices without increasing output or pro¬ ductivity in the u.s. economy. The eroding u.s. dollar, the world’s benchmark currency for foreign exchange and trade, especially in oil, caused dislocation in the world economy. The economic problems were further complicated by the policies of Richard Nixon’s administration. By 1974, inflation in Canada was running at around 11 percent annually, the same as in the United States. As a result of this inflation, it was cheaper for a company bent on expansion to buy its competitor’s production capacity than to build new factories. The resulting lower overhead on the production floor translated into better profit margins down the line."

"told him that he was crazy. The money the brothers had invested wouldn’t, however, get them far. Nor did they have access to the expertise they so sorely needed. It certainly did not exist anywhere in Carleton County or, for that matter, in Canada. All they had was the raw material – potatoes. However, the quality of the local potatoes was in question, at least when compared to Idaho potatoes, which were considered more suited to the frozen food business. Nor was there yet a market in the three Maritime provinces for frozen food, and the large markets were thousands of miles away. Then there was transportation to consider, a daunting problem in the late 1950s, especially for moving frozen food. The transportation infra- structure and industry in New Brunswick in the late 1950s were both lacking on many fronts, particularly when it concerned frozen food. They also lacked financial resources."

"Why did I want to do it? Because all my life I have been worried when I have remained for a long time in a routine and settled way of daily habits. I was always afraid of standing still, of stagnating. My ambition had always kept well ahead of my accomplishments. The chance of becoming owner of a truly national newspaper in contrast to the purely local dailies which I ran in Canada—and indeed the Scotsman was a paper with an international reputation, an entirely different proposition from anything I owned—had a strong appeal."

"When Kaiser was still in Canada, his right-hand man, A.B. Ordway, asked if Kaiser would give his men Page 20 the Canada Day holiday (July 1) off. Kaiser said no, there was no reason for Americans to observe a Canadian holiday. When Ordway asked if they could have the Fourth of July off, Kaiser said there was no reason to observe an American holiday in Canada. 22 Kaiser was going to squeeze every minute of labor he could from his men."

"After devoting his first couple of years to constructing streets in Vancouver, in 1916 Kaiser shifted his attention to work in the state of Washington. Kaiser had good reasons both to leave Canada and to return to the United States. The British Commonwealth was at war with Kaiser Wilhelm's Germany, and Canadians reacted more negatively to the Kaiser name than Americans did."

"The 1960s were a period of consolidation as well as expansion of Rupert’s tobacco and cigarette interests. The takeover of Carreras and Rothmans led to expansion in other parts of the world. Using Rothmans as his flagship, he created a stir with his philosophy of industrial partnership in various countries where he embarked on new initiatives. Partnership companies were established on a bilateral basis in Australia and New Zealand, Malaysia, Singapore, Indonesia, Canada, Jamaica, Northern and Southern Rhodesia (now Zambia and Zimbabwe) and Nyassaland (now Malawi) − eventually even beyond the Iron Curtain in Russia and China."

"– The share price must be less than book value. Preferably it will be less than net working capital less long-term debt. – The price must be less than one half of the former high and preferably at or near its all time low. – The price earning multiple must be less than ten or the inverse of the long term corporate bond rate, whichever is the less. – The company must be profitable. Preferably it will have increased its earnings for the past five years and there will have been no deficits over that period. – The company must be paying dividends. Preferably the dividend will have been increasing and have been paid for some time. – Long-term debt and bank debt (including off-balance sheet financing) must be judiciously employed. There must be room to expand the debt position if required. In addition, studies should be made of past and expected future rates of profitability, the ability of the management and the various underlying factors and hypotheses that govern sales volume, costs and profit after taxes. To the best of my knowledge, this investment philosophy would have outperformed every mutual fund in Canada."

"If the Gammells were prosperous and well connected, they were also tough and practical Scots. The family rite of passage was to send each grown child ‘somewhere in the world’ with a one-way ticket the year after leaving school. One brother went to Tanzania, another rode the range in Texas, a third went to Canada and their sister went to Pennsylvania. Bill came to Australia to work as a roughneck in a geological mining crew at Tennant Creek in 1970."