DealFlowBlog

DealFlow Punta Mita Mexico

This week the newest episode of DealFlow shot in Mexico late last year aired on CNBC World for the first time. We looked at Punta Mita, a 1,500 acre real estate development at the western tip of Banderas Bay, just north of Puerto Vallarta. This stretch of fantastic waterfront is the beginning of the Riviera Nayarit.

The DealFlow team had a short week in Punta Mita; I say short because this is a place to relax, play golf, tennis, stroll on the beach and eat and drink in a different first class restaurant every night. Just up the coast in Sayulita, some of Mexico’s champion surfers live and “work”. It is a hard life....

Foreign ownership of property near the water is restricted and we discuss not only that aspect of buying property in Mexico but also some of the aspects of a development that should help preserve the investment and let it appreciate over time.


And the sunsets...well there is one every night and each seemed more fabulous than the one before. I hope you see and enjoy the show.

Modern Marketing Techniques – Not Just for the Under Thirties

I was recently at a dinner with a group of my peers when the topic of social media was tabled.

One woman mentioned that her daughter was on Facebook all the time.  Another gentleman echoed her observation about his son.  The topic quickly moved to whether anyone at the table was on Facebook.  A couple of individuals said that they did have a Facebook account, but felt guilty because they had established a presence on the site primarily to check up on their kids.

There was absolute silence when I announced that I had a Facebook account as did both my sons, but that I was not connected to either of them.  Ironically  several of my friends are connected to them.

 

Facebook, MySpace, LinkedIn, these are tools for keeping in touch with friends, family and business associates. This sites are not limited to the under twenty-fives.

When not running my marketing companies, I am a professional trumpet player.  I play in a 16 piece jazz band.  The band leader uses Facebook to connect with the band members whenever there is a gig in the works or he needs to communicate something to the group.  In the professional music world Facebook has all but replaced email.  Now your email is a way for Facebook to alert you that you have a new message or posting.

Some companies are starting to embrace social media sites as viable options for their marketing efforts and ad dollar spends.  The unique nature of social media is that it encourages the potential customer to be engaged with you/your brand.  It is a two way communication.  For anyone that has been in sales knows, once you gain rapport with a potential customer you are many steps closer to selling them.   Social media promotes that opportunity in an electronic forum.

The key to promoting in a social media setting is to craft a message that is engaging and that encourages input. For example prompts in Amazon ask for reviews of books posted for sale..  Their software also recommends other books purchased by the same people who purchased the book you are considering.  All of a sudden you are not being told by the company what to buy or how good/bad the book is, you are being encouraged by your peers.

Is this so much different than the dinner party, where you engage in conversation and listen to others and discuss ideas on topics being tabled?  No not a t all, technology has just allowed us to share our opinions and comments on a much much broader platform; the internet.
R.B.
 

Bay Street Fight Club.

“Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash…” – Rolling Stone (Wall Street's Bailout Hustle – February 17, 2010)

Listening to Government Mule’s “I Shall Return” in the background while reading Matt Taibbi’s Rolling Stone article this morning I am struck by the dark humor by the metaphoric lyrics. Many of us watching the major bailout recipients on Wall Street announce record bonuses after nearly collapsing this year are hardly celebrating a Lazarus miracle -- we are not sleeping.

"The only reason such apathy exists, however, is because there's still a widespread misunderstanding of how exactly Wall Street ‘earns’ its money…” he writes. To me, identifying the variables credited with our changing economic landscapes goes beyond apathy. There are endless competing core elements competing for credit of this incomprehensible mess. I agree that the formula was flawed: “Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back. Ask yourself how well that ever works out. And then get ready for the reload…”

Interested in our industry’s primary reactions, it is my experience there are only 2 ways to go - fight or flight. Those that react with inaction will not survive.

Holding strength in the belief that the ‘fight’ response for survival in this economic tide through action is a winning formula, Mark Twain’s “It's not the size of the dog in the fight, it's the size of the fight in the dog.” is a theme we all reveled in as we watched the Olympics – a little less pleasant in defense of our wallets.

Therefore, Wall Street’s survival depends on team building in our fast paced economy through the wooing of the brightest minds and most talented players in the world with track records of performance.

Speaking of the brightest -- kudos to Bay Street, which will be hosting PDAC 2010 starting on Sunday through Wednesday (March 7-10). PDAC, as many of you know, is the world’s most successful industry event for the exploration and mining industry -- Bay Street Fight Club to be present.

Mining in South America

The Prospectors and Developers Conference (PDAC) is the largest mining show of the year; it takes place in Toronto March 7-10, 2010. Companies and investors from all over the world will attend this show.

