Category Archives: Investing

Baking, Sourdough and Martha Stewart – Is There Room Today for Investing in Stocks and Bonds?

Cara used to call me “Martha Stewart”.  I supposed it was partly her age and being embarrassed at having a mom-dad at home.  I had single parented for a decade by this time and I didn’t want the girls to be somehow disadvantaged because their primary care provider was a guy.

In the days before the richness of online recipes and apps, my “go-to” was a tattered copy of “The Joy of Cooking” and I’ll admit that reading the basic skills part at the beginning of the book coupled with my proclivity to measuring in “about” rather than precise amounts, and sometimes skipping steps, led to as many failures as successes.

In time I started to watch Martha Stewart on TV and slowly built the skills and confidence to master the basics.  And it helped me affirm that my tastes, while decidedly masculine, were appropriate.

My quip back to her was “fine, you can’t have any of the chocolate chip cookies I’m making”, or something like that.  I always felt insecure raising the two girls alone and worried that I would somehow fail them.  I was pro-feminist before I knew what that meant and supported them in whatever choices they made.  If that meant walking to the school to pick one up with her bass baritone sax because the truck was broken down yet again and I didn’t have the slack to get it fixed or making homemade cookies because it was cheaper than store bought, so be it.  The important thing was to make sure that they didn’t miss out or do without.

I read and posted an article recently about a growing trend in making the perfect sourdough bread.  I was intrigued by this group of male tech-employed millennials, their search for perfection and the precision with which they undertook baking that perfect loaf.  I’ll admit that some basic skills coupled with my recent experience with a food delivery service leaves me in the artisanal space and the world of food excellence, but I doubt I have the temperament to pursue the perfect loaf.

One of our CSI members is working through the process of launching a beer bread business, baking sourdough bread from the leavings of the beer making business.  Looking beyond conceptually the impact of both a green and circular economy and how he is creating value from something that was destined for pig feed or the big organic digesters the city runs for bio-waste, I was struck by how the opportunities for making and selling artisanal bread are limited by scalability issues.  The excellence of the product lies in part in the lack of preservatives, so its shelf life is limited, the margins of the product are such that there is no room for sales returns and finally the product is a one-off so there is no suite of artisanal products that can be wholesaled.

If anyone can figure out how to ramp this business up it is Dihan.  He is doing enough to have perfected his recipe and approach, has examined his options and is exploring what avenues are available to him.  I strongly suspect that his final choices are going to rest in both technology and the disruption that technology is causing in the area of fulfillment.

Consider for a minute what the process is for you in bread fulfillment.  You could go to Costco and buy Costco sized bread products.  You can buy the same product at your local grocer, but (bread scandals aside) at a higher price.  Or you could nip into your local convenience store and pay a higher price still.  From bakery to retail, you are largely unaware of the steps and effort to make, ship, stock and manage that inventory so that wherever you buy it, it is easy and convenient.  Well maybe not Costco – but who shows up to Costco just to buy bread?

What you’re buying isn’t something full of wholesome goodness, but a product designed to remain fresh for a lengthy time.  I can buy a loaf of pedestrian whole wheat or some douchie version, but I guarantee you that the last slice two weeks from now is going to be as fresh as the first slice that I took out.  No mouldy nor desiccated offering as it sat out on my counter; truly a marvel of food engineering.

Over the course of two decades I have heard the cries of foul from my peers complaining about discount brokers. Like the male millennial purveyors of the ultimate sourdough experience, there are those that find enjoyment in constructing and managing their own portfolios.  Others with less discipline but more experience are like the home-made pierogi crowd who through years of making them know just the right mix and texture to make the perfect dough (hint, save and use the potato water). They don’t need us to be order takers.  In fact, the DIY group can do it far more cheaply and effectively than I can.

Our chosen profession is in the advice-giving channel; our value proposition is in the experience.  I am toying what it means to be “artisanal” using stocks and bonds as the base ingredients, but I share the same struggle as the beer-bread entrepreneur.  I’m just not sure how I fulfill the client experience in a world of tighter margins and packaged goods.  In fact, I may be convinced that back-to-the-basics is better but don’t know how to communicate that.

So yes Cara, maybe I haven’t lost my Martha Stewart tendencies.  I just haven’t figured out how to make it work for me.

David Chellew and Linda Odnokon have been life partners and in business together for almost 19 years. During that time, they have mellowed into their respective roles and enjoy working with individual investment clients. Dave is a Portfolio Manager and Linda is an Investment Advisor with iAS and work out of the co-work space, Centre for Social Innovation at Queen and Spadina downtown Toronto.

