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In his own words: Micheal Lee-Chin
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Michael Lee-Chin may be best known for his recent $30-million donation to the ROM and the subsequent crystal that bears his name, but who is he, where did he come from, and how did he become one of Canada’s wealthiest?
Published on November 12 2007
Born in Port Antonio, Jamaica in 1951 to Chinese-Jamaican parents, Chin moved to Canada in 1970 when he received a scholarship to study civil engineering at McMaster University. He then went on to work at Investor’s Group before, in 1987, buying Advantage Investment Council, which had around $800,000 in holdings. He renamed the company AIC, now one of the largest mutual funds in Canada. He now lists as the 15th-richest Canadian on the 2007 Forbes List of Billionaires, with a reported net worth of $1.6-billion.
In his keynote address to 800 guests at the Weston Harbour Castle on November 9, 2007, Lee-Chin explained how he got to where he is today.
Good evening ladies and gentlemen, good evening fellow entrepreneurs. This audience here reminds me of an evening in Toronto this past summer, where the Rolls-Royce and Mercedes Benz rolled up to the valet service in the parking lot. When this party got to its highest crescendo, the mischievous host said to his lieutenant, “Stop the music. Tonight, we’re going to have a contest and the contest will be between all the eligible bachelors. So bachelors, come on over here to the indoor swimming pool. We’re going to swim across the pool, and the first person to alight unscathed can either get my beautiful daughter’s hand in marriage or $1-million. So gentlemen, line up. On your marks! Set!” Just as he was saying “Go,” he said to his lieutenant, “Open the gates,” and in swam the killer sharks. He said, “Go!” No one moved. Go! No one moved, except this one fellow flailing away! Sharks jumping at his heels! Miraculously, he alighted from the pool unscathed.
I’m here tonight to say this to you: the killer shark that is chomping at every entrepreneur’s heels is complacency. My greatest fear as an entrepreneur is summarized in the following mantra: success begets complacency, begets failure. And so my fear is that I have to make sure, irrespective of how much success I may have at the time, I don’t become complacent, because complacency is anathema to success.
“Excellence is the result of caring more than others think is wise, risking more than others think is safe, dreaming more than others think is practical, and expecting more than others think is possible.” Isn’t this what we try to do every day as entrepreneurs? Care more, risk more, dream more, and expect more.
In 1962, my first day in high school—in Jamaica we went to high school at 10, 11. So I’m standing there, in my short, khaki pants, at attention and the Lieutenant-Governor of the province, was addressing us.
He said in a booming voice, “Boys and girls, opportunity knocks but once!”
A friend of mine eventually said “Look, he has got it all wrong. Every day there are opportunities. The key is, number one, to recognize them, and number two, more importantly, is to execute and do something about them.”
He also said, the Chinese definition of the word ‘crisis’ is an equation: Crisis equals danger plus opportunity. There cannot be an opportunity unless there’s a crisis. And there can’t be crisis without the opportunity. So it’s a matter of your perspective and attitude.
So entrepreneurs, I say to you: whenever there’s a crisis, ask yourself the question. You’ll feel awful, we all feel awful, you’ll tend to get paralyzed, to get negative. Remember the Chinese definition of the word. If there’s danger and you get paralyzed, you get depressed, it’s because you’re focusing on the danger component. Remember, there’s a second component, the opportunity.
What is necessary, I think, to be a successful entrepreneur? Aspiration. At age 10 I go out one day by myself, overlooking the harbour, and I’m thinking “How does the son of two clerks in a supermarket get to own the supermarket?” That is what I was thinking at 10. In other words, aspiration. We all have to have aspirations.
Aspiration transforms a set of ordinary people into extraordinary people. It provides mental and physical energy for people to convert plausible impossibilities into convincing possibilities. So entrepreneurs, make no little plans. They have no magic to stir men’s blood.
Aspiration is number one. The second quality that a successful entrepreneur has to have is an enduring value system. When Warren Buffet was asked, “Warren, the most successful investor in the world, how come you’re so successful?” His response was, “To be successful, over the long run—and success won’t come overnight—to be successful over the long run doesn’t require a stratospheric I.Q—” Whoo! Thank God for that! “—To be successful in the long run doesn’t require a stratospheric I.Q., unusual business insights or any particular inside information. What’s needed, number one, is a sound intellectual framework for making decisions, and secondly, the ability to prevent your emotion from corroding your framework.” So we need, ladies and gentlemen, an enduring value system, one which is based on openness, honesty, integrity, meritocracy, fairness, transparency, and excellence. It will help us raise our confidence and give us courage to handle tough situations with confidence, and sacrifices will become easy and natural. That’s an enduring value system.
Successful entrepreneurs will need to know that persevering is a precondition to success. Calvin Coolidge once said, “ Persistence and determination are omnipotent.”
Performance—another precondition. *Performance leads to revelation. Revelation brings respect. Respect enhances power. *Humility and grace in one’s moment of power enhances dignity.
Another condition is leadership by example. In other words, role-modelship. Role models are a powerful catalyst in raising the confidence and enthusiasm and energy level of an entire generation.
Ladies and gentlemen, there’s a three-step formula for success that will never fail you. Never fails, irrespective of what your endeavour is, whether your endeavour is to be the best editor, president, the best student, the best investor, the best parent, the best entrepreneur—this three-step formula will always work.
Step number one: identify a role model. Who before me the best in this job I’m trying to be successful in? Who before me has done the best job in the world? Identify a role model.
Secondly, kneel at your role model’s feet, and say, “Role model, please, I beg you, give me the recipe!” Study, watch videos, watch documentaries, read, get the recipe of success.
Thirdly, ladies and gentlemen, don’t put your fingerprint on it, don’t tweak it, don’t change it. Execute it faithfully until you’re better than your role model. Then you have license to change it, but until then, execute it faithfully.
The last precondition for success as an entrepreneur is that we all have to be risk-takers. As we all know, ships are safest in harbours, but they were not meant to be there. They have to sail long and hard, and face many stormy seas to reach the comfort of a desirable destination. Next, progress requires that you take calculated risks and bold moves.
How does a Jamaican immigrant whose parents were clerks in a supermarket come to Canada as an engineering student and within 1987 to 2007 achieve what you saw on the screen? When I look at that video, every time I think, ‘My God, how is that possible?’ Let’s talk about how it happened, from the get-go.
I started in 1977 as a personal financial advisor. I would go knocking on doors. That’s how I started. I thought to myself, “If I’m going to be a successful financial advisor, I have to lead by example. I therefore need credibility so that when I advise a client, they know that I’m not advising them for the commission to put my children through university or to buy a nice car. I’m doing this because I’m passionate about it.” So my job was to be the best investor in the world. So I started reading.
Remember the three-step formula? Identify a role model, get the recipe—so I started reading.
In 1979 I came across this book, it’s entitled The Money Masters, which chronicles the methodologies of the various money people in the United States. I came across a chapter on Warren Buffett in 1979 and I thought, “Eureka!” This, his methodology, I could execute it faithfully because I could train myself to see, taste, smell, hear, feel, recognize a great business.
Every single billionaire created his or her wealth according to these five principles.
I scanned the universe of what money managers were doing, and I superimposed their behaviour against what I call the gold standard, Buffet’s methodology. I noticed that money managers of mutual funds, by and large, displayed in their behaviour a sympathy for a concept called diversification.
Anyone own mutual funds here? When you go home tonight, look at your mutual fund, and count the number of stocks in your mutual fund, and you will see there almost 200 different stocks. That’s what I saw. That doesn’t make any sense. There’s a fundamental disconnect between what mutual fund managers are doing and what rich people are doing! Nobody ever became rich by owning 200 different companies, and a rich person understands what he or she owns. If you own 200 or 300 different businesses, it’s impossible to understand them all.
Understand. I’m going to dedicate my life to one methodology of investing that represents those this methodology, and that’s how they’re going to be differentiated. I’m going to persevere and convince everybody of the right way of investing, and that is what I did.
I started with a value fund. I bought a value fund in 1987 and I put $800,000 in it. I took a look in it, and it had 100 different stocks. I made a list of the 15 businesses that I understand. Over time, for the first five year, ladies and gentlemen, it was tough. What I recognized, early, was that everything has a gestation period: five years. You just have to get beyond five years. I don’t know where that number comes from, but you have to get by five years, and if you can get by five years, it’s like somebody says, ‘OK, you can come in.’ Right?
So I wanted to get by five years.
By the end of five years, we had the best five-year track record in Canada. Period. The assets started to pour in. In 1997 we had a record for sales in mutual funds that in Canada has not yet been broken: $4.3 billion in one year.
People began to realize that what we were doing was rational and they could see it in the performance.
