Hello everyone!

I’m going to try little experiment today, details in Section 1.

First, a bit of a preamble on AI to set the stage.

Artificial Intelligence is expanding at a rate faster than we can comprehend. Open AI, the owner of ChatGPT, is indeed the fastest growing company in history.

It will permeate every corner of our daily lives, including the jobs we take for granted or thought were safe.

Whether we like it or not or agree with the ethics, the genie is out of the bottle.

An excerpt from the Wall Street Journal paints a stark reality:

“Advances in generative AI also play a role. Shopify CEO Tobi Lütke recently told employees that the e-commerce company won’t make new hires unless managers can prove AI isn’t capable of doing the job. Other business leaders are warning their staff to adopt more AI—or else.

“AI is coming for your jobs. Heck, it’s coming for my job too. This is a wake-up call,” Micha Kaufman, CEO of the freelance marketplace Fiverr, wrote in a staff memo last month. Those “who will not wake up and understand the new reality fast are, unfortunately, doomed.”

After reading that, the question becomes, what are we going to do about it?

I’ve been a causal user of ChatGPT for a while now, and it is insane what it can produce (I encourage everyone to download the free version and try it out).

Do I believe that AI will completely replace everything we do? No, absolutely not. One example that I really like is the fact that AI has been able to beat the best Grand Master Chess players for years. As in, absolutely destroy them. And yet, Chess has never been more popular. It is the human element of the game that makes it exciting for players and fans.

So too will there be infinite room for human touch and creativity in other areas of life. So, rather than fight AI or avoid it altogether, we must see it as a tool that augments what we do.

Ultimately, you get out of it what you put into it:

If you need a complex financial analysis, you could ask: “What do you think of this balance sheet?”

→ You’ll get a largely useless, meh answer.

But if you say: “You are an expert financial analyst, please identify which business model inputs in this spreadsheet are most important, least important, the potential risks in the model’s assumptions, and how to protect against downside, including scenario analysis. Keep the response succinct and in bullet point format. Go.”

→ Your jaw will drop, and you will have something valuable to use.

Metaphorical for life I suppose. I really hope people use the technology to their advantage—it’s there for the taking. But I’m not sure everyone will.

It's like You tube; among other things, the video sharing platform has provided excellent education on all matters, including business, investing, anything really, for free, for years.

Yet still we see people struggling financially because they spend way more than they earn and never invest a dime, preferring Netflix and chill instead of listening to a few half hour investment education videos.

Maybe the problem is that it’s free. Maybe “free” feels like it has no value.

Which brings me to my experiment.

Personal Finance

I sell an investing course for C$200 (US$150). It’s two hours long, the length of a movie, and contains everything I’ve learned over a 15 year investment career that truly matters for building long term wealth.

Today, I’m offering it to you for free. No strings attached.

Click this link and use the code MARGARET at checkout.

Some might call this dumb, giving up revenue, maybe so. But honestly…whatevs.

I’d rather see everyone get the right tools and mindset to win at money, now instead of never.

And so the experiment today is this: is “free” of no value?

Or, maybe, today’s offer will help someone get off the fence. I prefer other’s financial prowess more than the revenue I might give up.

Let’s see how many sign up.

Let’s see how many finish it.

It’s there for the taking.

PS for past customers, you might as well send along this offer to your friends and family, and encourage them to do it. Select “buy as a gift” and enter the same code. Or just forward them this Journal.

Stock Markets

Talked to a new investor, she started buying shares in February before the market really started to fall. And you know what? She actually kept buying as the stock markets fell!

This is awesome, because a lot of new investors might get scared and stop investing because the prices were starting to fall.

But this new investor said “Eddie, like, I can lower my cost and get shares for cheaper, so this is great!”

But then when the stock market started to increase, now up about 15% since the low point, and in fact, it’s actually flat for the year if you can believe that despite all of the crazy headlines, she said, “but Eddie, I don’t wanna keep buying anymore because the stock prices are getting higher and I don’t want to increase my cost!”

Well, that’s what stock markets do, they go up in price overtime. So if you are a long-term investor and you are always buying, then you are inevitably going to be acquiring more shares at higher prices anyways.

This is a great thing. The whole point of building a retirement portfolio is acquiring more shares.

Because the calculation of your portfolio value is simply the number of shares x the price of your investment.

So your job is to accumulate as many shares as you can, in good markets and bad, and let time do it’s thing.

Keep buying no matter what the price is, eventually, it will be up. Likely, way up.

Real Estate

Short story of how I got into Real Estate syndications.

My Grandad, my namesake, also Eddie Gudewill (he owned a company called Goodwill Bottling, after which this Goodwill Investing Journal is named), had some apartments back in the 80s and 90s. When he died, he left them to his sons.

My dad and his brothers were all individually entrepreneurs, at the time 30–40 years old, busy starting families, and decided managing a bunch of residential tenants and calling plumbers wasn’t their shtick.

So they sold the apartments for cash and redeployed into Real Estate Limited Partnerships, where they invested as “Limited Partners” alongside a “General Partner” (otherwise called a “Sponsor”) who is responsible for acquisitions, leasing, property management, asset management (figuring out how to add value), dispositions, and so much more.

Soup to nuts, General Partners put in the work, augmented by the Limited Partner capital that is required to buy large commercial buildings.

In return, the Limited Partner receives a return on their money via rent - expenses = cash flow—and a handsome share of the profit on sale.

This was a successful strategy for them:

1. They could focus on their own businesses and families—otherwise too busy to be Real Estate operators—but still enjoy the returns private real estate can afford, and

2. Real Estate values generally did very well over the last 30 years, so the capital deployment was a great strategy.

Growing up, my first interest (and perhaps always will be) was to pick stocks like Warren Buffett. So I went down the path of Equity Research and then Portfolio Management.

Then my cousins and I started to invest in real estate…sort of a 3rd generation project, which has turned out to be a great learning experience, fun, and successful, too.

Furthermore, during my time at Richardson managing portfolios, we would allocate a slice of the portfolio to Private Real Estate Limited Partnerships. This part of the job I really enjoyed, for it is in many ways like investing in single stocks—you size up an individual opportunity, the management team, understand the value proposition, cash flows, etc., and deploy.

Over several years I ended up realizing Portfolio Management wasn’t for me long term, so I began pursuing ideas with a friend, Mike, to start investing in Private Real Estate as General Partners and see if we could make a small business out of it.

At the same time, I got to know one of the General Partners that my family has invested with for 25 years or so, a group with an extremely high-quality reputation and track record.

And I began asking questions… lots of them. Started sending him real estate investment ideas, calculating returns, and to get his advice.

I even sent him one that he ended up acquiring, a $15,000,000 retail plaza! For that, he sent me a cheque for $12,000. I didn’t expect anything, it just showed up in the mail.

So I went to the Casino and put it all on red.

I realized, maybe there’s something here.

Meanwhile, my friend and I acquired a small grocery retail investment together. I sent the deal for comment to this seasoned General Partner too, again seeking his advice.

Following which, he just said to me: “how would you like to come be VP Acquisitions for Narland?”

And that’s how it all began.

1 Quote

“In it to win it”

Luke, Reed, and the boys.

A Question

What’s a lesson you learned recently?

Me? Golf is hard.

_____________

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Thank you

Eddie Gudewill, CFA

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