Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 97567 times)

Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #280 on: July 11, 2018, 02:07:59 PM »
Liquidate the whole thing is the best and only logical scenario. I doubt very much they will do that but, that is what should happen if that Jonathan Goodman was smart but, that is Dumbdee remember?

Where is it said that they have had success in mining and wealth management? Where are these resounding successes? Barrick, Teck, GoldCorp, Investors Group, banks? They are nowhere near any of these known Canadian companies.

All I see is incompetence all around. When you are too dumb to realize that buying your debt for 40 cents on the dollar while you can by selling garbage investment with little to no upside then it only indicate that you are really dumb.

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Lakesider

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #281 on: July 11, 2018, 02:32:46 PM »
+1 Cardboard

I wonder if there will ever become a point where they decide they have destroyed enough of the Goodman fortune and hand over the reigns.
« Last Edit: July 11, 2018, 03:17:29 PM by Lakesider »

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #282 on: July 11, 2018, 03:02:43 PM »
+1 Cardboard

I wonder if there will ever become a point where they decided they have destroyed enough of the Goodman fortune and hand over the reigns.

Not a chance, IMO.  This is the huge risk with dual-class share structure.  Do these guys have kids in line to take over?   



Rod

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #283 on: July 12, 2018, 07:59:05 AM »
Liquidate the whole thing is the best and only logical scenario. I doubt very much they will do that but, that is what should happen if that Jonathan Goodman was smart but, that is Dumbdee remember?

Where is it said that they have had success in mining and wealth management? Where are these resounding successes? Barrick, Teck, GoldCorp, Investors Group, banks? They are nowhere near any of these known Canadian companies.

All I see is incompetence all around. When you are too dumb to realize that buying your debt for 40 cents on the dollar while you can by selling garbage investment with little to no upside then it only indicate that you are really dumb.

Cardboard

I would call Dundee Wealth a resounding success.

LongHaul

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #284 on: July 12, 2018, 08:38:22 AM »
One question that's never been properly answered is how this disaster came about. For about 20 years Dundee had a great record of value growth under Ned Goodman et al. This culminated in the sale of Dundee Wealth to Bank of Nova Scotia. The BNS shares were sold and the investment spree began under CEO Ned leading to massive misallocation of capital. What happened to Ned?? Was this a case of hubris brought on by a very long record of success? Did Ned lose his marbles??

I guess nobody wants to ask this question on conference calls directly to Ned's sons out of fear of being rude. But surely it must be on people's minds. Does anyone have some insight into this question? Ned himself has been very low profile the last few years. Usually he is very outspoken.

This is a great Question.   At one point it looks like they had a great track record - IIRC in the 2014 annual letter ~18% CAGR in per share value for ~20 years.  Then it all fell off a cliff.   In the ~50 page annual letter it seemed to lack clear insight about the nature of the current operations.  I did see that almost all the major listed businesses were losing money.  They seemed like very risky startups with a lot of assumptions.  New business ventures have a ton of risk as there are many assumptions.  One example was the Blue Goose Organic beef.  It looked like it was losing a ton of money.  I have heard that established cattle ranches sell for .5% cap rates.  Yes that is 1/2 of 1% as everyone wants to be a cowboy after the Westerns came out.  So to go into a risky startup where the payoff might be .5% seems nuts.

I did not take a deep dive but noticed a few things.
1.  IIRC there were 400 people in the corporate office.  What is the cost of that $50m per year?  They are still spending $16m per year I believe - which is waaaaay too high.  (I can lose money for a lot less!)
2.  Many investments in risky startups.
3.  Certainty of inflation so put money in gold and other "hedges" like natural resources.  I thought this was faulty thinking as real estate or good businesses would likely be better inflation hedges if bought cheaply.
4.  Perhaps they got luck in a long natural resource/gold boom and the bust was the unluck.


I passed on investing because if the current CEO is focusing on Junior mining companies, I have read that is  one of the riskiest areas to invest.  Count me out.   Not sure what the odds are Dundee is a 0 but it is a lot more than 0% with this mgmt team in place. 






doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #285 on: July 12, 2018, 10:31:26 AM »
Yeah I don't think it makes a lot of sense to be a holding company of money-losing businesses.  They have pretty high corporate costs and don't have any money-making assets.  So if things stay the same, then over time they'll just have to keep liquidating assets, in increasing desperation, to pay their salaries.

The pivot to junior mining also concerns me.  Seems like a heck of a place to lose money, and I suspect their success in the past had more to do with the huge commodities boom as opposed to innate talent.  In any case, even in the best-case scenario, it will take quite a while before it can overcome the losses elsewhere in the company. 

I'm getting antsy to see something done with Blue Goose or any of the other private holdings.  That'll send a message that things really have changed, and also give us some insight as to how much we should be discounting their other assets.

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #286 on: July 13, 2018, 01:27:21 AM »
Junior mining can work very well if you know what you're doing. It's a graveyard for those that don't. I've no issue if they have a good team but I haven't found much on the guys they hired.


doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #287 on: July 13, 2018, 06:27:24 AM »
Junior mining can work very well if you know what you're doing. It's a graveyard for those that don't. I've no issue if they have a good team but I haven't found much on the guys they hired.

The guys they hired all came from Primary Capital.  Three of them worked for Dundee Securities up to around 2010, before heading to Primary.  The fourth is a young'un.

http://www.dundeesecurities.com/

So these guys are a known entity for Dundee.

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #288 on: July 13, 2018, 08:44:54 AM »
Thanks. Do you have a view on whether they are any good?

It's interesting they've chosen to come back. That alone might say something.

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #289 on: July 13, 2018, 09:07:15 AM »
Thanks. Do you have a view on whether they are any good?

It's interesting they've chosen to come back. That alone might say something.

No, not a clue. You'd imagine Dundee wouldn't hire them back if they weren't capable.  It bodes well that none of them is a Goodman.