Selina Ji is entering her third year at Western University, joining Ivey’s HBA program this September. She spent her first two years in Western’s Bachelor of Management and Organizational Studies (BMOS) program. Originally from Guangzhou, China, she immigrated to Toronto with her family at a young age and has lived there ever since. Currently, she is interning at Scotiabank’s 1832 Asset Management through the Women in Asset Management program.
As the in-class portion of Ivey’s Women in Asset Management (WAM) program came to a close, the final Capstone Activity put our learnings to the test. Working in teams of six or seven, we were tasked with creating an equity report presentation and making recommendations to senior executives at Canadian Tire. The focus was how the company might enhance shareholder value. The most exciting part: the project was to be completed in two days, following a visit to Canadian Tire headquarters, and presented to Ivey’s WAM Advisory Council.
The complexity in business operations
When Canadian Tire was announced as the subject of our analysis, we felt a sense of comfort because most, if not all, of us had shopped at Canadian Tire at some time in our lives. It wasn’t until the company tour that we realized the complexity of a national retail chain. While most of us were familiar with Canadian Tire’s retail stores, we were unaware of the complexity behind Canadian Tire real estate investment trusts (REITs), the importance of Canadian Tire Financial Services, and how those components contribute to the overall operations. Through this project, we were able to learn about the company’s business model and what made Canadian Tire the giant it is today.
While the average lifespan of a company on the Standard and Poor's 500 Index is just over 21 years, Canadian Tire is celebrating its 100th anniversary this year. This project allowed us to peek into an incredible business that innovated and adapted to remain competitive in the face of changing business climates and numerous economic cycles.
So we were wrong...
It’s been a month since the project. I vividly remember every group presented a buy rating for the stock, with target share prices set around $200, if not more. As we walked away from the presentation, we were all extremely confident in our analysis, with many of us thinking of actually owning the stock afterwards! However, as I write this article, CTC.A has dropped to $164 from $170 at the time of the presentation. So we were wrong, and many of us were disappointed.
While reflecting on what went sour, I thought back to a piece of advice given at the end of the presentation from Dagmara Fijalkowski, MBA '94, Head of Global Fixed Income & Currencies at RBC Global Asset Management and WAM Advisory Council Chair. Since investor relations representatives are trying to sell you the stock, they put themselves in a positive light. It is up to the investor to come up with a verdict. As students, we were easily swayed, which may have led us to neglect other parts of the investment as well as the risks associated with the investment. Fijalkowski suggested arguing against the motion for a change, as doing so offered a whole new perspective to the stock valuation. That was one of the multiple pieces of advice that stuck with me as I entered my internship and continued in the industry. Good investors don’t just listen to other people’s opinions, they form their own. An analyst excels by being different from the streets.
Most importantly, it is OK to be wrong. Many guest portfolio managers shared during the program that they’ve made several mistakes throughout their careers. What’s important is that we learn from mistakes and improve going forward.
A team effort
As much as I’d like to say the project was all fun and games, that’s simply not true. It was a brutal and stressful two days, where everything we learned was put to the test. I most vividly remember staying up until midnight to rehearse with my group, then waking up at 5 a.m. the next day to rehearse my script before the presentation. While the in-class lessons taught us all the technical and presentational skills we needed to excel in this project, the most challenging part – and greatest lesson learned – was how to work with a diverse team.
The WAM program brought together women from all different backgrounds, from art majors who never touched investments to STEM majors who have been pitching stocks since their first day of university. The diversity in backgrounds and personalities made it difficult to work in a team. There were numerous conflicting ideas along the way and frustrations from the lack of solutions. Reflecting on the conflicts made me realize I could have done some things better in the team setting. More listening, discussing, and understanding were in order.
It also made me consider what it meant to be a woman in the field and the work needed to be heard. It became clear that inviting different voices to the conversation is only the first step. Learning to listen and incorporate other’s input is another. Embracing diversity isn’t something women can do alone, it’s a team effort. There is no point in inviting women to the table if they aren’t allowed to speak. There is no point in allowing them to speak if what they say falls on deaf ears.