Forty years after receiving his MBA from York University in 1968, Tony Arrell, chairman and CEO of Burgundy Asset Management Ltd., returned to York’s convocation stage to receive an honorary doctor of laws degree.
Taking his cue from the raging instability and global financial market meltdown. Arrell used the occasion to offer newly minted graduates of the Kellogg-Schulich Executive MBA program some simple advice gleaned from his 40-year career as an investment adviser.
Right: Tony Arrell
"Being in the investment business, I know that when times are bad or uncertain, you can learn a lot. My message is that there are some great lessons in life that we can learn from looking at the current situation we are facing in our financial world," said Arrell.
Never in his career, said the 63-year-old, had he witnessed such market turbulence, uncertainty and concern as there is today. Most of the problems in the current financial crisis, said Arrell, are related to a crisis in confidence. "There has been too much leverage, a product of some years of easy money, and now we are seeing a ‘de-leveraging’ from that."
"There are at least five lessons you can learn from today’s troubled times: expect the unexpected in life; live your life with integrity; keep your own counsel; realize that money is not everything; and be an optimist," said Arrell.
Arrell advised the new graduates to expect the unexpected and learn from it. It is very important to have a plan in life, he said, but remember that the unexpected can bring with it many opportunities. Drawing from his own life, he spoke about his move 16 years ago to set up his own financial asset management firm. The move, he said, was the result of a takeover of his then employer, Wood Gundy, by the Canadian Imperial Bank of Commerce. "This unpredictable thing led to an unbelievable opportunity for me," he said.
He stressed the importance of living life with real integrity. Speaking of the demise or transformation of such US stalwarts as Wachovia Bank, Lehman Brothers, Fannie Mae and Freddie Mac, Arrell said, "The managements were not completely levelling on their financial statements and I don’t think they were operating with as much integrity as they might have." He quoted US billionaire investor Warren Buffett: "In looking for people to hire, you want to look for three qualities: integrity, intelligence and energy. If they don’t have the first one – integrity – the other two can kill you.
"Remember in life that your actions touch a lot of people and it is important that you conduct yourself with integrity," Arrell said.
Arrell advised graduates to avoid the lemming mentality and to keep their own counsel. "Don’t do what everybody else does. Part of the reason we are where we are in the financial system is that there have been so many people doing the same thing – using a lot of leverage to try to make money. In the past, if you had followed what others had done, you would have been a lousy investor. You would have been in technology in 1999, in Nortel, you would have been in commodities two years ago, and probably if you were following trends, you would be selling stocks."
Left: Arrell addresses graduates of the Kellogg-Schulich Executive MBA program
Then Arrell turned to another of his lessons. "Some people who were the biggest money-makers on Wall Street have lost all of their money and that of their shareholders as well. The current financial crisis should remind you that money is not everything," he said.
The business people he admires, he said, have used their talents to create strong firms based in integrity and contributed both financially and through volunteering to improve society. "Money is like manure; it is not much good unless you spread it around."
About Tony Arrell
Arrell has had a distinguished career in Canadian business and has made important contributions to Canadian society. He has stayed active in the education community by serving as chairman of the board of The Bishop Strachan School from 1997 to 2001; trustee of the board of governors of the University of Guelph; and as a member of the dean’s advisory council at York’s Schulich School of Business.
Arrell is a member of the board of St. Michael’s Hospital and is chair of the St. Michael’s Foundation Board and the St. Michael’s Hospital Pension Committee. He has been active for many years with the Canadian Cystic Fibrosis Foundation and the Canadian Opera Company.