Tesla stock soars; Cathie Wood cashes in
Tesla’s stock closed at $1,128 a share in after hours trading on Friday. That’s $6 off its high— also set this past week— and up from a 52 week low of $392.
Cathie Wood, the woman who runs Ark Invest, has been selling blocks of stock— close to $200-million worth— into the frothy end of the market, though Tesla is still Ark’s largest holding, according to Yahoo Finance.
Tesla rules the electric car market. Demand is so strong that the delivery on a Model Y— picture above— in Canada is June of next year. And last week. Tesla raised the price of Model Y by about $4,000 to $77,590.
Not everyone loves the stock. Here’s a note from a successful Canadian stock picker:
“Insanity – Last week, the gain in Tesla shares was equal to the current value of Ford. The stock remains completely insane and you have to assume that Tesla will have at least 50% market share of all cars sold around the world in order for this valuation to make any sense at all. Analysts that recommend the stock are now giving the company credit for businesses that don’t yet exist and will almost certainly never exist just to get to the current share price. Avoid.”
The Moment of Truth: Mortgage Rates Set to Rise
At least in Britain, according to a piece in The Daily Telegraph, with the headline: Mortgage rates will “double with months”.
The reason is that inflation is running higher than expected and banks and other lenders don’t want to be caught with low cost loans. Someone with a £200,000 mortgage would pay about £100 a month more. Same could be true in other rich countries. The Bank of Canada said this week it will hold rates steady but will stop supporting the bond market with a practice called `Quantitative Easing’, gobbledygook that must mystify 99% of the population.
Personal Inflation
Everyone has their own personal rate of inflation. Mine is on the rise. For the first time in a year and a half I ventured to the underground walkways in Toronto downtown financial district. Shocking it is still so empty. Back to inflation: the price of a shoe shine is through the roof. It was $16 and what kind of tightwad isn’t going to give the woman a $20 bill and say keep the change. It used to be $10 or $12, depending where you were. Not something measured in the cost of living index.
Next, the first flight on Air Canada in a year and half. Figured I would use the Aeroplan points built up during the pandemic. For a one-way flight from Toronto to Montreal it was 16,660 points and $41. It used to be 7,500 points and about $50.
Morning coffee and croissant is up three or four dollars. What’s a guy to do?
Pollution
As the UN climate meeting starts in Glasgow, China is still building coal plants. Without them it suffers power shortages. China produces 23% of the world’s greenhouse gases. The United States is a close second.
As you can see below, China is by far the largest user of coal. It might be simplistic, but how can the climate crisis be solved as long as that goes on?
Britain and Germany also using coal now to bolster irregular wind and solar.
Why just pick on China
India is number three in the greenhouse gas sweepstakes. Next to China it burns the most coal. Like China, much talk about cleaning up but not much action. The photo below was taken in New Delhi two years ago this month. Beijing class smog.
Dyson’s Farm
The British vacuum cleaner and hair dryer billionaire, Sir James Dyson, spending £110-million (US$150-million) instead of taking a ten minute blip into near space.
Dyson farms 35,000 acres stretched across four English counties, a huge amount of land for such a small island. It means Brits can have strawberries year round. Labour shortage? There are robots to pick the fruit. Click below to read the full article.
Who speaks what second
This is something I stumbled across on the Internet. Sorry about the ad at the end, I couldn't get rid of it. One comment: Post Brexit it’s hard to believe Polish is still the second most spoken language in Britain.
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Essay of the Week
The two books I wrote on Belize were for Bob Dhillon, a Canadian real estate tycoon, who owns property in that quiet Central American country. The text is written in Bob’s voice, so the I is Bob. This is one chapter from the Second Edition of the book, Business and Retirement Guide to Belize, Dundurn Press. It is about two charming men who started a successful hotel in Belize. They both were successful back in the United States. One is Brown Rice; there is a Brown University in Texas and a Rice University. He is related to both of them. I have an oddball memory and I mentioned to him: “Wasn't Howard Hughes married to a woman named Rice?” The answer: “Howard was my uncle.” Not boastful, just a fact. Here is that chapter.