Natural resources are a major source of wealth for many emerging economies. Some feel that most mineral deposits in the world have already been identified by technology. Regardless, activity by junior exploration companies and the need of major finds to replace depleting reserves by larger mining companies is taking miners to countries they have not paid as much attention to in the past.

The DealFlow team looked at mining in Peru. This country has a rich history of mining with some of the early documentation still to be found in Spain. Substantial gold and copper mines exist and exploration activity is extensive.

We visited the town of San Mateo and some exploration properties in that area to the east of Lima. Going up to 4,500 metres elevation in the Andes was quite an experience. We were there on a Sunday; the town was full of activity with market stalls and soccer games. Higher in the mountains above the town, life looked hard.

Rich in minerals but poor in the rural areas, direct foreign investment to explore and exploit the natural wealth is important to the future of this country. For clips of episode 101 please visit www.dealflowworld.com.

Companies active in mining and exploration in Peru and many other countries will be telling their stories at PDAC.
 

http://www.facebook.com/video/video.php?v=102975506399854

Social Media – the Game Changer

Social media is the modern version of word-of-mouth.  It allows people to be more connected than ever before on a global basis.  Online users are communicating in real time and every brand in the world is being caught up in the conversation. 

Venturing into social media means opening up your brand and company to the world at large and giving up some control on how your message is being spread.

Harnessing the social web and social media to promote your stock or company’s brand the way you want it to be seen requires a well thought out plan.  By using clear best practices and choosing the strategy that best fits your goals you will drive your company’s online presence to success.

Keys to this success include flexibility, transparency and swiftness of response.  Your company can use a designated communications team or enlist the whole company to contribute.  It is very important that the company is represented as a true representation of who and what you are - back to that transparency ideal.  The public wants and expects to communicate with you and if they have a good experience, they will spread the “social  proof” about your brand to new audiences and networks.  Word-of-mouth is still the most effective form of marketing and engaging your audience.  Social media marketing is simply using technology to drive this initiative. 

Some facts about user volume on the most famous social media networks.
• Facebook has over 250 million active users who spend over 5 billion minutes on the site each day.  More than a billion pieces of content are shared each week, including blogs, videos, links, microblogs and more. 
• Inline applications show that the average number of Tweets per hour is over on million.  In a period between July 118 and July 27 2009, Tweespeed measured 1.034,545 postings per hour on twitter. 
• Over 100,000,000 YouTube videos are viewed every day.

These numbers are only the tip of the iceberg, drawn from three of the most popular social media networks. The sheer size and activity of the audience gets bigger every day and is something you and your company cannot afford to ignore. With the advancement of technology and the establishment of real-time social networks like Twitter and Facebook, social network marketing can now reach a global market faster than any other kind of marketing.

The most important thing to remember about social media is that it is a two way conversation.  The audience is actively participating in the message that is being sent.  The message has to be clear and concise.  It can be delivered in a multitude of ways, meaning everything from conversations, to information postings to mutual observance of a clever video or presentation. 

It is imperative to the success of your marketing initiative to embrace and engage in ongoing social media growth.  To do that effectively you have to put a strategy in place that is based on the best methods to harness the social web so that the information about your company best reflects your message.

Social media presents the ideal opportunity for you to listen to your customers, industry experts, prospects and other influencers.  Then use that gathered information to improve your business.

When you start participating in the conversation, you need to speak to the overall market and take part in helpful, quality content so that you audience will share the experience they have with your company and others online.

Building these relationships with your customers and market conversation influencers will help your online presence evolve positively and organically (remember it is a two way conversation).

For many of us, the idea that the customer is part of the marketing message will take some getting used to, but it is what the Web and social media in particular has brought us.

Liquidity in the Financial System and Bubble Economies

Last week was an interesting news week and a bit of a trip down memory lane for me as I spent the weekend, staying in the Chateau Laurier in Ottawa.

First some of the news items:

China Sells Treasuries as Obama Increases US Debt (Bloomberg)
Ordos – China’s Empty City (International Business Times)
China – No One Home (Financial Times)

It had less immediate impact than I would have expected but the Chinese sale of short term US Treasuries brought China’s exposure to US Treasury debt below the level of Japan’s. Between the two nations it is reported by the Treasury Department that they hold US$1,524.2 Billion.

I wonder who the buyer was and for the record, I had to Google this to know how it is expressed. It is either one thousand five hundred billion or one million five hundred thousand million…..I supposed we will be getting more accustomed to these magnitudes.

The news suggests some Chinese problems; the government funded rapid infrastructure growth that helped commodity prices based on demand may have been overdone. Brand new cities according to the Financial Times and International Business Times articles linked above are sitting largely empty. This will inevitably impact liquidity in the Chinese economy.

