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You're one of the greatest entrepreneurs and I want to hear your story.
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I'd already made a decision I was going to be in the blueberry business.
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So I built a freezing plant in 1968 when I was 28 and didn't have any idea what I was doing.
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You've never shied away from using debt.
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We just kept levering and levering and buying and buying some more.
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It was hardly year that we didn't have an acquisition.
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If you tell somebody you're going to do something, you're going to do it.
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And if you say you're going to be there at 7, you're going to be there at 7 or before.
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That's the way you stay in business.
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A lot of your competitors have sort of come and gone over the years. Why has Oxford survived?
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It was a cottage industry when I started.
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We tried to find a product we could run and run the hell out of it.
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You used to go to the Berkshire Hathaway meetings.
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What are some of the lessons you took away from Munger and Buffett? I understand Buffett.
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I don't always agree with them.
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[Music] I want to start with your childhood. Take me back. What was that like?
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Well, I grew up in a village of 300 or 350 people.
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As I remember it, we had a sports event of some kind going all the time from time I was five or six years old.
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We'd have a sponge ball game and so a lot of sports activity and skating on swamps and hockey games on swamps and in grade 8 we had a new regional school in Oxford, brand new school with a gymnasium which was a just a wonder for us because we'd been playing baseball in Hayfields and to get a gymnasium and and a gymnasium teacher was just fantastic for us.
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So it uh became a big part of our life.
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I was a member of 4 and had a winning calf and all those little things, you know, I guess you build on them through the years.
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What kind of values and principles did you learn from your parents?
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They were both very straightforward.
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My father grew up in a country store.
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You had to have repeat clients, small community, and people didn't travel.
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So you had to treat people with respect and and honorably.
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If you tell somebody you're going to do something, you're going to do it.
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And if you say you're going to be there at seven, you're going to be there at seven or before.
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Very straightforward values, you know, good base to build on.
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So you started collecting wild blueberries in high school.
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I did my very first year. I was 15.
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So, I had to hire somebody to drive the pickup truck and and we had four or five pickers and pick 4,000 lbs of blueberries when you think today we do 150 million pounds.
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Quite quite a difference.
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It was the beginning of an entrepreneurial career, I guess.
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And you use that to pay for university.
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My last year of high school, I actually uh made $4,000 picking blueberries because that w had developed and it cost 1,200 to go to Mount A.
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the game was I could pay my way and although my parents could afford to and then by the end of university I was doing a lot better than that had a choice to teach school for $3,800 and an extra hundred if I'd coached the basketball team and I had made uh several thousand more than that picking blueberries that year.
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So I knew what I was going to eventually do.
3:32
So you built an apartment building during university too.
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As I left university, a fellow student and I built an apartment building. You're well informed. I forget about that.
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But but it was a great venture and a great learning curve for us.
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And you ended up owning that for like 50 years. Owned it a long while. Yeah.
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And finally when we were were doing one of our major cable acquisitions, we said that we would sell some noncore assets.
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And that was a noncore asset and and went along with some other noncore items.
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But after Mount A, you went to Delhauszy Law School.
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I went to Delhausy Law School, which was kind of interesting because I didn't ever plan to be a lawyer.
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A friend of mine was going and so then I had to talk my way into law school at the last minute, but I was only there about 3 weeks when I realized it was for lawyers.
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But it was a great education.
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I met some great people, good friends.
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Was probably my best education was first year law.
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And um how did that help you in the business world after?
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Where it helped me was the principle of of a fair deal on both sides of the table.
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We'd like to think that when we've completed a purchase or a deal of any kind that the other side's happy and we're happy.
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You can't always do that, but it's it's a good objective.
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So you left and then you went into the blueberry business.
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I came back to the small village and and decided that my father and brother were in the cellmill business that I could help them but that I could pay my way with the blueberry business which worked out all right.
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Then in 1968, we had a real turning point when there were big crops in Maine and and the grower price went down and in some cases couldn't sell them on some days. We had to stop picking.
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I had already made a decision I was going to be in the blueberry business and I decided if I was going to be grow blueberries, I better have my own freezing plant.
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So I built a freeze in Glanton 1968 when I was 28 and didn't have any idea what I was doing just just a focus.
5:50
Who taught you the blueberry business?
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Like how did you even start to build a frozen plant?
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On the farming side, the Department of Agriculture in Nova Scotia had some very good extension workers and a commitment to try and grow the blueberry industry in Nova Scotia.
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And so I kind of came along with that.
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Uh it was truly a cottage industry at that time.
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And then the frozen food side, we were fortunate to find some consultants in Pennsylvania that had done work in Maine.
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So we hired these consultants to design.
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We we built the plant with our own help, but really we're naive.
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There's no question we were naive.
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You know, if you're dedicated enough, you can make it work.
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What was the reasoning for the frozen plant? Like why go frozen?
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You're picking wild blueberries.
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Picking wild blueberries.
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Well, in ' 67 we we couldn't sell them.
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And if we did, we felt we were giving them away.
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Not a good base to go forward on if you trying to grow the industry, but you can't sell them.
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I decided I should become master of my own destiny.
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And it, you know, wasn't easy.
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The first year we had a complete crop failure.
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the only one in the history.
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We've had poor crops and good crops, but that year we had a disaster and that was right after all the factory investment having built a factory and all and geared it up to run 2 million pounds and we ran I don't know 100,000. There just was no crop.
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People could understand that our our bankers they knew it wasn't something we did wrong.
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It was mother nature and so we got through it.
7:28
How do you handle uh inventory?
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Do you save some when the pricing is bad so that you can release it when the pricing is better?
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Sometimes you think that that's what we should do, but when there's an opportunity to sell and get the cash, I guess you take it and and that's what we do.
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Now, that's not to say we don't carry inventory over strategically.
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you know, if the market's too weak, we we might carry some over, hoping the market will will firm.
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At what point did you realize the blueberry business could be as big as it's become?
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I don't think I ever really understood that we could grow to what it is and that it would be a base to grow other things and other companies and other businesses.
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You know, we've had good years and bad years, but we've made it work.
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When I started in the industry, the wild buay industry was4 million pounds in total and I hope to do two of that and today the industry is over 300 million getting closer to four and we do half of it.
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We couldn't see the growth but of course you know we made a major acquisition in 1983 in Maine.
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We bought one of the two largest operations in Maine.
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And then more recently, we're developing a lot of land in the Acadian Peninsula, but it's probably pretty mature now.
8:53
So, why did you buy more land?
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The the 82 acquisition, the you've bought more land as it's come up around Oxford.
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Is that to control supply?
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Yeah, I think we have a lot of money invested in the factories.
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Our ideal position would be to grow half them on our own farms and buy half from farmers.
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If you took the extreme and bought them all from the farmers, then you could be pretty vulnerable to competition running the price up too much or the growers ganging up on you.
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I mean, they're all great guys, but you don't want to be 100% in there when you have all the money tied up in the factories.
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And the other side is we don't want to have 100% of the industry.
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That wouldn't be good politics.
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You know, we need a good farming community and we enjoy working with the farm community and we've got friends we've had for 50, 60 years.
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Well, talk to me about that a little.
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You do a ton of research and you make it available to your competitors.
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You make it available to farmers. We do.
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We we've developed quite a while ago a philosophy that says if it's good for us, why don't we share it with the farmers?
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A lot of them deal with us and bring us their fruit.
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If we can make them more efficient, that keeps us in business.
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And we're continually saying to our own farm people and to the farm community.
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We have to be more efficient.
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We have to compete in the world.
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We're competing with all fruits and all foods.
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So, if you're going to do that, you have to grow more pounds per acre and do it more efficiently.
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So, that's the way you stay in business.
10:28
Talk to me a little of the what's the agriculture of wild blueberries?
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Uh my understanding is they're not planted. You're right.
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There's different bases in Nova Scotia.
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It's on abandoned farmland on the back roads where people moved out.
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I say in the 30s when rural electricity went through, didn't go to every back road.
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Now when we're talking about wireless and internet, we have to be in every back road.
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It doesn't matter whether there's just a camp there. They they want internet.
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You compare that with rural electrification which did the back roads but not the real back roads.
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And so a lot of people when electricity went through uh moved off the the backro farms and those farms eventually became blueberry fields. They revert to nature.
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Spruce trees grow on them.
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Blueberry plants grow on them usually 30 years after they were farmed by a farmer.
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And so they're not planted. They're there naturally.
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And in many cases, some of these farms had already been taken over by spruce trees, whether quite thick or scattered.
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And we went in, cut the spruce trees down, and we had a blueberry field.
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Now, the industry in Maine, uh, which was the mother of the industry, had about a 50/50 ratio between old farms, which tended to be smaller than they were here.
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smaller than they were here. But then they had the blueberry barren which were big fields that were a pine forest originally and then through forest fires they became uh you know there's history written about them picking blueberries
12:06
in the 1700s on these baronss they'd been burnt over the years and so that's a different industry and now in New Brunswick on the south side of New Brunswick again it's old farmland but on the northshore It's um a pine forest that we're clearing. We're really
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We're really excited about the potential in New Brunswick.
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We're going to have more acres and blueberries than New Brunswick has in potatoes.
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So, it's going to change the Acadia Peninsula and the economy there. What is it about?
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My understanding is Quebec, Maine, Nova Scotia, New Brunswick.
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Those are the basically the only places wild blueberries really grow. Not quite right.
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Nova Scotia, Maine is the mother of the wild blueberry industry, but Lake St.
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John is also quite a big production area.
12:57
In 83 when you did the Cherry Field acquisition in was that the big step up for Oxford?
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Yeah, I would say 83 was kind of a transformative year.
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It's also the year that we bought control with Steuart Wrath of Halifax Cable.
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It took us from being operating small rural towns to having the major city.
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And so those were bases that we've built on.
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We weren't that well financed.
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So lots of borrowing and lots of convincing banks we could do it. So 83 was a big year.
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You've never shied away from using debt.
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We haven't shied away from using debt.
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Although today our balance sheets are in great shape, but through the years we've always been what I would say almost fully levered.
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The food business we were levered, but we had good assets.
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The cash flow wasn't as consistent as you'd like.
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But in the cable business, we were buying cable companies all over Atlantic Canada and out west and in Ontario, but the the cash flow was pretty consistent.
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you could budget it and see where you were going.
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So, I wasn't afraid of debt.
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And I think that separated me from, you know, the original cable owners. There were lots of them.
14:16
As the industry developed and fiber came along, we started tying them together and there was a lot more capital involved.
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Lots of the small town operators just decided that it was time to move on, that they didn't want to lever themselves the way it was required.
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So we started buying small systems and tying them together and then we had the opportunity to get Halifax and eventually uh Dartmouth basically all of Nova Scotia except Glaz Bay and a little bit in Cape Breton.
14:48
We just kept levering and levering and buying and buying some more and uh it was hardly a year that we didn't have an acquisition.
14:57
I want to come back to East Link in a second because you you own one of the largest I mean the largest private telecommunications company private. Yes, by far.
15:08
What are the input costs to blueberries?
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I think one of the big ones is bees.
15:12
The biggest single cost are the rental of honeybees for pollination.
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You know these berries, they're 1,500 blueberries a pound.
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Every blossom has to be visited by a bee to get a blueberry.
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So we require a lot of hives.
15:25
And I was reading an article this morning on on the Canadian economy and where Scotia Bank had put out a report that said if we would eliminate the borders within our provinces that it was something like$2 to7 billion dollars of efficiencies that would come to Canadian.
15:45
So in our bee business we're stuck with with restrictions.
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We can bring bees from the Okonogan Valley all the way to New Brunswick and we have to get permission through each province and we get the permits and we bring but when it comes to the Nova Scotia border, no.
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So Nova Scotia and PEI are the only jurisdictions in North America that have restrictions.
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It's in historically it was about protectionism.
16:13
some local beekeepers got together and lobbyed the government and said, "We don't want others coming in here. This is our market."
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But that's a small business compared to the blueberry business.
16:24
So, we're held hostage by by uh a lack of pollinators in Nova Scotia.
16:30
My understanding is like there's a almost like a team of uh moving pollinators in the US.
16:39
They start on the West Coast and they sort of like go across the country to Florida and then up to northeast. Yeah.
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I asked one of the guys about their business model and they said ABC almonds, blueberries, cranberries and then they go to Florida for the winter and then they go back to California and the almonds and they do the route over again and it makes them quite efficient.
17:02
Where in Nova Scotia, what can you do?
17:04
You have to stay within the borders.
17:06
We have a great junior hockey team in Halifax, the Moose Heads.
17:11
And it's like saying you can play in the queue, but you have to use only Nova Scotia inputs. Yeah.
17:15
And you can't bring anybody in. It's not only bees.
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There's just restrictions all over the place on on border crossing.
17:23
And there's been panels and people studying.
17:26
Harper had a study group and everybody finds the same thing.
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It's kind of ridiculous, but that's the country we live in and and but there's always hope.
17:41
Do you have a professional beekeeper on staff? We do.
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We We're the largest beekeeper in Nova Scotia by far and one of the largest in Canada because we couldn't get the bees.
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So, we had to start our own ap.
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We still don't have enough and the farmers don't have enough.
17:58
And what difference does the bee make in yield?
18:01
like the pollination process four or five times.
18:03
I think if you had no honeybees imported and relied on on local pollinators, you might get 1,000 to,500 lb.
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If we use four to five hives, which is considered high, but we can grow 8,000 or 9,000 lb.
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So, it's tremendous difference. and with our research.
18:28
We've been sponsoring research with Dr.
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Pible at the agricultural college and he's really taught us how to to grow plants that are more productive and with fungicides and fertilizers and we do have the basic crop there, but then you have to get it pollinated.
18:48
It's a real problem and this year was particularly bad.
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The farmers lost in many cases 50% of their bees over winter.
18:57
See, we should be taking those bees to Florida maybe in the winter time because it was too cold. Is that why? I'm not sure.
19:04
There's always lots of of reasons our beekeepers say they went into the winter in poor condition.
19:09
So then they didn't survive well.
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It does mean that if you want to raise bees in Nova Scotia, you know, there's a second market in New Brunswick.
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The Cadian Peninsula is 10 days later than Nova Scotia in a micro.
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So we could pollinate here and then take them New Brunswick, but we can't do that.
19:28
So our biggest input cost are bees.
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If the total is $2,000 or thousands, the thousand of it's in bees.
19:37
So it's a big big factor and a big issue and a big disadvantage to Nova Scotia farmers. Tremendous disadvantage.
19:45
And when you started, you were picking blueberries with rakes manually. That's right. Yep.
19:51
And how has that process evolved to today?
19:53
There have been all kinds of people trying to uh develop a mechanical harvester and my brother and a mechanic looked at some of these efforts that were done in Maine and other places and they said, "We can do this and we can do it better."
20:11
So, it took them quite a while because we really weren't focused.
20:15
It would be something that we'd say in July, "Oh, we should get that old machine out and see if we can pick Blu-rays with it."
20:22
So, the only thing I brought to the table was I got them a dedicated tractor and said, "We're going to start working on this in January."
20:30
And they did and they solved the problem.
20:33
That took a couple of years maybe but very talented and the same basic principles being used today that they developed back in the 80s.
20:40
So uh it was a big effort and it cost some money but again we made it available to the farmers that it's still the standard.
20:52
There are some other harvesters that are made by local farmers or a mechanic, but but the one that my brother and Lloyd Weatherbe developed is it's kind of the standard.
21:08
It was nice that you made it available to everybody, too.
21:09
That could have given you such a competitive advantage because labor is obviously expensive.
21:15
We not only have to have our own farm sufficient, we need the farmers sufficient.
21:19
I like how you think in in terms of the ecosystem.
21:21
H a lot of your competitors have sort of come and gone over the years. Why has Oxford survived?
21:28
It was a cottage industry when I started.
21:30
People were were operating it like a cottage industry and as the requirement for more capital and more capital and and bigger operations came.
