Early Birds, June 16, 2022

JD MacDonald - back at Birds and happy to see us. Will be alternating between Birds and another business networking group on Thursdays.
 
His daughter graduated with her second degree, and after the ceremony they wound up eating at Joe’s and ran into Brianna. She’s acting as Tony’s agent referring business to SML. Haha.

Dan Kennelly - Mint car wash is open and spectacular. Used to be the Stetson Hotel. More information here: https://mintsmartwash.com/calgary-alberta-macleod-trail/, including on the car wash subscription plans (?!)

Paul Boucher - travel tips which really come down to give yourself an extra hour even for domestic travel, and avoid Pearson if at all possible.

Sean Baylis - Inflation numbers came out Friday in the US, 8.6 for May, downside in the market. It’s now well over 7% in Canada.

Interest rates went up by 75 basis points this week in the US. Rates will continue to rise.
 
Very good question asked by ScotiaBank, particularly after our Feds opted to fight inflation…..by creating more inflation is “Why is the Bank of Canada Fighting Inflation Alone?” The article is here and downloadable in PDF format: https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.inflation-reports.inflation-management--june-19--2022.html?utm_source=Sailthru&utm_medium=email&utm_campaign=NP%20Platformed%20newsletter%202022-06-21&utm_term=NP_Comments. 

On the subject of inflation, *everything* is more expensive. 

All this is setting up a volatile market for the summer with plenty of buying opportunities for undervalued companies.

Having said that, Sean said: “…if you’re waiting to deploy cash, it’s worth waiting a bit longer.”

Ukraine still impacting prices on the resources.

RBC likes Teck Coal, who despite the name will double copper production. 

In the US, RBC likes Palo Alto systems, cyber security. 

Don Davis - complaint this morning. Government intruding in the BHP and Nutrien sphere - loaning BHP - the *Australian* company BHP $100 million rather than support the Canadian company.

Ross Mikkelsen - he’s been telling Birds about inflation for almost 2 years now, and from his perspective with the way he has to run his business, it’s a lagging indicator, not a leading one. He figures we may actually start to see price DEcreases, freight on the ocean is cheaper. He sees over supply in some sectors cutting prices.

Matt Dart - The family typically heads off to Silverwood in Idaho during the summer, stays in a relatively cheap hotel, usually $200 a night. This year? $500 a night, so they’l be looking at renting a house.

Work - BC office of Johnson Controls is having trouble because of a new tax affecting natural gas-based products. Tough to compare pricing when that’s factored in.

An observation from Matt that with Johnson Controls allowing finance people to run the company rather than the people the ground, the company is bottom line driven at the expense of some important long- and short-term relationships.

Tony Fisher - seeing the same as Ross, but thinks the factories may not have as much room to go backwards from a price standpoint. “WE’RE SHOCKED!” said NO one around the table.

Dwayne Vinck beating the drum quietly for Braveheart Resources, who like Teck are involved in a copper play. However, Dwayne cautions and Braveheart and Teck are two different beasts to buy.

Keep an eye on Braveheart though. There’s still optimism based on the existing asset and the resource in play.

Rob Beasant - On the market - despite a heavily myopic Eastern bias, the Desjardins report on the housing market across the country makes for interesting reading. You can access it here: https://www.desjardins.com/ressources/pdf/pv220608-e.pdf?resVer=1654690735000. 

A couple of quick highlights: since 2018, Toronto up 60%, Calgary 23%.

Calgary 6% price correction predicted. But Rob thinks they didn’t take various factors into consideration. Prices MAY drop, but among other things, condo sales are up 40%.

Seventy percent of his buyers looking for condos.

He’s still seeing a lot of Ontario and BC investors.

Garry Friedrichsen - Lada - the “venerable” Russian carmaker is actually releasing incomplete cars. There are no parts. In some cases, little things like sterling wheels. No joke.

Sanctions aren’t helping. The war in Ukraine disabling steel and aluminum supply for a lot of that part of the world isn’t helping. Commodities are being played against currency so will affect logistics. In times like this, it’s time to be on the lookout for counterfeit consumer packaged goods.

Brett Bain - once again a nod to the many benefits to Birds and thank you to Mike, Ross.

Mike Boyle - family reunion at the officer’s pub. Great food and service. 

Nephew is CEO - in Singapore - Collins Aerospace. The company looks after airport lounges and check-in processes at airports.

One thing they’ve noticed in Singapore is how MANY executives have moved there from Hong Kong.

In business Mike had 3 conversations this week on material price increases, one as high as 40%, another 15%, on top of an earlier 15%. Very short notice on price increases. Tough for businesses to manage.

Andy Lockhart - Observations on Game 1 of the Stanley Cup finals, one of the best games he’s seen in years. Worth watching.

Andy reading the tea leaves believes the assessment that Liberal insiders are tiring of Justin. Can the night of the long knives be far behind?

Bob Wiggins - at the time of the meeting, his son and grandson heading to Denver to watch part of the Stanley cup final.

3 weeks ago realized he left his jacket here at Birds. He called, they found it and set It aside. When he came by to pick it up, it was gone.

Bob also had a pretty decent lawyer joke.

“A Lawyer And His Twelve Kids…

A lawyer, who had a wife and 12 children, needed to move because his rental agreement was terminated by the owner who wanted to reoccupy the home.

But he was having a lot of difficulty finding a new house. When he said he had 12 children, no one would rent a home to him because they felt that the children would destroy the place. He couldn’t say he had no children, because he couldn’t lie – we all know lawyers cannot and do not lie.

So he sent his wife for a walk to the cemetery with 11 of their kids. He took the remaining one with him to see rental homes with the real estate agent.

He loved one of the homes and the price was right – the agent asked: “How many children do you have?” He answered: “Twelve.”

The agent asked” “Where are the others?” The lawyer with his best courtroom sad look answered: “They’re in the cemetery with their mother.”

He got the house. 

MORAL: It’s not necessary to lie, one only has to choose the right words, and don’t forget, most politicians are unfortunately lawyers.”

Dwayne Vinck - 2nd round contribution - you CAN get your cell phone repaired rather than simply replace it at a place called Mobile Clinic: https://mobileklinik.ca. They also buy back old cell phones for resale.

Don Davis final travel tip - Hamilton and Abbotsford better for rental cars than Toronto and Vancouver respectively.