Now for memory lane…

Ottawa’s Winterlude is a great February tradition with skating on the Rideau Canal and ice sculptures. The Chateau Laurier Hotel is a landmark that opened in 1912. It sits next door to the Parliament buildings and across the street from what was built as Union Station by the grand Trunk Railroad. The hotel opened in 1912. Later the Canadian Pacific Railroad (CPR) bought the Grand Trunk and the Chateau Laurier was part of the CP Hotels chain acquired by Fairmont.

My grandfather was close to many of the directors of the CPR in the 1920’s. It was a time of growth in Canada and it was also a period in which the Canadian dollar for the period from 1926 to 1931 was on a gold standard. As we all know the investment bubble burst in 1929 but there were other bubbles that took time to deflate. One significant one for many Canadian business and investors in 1931 was sugar.

In 1925 Cuba produced one fifth of the world supply of sugar from cane and beets. By 1932 according to The Cuban Sugar Economy and the Great Depression, by Brian H. Pollitt © 1984 Cuban production had been reduced by half as a result of falling prices and The Great Depression.

The Royal Bank of Canada was a significant bank in Cuba at that time and was also a principal bank in the financial community centred in Montreal. When the Canadian dollar came off the gold standard in 1931 two of the biggest brokerage firms in Canada, Greenshields and McDougall & Cowans failed. Having survived The Crash, McDougall & Cowans had funded its retail client margin business at US banks and neglected to hedge its FX exposure. The precipitous drop in the value of the Canadian dollar becoming a fiat currency in combination with the partnership not having limited liability caused the bankruptcy.  At this time RBC was probably facing its own liquidity issues with exposure in Cuba and otherwise the money would have been borrowed domestically.

The combination of news and memories certainly has me thinking.

Property Investment in Mexico

Buying a second home is fairly straightforward most places, certainly in North America. When the DealFlow team looked at investing in real estate in Mexico we wanted to know if it is as easy, particularly from the perspective of US buyers who are the main market for the high end development at Punta Mita on the Nayarit Riviera in Mexico.

I interviewed an owner who had fallen in love with the west coast after first visiting Puerto Vallarta with her husband as newlyweds. Their first investment at Punta Mita was modest but like many this couple in now in their second property having moved up market.

We talked during the interview about foreign ownership, laws about oceanfront property titles, security and community facilities that were important to her as an owner and investor. The backdrop was one of the two Jack Nicklaus signature (meaning Nicklaus himself designed it) golf courses and a view of the Bay of Banderas.

The episode on real estate investment will be airing for the first time on CNBC World, WealthTV and other networks and airlines shortly. We look forward to hearing from viewers with comments.

Tracy Ice Treks and Secures a Rare Find

For an occurrence to become an adventure, it is necessary and sufficient for one to recount it. – Jean-Paul Sartre

Barely 20 minutes off of the plane and the office of Floyd Roland, Premier of the Northwest Territories (NWT), invites me to the Legislative Assembly gallery. Premier Roland graciously introduces me to the full seating of the Legislature as the Editor of RareMetalBlog, Host of DealFlow and references the impact of the positive media for the Northwest Territories with my host David Connelly being recognized for also bringing in Channel 3 from France. I learn quickly that many in the community do not appreciate the way the NWT is represented in the media and I explain that I am simply here on a dare from the “intrepid adventurer” to show that I am not a “woos” and to go to AVALON’s Nechalacho Camp in Thor Lake, NWT to see what may be the largest deposit of heavy rare earth elements (HREE) outside China.

(Photo was graciously taken by the talented Professional Photograher Dave Brosha of Yellowknife)

It’s less than 2 hours, sun is shining and I am shocked, I am n-o-t freezing. Local associates tell me that it is an unusually warm day and that I should brace myself for Sunday. Of course today it’s Sunday and it’s approximately -30C out here on the lake and I am typing away -- in my cozy tent. Note that I have a video on my living conditions that will be posted later this week but with only 3 layers of Mountain Coop Equipment designer and latest technology alpine wear, I am actually warm…but not as stylish as Jean-Luc whose winter-wear is Paris runway ready.

I meet the film crew from Channel 3 of France (Jean-Luc and Max), the business editor of The Yellowknifer (Guy) and experience world class arctic char in a local sushi restaurant upon arrival. The Thursday evening Pre-Production wine and pizza party at the home of well known Northern strategic advisor, entrepreneur and intrepid adventurer  has at least 3 dozen people from the community, including but not limited to world class photographers Bill Braden and Dave Brosha; political, aboriginal, business and creative  leaders along with Jennifer from Discovery Mining. Jennifer, who is purely lovely in every manner of the word, explains how in spite of living in Australia and her endless travels – all roads lead her back to Yellowknife. I tell her that we had the highest open rate for our weekly WaterCooler Confessions newsletter and that all 7 of the writers for this effort had all indicated that the photo of her “expediting a float plane” in Old Town Yellowknife was the reason.