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Most of the existing people really weren't up to mortgaging what they had and and they were a different generation.
21:49
And so I'm a young guy that says I want to do this the rest of my life and I want to grow the industry.
21:54
So it was more of an attitude.
21:58
I think I just fell into an industry that needed to be developed and so uh in some ways we provided the leadership for that.
22:10
Do you think that that long-term sort of approach to it helped you?
22:12
Yeah, we're big big uh believers in looking at the horizon.
22:20
There's a famous quote by I think it was D Hammershaw who said that that only those who look at the horizon find the right road.
22:28
If you look at your at your feet, you'll stumble.
22:31
So, we're bigers at the horizon saying, "How can we do this?"
22:37
And a private business allows you to do that.
22:39
One of the interesting things about Oxford from my point of view is you never got into formulated sort of products which would be naturally pretty easy in the frozen food market and probably have higher margins. Why not?
22:53
Lots of people have suggested we should have our own brand products.
22:55
My great friend and mentor Py Crawford used to say, John, you'll spend $10 million on a factory but nothing on marketing.
23:07
But our real business was business to business as we call it to selling to jam manufacturers in Europe and pie manufacturers.
23:15
And if you're a pie manufacturer, you're going to go where the apples are because they're 50% of the pies are apple.
23:22
Or if you're in the jam business, you you know, you have to have a whole variety.
23:27
So Oxford didn't have anything to offer.
23:30
Blueberry jam in North America would be maybe five or six on the popularity list.
23:36
We're a provider to manufacturers and whether it's smoothies or whatever.
23:42
Uh so there was no economies to scale.
23:47
I remember, you know, we have this great golf course at Kabat down in Cape Breton and the industrial commission of Inesse before Ben built Kabat came to see me see if I would make blueberry jam and Inesse.
24:04
Well, you know, their intentions were great, but it made no economic sense to try and like blueberries to Cape Breton, make jam, and then bring everything else, whether it's raspberries or whatever, strawberries, and from other areas.
24:20
But so many people chase these higher margin products and they lose focus. That's exactly right.
24:25
That's a lot of people do that.
24:27
Why we succeeded is we tried to find a product we could run and run the hell out of it.
24:33
As we would say, we're by far the largest wild blueberry produce.
24:38
As we sit here today, we're processing carrots.
24:42
We're the largest carrot certainly carrot processor in Canada, but maybe in North America.
24:47
So, we learn how to do it and do it well and then just run it as much as we can.
24:52
And then we do battered products and and we try to do the same thing there.
24:58
So stick to your knitting.
25:01
Do what you can do and do more of it and try and grow it.
25:03
Don't try and do everything.
25:06
So many people fail by getting successful one and then think they can do everything.
25:14
Was the rationale for carrots to sort of use the factory more?
25:17
Because my understanding is like blueberry season ends sort of midepptember and then carrot season starts.
25:24
We said what can we do in the fall extend the season because we start the first of August running 24 hours 7 days and and the minute blueberries are done we move to carrots.
25:37
It's taken us quite a while to learn how to do it and do it really well and which we're doing now but that was exactly it.
25:45
And then we wanted to have a core of people in the wintertime.
25:51
And so we started making battered products for McCain foods.
25:56
That was the onion rings.
25:58
Onion rings and cheesesticks and cauliflower and but onion rings primarily.
26:03
Talk to me about that deal with the McCain's for the onion rings. Well, very interesting.
26:06
I would say typical maritime uh deal.
26:09
I went to see Wallace McCain.
26:15
this is over 50 years ago.
26:19
And said, "Look, I need something to keep my people busy and have you any ideas."
26:24
And he threw me a file on onion rings that they had looked at and but it didn't fit because they were doing French fries year round.
26:32
And he says, "Well, maybe you can do it."
26:35
So, needing needing something to do in the wintertime and off season, uh, we took the file and and we had a one-page agreement, which I still have, which gave us the exclusive right to make onion rings under the McCain label in Canada.
26:54
And we've been doing that for over 50 years.
26:56
And I would say only in the Maritimes, you know, and and of course we've had our ups and downs, but in all those years, I never once went back to Wallace or Harrison and said, "I need help.
27:11
Your guys are giving me a hard time."
27:13
I always worked it out behind the scenes because I thought I could go to them once and I was going to save that.
27:20
But if I became a nuisance to them, then the relationship would disappear.
27:25
So, we've worked all these years, and I never had to ask a favor.
27:30
We've done it on a pure commercial basis.
27:32
And I think it's worked well for both of us.
27:35
I like the fact that it's a simple one-page agreement over a handshake. Yeah.
27:40
But at the time you entered that, you had no idea how to make onion rings.
27:43
Didn't know how to make onion rings.
27:43
The deal we made is is still going.
27:45
still one page, but it's altered in many ways.
27:51
Uh, of course, over time with investments and so on.
27:54
Yeah, we didn't know how to do it, but we we didn't know how to do blueberries either or carrots.
28:00
What gave you the confidence to figure that out?
28:02
Other people in the world are doing it.
28:05
There must be some way you can learn how to do it.
28:07
It can't be that complicated.
28:09
But this is back in the day before Google or anything, right?
28:10
Like you're not like searching how to make onion rings. Suppliers love to talk.
28:16
So you talk to the people who make batter and say, "Well, you know, what kind of batter should we use and what?"
28:22
So they'll tell you more than they should sometimes.
28:24
It was difficult, but and and our objective wasn't to make good onion rings.
28:30
It was to make onion rings exactly the same as the competition because then it's an easy sell.
28:37
You don't have to have something unique.
28:39
And that was not as easy as you would think.
28:42
And we could make better tasting ones.
28:45
We could put them in a blind test and ours would win, but they were a little different and the objective was make the same as the other guy.
28:55
What's necessary to be successful in a commodity business if you're making the same product in a very similar way that other people are making it?
29:02
What gives you an advantage?
29:03
How do you create an advantage?
29:06
You have to be the lowcost producer and you have to be top quality.
29:08
and blueberries and carrots.
29:11
There's there are established grades and so on.
29:17
So it's not battered onion rings a little different because there was only one major competitor and we were trying to compete with with that.
29:23
By and large you have to be a lowcost producer and and have top quality and and top quality doesn't necessarily cost.
29:34
In fact, quite often it's cheaper because you have less product on the floor and less shrinkage and you're doing it all right and the end product becomes better.
29:45
Top quality, low cost is a pretty good model.
29:48
There seems to be a natural entropy in business.
29:52
As you become successful, you start spending more money, you start doing things that are are different or you know getting a fancy office or doing these things.
30:02
But how do you maintain that low cost over 50 years?
30:07
I'd like to think that we're we're low cost and hopefully we are, but we strive every day and we have a culture of every year trying to do it better.
30:16
There's always changes we can make in the manufacturing line or on the farm.
30:20
And so we have a real culture of of being open to doing better tomorrow.
30:28
I could could list five or six things that I know we're going to do better next year and from some of the things we learned this year and uh you know improving the mechanical harvester improving how we unload the product and how we deal with the farmers and there's there's always steps that you can do and you can't be satisfied with the status quo.
30:59
You know, we could sell 40 million pounds of blueberries, wild blueberries, kind of as a specialty item.
31:04
But when you want to sell three or 400 million pounds, now you got to compete with with culivated blueberries and with strawberries and marmalade, raspberries.
31:17
We're always trying to be to be better and and to get our cost down.
31:22
What's the difference between wild blueberries and cultivated blueberries from a pragmatic?
31:25
Oh, it's tremendous difference.
31:28
First of all, the the health benefits, the antioxidants are double in wild blueberries.
31:34
The flavor is much better.
31:37
The cultivated blueberries, they're a fine product, but but if you have them side by, anybody will choose the wild for flavor and that's a big a big help.
31:49
We have like gem manufacturers that one of the biggest in in the world is Andros in France and they'll only use European blueberries which are a different species again or our wild blueberries and Europeans can't compete with us because they're still a c cottage industry.
