Seymour Schulich, 75, spent 22 years with Beutel Goodman in Toronto and co-founded Franco-Nevada, a gold royalty firm acquired in 2002 by Newmont. His foundation has donated $300 million so far.
You made most of your money in gold and energy. What's your outlook for these sectors now?
As far as gold goes, I believe one needs to consider that the real level of inflation is running more like 9.5% to 10%. I think the number—2%—given by North American governments is absolute nonsense. Some reports suggest that major governments have been printing money at a rate of about 15% per year since the 2008-2009 financial crisis.I think you are going to see gold selling for at least $3,000 an ounce within the next three to five years. On energy, I am no longer bullish on oil, but I am convinced that these B.C. liquefied natural gas projects are going ahead. There are only about four companies, including Birchcliff Energy, that have major reserves to supply those projects. That's why I own 26% of Birchcliff. My motto is, "Go big or go home."
What was your best investment?
Franco-Nevada. I owned it for 22 years, and it definitely made a lot of money. But I made 60% of Franco-Nevada's profits in the Canadian oil sands over seven years, and in BlackRock Ventures over five. Birchcliff is probably going to be the biggest of them all. It is among many energy firms that could be acquired over the next couple of years. It has two huge advantages: It owns and operates close to 100% of its wells and gas plants, and it is one of the lowest-cost producers.
What was your worst investment?
Starfield Resources, a copper-nickel exploration play in Nunavut. I lost $50 million. I learned a lot of lessons.
What advice would you give investors?
I can only tell you what I am doing. It's pretty simple. I am about 30% in cash, 30% in gold and 30% in gas. I have five stocks. Birchcliff and San Juan Basin Royalty Trust are my gas plays. I also own shares in Teva Pharmaceutical Industries, the world's largest generics company. I own physical gold through the Royal Canadian Mint's bullion exchange-traded receipts. I own one gold stock—Barrick. I think it has the five best gold mines that I know of, and I can see how it can dig out of its current problems. It has to reduce its debt by about $3 billion, and can probably do so by selling a piece of its Pascua-Lama project, so I am not worried.
Describe one of your key philanthropic "investments."
My main focus now is a $100-million project called the Schulich Leader Scholarships, which go to students pursuing science, technology, engineering and math studies. The scholarships amount to $80,000 over four years. You can't believe these kids. They are going to be the future of this country.
What keeps you awake at night?
Nothing keeps me awake, because we live by my family's motto and creed: "Often wrong, but never in doubt." That is how I operate. If you live that way, life is good.
What's your favourite investing movie?
Wall Street: Money Never Sleeps, the sequel to the 1987 classic Wall Street.
What's your favourite investing book?
Get Smarter: Life and Business Lessons by Seymour Schulich (with Derek DeCloet)