2 - JANUARY 2013 - MISSISSAUGA BUSINESS TIMES
NEWS
He makes dollars and sense
Jeff Hull, senior financial advisor at Manulife Securities, shows us his impressive offices at 3 Robert Speck Parkway. It's that time of year again, as Hull takes
readers on a whirlwind tour of the money markets around the world, and explains where he would put his investments.
BY RICK DRENNAN
T
he Bible says the love of money is the
root of all evil. The well-heeled Mitt
Romney says acquiring it is the route
to eternal happiness. Go forth and multiply,
sayeth Mitt, and damn the 47 per cent living
on food stamps.
The truth probably lies somewhere in
between. There’s no doubt money-love is
deeply rooted in our over indulged society.
It’s what drives sales of the Mercedes-Benz
C112 to the spoiled and over-remunerated,
or pushes your basic DAO (down and outer)
to scramble through garbage bins for empty
bottles and cans.
Money is getting a lot of bad press these
days. The ones with too much of it, the top
1 per cent (Mitt, et al.), were vilified in the
recent U.S. presidential election, while the
rest of us, have to beg, borrow (oh, how we
borrow!) and steal (oh, how we steal!) in
search of more.
Today’s mad pursuit of filthy lucre means
running up the VISA, taking out bridge
loans, remortgaging the house, running
Ponzi schemes, burgling from the Salvation
Army, and in the case of the DAOs, cashing
in their empties.
Last year, I reported that the U.S. national
debt was $14,271,000,000,000. If all those
zeroes make you say, ‘yikes,’ it’s worse this
year. But get this: the debt levels per person
in Canada now exceeds the average in the
U.S. Double yikes.
On the macro level, the United States
teetered on the f inancial cliff in early
January, while in Europe, most countries
had already fallen to the rocks below. The
economies of Greece, Italy, Spain, Portugal
– everywhere except Germany – have been
shredded like last year’s Toronto Maple
Leafs’ defence corps.
The solution seems simple: print more
money. The U.S. and China have turned it
into an art form.
Money can’t buy you love, sang the
Beatles. Or respect, warbled Dorothy Parker,
summed up in this acidy zinger: "If you
want to know what God thinks of money,
just look at the people he gave it to."
Should I pick on Mitt again?
It’s Niall Ferguson’s contention that
money (aka. moolah, or the dough-re-mi)
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can be used to purchase almost anything,
including political power.
His book, and subsequent PBS special,
The Ascent of Money, says even if money is
in short supply, it’s still the staple of our
world, and everyone wants more.
There’s an old native American saying
that “one day the money will die.” Let’s hope
not. I have a car payment due next week.
But how mone y i s m a n a g e d (or
mismanaged) has been the subject of great
debate over the years.
Which brings me to Mississauga’s Jeff
Hull, the senior f inancia l advisor at
Manulife Securities (3 Robert Speck
Parkway). He’s a money manager par
excellence, with a track record that’s been
duly recorded in these pages over the years.
His ROI is better than the top RBI totals of
the best player on the Toronto Blue Jays’
roster. But more than anything, he’s always
a voice of reason in a world that keeps
edging towards the financial cliff.
At the beginning of each year, I join Hull
in the comfy confines of his well-appointed
office to discuss the state of our money, and
what kind of a wild ride we’ll be taken on in
2013. So here it is again folks, Money 101.
Join me as I grill Professor Hull on the new
world order.
Predicting the money markets, and global
and local trends isn’t a game for the faint of
heart, says Hull. Still, his predictions over
the years have been spot on.
For example, in 2010, he said: Companies
that provide the essentials of life (soap, toilet
paper, toothpaste, etc.) will continue to do
well. A year later: You can’t solve the debt
crisis by creating more debt. The fact the
U.S. government is printing money for an
economy already hemorrhaging trillions in
debt is like helping an alcoholic by giving
him more alcohol. And last year: The
problem with today’s economy is that there
is no middle ground. Countries, like
companies, are either thriving or striving to
survive. For every Greece, there’s a Germany
– plump with money and future prospects.
For every Apple, there’s a Dell. For every
social media network, there's old-time print
journalism – doomed to the scrapheap.
