Skiing - My Story

One of my brightest childhood memories is of skiing.  I spent my childhood in Murmansk, a port city up in northwest Russia (located above the Arctic Circle).  Incidentally, it was the birthplace of the fictional submarine Red October from the movie The Hunt for Red October.  On Sundays, my family – my father and mother, my two brothers, and I – would go skiing.  What in America is called cross-country skiing, we just called skiing.  Murmansk doesn’t have mountains, but it does have “sopki,” which are mountainous hills that surround lakes.  We’d walk a mile carrying our skis – half of the trek would be to get to the top of the hill. (As I type this I realize how spoiled my kids are today in Denver.)  Then we’d ski for a couple of hours.  I don’t think I ever really enjoyed the skiing – after all, it was work, not unlike running on snow.  But I always looked forward to the sandwiches and hot tea that we’d have at the end of the trip.  Somehow the simple sandwich tasted better and the tea was sweeter.  Despite the poverty and inconvenience of living in the Soviet state, I remember my childhood as happy days; I always enjoyed being around my parents and my brothers.

I’ve lived in Denver for twenty-two years,  and I’ve skied maybe a few times each year.  My wife doesn’t ski, nor do my close friends, so getting out skiing was a logistical ordeal. However, as my kids got older, I realized that I now had skiing partners.  My seven-year-old daughter, Hannah, skied for the first time four years ago. (I remember that vividly because that was the day of Obama’s first inauguration.) And Jonah, who is going to turn twelve in a week, started when he was seven. (I wasted a few years with him.)  Two years ago it really hit me: people come from all over the world to ski in Colorado’s beautiful mountains, and we go to Mexico in the winter.  That makes no sense.  So we bought season passes, rented skis for the kids for the whole season (it makes no sense buying them skis because they grow out of them every year), and started taking skiing seriously.  Now we go skiing almost every winter Sunday, and a few times we rent a condo and stay in the mountains for the weekend.  It is an incredible experience.  It takes us about an hour and half to get to the mountain. We listen to music in the car, we talk.  No iDevices allowed.  While we are on the lifts we talk some more.

Skiing helps to build my kids’ character: they’ve had to overcome their fears.  At the beginning of last season, