Don CoxThank you for tuning in to the call, which comes to you from Toronto. The
chart that we faxed out was of natural gas futures and the tag line was
"Problem for Hedgers and Consumers".
So I want to lead off with the consumer side of it because in talking to
institutional investors in the last couple of weeks, one of the things that
comes up at 90% of the meetings is a question "What about demand destruction
because of high energy prices?" And so, the answer that I've given at all
of these meetings is that one should be very cautious about assuming we have
statistical confirmation that $60 oil has produced a big drop in demand for
oil. And in the case of natural gas we have no evidence on this whatever at
this stage.
One of the reasons why I think you should be cautious about this, is first
of all, that the figures that they have on this are US refinery sensitive
and US refineries, of course, we've lost a lot of capacity in the United
States, temporarily, because of Katrina and Rita.
So, I'm not clear on exactly how those numbers are being drawn because one
of the things they can't really get good numbers on is demand at all the gas
stations in the United States because there are so many thousands of them,
many of which aren't branded by Big Oil, they're various independents or
even down to Mom and Pop operations.
So, I think the other point that I make is simply that we're in a change of
seasons, since all of this unfolded and the seasonal adjustment factors are
big items and you should always be cautious where it's season adjustment
factors that are leading to a conclusion.
That said, there's obviously no doubt that - to the extent that people have
much of a choice about it - if it costs you three dollars a gallon to gas up
your Navigator, you're going to be a little more cautious about it on
average than if it costs you two dollars a gallon. But, I can tell you that
what I've told the clients, I would be delighted as one who goes out to the
O'Hare airport along I-90 and 94, I would be delighted to see demand
destruction showing up in terms of the Interstate highways in Chicago
because that would make my travel a lot easier. And I still think that's
where most driving is done and the statistics on trucking show that demand
for diesel is holding up very well because that industry is strong.
I think that, to support the 15% sell-off that we've had in the oil and gas
group, since quarter end, on the basis that there's evidence of a drop in
demand which is going to force prices down...very much a premature response.
Certainly if that is justifiable, it's been more than accounted for by the
sell-off in these stocks.
Now the natural gas story is one that has already claimed a sort of a victim
with Encana, which has been mentioned in these calls for a year now in the
hedging aspect. Encana, since they reported their third quarter numbers,
they were the first out of the box, the stock is down seven dollars and
eighty cents. And the headline in the Globe and Mail Report on Business
here yesterday was "Hedge Contracts Blast Encana Profits". Now this is the
first time, frankly, that this hedging matter seems to have drawn any
attention whatever, from the media or from the markets.
Now you've heard my complaints on these calls and I published an issue of
Basic Points about foxes and hedgehogs, talking about what I thought was the
significance of these massive forward sales by companies. There's no
question that the decision to make the forward sales is a business decision
based on long-established business practices. We're not talking here about
something that's wildly erratic. But, having said that, when you've sold
short, for example, as PetroCanada has, half of your North Sea production
from the Buzzard Field through to the end of the decade at $26 a barrel, the
market should not assign the same value to your North Sea exposure that it
does to companies who haven't sold it short.
And in the case of Encana, when they bought Tom Brown, they were told by
their Wall Street investment bankers that they should lock in the high
prices for natural gas at $5 and $6 an MCF to make sure that that deal
worked out. And given the sheer scale of the Tom Brown purchase, which made
Encana number one in natural gas in the US, that was a reasonable business
strategy.
But, capitalism, of course, pays off on the basis of the business strategies
that give you good results and so therefore it's not a question of saying
the management is poor, it's just a question of what's happened then on a
mark-to-market basis as required by Rule number 133, the cost of those
hedging contracts, is gigantic. Now as they point out, most of these are
going to get run off this year and next year. So the way to look at them is
simply that they are a special debt item on the balance sheet where their
value gets adjusted each quarter in relation to what the price is of oil and
gas at the end of the quarter.
And so it's a temporary thing, unless you see the company doing very
long-term forward sales. Now one of the reasons we've stuck with this is
because of our metric for valuing oil stocks and mining stocks, which is
different from The Street. We say you value them on the basis of secure
reserves in the ground, secure in two ways: politically secure and that the
value attaches to the stockholders.
