We’ve had great reaction to The Steadyhand Diaries published last week in the Globe Investor magazine.  Over the next few weeks we are going to complement the Diaries with a few additional postings.  The original draft of the article was 8,000 words and was broader and deeper than the final 3,500.  Of the words that ended up in my editor’s waste basket, 4,000 of them belonged there, but there are a few things we can elaborate on. 

One of the areas of the piece that was seriously reduced was the valuable input we got from people along the way.  A few were noted - Chuck Winograd (hard ass mentor), Bob Hager (nice ass mentor) and Bernie Hadley-Beauregard (wine guru) - but others got edited out.  I want to correct those omissions.

Tony Hamblin was a key influence.  Tony has always operated under the radar, but he had a huge investment career.  He was the Chief Investment Officer at Confederation Life, where he trained many of Canada’s great investors, and he subsequently co-founded Hamblin Watsa Investment Counsel.  Since he left the business, he’s taken on the task of turning around an aircraft manufacturer, Found Air, in Parry Sound, Ontario (you heard right...an aircraft manufacturer).  His spirit and energy was an inspiration to me as we contemplated Steadyhand.  Over numerous coffees and breakfasts he urged me to (1) finance the business well, so money issues don’t distract us [done], (2) focus the sales pitch on our business and investment philosophy rather than performance [agreed] and (3) hire good, energetic people [so far so good].  

A number of people were just flat out excited about what we were planning and gave us the appropriate push when we needed it.  Warren Stoddart at Connor, Clark & Lunn Financial Group said one time, “you’ll never know if the phone will ring until you try” and another time, “you know it’s going to grow, it’s just a matter of how fast.”

My friends at Burgundy Asset Management – Tony Arrell, Brad Badeau and Rob Barbara – were also very encouraging.  Jim Hunter, the former CEO of Mackenzie Financial, was about a year ahead of us starting up his own firm, NexGen Financial.  While he operates in another segment of the market, he recognized our value proposition and was a stabilizing influence.  Both firms were generous in offering their time and resources. 

Bob Krembil, the now retired founder of Trimark Financial, was a great sounding board.  Steadyhand’s investment philosophy is closely aligned with his, but he reminded me that even if you build a better mouse trap, “you still have to get out and sell it.”

One of the missing persons was someone I have never met, but his book is the Steadyhand bible.  David Swensen, the hugely successful Chief Investment Officer of Yale University, wrote a book called Unconventional Success: A Fundamental Approach to Personal Investment.   The book takes a critical view of the U.S. mutual fund industry.  Rather than discount his concerns (we couldn’t...we agreed with them), Neil and I decided early on to use them as a touchstone.  Steadyhand would address his complaints by either eliminating or reducing them.  As a result, our fees are at the low end of the industry range, our managers are experienced and stable, the funds are concentrated on fewer stocks and look different than the indexes they are trying to beat, and everyone here has the same interests as our clients (we own the same funds). 

Finally, I should acknowledge Kathleen Edwards, a Canadian and one of my favourite singer/songwriters.  Watching her build her following and grow as an artist reminds me of what we’re trying to do.  Her music and lyrics have real substance.  Her fans in small venues (Richards on Richards this week) are just as important as those in arenas.  And her energy and smile on stage scream out that she loves what she is doing.

It’s early days in Steadyhand’s development, but we’ve already had lots of help and inspiration.  We appreciate every word of it.