But everything in life moves in cycles. In 1999 everybody wanted high-tech. Remember? Everybody wanted Internet, everybody wanted telecommunication, and as a consequence of that, nobody wanted the hardcore businesses like Loblaws, like TD Bank, like McKenzie Financial. The hard, cash-flow generators.
Everybody wanted Nortel, BCE that were creating at 200-times earnings.
You do not have a business, where the earnings remain constant, if it took you 200 years to get back your original capital, would you? No! That was what investors were doing when they paid 200-times price-earnings ratio in 1999 for BCE and Nortel. So we refused to get into those securities because we simply didn’t understand how to value them, and if you don’t understand what the value of a business is, stay away.
September 2, 1999 was a pivotal day in AIC’s history, because a Globe and Mail writer, his name is Andrew Willis—he still writes for the Globe and Mail—wrote “AIC Mutual Funds has no Bay friends.” I walked into the office that day greeted by this article:
At this time, said the article, nobody wants those old cash-flow generators. As a consequence, it claimed, my unit holders were redeeming. So, because he’s suffering from this redemption, this is how the article goes, he’s going to have to sell, and because he has a big share in those companies, when he sells, his behaviour is going to push those stocks down and drive the unit price of those stocks down. Which implies: “you better sell now before he sells.”
When I read that newspaper I thought, ‘My God, this is the end,’ and for the next hour I cried in my tea until it came to me. ‘Mike, come on. You didn’t really believe in the Chinese definition of the word “crisis:” danger and opportunity.’ So I changed gears. I though, ‘OK, where are the opportunities?’ Blank.
“Where are the opportunities?” Blank.
All of a sudden, it came to me. “Mike, you own the best securities in Canada, and because no one wants to buy before you sell, the price will be driven down…
“Great time to buy!”
That’s the opportunity. But where am I going to get the money to buy? I can’t use mutual funds to buy because I have to keep the cash from redemption. Two places: one, borrow from the bank. Two, your own private coffers. So I called up the bank.
I said, “Please, lend me $50-million.”
They said, “Sure, we’ll give you $50-million.”
I said, “Why don’t you put in 50 and I’ll put in 50 to make 100?”
That was September 2, 1999. The Globe and Mail called, they wanted my response. They said, “Mike, what’s your response?” I told them I’m going to buy.
I said, “Shirley, today I’m buying and I bought one stock. I’m going to load up on McKenzie because it’s cheap. It’s trading at 4.5 times earnings. So please put that in your newspaper.”
Ladies and gentlemen, your behaviour today is your history tomorrow. In those next six weeks I spent $100-million to buy one stock. It was a stock that I knew very well and I bought it because it was cheap, and it was cheap because there was a crisis and it was being given away.
Eight months later—so we now own 25 per cent of the company—eight months later, the company was in play to be taken over. We were the largest shareholder. CI dropped out when the bidding started—18, 19, 20, 21, 22—CI was a bidder, it dropped out—23, 24, 25—two companies were left: Investor’s Group and AIC.
Now I knew one thing: I started off at Investor’s Group as a financial advisor, and there was no way Mr. Desmarais, the owner of Investment Group, was going to let his lowly salesman to beat him. No way! So I let it continue: 25, 26, 27, 28, 29, at 30, I said ‘Have it.’
So ladies and gentlemen, in summary, our unit holders from that day, September 2, when there was a crisis, our unit holders made $400-million, we made $100-million in profits on $50-million borrowed and $50-million of our own, over a year.
We closed in 2001. In 2004 I’m having a meeting with the journalist who had written the article years earlier. In Jamaica there’s this saying: I’ve been sharpening my machete. It was like I had been sharpening my machete for three years. So for three years I’m sharpening my machete to meet this guy.
I said, ‘Andrew, come to Burlington, I have a story for you.’
He said, ‘What’s the story?’
I said, ‘Come, please, quick.’
He came to my office. Right at that moment—if you were choreographing the moment for three years, it would have been perfect—right at that moment he looks across my right shoulder and said “Mike, what a beautiful Annex!”
I said, “Yes!” We had just put on a new annex to our campus. I said, “Yes! We’re going to call it the Andrew Willis Annex.”
“What! What do you mean?”
I said to him, ‘Andrew, you may not remember, but on Sept. 2, 1999, you wrote an article entitled “AIC disadvantaged: no friends on Bay Street.” You probably wrote that article on Sept. 1, you gave it to your editor, and it was printed on Sept. 2, and as far as you were concerned, [wipes his hands] ‘that’s the end of that, next article.’ That was chapter one. I had to deal with chapters two, three, four, five, six, seven.” And I told him the story I just told you.
