Seymour Schulich is a billionaire whose career has spanned stock brokerage, investment counselling, mining and the oil industry. He is Canadian and is among the greatest living philanthropists and many universities has his name on buildings. He also awards 650 scholarships a year. He is in his 70’s and wrote a book to tell students about his life experiences and the book is called Get Smarter – Life and Business Lessons by Seymour Schulich published by Key Porter Books, Toronto, 2007.

Skin in the Game – when you are investing in stocks, your chances for success are greatly improved when you pick companies where the officers and directors own a large amount of stock. The reason is it human attitude and behavior change completely if he own something, or has skin in the game. (most times they do not bet the house on a big transaction or make seemingly stupid errors(.

On Buying a Business – Mr. Schulich’s father told him “Nobody sells a good, growing business. If life there are exceptions, but you need to know why the seller is selling.

Deals and Investments – The 5 questions to ask why screening a deal:

How much can I make?    or your potential upside

How much can I lose?       or your potential downside

How do I get my money back?    issues of liquidity

Who says this deal is any good?      management record

Who else is in the deal?                   endorsement

The upside/downside equation – successful deal making requires only 2 things an ability to asses odds and the discipline to act only when the odds are heavily in your favor.

Going against the crowd – a great rule of markets, deal making and life is: when everyone thinks something is so, it usually is not.    Being a contrarian is not easy. The best opportunities come to those with patience, courage, and a cash reserve.

Negotiation – the most effective negotiating point in any deal is when you reach the point of indifference or you no longer care in you settle. In most markets, you will reach the best price if you are give up and walk away. The seller will chase you down and come back with a lower price.

Zero-sum Games  – is a game in which for you to win, someone has to lose. No wealth is created just merely passed from one player to the next. Playing these types of games other than temporary amusement is just plain stupid.

Why Growth Stocks are a Poor Choice for Wealth Creation – if you buy stock in a fast growing company it will be trading a high Price/Earnings Ratio, eventually when the growth slows the PE Ratio will fall and so will the stock price. The better thing to do is identify commodity price trends or buy $ 2 of assets for $ 1 to give yourself a margin of safety. In this fashion, you avoid losses and the wins will take care of themselves.

Venture Capital – Investing in Start- Ups – some lessons learned

a) In each 5 year segment, the fund made no money for 4 years but the 5th year was exceptional because it takes 5 years to build a good business.

b) Success rested on the performance of just a few of the investments

c)  The best results came from entrepreneurial groups that had done it previously for themselves or an employer. Experience in running a business is a useful test with evaluating a start-up proposal.

Linking to dividend paying stocks, while the process is to let others run the company it is equally important to be able to evaluate the company for different perspectives. The advantage a profitable dividend paying company has it can make mistakes and still make money. Sometimes it seems the simple questions were not asked and management went into what seemed like a good idea at the time because they did not understand or it was keeping up with Jones. Making money today and tomorrow is the issue.

There are more questions than answers, till the next time – to raising questions.