Financial journalism

Recommended reading, economic debates, predictions and opinions.

Postby parvus » 13 Jul 2006 21:27

Bylo wrote:
Based on the Portus et al experience what guarantee is there that you'll get back even the amount you invested, let alone earn any positive return?


Well, from what I heard, RBC, which issued a Norshield-based note, liquidated the note early and gave investors their NAV back — not their principal. They could, of course, have simply appointed another investment manager, e.g. Northwater, which has been advising on the Portus "notes."

(Not sure how many bodies RBC threw over the side for not thoroughly understanding the Norshield structure: a poorly collateralized call option on managers that RBC in New York did, apparently, vet). As for the Pro-Hedge note based on Norshield, so far as I know, it will run its course: investors will get 100% at maturity, but alas no upside.

Still, with any of the notes, the banks' rep is on the line; they will pay out. Sort of like the lifecos had to with "vanishing premiums."

As for Portus, though, why SocGen was so hesitant to come forward as one of the ultimate destinations of investor money is a puzzle, since it clearly damaged their reputation with the institutional community. To be sure, they had no control over Portus, which may have sold forward its own management and incentive fees simply to reap the assumed future value now. :roll: (BTW, Nick Mancini has reappeared at Connor Clark and Lunn as President and CEO of Managed Portfolios.)

In any case, most of the Street stayed away from Portus — would you invest with a hedge fund complex that promoted itself with ex-Navy Seals? — and Portus went into the insurance channel instead. My gripe is that insurance advisors are more gullible (cf. vanishing premiums supra) because lifecos have always assumed vicarious liability (viz: ManuLife) and eaten their actuarial mistakes. As a result, insurance reps haven't quite cottoned on to the broker's however imperfect "culture of compliance." Sorta like Fulcrum types selling unregistered securities, or MFDA types using co-op arrangements to give "Dr" White a nescient and noisesome pulpit.

In one of the receiver/liquidator reports, there's Joseph Groia's notes to Manor: e.g., "shut down now, you're way offside." The tragedy is that the OSC didn't step in earlier. Other folks tried to say that, but Manor slapped them down with libel chill.

But apart from SocGen's noticeable reticence to fess up (they provided the guarantee as well as the investment platform that the Portus "trusts" were invested in, minus commissions, working capital, precious metals "hedges," undertaken by the investment manager, etc :shock: ), for the banks, manufacturing a PPN is the same as — and done by the same team as — an index or fund-linked GIC (and BMO has a dividend-fund linked GIC).

NormR: wrote:
Even if the guarantee is good, you're almost 100% likely to be ripped off with PPNs. They do provide a good test for advisors. If they recommended them then you should probably get a new advisor.

Depends on what you're doing with them. If you've got $10m, want exposure, but don't want to risk capital, and you're 60, why not? Now if you're 60, have $100,000... I don't know. Remember, some folks lost big in the Nasdaq bust (I don't have Georges post on Nortel ready to hand, but I'm sure you'll dig it up).

I may not see the point, because I have a 20-year investment horizon and stick with value managers (well, er, ahem, mostly. I let Sprott and Norm Lamarche do my resource investments). But some folks are risk-averse.

The impression I get, however, is that, as with GICs, you probably want to build a ladder, plus diversify across four or five notes each year. (The option or dynamic leveraging structures can be quite complex, and if there's a butterfly in Beijing .... fractal disasters happen).

Me, I'm waiting for the full rollout of the RAFI/Arnott ETFs. Greater fool me, I suppose. :wink:
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Postby RobinHood » 15 Jan 2007 03:14

Going back to what Smelly was saying about reading financial articles, let's remember that the media needs to do one thing... get eyeballs (or ears if it's radio). It's well known (and sad) that good news does not sell, bad news does. The media will always get more eyeballs and ears if the article is sensational than if is it plain, boring and straighforward. Sooooo, it should be no surprise that the writers tend to flip-flop around on positions depending on which one grabs more eyeballs and ears at that point in time. Based on that, what's the value of THEIR advice? hmmm, that's pretty jaded eh?
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Postby Dennis » 15 Jan 2007 08:50

Too often the media are hacks for the industry.
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Postby brucecohen » 15 Jan 2007 10:45

RobinHood wrote:Based on that, what's the value of THEIR advice? hmmm, that's pretty jaded eh?