Industrial Alliance Securities Inc. (IAS) is a member of the Canadian Investor Protection Fund (CIPF) and the Investment Industry Regulatory Organization of Canada (IIROC). iA Securities is a trademark and business name under which Industrial Alliance Securities Inc. operates.

This information has been prepared by David Chellew, Portfolio Manager for Industrial Alliance Securities Inc. (IAS) and does not necessarily reflect the opinion of IAS. The opinions expressed are based on an analysis and interpretation dating from the type of publication and are subject to change. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. For more information about IAS, please consult the official website at www.iasecurities.ca. David Chellew can open accounts only in the provinces where he is registered.

 

The Journey from Angry Recycler to Socially Responsible Investing

Raising four teenagers in a blended family can be challenging.  In fact, if memory serves me correctly, if you lose your sense of humor teens can be impossible to be around.

In our kitchen in our waterfront home (well, more like a rambling near-shack) we had a pantry cupboard that I had removed the shelves from.  It wasn’t much different than all cupboards in the kitchen, for years missing the hardware.

I wanted to paint all of the old 1960’s plywood fronted and varnished wood a nice clean flat white.  I got so far as to bust the shine and prime part of one shelf on one cupboard before I had to abandon my best of intentions to deal with other things.  9 years later when we sold the house it still had that one shelf half-painted, but along the way the cupboard and drawer hardware had reappeared.

Don’t get me wrong, it’s not that I don’t finish what I start, or that I’m not a good handyman.  It’s just that having a two-story eight-bedroom, two-thirds of an acre home required more work than I could reasonably handle, even with a lot of willing help.

In fact, Linda called it the money pit.  That’s not quite fair; it had good bones and a decent layout.  It had never been finished well by the original owner and while linoleum floors and cheap carpeting might have been embarrassing, our four teens and their assemblage of friends didn’t care.  In fact, by dint of location and who the teens were, I’m sure there are few people from Sudbury between the ages of 30 and 35 who haven’t partied at the house.

Getting Back to that Pantry 

Unlike the garbage which sat next to the fridge, the pantry had a big plastic garbage can lined with recycling bags.  Big recycling bags.  Into it went all the empty cans, bottles and cardboard that a bunch of teens could generate.

I watched on many occasions one of the four opening the door just wide enough to pitch an empty onto the pile.  Opening the door fully meant confronting the fact that there would be a flood of recyclables rushing out.  I kid you not, I watched all of them sneak around, being environmentally conscious, but avoiding Linda.  Mama O didn’t brook attitude; if she saw it she would deal with it, which meant whomever was closest would be stooping over, picking up the rush that Linda caused and hauling the bags outside.

As a man, I appreciated teen avoidance behavior.  As an adult, if I opened the door and found disaster within, I was going to have to deal with it, which inevitably included fitting all the debris into two bags in a pantry with a one bag limit.  I worked on a more elegant version of avoidance; I just wouldn’t recycle.

I wouldn’t recycle, that is, until my oldest daughter Cara called me out.  Rather than sheepishly admit that I was doing the dad-version of sneaking a pitch, I went on some self-righteous rant.  Digging out my recyclables from the garbage, I yanked the door open in anger, dropped an f-bomb, and waited for the flow of cans, bottles and cardboard to come to an end.  Too embarrassed to do much more than pick it all up and haul it out, I never fully reconciled our kids’ environmental stewardship with their unwillingness to do much more than a sneaky pitch.

Our household never came to understand why, in early 2003, the great recycling drama would come to an end.  Rather than deal with the inevitably tension-filled back and forth, I would check the pantry a couple of times a week when I woke up early, and if it was nearing overflowing, quietly stuff the bags before carrying my morning coffee and the recycling out.

Today Rob and James proudly point out that they only generate one little garbage bag a week because of their recycling and composting efforts.  I quite frankly want to use the verbal equivalent of throttling them:  you know, something sarcastic about what an effort that may take.

Environmental Concern Should Inform our Investing

Environmental consciousness comes easily to me.  When I was ten, growing up on the South Shore, I would troop down to the STOP (Society to Overcome Pollution) depot with the week’s haul of newsprint and spend a couple of hours volunteering.  This was driven more by a 1960’s “hippy” philosophy than it was the economics of filling up landfills.

Now that I work out of the CSI co-work space, I am even more acutely aware of the effort necessary to be responsible stewards of the environment.  I carry around orange and banana peels to make sure they get into the compost pail.  I separate out my garbage and am aware of what ends up in my pail that I am trying hard not to empty more than once a month.  And that community influence extends to home.