32:09
So they're gradually disappearing but there are lots of people who will will change the recipe and maybe use 50% cultivate it.
32:15
Uh so so it's big competition because it's more expensive.
32:22
Wild blueberries are more expensive historically more expensive and we could get a premium but it's becoming more difficult.
32:30
So our objective is to be the lowcost producer even against cultivated.
32:36
What are the key sort of performance indicators or metrics that you look at to judge the business?
32:41
The food business is uh is very difficult to put down on paper.
32:48
It you know you're fighting the weather and and all kinds of weather conditions. Currency is a big issue.
32:59
Labor supply is a is because we're seasonal really in the food business the blueberry business in particular.
33:08
We just have to put all the inputs in, do it all at the right time, the exact day for the sprays and so and then hope that mother nature gives you a break and doesn't take it away from you.
33:21
Like for instance this year, we think the Acadian Peninsula has great potential for wild blueberries and it catches showers because it sticks out in the water and the bay shores on one side and and and uh the either the Marrami Bay or whatever is on the other, but they normally had catch good showers and have good rain.
33:50
This year they didn't get any rain and we had a tremendous crop and you go to see it the day before at harvest and they're just little wee blueberries that hardly weigh anything and as a result we had less than half a crop and so we did everything right.
34:06
All the conditions were right.
34:08
So very difficult to project.
34:10
But but what you need as a farmer is somebody else to be in trouble with their crop and your crop work out well.
34:20
But you're always looking so what's it what's the cottage industry and what's the crop in Lake St. John?
34:28
What's the crop in Maine?
34:28
What's the cultivated crop?
34:30
So you're always looking for somebody else to have trouble.
34:34
All you can do is farm through the cycles.
34:36
keep putting the inputs in, do everything on time professionally and hope you hope you get the break.
34:42
Our advantage is that we are in three three different microclimates like I mentioned that we had a poor crop in the peninsula but we had a very good crop in Maine and so just a different microclimate.
34:57
Most businesses you can kind of project and do a business plan, but in the food business, weather plays a big part.
35:07
Let's switch gears a little bit to Brag Communications, which became East Lank, but it started way back in 1968, right after you just had a crop failure.
35:18
You just invested all this money into the factory that you can't use, right?
35:24
And then you bought your first, was it a television license?
35:27
It was a cable television license and we didn't really buy it.
35:31
The license were owned by the federal government and so they accepted applications for different towns and their philosophy at the time was to have local entrepreneurs do local television.
35:47
But that got taken over by technology with fiber and and where you could tie 10 small systems together and have a good size one and and a lot more capital.
35:57
And when we started, you know, we had two American channels that we were offering.
36:02
And and uh I remember when we were upgrading Halifax from six channels to 12.
36:08
Our engineer at the time said, "Nobody will ever watch 12 channels."
36:13
and and that's all of my time.
36:16
So, we built 12 channels and of course within a short time that was outdated. We had to rebuild.
36:20
So, we didn't pay for the license.
36:23
The license we applied for and nobody else applied.
36:28
This is for Ammerst, Nova Scotia.
36:28
We built a system and with coax cable and put up a big master antenna to get the signals out of Halifax and then we got microwave American channels in. But it was tough. It was really tough.
36:45
I mean, again, we didn't know what we were doing.
36:48
Is it true you used to bus in tapes from New Brunswick?
36:53
That's a That's I wasn't going to mention that. It was so terrible.
36:55
We built a tower down at Mount Shamok on the US border and we received the Bangor channels there, taped them, put them on the bus and of course Halifax got them first.
37:09
Time we got them in Ammeris, they were two weeks old.
37:11
But the sitcoms were okay, but the Boston Bruins two weeks later were not not quite so good.
37:16
There was not not a lot of entertainment.
37:19
So, we were selling these uh US channels uh two weeks old.
37:25
And then eventually we got a microwave system that brought them in directly still off Mount Shamco and now of course all this stuff comes by fiber and so tremendous changes in that business.
37:40
Was it capital intensive back in ' 68 as you're building this out?
37:42
So where did the capital come from to build that out?
37:47
Well, it was a small town and so you know it didn't take a lot of capital but but we borrowed the money from the Bank of Nova Scotia or most of it and we worked hard.
38:00
It's amazing how it's developed.
38:02
But then we could see that you could tie them together with fiber and we kept and they kept more capital was required.
38:09
So a lot of the other towns, the guys just decided they didn't want to put more capital in.
38:14
So for sale and my corporate lawyer at the time, George Kane, said, "John, there's something interesting here. All these towns come up.
38:23
There's six buyers, but you always get them."
38:25
And it was basically we became easy to deal with and we always lived by our word and we always paid top price and so we just kept picking them off one at a time and and made it easy and didn't over overgotiate.
38:42
We gradually picked up a lot of towns and and and then you know we bought company out of Newfonland that had systems in Sudbury and in British Columbia and Alberta and we just gradually bought them but there's nothing to buy anymore. I think about this.
39:03
We have both our cable and food business that were both quite rapid growth businesses from really small cottage industries to to professional companies.
39:13
We've played that game and they're both good businesses, but but I don't see the next big step.
39:22
They're kind of mature businesses. Yeah.
39:24
And all the bigger companies have, you know, are public companies and uh and they're not going to sell.
39:30
At one point you were losing a lot of money every month. Yeah.
39:36
And you went to see your father and your brother. That's right.
39:39
I guess maybe it was 11,000.
39:41
These numbers, you know, grow or shrink over 50 years.
39:45
I think it was 11,000 a month we were losing.
39:50
But that's not that's like hundreds of thousands today.
39:54
Thought we should have a little family meeting on it.
39:58
that look, we're losing it and I'm cutting cost everywhere.
40:00
We did cut cost to all the extra people out.
40:06
Uh I can see a light at the end of the tunnel, but I'm not really sure where we're going.
40:11
I think we could sell to some of our neighbors or maybe we could buy one or two cuz they were they were everybody was struggling.
40:21
My father said, "Well, we spent a lot of money on your education.
40:25
and we shouldn't throw it away. A pretty wise advice.
40:27
And I said, geez, I don't know whether we'll ever get it back or not, but but it turned out it was right.
40:35
It we had an expensive education and we learned how to how to go on it.
40:40
Sometimes you get a little wisdom. Uh takes you a long way. How important was scale?
40:46
Well, scale ended up being very important in in that business and uh and that's why in ' 83 when we got Halifax and were able to tie, we couldn't really afford to have professional engineers.
40:59
We were relying on suppliers to give us the technical advice and but skills absolutely important.
41:09
And so as you you expanded this, you've done I think hundreds of acquisitions effectively in East Link.
41:17
Why the reputation for paying the most?
41:20
I don't think we paid too much, but we were prepared to pay at the top of the cycle.
41:25
Again, we were looking at the horizon.
41:27
If you paid a little too much and you're a private company, you just have to live a little longer to make it work.
41:36
My brother used to say about buying a wood lot, well, maybe we're paying too much, but if we live long enough, it'll be a good deal.
41:42
So this was the same with cable.
41:44
It just meant that instead of a 10-year payback, you took 12 and you worked for nothing for two years.
41:52
In the big scheme, that was the right thing to do.
41:56
Is that something private companies can do easier than public companies? Oh, yeah. Absolutely.
41:59
I mean, we're still doing all kinds of land development and this development we have in the food business on the peninsula.
42:09
It's all 20 year horizon types stuff to to get get the land cleared and developed and get it productive.
42:15
Uh but it's unique and nobody else going to have it.
42:21
So there's lots of of projects like that.
42:26
What are some of the other uh either projects you have going on that you could do privately that you couldn't do publicly or advantages of just being private versus public?
42:33
I think there's tremendous advantages to if you have good management and we'd like to think we have good management. We work hard at that.
42:43
But there's just all kinds of decisions that we're making that of course if it's efficiencies in the factory we want to have a two or threeear payback.
42:55
But sometimes you have to make motherhood statements.
43:00
chefs say, "Well, we like we built a $150 million factory in in the Aadian Peninsula."
43:06
That's a motherhood statement.
