August 23, 2008 – Delawana Inn, Obama, Biden and Gold

by JDH on August 23, 2008

I am finishing a week’s vacation up at the Delawana Inn in Honey Harbour, Ontario, Canada; the internet connection isn’t great up here, so I took the opportunity to ignore the market this week, so I will not offer any detailed comment on the market’s action this week, other than to say it appears that some days were up, and some days were down, and we ended roughly where we started. It was, apparently, a good week to be on vacation.

I do, however, have two thoughts, which do have implications for the market.

First, we met a perfectly charming American family on a boat trip this week. The young daughter (I think she was six or seven), was wearing a T-shirt with the inscription “I want a new President”. Her mother said that it was the least radical T-shirts she had. I offered the opinion that I was quite sure she would get a new president, to which everyone laughed. She then admitted that she was voting for Obama.

Now I know that my readers don’t care what I think politically, and as a Canadian my opinions on American politics don’t matter anyway, but since I think there will be significant market implications to the upcoming election, here are my thoughts:

My American friend is wrong: she doesn’t want a “new” president; she wants an old president. She wants FDR.

I won’t pretend to be a student of American history, but it seems to me that the two most damaging presidents of the last 100 years have been FDR and Nixon. Nixon took the country off the gold standard, and as a result the American dollar is almost worthless compared to it’s value in 1972. FDR created the “New Deal”, which meant massive government spending, which of course was the reason that Nixon took the country off the gold standard (so the government could print money at an unlimited rate to pay for these programs).

The great strength of America is Americans. They are not Europeans, and they are not Canadians. They are risk takers. They pursue profit, and as a result it is Americans who have invented more stuff in the last 200 years than the rest of civilization has invented in the last 2,000. I wouldn’t have this computer, or this blog, if it weren’t for the ingenuity of Americans. (I must confess, however, that I am connected to the internet via my Blackberry, a wonderfully Canadian invention).

So why would you be so eager to elect FDR2? Obama will increase taxes, increase government, and generally stifle the ability of the individual to take risks and help society progress. I just don’t get it.

To be clear, I’m not saying I’m a supporter of Bush or McCain. Bush, the supposed conservative, has spent more money than even the most drunken liberal could imagine. And McCain marches to his own drummer, and it doesn’t appear to be the drummer of less government, and more freedom. I’m not actually sure what tune the drum is playing.

But Obama? With Joe Biden as his running mate? Joe Biden? This is the youth movement?

So who should you vote for? I don’t have the faintest clue.

If it’s any consolation, we have the same problem in Canada. We always pick from the least-bad candidate, never the best, so eventually Canada will follow the USA off the cliff.

I guess if you have lots of brains and ambition, you don’t go into politics. You don’t subject yourself to the relentless 24-7 news cycle, where your choice of clothing and haircut is dissected on national TV, but where a considered discussion of actual policies is deemed irrelevant. You go into business, you start a company, and you make true innovations and progress. How many great advancements have come from government? How many from private enterprise? (Hint: the Blackberry is made by a private company).

Sorry for that rant, my dear readers. Call me a pessimist, but it appears inevitable to me that the national debt is going higher, taxes are going up, and gold is probably the one sure investment that will be much higher a few years from now than it is today.

(My internet connection is bad up here, but did I hear that the U.S. mint has suspended the sales of the American Eagle gold coin, which they have never done in the 20 years they have been producing it, since they have “run out of supply”. Apparently Americans, and everyone else, have been buying up the coins like crazy, and buying has picked up with the recent drop in gold prices. Call me a skeptic, but I would think that if the price is down, there should be lots of supply. Hmmm. Sounds like manipulation to me. Sounds like the big boys have dropped the price, and are now loading up, knowing that gold will be much more expensive in the future. Or perhaps I’ve just had too much sun this week).

The Delawanna Inn

NOTE TO READERS: I’m going on another rant, that will have a point when I’m finished, but feel free to jump off now; you won’t be missing much; I’ll see you again next week with more thoughts on gold, uranium, and the markets.

As I said, I’ve been on vacation at the Delawana Inn in Honey Harbour, Ontario, Canada. They advertise themselves as Canada’s best family vacation resort, and they are proud that they have been around since 1897.

Unfortunately, the place looks like some of their buildings have been around since 1897.

On the plus side, the “Del” has tons of great activities for kids. If you want, you can put your children in supervised activities all day long, at no extra cost. You can rent paddle boats, canoes, kayaks and the like for no cost. You can hit golf balls at the driving range (not with a driver, mind you; it’s not that small). You can sit by the beach or pool. You can take a trip to a nearby island (there are 30,000 islands up here off Georgian Bay). My wife quite enjoyed her afternoon at the spa.


The accommodations, for the high price, leave a lot to be desired. They seem to have taken “rustic” to a whole new level. I don’t think peeling wallpaper is rustic. I don’t think dark paneling with limited lighting is rustic. It’s the little things that upset me. The coffee maker doesn’t work. The door knob in one of the older areas came off in my hand. Our room key needed to be jiggled and fiddled with for 5 minutes to make it work. The furniture is old, tired, and dirty looking.

The carpet is all new, so I get the impression that the resort waits until things are broken or drastically in need of repair, and then fixes them. They aren’t proactive, they just react to the crisis and fix it as they go.

We rented a stand alone cottage, so we were able to prepare our own meals when we wanted to. One night we wanted to go to the main dining room, so we phoned for a reservation and were told they were “too busy”. How is it possible that a dining room that seats 300, with 300 guests, can be too busy for one of their guests? Sometimes I think employees find it easier to say “no” than “yes”, so they don’t have to do any work.

So what does this have to do with anything?

First, it demonstrates the power of the internet. We found the Delawana Inn by doing a search on the internet, and now someone will find this blog posting by doing a search, and it may mean they think twice about spending their summer vacation here. Beware the power of public opinion.

Second, if you work in or operate a business of any kind, ask yourself what your customers see in your business. Do they see a brilliant, leading edge business like the Delawana Inn was in 1897? Or do they see a tired, old, worn out enterprise like the Delawana Inn is in 2008? What are you doing to make your business remarkable? Or are you just resting on your laurels, and milking your past glory?

If I owned the Delawana Inn, I would raise the money to turn it into a first-class resort. I’d renovate the rooms to make them bright, clean, and inviting. They don’t need to be made bigger; just better. I’d replace all of the fixtures, the furniture, and refinish all of the walls. (Hint: lose the wallpaper).

Then I’d make it remarkable. I’d put high speed internet in every room and cottage, so that bloggers like me could still do their work. Then I’d survey my guests to find out what else they want, and I’d give it to them. (According to my wife, a decent coffee shop on the grounds somewhere would be nice).

Thus ends my rant. If you have lots of money, perhaps you can call the owner of the Delawana and offer to buy him out; he can probably use the cash, and you could invest the money to make the place remarkable.

If you are an investor, make sure you are buying stocks in companies that are on the cutting edge; don’t buy companies that were great 10 years ago; buy companies that will be great tomorrow.

I must confess that I haven’t read anything on the Buy High Sell Higher Forum this week, but please continue to post your thoughts, and next week I’ll be back on some more detailed thoughts on gold. See you then, and thanks for reading my rants.

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