As chairman of the committee assigned to spearhead the massive-and historic-asset-backed commercial paper (ABCP) restructuring process in Canada, Purdy Crawford spent more than a year focused on the losses of thousands of investors. So it may seem a little ironic that during his downtime, he chose to occupy himself by thinking about investing. But for the veteran executive and commercial lawyer, portfolio-managing is a long-standing passion that combines two of his great interests-reading and the study of people.
Crawford's career as an investor started early, after his return to Toronto from Harvard Law School in 1958. "I went to the bank and borrowed all I could," he says, "which probably amounted to $20,000 of stock." One early investment was in Berkshire Hathaway-when it was only $6,000 per share (in mid-April, it was trading at $91,000). "I'm still holding that," he says with his impish smile. "That was the start, though-I started reading more and more, about investing and business."
He hasn't stopped since. A voracious assimilator of information, Crawford reads an ever-growing list of material that includes analysts' reports, annual reports (paying particular attention to the chairman's letter), Barron's, Forbes and Fortune magazines, BusinessWeek, Harvard Business Review, Report on Business magazine and all the business books he can get. Well, nearly all-"I don't believe in these so-called strategy books," he says. "It seems to me they take what could be 20 pages and blow it up into 200."
As his required-reading pile expanded, Crawford became confident that he knew enough to make sound investing decisions. "I remember one fellow I used to rely on for investing advice-there came a time when he was asking my opinion."
There is something slightly incongruous about the sweetness of his face-that sandy curl across his forehead, and his porcelain skin against the steeliness of his pale blue eyes. One can imagine that over a lifetime as a lawyer, Crawford has used this to his advantage, catching opponents off guard-at least in the early days before his reputation became monolithic.
Crawford makes investments based on a range of macroeconomic information, industry fundamentals, business-specific data, and then, most importantly, a judgment of management. "A big part of the decision for me is the calibre of the people who run the company. …I read these analysts' reports and not enough of them put enough weight on the people running the business. It can make all the difference." As a former CEO himself (of Imasco Ltd., from 1985
to 1995), Crawford knows a good many of his peers in Canada and the U.S. Like Warren Buffett, he believes in the notion of buying what you understand. "If I had a criticism of Mr. Buffett, it's that he doesn't move investments enough." Crawford's good bets over time have included consumer names such as Johnson & Johnson, Procter and Gamble and Pepsico.
He owns Nasdaq-listed Lincoln Electric, and he's keen on biotech crop leader Monsanto, which makes herbicides and genetically modified grains. "The stock is depressed," Crawford says, "but earnings are going higher."
Canadian National Railway has been his best Canadian investment (he's been on its board since 1995). His luckiest trade may have been out of Nortel, when it was still sitting at $70. "I just didn't like the management," he muses now.
So after years of smart investing, what's his portfolio worth now? Crawford won't say, but he will say that he makes his trades through a TD Waterhouse discount brokerage account. (Actually, his long-time assistant, Sue Lucas, makes the trades under his direction. She also keeps monthly records for him to review.)
As for the long and circuitous restructuring of the commercial paper market, Crawford says now that he considered resigning the chairman's job several times because some of the key players in the negotiations were difficult personalities. But he really committed to the project during a cross-country road show he undertook to explain how a restructuring deal might work. As he travelled the country, he met individual investors and heard their anger and frustration. "After that, I just couldn't leave them. They were obviously sincere and concerned.
I could relate to them."
The resolution of the ABCP crisis was hard-won and, in some ways, is still controversial, but Crawford is satisfied he did what he could for the investors. And no one can deny he gave it his all.
With the development of a plan for restructuring $32 billion worth of ABCP notes now behind him, he's looking forward to a slightly less hectic pace. He and his wife of more than 50 years, Beatrice, split their time between Toronto, a home in Caledon, Ontario, and holiday homes in Nova Scotia (where he's from) and Naples, Florida. They also spend a lot of time with their six children and 15 grandchildren.
Apropos of his appetite for reading, Crawford has taken to passing on interesting articles and reports to a select circulation list-he calls his missives "Purdy's Picks."
"I'd be the first to admit there might be people out there who would be better than me at this…but I enjoy it." And, he adds, with his gravelly laugh, "I've made my share of bad investments, but strangely I can't remember them."