The Pioneers
Some people discovered Belize a long time before I did.
In 1979 a group of young men, some from Texas, a few from Canada, decided to build a hotel in Belize, and they chose a spot at the southern tip of Ambergris Caye. Even though it was a modest venture at first, just 10 casitas, or small guest cabins, and a dining room, it was ambitious for the era.
They opened for business in 1981, the same year Belize became an independent country. Today those once primitive lodgings are the oldest 5-star hotel in Belize, Victoria House.
“We wanted to have an English name to our hotel, this having been a British colony” said Browne Rice, one of the original founders. He is sitting with Ab Fay, another of the original investors. The two men, who have been friends since childhood, own the hotel outright. Sitting in a quiet, comfortable room just off the bar, they remember how the whole thing came about.
By the late 1970s both men were successful businessmen. Mr. Fay was a developer, among other businesses, and Mr. Rice had quit his job as a stock broker earlier in the decade and started a steakhouse in Houston that took off. He says it was a success because it appealed to “auto part dealers and bank presidents.” Both men had some spare cash when the Belize opportunity came along. The Ambergris Caye property was discovered by a homebuilder in Houston named Mervin Key. It was nine acres with six hundred feet of beachfront.
“It was for sale for forty-eight thousand dollars which was a pretty good bargain even then. He put a group of investors together, fourteen of us, and everybody put up $30,000,” said Mr. Fay. The extra money was to develop the property, not an easy task. First, the land had to be cleared. That turned out to be the easy part.
Today Ambergris Caye is overflowing with development, with modern construction equipment to make building new condos and hotels a lot easier than it was almost 40 years ago. For openers, there was no electricity less than two miles south of San Pedro, then a sleepy fishing village of 1,200 people. For power they used two diesel generators they brought down from Houston. If a generator broke down, which they did often, there was no phoning for spare parts – there were no phones – and parts came from Houston.
One of the partners lived on site, looking forward to life in a tropical paradise.
“This guy’s dream was to come down here and build a small hotel, bring his family and live happily ever after. So, he hired some contractors and we started building. Initially it took two years to get to where there were a few tents and a dining room. The reason it took so long was back then there were no barges from the mainland. This island had twelve hundred people then, basically it was a little fishing village. We decided to build out of concrete and nobody else had done that here,” said Browne Rice.
“We started construction during the rainy season and we couldn’t do any logging so we opted for masonry material but we found out you can’t use this beach sand to make concrete with because it’s coral sand. We had to import silica sand from the mainland by the boatload. Sailboats, with no motors, loaded with sand to the gunnels,” recalled Mr. Fay.
“They would get as close as they could and then shovel the sand into a canoe, bring it to the beach then shovel it into a wheelbarrow then take the wheelbarrow up to the job site which had a piece of plywood. They would put the sand on the plywood and throw a little cement in there, squirt it with water and stir it up and go to work. So, it was pretty labour intensive but labour was nothing back then.”
The hotel didn’t take off right away, and that’s an understatement. For one thing, it wasn’t that easy to get to Belize from the United States, and why would tourists come to a place they had never heard of.
“We opened up Victoria House without much fanfare at the time. Nobody showed up, nobody knew where Belize was. Back then you had to fly from New Orleans to Belize City on Taca Airlines,” said Mr. Fay. “Small planes were just starting to fly out here to the island then using little Cessna 180’s and then 206’s. Now they have a fleet of twelve Caravans, which is indicative of the growth of this island.”
The dream of the tropic idyll faded when things didn’t go quite as planned. The homebuilder from Houston moved down to run the small hotel, but he had a weakness for rum.
“We were open for about a year and one of our friends from Houston came down here and he came back and said `You guys need to go down there and check on your hotel’. So I flew down here and, our managing partner, like a lot of gringos who had moved down here, he had fallen off into the rum bottle and was just drunk all the time.”