43:09
I mean, the you couldn't say, "Well, it's going to be a three-year payback." It's not going to be.
43:12
But but it's it's a good long-term asset for the area.
43:19
It's a good long-term asset for us.
43:21
But so, there are some what I call motherhood decisions you make to keep yourself efficient and and going.
43:26
Are there other ones that come to mind?
43:32
The land development we're doing up there is is the same thing.
43:34
Uh we we've bought about 3,000 acres of carrot land in the Annapolis Valley at premium prices.
43:44
Why would you pay premium?
43:47
We need to secure the base.
43:50
That's where we grow our carrots and and we we're you know doubling the production of carrots.
43:56
So we need the land base in some case paying twice what the market was but it's only available once you know if you don't it's not always available.
44:08
Buffett talks about well I want all my managers to run their businesses as if they owned 100% of it right and then you would do these things where it's like well this might not make economic sense for 10 years but it makes economic sense over 50 or 100 years and I'm not sure Buffett would agree.
44:23
I mean he he buys going companies with with existing revenues and he I don't think he's done much startup and and you know he gave up on on Birkshshire which was the right thing but he he's he's buying companies all over the world that are already cash flow positive and making money and he can measure that.
44:45
my business of food and cable and even inland were buying kind of startups and growing them and uh maybe we're just lucky but we've made that work but you know we could see that we we could do that.
45:04
So it's a little different than Buffett now that we have mature businesses we'd like to find something that fits Buffett's model.
45:13
find something already has good cash and good management.
45:16
And we're looking every day and uh we almost closed on a significant one, but but at the end of the day, we said, "No, we've reached our limit.
45:28
We can't pay that price."
45:28
And we could have could have quite easily, but we'd rather buy more Buffett stock than than pay too much for an operating company. You you did that.
45:38
We were talking about this earlier.
45:40
You took one public company private in 2007208 which was AM Telecom. Yeah.
45:47
AM Telecom and in southern Ontario.
45:51
southern Ontario. We got some real efficiencies by taking it privately and it you know became a branch plant as compared with a separate head office separate accounting separate I don't know how much it wasn't that big a
46:06
company but we probably took three or four million dollars of overhead out of it which is part of the cost sort of being public in a way it's costly to be public and it slows you down and you're uh and you're a target for everybody Public companies attract government. You know, I've been a director of a one
46:26
You know, I've been a director of a one of the major banks in Canada and I've been a director of many other companies that were public.
46:34
But it seems to me that, you know, living in Oxford and running a private company, you're under the radar a lot compared with public and public filings and and and regulations.
46:50
So, we have the mall and we like our food business.
46:52
We run top quality and I used to have this discussion with Donald Soie who encouraged me to to go public because it gave liquidity for the shareholders, but I'd like to think we could solve that problem without going public.
47:06
But it's really cumbersome. There's no question.
47:08
And very hard to make long-term 20-year decisions.
47:11
One of the things that you never got into with East Link to my understanding was really buying programming which seems to be the whole nature of the last 10 or 15 years of the business where you have you know the Bells and the Comcasts and everybody's sort of like trying to buy up the programming, right?
47:35
Why did you guys never get into that?
47:38
I think it was probably a gut feeling.
47:41
They were paying a lot for this programming.
47:42
And do you think Bell are happy that they spent a lot of money buying programming now? I don't think so.
47:48
It really hasn't worked out well. Were we lucky?
47:51
We thought a lot about it and there were programming we could have bought.
47:56
I guess, you know, we felt we had limited resources.
47:59
We'd rather buy another company than than buy programming.
48:04
How do you think about something like Starlink now with rural internet access?
48:10
You have hundreds of millions of dollars invested in physical assets delivering internet.
48:22
When it comes to the technology business, I'm the wrong one to to try and answer that.
48:26
It's very difficult to to be better than a good fiber system in rural Nova Scotia or rural areas because you have so many options with it.
48:38
In fact, we're doing business with Starlink because when they get down, they want to have fiber that they can feed to people. Are they a competitor? Are they a customer?
48:50
Uh, I'm not sure where that's going.
48:54
And there's limited capacity in these satellites, too.
48:56
Certainly, there's going to be competition.
49:00
But I take a little different view. We've got the customers.
49:03
And so, our job is to be efficient, provide good service, make it easy, and and can we do that?
49:14
I mean, are we going to carry sty links?
49:16
Are we uh we're a distributor of other people's products.
49:20
other people's products. So I think having the fiber the fiber network and in our office in Halifax on the wall we have a picture of our fiber network it's really amazing and I think it's an asset that's not recognized by the financial
49:40
advisors and so on of the big companies but if you look at our map we have fiber from Ireland to Bermuda to the to the east coast and then we fiber going west through through Chicago and Detroit through Toronto and up north and all the way to British Columbia. And a lot of
49:58
And a lot of this we own. Some of it we trade.
50:01
We might have 48 fibers in an area and somebody wants 12 of them, we'll say, "Sure, we'll give you 12 in a rural area, but we need two to Detroit at her to Chicago."
50:13
So we either own or have trades a fiber network.
50:17
That's really amazing when you see it on the wall.
50:19
I remember I went to lunch in uh Stockholm with the Ericson guys when we were first getting in cell business and I said, "Will you put us out of business?
50:32
Will you put my cable business out of business eventually?"
50:36
He said, "Look, we've got to get off those towers and into fiber as fast as we can."
50:40
So, you know, you think of it's all cell, but it's really coming to you from fiber and wherever the cell is, there's fiber to another node and and you're picking it up.
50:52
I think the cell network is a big asset for a lot of years, but voice is changing all the time.
50:59
Talk to me a little bit more about the fiber and the asset nature of it.
51:00
Is it more valuable than people think because it's harder to get permits to put new fiber in?
51:07
Is it more valuable because it's super expensive to put new fiber in?
51:12
I think it just gets more expensive all the time and by now there's a lot of fiber networks built.
51:16
So, who's going to build another one?
51:20
You know, there's a lot of competition, but we've got this.
51:22
It's plowed in capital that's there.
51:25
That's going to be a big asset for a number of years, I think.
51:29
Why did the name change from Bragg Communications to East Lank?
51:31
Well, originally we called it Central Cable in Ammerst and that was to keep our name off it, but then we had a holding company and somebody's named it Bragg Communications holding company that was was not in the public at all.
51:48
some way as we bought companies the brag name became a little more but in most cases we still ran under the original name whether it was in Sydney or Somerside or Charlotte Town for finance reason and so on had to put them together the holding company named Brag Communication sort of got out there but it was never on on the walls of any of our buildings because they were all run as Hellifax scale or whatever.
52:17
it was truly a holding company and then and then we moved it on from there.
52:21
But those were kind of decisions I I wasn't paying much attention to or didn't care much about.
52:30
We we were always uh rejigging the financial structure.
52:36
You said something interesting there which was you didn't want your name on there.
52:40
Most people I think would almost be the opposite.
52:42
They do from an ego perspective. Yeah.
52:45
Well, we don't have our name in the food business.
52:46
Oxford's a good classical name around the world.
52:49
One of the best marketing tools you can have is use your own name. People catch on.
52:57
McCain's would be a great example.
52:59
Everybody knows McCain French fries.
52:59
But I was determined that from a family point of view and if my grandson or granddaughter want to have a just a normal job in the business or outside of the business, they don't need the burdens of of the name being everywhere.
53:17
So, I was quite determined to keep our name off it.
53:19
It's more so today, but but security, you don't need a high profile in these small towns.
53:25
And and I think I think it's uh just makes a better family situation if you don't have your name plastered over everything.
53:35
But I can understand why people do it.
53:38
But but in my case, I prefer not to do it.
53:43
You like the low profile?
53:45
Yeah, I like the low profiles. No question about that.
53:47
My son Matthew and I were looking at a cottage that he was looking to buy.
53:54
It was the former cottage of Alex Kovville, who was the famous artist from Mount Allison, my university, and it was for sale.
54:02
And we thought it would be nice to own the Kovville cottage.
