Concordia University

A message from Kenneth Woods

Kenneth Woods

Congratulations to our graduating Class of 2016. Once again we had an outstanding group of students who worked exceedingly hard to manage the program’s live portfolio under very uncertain conditions. During the previous year the students were faced with a world that saw increasing violence, social unrest and subdued economic growth. Uncertainty, we thought, was at its maximum.

Needless to say 2016 witnessed events that were even more surprising and unpredictable and contributed to opportunity for contrarians and subdued performance for the majority. We started with the viability of commodity and energy companies in question, and ended with optimism and an almost worldwide bull market. No doubt the investment world continues to be increasingly complex and challenging for our students to negotiate.

The Class of 2016 saw opportunity in repositioning the portfolio to “best in class” securities. This is an outstanding strategy for long term investing. Regrettably, the students’ portfolio performance is measured over a shorter period of time – one year. It becomes very difficult to transition from one style to another when price and opportunity are most usually friends of those who are patient.

Under this background and the unusual string of events, the portfolio rose 4.88%, adding $117,700 to the value of the fund, which ended the year at $2,423,700. Compound investing continues to be our friend.

There was one other significant event that impacted our students and myself, if not the portfolio during the year. We received an invitation to visit legendary investor Warren Buffett in Omaha, Nebraska. Everyone who was able to attend (21 of us in all) found the experience a once in a lifetime event. While I am sure it will remain a special day for everyone, for me it was an opportunity to listen and talk to someone whom I have admired for a long time and to receive some words of wisdom not usually shared with the public. Of particular interest to me was his description of the mentoring he received and associations he made with people he admired and tried to emulate in the investment world. If nothing else, his insights provided us all with an optimism and excitement about the potential each of us has should we wish to pursue it.

Throughout the year the students worked hard with the 2nd year students (portfolio managers) making the investment decisions and the 1st year students (research associates) providing support and preparing themselves for 2017. Their mandate is based upon a statement of investment policies that mirrors that of a balanced fund with several difference asset classes to manage. While the students work as a team they also assign asset classes to individuals so each student has a responsibility and opportunity to excel.

The investment “business” is complicated because there is so much information. It is often difficult to identify essential issues. Confucius said, “Life is really simple, but we insist on making it complicated.” This definitely applies to the investment industry. Helping and guiding the students through the mass of data and helping them identify the essential issues are part of the work of the client committee. Over 16 years these groups of talented and dedicated volunteers help the students identify issues, clarify their thoughts and reassess the fundamentals of their investment decisions. I am greatly appreciative of the essential role they play in making the program a success.

There are others to thank including the many mentors and seminar presenters (listed separately in this report). The most import individual in the success of the program remains the Program Director Reena Atanasiadis, whose dedication and hard work has been essential to the continuing success of the program. If the students wish to thank anyone for the tremendous opportunity they have been given, they should thank the Program Director. This year’s special trip to Omaha was due to her persistence, personality and organization. Sincere thanks to a very special person for a job well done.

The investment returns were perhaps not as impressive as previous years versus a difficult benchmark. However the returns were positive and added $118,000 to the total fund. There is a lot to be said about preservation of capital. While the performance was below the benchmark, the students learned a tremendous amount, benefiting from on the job training permitted when the portfolio represents real money. Making a few mistakes often results in the most valuable lessons learned.

2016 was our 16th year of operation. Including the graduating Class of 2016, we will have 120 Calvin Potter Fellow graduates with 18 students remaining in the two-year program. I am pleased and proud to say that most of the alumni are now working in Canada in the investment business, fulfilling one of the objectives that was identified when the program was established 17 years ago. Needless to say we are proud of all the alumni and contributions they are giving to society. Many are finding fulfillment in giving back to the community in which they live.

For me it was a special year of excitement. Seeing the continuing success of the program, participating and getting to know the students and our visit to lunch with Warren Buffett all contributed to an extraordinary year. It certainly proved that when you give back, it comes back.

Congratulations to each of this year’s class for your hard work, honesty and enthusiasm. As I’ve said before a positive attitude is an important attribute to have in life, particularly in the difficult work of investment management. Congratulations to all for your accomplishments and good luck in all future endeavors.

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