Depends on the subject:

In terms of specific investments, zero at face value. If the writer is quoting a good source, consider your faith in that source and whether the article presents a logcal rationale for the view. Be aware that media coverage of new products is heavily influenced by the sponsor's marketing people and their materials.

In terms of investment strategies, look for supporting facts and make up your own mind.

In terms of tax planning, the media is generally quite good because it relies heavily on tax accountants. Again, look for who's being quoted and consider if the strategy makes sense.

Basically, view financial coverage the same way you'd view sports or auto coverage.
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Postby beaverlodge » 15 Jan 2007 16:56

Pay more attention to blonde on any financial articles and those who write them.

Follow the $$$$$$$$$$$
"Not everything that counts can be counted, and not everything that can be counted, counts."

Albert Einstein displayed this prominently in his office. This ingenious turn of thought is attributed to Sir George Pickering.
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Postby brucecohen » 15 Jan 2007 23:46

beaverlodge wrote:Pay more attention to blonde on any financial articles and those who write them.

Follow the $$$$$$$$$$$


A meaningless statement except when applied to pay-for-play pundits like Jerry White and Garth Turner.

Staff writers like Carrick, Chevreau, Roseman etc are on salary and contractually prohbited from taking any payment from the companies they cover. Years ago the Post stopped splitting reprint fees with writers. The explanation was that this avoided the risk of a conflict of interest in which a writer might knowingly produce a puff piece in anticipation of reprint fees from the company. I'm pretty sure the Globe, Star and other major publications have the same policy.

Writers do not know who's advertising on the pages where their work appears. The only people in a newsroom who know that are the layout editors. Financial planning articles are often written at least a week before publication. Investment articles are often written a few days ahead.

It is possible for a freelancer to take a bribe, but a more likely scenario would involve a freelancer doing a corporate job and then recycling some of that into an "objective" piece for a newspaper or magazine. That's not a good idea. If caught, he/she will never sell another media piece again. It's a very small community and the editors all socialize with each other.

Guest pieces by people working in the financial field vary widely. Some are sales-promotional puff pieces and, in many cases, produced by a staff writer or freelancer under assignment by the company's marketing department. Many guest pieces, particularly ones by accountants and lawyers, are carefully done because the point of the exercise is to build/reinforce the image and credibility of the individual practitioner and/or the firm. As a rash generalization, practitioners with designations recognized under law tend to be more objective and reliable. This group includes accountants, lawyers, actuaries and CFAs. Pracitioners with voluntary designations granted by industry associations vary widely. This group includes CFPs, CLUs, RHUs, etc.

One point that Smelly never understood is that there's a big difference between writing about a specific investment and actually endorsing it. An automotive reporter will write about Ford or GM's newest offering even if he thinks their products are crap. That's because people are interested in new products. It's also important to differentiate between statements made by the writer on his/her own and those which quote others.
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Postby YogiBear » 16 Jan 2007 00:07

BruceCohen wrote:
beaverlodge wrote:Pay more attention to blonde on any financial articles and those who write them.

Follow the $$$$$$$$$$$


A meaningless statement except when applied to pay-for-play pundits like Jerry White and Garth Turner.

Staff writers like Carrick, Chevreau, Roseman etc are on salary and contractually prohbited from taking any payment from the companies they cover. Years ago the Post stopped splitting reprint fees with writers. The explanation was that this avoided the potential conflict of interest in which a writer would produce a puff piece in anticipation of reprint fees from the company. I'm pretty sure the Globe, Star and other major publications have the same policy.

Writers do not know who's advertising on the pages where their work appears. The only people in a newsroom who know that are the layout editors. Financial planning articles are often written at least a week before publication. Investment articles are often written a few days ahead.


Granted all that you say, and without joining the family Castoridae, what about the situation (notoriously shared with analysts) where journalists feel constrained to pull their punches, or even drop a potential story, for fear of causing such upset that their future access to interviews and "insider" info may be reduced or eliminated? I wonder how many stories about practices in the financial services industry were planned and researched, but never saw the light of day for fear of de facto ending a career. That would in effect constitute indirect, but very real, monetary pressure, from which only the biggest names in financial journalism might be immune.

