How the stock market works

Once upon a time in a place overrun with monkeys, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers, seeing that there were many monkeys around, went out to the forest, and started catching them.

The man bought thousands at $10 and as supply started to diminish, they became harder to catch, so the villagers stopped their effort.

The man then announced that he would now pay $20 for each one. This renewed the efforts of the villagers and they started catching monkeys again. But soon the supply diminished even further and they were ever harder to catch, so people started going back to their farms and forgot about monkey catching.

The man increased his price to $25 each and the supply of monkeys became so sparse that it was an effort to even see a monkey, much less catch one.

The man now announced that he would buy monkeys for $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf.

While the man was away the assistant told the villagers. 'Look at all these monkeys in the big cage that the man has bought. I will sell them to you at $35 each and when the man returns from the city, you can sell them to him for $50 each.'

The villagers rounded up all their savings and bought all the monkeys. They never saw the man nor his assistant again and, once again, monkeys weren't worth anything.

Now you have a better understanding of how the stock market works.

(I do not know who first wrote this but it is wonderful.)

Changing Canada

In my 2002 book, The Provinces Must Go... An Idea to Cure the Malaise of Canada, I set out my belief that the Canadian Constitution is an archaic document that does not reflect the Canada of this new millennium.  I believed it then and I believe it now.

A modern Canada would reflect the FACT that, in the governance of Canada and Canadians, provincial governments are merely middle men/women/persons between the real parties that do the heavy lifting - the federal government that looks after the welfare of the country and the municipalities who look after the welfare of the people.

In the debate over Supply Management, people are beginning to recognize that there is a middle man/woman/person between the farmers and the consumers and while they have little effect on quality or selection, they suck up a large part of the resources.  The same goes for provincial governments.   They have little direct effect on the country and little direct effect on the people.  Oh sure, they pass laws, run departments and spend money that affects the quality of life but who actually delivers the goods to the people.  I can guess that no bureaucrat could find his/her way from the emergency room to the cafeteria in any major hospital, or tell you how many days little Johnny missed classes last week, or what the insulation (R) value is on the walls of a home in Attawapiskat - but someone can.  The knowledge lies with the teacher, the nurse or the local tradesperson, so why not let the teacher or the nurse or the local tradesperson make decisions, rather than some faceless bureaucrat in Halifax or Quebec City or Edmonton.

Bring real government closer to the people.  That is where you get your biggest bang for the buck!

And for you cheapies, I am testing out some e-book technology and you can read The Province Must Go online, free of charge, at: http://www.mysteriesofcanada.com/e-books/e_books.htm.

Time to Fix Canada

"I am a Canadian. Canada is the inspiration of my life. I have had before me as a pillar of fire by night and a pillar of cloud by day a policy of true Canadianism, of moderation, of conciliation." - Sir Wilfred Laurier.

Boy, those were the days.  Eloquent politicians with a message of hope, of direction and commitment to the betterment of Canada and Canadians.  Let's compare that to what we have today.

We have self-serving governments who see their fiefdoms as separate from the whole.  We have opposition parties who do not see any value in separating criticism from opposition.  We have a polarized media who are sanctimonious in their editorial.  We have an electorate who is apathetic and, at the same time, ignorant of about that which they are apathetic.  We have a financial system out of control, a healthcare system in decline, a justice system that looks like Swiss cheese and an educational system that has trouble with its raison d'etre.

There are so many problems in Canada that any single and simple fix is like putting a band-aid on a grenade wound.  We have complex problems that require complex solutions.  The first solution?  Our constitution.