I told Jeff I didn’t like that last one, but
alas, he’s probably right. If this paper gets
any smaller, I’m one missed pay cheque
closer to joining those DAOs.
Hull calls debt “financial quicksand,” and
passes on this note to investors: buy into
consumables – which he renames ‘reliables.’
Hey, we buy a car every six years or so, he
says, but we fill the car with gas once or
twice a week. When investors focus on old
reliables that are ingrained in society’s daily
rituals, there’s a much better chance for a
payof f. A lso pour your loonies into
companies that are state of the art, not state
of the ark. Remember: Kodak bet against
digital photography.
Because Hull is scary smart, you’ll never
catch him flatfooted. When the financial
system collapsed in 2008, he had already
saved his clients from the nasty effects by
pouring their investments into cash.
You see Hull is a contrarian – a disciple of
Warren Buffett, the Oracle of Omaha. ‘Ol
Warren might be as dull as oatmeal, but as a
money ma nager he turned Berk shire
Hathaway into his personal plaything, and
made mega-billions.
Hull has been a Buffett fan since he was
‘Ol Warren [Buffett] might be
as dull as oatmeal, but as a
money manager he turned
Berkshire Hathaway into his
personal plaything, and made
mega-billions.
in short pants, and over the years he also
became a friend, and a proponent of Buffett’s
investment philosophy: look for value.
Money needs to be respected and invested
properly, says Hull, who isn’t afraid of
throwing a few Parker-like zingers at those
who have crapped on capitalism over the
years – the Enrons, the Bernie Madoffs, and
even the brainiacs at Research in Motion
(RIM), once the technology darlings in this
country.
But Hull is really a sheep in wolf ’s
clothing: a good-natured Christian man
who spends most of his off-hours dedicated
to his teenaged daughter Brittany. She, like
dad, has shown a youthful vigour for wise
investing. I keep waiting for Hull’s Midas
touch to rub off on me.
I’m still waiting.
What’s new to report this year is that Hull
has created Canada's first and only Lottery
Transition Team (LTT). It assists those
lucky (or unlucky) enough to strike it rich.
There’s really no safe transition into a new
life of disgusting wealth, but Hull keeps the
scammers and sharks away from these
instant millionaires. "I cherish my clients,
and I will always do everything I can to help
and assist them,” he wrote in a book
dedication a few years back. Unlike some, he
walks the talk.
So where is Hull’s active mind fixated as
we head into 2013?
Greece is a quagmire of multiple selfinflicted disasters, he says. Why did noted
Hollywood director George Lucas sell his
vaunted company Lucas Films to Disney for
$4 billion last year? Because his tax saving
would be a whopping $200 million. Like
most head-in-the-sands Americans, the
creator of Star Wars doesn’t like paying
taxes.
Hull says sure, Apple is a great company
and an investment that has made his clients
signif icant money over the years. “But
people often forget that there are many other
companies that grow alongside Apple - like
those that make the cameras for their iPhone
and iPads, and the microchips etc.,” he says.
How many public investors are willing to
smash open their iPhone to search with a
magnifying glass who the parts makers are?
Cont. on page 3
JANUARY 2013 - MISSISSAUGA BUSINESS TIMES - 3
NEWS
Make the most of contrarian's advice
Deglobalization will
be one of the ongoing
themes of 2013
Cont. from page 2
I’ll name one: Hull. That’s why he tapped
into ARM Holdings PLC from the U.K.,
designer of the chips that run the brain for
Apple devices. That’s why I’m still driving a
seven-year old Camry and he is not.
Hull has over 24 years in the investment
business, and his Manulife branch is one of
the largest in the country. He mostly
specializes in wise investing for millionaires,
which means, I will never be one of his
clients. Do I resent his success?
Au contraire, as Buffett would say.
His investment advice is also an ode to
Buffett: "Buy a lawnmower in the winter,
and snow blower in the summer. Get the
best deal. Same for investing. Bargain
hunt.”
His world economic philosophy is
brilliantly simple: "Capital ultimately goes
to where it is treated best.”
Hull has a knowledge of wealth and a
wealth of knowledge, and for that reason,
here are some investment strategies of his
that you should embrace this year:
• Look for companies (equities) that are
paying good dividends; you are paid to
be patient.