Do you think this is an issue (as it has been identified as being for analysts, and automotive and travel "journalism", for example, seem to often work similarly), or does the financial "news game" not work quite that way?
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Postby RobinHood » 16 Jan 2007 02:04

Actually when I said that bit about the jaded view, I was referring to my view, not the journalists' view. :D

No one has a crystal ball that works, and if they did, they should be buying lottery tickets :)

Again, I FEEL there is generally the attempt to make the article "sexy" by jazzing up the story by varying degrees. And when that happens, the value of the advice suffers. It's just like the guy (or gal) at a party who likes to talk up the home run investment they are in. They never talk about the ones where they lost their shirt or the nice safe boring funds they invest in that make a solid return and underpins their portfolio. That would not be interesting. And the person listening does not get the whole picture. 'nuff said I think... Enjoy!
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Postby DanH » 16 Jan 2007 08:53

BruceCohen wrote:It's also important to differentiate between statements made by the writer on his/her own and those which quote others.


Bruce, one point that I think smelly was right about is that people often scan articles and can get a somewhat different impression than is intended. For several years, I have been taken aback at the number of people who tell me that they enjoy MY articles in the Globe and Mail. I then explained to them that I was just a quoted source - not the author - and that I've never authored anything for any newspaper.

But it happens so much (still) that I just say 'thank you'. I'm astounded at this because the author's name - and often picture - appears with the article yet so many people think I write those pieces.
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Postby brucecohen » 16 Jan 2007 10:18

YogiBear wrote: Granted all that you say, and without joining the family Castoridae, what about the situation (notoriously shared with analysts) where journalists feel constrained to pull their punches, or even drop a potential story, for fear of causing such upset that their future access to interviews and "insider" info may be reduced or eliminated?


Not a big problem. First, few journalists ever get real “insider” info. Second, if you really want to know something you can always find somebody to tell you if you look around enough. Third, and most importantly, journalists and sources such as analysts and marketing execs have a symbiotic relationship. Nobody's compelled to speak to a reporter. You do so for a purpose, and yanking access in a snit simply amounts to cutting off your nose to spite your face.

Years ago Financial Post high-tech reporter Mike Urlocker became a high-tech analyst at UBS. He gave a talk at an FP professional development conference where he said, “We (analysts) use you and you use us; it’s a two-way street.” Frankly, the real reason why analysts and staff economists talk to reporters is to promote their names so they carry higher value when changing jobs.

That said, I do know that many people on Bay Street -- and elsewhere -- now try to avoid a certain reporter because this person has a narrow mind, a strong drive and often a chronic inability to understand complex explanations.

BTW, the media keeps publishing stock recommendations by mutual fund managers and other institutional investors. Be aware that none of them will offer a stock tip until they’ve acquired all the shares they want. I'm not saying they're trying to bid up the market for the shares they hold but rather that these tips ain't fresh goods.

RobinHood wrote:
Again, I FEEL there is generally the attempt to make the article "sexy" by jazzing up the story by varying degrees.


You’re right. Sizzle sells. If newspaper and magazine articles read like academic publications hardly anybody would read them.

DanH wrote:Bruce, one point that I think smelly was right about is that people often scan articles and can get a somewhat different impression than is intended.


I agree too. It’s a big problem compounded by the fact that the person who wrote the article doesn’t write the headline. But it’s a universal problem; how many people scan books, tax guides, etc and get a somewhat different impression than was intended? How many people hear what their financial advisors tell them with only half an ear and quickly forget or distort the message? From time to time I used to joke that, like Weekly Reader, we should follow each article with a quiz on its contents.
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Postby Bylo Selhi » 16 Jan 2007 10:39

DanH wrote:I then explained to them that I was just a quoted source - not the author - and that I've never authored anything for any newspaper.
BruceCohen wrote:Frankly, the real reason why analysts and staff economists talk to reporters is to promote their names so they carry higher value when changing jobs.

So Dan, when are you changing jobs? :twisted: :lol: :P
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Postby DanH » 16 Jan 2007 14:44

Bylo Selhi wrote:
DanH wrote:I then explained to them that I was just a quoted source - not the author - and that I've never authored anything for any newspaper.
BruceCohen wrote:Frankly, the real reason why analysts and staff economists talk to reporters is to promote their names so they carry higher value when changing jobs.