And frankly we learned all this from the gold mining industry in the 90's,
where the great success story of the 90's was Barrick, which used the
contango contract on gold, which meant that the out-months were always
higher than the spot, to always get, on a realized price for gold, higher
than gold ever traded that year. It was brilliant financial engineering.
Because gold was in a triple waterfall crash, which had begun in 1980 and it
lasted until, of course, the year 2000.
So that strategy was the brilliant strategy and was the right strategy. But
the problem with that, is that when it turns around then what you've got is
all these forward hedges, which then become really expensive to you. And
that's what happened to Barrick and Ashanti Gold.
Now the mining and oil industries were able to resist this in terms of the
way they set up their balance sheets and earning statements until Paul
Volcker's group, the International Accounting Standards Board, got the FASB
also to change their rules and call these contracts derivatives, which meant
they had to be marked-to-market like all other derivatives. So that means
that companies registered with the SEC have to report this way. And to me
it's the same kind of argument we had about stock options in the 1990's.
The mining and oil industry objected to Volcker, saying we've always done it
this way, why should we call these derivatives, these are simply prudent
devices to reduce volatility in our earnings. And that was the same
argument, in effect, that they used in stock options, was, we reduced our
cash employment costs, this is a non-cash item, therefore we shouldn't have
to account for it.
So, when people like me pointed out that when you looked through the stock
options, a company such as Cisco, which at that time was the second most
valuable company in the world, was earning almost no money. But we were
told, it's a non-cash item, you don't know anything about technology anyway,
forget about it.
So maybe the analogy isn't full here, but I still think that ultimately the
stock market will reward most the companies that don't have big hedging
arrangements. And I say that partly because when I talk to people who are
enthusiastic investors in commodity stocks, they are almost without
exception people who believe that commodity prices are going up.
And so, if you invest in a company that hedges heavily, then it's the
equivalent of investing in a market-neutral fund and if you're an equity
investor, if you really love the outlook for the stock market, you wouldn't
invest in a fund that's both long and short. You'd want one that's purely
long.
Now it's true that from a business standpoint, being purely long is an
arguable strategy, particularly if you're buying assets and borrowing to do
so. But, again, you've got to separate out here from the standpoint what is
maybe a sound strategy within the company, to what kind of stocks you should
own, depending on why you buy them at all.
So, our theory is, the reason you should buy commodity stocks is commodity
prices - and we use a five-year time horizon - are going up. And we never
try to tell you what they're going to do in the near-term and of course
hedgers have to deal with what happens in the near-term so they've got a
different kind of challenge. But that doesn't mean that you as an investor,
if the reason you're investing in commodities, that you should be invested
heavily in the companies that are using those strategies. To me, they're
less attractive, if you share this view.
If, on the other hand, you are simply interested investing in them as
business organizations that have sound business practices and you think the
oil and gas business is a good one, then these probably should be your
choice. So, understand why it is you invest in oil and gas and mining
stocks and you get a sense as to which companies are going to go best with
your personal make-up.
So this doesn't say that one strategy is right and another is wrong. What
it says is, you buy the stock not the company. So what you want to buy the
stock of companies who believe, like you, that prices are going up or you
want to buy the stock of companies who say that prices have always gone down
so we're going to sell short huge quantities of our future production so
that when the prices go down, stockholders aren't hurt.
So that's the last I'll say for some time on this. Because I've talked
about it so much perhaps the only reason I come back to it is because I've
had so much resistance at meetings with institutional investors who point
out that the companies a) don't agree with me and b) the reason why oil
analysts don't agree with me, most of them at least, is because this is just
not sound business practice that I'm advocating. I'm not advocating a
particular kind of business practice. I am simply saying you're reason for
being in oil and gas and mining stocks is you think the outlook for
commodity prices is good, then maybe you want to buy stock of companies who
are prepared to bet the way you do.
Now, it is a week in which on the front page of the New York Times and the
Wall Street Journal, they're referring to the gigantic profits of Big Oil
and talking about the political problems of Big Oil earning all this money.
Exxon managed, by taking some write-offs and such, to keep their quarterly
profit just under $10 billion. Nine point nine odd, something, and so ha
ha, obviously this was something that 10 looked more menacing to the public
than 9.9. Shell's profits were up 81% at just over $9 billion. BP's up
34%. I mean the numbers are fabulous.
