Jason Szabo was ecstatic when he was appointed manager of information technology at an Ottawa high-tech firm in December -- until he discovered his salary was less than half of what his predecessor had been paid.
"I felt absolutely ripped off," Mr. Szabo says.
"I had no motivation to go to work. . . It had me thinking of leaving the company."
Many people can relate.
Discovering that you're earning less in salary or perks like stock options and country-club memberships than someone else with similar qualifications to do the same job can be a crushing blow -- as hard for some to digest as being laid off or fired, says human-resources consultant and business coach Bob Summerhurst, owner of Summerhurst Consulting in Ottawa.
"It can be an assault to the self-esteem," he says.
"You feel undervalued, and demotivation becomes the big challenge. . . . You find yourself saying, 'What's the point of me putting in the extra effort when I'm earning less than the person next to me?' "
Just as challenging, say the experts, is knowing whether you are being paid fairly.
"It can be tough to get at the truth about salaries," acknowledges Karl Aboud, head of the reward consulting practice at Hay Group Ltd., an international management consulting firm specializing in employee compensation and performance.
"You might hear at a cocktail party that someone is earning more or you might see a tax return on a colleague's desk, but what you see and hear is not always the full truth."
Wonder whether you're being paid what you're worth?
Other than trying to sneak a peek at a colleague's paycheque, there are ways to determine whether your compensation package accurately reflects your talents and contributions to your organization -- as well as strategies to put yourself where you feel you belong on the pay scale.
Before marching into your boss's office to demand a raise, try to ferret out accurate salary information for employees with similar credentials who work in your department or hold comparable jobs in your industry, Mr. Aboud suggests.
Start by directly asking your boss or human resources department.
"It's your right to know the salary range for your position," says Monika Morrow, regional managing principal in Eastern Canada for career-transition firm Right Management Consultants.
Many companies make general salary information available to their employees, either in company publications or on internal corporate websites, says Sandra Bernier, HR director at casualty and property insurer Lombard Canada in Toronto.
At her company, she adds, she will discuss rates of pay with employees for a job opening for which they would be qualified to apply .
If your company won't cough up information, it pays to know your way around the Web.
Salary data, usually for free, is available at career-management portals such as monster.ca, salary.com, payscale.com and hotjobs.ca, where on-line tools dig out pay ranges for thousands of jobs in most major Canadian cities.
Other sites may also contain salary information.
Mr. Szabo, for instance, determined what he should be earning by surfing to a Statistics Canada website that contained a wealth of information about high-tech salaries.
Companies, themselves, may list pay scales along with job openings they advertise on their own websites.
If you're a professional, chances are that the association that represents your profession assembles salary information based on annual surveys of members and companies.
The information is available for free or a small fee on the Internet or in hard copy.
Most of the 11 provincial and territorial affiliates of the Certified General Accountants Association of Canada, for instance, track salary information.
It's available on request to members and the public free of charge, says communications director Taylore Ashlie, whose organization represents 62,000 students and certified general accountants.
The Ontario Society of Professional Engineers (OSPE) produces an annual salary report, which breaks down base salaries into six levels of experience in six different sectors, says Hanan Jibry, the society's executive director.
It's available for a fee to both members and the public.
Be forewarned, however, that some association information is outdated. The material in the OSPE reports, for instance, represented data current as of June 1, 2004; the CGA-Ontario information was based on an October, 2004, survey.
If it's perks that irk, network with others in your industry to find out standards and whether your overall package meets them, Ms. Morrow suggests.
There is also plenty of information about executive compensation disclosed in materials put out by public companies, suggests Graham Dodd, Vancouver-based national practice director for the human capital group with HR consulting firm Watson Wyatt Worldwide.
"Executives can therefore do their own comparisons," he says.
"The trend is for more and more disclosure so, over coming years, this information will cover all aspects of compensation for the most senior executives."
Still, there's more to winning a raise than finding out that you're paid less than someone else, Mr. Aboud says.
Before asking for more money, he urges employees to research their company's compensation philosophy.
It's tied to variables ranging from experience to skills and, more and more, to proof of performance.
"Many companies link performance to pay and pay a higher performer more than a weaker performer," he says.
"Many measure a person based on the skills required to do the job, along with behaviour demonstrated on the job, how they work as part of a team and the actual results they accomplish."
Other reasons can also account for salary discrepancies.
They range from someone else being hired in better or more competitive times to a higher-paid colleague having joined the company through a merger and bringing a previous employer's paycheque to the position, Ms. Morrow adds.
Does your research have you convinced that you should be earning more?
Then it's time to take action, the pros say.
Develop a fact-based "business case" to convince the higher-ups of why you are deserving of more money, Mr. Dodd suggests.
He advises employees to point out to their boss their range of strengths, from qualifications to accomplishments to solid contributions they have made to the company's bottom line.
"For all of these reasons, tell them you think you are worth more money -- organizations will pay for enhanced productivity," Mr. Dodd says.
A good time to bring up your pay is during a performance or annual review, when money has been budgeted for raises and your boss has an up-to-date assessment of your work.
That's when you can not only ask about your own paycheque but about the range and decision-making criteria in the company, Ms. Morrow suggests.
But don't be afraid to drop hints earlier and keep your boss apprised of any and all accomplishments that might earn a financial reward come raise review time, HR experts say.
Timing also counts; it's better to ask for more money when times for your company are good or raises seem to be common.
Major management consulting firms are predicting that next year will see average base-rate salary increases ranging from 3.3 to 3.5 per cent.
Mr. Szabo followed many of these strategies to bolster his case for more money.
Aside from asking his predecessor directly what he made and scanning the Web for further salary information, he made repeated requests to his supervisor and HR department for raises, during which he reinforced how well-trained he was for the job, yet doing the same work as his predecessor for a much smaller annual stipend.
For a long time, he was regularly rebuffed. If that happens to you, too, don't stomp away in a huff, Mr. Dodd says.
Instead, seek out constructive advice from your boss on what you would need to do to get a raise, and work out a plan to act on the advice.
In the end, Mr. Szabo won out. In July, the company gave him a hefty raise. It still left him more than $20,000 behind his predecessor's paycheque, but he wasn't irked because the former boss had 10 years more experience in the high-tech field.
If you can't win your case for higher pay, it may be time to move to another company, Mr. Aboud says. If so, make sure your parting is amicable, he advises.
Burning a bridge is never to your advantage, he says, because finding a new job with a higher salary may hinge on a positive reference from a former employer.
Mr. Szabo, who left his employer about a month after getting his raise to co-found Emos Systems, an Ottawa-based IT outsourcing and consulting firm, agrees.
"I didn't yell and scream and make a big deal of it. I did what I was supposed to do: sucked it up for a while and was persistent in making it known that I was frustrated about being underpaid. It worked for me."
How to win a raise
Trying to squeeze a raise out of your boss? Here are expert tips:
Make your approach during a performance or annual review, when raise money has often been budgeted and your boss has an assessment of your work.
Don't be afraid to drop hints in the months leading up to your pitch to get the boss thinking about more money for you.
Present facts that show others with similar qualifications are earning more. Ask why you are being paid less.
State your case clearly and succinctly in a one-page document that outlines your qualifications and accomplishments during the past year, such as awards you've won and large contracts you landed.
If you have a higher-paying job offer from another company , let your boss know. But don't hold your company hostage by threatening to quit if you are denied a raise.
If your résumé doesn't measure up , offer to enroll in courses, volunteer for projects or take other measures that will enhance it.
Seek a raise when times are good, not when the company is struggling.
Have a backup plan if you are turned down. Ask for constructive advice on why your raise was denied and what you can do to earn one in the future.
Saturday, June 30, 2007
Thursday, June 28, 2007
Want to score? Be a good sport - Wallence Immen
Michelle McIntosh was no golfer. One of the few times she ever hit the course, her brother took away her clubs.
"He said watching me play was too painful," she recalls.
So, Ms. McIntosh was more than a little stunned when she was interviewed in May for a job that would be a big step up in her career - and was told that playing golf would be a make-or-break factor in getting hired.
Ms. McIntosh had to fess up to being a duffer - but she swore she was willing to take lessons and learn to play a good game.
Such enthusiasm was what the bosses wanted to hear. Just three hours after the interview, she was called with an offer to become a business development representative in the Mississauga office of Calgary-based environmental analysis company Agat Laboratories Ltd.
True to her word, she's just completed a five-week golf-for-business program organized by the Sheridan Institute of Technology in conjunction with golf course operator Kaneff Golf, where she learned strategy, rules and etiquette, and play.
Now, she's about to face her first big test - networking with clients on the golf course.
"Let's just say I'm a little nervous," Ms. McIntosh confesses.
But she knows her bosses were right when they told her that networking with clients on the course would be crucial to her job - and she realizes that having shied away from invitations to play golf with clients, co-workers and bosses in the past, she'd missed golden opportunities to develop relationships that could help advance her career.
"I'd always thought it was something I wanted in my career arsenal because golf is a major part of business."
The opportunities don't end with that sport. Getting into the game, whether golf or tennis, baseball or curling, hockey or even beach volleyball, can provide great opportunities to score in your career, pros say.
"Look at it this way. If you want to bond with the boss, play the boss's game," advises leadership coach Cassandra Gierden, president of Prophet Coaching in Vancouver.
And if you want to catch clients and co-workers when they're in a mood to be receptive to your ideas, be there when they're out of the office and on the course, rink or court, she adds.
Playing sports can be the great equalizer, says Vince Gowman, founder of Remembering to Play, a Vancouver-based consultancy.
"Playing sport is a great way to loosen up our rigidity about our roles. When we release, we actually begin to engage with others more creatively," Mr. Gowman says, adding that sports participation also boosts co-operation, teamwork and trust.
But as fun and easy as athletic endeavours might sound, a surprising number of people hang back, whether it is playing on an office baseball team, joining the boss for a one-on-one on the tennis court, or participating in one of the many corporate sports events that fill the calendar especially in the summer months.
In fact, the prospect of participating in sports fills many people with dread, Ms. Gierden says.
"In most cases, it is because they are afraid of making a faux pas or looking like an amateur."
Indeed, 40 per cent of the 6,154 people who responded to a globeandmail.com poll last week said they believe sports and work are two separate pursuits, and another 30 per cent said they don't participate in any sport at all.
Another 8 per cent said they don't play sports to career advantage because they worry that their level of skill will make them look incompetent, and another 2 per cent fear their competitive drive might offend those they play with.
However, 12 per cent of respondents have made the connection between sports and their career, saying playing has helped them expand their networks outside the office.
And another 8 per cent said they have seen payoffs in getting closer to managers and colleagues.
The number who don't play sports for career gain surprises Lou Clements, a partner in executive transition consultancy Miller Dallas Inc. in Toronto, whose business revolves around meeting executives and finding out when they are ready for a career change.
"There's a familiarity that comes from playing together in a game, and that can be any game," Mr. Clements says.
He says he developed referrals for many of his best clients through contacts made while playing golf or hockey and on the bench or over beers after the game.
"Hockey is particularly good at bringing out the character of people," he says.
"Even when playing recreationally, you can tell a lot about their determination, their competitiveness and their ability to co-operate in a team by watching them in a game."
It was a big blow last year when he had to hang up his skates due to a back injury. Ditto his golf bag when a torn rotator cuff couldn't be fixed.
Now, he says, he's extremely frustrated.
"I've had to turn down five golfing invitations in the past four weeks that would have been great networking opportunities," Mr. Clements frets.
If more traditional sports, such as golf, tennis and hockey, don't grab your fancy, there are plenty of other options these days.
Holly Rhodes credits her involvement with a dragon boat racing team for helping her rise to branch manager for AJ Insurance Services Ltd. in Victoria.
Ms. Rhodes, who started as one of 20 paddlers on a competitive office crew, now runs her own team.
"Participating really gives you a good strong base. I found confidence to lead a team and a lot of the people I have met paddling have become clients," she says.
"There are paddling parties, barbecues and dances. It gives you a chance to know everybody," she adds. "The camaraderie is incredible and you don't have to be an incredible athlete to do it."
For James Chan, beach volleyball has helped get the ear of a managing partner and boosted his visibility at employer Ernst & Young LLP in Toronto.
Mr. Chan started playing the game informally two years ago with some workmates. Soon, dozens of other E&Y employees wanted in. Mr. Chan approached his boss about setting up and sponsoring a team. This summer, it has grown to several teams sporting E&Y logos that play in corporate leagues at varying levels of ability.
Mr. Chan says his involvement has not only improved his spike but also his career.
"Helping organize the teams has given me more visibility with management and demonstrated my leadership potential," he says, which he credits with helping to speed his promotion from entry level to senior staff accountant at E&Y.
Even with the array of sports growing, golf still remains the key game to be in, experts say.
"I find golf is a major part of the corporate world, more so than other sports," says Lori Weir, senior vice-president of human resources for risk services firm Marsh Canada Ltd.
As a non-contact sport, she points out it is easy for men and women of all ages to play. And you can be comfortable as a beginner playing in a group that is more experienced.
As a bonus, because so many executives pursue golf, it can be a way to network with management. "Where else can you be side by side enjoying a nice day with your boss for four hours? There's lots of time between holes that are conducive to making connections and building relationships."
Ms. Weir finds golf has opened many doors in her business, which is still male-dominated.
"Because I know how to play golf, I get many invitations to play with clients and charity tournaments, and that has helped me network and build ongoing professional relationships that would have been difficult to develop any other way," she says.
Even if you decide you don't actually want to play golf or any other sport, you should still find a way to participate, Ms. Gierden advises.
"Get out there and cheer your colleagues on and get involved in team gatherings and celebrations. It will make you part of the action."
If you're worried about looking foolish, taking lessons can also make a difference, pros suggest.
Ms. McIntosh's brother won't be taking away her clubs any more.
"I went and did a round with my family the other night. They were impressed."
She's hoping her clients will feel the same.
"I'm going to have quite a few opportunities to play in company and client events this summer," she says.
"I'm realizing what an icebreaker it can be in business. Playing golf breaks down that barrier of formality and gives people a chance to become friends. It's fun to play the game as well."
*****
Rules of the game
It's not whether you win or lose, it's just about playing the game. If you want to make the most of participating in sports for your career, here are some tips from experts:
Employees
Be a team player. A good show of sportsmanship goes a long way.
Don't be overly competitive. It's nice to win but it is, after all, a game - and you won't score points if all that shines through is your desire to win.
Think about timing. If you're going to talk business, don't be overly aggressive. Wait until you see people enjoying themselves.
Know the etiquette. Each sport has rules and codes of conduct - avoid annoying fellow players.
Take lessons. A teacher can help make you more competent, confident and more fun to play with. And it shows you are determined to be as good as you can.
Reduce distractions. Turn off cellphones and BlackBerrys while playing to keep your concentration and avoid distracting others.
Commit to the time. Corporate or charity tournaments are usually full-day events with a social component afterward, which is the best time for building camaraderie with clients and fellow employees.
Plan a follow-up. Use the opportunity to plan another encounter.
Employers
Create a community. If employees are involved in a regular sport activity, think of having team uniforms and cheers.
Keep it voluntary. No one should be pressured to participate.
Encourage spectators. Not everyone wants to play, but co-workers can enjoy being in the stands to cheer.
Keep it social. Plan practices and a gathering for drinks or snacks afterward to encourage chat and networking.
Build in rewards. Along with medals for the winners, give personal thanks to those who participate.
"He said watching me play was too painful," she recalls.
So, Ms. McIntosh was more than a little stunned when she was interviewed in May for a job that would be a big step up in her career - and was told that playing golf would be a make-or-break factor in getting hired.
Ms. McIntosh had to fess up to being a duffer - but she swore she was willing to take lessons and learn to play a good game.
Such enthusiasm was what the bosses wanted to hear. Just three hours after the interview, she was called with an offer to become a business development representative in the Mississauga office of Calgary-based environmental analysis company Agat Laboratories Ltd.
True to her word, she's just completed a five-week golf-for-business program organized by the Sheridan Institute of Technology in conjunction with golf course operator Kaneff Golf, where she learned strategy, rules and etiquette, and play.
Now, she's about to face her first big test - networking with clients on the golf course.
"Let's just say I'm a little nervous," Ms. McIntosh confesses.
But she knows her bosses were right when they told her that networking with clients on the course would be crucial to her job - and she realizes that having shied away from invitations to play golf with clients, co-workers and bosses in the past, she'd missed golden opportunities to develop relationships that could help advance her career.
"I'd always thought it was something I wanted in my career arsenal because golf is a major part of business."
The opportunities don't end with that sport. Getting into the game, whether golf or tennis, baseball or curling, hockey or even beach volleyball, can provide great opportunities to score in your career, pros say.
"Look at it this way. If you want to bond with the boss, play the boss's game," advises leadership coach Cassandra Gierden, president of Prophet Coaching in Vancouver.
And if you want to catch clients and co-workers when they're in a mood to be receptive to your ideas, be there when they're out of the office and on the course, rink or court, she adds.
Playing sports can be the great equalizer, says Vince Gowman, founder of Remembering to Play, a Vancouver-based consultancy.
"Playing sport is a great way to loosen up our rigidity about our roles. When we release, we actually begin to engage with others more creatively," Mr. Gowman says, adding that sports participation also boosts co-operation, teamwork and trust.
But as fun and easy as athletic endeavours might sound, a surprising number of people hang back, whether it is playing on an office baseball team, joining the boss for a one-on-one on the tennis court, or participating in one of the many corporate sports events that fill the calendar especially in the summer months.
In fact, the prospect of participating in sports fills many people with dread, Ms. Gierden says.
"In most cases, it is because they are afraid of making a faux pas or looking like an amateur."
Indeed, 40 per cent of the 6,154 people who responded to a globeandmail.com poll last week said they believe sports and work are two separate pursuits, and another 30 per cent said they don't participate in any sport at all.
Another 8 per cent said they don't play sports to career advantage because they worry that their level of skill will make them look incompetent, and another 2 per cent fear their competitive drive might offend those they play with.
However, 12 per cent of respondents have made the connection between sports and their career, saying playing has helped them expand their networks outside the office.
And another 8 per cent said they have seen payoffs in getting closer to managers and colleagues.
The number who don't play sports for career gain surprises Lou Clements, a partner in executive transition consultancy Miller Dallas Inc. in Toronto, whose business revolves around meeting executives and finding out when they are ready for a career change.