So Dan, when are you changing jobs? :twisted: :lol: :P


That didn't seem to work the last time I was looking for a job. As it turns out, a bear market (I was job seeking back in 2002) easily trumps any name recognition - particularly when you don't want to relocate to the centre of the universe. ;)

I freely admit that most of the time I spend with journalists is my cost of marketing. I don't advertise (aside from my website) and I need to get my name out there and journalists need independent, credible sources of information. We definitely help each other.

But for every ten times you see my name in print somewhere, I have probably helped with background information and off-the-record comment on 2-3 other stories where my name is entirely absent.
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Postby YogiBear » 16 Jan 2007 14:56

BruceCohen wrote:
YogiBear wrote: Granted all that you say, and without joining the family Castoridae, what about the situation (notoriously shared with analysts) where journalists feel constrained to pull their punches, or even drop a potential story, for fear of causing such upset that their future access to interviews and "insider" info may be reduced or eliminated?


Not a big problem. First, few journalists ever get real “insider” info. Second, if you really want to know something you can always find somebody to tell you if you look around enough. Third, and most importantly, journalists and sources such as analysts and marketing execs have a symbiotic relationship. Nobody's compelled to speak to a reporter. You do so for a purpose, and yanking access in a snit simply amounts to cutting off your nose to spite your face.

Years ago Financial Post high-tech reporter Mike Urlocker became a high-tech analyst at UBS. He gave a talk at an FP professional development conference where he said, “We (analysts) use you and you use us; it’s a two-way street.” Frankly, the real reason why analysts and staff economists talk to reporters is to promote their names so they carry higher value when changing jobs. [bolded emphasis added]


Thanks for your reply. If I understand your point correctly, you are saying that ultimately the quality of a journalist's work is due much more to their ability and effort- such as with the example in the bolded emphasis- than to any attempt at ingratiating themselves with potential subjects. As a corollary, then, would self-censorship by a journalist- at least in a democratic society- usually indicate a problematic aspect to their work (abstracting professional imperatives such as protecting the identity of sources, of course)?

To clarify an additional point: my reference to analysts was not meant wrt their role as journalistic subjects (although as you note, it is appropriate in that sense), but as an analogous quandary to the one I assumed might apply to journalists- if one speaks too honestly, the well from which one draws information might dry up, making work much more difficult. Thus the well-known tendency for stock analysts to issue far more "buy" than "sell" ratings (although investment banking business often meant that the pressure originated internally to the analyst's organization as well, of course). But again, as with your point about journalists, a talented analyst with a good work ethic would care far less about playing nice with subjects, since there are always ways to get the needed information no matter the attitude of the subjects.
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Postby beaverlodge » 16 Jan 2007 19:05

From Dan H.

Bruce, one point that I think smelly was right about is that people often scan articles and can get a somewhat different impression than is intended. For several years, I have been taken aback at the number of people who tell me that they enjoy MY articles in the Globe and Mail. I then explained to them that I was just a quoted source - not the author - and that I've never authored anything for any newspaper.

But it happens so much (still) that I just say 'thank you'. I'm astounded at this because the author's name - and often picture - appears with the article yet so many people think I write those pieces.




This proves two points

First it shows the complete lack of knowledge of most people on financial matters and their need for direction.

Second for those who like to put their names forward it shows that it works even when they are quoted and have not written the article.
"Not everything that counts can be counted, and not everything that can be counted, counts."

Albert Einstein displayed this prominently in his office. This ingenious turn of thought is attributed to Sir George Pickering.
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Postby beaverlodge » 16 Jan 2007 19:16

A meaningless statement except when applied to pay-for-play pundits like Jerry White and Garth Turner.


Isn't SHILL the right word?
A pundit is a learned expert or teacher.


To paraphrase Bonde; Follow the Money. However you want to cut that.
It is all about money.
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Postby brucecohen » 16 Jan 2007 20:09

YogiBear wrote:
Thanks for your reply. If I understand your point correctly, you are saying that ultimately the quality of a journalist's work is due much more to their ability and effort- such as with the example in the bolded emphasis- than to any attempt at ingratiating themselves with potential subjects.

Ability, time, interest and effort. There’s no point in trying to ingratiate yourself; analysts and financial industry execs are not stupid and have little time for fools. Indeed, they’ll talk more and tell more to reporters whose work shows concern for accuracy, knowledge and insight. Essentially, it’s the difference between a customer and a client. A customer is good for a one-time transaction; a client is someone with him you want an ongoing relationship. Each part of the media – at least the print media -- is in a two-way symbiotic relationship with the community it covers.