Let’s be frank, I have taken a lot of grief on this “confessions of a southern girl heading north” series, but it was my hope to add some entertainment value towards the real story: dependence on the Chinese for our rare metals and rare earth supply. Look, I love China and my education included a substantial concentration in Chinese culture and history, but the facts are 90% of these metals are supplied and 95% are processed in China. As an entrepreneur and a consumer that appreciates competitive pricing, I perceive an increasing need for these ‘technology rocks’ that are mandatory for everything from our flat screen TVs to our electric toothbrushes to windmill turbines. This demand for these “technology rocks” especially for those of you out there really working hard towards a greener future (there are over 35 kgs of these metals in an electric car) this is a compelling topic on many levels. This was an attempt to provide an entertaining way to show what real entrepreneurs do towards solving problems…they think out of the box…they go where no one else dare goes…and they just make it happen.

This brings me to AVALON’s Nechalacho Camp in Thor Lake. In addition to what many experts deem “the best Heavy Rare Earth Element (HREE) project in North America”, the additional significance in this experience was seeing firsthand the leadership role that AVALON has with respect to aboriginal engagement and community relations. Chief Ted spoke very passionately at the Pre-Production reception on Thursday night about balancing the economic and developing opportunities that AVALON could present from mining with the protection and respect for his peoples traditional lifestyles. He was very complementary in the vanguard role that AVALON was playing in aboriginal relationships and “doing it differently than it has been done before.” The more I am learning the greater my appreciation of how important community and aboriginal relations are to making or breaking a successful mine.

I filmed the ice road experience, the twin otter plane that I rode in that landed on ice with skis and even captured some drilling in this location, approximately 130 km SE from Yellowknife – but until I can get these files compressed, I will have to rely on words.

It’s true that I am a Managing Partner for Pro-edge Consultants Inc., an investor relations firm that was founded in 2001; and that has represented Avalon Rare Metals (TSX: AVL | OTCQX: AVARF) since January 2009 – but that does not discount the merits of the real story here…a real viable source for significant grades of HREEs in North America. It was AVALON that inspired me to suggest that we build RareMetalBlog (another blog that we write for) with the idea that many of us (including me) did not understand the complexities relating to everything from the source of rare metals and rare earths but their importance in our economy. Let me add, this was done with a world class team lead by Ian London and today has Stew, Fred, Virginia, and I can’t wait for next week when we roll out another several world class contributing writers with new RareMetalBlog sponsors Stans Energy and Tasman Metals. Gareth Hatch has become the editor-in-chief since January and we are all counting on him to quarterback RareMetalBlog into an exciting 2010.

Stay tuned for the video series…and thank you for your support, feedback and commentary on RareMetalBlog. As for “the bet”, I would like to thank RareMetalBlog readers who bet that I would turn around and not make it: you can send your apologies to my office and please settle the bottles of 18 year old Macullum scotch with the respective parties.

Virtual Reality in the Business World

I have been looking at the business of virtual reality recently (VR). Although DealFlow did an episode shot in Montreal on MMORPG or on-line games the amount of business transacted in VR through Linden Lab’s Second Life (SL) really grabbed my attention. Linden announced recently that the equivalent of US$567 million had been processed through SL in the last year.  The economy of this VR environment is now on the level of some smaller national economies and grew last year at over 60% year over year.

Like many my first experience with a VR tool or toy was Microsoft’s Flight Simulator about 25 years ago. Under the guise of ensuring my children understood computers, I bought and IBM machine for an enormous amount of money – over $3,000 as I recall. The kids would need a joystick of course, so why not learn to fly lick Billy Bishop or the Red Baron?

Teaching pilots how to fly has been done in VR for decades of course going back to Link Trainers in the 1930s. Lots of airmen learned skills in these small devices especially during the 1940s. Link was bought L-3 Communications which still makes flight simulators today.

The DealFlow Malaysia episode was on television recently and I was reminded of the hour in a Malaysian Airlines Airbus A330 simulator. These machines are so real and with the help of an instructor I managed to take off and land without loss of life. He later showed me how Bangkok airport where I “landed” looks in snow conditions. (Don’t tell Suzuki or Gore that it snowed in Thailand!) Malaysian Airlines has a large training facility outside Kula Lumpur. I also got to sit in a Boeing 777 simulator.

Companies are using VR for enterprise uses. IBM held its annual general meeting in VR on Second Life last year. The time and cost savings are potentially enormous, not to mention one’s personal carbon footprint.

The DealFlow team is looking to tell the VR story during Season 2. Stayed tuned.