Well, by coincidence, it's the twentieth anniversary of the national energy
policy, which was the most elaborate policy that I know of, designed to
extract the excess profits from the oil industry. And so, looking back
through history, it's marvelous to see how it all worked out. It was an
absolute disaster for the oil industry in Canada, it was a disaster for
Calgary. It was a disaster for the Liberal Party in Alberta, but the fellow
who drew up the policies and sold them ended up being President of a
Canadian bank.
So, there were winners and losers from all of this. But what I think we've
learned from the national energy policy in Canada is that it was a dumb
policy. It was built on a bias against Alberta and the oil industry, in the
key places were Toronto and Montreal, which is basically where the Liberal
Party gets elected from. And so any time you use a regional elites views to
go against a region and a major industry, you're preceding probably from
logic which isn't designed from logic, but from bias.
So, it didn't work out, but we all learned from that experience and I don't
expect the US is going to replicate it and in any case there isn't a chance
that notwithstanding the huffing and puffing going on in Congress that there
will be anything serious done against the energy industry. The energy bill,
which was designed to, although it's a monstrosity, at least has some good
provisions in it for encouraging building of refineries, which in terms of
what needs to be done most in the US in the near term, what needs to be done
to increase the production of natural gas and increase refinery throughput.
Because if we've learned anything in the last nine months it is that there
is going to be no light oil, new light oil coming, out of the Gulf states.
It's all heavy crude. And so, even if the Saudis do manage to expand their
output the way they're bragging, it's going to be heavy crude. And so
you've got to have the refineries to accommodate it.
Again, interesting enough, at long last, a front page story in the New York
Times that the administration is now getting somewhat upset about all those
Saudi promises to keep raising oil production and they're wondering whether
the Saudis have either the productive capacity or the reserves that they
were assuring Bush that they had.
Well, as you know from our exchanges with Al Jazeera and so forth, we are of
the view that Ghawar has peaked and if Ghawar has peaked then it's
improbable that the Saudis can vastly expand output and that means
that...and if they do, it's all going to be heavy crude. The Saudis
themselves admitted, that when they said they were going to expand output by
five million barrels a day in the next five years, that it was all going to
be heavy crude.
So if there's no more Saudi light to come along, that's a big statistic and
it's another reason, oddly enough, why the Canadian oil sands stocks are
attractive, because with upgraders, what they do is produce or can produce a
superior product even to West Texas Intermediate.
So, the argument about the oil situation is more complicated than just how
many barrels of oil produced. It's a question of what kind of oil and who
has the refining capacity to use what's available. So that the price of
something that people can use, whether it's gasoline or distallate, is at a
price that they're not wildly unhappy to pay. And so, I would hope that now
that we're looking at these kinds of profits that something like that would
happen but I'm not going to be my life on a good outcome.
Statistic for you, though. The twelve biggest oil companies made a hundred
billion bucks last year. And they've now got, according to the latest
statistics, more than a hundred billion in cash on their balance sheets.
Now this is, to me, a really big number. When you figure, that they've had
six years where they've failed to replace their production. And the decline
has been accelerating; in the last three years it's been really bad in terms
of output in relation to where they were before and failing to replace the
reserves.
So we've got a declining trend and we've got the fact that the twelve
biggest oil companies that trade around the world on various exchanges are
trading roughly at their reserve life indices. No matter how much money
they make - and their profits are truly gigantic - the market will not pay
up above the reserve life index. Which makes sense. Because the investor
says "Look, I don't want just a return of capital, I want a return on
capital. If in effect, what you're paying out for profits is capital, then
I'm not going to assign a big multiple to that. So you're a form of royalty
trust, only I don't get the kind of breaks that a royalty trust does on
taxes or at least until Canada's Finance Minister doesn't play around with
them.
So my point here is that the situation in the oil industry can be taken
simply out of two quotes from Lee Raymond, now that I've given you those
numbers. Four years ago he said that we wouldn't even see $50 oil, because
in the unlikely event that demand came up to catch supply, he and the other
major oil companies would bring on so much new production from Russia and
from Venezuela that that would drive oil prices back down.
Four months ago, he came out and said "ExxonMobil will not commit new money
to Russia and Venezuela, the political risks are too great". And so, from
my standpoint that explains why Big Oil has a hundred billion dollars of
cash on its balance sheets, despite a record level of stock buybacks.