"There's a familiarity that comes from playing together in a game, and that can be any game," Mr. Clements says.
He says he developed referrals for many of his best clients through contacts made while playing golf or hockey and on the bench or over beers after the game.
"Hockey is particularly good at bringing out the character of people," he says.
"Even when playing recreationally, you can tell a lot about their determination, their competitiveness and their ability to co-operate in a team by watching them in a game."
It was a big blow last year when he had to hang up his skates due to a back injury. Ditto his golf bag when a torn rotator cuff couldn't be fixed.
Now, he says, he's extremely frustrated.
"I've had to turn down five golfing invitations in the past four weeks that would have been great networking opportunities," Mr. Clements frets.
If more traditional sports, such as golf, tennis and hockey, don't grab your fancy, there are plenty of other options these days.
Holly Rhodes credits her involvement with a dragon boat racing team for helping her rise to branch manager for AJ Insurance Services Ltd. in Victoria.
Ms. Rhodes, who started as one of 20 paddlers on a competitive office crew, now runs her own team.
"Participating really gives you a good strong base. I found confidence to lead a team and a lot of the people I have met paddling have become clients," she says.
"There are paddling parties, barbecues and dances. It gives you a chance to know everybody," she adds. "The camaraderie is incredible and you don't have to be an incredible athlete to do it."
For James Chan, beach volleyball has helped get the ear of a managing partner and boosted his visibility at employer Ernst & Young LLP in Toronto.
Mr. Chan started playing the game informally two years ago with some workmates. Soon, dozens of other E&Y employees wanted in. Mr. Chan approached his boss about setting up and sponsoring a team. This summer, it has grown to several teams sporting E&Y logos that play in corporate leagues at varying levels of ability.
Mr. Chan says his involvement has not only improved his spike but also his career.
"Helping organize the teams has given me more visibility with management and demonstrated my leadership potential," he says, which he credits with helping to speed his promotion from entry level to senior staff accountant at E&Y.
Even with the array of sports growing, golf still remains the key game to be in, experts say.
"I find golf is a major part of the corporate world, more so than other sports," says Lori Weir, senior vice-president of human resources for risk services firm Marsh Canada Ltd.
As a non-contact sport, she points out it is easy for men and women of all ages to play. And you can be comfortable as a beginner playing in a group that is more experienced.
As a bonus, because so many executives pursue golf, it can be a way to network with management. "Where else can you be side by side enjoying a nice day with your boss for four hours? There's lots of time between holes that are conducive to making connections and building relationships."
Ms. Weir finds golf has opened many doors in her business, which is still male-dominated.
"Because I know how to play golf, I get many invitations to play with clients and charity tournaments, and that has helped me network and build ongoing professional relationships that would have been difficult to develop any other way," she says.
Even if you decide you don't actually want to play golf or any other sport, you should still find a way to participate, Ms. Gierden advises.
"Get out there and cheer your colleagues on and get involved in team gatherings and celebrations. It will make you part of the action."
If you're worried about looking foolish, taking lessons can also make a difference, pros suggest.
Ms. McIntosh's brother won't be taking away her clubs any more.
"I went and did a round with my family the other night. They were impressed."
She's hoping her clients will feel the same.
"I'm going to have quite a few opportunities to play in company and client events this summer," she says.
"I'm realizing what an icebreaker it can be in business. Playing golf breaks down that barrier of formality and gives people a chance to become friends. It's fun to play the game as well."
*****
Rules of the game
It's not whether you win or lose, it's just about playing the game. If you want to make the most of participating in sports for your career, here are some tips from experts:
Employees
Be a team player. A good show of sportsmanship goes a long way.
Don't be overly competitive. It's nice to win but it is, after all, a game - and you won't score points if all that shines through is your desire to win.
Think about timing. If you're going to talk business, don't be overly aggressive. Wait until you see people enjoying themselves.
Know the etiquette. Each sport has rules and codes of conduct - avoid annoying fellow players.
Take lessons. A teacher can help make you more competent, confident and more fun to play with. And it shows you are determined to be as good as you can.
Reduce distractions. Turn off cellphones and BlackBerrys while playing to keep your concentration and avoid distracting others.
Commit to the time. Corporate or charity tournaments are usually full-day events with a social component afterward, which is the best time for building camaraderie with clients and fellow employees.
Plan a follow-up. Use the opportunity to plan another encounter.
Employers
Create a community. If employees are involved in a regular sport activity, think of having team uniforms and cheers.
Keep it voluntary. No one should be pressured to participate.
Encourage spectators. Not everyone wants to play, but co-workers can enjoy being in the stands to cheer.
Keep it social. Plan practices and a gathering for drinks or snacks afterward to encourage chat and networking.
Build in rewards. Along with medals for the winners, give personal thanks to those who participate.
Tuesday, June 26, 2007
Capital investment driving labour productivity - Tavia Grant
Investment in capital - rather than gains in worker skills or technological change - has been the key driver for labour productivity growth over the past 45 years, Statistics Canada has found.
Labour productivity, an important indicator of an economy's health, rose at an annual rate of 2.1 per cent between 1961 and 2005. Yesterday's study looked at the contribution of three main components of this growth.
It found that increases in capital intensity -- which measures the amount of capital in a business in relation to other production factors, especially labour -- contributed about 55 per cent of growth in labour productivity. In 2005 alone, capital intensity accounted for about three-quarters of the growth.
In terms of capital, "there has been a long-term shift towards machinery and equipment, and away from structure capital, land and inventories in the business sector," the report said. Within that category, information and communications technologies have increased the most.
Capital-intensive industries include the natural resources sector, along with the finance, insurance and real estate industries.
Gains associated with technological change accounted for about a quarter of the productivity growth in this period. The remainder - about 20 per cent - came from changes in the work force as more people obtained postsecondary degrees.
Since 2000, growth in labour productivity has slowed from the gains recorded between 1989 and 2000, especially in the mining and manufacturing sectors. This slowdown largely reflects a decline in growth of "multifactor" or technological productivity.
Labour productivity is a measure of the real gross domestic product per hour worked and, over time, it raises the population's standard of living and business competitiveness. Any gains are connected with changes in real wages over the long term.
Labour productivity, an important indicator of an economy's health, rose at an annual rate of 2.1 per cent between 1961 and 2005. Yesterday's study looked at the contribution of three main components of this growth.
It found that increases in capital intensity -- which measures the amount of capital in a business in relation to other production factors, especially labour -- contributed about 55 per cent of growth in labour productivity. In 2005 alone, capital intensity accounted for about three-quarters of the growth.
In terms of capital, "there has been a long-term shift towards machinery and equipment, and away from structure capital, land and inventories in the business sector," the report said. Within that category, information and communications technologies have increased the most.
Capital-intensive industries include the natural resources sector, along with the finance, insurance and real estate industries.
Gains associated with technological change accounted for about a quarter of the productivity growth in this period. The remainder - about 20 per cent - came from changes in the work force as more people obtained postsecondary degrees.
Since 2000, growth in labour productivity has slowed from the gains recorded between 1989 and 2000, especially in the mining and manufacturing sectors. This slowdown largely reflects a decline in growth of "multifactor" or technological productivity.
Labour productivity is a measure of the real gross domestic product per hour worked and, over time, it raises the population's standard of living and business competitiveness. Any gains are connected with changes in real wages over the long term.
Monday, June 25, 2007
Private equity on retail investors' radar - Shirley Won
Private equity investing has always been a game for the super rich or the deep-pocketed institutional folks.
But it's now getting easier for Canadian retail investors to join the party in this hot - albeit risky - asset class.
Giant U.S. private equity players are going public - as Blackstone Group LP did with a splash last Friday - and others are poised to follow.
And more Canadian asset managers are launching funds that invest in unlisted or publicly traded private equity funds aimed at higher net worth for average investors.
Toronto-based entrepreneur Miles Nadal controls Artemis Investment Management, which last week began marketing Elite Private Equity LP.
It will invest in four U.S. private equity funds run by big-name players like Blackstone Group, Carlyle Group, Thomas H. Lee Partners and Clayton, Dubilier & Rice.
"Canadians haven't been able to access the big private equity firms historically," said Mr. Nadal, who is also chief executive officer of advertising conglomerate MDC Partners Inc.
"This is the first alternative investment opportunity to invest in some of the biggest brands in the world."
Mr. Nadal, who says he has his personal wealth invested in about 25 private equity funds, was able to secure a spot for the Artemis fund because he has invested with some of those players.
"I am very close to the management of all of them," he said.
Canadians are more aware of private equity as an asset class now that some of the U.S. players have become involved in Canada, through bidding for BCE Inc. or by taking stakes in domestic companies such as Shoppers Drug Mart Corp. and Masonite International Corp., he added.
In recent years, many private equity firms have been generating superior returns to public market benchmarks. Their managers can buy inefficient companies, manage them to drive up their value, and then sell them or take them public at a nice profit. With more money chasing deals these days, however, the home runs could be hard to come by.
Because the minimum investments for some private equity funds can be about $5-million or $10-million, this world has been accessible mostly to institutional players like pension and endowment funds.
"It really functioned like a private club for a long time," said Rick Nathan, managing director of Toronto-based Kensington Capital Partners Ltd.
Kensington Capital, a Canadian private equity manager, raised just under $25-million for its Kensington Global Private Equity Fund, which closed in April.
The fund is expected to open again later this year once the monies are invested.
So far, it has invested in private equity funds run by U.S.-based HarbourVest Partners LLC, and Nordea Private Equity, a unit of Swedish financial services firm Nordea AB.
"Roughly, 80 per cent of our money is going into funds, and the balance will go directly to companies," Mr. Nathan said.
In addition to the two private funds, Canadian investors also have access to Diversified Private Equity Corp., a publicly traded closed-end fund administered by Scotia Capital Inc.
That fund, which closed in March, is invested in the 10 largest publicly traded firms specializing in private equity in North America and 10 in Europe. The portfolio includes Toronto-based Onex Corp. and U.S. players like Apollo Investment Corp., and American Capital Strategies Ltd.
Had Blackstone Group being a public company at the time when the fund was marketed, it would have been included in the names.
"But this is a fixed portfolio," said Robert Fournier, analyst in investment banking at Scotia Capital.
"We are not changing any names going forward unless there is some type of corporate action or takeover," Mr. Fournier said.
"This was purposely done as a passive portfolio ... It's a low-cost way to get very broad exposure to private equity throughout the world."
Michael Banwell, president of Toronto-based financial planning firm Banwell Financial Inc., said that private equity has indeed become a "hot asset class," but it is not suitable for everyone.
"If someone is going to consider this, it should be part of an overall portfolio that is already broadly diversified ... around 10 per cent," Mr. Banwell said.
Morningstar Canada analyst Mark Chow agreed, saying there is "more risk" for investors, particularly with the private funds. "They are not as open and transparent as a mutual fund," he warned.
"The M&A activity is very hot now," Mr. Chow added. "Blackstone has gone public. Carlyle Group and KKR are thinking about it. They are coming out when they can get the best valuation. That is typically the top of the market."
Five ways to invest in private equity
1. Elite Private Equity LP
A Canadian fund that will invest in four U.S.-based private equity funds, including those run by Blackstone Group, Carlyle Group, Thomas H. Lee Partners and Clayton, Dubilier & Rice. Artemis Investment Management, a unit of Peerage Capital Inc., is making the private fund available until July 16 through an offering memorandum. The units are not redeemable, but investors will get distributions as the funds exit companies. Minimum investment is $25,000.
2. Kensington Global
Private Equity Fund
A Canadian fund of funds offered by Kensington Capital Partners Ltd. It closed in April, but could reopen later this year. The fund invests in private equity funds in Canada, the U.S. and Europe as well as directly in private companies. The fund is offered through a prospectus. Units are redeemable once a year. Minimum investment is $25,000.
3. PowerShares Private
Equity ETF (A-PSP)
The exchange-traded fund was listed last fall on the American Stock Exchange. It tracks the Listed Private Equity Index, a benchmark created by Denver-based Red Rocks Capital Partners. This is an index of about 30 publicly traded companies that invest in private equity.
4. Diversified Private
Equity Corp. (TSX-PEQ)
A closed-end fund that began trading on the Toronto Stock Exchange in March. The fund, administered by Scotia Capital Inc., is invested in the 20 of the largest firms specializing in private equity that are publicly traded in North America and Europe. The fund went public at $10 a share.
5. Stocks
Onex Corp., run by founder shareholder Gerald Schwartz, is the only pure-play private equity player on the Toronto Stock Exchange. U.S. buyout giant Blackstone Group went public last Friday on the New York Stock Exchange. Other major U.S. players, Kohlberg Kravis Roberts & Co. and Carlyle Group, may go also go public.
But it's now getting easier for Canadian retail investors to join the party in this hot - albeit risky - asset class.
Giant U.S. private equity players are going public - as Blackstone Group LP did with a splash last Friday - and others are poised to follow.
And more Canadian asset managers are launching funds that invest in unlisted or publicly traded private equity funds aimed at higher net worth for average investors.
Toronto-based entrepreneur Miles Nadal controls Artemis Investment Management, which last week began marketing Elite Private Equity LP.
It will invest in four U.S. private equity funds run by big-name players like Blackstone Group, Carlyle Group, Thomas H. Lee Partners and Clayton, Dubilier & Rice.
"Canadians haven't been able to access the big private equity firms historically," said Mr. Nadal, who is also chief executive officer of advertising conglomerate MDC Partners Inc.
"This is the first alternative investment opportunity to invest in some of the biggest brands in the world."
Mr. Nadal, who says he has his personal wealth invested in about 25 private equity funds, was able to secure a spot for the Artemis fund because he has invested with some of those players.
"I am very close to the management of all of them," he said.
Canadians are more aware of private equity as an asset class now that some of the U.S. players have become involved in Canada, through bidding for BCE Inc. or by taking stakes in domestic companies such as Shoppers Drug Mart Corp. and Masonite International Corp., he added.
In recent years, many private equity firms have been generating superior returns to public market benchmarks. Their managers can buy inefficient companies, manage them to drive up their value, and then sell them or take them public at a nice profit. With more money chasing deals these days, however, the home runs could be hard to come by.
Because the minimum investments for some private equity funds can be about $5-million or $10-million, this world has been accessible mostly to institutional players like pension and endowment funds.
"It really functioned like a private club for a long time," said Rick Nathan, managing director of Toronto-based Kensington Capital Partners Ltd.
Kensington Capital, a Canadian private equity manager, raised just under $25-million for its Kensington Global Private Equity Fund, which closed in April.
The fund is expected to open again later this year once the monies are invested.
So far, it has invested in private equity funds run by U.S.-based HarbourVest Partners LLC, and Nordea Private Equity, a unit of Swedish financial services firm Nordea AB.
"Roughly, 80 per cent of our money is going into funds, and the balance will go directly to companies," Mr. Nathan said.
In addition to the two private funds, Canadian investors also have access to Diversified Private Equity Corp., a publicly traded closed-end fund administered by Scotia Capital Inc.
That fund, which closed in March, is invested in the 10 largest publicly traded firms specializing in private equity in North America and 10 in Europe. The portfolio includes Toronto-based Onex Corp. and U.S. players like Apollo Investment Corp., and American Capital Strategies Ltd.
Had Blackstone Group being a public company at the time when the fund was marketed, it would have been included in the names.
"But this is a fixed portfolio," said Robert Fournier, analyst in investment banking at Scotia Capital.
"We are not changing any names going forward unless there is some type of corporate action or takeover," Mr. Fournier said.
"This was purposely done as a passive portfolio ... It's a low-cost way to get very broad exposure to private equity throughout the world."
Michael Banwell, president of Toronto-based financial planning firm Banwell Financial Inc., said that private equity has indeed become a "hot asset class," but it is not suitable for everyone.
"If someone is going to consider this, it should be part of an overall portfolio that is already broadly diversified ... around 10 per cent," Mr. Banwell said.
Morningstar Canada analyst Mark Chow agreed, saying there is "more risk" for investors, particularly with the private funds. "They are not as open and transparent as a mutual fund," he warned.
"The M&A activity is very hot now," Mr. Chow added. "Blackstone has gone public. Carlyle Group and KKR are thinking about it. They are coming out when they can get the best valuation. That is typically the top of the market."
Five ways to invest in private equity
1. Elite Private Equity LP
A Canadian fund that will invest in four U.S.-based private equity funds, including those run by Blackstone Group, Carlyle Group, Thomas H. Lee Partners and Clayton, Dubilier & Rice. Artemis Investment Management, a unit of Peerage Capital Inc., is making the private fund available until July 16 through an offering memorandum. The units are not redeemable, but investors will get distributions as the funds exit companies. Minimum investment is $25,000.
2. Kensington Global
Private Equity Fund
A Canadian fund of funds offered by Kensington Capital Partners Ltd. It closed in April, but could reopen later this year. The fund invests in private equity funds in Canada, the U.S. and Europe as well as directly in private companies. The fund is offered through a prospectus. Units are redeemable once a year. Minimum investment is $25,000.
3. PowerShares Private
Equity ETF (A-PSP)
The exchange-traded fund was listed last fall on the American Stock Exchange. It tracks the Listed Private Equity Index, a benchmark created by Denver-based Red Rocks Capital Partners. This is an index of about 30 publicly traded companies that invest in private equity.
4. Diversified Private
Equity Corp. (TSX-PEQ)
A closed-end fund that began trading on the Toronto Stock Exchange in March. The fund, administered by Scotia Capital Inc., is invested in the 20 of the largest firms specializing in private equity that are publicly traded in North America and Europe. The fund went public at $10 a share.
5. Stocks
Onex Corp., run by founder shareholder Gerald Schwartz, is the only pure-play private equity player on the Toronto Stock Exchange. U.S. buyout giant Blackstone Group went public last Friday on the New York Stock Exchange. Other major U.S. players, Kohlberg Kravis Roberts & Co. and Carlyle Group, may go also go public.
Thursday, June 21, 2007
Indian women flex economic muscle - Marcus Gee
A pretty woman on a pink motor scooter gives a lift to a man stranded by a village roadside. He tells her he's in town to see "some silly village girl" that his matchmaking parents want him to meet.
After buzzing him around town on the back of the scooter, she drops him at the train station and lets him in on a secret: She is that silly girl. As she drives away, she throws her head back and laughs, while the chagrined young man watches her disappear. "Why should boys have all the fun?" says the television advertisement for Pleasure motor scooters.