The Constitution Act, as amended in 1982 but still reflecting the BNA from 1867, is so far out of keeping with the 21st century Canada that it is almost laughable.  Our country has changed since confederation.  Our population has grown and moved.  We have many cities more populous than some of our provinces.  More people live in cities than in rural environments.  Health care delivery grows more complex every day.  The disparity between rich and poor is a widening gap.  Our tax system has more loopholes than a Turkish rug.  We do not know why we need a military with all the toys... we just know we need one.  Lobbyists and special interests are running our policy making.  We have governments who couldn't care less about the electorate or democracy, just so long as their brand of policy prevails.  We have governments who pontificate their purity at the time of elections then break their promises once elected - all because they have not the guts to tell us the truth.  In truth our politicians are managers... not LEADERS.

You want to change Canada for the better?  Forget tinkering with healthcare or the justice system or transfer payment to provinces.  Bite the bullet.  Change the Constitution to reflect a modern Canada.  And do it soon.

Manipulating the EI truth

I have a certain affinity to the people of the maritime provinces.  They are wonderful folks, on the whole, who live in a wonderful place with a great history.  No wonder that, when they leave to find work, they long to go back HOME.

The Harper government has made a lot of hay recently accusing maritimers, and others, of being too lazy to take jobs that are going unfilled in their regions or to move to areas of Canada that jobs are available.  They are making it rougher to collect EI benefits to force one to move away or to pump coffee at Timmy's.  If that is not social engineering, something that the Cons decrie, then I do not understand the term.

But is there anything in the political history of this country that may have contributed to the problems in the maritime provinces?  Let's take the Miramichi region as an example.  Since before confederation the Miramichi had been an economic powerhouse in Canada.  Shipping had been plying the Miramichi for decades before the Intercolonial Railway reached the region in 1875, shortly followed by the Northern and Western Railway (later the Canada Eastern Railway).  Fish plants, sawmills and pulp mills provided jobs and wealth to the area.  Until...

In the 1960s, the government of Louis Robichaud decided to build a new port at neighbouring Belledune.  Belledune took over the industries and jobs that were once in the Miramichi.  Then the federal government put the nail in the coffin by stopping regular dredging operations of the Miramichi River thus closing off the area to major shipping.  Miramichi, a jewel of Canada, was laid waste.  In June of 2011, the unemployment rate of the Campellton-Miramichi area was 16.8%... fully double that of Canada as a whole.  That means, according to Harper and his minions, that there are over 62,600 lazy people in the region... or has government had any role in the problem?

When are politicians going to learn when to shut up!

I am not a great fan of ACOA, the Atlantic Canada Opportunities Agency, so I was not too disappointed when the government announced a cut back in its funding.  My problems with ACOA is that it is excessively partisan, blind to outside help and staffed with people who can count money but can't account for it.

There is no doubt that ACOA, some of the folks anyway, can and have been a help to entrepreneurs in getting their businesses off the drawing board.  A case in point is the Ocean Nutrition Canada plant in Mulgrave, Nova Scotia, which produces high quality fish oil products which are exported across the world.  It is also true that ACOA has had some major disasters!

All that aside, let's explore how the federal Minister responsible for ACOA handles the cut back.

"A careful reading of [ACOA's] annual reports will give people a fair idea of what they do, which I don't dismiss as useless, but what I question is the bang for the buck of taxpayers' dollars."

So far, so good.  Minister Valcourt makes a valid point and justifies his decision.  So why didn't he then shut up?  As is the habit of so many holier-than-thou politicians, he just couldn't stop from making a jab in the groin.  And that jab blew the crux of his argument.

Valcourt continued, "I have yet to meet an entrepreneur or business who tells me that the reason for their start up or expansion or trading around the world is because what a regional economic development agency did. Quite to the contrary, it's fully attributable to the entrepreneurial spirit of the individual and the company and the federal or provincial programs in place."

So much for his previous statement "...I don't dismiss [ACOA] as useless...!  If a regional development agency's help is never the reason for business success, then don't just give the agencies a hair cut, chop them up and spit them out.  And that includes the agencies in western Canada, Ontario , Quebec and the Maritimes.


 

Gas prices... The Big Lie

Over the past couple of weeks the price of oil has gone down and the price of gas at the pumps has gone up.  Why?

