Early Birds Minutes, June 15th and 22nd, 2023

Dan Kennelly - a bit slower the week leading up to the 22nd. Some customers booked out for the year but they have their materials so won’t be providing Trans Am Pipe with more business..

Dan told the story of an incident at one customer’s headquarters. An employee, untrained on a forklift, flipped a 200-300k piece of equipment off the truck and ruined it. Normally this company is very safety conscious, but all it takes I s momentary slip. From the meeting on the 15th – an observation from Dan that takes us from San Francisco to Calgary with a direct economic impact. In San Francisco, downtown is being deserted by companies due to crime and cost. The average rent for an apartment is $4500. 

Here in Calgary, although not as extreme, a similar thing is happening – and this is where Andy Lockhart hopped in to give a case in point: a cabinet maker who moved to Diamond Valley from Calgary saw his property taxes go from $27k to $3k.

Andy continued by circulating an article headlined Canadian Economic Productivity in Freefall from the National Post. Among other nuggets from the author of the report the article sprung from, Trevor Tombe, Ontario is equal to Alabama in productivity. Alberta, best in the country, still doesn’t crack the 10 of the richest US States. The article and the link to Trevor Tombe’s information on The Hub are here: https://nationalpost.com/opinion/canadian-economic-productivity-is-in-freefall. 

Here’s another great article from Andy via one of his favourite sites, The Hub. Andy circulated this on the 15th after the Bank of Canada hiked its rate – unexpectedly for some. The carnage ain’t over: https://thehub.ca/2023-06-09/rudyard-griffiths-dont-expect-the-bank-of-canada-to-stop-hiking-rates-anytime-soon/. 

Brad Pachal – Thanked Dave Hicks and his company Hixie Electric for the second week running for work on a large project for a client. Client is delighted with the quality of the work. Brad went on to speak about one of his paint suppliers, Belair. They cannot keep enough stock. A local company that services and maintains large fuel storage tanks also shops Belair and they purchase $30k a week of product. To say nothing of the commercial builders/painters.

Some people he’s aware of have found creative ways to avoid production and delivery delays. For instance, a framer he knows has built a Quonset so he’s able to pre-fabricate walls away from weather to continue a stream of construction.

Jim Bladon – was out in Kananaskis camping week before last. Rainy and chilly at night. His tip: double-check your trailer and tent before you head out. A seal on a skylight leaked. A lot. He was able to get everything he needed, parts and a good price for everything at Princess Auto. Better price than any of the usual RV places. 

Steve Price – continues to be in the running for the smartest person in the room by opening his comments with the Jevons Paradox in relation to the environmental lunacy currently afflicting our government among others.

From Wikipedia, this succinct explanation:

“In economics, the Jevons paradox (sometimes Jevons effect) occurs when technological progress or government policy increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the falling cost of use increases its demand, increasing, rather than reducing, resource use.The Jevons effect is perhaps the most widely known paradox in environmental economics. However, governments and environmentalists generally assume that efficiency gains will lower resource consumption, ignoring the possibility of the effect arising."

That Wikipedia entry is a very interesting rabbit hole and available here: https://en.wikipedia.org/wiki/Jevons_paradox. 

From the 15th meeting, Steve had spoken to the same theme and reported interesting stats on efficiency and renewable energy. For example, a pure Electric Vehicle has a higher carbon footprint than a hybrid.

Forty percent of public charging stations don’t work.

This quote also raised eyebrows: “The overall carbon reduction of 90 hybrid vehicles over their lifetimes is 37 times as much as a single battery electric vehicle.” You’ll find that among a quick analysis here: https://www.kbb.com/car-news/report-toyota-can-build-90-hybrids-or-1-ev/#:~:text=“The%20overall%20carbon%20reduction%20of,before%20igniting%20their%20gasoline%20engine.

After that little body of evidence, Andy Lockhart, summed things up thus: “…never underestimate the power of a politically correct bad idea.”

Matt Dart – is planning on traveling and has been reading up on eSims rather than obtaining a second physical SIM card for his smartphone – which he would have to physically swap out. An eSim allows you to install a second “virtual” SIM with an international number and plan that you can activate when you’re traveling. 

Paul Boucher hopped in with confirmation that he’d used the Orange eSim plan on the strength of the advice from one of his favourite IT people. He’d used the Europe Orange plan. 20 gb – and everything included, calls, text AND data for 39.99 € for a 20 day period. It was seamless and easy and came with great instructions. Ross Mikkelsen chimed in with his experience with another provider uBiGI. Their plans were 30 days and great rates on what was needed, possibly even a better fit for Matt’s needs. Links to both for your own future reference: UBIGI: https://cellulardata.ubigi.com, and Orange: https://travel.orange.com/en/. 

Matt had also met a guy from Aussie investment firm MacQuarrie Group. He, in turn told Matt a story about MRU students who distinguished themselves as the best in the class in a class of international students. Proud Calgarian moment.