It's that they don't have a place to go to replace their output. Which is
why I believe it's so important what this SEC decision is going to be and
you know, I have no better information than anybody else. I get calls
asking when will it be coming. I believe it has to come before year-end
because the companies have to use it in their accounting. The application
was filed in February.
So when it does come and I see no reason why it shouldn't favor the industry
that allowed them to account for the value of oil sands in the reserve life
index, what you're going to have is an immediate place to deploy a good part
of that hundred billion to get the reserve life index back up. And since
there's this correlation between the reserve life index and the P/E ratio,
what an oil company can do, a big one, by buying one of the oil sands
companies, is they can make their whole company worth far more. And that's
the real story behind it.
Now finally, I'd like to just make a light reference to the unfolding story
of the big corporate pension plans in the United States and the SEC getting
involved. General Motosr is the one they've lead off with and there's
rumors of course of bankruptcy at GM which have been denied but they're
asking a bunch of other companies such as Boeing, about the details.
Let me explain what I think I know about this from my years of work in this
field. The argument comes down to a very simple one, which is that under
the current accounting rules that you have for pension funds, FAS 187, what
you have is a situation that you are allowed to make assumptions going
forward about your returns on the various asset classes and your actuaries
can approve assumed return rates on them, based on historical evidence. And
to the extent that you don't realize those, it's a hedge against current
earnings but it doesn't change the fundamentals of your pension balance
sheet.
So, for example, as I've mentioned in previous conference calls, I've found
it amusing year after year to see IBM's annual statement where they assume
returns on their bond portfolio of over 8%. And their pension fund. And
they're asked, Wall Street rarely asks this question, "How can you assume
that?" and they say "Well that's what we've earned...that's less than we've
actually earned on our bonds over the last fifteen years and so actuarially,
that's the right assumption to use.
Now, the fact that they can get away with this in a period of time in which
the interest rate on Treasury bonds went from 10% down to 4% and that you're
allowed to use the gains you had in bonds in that period and say they're
going to happen going forward, now it's amazing to me that they can do it,
but they do. And undoubtedly General Motors is using the same kind of
approach, which is, we've got historical evidence to justify it. Look, we
can prove that our technology stock portfolio was wonderful because the
average return on NASDAQ for the last fifteen years has been huge. And so
therefore we can assume it's going to be that way going forward.
So this is a quick distillation of what the real issue I think is, on the
funding of corporate pension plans. What should you be allowed as your
assumed rate of return? And the government, the PBGC is telling them that
they should use the rate of return on long Treasuries. And of course if
these pension plans are forced to cut back to that, there's a real blow.
And what they're saying is they should be allowed to continue doing what
they've always done which is, use historical rates of return of the asset
classes.
Now those of you who listen to these calls know that I think in an era of
triple waterfall out there, you've got to be very cautious about using
historic rates of return or at least rates of the last fifteen years and
then projecting them forward. So, over that issue, if these pension funds
are forced to use long-term Treasury rates, then we are going to deal with
situations of major corporate bankruptcies, it's that simple. Because it
will just wipe them out. And it's another reason, I think, frankly, why the
S&P is not a very attractive index, because so many of these major
corporations are in the position where if they had to use the rate of return
on the 10-Year note, to value their pension funds, their pension liabilities
would just explode.
So, the story is just beginning, but I'm telling you that it's no more just
a Page Sixteen story, it's probably made it to Page Twelve. But it's one
worth watching, because I think that the position of the corporations is so
wrong, in terms of reality out there, that they're quite likely to lose on
this one. So, we'll see how the story plays out but it's another reason for
being dubious about having a price/earnings ratio of fifteen on the S&P and
seventeen if you take out the energy group, which I think you should,
because they're functioning in a world all their own.
So, finally, I would just like to once again, pay tribute to Paul Volcker.
The latest service he's given is his report on the oil for food program of
Saddam Hussein, which was run by the UN. Now that we have a new Fed
chairman of the Board of Governors, Ben Bernanke, people are saying that
Alan Greenspan is the greatest Fed Chairman ever.
This corner says no, it's Paul Volcker by far, the greatest of all. And
he's gone on from there to set up the International Accounting Standards
Board, which because of its success has improved the functioning of the
FASB. And I believe that the work that they've done is the key reason why
risk parameters have not widened this year despite all the bad news we've
had out there, a theme I'm going to be taking up in future calls. And he's
given us this service to show us that some of the most conspicuous
supporters of Saddam Hussein and the most consipicuous opponents of any
kinds of attack on Saddam Hussein were being paid millions and millions of
dollars in bribes.