The biggest lie told about gas prices are set based on supply and demand.

That's bullshit.

In that scenario, the increase in gas prices should be caused by a reduction in supply or an increase in demand.  But that is not the state of the matter today.,  In fact, Canadian Press, just today, led with the headline -

 

Imperial Oil eyes sale of N.S. refinery or converting it to a terminal.

A quick read of the article tells the tale... "Imperial Oil Ltd. is eyeing the sale of its refinery in Halifax, citing global competition and lower demand for gasoline- particularly in Europe."

But let's not be sidetracked by the Europe reference, the refinery also supplies eastern Canada, where demand is also down.

So the next bastard that has the balls to tell you that supply and demand determines gas prices, poke him/her right between the eyes.

 

Share-of-Wallet analytics

I have been doing some thinking recently about the past bunch of years that I have spent in sales and marketing.  One basic truth keeps coming to mind.

It is cheaper and much more efficient to get new business from an existing client...

than it is to find a new client.

Little did I know that the Higher-Ups of this world have come up with a term for that truth.  They call it Share-of-Wallet Analytics or SOW.  Forte Consultancy describes SOW as follows:

"The percentage of a customer’s spend that is with a given company over a given amount of time. For a gas retailer, for example, it’s the number of times a given customer fills up their car’s gas tank one month at their own pumps divided by the total number of times the same customer fills up their car’s gas tank that entire month. So a customer who fills up his or her car’s gas tank four times a month with three of those fills at one gas retailer is giving that gas retailer 75% share of their wallet."

It's fancy words but it means the same thing.  Who knew I was ahead of the curve?

F35... an example for ALL politicians

If politicians are smart, and the jury is out on that, they will study the whole F35 debacle and learn a few lessons from it.  And I am not just talking about the Harper government but all politicians, be they national, local, municipal governments or school boards.

The fundamental lesson for offenders?  All things will come out, so don't fudge the truth or hide the facts!  And when you are uncovered, be up front rather that digging a larger hole

The fundamental lesson for accusers?  Don't gloat if you are proved correct... acknowledge the truth and move on.  The time to gloat is the next election.

It's a game of win and lose

Recently a Wal-Mart employee was involved in an accident wherein he was hit by a truck and suffered brain damage.  Wal-Mart's insurance carrier paid out $470,000 for his treatment and care.  WIN for Wal-Mart.

The relatives of the employee sued the trucking company for pain and suffering and lost future wages and won a settlement of $417,000. WIN for employee.

On news of that settlement, Wal-Mart sued the employee for the return of the $470,000 they paid out for the treatment and care.  WIN for Wal-Mart.

On the news of suing the employee, Wal-Mart's share value dropped by millions of dollars, due to the bad publicity.  LOSE for Wal-Mart.

Seeming not to bother taking notice of Wal-Mart's mean and petty attitude towards their employees, shopper's continued to flood the store with dollars, thus shoving Wal-Marts market cap back up.  WIN for Wal-Mart and MAJOR LOSE for DECENCY.

Would you flee over $10,000?

You have to chuckle at Bozo the Clown on CBCs Lang and O'Leary Exchange.  And I am not referring to Amanda Lang.

Kevin O'Leary, a man who loves money, money and only money, burped up a big one recently that made him look silly and petty. 

O'Leary claims that corporate executives in Ontario will be bailing from the province in droves because of the 2% surtax being placed on income over $500,000.  That takes the effective rate of tax on the wealthy from 16% to 18% - a whopping $10,000 on an income of $500,000 or more.

Think about it, Kevin.  How much would it cost to make the move out of Ontario?  Would you have to give up your job and lose your benefits?  And where would you go?  Alberta has lower taxes but higher housing costs... no savings there.  How about to the US, Kevin?  How much will it cost you to replace OHIP in the US?  I bet it will be more than $10,000.

Get the picture, Kevin?  No rational executive will panic at a 2% surtax unless they are... named O'Leary?