How would you invest $100,000?

“There are probably 100 cheap stocks I would buy on a diversified basis. For the time being, I would stick with consumer items everybody has to buy, such as toilet paper. The most secure companies of that type would be Procter & Gamble, Kimberly-Clark and Kellogg. I might look at beaten-down oil stocks—eventually, oil will come back. If I were really courageous, I would nibble at some of the financials.”

See what the other six investing gurus said...

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Jarislowsky comments on $85bn bailout in the U.S.

BNN interviews uber-market veteran and billionaire, Stephen Jarislowsky, one of Canada's biggest institutional shareholders about the fragile state of the markets and financial sector.

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Jarislowsky jabs at BCE

Diane Francis of the Financial Post sits down with one of Canada's top money men to discuss the latest opinions of BCE. With Michael Sabia out, and George Cope in, as well as the supreme court's ruling on the legality of the BCE Board of Directors actions regarding bond-holder rights, Stephen Jarislowsky speaks his mind.

Q: BCE?
A: “It’s outrageous that the board of directors took $1 billion from BCE’s bondholders. It’s also just plain stupid that the Supreme Court of Canada, in a 7 to 0 opinion, briefly heard the case and overturned the Quebec Appeal Court’s unanimous 5 to 0 opinion upholding the rights of bondholders.”

Q: The Supreme Court’s overturning of the Quebec Appeal Court’s unanimous decision in any other issue would have sparked a constitutional crisis? What was this all about?
A: “The whole field of investor law is a joke in Canada. What was allowed to happen to BCE bondholders is unbelievable. The dividends were cut for BCE shareholders to reduce the price paid. The board did not look after the bondholders as well as the shareholders. The Quebec Appeal Court’s decision was the correct one.”

Q: Wasn’t this lack of protection for bondholders in the fine print of the deal?
A: “In Canada, the board is responsible to the company and not the shareholders or bondholders. Thomson Reuters just sold bonds and had a clause which stated that bondholders were not protected or subordinate to shareholders. We would not buy bonds like that which mean that they can go from As to junk based on board decisions in the future.”

Q: How is it that BCE is now run by the buyers even though the deal hasn’t closed?
A: “It’s unacceptable.”

Q: Will BCE get the debt it needs to close the deal?
A: “I don’t know. The banks have been out of control and are now having difficulties.”

Q: What legal reforms should occur in Canada?
A: “Much work needs to be done and I am setting up a foundation with others to come up with legislative ideas. Take Conrad Black. He stole more money in Canada than he did in the U.S. and he wasn’t even pursued here. We do not have police or securities commissions who are on the ball. We do not have specialized courts who understand what to do. Suing in Canadian courts is not a remedy because it takes ten years to get anywhere and why should shareholders have to suffer when a board has done something wrong?”
“Arbitration, not lawsuits, is the best way to handle disagreements and problems.”

Q: Why has BCE been so badly managed for so long?
A: “All the company did for decades was go to Ottawa and ask for higher rates of return. They blew money on bad investments and never fixed their customer relations problem. This is a company that has been disliked as much as Air Canada with its hated, high-handed employee behaviour toward customers. That still hasn’t been fixed. I used to have lunch with Michael [Sabia, former CEO]. I like him but he never fixed it.”

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Stephen Jarislowsky

Stephen A. Jarislowsky (born September 1925) is a Canadian billionaire investor and philanthropist.

Born Berlin, Germany, the step-son of a steel mill owner in Germany who was ousted by the Nazis for harbouring Jews, Jarislowsky emigrated to the United States in 1941 after attending public and high school in the Netherlands and France. In Asheville, North Carolina, he attended preparatory school, and then studied mechanical engineering at Cornell University. With the US entry into World War II, he served in the US Army. He finished basic training and studied Japanese at the University of Chicago before serving in counter-intelligence in Japan after the war.

He returned to the University of Chicago in 1946 and graduated with an MA in Asian Studies and Phi Beta Kappa Honours. This was followed by a Masters in Business Administration from Harvard Business School in 1949. For the next three years, he worked as an engineer for Alcan Aluminum in Montreal. He briefly returned to the United States, but by June 1955 he returned to Montreal where he started Jarislowsky, Fraser & Company Limited.

Called by publisher Jean Paré the Warren Buffett of Canada[1] , he is Chairman and Chief Executive Officer and former President of Jarislowsky, Fraser, which he built into one of the largest and most successful investment management firms in Canada, by 2005 managing assets of over C$54 billion [2]. His personal wealth has been estimated at $1.2 billion, making him the 25th richest person in Canada.[3]

He is a Director of the influential C.D. Howe Institute and has also been active in numerous other corporations besides his own including SNC-Lavalin, Canfor, Southam, Swiss Bank Corp., Velan Valve Inc., Abitibi and Goodfellow Lumber Inc. He has participated in educational, cultural and charitable activities, and with his wife Gail, to date has endowed eleven eponymous university chairs in Canada including those in Environment and Health (McMaster, established 2003); Families and Work (Guelph University, 2003); Religion and Conflict (Assumption University, Windsor); Public Sector Management (University of Ottawa, 2003); International Business Administration (Laval, 2000); Urology (McGill); Finance (University of Alberta, School of Business); Biotechnology (Saskatchewan, 2004); Technology and International Competition (École Polytechnique de Montréal); History (Concordia); and Public Sector Management (Ottawa, 2005). “All these chairs are concerned with excellence,” he is quoted as saying, "something Canadians have never really espoused". [4]

Cultural contributions include The Stephen A Jarislowsky Dance Studio in Vancouver, and the Gail and Stephen A. Jarislowsky Institute for Studies in Canadian Art, established in 2001 at Concordia University in Montreal.

In 2002 he co-founded (with Claude Lamoureux) the Canadian Coalition for Good Governance to further this cause, focusing on such contemporaries as Frank Stronach and Conrad Black for their corporate excesses.

Recently, Jarislowsky's firm which owns 18% of the shares of Canfor, was embroiled in a bitter proxy fight with tycoon Jim Pattison, who owns 25%. Pattison won and ousted CEO Jim Shepherd over Canfor's poor performance and declining share price, replacing him for the interim with Jim Shepard.[5]

Jarislowsky is an Officer of the Order of Canada and a Grand Officer (promoted from Knight) of the National Order of Quebec. He has Honorary Doctorates of Law from a growing list of Canadian universities including Queen's University, University of Alberta, McMaster University, Université Laval, Concordia University, the University of Windsor,the Université de Montréal[6]and the University of Ottawa.

He is married and has four children.

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