One result of India's economic boom has been the growing emancipation of women. Once tethered to home, father and husband, Indian women are making their own decisions about marriage, work, when to have children and - most important for business - what to buy. With jobs and financial independence, many women are expressing their new freedom by shopping till they drop.
Throwing aside the docility and frugality of old, India's consuming women are becoming a powerful economic force, watched closely by Indian and global companies hoping to sell to the country's fast-growing middle class.
In earlier times, "you bought a steel cupboard and hoped it would last 30 years so you could pass it on to your kids," said Nonita Kalra, editor of the Indian edition of Elle magazine. "Now they want something new all the time. They're buying shoes, they're buying phones, they're buying fridges, they're travelling, they're crowding into the hypermalls."
One leading economist predicts that the rising incomes and consumption of women could add $35-billion to India's gross domestic product over the next five years, lifting consumer demand by 10 per cent.
A study by Grey Global Group showed that 51 per cent of young single women in big cities say they believe that a big house and a nice car are essential to happiness. In smaller cities, the figure was 86 per cent.
On the streets of Mumbai, billboards advertise a fashion line unabashedly called Millionaire Woman.
Ms. Kalra traces the rise of female consumerism to the introduction of satellite television. With hundreds of channels from India and around the world on tap, women were suddenly exposed to new products and lifestyles.
Shows like Friends and Will and Grace showed independent, assertive women making lives of their own, "all polished and pretty. You just saw the whole world opening up."
Today's television is full of ads pitching blue jeans, cars and cosmetics at the new Indian woman.
Hero Honda's series of ads for the Pleasure scooter show fun-loving women enjoying the sleek two-wheeler, offered with an oval instrument panel and trendy colours designed to appeal to female buyers. Another ad for a Mahindra SUV shows a woman pushing a male driver out of the way so she can take the wheel.
Urban, middle-class women are still a small minority in a country where the average woman earns just $5 a day - a third that of men - and female literacy stands at 47.8 per cent, compared with the male rate of 73.4 per cent. But they are an increasingly influential minority and their numbers are growing fast. A recent study by global consultancy McKinsey & Co. predicted that India's middle class would grow by 10 times to more than 500 million people over the next two decades, making India the world's fifth biggest consumer market.
Women are a big part of that story. A recent survey showed that 31 per cent of urban working women have their own investments. It also showed that 35 per cent of women from car-owning families had been involved in the buying decision, while 45 per cent had a part in buying new computers.
"Buying gives you a certain sense of power," said Alia Ramaswamy, 26, a Delhi social worker. She admits that after weeks of working with the poor, she enjoys going out for a bit of "retail therapy."
"Theoretically, I hate consumerism, but I still find shopping therapeutic. When you feel sad, you go buy things. When you feel happy, you go buy things."
Richa Sood, 20, shopping in a suburban Delhi mall on her lunch break, said today's women believe in "pampering themselves to the core" after a hard week at work. "My mother shopped only when she need to. I just go out and buy."
Retailers like their attitude. Nilamoy Ghosh, manager of the Guess fashion outlet at another mall, said women shoppers are intensely brand conscious, snapping up goods by Zara, Replay, Benetton and the host of other international retailers who have come to India over the past few years.
Few hesitate over the price. "Everything they want, they buy," Mr. Ghosh said.
After buzzing him around town on the back of the scooter, she drops him at the train station and lets him in on a secret: She is that silly girl. As she drives away, she throws her head back and laughs, while the chagrined young man watches her disappear. "Why should boys have all the fun?" says the television advertisement for Pleasure motor scooters.
One result of India's economic boom has been the growing emancipation of women. Once tethered to home, father and husband, Indian women are making their own decisions about marriage, work, when to have children and - most important for business - what to buy. With jobs and financial independence, many women are expressing their new freedom by shopping till they drop.
Throwing aside the docility and frugality of old, India's consuming women are becoming a powerful economic force, watched closely by Indian and global companies hoping to sell to the country's fast-growing middle class.
In earlier times, "you bought a steel cupboard and hoped it would last 30 years so you could pass it on to your kids," said Nonita Kalra, editor of the Indian edition of Elle magazine. "Now they want something new all the time. They're buying shoes, they're buying phones, they're buying fridges, they're travelling, they're crowding into the hypermalls."
One leading economist predicts that the rising incomes and consumption of women could add $35-billion to India's gross domestic product over the next five years, lifting consumer demand by 10 per cent.
A study by Grey Global Group showed that 51 per cent of young single women in big cities say they believe that a big house and a nice car are essential to happiness. In smaller cities, the figure was 86 per cent.
On the streets of Mumbai, billboards advertise a fashion line unabashedly called Millionaire Woman.
Ms. Kalra traces the rise of female consumerism to the introduction of satellite television. With hundreds of channels from India and around the world on tap, women were suddenly exposed to new products and lifestyles.
Shows like Friends and Will and Grace showed independent, assertive women making lives of their own, "all polished and pretty. You just saw the whole world opening up."
Today's television is full of ads pitching blue jeans, cars and cosmetics at the new Indian woman.
Hero Honda's series of ads for the Pleasure scooter show fun-loving women enjoying the sleek two-wheeler, offered with an oval instrument panel and trendy colours designed to appeal to female buyers. Another ad for a Mahindra SUV shows a woman pushing a male driver out of the way so she can take the wheel.
Urban, middle-class women are still a small minority in a country where the average woman earns just $5 a day - a third that of men - and female literacy stands at 47.8 per cent, compared with the male rate of 73.4 per cent. But they are an increasingly influential minority and their numbers are growing fast. A recent study by global consultancy McKinsey & Co. predicted that India's middle class would grow by 10 times to more than 500 million people over the next two decades, making India the world's fifth biggest consumer market.
Women are a big part of that story. A recent survey showed that 31 per cent of urban working women have their own investments. It also showed that 35 per cent of women from car-owning families had been involved in the buying decision, while 45 per cent had a part in buying new computers.
"Buying gives you a certain sense of power," said Alia Ramaswamy, 26, a Delhi social worker. She admits that after weeks of working with the poor, she enjoys going out for a bit of "retail therapy."
"Theoretically, I hate consumerism, but I still find shopping therapeutic. When you feel sad, you go buy things. When you feel happy, you go buy things."
Richa Sood, 20, shopping in a suburban Delhi mall on her lunch break, said today's women believe in "pampering themselves to the core" after a hard week at work. "My mother shopped only when she need to. I just go out and buy."
Retailers like their attitude. Nilamoy Ghosh, manager of the Guess fashion outlet at another mall, said women shoppers are intensely brand conscious, snapping up goods by Zara, Replay, Benetton and the host of other international retailers who have come to India over the past few years.
Few hesitate over the price. "Everything they want, they buy," Mr. Ghosh said.
Monday, June 18, 2007
High stakes and hard lessons - Sinclair Stewart & Boyd Erman
On a mild evening in late March, 600 business types, including several top officials from Royal Bank of Canada, mingled in a cavernous expanse of New York's Museum of Modern Art, swilling complimentary champagne and munching on Asian tapas.
They had gathered for an exclusive showing of the critically-lauded Vancouver photographer Jeff Wall, whose massive, backlit portraits were the subject of a career retrospective.
But this night was as much a coming-out party for event sponsor RBC Capital Markets, a Canadian investment bank that, after some fitful progress here and more than a few growing pains, had mustered enough swagger to emerge as a cultural patron on arguably this city's grandest stage.
"Tonight, I think, this is one of the first times I can remember that we sponsored an event in the United States that has pretty broad appeal," acknowledged Peter de Vos, a grey-haired former submarine officer who heads RBC's U.S. investment-banking business.
"It's almost like borrowing a line from Avis Rent A Car: We've got to try a little bit harder."
At home in Canada, RBC can rely on brute size, unsurpassed financial muscle, and decades-old relationships to maintain its dominance. In New York? Not so much.
Instead, the bank has had to learn - sometimes the hard way - to hand responsibility to local managers, and resist the temptation to micro-manage from Toronto. It has endured culture clashes and learned to expect mistakes, even failures, as it bought new businesses and expanded into everything from investment banking and trading to fixed income, derivatives, and municipal bonds. And it has learned that things rarely go as planned.
"You have to be patient, and you have to expect it. Believe me, these aren't things that we knew at the beginning," conceded Chuck Winograd, who heads RBC's global capital market business out of Toronto. "Some things haven't become substantial businesses. None of them have worked out exactly. Some have been better, some have been worse, some have taken longer and a few have been shorter. But basically business plans generally take longer."
MOVING ON UP
RBC's New York nerve centre occupies 120,000 square feet in One Liberty Plaza, a hulking black skyscraper just a half-block away from Ground Zero. A swarm of people are hunched over computer screens or bustling about the long corridor of the trading floor, oblivious to the hand-scrawled sign that promises "Blood pressure screening and cookies" - think Wall Street stress with a dash of Canadian nicety.
Soon, many of them will be moving across the street.
The bank's U.S. trading corps has swelled to 500 people, in part from internal growth, and in part because of recent acquisitions like Carlin Financial Group, an electronic trading outfit that caters to small hedge funds.
Space has become an issue, so the bank has quietly arranged to lease another 200,000 square feet at a nearby building this fall.
Of course, the words "expansion" and "United States," at least when they are conjoined, usually conjure a bleak vision for Canadian investors. These investors are all too familiar with the travails of Canadian Imperial Bank of Commerce, which attempted to go toe-to-toe with the biggest U.S. investment banks in the late 1990s, and only ended up stubbing itself. Bank of Montreal has maintained a modest trading and capital markets business here, but that, too, fell prey to the jinx in recent months, amidst a gas-trading scandal that has already cost the bank $680-million (Canadian). And both RBC and Toronto-Dominion Bank have suffered setbacks with their push into U.S. retail banking.
Some of these mistakes have been chalked up to poor timing; others to bad strategy or even arrogance.
Whatever the case, Canada's largest bank has stuck with it, even when things appeared bleak.RBC took a significant step into the U.S. capital markets in 2001, when it paid $2.1-billion to acquire Dain Rauscher and Tucker Anthony Sutro, a pair of Midwestern brokerages. The idea was to create a leading "mid-market" player, catering to smaller companies that weren't viewed as big enough fish for the top Wall Street firms.There were issues from the beginning. On the investment banking front, Dain had a reputation for being "co-manager of choice" - a banking euphemism for bridesmaid. It was in plenty of deals, but only led about one in 10. It also placed a large emphasis on the technology industry, which went into the tank after the dot-com crash. Soon, analysts were griping that RBC had overpaid for Dain.
In the first four years after RBC bought Dain, the investment bank generated just $90-million (Canadian) in profit. After 2004, RBC reorganized its structure, and did not break out specific numbers for its U.S. unit, making it difficult to get a handle on profitability. But there is little debate that the operations are improving.
The U.S. arm now accounts for almost 40 per cent of the company's overall capital markets revenue, and all indications suggest it will surpass Canada soon as the biggest single source. Profit for the global business, meanwhile, climbed to a record $1.4-billion last year, almost double its contribution from 2005 (when the bank suffered from an Enron charge) and well ahead of the $827-million it made in 2004.
Part of the turnaround can be attributed to RBC's recognition that it couldn't oversee the business from Toronto. Six months after it made the Dain purchase in 2001, RBC attempted to integrate its energy and technology businesses into a North American unit, giving some bankers cross-border responsibilities. Then, in 2003, it reversed course, tacitly acknowledging that the markets were far different.
"The game used to be you used to send a Canadian down to do things," Mr. Winograd said. "The fundamental change was recognizing you needed Wall Street people to run it. You could send down the odd Canadian but basically it had to be done with local talent."
It also required new talent. Of the 40 managing partners who worked at the firm when it was acquired, only four are still with RBC.
This is fairly dramatic turnover, and in many ways it has been good. RBC now says it leads about 35 per cent of the deals it is in, and recently won the mandate of sole adviser to specialty grocer Whole Foods Market in its planned $565-million (U.S.) purchase of Wild Oats Market.
Tony Munoz, a young health care services banker who joined this spring from UBS, said he was drawn to RBC because it wasn't a big firm: the clients may be smaller, but that allows bankers to deal directly with more senior executives.
"It's a lot more entrepreneurial here," he said. "Things were sort of cookie-cutter at UBS."
This is precisely the sort of critique an investment banker at an independent Canadian firm might level at RBC's Toronto mother ship. And it brings up an interesting challenge: creating a culture that entices hungry and aggressive young bankers, but at the same time doesn't invite the sort of cowboy theatrics sometimes associated with boutique firms.
"It requires, in my job, I'd say eternal vigilance," said Mr. De Vos. "Do we have to monitor it closely? Do we have to hold up some people's promotions? Yes. And it's hard going through that balancing act."
LEADING WITH MAPLE BONDS
Taking companies public or advising them on mergers and acquisitions, the business of investment banking, tends to get the headlines.
A great deal of RBC's success resides in the less glamorous worlds of debt and derivatives. Mark Standish, a London native who joined RBC in 1996, oversees both these divisions from his New York office, perched just above the trading floor.
Mr. Standish, recently named co-president of RBC's global capital markets business along with Doug McGregor, who works out of Toronto and heads investment banking, admits it was difficult to get American clients to take his calls initially.
The bank was always strong in municipal bonds, which provide project financing for schools and cities, but less so in the corporate world. He credits a Canadian invention with helping him to bridge the chasm.
Maple bonds, a type of corporate debt sold to Canadian investors by foreign companies, have become a huge business since they were introduced a few years ago, and RBC is the leading player.
"That gave us a really strong calling card," said Mr. Standish. "It suddenly made the Canadian market relevant to a lot of global issuers."
That has helped pave relations not just in the United States, but in Europe as well. The global debt operations, based in London, led $30-billion worth of U.S. dollar issuance in 2005. This year, they're on pace for $80-billion, which would eclipse the entire annual bond sale total in corporate Canada.
In derivatives, RBC is bucking the trend. While some Canadian banks, most notably Toronto-Dominion Bank, have cut back, RBC has bulked up in what is considered one of the more complex - and risky - areas of finance. RBC officials have bristled over suggestions they're climbing the risk curve, and Mr. Standish insists that any fears over the bank's appetite in this regard are misguided.
"I love risk, but I love smart risk," he said. "We can easily up our risk profile."
Mr. Winograd, who prepared for his succession last fall by appointing Mr. Standish and Mr. McGregor as co-presidents, said it's "inexorable" that the U.S. business will become much larger than the Canadian division at some point, but stressed it will do so in a measured and careful fashion. Message? Don't expect any game-changing acquisitions.
"When you take a look at foreign banks in the U.S. that have come and tried to do it, that wanted to do it with a bang, they usually did," he said. "I always say I wish I knew as much as I knew now when I started, because it would have been easier. Some of my lessons in this business have been very expensive."
They had gathered for an exclusive showing of the critically-lauded Vancouver photographer Jeff Wall, whose massive, backlit portraits were the subject of a career retrospective.
But this night was as much a coming-out party for event sponsor RBC Capital Markets, a Canadian investment bank that, after some fitful progress here and more than a few growing pains, had mustered enough swagger to emerge as a cultural patron on arguably this city's grandest stage.
"Tonight, I think, this is one of the first times I can remember that we sponsored an event in the United States that has pretty broad appeal," acknowledged Peter de Vos, a grey-haired former submarine officer who heads RBC's U.S. investment-banking business.
"It's almost like borrowing a line from Avis Rent A Car: We've got to try a little bit harder."
At home in Canada, RBC can rely on brute size, unsurpassed financial muscle, and decades-old relationships to maintain its dominance. In New York? Not so much.
Instead, the bank has had to learn - sometimes the hard way - to hand responsibility to local managers, and resist the temptation to micro-manage from Toronto. It has endured culture clashes and learned to expect mistakes, even failures, as it bought new businesses and expanded into everything from investment banking and trading to fixed income, derivatives, and municipal bonds. And it has learned that things rarely go as planned.
"You have to be patient, and you have to expect it. Believe me, these aren't things that we knew at the beginning," conceded Chuck Winograd, who heads RBC's global capital market business out of Toronto. "Some things haven't become substantial businesses. None of them have worked out exactly. Some have been better, some have been worse, some have taken longer and a few have been shorter. But basically business plans generally take longer."
MOVING ON UP
RBC's New York nerve centre occupies 120,000 square feet in One Liberty Plaza, a hulking black skyscraper just a half-block away from Ground Zero. A swarm of people are hunched over computer screens or bustling about the long corridor of the trading floor, oblivious to the hand-scrawled sign that promises "Blood pressure screening and cookies" - think Wall Street stress with a dash of Canadian nicety.
Soon, many of them will be moving across the street.
The bank's U.S. trading corps has swelled to 500 people, in part from internal growth, and in part because of recent acquisitions like Carlin Financial Group, an electronic trading outfit that caters to small hedge funds.
Space has become an issue, so the bank has quietly arranged to lease another 200,000 square feet at a nearby building this fall.
Of course, the words "expansion" and "United States," at least when they are conjoined, usually conjure a bleak vision for Canadian investors. These investors are all too familiar with the travails of Canadian Imperial Bank of Commerce, which attempted to go toe-to-toe with the biggest U.S. investment banks in the late 1990s, and only ended up stubbing itself. Bank of Montreal has maintained a modest trading and capital markets business here, but that, too, fell prey to the jinx in recent months, amidst a gas-trading scandal that has already cost the bank $680-million (Canadian). And both RBC and Toronto-Dominion Bank have suffered setbacks with their push into U.S. retail banking.
Some of these mistakes have been chalked up to poor timing; others to bad strategy or even arrogance.
Whatever the case, Canada's largest bank has stuck with it, even when things appeared bleak.RBC took a significant step into the U.S. capital markets in 2001, when it paid $2.1-billion to acquire Dain Rauscher and Tucker Anthony Sutro, a pair of Midwestern brokerages. The idea was to create a leading "mid-market" player, catering to smaller companies that weren't viewed as big enough fish for the top Wall Street firms.There were issues from the beginning. On the investment banking front, Dain had a reputation for being "co-manager of choice" - a banking euphemism for bridesmaid. It was in plenty of deals, but only led about one in 10. It also placed a large emphasis on the technology industry, which went into the tank after the dot-com crash. Soon, analysts were griping that RBC had overpaid for Dain.