He said, “What? You made $400-million for unit holders, $100-million for yourself, half a billion dollars on a 75-cent newspaper?”
I said, “No no no, Andrew, that was then! I made half a billion dollars then. $400-million for unit holders, $100-million for us, of which I took $20-million and built that Annex. That’s the Willis Annex. And I took $80-million and bought a bank in Jamaica. That $80-million is now worth $400-million. So really, we’re coming close to a billion from that 75-cent newspaper. Andrew, please, go out and write another article.”
Your behaviour today is your history tomorrow. And the good news is, who controls your behaviour? Who?
You control your behaviour, so what does that mean? You are the author of your history. Isn’t that true?
Just before I’m about to sign that cheque to buy the bank, I’m thought “My gosh, how is it possible for the son of two clerks in a supermarket to buy the National Commercial Bank of Jamaica? This would be tantamount to you buying the Royal Bank of Canada. How is that possible?” This is what I’m thinking.
I thought, “Mike, it is possible for many reasons that you have nothing to do with!”
Firstly, I was born in a country, Jamaica, that nurtured me into a confident person. I’m the product of the country in which I was born. I didn’t choose the country in which I was born. I was blessed.
Secondly, I was born to parents who had high expectations of me. Who led by example and had integrity, high standards. I didn’t choose my parents. I was blessed. I could have got somebody else’s parents, who had no morals, no standards.
And then thirdly, I didn’t choose the experiences I had growing up, in my formative years. I didn’t choose the experience I had when I came to Canada, that nurtured me into being a successful, confident person.
And lastly, I did not choose the era in which I had been born. Had I been born 200 years ago, I would not have had the opportunity to own. I’d have been owned. I’d have been a slave.
Make sure these enormous blessings that have been bestowed on you, you don’t keep them and just store them for yourself. May sure you share them with people born in countries where they are truncated, who have parents who don’t lead by example, who are misfits because they are born in the wrong era. Make sure you use the podium to help all of them.
Ladies and gentlemen, thank you very much. .
Article Tools
Michael Lee-Chin may be best known for his recent $30-million donation to the ROM and the subsequent crystal that bears his name, but who is he, where did he come from, and how did he become one of Canada’s wealthiest?
Published on November 12 2007
Born in Port Antonio, Jamaica in 1951 to Chinese-Jamaican parents, Chin moved to Canada in 1970 when he received a scholarship to study civil engineering at McMaster University. He then went on to work at Investor’s Group before, in 1987, buying Advantage Investment Council, which had around $800,000 in holdings. He renamed the company AIC, now one of the largest mutual funds in Canada. He now lists as the 15th-richest Canadian on the 2007 Forbes List of Billionaires, with a reported net worth of $1.6-billion.
In his keynote address to 800 guests at the Weston Harbour Castle on November 9, 2007, Lee-Chin explained how he got to where he is today.
Good evening ladies and gentlemen, good evening fellow entrepreneurs. This audience here reminds me of an evening in Toronto this past summer, where the Rolls-Royce and Mercedes Benz rolled up to the valet service in the parking lot. When this party got to its highest crescendo, the mischievous host said to his lieutenant, “Stop the music. Tonight, we’re going to have a contest and the contest will be between all the eligible bachelors. So bachelors, come on over here to the indoor swimming pool. We’re going to swim across the pool, and the first person to alight unscathed can either get my beautiful daughter’s hand in marriage or $1-million. So gentlemen, line up. On your marks! Set!” Just as he was saying “Go,” he said to his lieutenant, “Open the gates,” and in swam the killer sharks. He said, “Go!” No one moved. Go! No one moved, except this one fellow flailing away! Sharks jumping at his heels! Miraculously, he alighted from the pool unscathed.
I’m here tonight to say this to you: the killer shark that is chomping at every entrepreneur’s heels is complacency. My greatest fear as an entrepreneur is summarized in the following mantra: success begets complacency, begets failure. And so my fear is that I have to make sure, irrespective of how much success I may have at the time, I don’t become complacent, because complacency is anathema to success.
“Excellence is the result of caring more than others think is wise, risking more than others think is safe, dreaming more than others think is practical, and expecting more than others think is possible.” Isn’t this what we try to do every day as entrepreneurs? Care more, risk more, dream more, and expect more.
