Vancouver Moneyshow / Financial Forum

I try to make the effort to go out to the annual Vancouver Financial Forum, usually held at the Vancouver Convention Centre (where the Pan Pacific Hotel is on Waterfront). This year, apparently the conference was acquired by another company and is now re-branded as the Vancouver Moneyshow and was held at the Hyatt on Burrard Street.

The reason why I try to show up to this is because I have found it to be a rather uncanny barometer of investment sentiment, and what the “strategies of the day” tend to be. As a result, I know what to stay away from for at least the next year. I consider it to be more entertainment than anything else, although occasionally you will get some corporate swag that is actually useful.

The themes to avoid this time around seem to be heavily concentrated on gold and silver (both bullion and mining ventures), and also real estate limited partnerships.

So this year, I would like to thank the two ladies at the booth of Vale Corporation, who gave me a steel thermos. Considering I never heard of the corporation before, I much later realized that the reason why the two ladies had Latin American-sounding accents is because the company is headquartered in Brazil, and does about $30 billion in revenues a year in the mining industry.

There were a few other large-cap companies that showed up, including Proctor and Gamble, Cemex, National Bank and a couple others. I truly believe the only reason why they show up to these things is to get some vacation time out in Vancouver, although the weather this time of year was pretty rainy and windy and not hospitable.

I enjoy listening to bad investment pitches, and about half of them I classify as bad, so it takes a bit of cherry picking and research to determine which is the worst of the worst. To protect the guilty I will leave out the specific names of the companies involved.

There were three “trading schools” that had tables. One of them in particular, had a 5-day training course which you could pay $4000 for, and they give you a live account to trade 100 share lots of Apple or some stock of the day with using technical indicators they train you with. They then explained you could take the course as many times as you want with no charge, and that they train their people to do around 60 to 80 trades a week. They also said their classes have 21 people and despite them trading furiously in training, they collectively don’t lose more than around $200. I found that tough to swallow. I liked their marketing front, however – one guy and three attractive women – it implied “Want to meet women? Sign up to trading school!”. Fortunately as I left the table, I still had my wallet with me.

There were plenty of real estate “opportunities”, ranging from commercial real estate to residential apartment investing. They typically pitched a limited partnership format. One of them, which I thought was particularly atrocious, was pitching a limited partnership that proposed redeveloping a strip mall in northeastern Edmonton. The partnership would then acquire the property from a related party through a leveraged buyout (this is where the promoters truly make their ‘money’ even if the underlying project fails), the limited partners get a substantial tax-loss writeoff in the first year, and then they very patiently have to wait many, many years for payback (i.e. 2022). A great deal for them – get your money today, and maybe give it back to your investors 12 years later.

When asking the guy “So, let’s pretend I have $25,000 in my wallet, why should I invest in you guys than Rio-Can?” and the salesguy basically gave three minutes of speech about how great their property is, and how they are not exposed to “market risk” like Rio-Can is… I did say this was entertaining, right?

The companies providing charting services were also equally amusing, although they have been a mainstay at the financial forum – charts that can produce the fanciest lines and do a wonderful job of extracting value out of historical data, but with no predictive value whatsoever.

For the first time, I’ve noticed a few firms trying to get into the fundamental data analysis sales business, but the companies were relatively uninspiring. The worst of them pretty much copied all the information out of a company’s annual information form and just put it in a research report with some very bland extrapolations of their financial status in a typical research report.

I truly wonder how many people that go to these things actually think the information they receive at these forums can be acted upon with real money.