As a corollary, then, would self-censorship by a journalist- at least in a democratic society- usually indicate a problematic aspect to their work (abstracting professional imperatives such as protecting the identity of sources, of course)?

I don’t understand the question. Journalism professors might tell students that reporters are obligated to tell the public everything they know, but that’s not real life. Every journalist self-censors. Often that’s because they learn a lot of stuff that doesn’t matter. Who cares if Steven Harper is color-blind and his wife has to pick out his clothes? (Just a hypothetical, I don’t know if Stevie is color-blind or who picks out his clothes.) Sometimes it’s more material, but the reporters give the guy a break. Maybe Harper returned bone tired from a long flight after an unsuccessful round of meetings and snapped at his driver or some lowly aide. Sometimes it’s quite material, but you can’t prove it. Sometimes it’s very material and your editors agree to hold it for overriding reasons. Bush persuaded the New York Times sat on the NSA domestic surveillance story for a year. Actually, they didn’t totally sit on it. Rizen and his partner continued to flesh out the story but did not report it.

To clarify an additional point: my reference to analysts was not meant wrt their role as journalistic subjects (although as you note, it is appropriate in that sense), but as an analogous quandary to the one I assumed might apply to journalists- if one speaks too honestly, the well from which one draws information might dry up, making work much more difficult. Thus the well-known tendency for stock analysts to issue far more "buy" than "sell" ratings

Everyone knows that analysts give more buy than sell ratings. Even those at firms that don’t do underwriting. My experience has been that mutual and pension fund managers spend more time talking about their buys than their sells. Buying is positive and I think most humans unconsciously favour positive activities.

But again, as with your point about journalists, a talented analyst with a good work ethic would care far less about playing nice with subjects, since there are always ways to get the needed information no matter the attitude of the subjects.

Generally speaking, the only journalists I know who think about “playing nice” or “playing mean” are those in TV, which is more about acting than reporting. Print reporters – the ones who break stories most often – understand they’re in a symbiotic game in which every participant has needs to be met. Reporters will trade info with sources. Experienced reporters know the only reason why somebody is talking to them is because that person has a view or story he/she wants made public – with or without attribution. As I said before, no law compels a person to speak to a reporter. This substantially limits a print reporter’s ability to be a bully. It creates a whole different dynamic with TV reporters who gush at footage of an interview subject running away or slamming the door. But, as I said, TV news is more about acting than reporting.

beaverlodge wrote:
A meaningless statement except when applied to pay-for-play pundits like Jerry White and Garth Turner.

Isn't SHILL the right word?

Agreed.
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Postby YogiBear » 17 Jan 2007 00:29

Thanks again for a detailed reply- and for sharing your experience as a journalist.

BruceCohen wrote:
YogiBear wrote:As a corollary, then, would self-censorship by a journalist- at least in a democratic society- usually indicate a problematic aspect to their work (abstracting professional imperatives such as protecting the identity of sources, of course)?

I don’t understand the question.

I don't blame you- it was terribly worded ... :oops:

In any case, you indirectly answered the question. There are any number of professionally valid reasons why a journalist might not report on a story- that would otherwise be newsworthy- without that necessarily implying any negative conclusions about their work.

(The question related to my previous comment about pulling punches to avoid spoiling access- if there is evidence of actual pulled punches, what does that say about that journalist's work, if anything? This whole line of thought is now out-of-date- given your subsequent replies- and so is best dropped. Moving on ...)


BruceCohen wrote:
YogiBear wrote:But again, as with your point about journalists, a talented analyst with a good work ethic would care far less about playing nice with subjects, since there are always ways to get the needed information no matter the attitude of the subjects.

Generally speaking, the only journalists I know who think about “playing nice” or “playing mean” are those in TV, which is more about acting than reporting. Print reporters – the ones who break stories most often – understand they’re in a symbiotic game in which every participant has needs to be met. Reporters will trade info with sources. Experienced reporters know the only reason why somebody is talking to them is because that person has a view or story he/she wants made public – with or without attribution. As I said before, no law compels a person to speak to a reporter. This substantially limits a print reporter’s ability to be a bully. It creates a whole different dynamic with TV reporters who gush at footage of an interview subject running away or slamming the door. But, as I said, TV news is more about acting than reporting.