In the first four years after RBC bought Dain, the investment bank generated just $90-million (Canadian) in profit. After 2004, RBC reorganized its structure, and did not break out specific numbers for its U.S. unit, making it difficult to get a handle on profitability. But there is little debate that the operations are improving.
The U.S. arm now accounts for almost 40 per cent of the company's overall capital markets revenue, and all indications suggest it will surpass Canada soon as the biggest single source. Profit for the global business, meanwhile, climbed to a record $1.4-billion last year, almost double its contribution from 2005 (when the bank suffered from an Enron charge) and well ahead of the $827-million it made in 2004.
Part of the turnaround can be attributed to RBC's recognition that it couldn't oversee the business from Toronto. Six months after it made the Dain purchase in 2001, RBC attempted to integrate its energy and technology businesses into a North American unit, giving some bankers cross-border responsibilities. Then, in 2003, it reversed course, tacitly acknowledging that the markets were far different.
"The game used to be you used to send a Canadian down to do things," Mr. Winograd said. "The fundamental change was recognizing you needed Wall Street people to run it. You could send down the odd Canadian but basically it had to be done with local talent."
It also required new talent. Of the 40 managing partners who worked at the firm when it was acquired, only four are still with RBC.
This is fairly dramatic turnover, and in many ways it has been good. RBC now says it leads about 35 per cent of the deals it is in, and recently won the mandate of sole adviser to specialty grocer Whole Foods Market in its planned $565-million (U.S.) purchase of Wild Oats Market.
Tony Munoz, a young health care services banker who joined this spring from UBS, said he was drawn to RBC because it wasn't a big firm: the clients may be smaller, but that allows bankers to deal directly with more senior executives.
"It's a lot more entrepreneurial here," he said. "Things were sort of cookie-cutter at UBS."
This is precisely the sort of critique an investment banker at an independent Canadian firm might level at RBC's Toronto mother ship. And it brings up an interesting challenge: creating a culture that entices hungry and aggressive young bankers, but at the same time doesn't invite the sort of cowboy theatrics sometimes associated with boutique firms.
"It requires, in my job, I'd say eternal vigilance," said Mr. De Vos. "Do we have to monitor it closely? Do we have to hold up some people's promotions? Yes. And it's hard going through that balancing act."
LEADING WITH MAPLE BONDS
Taking companies public or advising them on mergers and acquisitions, the business of investment banking, tends to get the headlines.
A great deal of RBC's success resides in the less glamorous worlds of debt and derivatives. Mark Standish, a London native who joined RBC in 1996, oversees both these divisions from his New York office, perched just above the trading floor.
Mr. Standish, recently named co-president of RBC's global capital markets business along with Doug McGregor, who works out of Toronto and heads investment banking, admits it was difficult to get American clients to take his calls initially.
The bank was always strong in municipal bonds, which provide project financing for schools and cities, but less so in the corporate world. He credits a Canadian invention with helping him to bridge the chasm.
Maple bonds, a type of corporate debt sold to Canadian investors by foreign companies, have become a huge business since they were introduced a few years ago, and RBC is the leading player.
"That gave us a really strong calling card," said Mr. Standish. "It suddenly made the Canadian market relevant to a lot of global issuers."
That has helped pave relations not just in the United States, but in Europe as well. The global debt operations, based in London, led $30-billion worth of U.S. dollar issuance in 2005. This year, they're on pace for $80-billion, which would eclipse the entire annual bond sale total in corporate Canada.
In derivatives, RBC is bucking the trend. While some Canadian banks, most notably Toronto-Dominion Bank, have cut back, RBC has bulked up in what is considered one of the more complex - and risky - areas of finance. RBC officials have bristled over suggestions they're climbing the risk curve, and Mr. Standish insists that any fears over the bank's appetite in this regard are misguided.
"I love risk, but I love smart risk," he said. "We can easily up our risk profile."
Mr. Winograd, who prepared for his succession last fall by appointing Mr. Standish and Mr. McGregor as co-presidents, said it's "inexorable" that the U.S. business will become much larger than the Canadian division at some point, but stressed it will do so in a measured and careful fashion. Message? Don't expect any game-changing acquisitions.
"When you take a look at foreign banks in the U.S. that have come and tried to do it, that wanted to do it with a bang, they usually did," he said. "I always say I wish I knew as much as I knew now when I started, because it would have been easier. Some of my lessons in this business have been very expensive."
Centre of the Earth may power your portfolio - Richard Blackwell
While solar, wind and alternative fuels get most of the attention in green power investing, geothermal is often left out.
Five of the seven public North American geothermal firms trade on Canadian exchanges, and those five have offices in Canada. But there is really only one serious geothermal power exploration site in Canada - in south-central British Columbia.
The companies are based in Canada, analysts say, because several went public through reverse takeovers of TSX Venture Exchange-based mining firms, and because the Canadian junior markets are a good place to raise capital for what are essentially natural resource exploration firms.
Geothermal power is hardly a new technology - the first geothermal power plant was built in the early 1900s in Italy - but the industry has a higher profile now that it is seen as a potentially important source of reliable and emission-free electricity.
Essentially, the process taps hot water and steam trapped up to three kilometres below ground, usually in areas with active tectonic activity. The heated water is pumped to the surface, and used to power turbines that generate electricity.
The United States is the world's biggest producer of geothermal power - about 3,000 megawatts - but that amounts to less than 1 per cent of its electricity generation.
In North America, the biggest publicly traded player is Ormat Technologies Inc. , a Reno, Nev.-based company that trades on the New York Stock Exchange and has annual revenue of about $270-million (U.S.). It runs six geothermal plants in the United States and several others around the world.
The Canadian-listed firms are at much earlier stages of their development.
Western GeoPower Corp., based in Vancouver and traded on the TSX Venture Exchange, is the only one of the group that has a Canadian project in the works. It is testing a potential geothermal site in the South Meager region, about 170 kilometres north of Vancouver, but its main focus is on a 25.5-megawatt project in California north of San Francisco. That plant is set to come online in 2010, and it has recently signed an agreement to sell the power to Pacific Gas & Electric Co.
Other geothermal companies listed on the TSX Venture Exchange include Nevada Geothermal Power Inc., which is drilling test wells in northern Nevada, U.S. Geothermal Inc., working on projects in Idaho and Oregon, and Sierra Geothermal Power Corp., which is exploring sites in Nevada and California.
The one company with a listing on the TSX senior exchange is Polaris Geothermal Inc., which has offices in Toronto although most of its operations are in Nicaragua. It already has about 10 megawatts in production there, and the company generated about $3-million in power revenue last year - along with almost $400,000 from the sale of carbon credits.
Polaris hit a setback in February when the new Nicaraguan government said it was going to review the rights to develop the property. Those issues were resolved last week and an expansion of the project to 66 megawatts is now going ahead.
Fraser Mackenzie analyst Vic Vallance, who had put an "under review" flag on Polaris stock when the dispute arose, has reinstated his "strong buy" and a one-year target price of $2.25. Polaris closed on Friday at $1.15.
Geothermal power companies are for patient investors, said John McIlveen, an analyst who followed alternative energy for several years at Dundee Securities and now works for Jacob and Co., a startup investment bank specializing in the renewable power sector.
"It's almost like real estate investing," he said. "You're not looking for a flip tomorrow. This is a two- to four-year hold."
Still, Mr. McIlveen said, there are potentially huge returns for those willing to put their money in and sit tight. The big gains will come when certain milestones are reached - such as the completion of a positive feasibility study, or the signing of a power purchase agreement with a utility.
"[The shares] will go sideways for a year, until something happens, then all of a sudden a whole year's worth of appreciation will get into the stock in a couple of weeks," he said.
Five of the seven public North American geothermal firms trade on Canadian exchanges, and those five have offices in Canada. But there is really only one serious geothermal power exploration site in Canada - in south-central British Columbia.
The companies are based in Canada, analysts say, because several went public through reverse takeovers of TSX Venture Exchange-based mining firms, and because the Canadian junior markets are a good place to raise capital for what are essentially natural resource exploration firms.
Geothermal power is hardly a new technology - the first geothermal power plant was built in the early 1900s in Italy - but the industry has a higher profile now that it is seen as a potentially important source of reliable and emission-free electricity.
Essentially, the process taps hot water and steam trapped up to three kilometres below ground, usually in areas with active tectonic activity. The heated water is pumped to the surface, and used to power turbines that generate electricity.
The United States is the world's biggest producer of geothermal power - about 3,000 megawatts - but that amounts to less than 1 per cent of its electricity generation.
In North America, the biggest publicly traded player is Ormat Technologies Inc. , a Reno, Nev.-based company that trades on the New York Stock Exchange and has annual revenue of about $270-million (U.S.). It runs six geothermal plants in the United States and several others around the world.
The Canadian-listed firms are at much earlier stages of their development.
Western GeoPower Corp., based in Vancouver and traded on the TSX Venture Exchange, is the only one of the group that has a Canadian project in the works. It is testing a potential geothermal site in the South Meager region, about 170 kilometres north of Vancouver, but its main focus is on a 25.5-megawatt project in California north of San Francisco. That plant is set to come online in 2010, and it has recently signed an agreement to sell the power to Pacific Gas & Electric Co.
Other geothermal companies listed on the TSX Venture Exchange include Nevada Geothermal Power Inc., which is drilling test wells in northern Nevada, U.S. Geothermal Inc., working on projects in Idaho and Oregon, and Sierra Geothermal Power Corp., which is exploring sites in Nevada and California.
The one company with a listing on the TSX senior exchange is Polaris Geothermal Inc., which has offices in Toronto although most of its operations are in Nicaragua. It already has about 10 megawatts in production there, and the company generated about $3-million in power revenue last year - along with almost $400,000 from the sale of carbon credits.
Polaris hit a setback in February when the new Nicaraguan government said it was going to review the rights to develop the property. Those issues were resolved last week and an expansion of the project to 66 megawatts is now going ahead.
Fraser Mackenzie analyst Vic Vallance, who had put an "under review" flag on Polaris stock when the dispute arose, has reinstated his "strong buy" and a one-year target price of $2.25. Polaris closed on Friday at $1.15.
Geothermal power companies are for patient investors, said John McIlveen, an analyst who followed alternative energy for several years at Dundee Securities and now works for Jacob and Co., a startup investment bank specializing in the renewable power sector.
"It's almost like real estate investing," he said. "You're not looking for a flip tomorrow. This is a two- to four-year hold."
Still, Mr. McIlveen said, there are potentially huge returns for those willing to put their money in and sit tight. The big gains will come when certain milestones are reached - such as the completion of a positive feasibility study, or the signing of a power purchase agreement with a utility.
"[The shares] will go sideways for a year, until something happens, then all of a sudden a whole year's worth of appreciation will get into the stock in a couple of weeks," he said.
Sunday, June 17, 2007
The sky's the limit for private equity in Canada - Rick Nathan
Last year, a total of more than $11-billion was invested in Canadian companies by buyout funds. This set a new record, and more than doubled the 2005 total of $4.5-billion. This growth continues on a track to double again in 2007, with $5.1-billion invested in the first quarter of this year. New private equity funds raised also reached a new record level in 2006, with over $10-billion in fresh investment capital, led by a record total of $8-billion in new Canadian buyout funds.
Can this growth continue? Of course it can.
The boom we are seeing today in private equity, in our buyout sector, is primarily a boom in activity. The records we are setting are record market volumes, record numbers of transactions completed, records in the sizes of companies acquired, in the size and number of new buyout funds being raised.
Yes, prices are rising, particularly in acquisitions of public companies. But in the mid-market, where the vast majority of deals are completed, these price increases have not been dramatic.
And let's remember: When we do talk about rising prices in the buyout market, we talk about earnings multiples – the price to buy a good company moving up from six times, to seven times or maybe eight times earnings.
Earnings: These companies are all profitable, real businesses with real assets and tangible value.
But if prices are rising, it means that our buyout funds cannot count on finding bargains to drive the returns on their investments. They have to pay up, and they might not see any multiple expansion when it's time to sell.
The only way investors can count on making money in this market is by increasing earnings. Building real value. Building portfolio companies to a new, higher level.
Successful investors understand how to use the natural advantages of private ownership to generate these kinds of gains.
These natural advantages of the private markets are well known, advantages that generally lead to outperformance over the public markets.
These advantages include:
- Better investment selection, with the opportunity for real due diligence.
- Negotiated terms, with deal structures to reduce risk and enhance performance.
- Active investment, with board representation and strong relationships with management.
- Getting off of the quarterly earnings treadmill of the public markets – the freedom to build long-term growth without worrying about missing your quarterly numbers by 2 cents a share.
And the main advantage of private ownership: Following a buyout, all of these companies are run by their owners. The board is dominated by the investors and managers who own the company. They make decisions quickly, seizing opportunities, and taking direct action where necessary. They think and behave like owners.
This is much different than many companies in the public markets, where ownership is dispersed, boards must take on a broad oversight role as guardians of the small investor, and the whole governance and decision-making process is frequently much slower and less effective.
All of these natural advantages of private ownership are real. And skilled buyout fund managers will continue to outperform the public markets. The outstanding performance of the Canadian buyout sector continues: The top quartile benchmark return for our buyout funds has moved up to 21 per cent from 16 per cent at year-end 2005.
So just how far can we go?
The Toronto Stock Exchange has a market capitalization of $2-trillion, so when we saw our record $11-billion invested by buyout funds last year, this was roughly equal to ½ of 1 per cent of the size of our public markets.
And let's not forget that the overwhelming majority of companies in our economy are private, and natural candidates for private equity investors. Even in the U.S., which has much broader public markets, more than 80 per cent of all companies with annual revenues over $10-million, and fully two-thirds of those with revenues over $100-million, are privately held. There is no shortage for private equity investors to choose from.
Further, the majority of Canadian pension funds still do not have allocations to private equity. As the market grows, more of them are entering the asset class.
Those pension funds who are active in private equity generally have allocations in the range of 5 to 7 per cent of their portfolios, with some of our leading pension funds at higher levels.
There are no visible limits ahead for private equity in Canada. This growth is strong, it is real, and it will continue.
Can this growth continue? Of course it can.
The boom we are seeing today in private equity, in our buyout sector, is primarily a boom in activity. The records we are setting are record market volumes, record numbers of transactions completed, records in the sizes of companies acquired, in the size and number of new buyout funds being raised.
Yes, prices are rising, particularly in acquisitions of public companies. But in the mid-market, where the vast majority of deals are completed, these price increases have not been dramatic.
And let's remember: When we do talk about rising prices in the buyout market, we talk about earnings multiples – the price to buy a good company moving up from six times, to seven times or maybe eight times earnings.
Earnings: These companies are all profitable, real businesses with real assets and tangible value.
But if prices are rising, it means that our buyout funds cannot count on finding bargains to drive the returns on their investments. They have to pay up, and they might not see any multiple expansion when it's time to sell.
The only way investors can count on making money in this market is by increasing earnings. Building real value. Building portfolio companies to a new, higher level.
Successful investors understand how to use the natural advantages of private ownership to generate these kinds of gains.
These natural advantages of the private markets are well known, advantages that generally lead to outperformance over the public markets.
These advantages include:
- Better investment selection, with the opportunity for real due diligence.
- Negotiated terms, with deal structures to reduce risk and enhance performance.
- Active investment, with board representation and strong relationships with management.
- Getting off of the quarterly earnings treadmill of the public markets – the freedom to build long-term growth without worrying about missing your quarterly numbers by 2 cents a share.
And the main advantage of private ownership: Following a buyout, all of these companies are run by their owners. The board is dominated by the investors and managers who own the company. They make decisions quickly, seizing opportunities, and taking direct action where necessary. They think and behave like owners.
This is much different than many companies in the public markets, where ownership is dispersed, boards must take on a broad oversight role as guardians of the small investor, and the whole governance and decision-making process is frequently much slower and less effective.
All of these natural advantages of private ownership are real. And skilled buyout fund managers will continue to outperform the public markets. The outstanding performance of the Canadian buyout sector continues: The top quartile benchmark return for our buyout funds has moved up to 21 per cent from 16 per cent at year-end 2005.
So just how far can we go?
The Toronto Stock Exchange has a market capitalization of $2-trillion, so when we saw our record $11-billion invested by buyout funds last year, this was roughly equal to ½ of 1 per cent of the size of our public markets.
And let's not forget that the overwhelming majority of companies in our economy are private, and natural candidates for private equity investors. Even in the U.S., which has much broader public markets, more than 80 per cent of all companies with annual revenues over $10-million, and fully two-thirds of those with revenues over $100-million, are privately held. There is no shortage for private equity investors to choose from.
Further, the majority of Canadian pension funds still do not have allocations to private equity. As the market grows, more of them are entering the asset class.
Those pension funds who are active in private equity generally have allocations in the range of 5 to 7 per cent of their portfolios, with some of our leading pension funds at higher levels.
There are no visible limits ahead for private equity in Canada. This growth is strong, it is real, and it will continue.
Friday, June 15, 2007
Diversity key to well-managed Indian economy - Dale Jackson
Can India maintain momentum?
There are two words Jayesh Gandhi wants Canadian investors to remember when they think of India: sustainable growth. Those are the words the fund manager from Mumbai-based Birla Sun Life Asset Management uses when addressing concerns that his country's booming economy is growing too quickly.
"We hope to see India continuing its strong earnings growth and economic growth for the next 10 years," he says.
Mr. Gandhi is travelling across the country to promote his Excel India Fund - one of the best performing mutual funds and the only pure-play Indian equity fund in Canada. Over the past five years Excel India has consistently returned well over 30 per cent annually while the average emerging market equity fund has been pulling in an average 20 per cent a year. Even the benchmark MSCI emerging market index has managed to post a still impressive gain of 18.7 per cent each year.
Since the beginning of this year the Bombay Stock Exchange's 30-member Sensex Index has risen 50 per cent to surpass $1-trillion (U.S.). Economic growth in India has averaged 8.6 per cent annually over the past four years, helping to spur earnings growth as high as 35 per cent. The rupee is currently the best performing currency in Asia.
Mr. Gandhi says there's no reason to believe the good fortune will not continue because India's growth is diversified. His $277-million (Canadian) Excel India portfolio reflects that diversification with a mix of infrastructure, industrial and consumer stocks.
Key holdings in the fund also reflect Corporate India's expansion to the global stage. The country's largest private sector bank, ICICI, accounts for nearly 5 per cent of holdings.
