I rent an office in the crappiest mall imaginable that just got a whole lot worse.
This mall has two spaces for major anchor tenants. The first use to hold a Woolworth’s and then a Liquidation World, a chain which actually closed up because times were too good and it couldn’t buy cheap crap from closing stores any longer. Liquidation world shut its doors in 2007 and its space has been vacant since, with the exception of the town’s annual rummage sale and a few other one-off events.
The other big tenant is a grocery store that has been struggling for years now. Last week it finally bit the bullet and announced it was officially shutting its doors, effective at the end of the month.
It’s a bittersweet moment. I’m happy that they’re no longer burning perfect good capital to keep the location open (it was subsidized by two other profitable divisions, lumber and gasoline), but I feel bad for people who are losing their jobs. My fellow mall merchants who actually depend on foot traffic are pretty screwed, too. Who’s going to visit a mall that doesn’t have any anchor stores?
And most importantly, where am I supposed to go for snacks? I’m asking the important questions here.
The saddest part of this whole situation is, IMO, that store was run terribly. I’m convinced I could have cut the losses at least in half with a little active management and tighter controls. It was obvious for years, but instead of doing something the present management team just focused on the profitable divisions, letting the store go all to hell. It was a damn shame.
Links I liked
1. Let’s start things off with an investor nobody can accuse of not trying, Mark Charles Barnett. Mr. Barnett (who is from Florida, naturally), paid an unnamed man $10,000 to place bombs in Target stores all along the east coast. He then planned to buy depressed Target shares to make himself a tidy profit. THAT’S GOOD HUSTLE.
2. Here’s a great interview with Charles Koch, a man I’d consider one of my business heroes. It’s just too bad he felt forced to spend so much of his energy on political causes, although these days he mostly just throws money at things.
3. Speaking of videos of smart business guys, I wrote a few days ago about Charlie Munger and the Daily Journal annual meeting, which is just like the Berkshire Hathaway meeting but smaller and more fun. Here’s a video of the whole thing if you’re so inclined.
4. I think RRSP loans can be a great idea in the right circumstances. Over at Boomer and Echo, Robb talks about the subject and comes to a similar conclusion.
5. Here’s an analysis of a stock I first discovered at about $12 per share, Goeasy Ltd. They’re the company that makes unsecured loans to dirtbags charging 46% interest. Unsurprisingly, that’s a pretty good business and this is a pretty good analysis.
6. Should Ottawa let people invest their TFSAs in small business? Since most small businesses are funded by their founders, it would be a big advantage to them to allow such an investment. I’m not holding my breath, but it’s an interesting idea.
7. This week Warren Buffett’s Berkshire Hathaway announced it sold most of its Wal-Mart stake, signaling what one writer called “the end of retail as we know it.” The title is a little much, but it’s an interesting article.
8. More gold from Paul over at Asset-Based Life, the only blog I know with a dash in its title. He recently wrote about something called the “gas factor,” which is all you need to have a successful career. What’s the gas factor? Does it have to do with farts? You’ll have to click through to find out.
9. Over at Freedom 35 Blog, Liquid presents some timeless advice that certainly bears repeating. If you surround yourself with successful people, you’ll lift yourself up. It might be simple advice, but it works, dammit. I especially remember it when certain people show up and bum me out.
10. Dividend Growth Investor is a good read, even if you’re not a hardcore dividend-growth guy (like me). He recently wrote a great post on how it’s important to recognize risk when investing and embrace it, rather than avoiding it completely. He uses two tobacco stocks, Altria and Philip Morris, to illustrate his point.
11.BMO generated a lot of attention this week by declaring Toronto real estate to be officially in a bubble. Excuse my French here, but, no shit. People have been saying this for years now. BMO doing the same does nothing but confirm already entrenched biases. By the way, how’s shorting the Toronto real estate market working out for everyone? That’s what I thought.
(I agree with BMO and the 4,592 other analysts that called a bubble before this, BTW. I just don’t see what good it does anyone.)
12. Bullish on Realty Income, the overvalued REIT that has more middle-aged male fans than Kate Upton? Ian Bezek just splashed cold water in your face.
13. And finally, here’s a great post on negotiation from I Will Teach You to be Rich. This is something I need to get better at, and you probably do too.
Stuff Nelson wrote
As a reminder, you can hire me to write for your blog, newspaper, or poorly-Xeroxed newsletter. Hit the ol’ contact me page to get the ball rolling.
1. This week Prem Watsa (of Fairfax Financial) took off the company’s equity hedges after being pretty bearish for years. Good for Watsa to finally figure out betting against markets is foolish.
3. With the TSX Composite hitting new all-time highs, it’s time to start talking about taking some risk off the table. I outlined a few easy ways to do so.
Tweet of the week
TWO TWEETS. Oh, I spoil you guys.
Following up, @JustinTrudeau. Just wondering how many Alberta energy companies got interest-free loans so they could survive.
— Nelson! (@financialuproar) February 17, 2017
I don’t like to get too political, but can’t we all agree corporate welfare is a bad idea?
Have a good week, everyone.