OK. But since this is relevant to financial reporting, let me play devil's advocate and ask a question that I'm sure you have answered dozens of times in your career- isn't the line between "symbiotic game" where information is traded, and getting too cozy with one's subjects and losing the ability/ willingness to ask uncomfortable questions, a terribly grey, fuzzy and shifting one? IOW, how does a conscientious reporter draw a line between being aware of the needs of their sources, and being ready to ignore those interests in favour of possibly making a source uncomfortable or angry by digging too far (even if that means having to look elsewhere for the information)? How often might that sort of choice have to be made- for example, in financial reporting?
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Postby brucecohen » 17 Jan 2007 09:58

YogiBear wrote:How often might that sort of choice have to be made- for example, in financial reporting?


For many reporters, several times a week. It's a judgement call. At the most basic level it comes down to the price of a headline. Remember that, unlike electronic media, print reporters tend to specialize and cover "beats." A guy might say something that's worth a juicy headline, but you have to consider the value of that story and weigh it against all the stuff he might tell you going forward but won't if he feels burned -- or gets fired.

Last night a real case occurred to me. When I was new in the personal finance beat at the Financial Post in 1987 or '88 I had lunch with a young marketing VP from a mutual fund company that distributed all of its funds through intermediary advisors on a front- or back-load basis. In the course of conversation he remarked that mutual fund fees are "way to high," should be brought down and should not be embedded. I was too new to understand the impact of what he had said and pursue the idea. What if the same lunch had occurred yesterday?

I'd use the comment and say it came from a marketing executive at a major fund company, but I wouldn't identify the guy. That's because he's only at the VP level and the article could cost him his job. It would certainly cost him a fair-sized chunk of his annual performance bonus. Had the guy been the president of the fund company, I would have named him since he's the top guy and the company's public face.

Now, you might be wondering about the value of hiding the VP's name. It'd be easy for the guy's boss to check his schedule and see if he had had lunch with me. The reality is that the guy's boss -- the company president -- wouldn't care since the company wasn't named. The people who would care the most are advisors. Had the VP's name been used, they would have complained loudly to the fundco and fundcos care a lot about keeping advisors happy, especially amid pressure on advisors to sell the house-brand funds. Using the president's name would have triggered advisor complaints too, but the top guy is the company's public face and has to be responsible for what he says.

Another thought occurred to me too. During my years at the Post I was highly critical of Working Ventures Canadian Fund and used every opportunity to draw attention to the flaws of the LSIF program and WVCF in particular. Articles that come to mind immediately:

-- Criticized how early marketing was worded in such a way that it implied the value of the RRSP deduction was a unique LSIF benefit. This led regulators to order some toning down of the hype.

-- Showed how, even with the tax credits, investors were still behind where they would have been investing in major Canadian equity funds

-- Pointed out to investors that they were paying sky-high fees to have something like 80% of their money sitting in T-bills, which WVCF was paying another company to roll over. Their investment chief, who was drunk at the time, subsequently accosted me in the lobby of a downtown hotel and started screaming that nobody understood how hard it is to invest in a fishbowl with everybody watching. (WVCF was then the only LSIF outside of Quebec's Solidarity Fund, a very different animal.)

-- Showed how the fund's compensation system generated huge bonuses for the managers no matter how poorly they did

-- Reported that WVCF had found it so difficult to make the venture capital deals it was supposed to be doing that it had established a team to start putting money into publicly-listed stocks in order to meet its quota. This was before Triax and Altamira launched an LSIF that invested entirely in public companies.

-- Went to WVCF's annual general meeting one year and then reported that the crown jewel of their portfolio was a non-union company that was a Canadian company only on paper -- the head office and all product development and manufacturing operations were in Tennessee.

-- Tricked the fund's chairman, president of a union federation, into stating there was no investment merit to the fund -- that it was only about the tax credit

-- Summarized a long conversation in which a prominent venture capitalist explained at the LSIF program's access to subsidized money and lack of regard for performance had distorted the market for real VC investors. Pointed out that if investors really believed the VC story, they could invest in a pure play: a respected VC manager that was listed on the TSE.