Other large positions include Tata Steel, which has been reported to be a serious contender to acquire Stelco Inc. He says Tata has maintained a low cost structure while boosting quality to the global standard. Other members of the giant Tata Group include Tata Motors Ltd. and Tata Consultancy Services.
One infrastructure play in the fund is Bharat Heavy Electricals Ltd., which designs and builds power plants.
The fund, which has a management expense ratio of 3.4 per cent, also includes a large weighting in India's growing technology sector, including the country's second largest software manufacturer, Infosys Technologies Ltd.
There are, however, signs the fund may have hit a rut. So far this year Excel India has returned less than 2 per cent. Much of the fund's decline occurred earlier this month when fears of rising global interest rates caused steep selloffs on emerging markets, including India. Mr. Gandhi says he's not concerned because the fundamentals of the Indian market remain strong. "After a spectacular four years, six months is not a time frame one should look at," he says. "India's a much longer-term sustainable story."
Mr. Gandhi isn't alone in his optimism. TD Economics has upgraded its forecast for gross domestic product growth in India by half a percentage point a year to at least 8 per cent. "I think India's growth is sustainable because it's balanced," says international economist Richard Kelly.
That balance includes equally vibrant consumer and industrial bases combined with a cooling effect from a series of interest rate hikes by India's central bank. "Interest rates are starting to get in that biting range," says Mr. Kelly.
To make his point he contrasts India with a closely linked emerging market - China. Much of China's growth is in the industrial sector while an increasingly affluent Indian middle-class has been creating demand for consumer goods and fuelling a robust financial services industry. Average annual wage increases over the past five years in India have been as high as 15 per cent.
As a result India is the only emerging market economy running a current account deficit. That means India imports more goods and services than it exports. "You have to have a domestic consumer base to have a balanced economy," he says.
Mr. Kelly also credits India's central bank with taking the necessary measures to regulate growth and encourage diversification. "The economic management of India is doing much better than China," he says.
While he describes his view of India as "extremely optimistic," Mr. Kelly says like China, runaway inflation is the biggest concern in India. He says the first red flag will wave when inflation continues to climb after the central bank raises the benchmark interest rate.
There are two words Jayesh Gandhi wants Canadian investors to remember when they think of India: sustainable growth. Those are the words the fund manager from Mumbai-based Birla Sun Life Asset Management uses when addressing concerns that his country's booming economy is growing too quickly.
"We hope to see India continuing its strong earnings growth and economic growth for the next 10 years," he says.
Mr. Gandhi is travelling across the country to promote his Excel India Fund - one of the best performing mutual funds and the only pure-play Indian equity fund in Canada. Over the past five years Excel India has consistently returned well over 30 per cent annually while the average emerging market equity fund has been pulling in an average 20 per cent a year. Even the benchmark MSCI emerging market index has managed to post a still impressive gain of 18.7 per cent each year.
Since the beginning of this year the Bombay Stock Exchange's 30-member Sensex Index has risen 50 per cent to surpass $1-trillion (U.S.). Economic growth in India has averaged 8.6 per cent annually over the past four years, helping to spur earnings growth as high as 35 per cent. The rupee is currently the best performing currency in Asia.
Mr. Gandhi says there's no reason to believe the good fortune will not continue because India's growth is diversified. His $277-million (Canadian) Excel India portfolio reflects that diversification with a mix of infrastructure, industrial and consumer stocks.
Key holdings in the fund also reflect Corporate India's expansion to the global stage. The country's largest private sector bank, ICICI, accounts for nearly 5 per cent of holdings.
Other large positions include Tata Steel, which has been reported to be a serious contender to acquire Stelco Inc. He says Tata has maintained a low cost structure while boosting quality to the global standard. Other members of the giant Tata Group include Tata Motors Ltd. and Tata Consultancy Services.
One infrastructure play in the fund is Bharat Heavy Electricals Ltd., which designs and builds power plants.
The fund, which has a management expense ratio of 3.4 per cent, also includes a large weighting in India's growing technology sector, including the country's second largest software manufacturer, Infosys Technologies Ltd.
There are, however, signs the fund may have hit a rut. So far this year Excel India has returned less than 2 per cent. Much of the fund's decline occurred earlier this month when fears of rising global interest rates caused steep selloffs on emerging markets, including India. Mr. Gandhi says he's not concerned because the fundamentals of the Indian market remain strong. "After a spectacular four years, six months is not a time frame one should look at," he says. "India's a much longer-term sustainable story."
Mr. Gandhi isn't alone in his optimism. TD Economics has upgraded its forecast for gross domestic product growth in India by half a percentage point a year to at least 8 per cent. "I think India's growth is sustainable because it's balanced," says international economist Richard Kelly.
That balance includes equally vibrant consumer and industrial bases combined with a cooling effect from a series of interest rate hikes by India's central bank. "Interest rates are starting to get in that biting range," says Mr. Kelly.
To make his point he contrasts India with a closely linked emerging market - China. Much of China's growth is in the industrial sector while an increasingly affluent Indian middle-class has been creating demand for consumer goods and fuelling a robust financial services industry. Average annual wage increases over the past five years in India have been as high as 15 per cent.
As a result India is the only emerging market economy running a current account deficit. That means India imports more goods and services than it exports. "You have to have a domestic consumer base to have a balanced economy," he says.
Mr. Kelly also credits India's central bank with taking the necessary measures to regulate growth and encourage diversification. "The economic management of India is doing much better than China," he says.
While he describes his view of India as "extremely optimistic," Mr. Kelly says like China, runaway inflation is the biggest concern in India. He says the first red flag will wave when inflation continues to climb after the central bank raises the benchmark interest rate.
Wednesday, June 13, 2007
Vitamin D makers hit pay dirt - Tavia Grant
Vitamin D makers are enjoying a burst of sales after recent findings suggest the supplement helps cut the risk of cancer.
Jamieson Laboratories Inc., for example, Canada's oldest and largest vitamin maker, said sales spiked in the two days last week after the Canadian Cancer Society recommended all adults start taking the vitamin. The recommendation came as a U.S. study indicated the supplement cuts the risk of cancer by 60 per cent.
“One of our major retailers who partners with us witnessed a doubling of sales on the Friday and Saturday,” said John Challinor, spokesman for the Toronto-based manufacturer, adding that he can't give precise sales figures for another month.
His company's not alone. The Rexall family of pharmacies, which includes 1,500 stores across Canada, said sales surged after last week's news.
“The spike was eight times higher than normal,” earlier this week, said spokesperson Michelle Lee. It's since stabilized, though at a higher level than usual.
Her firm plans to promote the product in its stores and is building awareness among pharmacists about the sunshine vitamin.
This wasn't the first study linking the vitamin to reduced cancer risk. Other studies have yielded similar conclusions over the past year, causing Jamieson's vitamin D sales to rise 19 per cent in May from year-earlier levels.
Vitamin A and D sales amount to about $17-million annually in Canada and Jamieson accounts for about 40 per cent of the country's market share.
Last week's rush to buy the vitamin did cause some pharmacies to run out, but companies have said they foresee no looming shortages. Sales could climb even higher once ebbing sunshine in fall and winter set in.
Shoppers Drug Mart has seen “an increase in sales in vitamin D and our pharmacists have received more questions” about the supplement, said spokesperson Pat Chapman.
Most of vitamin D on drugstore shelves is made the lanolin extracted from sheep's wool.
The supplement is the least expensive vitamin on the market, costing about $5 for a 1,000 IU bottle of 100 tablets, “probably the most affordable health insurance for Canadians,” Jamieson's Mr. Challinor said.
Jamieson Laboratories Inc., for example, Canada's oldest and largest vitamin maker, said sales spiked in the two days last week after the Canadian Cancer Society recommended all adults start taking the vitamin. The recommendation came as a U.S. study indicated the supplement cuts the risk of cancer by 60 per cent.
“One of our major retailers who partners with us witnessed a doubling of sales on the Friday and Saturday,” said John Challinor, spokesman for the Toronto-based manufacturer, adding that he can't give precise sales figures for another month.
His company's not alone. The Rexall family of pharmacies, which includes 1,500 stores across Canada, said sales surged after last week's news.
“The spike was eight times higher than normal,” earlier this week, said spokesperson Michelle Lee. It's since stabilized, though at a higher level than usual.
Her firm plans to promote the product in its stores and is building awareness among pharmacists about the sunshine vitamin.
This wasn't the first study linking the vitamin to reduced cancer risk. Other studies have yielded similar conclusions over the past year, causing Jamieson's vitamin D sales to rise 19 per cent in May from year-earlier levels.
Vitamin A and D sales amount to about $17-million annually in Canada and Jamieson accounts for about 40 per cent of the country's market share.
Last week's rush to buy the vitamin did cause some pharmacies to run out, but companies have said they foresee no looming shortages. Sales could climb even higher once ebbing sunshine in fall and winter set in.
Shoppers Drug Mart has seen “an increase in sales in vitamin D and our pharmacists have received more questions” about the supplement, said spokesperson Pat Chapman.
Most of vitamin D on drugstore shelves is made the lanolin extracted from sheep's wool.
The supplement is the least expensive vitamin on the market, costing about $5 for a 1,000 IU bottle of 100 tablets, “probably the most affordable health insurance for Canadians,” Jamieson's Mr. Challinor said.
Tuesday, June 12, 2007
Easy living, easy business in Vancouver - Tavia Grant
Vancouver, a city best known for laid-back living and soggy weather, is the easiest place in the world to do business, a global study of 50 cities says.
The West Coast city, along with Toronto and Montreal, were top three in the world in that category because of a "strong national health-care system, excellent infrastructure, low traffic and easy access to public transportation," according to MasterCard International Inc.'s first annual ranking of global cities, to be released today.
While many Canadians might laugh at the notion these cities have "low traffic," they fare well internationally when compared with, say, Mumbai. It's their quality of life that makes the Canadian cities shine on the global stage, said one of the study's researchers.
"To come out ahead of the pack ... is really an achievement of having some qualities that aren't common," said Maurice Levi, professor of finance at the University of British Columbia's Sauder School of Business.
They excel in the one subcategory, but Canadian cities don't crack the top 10 when it comes to cities driving the world's commerce, according to the study.
It ranked London first overall, saying it outshined New York as the "leading centre of commerce."
Toronto ranks 12th, Montreal 27th and Vancouver 28th, partly because they're smaller and attract less capital in financial markets.
Canadian cities can be globally competitive if they maintain their high quality of life and continually improve infrastructure, Mr. Levi said. Rankings could also improve if the banking system becomes more supportive of business startups by extending credit more freely, he added.
Today's study is part of MasterCard's new drive to study how cities shape the global economy. Mr. Levi hopes the survey will help guide companies when they decide where to start or expand their businesses.
Among other findings:
London: The world's "leading centre of commerce" because of a flexible environment for business, strong global financial connections and "exceptionally high" levels of international trade, travel and conferences.
New York: Once the "unchallenged" global financial capital, the Big Apple was hampered as bond market regulations in New York affected the volume of listed sales, and the less stable U.S. economy and weakening currency made it fare less well than London.
Chicago placed second in North America because of its importance for commodities and financial markets.
Eastern and Western Europe continues to see an economic divide. The lowest-ranking Western European city on the list, Rome, scored nearly equal to Budapest, the highest-ranking Eastern European city.
"Asian Tigers:" Hong Kong, Singapore and Seoul all ranked among the top 10, with Seoul's higher education system and patent output helping it lead the pack.
Dubai: The region's air and cargo traffic hub, Dubai also claims a flexible business climate optimal for companies seeking a Middle East presence.
Santiago: Latin America's top centre of commerce, boasting a stable economy, low crime rate and high quality of life.
The West Coast city, along with Toronto and Montreal, were top three in the world in that category because of a "strong national health-care system, excellent infrastructure, low traffic and easy access to public transportation," according to MasterCard International Inc.'s first annual ranking of global cities, to be released today.
While many Canadians might laugh at the notion these cities have "low traffic," they fare well internationally when compared with, say, Mumbai. It's their quality of life that makes the Canadian cities shine on the global stage, said one of the study's researchers.
"To come out ahead of the pack ... is really an achievement of having some qualities that aren't common," said Maurice Levi, professor of finance at the University of British Columbia's Sauder School of Business.
They excel in the one subcategory, but Canadian cities don't crack the top 10 when it comes to cities driving the world's commerce, according to the study.
It ranked London first overall, saying it outshined New York as the "leading centre of commerce."
Toronto ranks 12th, Montreal 27th and Vancouver 28th, partly because they're smaller and attract less capital in financial markets.
Canadian cities can be globally competitive if they maintain their high quality of life and continually improve infrastructure, Mr. Levi said. Rankings could also improve if the banking system becomes more supportive of business startups by extending credit more freely, he added.
Today's study is part of MasterCard's new drive to study how cities shape the global economy. Mr. Levi hopes the survey will help guide companies when they decide where to start or expand their businesses.
Among other findings:
London: The world's "leading centre of commerce" because of a flexible environment for business, strong global financial connections and "exceptionally high" levels of international trade, travel and conferences.
New York: Once the "unchallenged" global financial capital, the Big Apple was hampered as bond market regulations in New York affected the volume of listed sales, and the less stable U.S. economy and weakening currency made it fare less well than London.
Chicago placed second in North America because of its importance for commodities and financial markets.
Eastern and Western Europe continues to see an economic divide. The lowest-ranking Western European city on the list, Rome, scored nearly equal to Budapest, the highest-ranking Eastern European city.
"Asian Tigers:" Hong Kong, Singapore and Seoul all ranked among the top 10, with Seoul's higher education system and patent output helping it lead the pack.
Dubai: The region's air and cargo traffic hub, Dubai also claims a flexible business climate optimal for companies seeking a Middle East presence.
Santiago: Latin America's top centre of commerce, boasting a stable economy, low crime rate and high quality of life.
Monday, June 11, 2007
Fairmont's art-deco springboard into China - Geofrey York
SHANGHAI -- China's most famous hotel has survived a civil war, Chinese bombs, Japanese occupation, Communist takeover and the fanatical Red Guards of the Cultural Revolution.
Throughout it all, the art-deco icon on the Shanghai waterfront has remained largely open - even if its rooms were sometimes requisitioned by Japanese troops or Communist apparatchiks.
But now, 78 years after its birth, the celebrated Peace Hotel is entering one of the most radical phases in its history: a three-year shutdown and a top-to-bottom renovation, with a key role being played by Fairmont Hotels & Resorts Inc.
The architectural landmark on the riverfront Bund is due to reopen in 2010 under a new name, waving the flag of the company, although still owned by a Chinese state corporation. It will be called the Fairmont Peace Hotel Shanghai.
Fairmont was bought by Prince al-Waleed bin Talal's Kingdom Hotels International and Colony Capital last year, but is still operated out of Toronto.
The $65-million (U.S.) refurbishment will be one of the toughest challenges in the history of one of the world's biggest luxury-hotel chains.
With heritage techniques honed at famed Canadian icons such as the Royal York and the Chateau Laurier, the company will try to transform the crumbling Peace Hotel into the most valuable luxury hotel in China, without jeopardizing its sensitive site and unique architecture.
At the same time, Fairmont will be using the Peace Hotel as its springboard into the fast-growing Chinese market. The stakes are high.
If the renovation is successful, it could pave the way for a rapid move by Fairmont into other historic hotels in Shanghai and other major cities across China.
"It's a terrific launching pad," said Matthew Sparks, senior vice-president for development at Fairmont Raffles Hotels International.
"We're getting into China in a splashy way. We've been working on this for almost two years. The Peace Hotel is one of the few hotels we've identified in China that keeps with our brand. We think it will be really magnificent."
Not everyone is so sanguine about the shutdown and renovation. Heritage experts are watching nervously, worried that the art-deco architecture could be endangered. And the Peace Hotel's most famous occupants - a group of elderly Chinese jazz musicians who survived the worst years of the Maoist era - are moving to another hotel and might not return intact to the Peace Hotel when it reopens in time for the 2010 Shanghai Expo.
Cao Ziping, an 82-year-old pianist in the Peace Hotel jazz band, says the aging hotel is certainly in need of repairs. Water pipes were sometimes bursting and leaking during the band's performances, he said. But the band's leader, 85-year-old trumpet player Zhou Wanrong, says he is not sure whether he will return to the hotel when it reopens.
Lu Jiansong, a professor of cultural heritage at Fudan University in Shanghai, says he is "gravely worried" that the renovations could damage the hotel's historical architecture. Shanghai's cultural authorities are too weak to supervise the project properly, and national heritage laws have too many loopholes, he said.
"Financial motivations are causing threats to our architectural heritage," he said. "This project will inevitably challenge the historical value of the Peace Hotel. I really doubt it will meet the standards for cultural preservation."
The 12-storey hotel, originally called the Cathay, was built in the 1920s by British tycoon Victor Sassoon, who lived in the pyramid-shaped rooftop penthouse. Among the guests in the 1930s were actor Charlie Chaplin and playwright Noel Coward, who wrote Private Lives in room 314.
After the Communist revolution, the Cathay was nationalized, briefly turned into an office compound, and then merged with the adjacent Palace Hotel under a new name, the Peace Hotel, in 1956. For many years it was one of only two hotels in Shanghai where foreigners could stay.
The hotel is now owned by state-run Jinjiang International Hotel Management Co., the biggest hotel operator in China. Under the new plan, Jinjiang and Fairmont are setting up a joint venture to renovate and manage the main tower of the hotel - the former Cathay. They'll also add a modern new wing with a spa and meeting rooms. The other tower, the former Palace Hotel, will be turned into an arts centre and a shopping centre for Swatch brand watches, to be managed by Jinjiang and a unit of Swatch Group AG.
"I think it's going to be a huge challenge for Fairmont," said Spencer Dodington, an expert on art-deco architecture who runs an interior design and restoration business in Shanghai.
"Shanghai is full of five-star hotels, but none of them are historic. The Peace Hotel will be the first combination of five-star luxury and historical preservation in Shanghai. It's a big opportunity for Fairmont. If they can pull this off and make money from it, there will be a lot of other opportunities for Fairmont to make a splash in China."
The Peace Hotel has suffered a series of cheap renovations under state guidance since the 1980s, he noted. "So they'll have to demolish a lot of the old renovations. It's going to take a lot of delicate effort. But there's every indication that they're going to do a very thorough and positive renovation this time."