54:04
And and we were there, and there were some other people showed up looking at on a Sunday afternoon, and they said, "Oh, we understand it's for sale.
54:13
We understand there's people interested, but Matthew and I were there.
54:17
They had no idea who we were.
54:19
And and they were talking this as if, you know, maybe we'd know who might be buying it.
54:26
And it's just nice to have nice low profile and be able to get around and not have the burdens of of people.
54:36
And not as much for me as for my children and grandchildren.
54:40
when you were acquiring all these companies whether through Oxford or through Eastlink did anybody ever ask for equity?
54:49
Yeah, we've had uh from time to time there's been that discussion and I face it headon and say, "Look, family companies are great to work for and we're going to pay you well and you're going to feel very comfortable here, but there's no equity available and and too complicated with with the finance structures if you start giving it away and then if they want out and I just didn't need that complication in my life."
55:17
I think historically uh there's a lot of good family companies and especially in Europe there's tremendous generation and and people are com I tell the story about young guy that was a basketball player and he was recruited to run the athletic department at St. University.
55:43
The president of the university said, "I'm probably only going to pay you half of what you're earning today, but I'm going to give you a job with twice the satisfaction."
55:51
And that's the most important thing in life.
55:56
He took the job and he's got great job satisfaction.
55:58
And you know, there's more to life than than just the pay envelope.
56:04
having a good civil place to go to work and good fellow workers and and and and a sense of working together is trying to get ahead of the other guy all the time. It's worked for us.
56:17
We've had great employees, just tremendous employee, dedicated. That's what we are.
56:24
Talk to me a little bit more about the culture inside the companies and how you shape it.
56:28
Probably the best thing we've done on the culture side is everybody is dedicated to doing it better next year and open to that.
56:37
Now, we always have some people who have to respond with a new idea with a negative comment to start with.
56:46
That's human nature, but they get through that within a day.
56:50
And then they're the the great team leader.
56:53
having a culture that you can just bring up ideas and and there's really no room for naysayers around the table.
57:02
You've got to just say, "Look, we got to do this.
57:04
Don't tell me why it's difficult to do it.
57:06
You agree it has to be done.
57:10
We should be better than we are.
57:12
So, well, let's get together."
57:12
And and I always say to my team, I said, "You're as smart as anybody else.
57:17
Why can't you figure out how to do it?"
57:19
And that's a good challenge.
57:21
but they are as smart as anybody else.
57:23
You know, you don't have to bring people from Toronto or Ottawa to to decide how to solve problems at Oxford.
57:30
There's a culture of hard work and all all of those uh basics and and and civility and respect.
57:40
I think it runs highly through the business.
57:44
And uh and we say to people, look, if you can't be respectful or if you're not happy here, please, you know, find a place where you can be happy.
57:55
How do you think about incentivizing sort of the leaders of the company?
57:59
Yeah, that's always quite a challenge.
58:01
And we have incentive programs and and they seem to work.
58:04
If I had my brothers, I'd rather pay you a million dollars and just expect you to work hard than to pay you 500 with a 500 bonus.
58:13
Incentives seem to be a way of life, but a lot of people will perform without without incentives.
58:23
Certainly, we have incentive programs and and they do seem to motivate people.
58:28
Well, John, if you want to hire me for a million bucks a year, I'm available starting tomorrow. There you go. See, without a bonus. No bonus necessary.
58:40
How do you manage it all?
58:40
We're rec recording this in in my so-called head office, which is only 200 yards from our food processing plant, but it's an effort for me to get away from the food business and let the professionals run it.
58:55
We have a very small head office and we're running several operating companies and and a few years ago we started a portfolio which is I think quite significant today.
59:07
I read where so and so is running $2 billion and three billion and we're doing more than that and so we've got big portfolio that's done very well for us.
59:18
So we try to streamline it and keep it simple and let the operators run the business and and they have to deal with the people problems and we work at it.
59:30
Who makes the investment decisions for the public companies?
59:32
Uh we have a very small team here in our head office. I'd say three of us.
59:39
Uh um and we're not we're not traders.
59:43
We're not trading all the time.
59:43
We're trying to we own like a lot of Buffett and we're just hanging on to it and probably'll have it 10 years.
59:51
Although I read an article on the weekend, a contrarian view about Buffett's maybe Bergkshire is not doing so well, but they compare it with Apple and Microsoft and some high-f flyers that have done extremely well.
1:00:06
We're buying Buffett for a 10 or 11 or 12% return.
1:00:08
We're not looking for 20 or 25%.
1:00:11
We just like to buy good solid investments and uh and let them grow.
1:00:17
How do you think about that when they're so liquid?
1:00:20
Like if they got overvalued, would you sell them or would you just sort of like hold on?
1:00:27
Basically, would we just hang on?
1:00:27
You know, uh you wonder whether Birkshshire is overvalued today or not.
1:00:32
He says he buys the stock when it's 1.
1:00:39
2 time book, but he's actually buying it at 1.
1:00:42
5 times and buying it consistently.
1:00:44
So, he knows something that we don't know.
1:00:47
So maybe you should sell the stock, but uh they're going to grow.
1:00:52
If you have good stocks, some will be up, some will be down, but uh we don't really pretend to be able to pick the high-f flyers.
1:01:03
That not really our objective.
1:01:06
We've always had a modest portfolio, but when interest rates were down to where we could borrow money for one or two%, we said, "Look, this is an opportunity. We should get at this."
1:01:17
And so, we did borrowed lots of money to buy good stocks, and it's been the right thing to do.
1:01:24
You used to go to the Berkshire Hathaway meetings.
1:01:26
What are some of the lessons you took away from Munger and Buffett? I don't know.
1:01:31
I There's so many so many basic lessons.
1:01:34
I say to my kids every once in a while, would Buffett do that?
1:01:40
And and they think, well, I guess he wouldn't. So that's the answer.
1:01:43
We don't we don't have to have a big discussion.
1:01:47
We're looking at a company recently and my son said, I think I'd rather have more Birkshshire. And so it's a good test.
1:01:54
And so he just brings value to our everyday everyday life uh all the time. What would Warren do? What would Warren do? That's a or Charlie.
1:02:08
What are some of the lessons you've learned from investing in public companies?
1:02:12
Buffett would say that that if you're a businessman and investing in your business, you're probably a better stock picker because you use the same principles.
1:02:23
But if if you're an investor, it will help you in your business because you're using the same principles in your business.
1:02:32
And so just like I said, my son, this company we're looking at, not not a very big company, but it would kind of fit.
1:02:39
And my son says, "Well, I'd rather buy Buffett.
1:02:44
That's a pretty good benchmark."
1:02:44
So you use that every day.
1:02:46
And he grew this business by buying other companies.
1:02:48
But he hadn't charged money to do that.
1:02:51
You know, he's he he always says he doesn't doesn't borrow money, but but some way he's he's borrowing the insurance money.
1:03:02
So he said cash available to buy them.
1:03:05
In my case, I built businesses from scratch and that's different and you have to have some different philosophies than than he would agree with that.
1:03:12
You know, he wouldn't have levered the way I did.
1:03:17
He would have would have used this insurance money, but he doesn't call that leverage.
1:03:21
is one of the differences that strikes me from your past and and his and they both obviously worked out exceptionally well is that after the 60s he basically seemed positioned for success no matter what happened.
1:03:36
Different businesses, right?
1:03:36
But like look at today they have 300 billion in cash on the balance sheet.
1:03:40
So if the economy crashes he's going to win.
1:03:42
If the economy keeps performing he's going to win.
1:03:46
And if it stays the same he's going to win.
1:03:48
It sounds like he's almost positioned not predicting the future, right?
1:03:53
Whereas when you're levering up, you're you're making a prediction.
1:03:55
It might be reliable because your revenues are constant and you're borrowing against that.
1:04:01
It is different because he's relying on the market.
1:04:04
If the market crashes, my cable business doesn't change.
1:04:07
People still watch cable or still use cell phone.
1:04:12
It might go down some, but it's basically if the market crashes, people are still going to eat blueberries.