The managing partner was out, though he continued to live in Belize, and the place was run by a competent local manager with Browne Rice overseeing things from his office in Houston, flying down once a month. Most of the partners started to panic.
“It was like owning a racehorse that didn’t win: you have to feed the son-of-a-bitch all the time,” said Mr. Rice. “There were cash calls from the partners because we had to have money to make the payroll and stay in business. The cash calls turned out to be a godsend for Ab and me because all of the partners over the years got tired of putting money up. Some of them had never even been here.”
They bought out the original partners for their initial investment and the two childhood friends ended up owning the hotel through the San Pedro House Limited, doing business as Victoria House Hotel. Around 1985 business started to pick up. Soon there was a direct flight from Houston to Belize City, and that made it easier for both Americans and Canadians to get to Belize.
Fay and Rice were believers and started to expand, at first building rooms over the dining room. Back then there was a beautiful road lined with trees that ran along the beach, and the hotel would pick up its guests at the airport in San Pedro with old pick-up truck with wooden benches in the back and take them along the beautiful sandy road to the hotel.
“I drove that truck down here from Houston. It was quite a trip through Mexico,” said Mr. Fay. “It was a Chevrolet pick-up truck. We built a little house on it and brought some scuba gear down here and some three wheel motorcycles.”
Looking at the verdant grounds of the Victoria House Hotel today, it is hard to believe it was once all sand, sometimes a problem because when a wind hit it would blow sand through the screens. There could be a layer of sand on bedspreads when guests returned to their rooms.
Someone, probably the manager Fidel, had the idea to plant grass. Or at least he was convinced it was his idea, since he would have to tend to the grass and he had never met a lawn mower. The grass was planted and next came the first gas-powered lawn mower in San Pedro.
About the same time the two men tired of running diesel generators for electricity and bit the bullet and paid $24,000 to connect to the power line in San Pedro, which by then was a little more than a mile from the hotel. As the place filled with guests, people staying the rooms above the bar would sometimes complain if there were rowdy parties below.
“So, in 1988, we built this bar out here and by then we needed more rooms so we built those two fourplexes, also in 1988. Obviously, we grew this out of our earnings over time,” said Mr. Rice.
“My wife thought I was crazy coming down here but I promised that our kids would still go to college,” laughed Mr. Fay.
In the beginning the guests were scuba divers and, to a smaller degree, fishermen.
“Then there were people who just came for the adventure of a third-world country. Nobody had heard of it and they knew it was safe, English speaking and the government was stable and you could buy land and own a free title to it, unlike a lot of other foreign countries,” said Mr. Rice.
“Also, the laws here are based on English Common Law which makes it easy to do business. So, those were the original tourists and they also came for this reef, the second-longest reef in the world. As time went by, the mainland started to develop for tourists. There’s a lot of stuff to do on the mainland: Mayan ruins, underground rivers, horseback riding in the mountains and all kinds of stuff. So, as that grew it opened up a little wider audience for Belize and with the direct flights out of Houston, that helped a great deal. Now, of course, people come from all over the world. Most of our guests come from Texas and secondly from California, thirdly from New York and the East coast and fourthly, from the U.K.”
The longest either of them stay on the island is a month. The two friends have businesses together back in Texas. Theirs is a success story of how to do business in Belize, even if it isn’t full time. Same way I do it.
These two men are true Texas gentlemen, who leap to their feet if a lady gets up in their presence, and great raconteurs. It is truly pleasure to listen to the story of how they built this hotel in the success it is today. There was one funny anecdote they told us one night over dinner. One night an American woman and her daughter were visiting from San Pedro. It was late, and one of the gentleman-owners offered them a spare casita for the night. The two were also travelling with their dog, a giant Great Dane.
They checked at the desk and were told the room was empty. The door opened and the first one in was the very friendly Great Dane who leapt on to the bed, on top of a honeymooning couple. The woman screamed, and the man hid under the covers. There were no hard feelings; the honey mooning couple have been back to Victoria House since.