In 1962, my first day in high school—in Jamaica we went to high school at 10, 11. So I’m standing there, in my short, khaki pants, at attention and the Lieutenant-Governor of the province, was addressing us.
He said in a booming voice, “Boys and girls, opportunity knocks but once!”
A friend of mine eventually said “Look, he has got it all wrong. Every day there are opportunities. The key is, number one, to recognize them, and number two, more importantly, is to execute and do something about them.”
He also said, the Chinese definition of the word ‘crisis’ is an equation: Crisis equals danger plus opportunity. There cannot be an opportunity unless there’s a crisis. And there can’t be crisis without the opportunity. So it’s a matter of your perspective and attitude.
So entrepreneurs, I say to you: whenever there’s a crisis, ask yourself the question. You’ll feel awful, we all feel awful, you’ll tend to get paralyzed, to get negative. Remember the Chinese definition of the word. If there’s danger and you get paralyzed, you get depressed, it’s because you’re focusing on the danger component. Remember, there’s a second component, the opportunity.
What is necessary, I think, to be a successful entrepreneur? Aspiration. At age 10 I go out one day by myself, overlooking the harbour, and I’m thinking “How does the son of two clerks in a supermarket get to own the supermarket?” That is what I was thinking at 10. In other words, aspiration. We all have to have aspirations.
Aspiration transforms a set of ordinary people into extraordinary people. It provides mental and physical energy for people to convert plausible impossibilities into convincing possibilities. So entrepreneurs, make no little plans. They have no magic to stir men’s blood.
Aspiration is number one. The second quality that a successful entrepreneur has to have is an enduring value system. When Warren Buffet was asked, “Warren, the most successful investor in the world, how come you’re so successful?” His response was, “To be successful, over the long run—and success won’t come overnight—to be successful over the long run doesn’t require a stratospheric I.Q—” Whoo! Thank God for that! “—To be successful in the long run doesn’t require a stratospheric I.Q., unusual business insights or any particular inside information. What’s needed, number one, is a sound intellectual framework for making decisions, and secondly, the ability to prevent your emotion from corroding your framework.” So we need, ladies and gentlemen, an enduring value system, one which is based on openness, honesty, integrity, meritocracy, fairness, transparency, and excellence. It will help us raise our confidence and give us courage to handle tough situations with confidence, and sacrifices will become easy and natural. That’s an enduring value system.
Successful entrepreneurs will need to know that persevering is a precondition to success. Calvin Coolidge once said, “ Persistence and determination are omnipotent.”
Performance—another precondition. *Performance leads to revelation. Revelation brings respect. Respect enhances power. *Humility and grace in one’s moment of power enhances dignity.
Another condition is leadership by example. In other words, role-modelship. Role models are a powerful catalyst in raising the confidence and enthusiasm and energy level of an entire generation.
Ladies and gentlemen, there’s a three-step formula for success that will never fail you. Never fails, irrespective of what your endeavour is, whether your endeavour is to be the best editor, president, the best student, the best investor, the best parent, the best entrepreneur—this three-step formula will always work.
Step number one: identify a role model. Who before me the best in this job I’m trying to be successful in? Who before me has done the best job in the world? Identify a role model.
Secondly, kneel at your role model’s feet, and say, “Role model, please, I beg you, give me the recipe!” Study, watch videos, watch documentaries, read, get the recipe of success.
Thirdly, ladies and gentlemen, don’t put your fingerprint on it, don’t tweak it, don’t change it. Execute it faithfully until you’re better than your role model. Then you have license to change it, but until then, execute it faithfully.
The last precondition for success as an entrepreneur is that we all have to be risk-takers. As we all know, ships are safest in harbours, but they were not meant to be there. They have to sail long and hard, and face many stormy seas to reach the comfort of a desirable destination. Next, progress requires that you take calculated risks and bold moves.
How does a Jamaican immigrant whose parents were clerks in a supermarket come to Canada as an engineering student and within 1987 to 2007 achieve what you saw on the screen? When I look at that video, every time I think, ‘My God, how is that possible?’ Let’s talk about how it happened, from the get-go.
I started in 1977 as a personal financial advisor. I would go knocking on doors. That’s how I started. I thought to myself, “If I’m going to be a successful financial advisor, I have to lead by example. I therefore need credibility so that when I advise a client, they know that I’m not advising them for the commission to put my children through university or to buy a nice car. I’m doing this because I’m passionate about it.” So my job was to be the best investor in the world. So I started reading.