1:04:17
Now, it might be might be tough going, but they're not going to stop eating.
1:04:22
And you might have to take a year or two when you don't make any money.
1:04:25
But, you know, back in was it 78 when interest rates were 18 and 20%.
1:04:34
I had a cable business and financed and the interest rates were killing me.
1:04:41
But we just hung in there and cut the cost and I remember saying, "Well, if we can survive in this situation, we'll be in pretty good shape going forward."
1:04:50
I understand Buffett, but I I I don't always agree with them.
1:04:55
That that money and see, as a long-term investor, having that money sit in cash, uh I don't know, he's got a crystal ball that nobody else has.
1:05:07
I'd be investing it in in good stocks because if the stocks go down, it doesn't matter.
1:05:12
But I guess he's waiting for the opportunity to buy them cheap. We'll find out, I guess. Right. Yeah.
1:05:20
And and he's creating cash.
1:05:20
So, he obviously anticipating quite a correction.
1:05:26
Like he does lever up some businesses there like not to the point of a lot of people, but like the railroad business has that the especially with the predictable revenues.
1:05:34
What are the key indicators you look at for your businesses on a regular basis to gauge how well they're doing?
1:05:43
Conor and Buffett were a big EBIT believer.
1:05:46
Uh the cash they generate uh if it's through depreciation that's all right.
1:05:53
How much cash are we generating and and how can we service the debt and what can we buy with that cash?
1:06:00
And as a private company that's worked for us.
1:06:03
You know when we were building the cable business there was lots of depreciation but the cash flow was good and still is the same in the food business as we invest in factories and so on.
1:06:16
And we also you know try to work the angles on on the tax situation and use our depreciations.
1:06:24
Warren has said in the past he's not a believer in IBIT DA but but we are we think it's the cash that the business generates that and so we're always saying well what's the multiple on IBIDA and so we know what cash is coming cuz you can you can usually cut back on your capital if you need to.
1:06:43
We're always trying to measure how much free cash the business are generating and what do we have to either pay down debt or to buy buy more Buffett stock or or something similar.
1:06:58
How would you classify your management style?
1:07:00
Historically, uh, a lot of hands-on.
1:07:00
I really don't find the daytoday operations as much fun as as I do the investment of the funds.
1:07:12
And so I'm enjoying moving to a head office role as compared with but I still like to monitor uh we still have monthly meetings with all of our major investments.
1:07:25
So probably a little people would say a little too much detail and so on but god when you're signing the checks and the notes you want to know what's going on.
1:07:35
And so I would rather be well informed up front so that I can help if there's a problem than come to the problem late.
1:07:44
Operating without surprises is is pretty important to me.
1:07:50
There's a trend in business sort of like getting away from the details as you move up in the organization.
1:07:56
A friend of mine one time said you can run any company with five points on the back of a cigarette package. That was years ago.
1:08:04
But that's really basic, you know, just what are the key items? Is it revenue? Is it sales? Is it margin? And and cost.
1:08:13
I'm a big believer in being a lowcost producer.
1:08:16
Doesn't matter what you're doing.
1:08:19
There's no excuse to waste money.
1:08:22
If you're low cost, you're going to stay in business in the tough times.
1:08:27
The key points are different in every business.
1:08:29
So I would say for instance in the food business all about cost because you don't know what the revenue is going to be because we don't know whether we're going to have a frost or whether the currency's going to change or or whether somebody else got a big crop or a poor crop.
1:08:43
But if we keep our cost in good shape, we'll be all right in the long run.
1:08:48
And I would say in cable, you know, you always have to look at cost, but capital probably the biggest thing in in the cable business because you can make big mistakes and and you know, spending a say a billion dollars to get into programming and that just didn't work out.
1:09:07
Every company, I would say every business has, you know, the five points might be different. You're 84 now. 84.
1:09:18
And you're still working full days? I try to. Yeah, I do. I do. I enjoy it.
1:09:24
And I work a little every night.
1:09:24
I'm always reading about stocks or reading business stuff.
1:09:29
And I guess I'm not working quite as much as I used to, but I could share with you.
1:09:33
I've given some money to an entrepreneurial school at University of Prince Edward Island.
1:09:41
Katherryn Colbeck who was the former premier there and and the business schools named after her and she was a friend of mine at university and a great person.
1:09:51
And so we gave some money to the to an entrepreneurial school and I said on the condition that you put 70 on the wall. What's 70?
1:10:05
That's the hours entrepreneurs have to work every week. I love it. not 50, but 70.
1:10:08
And entrepreneurs do work 70.
1:10:13
What role did Judy play in all of this?
1:10:16
I'd say she's a great mother.
1:10:16
She's been a full-time mother. We have four children.
1:10:19
I don't know whether she didn't have any interest in the business or I didn't want to share it, but I do like going home and not talking about the business.
1:10:27
You know, we have four great children and we have eight grandchildren.
1:10:30
She's been just a very supportive mother.
1:10:34
I traveled the world for years and she brought up our children.
1:10:39
Her role is a supportive role but not directly in the business.
1:10:44
Is there anything looking back that you would have done differently?
1:10:47
Probably if you said should I have done differently? Maybe.
1:10:50
But on the other hand, I was very comfortable doing what I did and I worked hard.
1:10:58
But, you know, I remember we bought our first cottage and theory was that Judy could be at the cottage with the kids and I could work, which worked out well.
1:11:09
But basically, uh, our our philosophy of life and so on, I wouldn't change.
1:11:15
We've lived a low profile rural community and and and at the same time had the ability to do whatever we wanted to.
1:11:27
What role did focus play?
1:11:27
Focus in business is a big deal when it comes to business principles.
1:11:32
There there isn't one any bigger than focus.
1:11:34
Just stay at it and work at it.
1:11:39
And it's amazing how hard work brings you good luck after a while.
1:11:46
Focus is absolutely critical.
1:11:48
Probably the biggest maybe the biggest single principle you can have in business.
1:11:52
Is there anything about decision making that you've learned that you think most people miss or would benefit from your knowledge? Stick to your knitting.
1:12:01
And I've seen a number of friends or associates who made the first million and then thought they knew how to make the second with ease.
1:12:14
and they would get off focus, go buy another company that they didn't know anything about uh and just just not focused on on what they knew.
1:12:24
I think it's fine to to diversify.
1:12:30
But you have to be careful how you do that.
1:12:32
how you do that. Frank Sobe when I was in university reading a financial times I don't know which one and and I read a quote where he says always keep the back door open so so although we were levering through these formative years
1:12:51
the real debt load was in cable where the cash flow was quite consistent the mistake many people make is is they have a business and they make the first million dollars And now they get into things they know nothing about in too big a way. I mean, if you want to test
1:13:06
I mean, if you want to test the waters, that's one thing.
1:13:08
I'm a a great believer in and and not having all the answers.
1:13:14
I always say the guy that asks the question looks better than the guy that has the answers.
1:13:20
And so I'd like to have the questions.
1:13:22
And but people get to have the answers.
1:13:26
You know, you we've all been around uh associates that once they make a little money, they they know more than the next guy.
1:13:36
In your experience, how often have those people self-corrected after they've started to go down that path?
1:13:42
I I haven't seen much selfcorrection.
1:13:42
A guy that's really doing well, when he speaks up, uh you listen to him.
1:13:48
When he goes broke, nobody listens to what he has to say anymore.
1:13:54
So making a million didn't make you smarter and losing it didn't make you stupider.
1:13:59
Talk to me about the role of patience and long-term thinking in terms of your success looking back over the last 50 60 years.
1:14:08
Patience is a real virtue.
1:14:08
I don't know whether I have enough but but I've had to have a lot because we we've built our team we have lots of imports now but in the early days we built her team on on locals that you know didn't have as much experience as people from away and and some of them turned out to be great entrepreneurs and but you had to have patience bring them along and and get them uh exposed.
1:14:38
One guy said to me because I was I was trying to point out the way I wanted to report and the guy says, "Yeah, but John, you're outside and seeing all these boards and reports." We don't see that.
1:14:51
Although you're smart, just didn't have the imagination.