Peter Hibbard, an historian in Shanghai who is regarded as the leading expert on the history of the Peace Hotel, has been retained as an adviser to the renovation project. "This building is a national treasure," he said. "It was the finest hotel in the world, in my view, but it fell into a very poor state of repair. It had really decayed, and it was badly renovated in the 1980s. It's going to be a long process to get this right."
Fairmont is aware of the potential pitfalls, Mr. Sparks said. "We have a strong sensitivity to maintaining and enhancing the historical aspects of our hotels. There's always a bit of tension between that and providing a 21st-century experience for our guests."
As for the challenges of the Chinese hotel market, Mr. Sparks said the key will be Fairmont's partnership with Jinjiang. "We have very well-motivated and well-connected owners," he said. "They're experienced and well-regarded, and they'll navigate the Chinese business world for us."
Fairmont Raffles, a sister company also controlled by Kingdom and Colony investors, is also planning a 3,000-room hotel in Macau, the former Portuguese enclave in southern China that is the casino capital of Asia.
Throughout it all, the art-deco icon on the Shanghai waterfront has remained largely open - even if its rooms were sometimes requisitioned by Japanese troops or Communist apparatchiks.
But now, 78 years after its birth, the celebrated Peace Hotel is entering one of the most radical phases in its history: a three-year shutdown and a top-to-bottom renovation, with a key role being played by Fairmont Hotels & Resorts Inc.
The architectural landmark on the riverfront Bund is due to reopen in 2010 under a new name, waving the flag of the company, although still owned by a Chinese state corporation. It will be called the Fairmont Peace Hotel Shanghai.
Fairmont was bought by Prince al-Waleed bin Talal's Kingdom Hotels International and Colony Capital last year, but is still operated out of Toronto.
The $65-million (U.S.) refurbishment will be one of the toughest challenges in the history of one of the world's biggest luxury-hotel chains.
With heritage techniques honed at famed Canadian icons such as the Royal York and the Chateau Laurier, the company will try to transform the crumbling Peace Hotel into the most valuable luxury hotel in China, without jeopardizing its sensitive site and unique architecture.
At the same time, Fairmont will be using the Peace Hotel as its springboard into the fast-growing Chinese market. The stakes are high.
If the renovation is successful, it could pave the way for a rapid move by Fairmont into other historic hotels in Shanghai and other major cities across China.
"It's a terrific launching pad," said Matthew Sparks, senior vice-president for development at Fairmont Raffles Hotels International.
"We're getting into China in a splashy way. We've been working on this for almost two years. The Peace Hotel is one of the few hotels we've identified in China that keeps with our brand. We think it will be really magnificent."
Not everyone is so sanguine about the shutdown and renovation. Heritage experts are watching nervously, worried that the art-deco architecture could be endangered. And the Peace Hotel's most famous occupants - a group of elderly Chinese jazz musicians who survived the worst years of the Maoist era - are moving to another hotel and might not return intact to the Peace Hotel when it reopens in time for the 2010 Shanghai Expo.
Cao Ziping, an 82-year-old pianist in the Peace Hotel jazz band, says the aging hotel is certainly in need of repairs. Water pipes were sometimes bursting and leaking during the band's performances, he said. But the band's leader, 85-year-old trumpet player Zhou Wanrong, says he is not sure whether he will return to the hotel when it reopens.
Lu Jiansong, a professor of cultural heritage at Fudan University in Shanghai, says he is "gravely worried" that the renovations could damage the hotel's historical architecture. Shanghai's cultural authorities are too weak to supervise the project properly, and national heritage laws have too many loopholes, he said.
"Financial motivations are causing threats to our architectural heritage," he said. "This project will inevitably challenge the historical value of the Peace Hotel. I really doubt it will meet the standards for cultural preservation."
The 12-storey hotel, originally called the Cathay, was built in the 1920s by British tycoon Victor Sassoon, who lived in the pyramid-shaped rooftop penthouse. Among the guests in the 1930s were actor Charlie Chaplin and playwright Noel Coward, who wrote Private Lives in room 314.
After the Communist revolution, the Cathay was nationalized, briefly turned into an office compound, and then merged with the adjacent Palace Hotel under a new name, the Peace Hotel, in 1956. For many years it was one of only two hotels in Shanghai where foreigners could stay.
The hotel is now owned by state-run Jinjiang International Hotel Management Co., the biggest hotel operator in China. Under the new plan, Jinjiang and Fairmont are setting up a joint venture to renovate and manage the main tower of the hotel - the former Cathay. They'll also add a modern new wing with a spa and meeting rooms. The other tower, the former Palace Hotel, will be turned into an arts centre and a shopping centre for Swatch brand watches, to be managed by Jinjiang and a unit of Swatch Group AG.
"I think it's going to be a huge challenge for Fairmont," said Spencer Dodington, an expert on art-deco architecture who runs an interior design and restoration business in Shanghai.
"Shanghai is full of five-star hotels, but none of them are historic. The Peace Hotel will be the first combination of five-star luxury and historical preservation in Shanghai. It's a big opportunity for Fairmont. If they can pull this off and make money from it, there will be a lot of other opportunities for Fairmont to make a splash in China."
The Peace Hotel has suffered a series of cheap renovations under state guidance since the 1980s, he noted. "So they'll have to demolish a lot of the old renovations. It's going to take a lot of delicate effort. But there's every indication that they're going to do a very thorough and positive renovation this time."
Peter Hibbard, an historian in Shanghai who is regarded as the leading expert on the history of the Peace Hotel, has been retained as an adviser to the renovation project. "This building is a national treasure," he said. "It was the finest hotel in the world, in my view, but it fell into a very poor state of repair. It had really decayed, and it was badly renovated in the 1980s. It's going to be a long process to get this right."
Fairmont is aware of the potential pitfalls, Mr. Sparks said. "We have a strong sensitivity to maintaining and enhancing the historical aspects of our hotels. There's always a bit of tension between that and providing a 21st-century experience for our guests."
As for the challenges of the Chinese hotel market, Mr. Sparks said the key will be Fairmont's partnership with Jinjiang. "We have very well-motivated and well-connected owners," he said. "They're experienced and well-regarded, and they'll navigate the Chinese business world for us."
Fairmont Raffles, a sister company also controlled by Kingdom and Colony investors, is also planning a 3,000-room hotel in Macau, the former Portuguese enclave in southern China that is the casino capital of Asia.
Face it: You'll never catch up, so set yourself some priorities - Harvy Schachter
Face it: You'll never catch up,
so set yourself some priorities
Most of us have more work than we can handle. So the only way to survive,
Thomas Nelson Publishing CEO Michael Hyatt says on his blog, is workplace triage
Acknowledge you can't do it all
The idea that you will eventually catch up is a myth. That's impossible. You have more work than you can reasonably be expected to complete and it's not static, growing even as you read and e-mails slide in.
Accept the fact that some things won't get done
Given that reality, you must make peace with the fact that you must leave some things undone.
Adopt the triage principle
On the battlefield, medics apply triage to sort through the victims and decide where to place priority. They ignore patients who will survive without medical attention and those who won't survive even with medical attention, and instead focus on those that will only survive with medical care. Similarly, you must know which things you can safely ignore and which demand your intervention.
Categorize your tasks by priority
All tasks are not equal. And you can't decide which to tackle in the hurly-burly of the moment.
Apply the priority system developed by author Stephen Covey:
A - urgent and important
B - important but not urgent
C - urgent but not important
D - not urgent or important
Focus at the start of the day on your A tasks, and then if those are completed move to the B's, and then to the C's.
Practise 'intentional neglect'
Many people are late in meeting deadlines or forget to do something out of unintentional neglect. Instead, pick what you will neglect:
The D tasks.
If, however, your boss thinks something is important and you consider it a waste of time, given your boss's importance in your life you must reclassify it.
Do the next most important thing next
Start your day on the most important task and continue to tackle tasks by order of importance.
"The bottom line is that you must learn to say 'no' to the unimportant tasks, so you can say 'yes' to the important tasks and actually get them done," he says.
so set yourself some priorities
Most of us have more work than we can handle. So the only way to survive,
Thomas Nelson Publishing CEO Michael Hyatt says on his blog, is workplace triage
Acknowledge you can't do it all
The idea that you will eventually catch up is a myth. That's impossible. You have more work than you can reasonably be expected to complete and it's not static, growing even as you read and e-mails slide in.
Accept the fact that some things won't get done
Given that reality, you must make peace with the fact that you must leave some things undone.
Adopt the triage principle
On the battlefield, medics apply triage to sort through the victims and decide where to place priority. They ignore patients who will survive without medical attention and those who won't survive even with medical attention, and instead focus on those that will only survive with medical care. Similarly, you must know which things you can safely ignore and which demand your intervention.
Categorize your tasks by priority
All tasks are not equal. And you can't decide which to tackle in the hurly-burly of the moment.
Apply the priority system developed by author Stephen Covey:
A - urgent and important
B - important but not urgent
C - urgent but not important
D - not urgent or important
Focus at the start of the day on your A tasks, and then if those are completed move to the B's, and then to the C's.
Practise 'intentional neglect'
Many people are late in meeting deadlines or forget to do something out of unintentional neglect. Instead, pick what you will neglect:
The D tasks.
If, however, your boss thinks something is important and you consider it a waste of time, given your boss's importance in your life you must reclassify it.
Do the next most important thing next
Start your day on the most important task and continue to tackle tasks by order of importance.
"The bottom line is that you must learn to say 'no' to the unimportant tasks, so you can say 'yes' to the important tasks and actually get them done," he says.
Thursday, June 7, 2007
Workin' 9 to 5? Yeah, right - Patrick White and Matthew Trevisan
It may come in the form of a meeting scheduled after closing time, the promise of after-hours pizza or even the spectre of layoffs, but stimuli to work late without pay are becoming evermore engrossing for Canadian workers.
More Canadians than ever before are toiling free of charge, induced by a combination of fear, devotion and a number of liberally dangled carrots.
On Tuesday, a Canadian Imperial Bank of Commerce teller launched a $600-million class-action lawsuit against her employer, alleging thousands of hours of overtime went unpaid to her and her colleagues.
Workplace lawyers and consultants say that the CIBC suit could be the tip of the iceberg.
By the numbers, more workers don't get paid for working overtime than do. According to Statistics Canada, 23 per cent of the Canadian work force regularly toils more than eight hours a day. But only 10 per cent of the work force is actually paid for it.
"Overtime issues are one of the central problems in just about every business out there," said Richard Press, an employment lawyer and partner at Davis LLP in Vancouver. "There's a growing difficulty with performing a 9-to-5 job."
The problem? While cellphones, e-mail and increasing workloads have laden workers with around-the-clock tasks, compensation is still based on an eight-hour schedule.
So what exactly is keeping the Canadian worker tied down to work?
"In some workplaces, there is a fear culture," Mr. Press said. "Employers will have a round of layoffs or threaten layoffs, and the people they pick will be those who are least productive."
That dread of a pink slip is enough to convince many in the banking industry to appear busy well after closing time, said Joel Rochon, a lawyer who has been researching unpaid overtime infractions at two major Canadian financial institutions.
During his research, Mr. Rochon has found that bank managers also regularly employed a few tricks, such as scheduling meetings for tellers after normal work hours and reprimanding workers who clock excessive overtime.
"They have created an environment where it's unfashionable not to work overtime," he said. "It's become standard to understaff branches, provide huge workloads for those on the front lines and expect the work to be done."
But overtime culture isn't limited to the financial sector.
Lorna Baptiste, a registered nurse who has worked in Toronto General Hospital's cardiovascular intensive care unit for 20 years, said nurses don't file for overtime on all but the longest days.
Her shift last night finished at 7:15 p.m., but she anticipated spending nearly an hour longer on the job without filing for overtime.
That's rule the nurses in her unit follow, she said: They usually don't file for overtime if they are there less than an hour past their shift.
In general, working overtime in the health industry the rule rather than the exception, and the pressure to keep up with peers can be great.
"In the caring industry, it's very different. If we're all going to start saying, 'Well, I'm taking 10 minutes for this; you have to pay me for that,' it just doesn't work."
Indeed, more than of half of all nurses in the country regularly work overtime without any form of compensation, according to Statscan.
In the education profession, there's a perception that teachers and principals clock in at 9 a.m. and clock out at 4 p.m., said Susanne Ellis, principal of Bayridge Elementary School in Kingston.
Not so, she said.
"There are very few who only work about eight hours a day - very few. Most are easily in the 50-hour range, minimum," she said, adding that often teachers mark and plan lessons at home late into the night.
"That's an expectation when you go into the position, that there are going to be times when you're working considerably long hours," she said. "It's not just the time that students are in the school."
In technology industries, programmers regularly put in 100-hour weeks under pressure to finish a product ahead of a scheduled launch, Mr. Press said. Companies such as Google and Electronic Arts support that with late-night cafeterias and sleep pods.
In many industries, managers have begun to accommodate positions that can no longer be crammed into a traditional 9-to-5 workday by encouraging an ad hoc workweek.
"There's this informal arrangement at many places," Mr. Press said. "You'll work an extra two hours on Monday, then on Wednesday you take off early. It makes sense on a gut level, but if you're going by the book, it's unlawful."
While the CIBC case is the biggest lawsuit to hit a Canadian business alleging unpaid overtime, similar cases have wended through U.S. courts.
Late last year, a court told Wal-Mart to pay $78-million (U.S.) to its Pennsylvania employees for not paying them for working through rest breaks and beyond a regular workday.
The original lawsuit alleged that Wal-Mart managers had forced employees to work after they had already clocked out for breaks.
"We are going to start seeing more of these suits here," Mr. Press said. "It was only a matter of time."
Still, at some workplaces, working late is not a matter of fear or coercion. Some workers simply like their jobs.
"I really don't keep track of my time," said Shyla Seller, production manager with Arsenal Pulp Press in Vancouver, who routinely puts in 10-hour days. "In our industry, we're doing it for a reason. It's more of a labour of love."
More Canadians than ever before are toiling free of charge, induced by a combination of fear, devotion and a number of liberally dangled carrots.
On Tuesday, a Canadian Imperial Bank of Commerce teller launched a $600-million class-action lawsuit against her employer, alleging thousands of hours of overtime went unpaid to her and her colleagues.
Workplace lawyers and consultants say that the CIBC suit could be the tip of the iceberg.
By the numbers, more workers don't get paid for working overtime than do. According to Statistics Canada, 23 per cent of the Canadian work force regularly toils more than eight hours a day. But only 10 per cent of the work force is actually paid for it.
"Overtime issues are one of the central problems in just about every business out there," said Richard Press, an employment lawyer and partner at Davis LLP in Vancouver. "There's a growing difficulty with performing a 9-to-5 job."
The problem? While cellphones, e-mail and increasing workloads have laden workers with around-the-clock tasks, compensation is still based on an eight-hour schedule.
So what exactly is keeping the Canadian worker tied down to work?
"In some workplaces, there is a fear culture," Mr. Press said. "Employers will have a round of layoffs or threaten layoffs, and the people they pick will be those who are least productive."
That dread of a pink slip is enough to convince many in the banking industry to appear busy well after closing time, said Joel Rochon, a lawyer who has been researching unpaid overtime infractions at two major Canadian financial institutions.
During his research, Mr. Rochon has found that bank managers also regularly employed a few tricks, such as scheduling meetings for tellers after normal work hours and reprimanding workers who clock excessive overtime.
"They have created an environment where it's unfashionable not to work overtime," he said. "It's become standard to understaff branches, provide huge workloads for those on the front lines and expect the work to be done."
But overtime culture isn't limited to the financial sector.
Lorna Baptiste, a registered nurse who has worked in Toronto General Hospital's cardiovascular intensive care unit for 20 years, said nurses don't file for overtime on all but the longest days.
Her shift last night finished at 7:15 p.m., but she anticipated spending nearly an hour longer on the job without filing for overtime.
That's rule the nurses in her unit follow, she said: They usually don't file for overtime if they are there less than an hour past their shift.
In general, working overtime in the health industry the rule rather than the exception, and the pressure to keep up with peers can be great.
"In the caring industry, it's very different. If we're all going to start saying, 'Well, I'm taking 10 minutes for this; you have to pay me for that,' it just doesn't work."
Indeed, more than of half of all nurses in the country regularly work overtime without any form of compensation, according to Statscan.
In the education profession, there's a perception that teachers and principals clock in at 9 a.m. and clock out at 4 p.m., said Susanne Ellis, principal of Bayridge Elementary School in Kingston.
Not so, she said.
"There are very few who only work about eight hours a day - very few. Most are easily in the 50-hour range, minimum," she said, adding that often teachers mark and plan lessons at home late into the night.
"That's an expectation when you go into the position, that there are going to be times when you're working considerably long hours," she said. "It's not just the time that students are in the school."
In technology industries, programmers regularly put in 100-hour weeks under pressure to finish a product ahead of a scheduled launch, Mr. Press said. Companies such as Google and Electronic Arts support that with late-night cafeterias and sleep pods.
In many industries, managers have begun to accommodate positions that can no longer be crammed into a traditional 9-to-5 workday by encouraging an ad hoc workweek.
"There's this informal arrangement at many places," Mr. Press said. "You'll work an extra two hours on Monday, then on Wednesday you take off early. It makes sense on a gut level, but if you're going by the book, it's unlawful."
While the CIBC case is the biggest lawsuit to hit a Canadian business alleging unpaid overtime, similar cases have wended through U.S. courts.
Late last year, a court told Wal-Mart to pay $78-million (U.S.) to its Pennsylvania employees for not paying them for working through rest breaks and beyond a regular workday.
The original lawsuit alleged that Wal-Mart managers had forced employees to work after they had already clocked out for breaks.
"We are going to start seeing more of these suits here," Mr. Press said. "It was only a matter of time."
Still, at some workplaces, working late is not a matter of fear or coercion. Some workers simply like their jobs.
"I really don't keep track of my time," said Shyla Seller, production manager with Arsenal Pulp Press in Vancouver, who routinely puts in 10-hour days. "In our industry, we're doing it for a reason. It's more of a labour of love."
Tuesday, June 5, 2007
Funds look to capitalize on water's worth - Shirley Won
Is water the new gold?
Given the growing scarcity of drinking water worldwide, more companies are launching investment vehicles to satisfy a thirst for this commodity that has been dubbed "blue gold."
In Canada, the Claymore S&P Global Water ETF began trading yesterday on the Toronto Stock Exchange. It joins the Criterion Infrastructure Water Fund, a mutual fund first offered in February.