Remember the three-step formula? Identify a role model, get the recipe—so I started reading.
In 1979 I came across this book, it’s entitled The Money Masters, which chronicles the methodologies of the various money people in the United States. I came across a chapter on Warren Buffett in 1979 and I thought, “Eureka!” This, his methodology, I could execute it faithfully because I could train myself to see, taste, smell, hear, feel, recognize a great business.
Every single billionaire created his or her wealth according to these five principles.
I scanned the universe of what money managers were doing, and I superimposed their behaviour against what I call the gold standard, Buffet’s methodology. I noticed that money managers of mutual funds, by and large, displayed in their behaviour a sympathy for a concept called diversification.
Anyone own mutual funds here? When you go home tonight, look at your mutual fund, and count the number of stocks in your mutual fund, and you will see there almost 200 different stocks. That’s what I saw. That doesn’t make any sense. There’s a fundamental disconnect between what mutual fund managers are doing and what rich people are doing! Nobody ever became rich by owning 200 different companies, and a rich person understands what he or she owns. If you own 200 or 300 different businesses, it’s impossible to understand them all.
Understand. I’m going to dedicate my life to one methodology of investing that represents those this methodology, and that’s how they’re going to be differentiated. I’m going to persevere and convince everybody of the right way of investing, and that is what I did.
I started with a value fund. I bought a value fund in 1987 and I put $800,000 in it. I took a look in it, and it had 100 different stocks. I made a list of the 15 businesses that I understand. Over time, for the first five year, ladies and gentlemen, it was tough. What I recognized, early, was that everything has a gestation period: five years. You just have to get beyond five years. I don’t know where that number comes from, but you have to get by five years, and if you can get by five years, it’s like somebody says, ‘OK, you can come in.’ Right?
So I wanted to get by five years.
By the end of five years, we had the best five-year track record in Canada. Period. The assets started to pour in. In 1997 we had a record for sales in mutual funds that in Canada has not yet been broken: $4.3 billion in one year.
People began to realize that what we were doing was rational and they could see it in the performance.
But everything in life moves in cycles. In 1999 everybody wanted high-tech. Remember? Everybody wanted Internet, everybody wanted telecommunication, and as a consequence of that, nobody wanted the hardcore businesses like Loblaws, like TD Bank, like McKenzie Financial. The hard, cash-flow generators.
Everybody wanted Nortel, BCE that were creating at 200-times earnings.
You do not have a business, where the earnings remain constant, if it took you 200 years to get back your original capital, would you? No! That was what investors were doing when they paid 200-times price-earnings ratio in 1999 for BCE and Nortel. So we refused to get into those securities because we simply didn’t understand how to value them, and if you don’t understand what the value of a business is, stay away.
September 2, 1999 was a pivotal day in AIC’s history, because a Globe and Mail writer, his name is Andrew Willis—he still writes for the Globe and Mail—wrote “AIC Mutual Funds has no Bay friends.” I walked into the office that day greeted by this article:
At this time, said the article, nobody wants those old cash-flow generators. As a consequence, it claimed, my unit holders were redeeming. So, because he’s suffering from this redemption, this is how the article goes, he’s going to have to sell, and because he has a big share in those companies, when he sells, his behaviour is going to push those stocks down and drive the unit price of those stocks down. Which implies: “you better sell now before he sells.”
When I read that newspaper I thought, ‘My God, this is the end,’ and for the next hour I cried in my tea until it came to me. ‘Mike, come on. You didn’t really believe in the Chinese definition of the word “crisis:” danger and opportunity.’ So I changed gears. I though, ‘OK, where are the opportunities?’ Blank.
“Where are the opportunities?” Blank.
All of a sudden, it came to me. “Mike, you own the best securities in Canada, and because no one wants to buy before you sell, the price will be driven down…
“Great time to buy!”
That’s the opportunity. But where am I going to get the money to buy? I can’t use mutual funds to buy because I have to keep the cash from redemption. Two places: one, borrow from the bank. Two, your own private coffers. So I called up the bank.
I said, “Please, lend me $50-million.”
They said, “Sure, we’ll give you $50-million.”
I said, “Why don’t you put in 50 and I’ll put in 50 to make 100?”
That was September 2, 1999. The Globe and Mail called, they wanted my response. They said, “Mike, what’s your response?” I told them I’m going to buy.