1:14:56
But today, tremendous uh executive.
1:14:59
But it does it does take a little time and patience, respect, civility, those words are are big in our culture.
1:15:10
One of the things that you said that I was most intrigued about that gives me a lot of hope is that most fortunes are made after 50.
1:15:18
I was a member of YPO like lots of other entrepreneurs and you get rocked out at 50.
1:15:23
And I remember saying, you know, for me this just the beginning cuz I've built a base now.
1:15:28
I haven't really made any money, but I built quite a base and now I've got to take that base and move on.
1:15:35
Most of my real equity, the way you would measure it, has come after 60.
1:15:43
But before that, I was building land bases and factories and people and and but it didn't show up in the bottom line, but I was building a real base of assets.
1:15:53
And then I could say that after 70, we've done a lot better still cuz got the base going and and like the portfolio we have, I didn't really get started until 75 maybe.
1:16:05
And we played I shouldn't say played around.
1:16:11
We had maybe a significant portfolio in some people's mind, but but not one that you would see written up in the New York Times or something.
1:16:21
But when I decided when when these interest rates were so cheap that you didn't have to be a genius to borrow at one or two% and invest in dividends at five.
1:16:32
So we did it could have sat back and done nothing and not everybody was doing that.
1:16:37
we have a board and I was explaining to them what my my, you know, thoughts were and how I thought it would work and what the downside was.
1:16:51
Well, we've just plugged away at it and we got a couple billion of equity or more now in in the portfolio.
1:17:00
All that came late in life.
1:17:02
What role does the board play?
1:17:02
I don't want to downplay the board, but one of the great things the board does is bring discipline to our management team.
1:17:09
The team love to have the board come and like to present, but they also have to be professional about it.
1:17:17
So, it's it's forced our team to be more professional.
1:17:22
Now, we get lots of wise comments, too.
1:17:25
But the the discipline that they bring by the board, the the different leaders coming before the board, presenting what they're doing, answering the questions, that's that's great discipline.
1:17:35
I use the board, different people on the board at different times as listening post.
1:17:40
I wouldn't go without it.
1:17:43
I'm I'm a big fan of private company boards.
1:17:45
I don't think they slow us down in decision making, but we won't make a big decision.
1:17:52
And we don't like to surprise the board.
1:17:54
It might be, you know, smaller decisions we just make and move on.
1:17:59
But if it's significant, we like the board to be primed in advance as to what we're thinking about, what we might do.
1:18:06
So, we kind of try to operate without without surprises.
1:18:12
You've mentioned interest rates a few times.
1:18:13
As somebody who's lived through basically the highest interest rates and the lowest interest rates we've ever seen, how do you think about interest rates and how they should or shouldn't be?
1:18:27
Well, there they've been a big big factor.
1:18:29
I mean, I was paying 18 or 20% at one stage for for loans.
1:18:32
Didn't have as many loans, thank God.
1:18:36
And then when they're cheap cheap, you know, these these rates uh have been exceptionally cheap and and then when they get to be 6%, everybody says, "Oh, it's too expensive."
1:18:48
Geez, I never dreamt that I'd ever see 6%.
1:18:53
Certainly, I didn't allow that to slow me down because, you know, it's kind of normal, but now we're coming back.
1:18:58
uh it does allow leverage and and uh and it it affects the the portfolio some.
1:19:05
You you might buy a few more dividend stocks if the money's cheap if if the dividends twice what what the cost of funds are. Yeah.
1:19:17
Pretty you can get a return without without too much risk pretty easily.
1:19:23
It's obviously it's my cost of funds.
1:19:25
How have you learned to deal with success? I don't know.
1:19:28
I my lifestyle is not much different now than How have you kept it that way?
1:19:33
There's no yachts, no mansions.
1:19:37
Well, we have a few too many homes around, but we don't abuse that and certainly no yachts.
1:19:42
Uh, you know, hate to admit it, but we have a plane, but that keeps me working.
1:19:47
I couldn't be traveling around of way the airports are at my age and my health.
1:19:53
One beauty of living in a small town, we're an hour and a half from downtown Halveck.
1:19:59
I could be going to dinner every night in Halifax, but the beauty of living here is I just put on the invitation.
1:20:06
Sorry, my sent my executive assistant sends it on.
1:20:12
The low profile helps, but but the wear and tear of going to dinner and going to receptions and you know, takes time away. That goes back to focus. That's exactly right.
1:20:25
I don't feel any different about myself now than I did 30 years ago because we have a place in Hawaii and so on and we're next door to the Americans.
1:20:34
I always say that the business community in the US if they make 10 million they spend like they have a hundred and Canadians make 10, they hide it. Yeah.
1:20:47
It seems to me the culture in the US is making money to spend it.
1:20:50
I I've never thought of it that way.
1:20:57
I'd rather, you know, we have a significant foundation.
1:20:59
I did typical estate freeze, but I kept a portion of for myself that that is going to foundation for public good.
1:21:10
And so that's one of the reasons I keep working is to is to be able to really really leave a foundation and at the same time the children will have more than they need or more than they should have probably but but we're going to have a significant foundation and and to work for that as compared to work for a big yacht.
1:21:33
I don't know how you measure those things but but it'll give me satisfaction anyway.
1:21:37
Are there any policy changes you would make to encourage more entrepreneurship and business in Canada?
1:21:45
There's so many roadblocks at every turn.
1:21:47
Uh my friend Wallace McCain, one of his saying, "Well, don't let the bastards get you down."
1:21:55
Well, I don't know who the bastards are, but there's somebody out there trying to slow you down every day.
1:22:01
And it's quite a statement.
1:22:01
So, you have to work through that.
1:22:04
Tax policies in Canada aren't bad.
1:22:06
jurisdictional hold up to the border, you know, with all these border deals is terrible. I'm an environmentalist.
1:22:16
We have big wood lots and and and I'm really an environmentalist, but but if you're not careful, they'll take it over.
1:22:24
You know, we had a wood lot when you this particular case, it was a thousand acre wood lot and we were building roads through it to do silver culture work. Great for the future.
1:22:40
And I went to see where they put a bridge in and it wasn't a bridge, but it was half bridge and a half rock.
1:22:45
It ended up costing $75,000.
1:22:52
When I was there, there was no water in it.
1:22:53
And there was only water in it maybe in the month of April when it came down off the hill.
1:22:58
So there's no fish in it. Yeah.
1:23:00
But they make it make it do things that are absolutely no common sense to.
1:23:07
And we could have had a nice rockway that you just traveled through, but you know, so there's just things like that.
1:23:15
That's a minor issue, but it's irritating.
1:23:18
And yeah, so there does seem to be general lack of common sense in in most regulations around the world at this point.
1:23:28
It's like sediment, right?
1:23:28
It started out with good, but it keeps adding and adding and adding and nobody would have chosen to get to the place where we're at.
1:23:35
And yet here we are and we keep sort of adding sediment and we add to it.
1:23:39
And the most irritating comment that you get from the civil servants is, "But this is the regulation." Yeah.
1:23:49
Don't talk to me about common sense. This the regulation. Yeah.
1:23:52
You know, when the people wrote the regulations, they couldn't envision everything, but then the regulation covers everything.
1:24:00
Just bypasses common sense.
1:24:02
And I've heard that, well, this is the regulation.
1:24:05
You know, we're just going by the regulation. Drives you crazy.
1:24:09
John, I really appreciate the time today for this conversation.
1:24:11
We always end on the same question, which is what is success for you?
1:24:15
Success for me is is the development of a great team.
1:24:19
And in many cases, we have people that worked in this factory through high school, university, came back to work with us, and are now running the company.
1:24:32
That's to me real success.
1:24:34
We have the same thing in our other businesses where we developed at East Link.
1:24:40
We have homegrown leaders that are competing with the with the world and doing it very well.
1:24:47
And so real success is is developing people so that they can add value.
1:24:54
But my my philosophy is always how can we add value today?
1:24:58
Well, if you can develop good people, uh they can add value and add value to society or any way you want to judge that.