And Toronto-based Sextant Capital Management Inc., which launched an offshore global water fund last month in the Cayman Islands, plans a similar hedge fund offering this year in Canada.
"Water funds have popped up because it is a theme that is growing significantly," said Som Seif, chief executive officer of Toronto-based Claymore Investments Inc.
Fresh water represents just over one per cent of the Earth's supply of H{-2}O. If the current rate of use continues, the United Nations has warned that two-thirds of the Earth's population will lack adequate water supplies by 2025.
While fresh water is a "limited asset," there are investment opportunities in the many companies involved in bringing this commodity to a growing global population, Mr. Seif said. "Some of the biggest pension plans and institutions around the world have been investing in water."
Canada Pension Plan Investment Board, for instance, has a one-third interest in British water utility AWG PLC.
The Claymore ETF tracks the newly created S&P Global Water Index with its 50 stocks that range from water utilities to infrastructure and equipment companies.
Names range from French-based water giants like Veolia Environnement SA [VE-N]and Suez [SZE-N]SA to Canadian-based Groupe Laperrière & Verreault Inc., which is spinning off its water treatment business.
The Claymore ETF and a global sister fund launched recently in the United States differ from two U.S. rivals that focus on American companies. They include PowerShares Water Resources, and recently launched First Trust ISE Water Index.
Ian MacPherson, president of Toronto-based Criterion Investments Ltd., said that investing in the water industry is also compelling because of the need to replace aging infrastructure in the developed world, and in developing countries like China and India.
Canadians have had fewer opportunities to invest in the water sector as domestic firms like Zenon Environmental Inc. and Trojan Technologies Inc. have been snapped up by global water giants in recent years, Mr. MacPherson said.
The appetite for such investments, he said, is reflected in the fact that his company's Criterion Infrastructure Water Fund - managed by Geneva-based Pictet Asset Management SA - has raised $45-million (CDN) in three months.
Unlike the gold or oil sectors where the volatile price of the commodity can drive a fund, "water prices throughout the world are highly regulated," Mr. MacPherson said.
"But we don't need the price of water to explode for this investment strategy to make sense," he added, noting that the fund appreciates from the growing share price of companies that make pipes or have technology to clean water.
Otto Spork, CEO of Sextant Capital Management, said his firm's recently launched offshore Sextant Global Water Fund has raised $100-million (U.S.) . in assets, but differs in that it looks for pure water plays.
That means this hedge fund - and a global water fund slated for Canada later this year - focuses on smaller companies and private equity placements, Mr. Spork said.
Fund analyst Dan Hallett of Windsor, Ont.-based Dan Hallett & Associates Inc. said there is a "lot of appeal" to the water story, but warned it's still a "specialized play" that is not suitable for many investors.
"I generally like to keep real specialized investments to under 10 per cent of the whole portfolio, or 10-to-15 per cent of the equity component [for conservative investors]," Mr. Hallett said. "You don't want to go overboard."
Given the growing scarcity of drinking water worldwide, more companies are launching investment vehicles to satisfy a thirst for this commodity that has been dubbed "blue gold."
In Canada, the Claymore S&P Global Water ETF began trading yesterday on the Toronto Stock Exchange. It joins the Criterion Infrastructure Water Fund, a mutual fund first offered in February.
And Toronto-based Sextant Capital Management Inc., which launched an offshore global water fund last month in the Cayman Islands, plans a similar hedge fund offering this year in Canada.
"Water funds have popped up because it is a theme that is growing significantly," said Som Seif, chief executive officer of Toronto-based Claymore Investments Inc.
Fresh water represents just over one per cent of the Earth's supply of H{-2}O. If the current rate of use continues, the United Nations has warned that two-thirds of the Earth's population will lack adequate water supplies by 2025.
While fresh water is a "limited asset," there are investment opportunities in the many companies involved in bringing this commodity to a growing global population, Mr. Seif said. "Some of the biggest pension plans and institutions around the world have been investing in water."
Canada Pension Plan Investment Board, for instance, has a one-third interest in British water utility AWG PLC.
The Claymore ETF tracks the newly created S&P Global Water Index with its 50 stocks that range from water utilities to infrastructure and equipment companies.
Names range from French-based water giants like Veolia Environnement SA [VE-N]and Suez [SZE-N]SA to Canadian-based Groupe Laperrière & Verreault Inc., which is spinning off its water treatment business.
The Claymore ETF and a global sister fund launched recently in the United States differ from two U.S. rivals that focus on American companies. They include PowerShares Water Resources, and recently launched First Trust ISE Water Index.
Ian MacPherson, president of Toronto-based Criterion Investments Ltd., said that investing in the water industry is also compelling because of the need to replace aging infrastructure in the developed world, and in developing countries like China and India.
Canadians have had fewer opportunities to invest in the water sector as domestic firms like Zenon Environmental Inc. and Trojan Technologies Inc. have been snapped up by global water giants in recent years, Mr. MacPherson said.
The appetite for such investments, he said, is reflected in the fact that his company's Criterion Infrastructure Water Fund - managed by Geneva-based Pictet Asset Management SA - has raised $45-million (CDN) in three months.
Unlike the gold or oil sectors where the volatile price of the commodity can drive a fund, "water prices throughout the world are highly regulated," Mr. MacPherson said.
"But we don't need the price of water to explode for this investment strategy to make sense," he added, noting that the fund appreciates from the growing share price of companies that make pipes or have technology to clean water.
Otto Spork, CEO of Sextant Capital Management, said his firm's recently launched offshore Sextant Global Water Fund has raised $100-million (U.S.) . in assets, but differs in that it looks for pure water plays.
That means this hedge fund - and a global water fund slated for Canada later this year - focuses on smaller companies and private equity placements, Mr. Spork said.
Fund analyst Dan Hallett of Windsor, Ont.-based Dan Hallett & Associates Inc. said there is a "lot of appeal" to the water story, but warned it's still a "specialized play" that is not suitable for many investors.
"I generally like to keep real specialized investments to under 10 per cent of the whole portfolio, or 10-to-15 per cent of the equity component [for conservative investors]," Mr. Hallett said. "You don't want to go overboard."
Monday, June 4, 2007
Everybody ought to be rich - Mantas Skardzius
“Everybody ought to be rich” - this was John Raskob’s (one of the most outstanding figures in Wall Street in notorious 1929) cry in late twenties. His plan was simple: to invest 15 bucks every month in common stocks and this should result in 80 000 dollars fortune in twenty years (whereas contributions would constitute miserable 3 600 dollars). Though this idea turned out to be rather far-fetched, more and more people recognize pluses of investing these days. It might be surprising how fairly little knowledge about it can result in pleasantly high returns. I will try to explain those merits of investing and how to achieve them.
First of all, I should explain the differences between speculation and investing. Usually, investing in stocks is unduly viewed as something like melting pot: stressful, extremely knowledge/time consuming and so on. Well, if films “Wall Street” or “Boiler room” are your sources of knowledge about investing, you are wrong. Investors don’t make millions of trades a day (unlike speculators), they don’t lose or earn millions of pounds in ten minutes. That sort of thrilling ride is suitable just for handful of devoted people. Whereas investing, in turn, is long-term sort of saving – alternative to bank account.
So, what actually you forgo by choosing to keep your money in a bank account rather than investing in stocks? Let’s compare those returns. A number of studies have found out that average return from stocks in the past century was around 6% over long-term risk-free bonds (for example, 20-year UK government bonds). Roughly, you can expect to get give or take about 5% per year if you keep your money in a bank account. What is the result? 20-year UK government annual bond yield is 4%, interest for your deposit in a bank account – 5% and annual return from stocks 10%. How do these returns affect your long-term savings’ performance? As you can see in this graph, if you invested 100£ in risk-free bonds/ bank deposit/ stocks, those return differences would result in significant variations in final level of savings in twenty years. To be concrete, investment in stocks would multiply your initial sum over six times. Bank deposit and government bonds would only double your money (though deposit’s performance would be slightly higher).
How to get those impressive returns? Basically, there are two ways: investing by using your own knowledge and your techniques or investing your savings in some sort of mutual fund (in this case, you will have to pay for someone to manage your funds). I will try to explain both ways.
Are you determined to seek for higher returns as well as to sacrifice considerable part of your time for searching for good stocks? Then you should understand that colossal work is waiting for you. If you are determined to invest yourself, there are two main ways of analyzing and picking stocks that suit your preferences: technical and fundamental analysis. Technical analysis, in essence, is trying to predict future movements of stock price by looking at the past. Actually, this sort of analysis is usually applied to short-term trading. Nevertheless, it can be used to detect most profitable points to invest in or sell particular stock. Experienced investors usually keep an eye on various charts to notice sell or buy signals. In this example, you can see stocks performance in recent two years. Have you noticed that red line? Technicians call that sort of line resistance/support (depending on price movement). In essence, this level of price prevents price from keeping initial trend. How could you use this line? For example, you could wait for price to penetrate that line because, as you can see, once price fails to penetrate it, it has to set back a bit, before trying to turn upwards again. Once resistance level is penetrated, this line acts as a support for existing price. That is, it prevents price form going down. Apart from this fairly simple use of support/resistance levels, there are many other measures to analyze any chart, such as, various indicators, Fibonacci studies, Gann lines and so on. Surely, there is no way I could explain all the logic and rules of technical analysis here, I have just wanted to show you one of its applications and how it can improve your investment decisions. Though this sort of analysis requires considerable amount of time to master, it pays off in practice as you can get in/out of particular stocks more accurately.
Another way of searching for lucrative stocks is to delve companies’ financial statements, trying to calculate various ratios, to evaluate company’s long-term position, whole industry’s position. One of the strategies is to compare book value to market value and then take appropriate actions. It is called Value investing. Of course, I should mention that Warren Buffet, second richest man in the world, uses this strategy. Another strategy is to search for Growth stocks. This was extremely popular in 90’s, when dotcom
(“.com”) companies were viewed as of limitless opportunities. In that way, stock valuation is highly influenced by investors’ future expectations. You can even apply sort of mixed analysis: I have formed virtual portfolio of around 10 stocks listed in London Stock Exchange by searching for stocks with low PEG (http://www.investopedia.com/terms/p/pegratio.asp), P/E (http://www.investopedia.com/terms/p/price-earningsratio.asp) ratios and high growth expectations. My portfolio has grown about 5% in three months so far. Undoubtedly, there are many more strategies to follow – it is up to you to chose, which one is the best.
Alternatively, if you prefer to have more free time (of course you will have to pay for it), you can choose from great variety of mutual funds or index funds. That means, you will hire (indirectly) experienced professional fund manager to manage your funds. It is no surprise that mutual funds have become increasingly popular these days, since many people are not so confident with investing or simply feel lack of time but, however, they want to benefit from impressive market movements. Thus, the idea of someone looking after your savings to yield income sounds attractive, even though you will have to pay fees for that manager. Or you could buy index fund’s shares. This sort of fund is simply replication of certain index. For example, index fund can track FTSE 100 or Dow Jones Industrial Average. In that way, your savings will almost identically (don’t forget about the fees) reflect general market’s performance.
To sum up, the art of investing simply can’t be explained in one article. There are thousands of books that delve this way of saving your money. I have just tried to outline this activity briefly so that it could be your starting point for further progress. What I could recommend, if you find this topic both lucrative and interesting, is to try to read number of articles in www.investopedia.com. Those articles will provide you with more in-depth knowledge about it. Of course, to gain true understanding you should read respective books. In my opinion, those worth reading are these (I have got no doubts that there are many more):
• “The intelligent investor” by Benjamin Graham (bible for value investing)
• “Technical analysis for the financial markets” by John Murphy (great book about technical analysis)
• “Intermarket technical analysis” by John Murphy (this book explains how all markets (equities, currencies, commodities, debt markets) are related and how to use those relationships in your investment decisions.
First of all, I should explain the differences between speculation and investing. Usually, investing in stocks is unduly viewed as something like melting pot: stressful, extremely knowledge/time consuming and so on. Well, if films “Wall Street” or “Boiler room” are your sources of knowledge about investing, you are wrong. Investors don’t make millions of trades a day (unlike speculators), they don’t lose or earn millions of pounds in ten minutes. That sort of thrilling ride is suitable just for handful of devoted people. Whereas investing, in turn, is long-term sort of saving – alternative to bank account.
So, what actually you forgo by choosing to keep your money in a bank account rather than investing in stocks? Let’s compare those returns. A number of studies have found out that average return from stocks in the past century was around 6% over long-term risk-free bonds (for example, 20-year UK government bonds). Roughly, you can expect to get give or take about 5% per year if you keep your money in a bank account. What is the result? 20-year UK government annual bond yield is 4%, interest for your deposit in a bank account – 5% and annual return from stocks 10%. How do these returns affect your long-term savings’ performance? As you can see in this graph, if you invested 100£ in risk-free bonds/ bank deposit/ stocks, those return differences would result in significant variations in final level of savings in twenty years. To be concrete, investment in stocks would multiply your initial sum over six times. Bank deposit and government bonds would only double your money (though deposit’s performance would be slightly higher).
How to get those impressive returns? Basically, there are two ways: investing by using your own knowledge and your techniques or investing your savings in some sort of mutual fund (in this case, you will have to pay for someone to manage your funds). I will try to explain both ways.
Are you determined to seek for higher returns as well as to sacrifice considerable part of your time for searching for good stocks? Then you should understand that colossal work is waiting for you. If you are determined to invest yourself, there are two main ways of analyzing and picking stocks that suit your preferences: technical and fundamental analysis. Technical analysis, in essence, is trying to predict future movements of stock price by looking at the past. Actually, this sort of analysis is usually applied to short-term trading. Nevertheless, it can be used to detect most profitable points to invest in or sell particular stock. Experienced investors usually keep an eye on various charts to notice sell or buy signals. In this example, you can see stocks performance in recent two years. Have you noticed that red line? Technicians call that sort of line resistance/support (depending on price movement). In essence, this level of price prevents price from keeping initial trend. How could you use this line? For example, you could wait for price to penetrate that line because, as you can see, once price fails to penetrate it, it has to set back a bit, before trying to turn upwards again. Once resistance level is penetrated, this line acts as a support for existing price. That is, it prevents price form going down. Apart from this fairly simple use of support/resistance levels, there are many other measures to analyze any chart, such as, various indicators, Fibonacci studies, Gann lines and so on. Surely, there is no way I could explain all the logic and rules of technical analysis here, I have just wanted to show you one of its applications and how it can improve your investment decisions. Though this sort of analysis requires considerable amount of time to master, it pays off in practice as you can get in/out of particular stocks more accurately.
Another way of searching for lucrative stocks is to delve companies’ financial statements, trying to calculate various ratios, to evaluate company’s long-term position, whole industry’s position. One of the strategies is to compare book value to market value and then take appropriate actions. It is called Value investing. Of course, I should mention that Warren Buffet, second richest man in the world, uses this strategy. Another strategy is to search for Growth stocks. This was extremely popular in 90’s, when dotcom
(“.com”) companies were viewed as of limitless opportunities. In that way, stock valuation is highly influenced by investors’ future expectations. You can even apply sort of mixed analysis: I have formed virtual portfolio of around 10 stocks listed in London Stock Exchange by searching for stocks with low PEG (http://www.investopedia.com/terms/p/pegratio.asp), P/E (http://www.investopedia.com/terms/p/price-earningsratio.asp) ratios and high growth expectations. My portfolio has grown about 5% in three months so far. Undoubtedly, there are many more strategies to follow – it is up to you to chose, which one is the best.
Alternatively, if you prefer to have more free time (of course you will have to pay for it), you can choose from great variety of mutual funds or index funds. That means, you will hire (indirectly) experienced professional fund manager to manage your funds. It is no surprise that mutual funds have become increasingly popular these days, since many people are not so confident with investing or simply feel lack of time but, however, they want to benefit from impressive market movements. Thus, the idea of someone looking after your savings to yield income sounds attractive, even though you will have to pay fees for that manager. Or you could buy index fund’s shares. This sort of fund is simply replication of certain index. For example, index fund can track FTSE 100 or Dow Jones Industrial Average. In that way, your savings will almost identically (don’t forget about the fees) reflect general market’s performance.
To sum up, the art of investing simply can’t be explained in one article. There are thousands of books that delve this way of saving your money. I have just tried to outline this activity briefly so that it could be your starting point for further progress. What I could recommend, if you find this topic both lucrative and interesting, is to try to read number of articles in www.investopedia.com. Those articles will provide you with more in-depth knowledge about it. Of course, to gain true understanding you should read respective books. In my opinion, those worth reading are these (I have got no doubts that there are many more):
• “The intelligent investor” by Benjamin Graham (bible for value investing)
• “Technical analysis for the financial markets” by John Murphy (great book about technical analysis)
• “Intermarket technical analysis” by John Murphy (this book explains how all markets (equities, currencies, commodities, debt markets) are related and how to use those relationships in your investment decisions.
Caught sleeping on the job? No worries - Craig Silverman
Sylvain Tremblay has had the unusual experience of oversleeping while at work.
"I slept for an hour and only meant to go for 20 minutes," Mr. Tremblay said a bit sheepishly.
The senior software engineer at Intuit Canada in Edmonton, blamed it on forgetting to set an alarm clock, but he didn't apologize for his extended workday snooze. And his employer wouldn't think of asking him to. The company encourages employees to take naps and has created three specific rooms outfitted with single beds, pillows, sheets and alarm clocks.
Sleeping on the job used to be a firing offence. But a growing body of research is extolling the many virtues of a midday doze. A Harvard School of Public Health study this year found that Greek men and women who took regular naps had a 37 per cent lower risk of heart-related death than non-nappers.
U.S. space agency NASA found that naps can have a positive effect on the memory and overall output of astronauts.
Then there's the issue of worker fatigue: A study published in the January issue of the Journal of Occupational and Environmental Medicine found it affects nearly 40 per cent of U.S. workers.
In response, a small but growing cadre of progressive companies are shopping for mattresses, selecting sheets and finding just the right soothing shade of paint.
Kilpatrick Stockton LLP, a law firm with offices in Raleigh, N.C., has a designated sleeping space it calls the Power Room.
Gould Evans Goodman Associates, an architecture firm in Kansas City, Mo., has installed "spent tents" - indoor camp tents equipped with pillows, blankets and other sleeping amenities.
Nike, British Airways and Pizza Hut also all reportedly encourage nap time.
