Can you sit still?

Recently, we’ve increased our positions in a few key holdings including CIBC, Genworth Mortgage Insurance and Blackberry. Initially the returns were positive, lately, based on the news cycle or lack thereof, their values have decreased somewhat. Nothing materially has changed for either one of these holdings, including Blackberry, which made an unexpected profit even when you back out the Qualcomm payment.

Analysts are paid to overreact, we do not. These businesses are sound, make money, and will make more money.

Our Criteria for investing is simple:

  1. Good or Service is Vital (Need)
  2. High Barriers to entry (Financial moat)
  3. Good Management
  4. Strong Balance Sheet and Cash position

The true mark of an investor versus a trader is how long they can sit still when things are not going in their favour at the moment. If you panic and “limit your losses” you are a trader, if you believe in your analysis and see these swings as temporary, then you are an investor. Limiting your losses also means wiping out future returns.

Stay Calm and Carry on.

Rick Barbosa

 

Royal Bank IT issue follow up

cheque pro

Literally 1 day after my post Cheque-Pro was up for about 2 days until they did a further shut down for maintenance. Since then every thing is back to normal. No communication other than, Royal Bank would waive the January and February fees associated with the product.

Also, amid several complaints including mine about how the new on-line banking screen had too much wasted space and was more time consuming than the original version (which was fine), they compressed the layout and made it fit on the screen. Handy when you don’t have to scroll to see all your accounts (like the original).

At least Royal finally listened. Some companies do not. The moral of the story is “listen to your customers, and if it works don’t try to fix it.” Businesses are here to make customers happy and make money, in that order.

Till next time

 

Rick

 

How not to handle an IT issue-Royal Bank Cheque-Pro

cheque pro

I have been a Royal Bank customer for decades, and I refer quite a bit of business their way from many of my clients. Usually they are on top of both technical and financial matters when it comes to serving their most profitable business segment (retail banking) until now. Take the recent facelift of their on-line banking makeover. It wastes a lot of space and makes me do twice the work to find out what I need to know. The old format was compact, easy to navigate and work with. The new interface in my opinion just plain sucks. Interestingly enough, Direct Investment and Business Banking has not changed, thank God for small miracles.  When I called in to complain the person at the call center said that Royal had used focus groups and surveys to mold their new design. I responded in kind “were the focus groups made up of hand-picked individuals or actual high volume users?” The rep responded that they would pass my thoughts along and also said that they were fielding a lot of similar calls.

This brings me to their latest blunder. Like many I liked the idea of depositing cheques remotely and avoiding driving to the branch. It would fund the account immediately and save time and money. The math was simple enough. I introduced it to many of my clients, some of which had to invest in scanners. About one month into their roll out the system was shut down. The only explanation I got was that they were having problems with an update.  It’s going on 3 weeks of down time and no update from Royal, despite still promoting Cheque-Pro on their site. All users get is this message:

cheque pro 2

As Canada’s Biggest Bank I would have expected more. Heads should roll and compensation needs to be addressed as well as doing the obvious and quit promoting a product that doesn’t work.

This is why competition from the Fintech industry is so important. Leaner, meaner and hungrier startups need to come in to save the day.

Royal, get your act together and get this fixed, or some Fintech company will fix it for you.

Till next time,

Rick