Don Doolan – harkened back to Brad’s note on the framer building some prefabricated homes/structures in his Quonset. He recalled when talisman tried prefab, they had their ass kicked because customers would get them on-site and want changes which cost a fortune to execute.

Don also picked upon Dan Kennelly’s forklift story by regaling us with the tale that he’d tipped over a forklift in his youth, and then did the same to a truck. He got PROMOTED both times!!

From the meeting on the 15th, Don gave us a heck of a cabin life story. 

They had guests down and one of them became violently sick. They called the ambulance, and fearing the worst due to the symptoms on display had them evaluated for a stroke. Among the symptoms, the guest couldn’t stand straight. It didn’t appear to be as “simple” as vertigo. In any case she was taken into Whitefish. They had a complete work up in 2 1/2 hours.

Don was impressed at how efficient the health care system in the area is since a lot of it is volunteer-based.

The tip in all of that - and you’ve heard it from various Birds and other sources: make sure you’re well insured.

Sean Baylis - Earnings season is over so the market is essentially in a sort of watch and wait mode.

Energy has some interesting opportunities. Global demand will continue to go up, production is flat.

Dividend stocks like Enbridge, Pembina (over 6%).

GICs also have higher rates right now, over 5%.

Bonds are discounted and might be a good place to park things over the summer.

Individual companies of note that came up: Dollarama - big, sustained growth even if not a big dividend.

Sean notes from the 15th : Tips on investing in AI - ETF - basket of 20 companies. RBOT is the ticker. Holds 30% of its company holdings in Japan. 7% NVIDEA. 

If there’s any pullback in the summer, it will be good buying opportunity.

On energy companies you might be considering, some of these energy companies could be debt free in the next few years. Good in a time of high interest rates. 

Tony Fisher chimed in with his observations on Dollarama in the NE. They have MANY outlets.

Then he went on to mention Freestone Produce: retail out the front, wholesale out the back. It’s so busy that there’s no parking for neighbouring businesses.

From the Freestone Produce web site: “Freestone Produce is a family-owned produce distributor located in the heart of Northeast Calgary. Going on its 8th year serving the Calgary community, Freestone Produce is a staple in Calgary’s produce market and rapidly growing in recognition and rapport. Freestone Produce provides staple produce items to a wide variety of different food-based establishments, as well as local Calgarians, looking for an affordable price on quality produce.” The web site is https://freestoneproduce.com. 

Value village is also big. Tony’s perspective on retail is of course, ridiculously well informed, and he noted that a lot of these so-called discount stores are now sought after anchors for shopping centers that have lost the likes of Nordstrom. These stores and thrift stores are huge with a younger demographic.

Dwayne Vinck – started with a shout out to Ross and the south Barbecues Galore store. Dwayne picked up a barbecue from sales rep Matthew Knowles. When he returned home from camping, everything was installed. It was a thing of beauty!

It’s a Napoleon product with a15 year warranty, almost unheard of these days.

Camped out in Bluerock campground in the Sheep River area in Kananaskis (https://www.albertaparks.ca/parks/kananaskis/sheep-river-pp/information-facilities/camping/bluerock/). Nice time despite the weather. No cell service, which was great.

Mike Boyles - Business development going well with clients. And that’s all good, but he had more important things to pass on. He had an epiphany while playing in a charity golf tournament: he sucks in inclement weather. 

Notes from the 15th: his son broke his leg week before last playing rec league soccer.

They operated quickly and now he’s partly bionic with a titanium rod.

One business note worth passing on. There’s a lot going on his business with a major oil and gas company that acquired a company in the US. They’re looking for economies of scale in supply chains and logistics.

Ross Mikkelsen – heads down busy season at all the stores. Despite that, he opened with thanks to Dwayne and Sean and Brad for looking after them. He’d also thanked Brett on the 15th for some help.

Ross and other stakeholders are watching political administrations across jurisdictions trying to ban gas. The industry is wary. The ripple effects from that sort of action could devastate the industry.

Don Davis – was at Fairmont Springs after not visiting since 1995. They couldn’t believe all the development that’s happened since then.

Still on travel – Don and Pat have decided they’re going to sell their Victoria condo. The condo board is frankly, insane. Despite mixed feelings on giving up the place, he figured they’ll save $30k a year in taxes and insurance.

Don brought up a story about Canada Bread paying a 50 million dollar fine for colluding on bread prices. Grupo/Bimbo is the parent company now, employing 45,000 people worldwide, and although it’s the maximum allowable fine, it’s pocket change for these people.

Don then mentioned that Pat wants new grips on her golf clubs. Andy Lockhart to the rescue! He said Priddis would do it the same day. Someone else mentioned Willow Park - same thing.

Dave Hicks – naturally was on the road to Jasper the day of the “untimely winter storm” that saw major snowfall all up and down the parkway. It was so bad that Dave went off the road near Jasper. Everything was fine, partly because he ended up between trees in a deep ditch. He was mighty impressed with AMA and their 3-word triangulation and locating system.

His tip: don’t rush. He was going just a bit fast for conditions.

Notes from the 15th: His daughter is dancing in national Highland Dancing Championships in July. There’ll be some pipin’!

One last thing from Dave re the tentative densification solution to the housing supply problem. The biggest issue from his perspective is upgrading the electrical. There’ll be a huge cost since most houses being upgraded were built with 100 amp. A house being expanded already required 116 amps before expansion. 

JD MacDonald – noted that it was a bit quieter in business last week; people seem to have put the brakes on again. He and Phyllis enjoyed enjoying the forwarded glow of his son and daughter taking in Formula one in Montreal, mostly through the extra time spent with their grandkids. JD was driving his grandson around and was surprised that the little guy knew the punch buggy game. He was merciless. 

One of the things JD discovered and appreciated was the security around kid drop off at schools.They do a good job of protecting the kids.

Garry Friedrichsen – opened with the first line of his standup act: “How do you spell China in Canadian English? Dollarama.” Ba dum ch!”

Reflecting on the Canada Bread price fixing and collusion scandal, Garry noted that in the past the all purpose cover your ass statement was that “…pricing is at the sole discretion of the retailer.” That statement relieved Gillette or Johnson and Johnson of responsibility for possible collusion even if pricing was discussed. In this case, of course, Loblaws and Weston were the ones who brought this to light in exchange for immunity from prosecution.

Notes from the 15th: People and companies leveraging AI with Chat GPT and Google’s Bart.

Garry finds it interesting to see who’s using it. He also finds interesting how teachers are fighting illegitimate uses of the tech by students. There’s a sort of “arms race” between software companies writing software to detect papers written by AI and the AI trying to be closer to “human-level” composition, etc.

Google’s Bart is dialogue based which is interesting – rather than text prompts for Chat GPT. Bart’s not available for use in Canada yet though.

Garry’s advice was to try it. Experiment with it. Don’t be afraid of it without knowing what it is in your hands.

And IF you do use it, it’s still worth checking your sources. AI will make sources up - warning is there in the software, but it’s easy to be fooled after being impressed with how fast it generates output.

Ian Campbell - finally sold the RV after close to a year of having it up for sale. Prompted by Jim’s camping story, Ian remembers patching the roof in 34-degree weather. He is NOT gonna miss that.

In business, Calgary Hearing Aid and Audiology signed a new lease at Marlborough. It’s a nice deal, but management changes so fats that different requirements from different people can make your business head spin! For example, CHA&A wanted to install carpet and splash on a new coat of paint. They got a request from architectural controls for CAD drawings, etc. just to change carpet! Engineering drawings were probably next for the coat of paint.

Notes from the 15th: Ian’s looking at trends in marketing, including an old fave: print advertising.

So far his experience with a new digital ad campaign is underwhelming.

The reason for the new look at their marketing is that their existing campaign, which had been performing well has delivered steadily declining results since January of this year. 

Ian finished a book called “Outlive: The Science and Art of Longevity” by Peter Dattia. Good read for health and wellness, and available at Amazon among other places: https://www.amazon.ca/Outlive-Longevity-Peter-Attia-MD/dp/0593236599.

Other entertainment tips: The new Marvel TV show, the secret invasion – essentially the story of Nick Fury is very good. Ian also mentioned Black Mirror – and a standalone episode released as a film called Bandersnatch named after the Lewis Carroll character. It gives the viewer decision points and every decision affects the actual outcome for the main character on screen. It’s on Netflix and easy to find.

From the 15th:

Rob Beasant - is crazy busy in real estate. There aren’t as many sales, but it’s taking about six times the amount of work to get anything done.

Sales in May were down 8%. Prices are 4% higher. Avg price for a home in Calgary is an eye-popping $674k.

Rob recounted how in 2014 condo construction started in earnest and the industry overbuilt. The market on them was stagnant until this year and now the condo market is on fire.

Supply is still the dominant issue in detached housing. If you buy a new home now, you can expect a move-in date of NEXT JULY!

Joel Shapiro - opened with the slightly frightening news that they’ve discovered that his wife has liquid around her heart. Apparently, it’s usually minor, so they’re hoping for that.

Joel’s daughter working with him through the summer. He’s enjoying that.

He’s busy hiring other friends to help with new client orientation.

Joel brought another great piece for us to read about conversations with employees and leaders. His Assessing Talent summary includes three things you can always be listening for.

The handout Assessing Talent is accessible via the button below.

Last word to Andy – a little nugget from the meeting on the 15th: “… watching Liberals try to govern is similar to watching Edward Scissorhands make balloon animals.”