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The Odd Couple


Parsad
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One of our local newcasts did a three-part story on Vancouver billionaire Jimmy Pattison, and his second in command, former British Columbia premier Glen Clark.  Both grew up in the working class neighbourhood of East Vancouver, and Clark still lives there to this day. 

 

I've always thought for a long-time that Pattison is probably the closest thing to Warren Buffett Canada has in terms of buying businesses.  He started out as a car salesman and now has businesses as diverse as grocery stores, magazine distribution, neon/sign production, billboards and even "Ripley's Believe It or Not" & "Guiness Records"...businesses that he understands, and that he picks up or develops when they are cheap and out of favor. 

 

Pattison is very good friends with Buffett, and has the same common sense mentality, gift with numbers, work ethic and charm.  A friend of mine ran Pattison's Neon Products division for many years, and he told me a bunch of great stories about him.  I also picked up one of his habits...Pattison always eats lunch at his desk, so that he doesn't waste any time during the middle of the day...he'll even brown bag it, or just get a bowl of soup and crackers.  Enjoy!  Cheers!

 

http://www.globaltvbc.com/exclusive+video/6442549010/story.html

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IIRC Pattison had the reputation of firing his lowest grossing car salesman every month at his dealerships regardless of their past history.  Like Buffett, just cause he's charming doesn't make him any less of a shark :-)

 

Actually, I've heard his take on that and you may think differently after:

 

He says that by keeping an underperforming salesperson on the floor, he's not doing them any favors.  He believes that there may be better opportunities that they are more suited to, and he'd much rather fire them and let them find their path, then keep them on the payroll because he feels sorry for them.  All he would be doing is delaying the inevitable. 

 

Mohnish also practices this.  I have a friend who once went to him to ask for advice about his investment fund, and how he could improve his business and generate more clients.  Rather than sugar coat the news, he just said "Well, your results aren't good!"  He could have lied and said "Just keep plugging away", but again he wouldn't be doing this person any favors.  This friend subsequently went on and is doing something that he's far more content with.  Cheers! 

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Big difference imo between giving someone straight advice and firing someone with no regard of past results or circumstances.  Anyone with skills can have a bad streak, especially in a business where returns tend to differ a lot and there are plenty of variables.

 

But thanks for the link! ;)

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Sanjeev, I find this amusing coming from a sterling hedge fund manager as yourself.  We all know that great managers can suffer terrible years, but it doesn't make them bad managers, and they aren't worth firing just cause of a bad year or two (especially in the investing world where a lot of returns over short term time horizons can be luck) :-).  I generally agree with the philosophy of honest and fairness though, but as tombgrt alluded to, it sounds like Pattison practiced it with a bit too much rigidity for my taste.  Jack Welch did something similar with GE (and many companies now follow his practice or a variation of it).  He famously forced everyone to identify the lowest 10% every year.  Most of the time the low performers left on their own accord, or were place on a 'performance improvement plan, so he said.  As tombgrt pointed out, everyone has rough days, months, years.  You don't throw out a star just cause he's had a bad streak.  But what do I know about car sales? :-)  And maybe car sales aren't anywhere as random as investment results can be in the short term..  I guess if you get really good with the closing techniques maybe it's easy to perform at a high level all the time...

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I think you have to seperate fields where in general more effort will result in better performance (car sales) and those where external factors (uncontrollable events) money management performance.  That is why letting go the bottom 10% in a field like car sales will produce better results than in money management perfromance.

 

Packer

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He says that by keeping an underperforming salesperson on the floor, he's not doing them any favors.  He believes that there may be better opportunities that they are more suited to, and he'd much rather fire them and let them find their path, then keep them on the payroll because he feels sorry for them.  All he would be doing is delaying the inevitable. 

 

If someone is bad at his job, this makes sense. Firing the bottom salesman every month sounds more like Glengarry Glen Ross.

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