I said, “Shirley, today I’m buying and I bought one stock. I’m going to load up on McKenzie because it’s cheap. It’s trading at 4.5 times earnings. So please put that in your newspaper.”
Ladies and gentlemen, your behaviour today is your history tomorrow. In those next six weeks I spent $100-million to buy one stock. It was a stock that I knew very well and I bought it because it was cheap, and it was cheap because there was a crisis and it was being given away.
Eight months later—so we now own 25 per cent of the company—eight months later, the company was in play to be taken over. We were the largest shareholder. CI dropped out when the bidding started—18, 19, 20, 21, 22—CI was a bidder, it dropped out—23, 24, 25—two companies were left: Investor’s Group and AIC.
Now I knew one thing: I started off at Investor’s Group as a financial advisor, and there was no way Mr. Desmarais, the owner of Investment Group, was going to let his lowly salesman to beat him. No way! So I let it continue: 25, 26, 27, 28, 29, at 30, I said ‘Have it.’
So ladies and gentlemen, in summary, our unit holders from that day, September 2, when there was a crisis, our unit holders made $400-million, we made $100-million in profits on $50-million borrowed and $50-million of our own, over a year.
We closed in 2001. In 2004 I’m having a meeting with the journalist who had written the article years earlier. In Jamaica there’s this saying: I’ve been sharpening my machete. It was like I had been sharpening my machete for three years. So for three years I’m sharpening my machete to meet this guy.
I said, ‘Andrew, come to Burlington, I have a story for you.’
He said, ‘What’s the story?’
I said, ‘Come, please, quick.’
He came to my office. Right at that moment—if you were choreographing the moment for three years, it would have been perfect—right at that moment he looks across my right shoulder and said “Mike, what a beautiful Annex!”
I said, “Yes!” We had just put on a new annex to our campus. I said, “Yes! We’re going to call it the Andrew Willis Annex.”
“What! What do you mean?”
I said to him, ‘Andrew, you may not remember, but on Sept. 2, 1999, you wrote an article entitled “AIC disadvantaged: no friends on Bay Street.” You probably wrote that article on Sept. 1, you gave it to your editor, and it was printed on Sept. 2, and as far as you were concerned, [wipes his hands] ‘that’s the end of that, next article.’ That was chapter one. I had to deal with chapters two, three, four, five, six, seven.” And I told him the story I just told you.
He said, “What? You made $400-million for unit holders, $100-million for yourself, half a billion dollars on a 75-cent newspaper?”
I said, “No no no, Andrew, that was then! I made half a billion dollars then. $400-million for unit holders, $100-million for us, of which I took $20-million and built that Annex. That’s the Willis Annex. And I took $80-million and bought a bank in Jamaica. That $80-million is now worth $400-million. So really, we’re coming close to a billion from that 75-cent newspaper. Andrew, please, go out and write another article.”
Your behaviour today is your history tomorrow. And the good news is, who controls your behaviour? Who?
You control your behaviour, so what does that mean? You are the author of your history. Isn’t that true?
Just before I’m about to sign that cheque to buy the bank, I’m thought “My gosh, how is it possible for the son of two clerks in a supermarket to buy the National Commercial Bank of Jamaica? This would be tantamount to you buying the Royal Bank of Canada. How is that possible?” This is what I’m thinking.
I thought, “Mike, it is possible for many reasons that you have nothing to do with!”
Firstly, I was born in a country, Jamaica, that nurtured me into a confident person. I’m the product of the country in which I was born. I didn’t choose the country in which I was born. I was blessed.
Secondly, I was born to parents who had high expectations of me. Who led by example and had integrity, high standards. I didn’t choose my parents. I was blessed. I could have got somebody else’s parents, who had no morals, no standards.
And then thirdly, I didn’t choose the experiences I had growing up, in my formative years. I didn’t choose the experience I had when I came to Canada, that nurtured me into being a successful, confident person.
And lastly, I did not choose the era in which I had been born. Had I been born 200 years ago, I would not have had the opportunity to own. I’d have been owned. I’d have been a slave.
Make sure these enormous blessings that have been bestowed on you, you don’t keep them and just store them for yourself. May sure you share them with people born in countries where they are truncated, who have parents who don’t lead by example, who are misfits because they are born in the wrong era. Make sure you use the podium to help all of them.
Ladies and gentlemen, thank you very much. .
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