• Look for companies that are actively
buying back their shares from the public,
t hu s i nc r e a si n g y ou r ow ne r s h ip
percentage without you putting any
more money into the investment.
• Be very careful with bonds, especially
when interest rates begin to rise.
• Look for companies that tend to be
dom ina nt in t heir indu st r y, li ke
Luxottica out of Ita ly. It controls
approximately 80 per cent of the globe's
eyewear market. The aging demographic
favours them going forward.
• Look for companies with little to no debt
and cash on their balance sheets.
• Buy investments in pieces over time and
often sell the same way: Dollar-Cost
Averaging can be a winning strategy and
one that dampens the volatility of
markets and gets you better discounts
over time.
Here are a few of Hull’s ‘Major
Emerging Themes for 2013 and Beyond’:
• Ne w f r a c t u r i n g t e c h n iqu e s a nd
horizontal drilling to access natural gas
and oil previously inaccessible even just a
few years ago (like in the Bakken's/
North Dakota) will create mini booms.
Natural gas and oil shale is a paramount
part of America's plan for energy self
suff iciency. Meanwhile, Canada is a
major partner/player in the entire
process.
• The "new safety" is companies like Apple
that are mega successes. Apple has over
$124 billion in the bank and pays
dividends that are far higher than even
10-year government bonds pay (in
interest).
• C lou d c omput i n g i s mov i n g to
mainstream with both companies and
people accessing digital information.
This is an enormous accelerator for
computing.
• Smartphones and tablets will continue to
accelerate "on the go" computing.
Desktop computer sales will continue to
decline as people go, go, go.
Remember the term “globalization?” Hull
replaces it with “Deglobalization!” Get used
to it, he says.
“I was a big investor for 24 years based on
globalization and now I am seeing a tectonic
shift to deglobalization. Do you think
German citizens like sending/lending their
hard earned money to Greece to bail out a
country that refuses to take the necessary
steps to reform? Do you think the USA
likes sending oil money to foreign countries
and their enemies?”
It’s all about tapping into opportunity,
says Hull. McDonald's added coffee to its
menu and raked in millions; Subway opened
for breakfast and added over a billion dollars
a year to its earnings.
Find silver linings in dark clouds, says
"Technology is
like bananas, it
rots quickly."
Jeff Hull
"Rule No.1:
Never lose money.
Rule No.2: Never
forget rule No.1."
Warren Buffett
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Hull. Hurricane Sandy swept through with
devastating effects, except for those that
positioned their portfolios to benefit by
buying stocks in USG Corp. (building
materials, dry wall etc.), Home Depot,
Lumber Liquidators and others.
Is it RIM or GRIM? Hull uses the G
word. His teenage daughter provided him
with some investment reconnaissance when
she reported that a year ago, nine out of 10
kids at her high school had BlackBerrys
(mainly because of BBM). Half have now
switched to Apple's iPhone. “As a patriot,
I'm sad to witness the decay of Canada's last
tech giant,” he laments. “They have decent
products and a great backbone structure
(BBM), but their execution is brutal. I think
RIM will survive but their market share has
been obliterated. L eaving t heir ne w
BlackBerry 10 platform on the shelf for so
long was a fatal miscalculation. BB10 will
likely be good, but might be too little too
late.” Adds Hull, cryptically: “Technology is
like bananas, it rots quickly.”
How about retailers vs. E-tailers?
Hull says Best Buy is becoming a
showroom for consumers to browse, and
then go home to find better deals online.
Same with Sport Chek. “Retailers must be
careful and have effective strategies moving
forward or they will become increasingly
irrelevant.” He punctuated that quote with
this fact: Over 80 per cent of contact lenses
are now purchased online.
Hull thinks money managers have a
sacred duty to protect and grow their clients’
assets, and keep them informed about why
they do what they do.
As for money, it shouldn’t be getting such
bad press these days, says Hull. Sure, there
are dark clouds. But behind them are silver
linings. Maybe golden ones.
The key is to invest wisely. Or invest
wisely in a good money manager.
Investors can still make a whole lot of
moolah if they take the route less travelled,
and follow a contrarian’s advice.
Hull is awaiting your call.
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