At Intuit, the nap rooms were requested by employees. "The nap rooms don't stand out in our environment because we have so many other amenities," said Cheryll Watson, the company's senior manager of employee and community engagement.
The idea fit in with the company's overall wellness plan, which includes a gym and a five-kilometre walking trail.
The same is true at Business Objects, a global developer of business intelligence software. Its main Vancouver offices feature a 7,000-square-foot wellness centre with exercise and recreational facilities. It also provides an open area featuring couches and a crackling fireplace for nappers. A separate building a block away has an enclosed room outfitted with two La-Z-Boy recliners.
During her pregnancy last summer, Dorit Shackleton, a public relations manager with the company, often ambled over to the open area. "I took naps a handful of times, especially as I got [further into my pregnancy]," she said. "I would take the time to take care of myself and my body."
Still, the concept of the company nap area requires a worker to be comfortable with his or her sleeping habits coming under observation.
"I've definitely seen people passed out with a newspaper over their head in front of the fire," said James Thomas, the company's senior director of corporate product marketing.
In an open area, a raucous snorer or habitual drooler will naturally be open to ridicule and, one assumes, office pranks. None of those interviewed would cop to any nap time high jinks. Some expressed shock at the suggestion that a nap room might be used by more than one person at once, or for anything other than an entirely professional purpose. And no one had seen a co-worker change into their pyjamas or bring anything besides wholesome reading material into closed nap rooms.
All say that there are rules to the company nap room, even if they remain unspoken: Change the sheets; make the bed; limit your activities to napping or relaxing; and do it alone.
Experts also say there is a correct way to take a midday nap: It should be between 15 and 30 minutes, usually between 1 and 3 p.m. After 30 minutes, the body enters a deeper stage of sleep, making it more difficult to wake up feeling refreshed and ready for work.
At St. Paul's Hospital in Vancouver, nurses, doctors and other staff were already in the habit or trying to grab a bit of sleep during long shifts. But "they weren't napping safely," said Stephanie Hennessy, St. Paul's leader of occupational health and safety. "Nurses and other staff were bunching their breaks into an hour and taking a long nap," she said.
In November, the hospital was given three EnergyPods, specially designed leather recliners with a white hood that shields the sleeper. The recliner can play soothing music or feed it from an iPod. After the appointed amount of sleep, it gently wakes the napper with subtle vibrations.
When the Pods failed to take off among travellers at the Vancouver airport, MetroNaps, the manufacturer, donated them to the hospital. It's hoping the results of a staff usage questionnaire will help sell them to other hospitals, which typically use inflatable mattresses or couches for workers to nap.
In most workplaces, however, there's still a negative reaction to the idea of sleeping on the job.
"It's great that our company does recognize people need rest to be their best," said Ms. Shackleton, as she walked past a Ping-Pong table at Business Objects. "My husband is a banker, and when we were in London, his boss would even say, 'Lunch is for wimps.' "
"I slept for an hour and only meant to go for 20 minutes," Mr. Tremblay said a bit sheepishly.
The senior software engineer at Intuit Canada in Edmonton, blamed it on forgetting to set an alarm clock, but he didn't apologize for his extended workday snooze. And his employer wouldn't think of asking him to. The company encourages employees to take naps and has created three specific rooms outfitted with single beds, pillows, sheets and alarm clocks.
Sleeping on the job used to be a firing offence. But a growing body of research is extolling the many virtues of a midday doze. A Harvard School of Public Health study this year found that Greek men and women who took regular naps had a 37 per cent lower risk of heart-related death than non-nappers.
U.S. space agency NASA found that naps can have a positive effect on the memory and overall output of astronauts.
Then there's the issue of worker fatigue: A study published in the January issue of the Journal of Occupational and Environmental Medicine found it affects nearly 40 per cent of U.S. workers.
In response, a small but growing cadre of progressive companies are shopping for mattresses, selecting sheets and finding just the right soothing shade of paint.
Kilpatrick Stockton LLP, a law firm with offices in Raleigh, N.C., has a designated sleeping space it calls the Power Room.
Gould Evans Goodman Associates, an architecture firm in Kansas City, Mo., has installed "spent tents" - indoor camp tents equipped with pillows, blankets and other sleeping amenities.
Nike, British Airways and Pizza Hut also all reportedly encourage nap time.
At Intuit, the nap rooms were requested by employees. "The nap rooms don't stand out in our environment because we have so many other amenities," said Cheryll Watson, the company's senior manager of employee and community engagement.
The idea fit in with the company's overall wellness plan, which includes a gym and a five-kilometre walking trail.
The same is true at Business Objects, a global developer of business intelligence software. Its main Vancouver offices feature a 7,000-square-foot wellness centre with exercise and recreational facilities. It also provides an open area featuring couches and a crackling fireplace for nappers. A separate building a block away has an enclosed room outfitted with two La-Z-Boy recliners.
During her pregnancy last summer, Dorit Shackleton, a public relations manager with the company, often ambled over to the open area. "I took naps a handful of times, especially as I got [further into my pregnancy]," she said. "I would take the time to take care of myself and my body."
Still, the concept of the company nap area requires a worker to be comfortable with his or her sleeping habits coming under observation.
"I've definitely seen people passed out with a newspaper over their head in front of the fire," said James Thomas, the company's senior director of corporate product marketing.
In an open area, a raucous snorer or habitual drooler will naturally be open to ridicule and, one assumes, office pranks. None of those interviewed would cop to any nap time high jinks. Some expressed shock at the suggestion that a nap room might be used by more than one person at once, or for anything other than an entirely professional purpose. And no one had seen a co-worker change into their pyjamas or bring anything besides wholesome reading material into closed nap rooms.
All say that there are rules to the company nap room, even if they remain unspoken: Change the sheets; make the bed; limit your activities to napping or relaxing; and do it alone.
Experts also say there is a correct way to take a midday nap: It should be between 15 and 30 minutes, usually between 1 and 3 p.m. After 30 minutes, the body enters a deeper stage of sleep, making it more difficult to wake up feeling refreshed and ready for work.
At St. Paul's Hospital in Vancouver, nurses, doctors and other staff were already in the habit or trying to grab a bit of sleep during long shifts. But "they weren't napping safely," said Stephanie Hennessy, St. Paul's leader of occupational health and safety. "Nurses and other staff were bunching their breaks into an hour and taking a long nap," she said.
In November, the hospital was given three EnergyPods, specially designed leather recliners with a white hood that shields the sleeper. The recliner can play soothing music or feed it from an iPod. After the appointed amount of sleep, it gently wakes the napper with subtle vibrations.
When the Pods failed to take off among travellers at the Vancouver airport, MetroNaps, the manufacturer, donated them to the hospital. It's hoping the results of a staff usage questionnaire will help sell them to other hospitals, which typically use inflatable mattresses or couches for workers to nap.
In most workplaces, however, there's still a negative reaction to the idea of sleeping on the job.
"It's great that our company does recognize people need rest to be their best," said Ms. Shackleton, as she walked past a Ping-Pong table at Business Objects. "My husband is a banker, and when we were in London, his boss would even say, 'Lunch is for wimps.' "
Sunday, June 3, 2007
Young, old, in-between: Can they all get along? - Virginia Gult
People naturally carry their formative influences to work with them. So, it's understandable that the youngest generation of employees, who grew up with constant feedback - "good for you for setting the table" - might expect the same at work, says Nora Spinks, president of Toronto-based Work-Life Harmony Enterprises.
However, these same young employees in supervisory positions might have no idea how offensive it is for a baby boomer to be told: "It makes me proud when my team completes projects on time." As if there was even a remote possibility that the work-obsessed boomer, old enough to be the supervisor's parent, would miss a deadline.
Hence the latest in corporate diversity initiatives: multigenerational diversity.
With four distinct generations now toiling cheek by jowl in the workplace, Ms. Spinks has found that a growing portion of her consulting work involves helping the different age groups understand each other's values.
Diversity initiatives traditionally have been aimed at removing barriers for women, visible minorities and lesbian, gay, bisexual and transgender employees in the workplace.
Now, International Business Machines Corp. is among the first companies to develop a formal program on multigenerational diversity, says Ronald Glover, its vice-president of global work force diversity.
The role of managers has never been more complicated, says Mr. Glover, who was in Markham, Ont., yesterday for a diversity event at IBM Canada Ltd.
"There are significant differences in terms of work styles, familiarity with technology ... [and] attitudes" among the different generations, he says. They even like to sleep and work at different times.
This month, Mr. Glover plans to hold a summit at the company's Armonk, N.Y., headquarters to focus exclusively on issues of generational diversity and develop practices that reduce the potential for clashes.
Mr. Glover says he cannot predict the outcome - IBM is "just on the beginning of this journey" of figuring out ways to bridge generation gaps and meet the needs and aspirations of all 358,000 employees worldwide, whatever their age.
The overriding principle that applies to IBM's other diversity initiatives will apply here, too: To foster open communication, and get people "talking to each other, as opposed to about each other," Mr. Glover says.
Employees are encouraged to be assertive in declaring what makes them tick, he says. The reason is straightforward: "There's a war for talent."
In order to retain the top minds in technology, IBM is exploring ways to keep its experienced older hands connected to the work force - rather than losing them to retirement - while also finding ways to make the footloose younger generations sign on and stay.
"Employers will need to become much more focused and creative in how they address the differences and needs of generational groups in order to build and maintain the talent to survive. Doing so is an important part of managing workplace diversity," IBM says in a background document.
At IBM, this could involve "two-way mentoring" - with more seasoned veterans transferring their depth of knowledge to younger employees, while members of the iPod generation bringing their elders up to speed on the latest technological advances. The younger generation, after all, is an important market segment for IBM, Mr. Glover says.
Ms. Spinks says generational diversity has become "a hot, hot topic" with employers, who acknowledge the differences among their four generations of employees - but don't quite know how to deal with them.
It would be a mistake to try to insist on conformity, Ms. Spinks advises managers. Instead, they should learn how to "leverage the diversity."
CollegeRecruiter.com, a Minneapolis-based online career site, says in a recently published employers' guide to Generation Y that these youngest work force entrants are high maintenance, but worth the effort.
"Many of them are college-educated and experienced through internships and co-operative education programs. They know they have a lot to offer and are eager to share what they have learned," according to the CollegeRecruiter.com report.
However, they can get on the nerves of older generations of workers because "they are impatient to gain levels of responsibility that, in the eras of baby boomers and Gen-X, would have taken either several years or hundreds of hours of dedicated hard work to achieve," the report says.
Younger employees, on the other hand, can find the dominant boomer generation overbearing and difficult to work with, according to a report released this week by the online job site Monster.ca.
"Numerous changes to the Canadian workplace have magnified these differences ... and ignited generational conflict," Monster.ca said in its report, Generation Clash!
Opportunities for advancement have been curtailed by the downsizing of companies, mergers, acquisitions and consolidations, the Monster report says.
And, because seniority is no longer the sole basis for promotion, "people from different generations ... compete for the same jobs, which, in turn, sets in motion a generational identification, whereby people blame other generations for workplace problems."
Another reason that fewer jobs are coming open at the top is the reversal of the early-retirement trend. The intention of a growing number of aging boomers to work beyond traditional retirement age - many of them still holding power positions - has added to the frustration of Gen-Xers anxious for their turn to call the shots, Monster says.
Mr. Glover says he has not observed such profound dissonance between the different generational groups at IBM.
Still, IBM's goal is to "get ahead of the curve," educate its managers on the generational differences, and make the company an accommodating workplace for all, Mr. Glover says.
"Competition to attract and retain qualified employees will be essential and intense," he adds.
Talkin' 'bout the g- g- g- generations
Traditionalists
(Born between 1922 and 1945):
They have a strong sense of duty, sacrifice, loyalty and a great faith in institutions, people and governments. They are unlikely to rock the boat, break the rules or disrespect authority, and usually stay with employers until retirement. They measure work ethic on timeliness, productivity and the ability to blend in, and believe promotions, recognition and raises should come from job tenure.
Baby boomers
(1946-1964):
They run governments, they're the managers and CEOs - in short, they are in control. They believe in teamwork and relationship building, but are skeptical about technology, as they believe it brings with it as many problems as it provides solutions. They measure their work ethic in hours worked (and like to be seen working them). These are the workaholics.
Gen Xers
(1965-1980):
They are more skeptical toward authority and cautious in their commitments. They prefer free agency to company loyalty, and - as the first generation of latchkey kids - are self-reliant and independent workers. They value control of their time, flexibility and freedom; they embrace technology as a way to maintain control of their lives. They respect production, open communication and having options.
Gen Yers
(born after 1980):
They are ubiquitous with technology. Also known as Millenials, Gen-Yers value altruism, have positive can-do attitudes, and expect positive reinforcement from employers. They have a bit of a pack mentality (wanting to connect with their peers) and enjoy material comforts and the good life. At the same time, they will not take just any job, but will spend time searching for a job that provides the greatest personal fulfilment.
However, these same young employees in supervisory positions might have no idea how offensive it is for a baby boomer to be told: "It makes me proud when my team completes projects on time." As if there was even a remote possibility that the work-obsessed boomer, old enough to be the supervisor's parent, would miss a deadline.
Hence the latest in corporate diversity initiatives: multigenerational diversity.
With four distinct generations now toiling cheek by jowl in the workplace, Ms. Spinks has found that a growing portion of her consulting work involves helping the different age groups understand each other's values.
Diversity initiatives traditionally have been aimed at removing barriers for women, visible minorities and lesbian, gay, bisexual and transgender employees in the workplace.
Now, International Business Machines Corp. is among the first companies to develop a formal program on multigenerational diversity, says Ronald Glover, its vice-president of global work force diversity.
The role of managers has never been more complicated, says Mr. Glover, who was in Markham, Ont., yesterday for a diversity event at IBM Canada Ltd.
"There are significant differences in terms of work styles, familiarity with technology ... [and] attitudes" among the different generations, he says. They even like to sleep and work at different times.
This month, Mr. Glover plans to hold a summit at the company's Armonk, N.Y., headquarters to focus exclusively on issues of generational diversity and develop practices that reduce the potential for clashes.
Mr. Glover says he cannot predict the outcome - IBM is "just on the beginning of this journey" of figuring out ways to bridge generation gaps and meet the needs and aspirations of all 358,000 employees worldwide, whatever their age.
The overriding principle that applies to IBM's other diversity initiatives will apply here, too: To foster open communication, and get people "talking to each other, as opposed to about each other," Mr. Glover says.
Employees are encouraged to be assertive in declaring what makes them tick, he says. The reason is straightforward: "There's a war for talent."
In order to retain the top minds in technology, IBM is exploring ways to keep its experienced older hands connected to the work force - rather than losing them to retirement - while also finding ways to make the footloose younger generations sign on and stay.
"Employers will need to become much more focused and creative in how they address the differences and needs of generational groups in order to build and maintain the talent to survive. Doing so is an important part of managing workplace diversity," IBM says in a background document.
At IBM, this could involve "two-way mentoring" - with more seasoned veterans transferring their depth of knowledge to younger employees, while members of the iPod generation bringing their elders up to speed on the latest technological advances. The younger generation, after all, is an important market segment for IBM, Mr. Glover says.
Ms. Spinks says generational diversity has become "a hot, hot topic" with employers, who acknowledge the differences among their four generations of employees - but don't quite know how to deal with them.
It would be a mistake to try to insist on conformity, Ms. Spinks advises managers. Instead, they should learn how to "leverage the diversity."
CollegeRecruiter.com, a Minneapolis-based online career site, says in a recently published employers' guide to Generation Y that these youngest work force entrants are high maintenance, but worth the effort.
"Many of them are college-educated and experienced through internships and co-operative education programs. They know they have a lot to offer and are eager to share what they have learned," according to the CollegeRecruiter.com report.
However, they can get on the nerves of older generations of workers because "they are impatient to gain levels of responsibility that, in the eras of baby boomers and Gen-X, would have taken either several years or hundreds of hours of dedicated hard work to achieve," the report says.
Younger employees, on the other hand, can find the dominant boomer generation overbearing and difficult to work with, according to a report released this week by the online job site Monster.ca.
"Numerous changes to the Canadian workplace have magnified these differences ... and ignited generational conflict," Monster.ca said in its report, Generation Clash!
Opportunities for advancement have been curtailed by the downsizing of companies, mergers, acquisitions and consolidations, the Monster report says.
And, because seniority is no longer the sole basis for promotion, "people from different generations ... compete for the same jobs, which, in turn, sets in motion a generational identification, whereby people blame other generations for workplace problems."
Another reason that fewer jobs are coming open at the top is the reversal of the early-retirement trend. The intention of a growing number of aging boomers to work beyond traditional retirement age - many of them still holding power positions - has added to the frustration of Gen-Xers anxious for their turn to call the shots, Monster says.
Mr. Glover says he has not observed such profound dissonance between the different generational groups at IBM.
Still, IBM's goal is to "get ahead of the curve," educate its managers on the generational differences, and make the company an accommodating workplace for all, Mr. Glover says.
"Competition to attract and retain qualified employees will be essential and intense," he adds.
Talkin' 'bout the g- g- g- generations
Traditionalists
(Born between 1922 and 1945):
They have a strong sense of duty, sacrifice, loyalty and a great faith in institutions, people and governments. They are unlikely to rock the boat, break the rules or disrespect authority, and usually stay with employers until retirement. They measure work ethic on timeliness, productivity and the ability to blend in, and believe promotions, recognition and raises should come from job tenure.
Baby boomers
(1946-1964):
They run governments, they're the managers and CEOs - in short, they are in control. They believe in teamwork and relationship building, but are skeptical about technology, as they believe it brings with it as many problems as it provides solutions. They measure their work ethic in hours worked (and like to be seen working them). These are the workaholics.
Gen Xers
(1965-1980):
They are more skeptical toward authority and cautious in their commitments. They prefer free agency to company loyalty, and - as the first generation of latchkey kids - are self-reliant and independent workers. They value control of their time, flexibility and freedom; they embrace technology as a way to maintain control of their lives. They respect production, open communication and having options.
Gen Yers
(born after 1980):
They are ubiquitous with technology. Also known as Millenials, Gen-Yers value altruism, have positive can-do attitudes, and expect positive reinforcement from employers. They have a bit of a pack mentality (wanting to connect with their peers) and enjoy material comforts and the good life. At the same time, they will not take just any job, but will spend time searching for a job that provides the greatest personal fulfilment.
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