-- Provided context for WVCF's ongoing justification that LSIFs were needed because there was a dearth of venture capital in Canada. There was a dearth of venture capital in Canada because 5-10 years earlier VC managers had over-promised and under-performed in their dealings with life insurance companies and pension funds. The big money had fired them, leaving unsophisticated LSIF investors as their own customers.

And there were more -- about WVCF and other LSIFs. Despite all that, fund president Ron Begg always took my calls and always answered my questions in a straightforward manner. When I retired from the FP, he phoned to wish me well, said he felt I had gone a great job and added something to effect of: "You helped me a lot. Whenever we were considering a tricky issue, I just asked what Bruce Cohen would write about it."
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Postby WishingWealth » 17 Jan 2007 11:56

RE: WVCF:
So you were [one of the] the guys who opened my eyes.
After reading a few such articles way back then, I circled the date when I could get out of there without a penalty.

I remember very well the interviews where Begg was constanly torturing the numbers/facts to make it look like he was 'adding some value' to the deal.
I used to pore over the Annual Reports and all I could find (most of the time) were companies that would hardly move up or down; hardly VC kind of investment.

thanks,

WW (Yes I may be biased against the Begg type of people)
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Postby brucecohen » 17 Jan 2007 14:48

WishingWealth wrote:RE: WVCF:
So you were [one of the] the guys who opened my eyes.
After reading a few such articles way back then, I circled the date when I could get out of there without a penalty.

I remember very well the interviews where Begg was constanly torturing the numbers/facts to make it look like he was 'adding some value' to the deal.
I used to pore over the Annual Reports and all I could find (most of the time) were companies that would hardly move up or down; hardly VC kind of investment.

thanks,

WW (Yes I may be biased against the Begg type of people)


Aside from immediate gratification greed, I can't see why any of my regular readers would have put (more) money into an LSIF. One time I got screamed at over the phone by the president of a now-vanished LSIF after I printed an article pointing out that there were no regulations governing how LSIFs valued their private holdings, and that compensation for external managers was tied directly to those valuations. Now, I believe, the LSIFs have an association with voluntary standards for valuation. There might even be regulatory guidance; I haven't looked in a long time. Back when I was in the beat, unit holders had no protection against over-valuation.
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Postby YogiBear » 17 Jan 2007 15:26

Great story, Bruce! Thanks again for taking the time to respond to my questions in detail.
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Postby skepticus » 27 Sep 2008 06:30

I must say that my brain is reeling from trying to understand articles about the latest financial crisis. Part of the problem is the complexity of the story; another part is my limited intelligence; and yet another part is the journalists. Most don't/won't write stories for the common man, using everyday English. Business News Daily on the BBC is the only place I know where the journalists are speaking to ordinary people like me, not economists or corporate executives. Does anyone here have another source like this ? (I really do best with stories that deliberately do not use words from the financial lexicon, but still go into a story in reasonable depth).

[I might add that I suspect a lot of business/financial journalists use corporate & financial jargon, and not everyday words, because they don't want to appear dimwitted to the business world, or their peers].
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Postby brucecohen » 27 Sep 2008 09:56

skepticus wrote:[I might add that I suspect a lot of business/financial journalists use corporate & financial jargon, and not everyday words, because they don't want to appear dimwitted to the business world, or their peers].

Partly true. It's also because they're immersed in the biz world. As someone who's not a sports fan, I understand little of sports coverage aside from who won and who lost.

{quote]I must say that my brain is reeling from trying to understand articles about the latest financial crisis...Business News Daily on the BBC is the only place I know where the journalists are speaking to ordinary people like me, not economists or corporate executives. Does anyone here have another source like this ?[/quote]
I too enjoy BBC's Business News Daily. Try the flagship NPR programs Morning Edition and All Things Considered. Among others, they often bring on WSJ economics editor David Wessel who is superb at explaining stuff in everyday English. All the NPR interviews and reports are archived at NPR.org and many have transcripts available.
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Postby skepticus » 03 Oct 2008 01:54

brucecohen wrote:Try the flagship NPR programs Morning Edition and All Things Considered. Among others, they often bring on WSJ economics editor David Wessel who is superb at explaining stuff in everyday English. .


Excellent suggestion. I've been tuning in, and NPR does a fine job explaining the financial mess and its implications. Thank you.
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Postby Small Investor Activist » 09 Oct 2008 13:16

The Globe and Shill
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