Most of us would agree that Leonardo da Vinci created enormous value by transforming a blank canvas and some paint into the ‘Mona Lisa’. If an alchemist could truly transform lead into gold, the alchemist could also justifiably claim to be a creator of value. The value added by da Vinci or by an alchemist is the difference between the cost of their unprocessed “raw material” and the ultimate value of the fruits of their labour. A more prosaic example of adding value is that of a baker who begins with a $5 bag of flour which he transforms into ten loaves of bread that are each worth $2, thereby adding $15 of value. By the same token, one can provide countless examples of the destruction of value. Vandalism or defacing public property quickly come to mind as examples of ‘value subtracted’.

In the endless quest to boost television ratings, a broadcast executive engaged the services of an economic consultant. The consultant’s mandate: to design a game show that could compete, head to head, with the highly successful “Who Wants to Be a Millionaire?” To attract viewers and generate high advertising revenue, the network was prepared to provide two contestants with a potential prize of $2,000,000. In practice, however, the network wanted to lower its cost by awarding far less in prizes.

Imagine two hikers who are being overtaken by a bear that is in hot pursuit. When one hiker remarks in despair that they are doomed because they cannot outrun the bear, his erstwhile friend and companion replies, “I am not trying to outrun the bear, I am trying to outrun you!” What is the moral of the story? Perhaps that relative superiority may be all that is needed for success. The surviving hiker did not have to match the speed of Olympic gold medalist Usain Bolt. Running slightly faster than his companion was sufficient.

By Irwin Lipnowski

The story contains all of the ingredients for a blockbuster Hollywood script, if not a modern Shakespearean play.  The dramatis personae comprise a cast that features characters with sharply contrasting styles.  The incumbents who have closed rank, circled the wagons and are engaged in a fierce defence of the status quo are a group of button-down blue bloods drawn from Canada’s elite and entrenched business establishment.  Led by a courtly and wily seventy year old man who had served as CEO of the most valuable company in Canada (Royal Bank), the supporting members of the incumbent group include the current CEOs of Suncor Energy and of James Richardson and Sons, as well as former CEOs of Xcel Energy, Westcoast Energy, Shell Canada and Corby Distilleries.  The challenger is a well-schooled (Harvard BA, magna cum laude, and MBA), extremely wealthy, supremely self-confident, brash and abrasive New York Jew who, at age 45, is young enough to be the son of all sixteen members of the incumbent group.

BILL ACKMAN - challenging for control of CP Rail