The Globe and Mail, Report on Business
Published September 20, 2008

I love writing this column, except on weeks like this. I don't generally do time-sensitive stuff (this isn't my day job), but when the markets are melting down, writing about anything else would bring the wrath of clients, editors and readers. So I'll put the timeless piece I finished last Sunday aside and tell you about my week.

Monday morning, 6:00 a.m. PDT - En route from Whistler to the office in Vancouver. Oh, oh. Lehman didn't get a deal done. Today will be ugly.

7:30 a.m. - I was right. This is the worst we've seen. Lehman going down is the focus, but the Merrill deal is a big jolt to me. In my 25 years in the business, the Merrill Lynch bull has been a constant. It's hard to believe a firm with the pre-eminent retail brokerage franchise, which is a licence to print money, had to do a desperation deal with Bank of America. I guess I should have been tipped off. I was at a conference a number of years ago when the then-CEO talked about turning the brokerage firm into a global bank. I'm sure he got paid big money for that strategic call.

8:45 a.m. - I bought a little more of the Global Equity Fund, our most beaten-up fund. I've also been nibbling at a couple of stocks - Rogers (superior technology and the iPhone) and Onex (they'll make a pile of money out of this mess). I really believe that purchases of real, "non-Wall Street" businesses will pay off.

It is disconcerting to be buying when the foundation of the capital markets is so shaky. But I think we'll get resolution to the Wall Street crisis in the next few days or weeks. With Fannie, Freddie, Lehman and AIG all on life support, there will be no more papering over the cracks. We may not have seen the bottom in terms of stock prices, but we're on the last page of the crisis calendar.

4:30 p.m. - Just posted a blog called "Weathering the Storm." My messages - "this is what markets do" and "stocks are on sale" - are getting tiresome. But I'm being more forceful, "It is time for investors to let the greedy side of their personality come out."

6:30 p.m. - Walking home tonight I came to the profound realization that the market is affecting my mood. Until recently it was just my golf game that was in crisis. Now my portfolio makes my 93 on the weekend look pretty good.

Tuesday morning, 6:00 a.m. - Waking to the news. Asia and Europe are down big. The media is piling on. CBC dredged up a couple of economists to confirm that the worst is yet to come. They predicted confidently that the markets are going down for a few more days.

At moments like this, the media is the biggest momentum player of all. The sound bites always confirm the current trend. If it were a given that the market is going to be down for the next three days, it would be there now. That's how it works. It's beyond me why any investment professional predicts what the markets will do over the next day, week or month.

I guess I'm going to be grumpy again today. We're down almost 1,000 points and it's only Tuesday morning.

11:15 a.m. - The client calls have picked up. Most people are looking for reassurance. Being a relatively new firm, we've had virtually no redemptions so far. A few clients have even put more money in.

Noon - Spoke too soon. Chris took a call a few minutes ago from a client who is panicky. Hopefully he has dissuaded her from bailing out at this point. The worst disasters I see are always situations where investors make a major change to their strategy at an extreme time - i.e. they bought tech in '98 and '99 or went to cash in '02. They felt better for a short time, and then lived with the consequences forever.

Wednesday, 8:30 a.m. - The banking sector is seizing up. Nobody wants to hold the other guy's paper. Corporate bond spreads are widening fast. I know everything is integrated in the capital markets (I've written about it a few times), but it seems unfair that the stronger Canadian banks are getting painted with the same brush. Can't we call a time out?

It reminds me of a conversation I have regularly with my wife. When Lori is complaining about how much the banks are making off of the consumer, I tell her to be careful what she wishes for. Canada's banking oligopoly is obscenely profitable, but at times like this, it beats the alternative.

12:30 p.m. - I took a call from a concerned client who wanted to know if our money market fund is secure (it is). We don't ever get calls like that, but with the longest-standing money market fund in the U.S. "breaking the buck" yesterday (trading below it's fixed price of $1), it's a fair question. This is as scary as I've seen in my time in the business.

9:30 p.m. - Posted another blog. This one was aimed specifically at clients. Our equity funds fared okay in today's carnage, but Wall Street's woes hit our Income Fund hard. I've never done a one-day update, but it seemed appropriate given the week we're having.

Thursday, 6:15 a.m. - Shreddies and the ROB. I see Marty Whitman, the legendary value investor who founded Third Avenue Management, is buying stocks, including our very own Power Corp. He was quoted as saying, "We can't try to pick the bottom, but it seems to me that there are great values out there now, just like in 1974." I've only heard about how depressing 1974 was. At times like this, even the veterans look to see what their mentors are doing.

7:00 a.m. - The market is up a bunch. The central banks have turned on the pump.

11:00 a.m. - It's laughable how up and down the market has been today. It's nice to see it recovering though. It lightens everyone's mood, even if one day is meaningless.

Friday, 7:15 a.m. - Ho hum. Europe is up 7 per cent and we're up 4. Now if only my golf game would come around.