So, this is the kind of work he does. A great civil servant and a servant
to the world, I don't know what he's going to take on next, but he's in a
league of his own. Apart from the fact that he's the only central banker I
know who stands six feet six, he does bestride the world like a colossus.
That's it, any other questions?
Thomas F.: Don, several calls ago you had suggested that perhaps the energy
stocks had reached a peak and you felt that if investors wanted to or needed
to invest in energy the best area would be natural gas. Do you feel that
way at this point?
Don Coxe: Well, I still feel the single best way is that limited group of
companies, the Alberta oil sands companies. They're a special situation.
But beyond that, as a generalization, I still believe that natural gas is
the best play and in terms of the US-stocks, the natural gas-levered stocks
are the best ones because what you've got there is a situation where it's
just not clear that the shortage can go away.
Whereas in oil, if you believe the consensus and if you believe Daniel
Yergin and if you believe the International Energy Agency and all these then
great amounts of new production are going to come on stream over the next
five years. So, the risk levels are different and the other thing frankly,
is that the natural gas industry is one where what we've had is twenty-six
straight years of falling production in the lower 48 states.
I mean, this is such a clear picture of falling supplies and the only thing
that was going to supposedly bail out the US was the pipeline to bring down
gas from the Arctic region. And, you know, I frankly think that we're
likely to be driving cars that are fueled by hydrogen before that pipeline
gets built unless they change the political circumstances. So, what's
standing in the way there is something that because of the Inuit tribes, is
a true impasse. And yet I talk to people in the US industry and they still
think this pipeline is coming soon, as their savior. Well, I don't.
So, the natural gas stocks and the service stocks, again, I keep citing the
New York Times, here, but they've got a wonderful piece today on the extreme
shortage of rigs and most importantly of people to drill. And the drilling
that's being done in the lower 48 states is overwhelmingly for gas. But
it's also, apart from deepwater Gulf of Mexico, for small pockets of gas or
for coalbed methane.
So, for conventional gas, what's available there is small stuff. So, to me
it's a terrific thing to be in and I don't think the stocks are reflecting,
the kind of price that there is there. And the other thing is, frankly, the
oil stocks are priced globally, the natural gas stocks are priced locally.
And it's quite clear, as I've made clear earlier on the call, that the oil
stocks are priced globally on the basis of the global price of oil and the
reserve life index of the industry.
So therefore, since some companies reserve life index, the big companies and
oil companies are going to decline, because there just isn't stuff out there
to drill. The natural gas companies are priced on the basis of the local
price of natural gas and their own reserve life indices and I think they
represent better likely value in the marketplace. Thank you. Any other
questions?
Arthur Gray: Good morning to you, Don. Following up on Tom Fitzgerald's
question, areas to invest. Is it too soon, or is it time to look at another
area, such as uranium with the nuclear possibility becoming more of a
probability all the time?
Don Coxe: [sigh] Yeah, I get asked this question so much in client meetings
and I have to give you a weak answer, which is, that for the past four years
I've been trying, in my work, to get institutional investors to overweight
commodity stocks. And it's been an uphill battle.
Finally, in the last year it's started to come true. And particularly with
US institutional investors that I see, it's a tough sell. Largely because
of the demography, when I go in to a meeting where we've got all these
recent graduates from Ivy League schools sitting there and they're
interested in technology and what they consider growth stocks. And they
consider the mining and oil industries old, polluting industries that are
sunset industries and all we're talking about is a short-term speculative
play.
So, what I have to do is take them through the arguments for oil, gas,
copper, nickel and zinc. If I go to uranium, I know, that given where they
went to university, that they were part of a group which was demonstrating
against nuclear plants when they were in college. And so I've got a very
much bigger problem because I have a basic ideology of theirs to deal with.
So, frankly I've decided it wasn't worth my while to make that case.
Because this is a case in which left-wing ideology of the Parlor Pinks and
Latte Liberals is so deeply entrenched that it's much easier...you can get
them to finally believe because they do drive cars and they do heat their
homes, that oil, gas and metals can be attractive investments, at least for
a while, until something better comes along.