For a while now Linda and I have been trying to divert most of our wet waste at the condo to the compost chute.  We’ve also questioned whether using non-compostable bags makes sense or if we’re just making things worse.  We now have a 1-gallon wet waste pail lined with small compostable liners – my bio-bomb in the making (so called because wet waste makes a satisfying splat when falling down an 11-story chute).

Because of where we are, Linda and I are starting to pay closer attention to socially responsible investing.  More than avoiding “bad” companies we’re starting to look at them through the B Corporation lens.

In an ideal world, I would have a plethora of B Corp certified publicly traded companies to chose from (as far as well can tell there is only one in Canada, Dirtt Environmental Solutions).  But sometimes leadership means taking a little extra time and focusing on quietly carrying out the recycling.

David Chellew and Linda Odnokon have been life partners and in business together for almost 19 years. During that time, they have mellowed into their respective roles and enjoy working with individual investment clients. Dave is a Portfolio Manager and Linda is an Investment Advisor with iAS and work out of the co-work space CSI (Centre for Social Innovation) in downtown Toronto.

 

Industrial Alliance Securities Inc. (IAS) is a member of the Canadian Investor Protection Fund (CIPF) and the Investment Industry Regulatory Organization of Canada (IIROC). iA Securities is a trademark and business name under which Industrial Alliance Securities Inc. operates.

 

This information has been prepared by David Chellew, Portfolio Manager for Industrial Alliance Securities Inc. (IAS) and does not necessarily reflect the opinion of IAS. The opinions expressed are based on an analysis and interpretation dating from the type of publication and are subject to change. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. For more information about IAS, please consult the official website at www.iasecurities.ca. David Chellew can open accounts only in the provinces where he is registered.

Passive versus Active Investing: There are no Shortcuts

I had a friend who absolutely hated weeding his mother’s flower beds and herb garden.

Even as a teen I knew they were something amazing, literally dominating an acre, and his mother’s pride.  I don’t suppose I’m equipped even now to understand where gardening for pleasure becomes gardening to impress, but clearly Danny’s mom was gardening to impress.

Fed up, Danny decided one day to take a short cut and nipped out to Canadian Tire to buy some herbicide.  Three days later nothing was left but flower bed after flower bed of dead and dying plant material.  I didn’t see Danny for the rest of the summer.

Investing is much like that:  there are no shortcuts.

You can, like me, buy cut flowers which pleases Linda and is convenient to me.  Living in a condo doesn’t leave space in my life for growing things and frankly I don’t place much value on the process, only the result.  It’s a lot like the planters on King Street West that miraculously have gone from winter foliage to spring flowers overnight.

The other end of the spectrum are the gardeners in our condo complex.  Our flower gardens are beautiful, and a small group of volunteers spend countless hours of their retired time keeping them that way, developing through the spring with early blossoms to late fall ablaze.  I didn’t exactly endear myself to one of them last year when she was complaining about not getting any help to which I quipped maybe we just needed to pave them over.  I know myself and as much as I love the results I’m not prepared to spend the time getting them there.

The decision about whether to be a passive or active investor is a lot like that.

There are no short cuts to riches.

“Overnight” success in investing requires a lot of trial and error, and time committed to experimentation and failure, until you find a groove which works for you.  People like me can help with the process, providing advice, guidance and mentorship but ultimately you must take responsibility and work at it.

At the other end of the spectrum is the “buyer of cut flowers”.

Passive investing is a lot less labor intensive and if all you want is the benefit of the bloom, you need to school yourself in terms of expectations.  On occasion you might benefit from the blaze of color, but generally what you’re going to get is a well ordered manicured investment landscape.

I’ve toyed a lot with the concept of control when it comes to defining investment.  But I keep coming back to the same thing.

It’s about time commitment.

My profession is one of my passions, but I get that not everyone shares my interests.  The demarcation is your willingness to experiment, to take the time and effort to learn what you need to make an informed decision.

And if you think you found the magical answer to instant riches, remember Danny and his herbicide.

David Chellew and Linda Odnokon have been life partners and in business together for almost 19 years. During that time, they have mellowed into their respective roles and enjoy working with individual investment clients. Dave is a Portfolio Manager and Linda is an Investment Advisor with iAS and work out of the co-work space Brightlane on King West in downtown Toronto.

 Industrial Alliance Securities Inc. (iAS) is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Securities is a trademark and business name under which Industrial Alliance Securities Inc. operates.

This information has been prepared by David Chellew, Portfolio Manager for Industrial Alliance Securities Inc. (iAS) and does not necessarily reflect the opinion of iAS. The opinions expressed are based on an analysis and interpretation dating from the type of publication and are subject to change. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. For more information about iAS, please consult the official website at www.iasecurities.ca. David Chellew can open accounts only in the provinces where he is registered.