But as soon as you talk about nuclear power, what you do is you velicate a
whole set of emotional ganglia and the meeting is lost. So that's why I
haven't done it and that's why on conference call, if I take up the subject
I'd be buried under. So it's cowardice, it's sheer cowardice. Thanks,
Arthur.
Paul: Yes, Hi Don. I had e-mailed you about the SEC ruling and I'd like a
follow-up question on it. Let's say that this ruling doesn't come as
planned, or as fast as planned, do you see any disasters happening, since
there's a hundred billion dollar cash on hand that these companies have,
from them deriving from their core business and maybe investing in potential
ventures that could be disastrous for them. And I heard the Saints in
football are moving, so they might want to buy a football team or something
crazy in that sense. What do you think about that?
Don Coxe: Well, you're absolutely right that back in the 70's, when Big Oil
got nationalized in the Arabian Gulf, that they proceeded to go in to other
ventures, they bought up mining companies and they had to write all of those
things down because they didn't know what they were in, and they got in to
other ventures so they had a record of disastrous adventures, like Bell
Canada in Canada which had excess profits out of the regulated telephone
industry and went in to a whole wide range of investments nearly all of
which had to be written down.
So, I put those in the same category as being serial destroyers of
stockholder value in the 1980's. The oil companies, this time, first of
all, if they bought the Saints at the going price of $600 million, and we're
talking about any of the companies with big operations in the Gulf, that's a
few days of current profits now. If they got a stadium named after them
now, that would be a few minutes of current profits. So, they've got more
room to do something stupid than they've had before. But, I also, frankly,
don't think that is likely to happen, just because the people who are
running these companies are very much aware of predictions that they're
going to blow the money.
So, I still think that a large part of that is earmarked against one of two
developments. That Hugh Chavez disappears. Or that Vladimir Putin says
that what I've been doing for the last three years is wrong. I'm going to
restore true free markets. Or, that the SEC comes up with a ruling
favorable to valuing oil sands reserves. You can guess which of those three
I think is the most likely event.
Any other questions?
Operator:Your final question is a follow-up question from Thomas Fitzgerald.
Tom: Don, two questions. One, what is the refining capacity for crude in
Europe? There's been quite a bit of importing of gasoline, as you know.
Second question, what is t prospect for what appears to be some rumblings in
Congress about an excess profit tax on energy companies.
Don Coxe: Okay, the last one I just mentioned briefly at the beginning of
the call, that because of the make up of Congress now and the White House,
notwithstanding these rumblings I don't think anything serious will happen.
Whether it does lead to a revised energy bill, which actually does something
worthwhile to stimulate natural gas production, LNG and refinery
construction, I don't know. But as to an excess profits tax, Bush has a
perfect record of never vetoing anything, that certainly would get vetoed,
for the same reasons, I think, you would be able to cite the Canadian
experience with the national energy program.
As to European capacity for refinining, you make a very good point and
thanks for asking the question, which is, that all the statistics we had
show there were lots of combined refinery capacity worldwide when you add in
Singapore, North America and Europe.
What is not clear, I haven't seen any recent work on this, is if we're
gradually going to increase, quarter by quarter, year by year, the
percentage of heavy crude in the total consumption of oil, let's say that
the current percentage of the 82 million barrel a day that's being refined
is "x" and if year by year the percentage of total output there declines by
10%, which is the light crude, and so we're putting more and more strain and
refinery capacity in dealing with heavy crude, I think we may be well near,
given that the spreads between heavy and light have stayed so wide, we may
already be straining the refinery capacity to handle heavy crude.
I'm strongly of the view that there isn't new light crude to be found in
the Gulf in any size and so if we in fact are going to rely on the Gulf, to
take care of growing demand then what we've got is a real squeeze on
refining capacity and it's not just in the US it's also in Europe.
Thank you all for tuning in, we'll talk to you next week.
Don Coxe Profile from the BMO websites:
Donald G. M. Coxe is Chairman and Chief Strategist of Harris Investment
Management, and Chairman of Jones Heward Investments. Mr. Coxe has 27 years
experience in institutional investing, including a decade as CEO of a
Canadian investment counseling firm and six years on Wall Street as a
'sell-side' portfolio strategist advising institutional investors. In
addition, Mr. Coxe has experience with pension fund planning, including
liability analysis, and tactical asset allocation. His educational
background includes an undergraduate degree from the University of Toronto
and a law degree from Osgoode Hall Law School. Don joined Harris in
September, 1993.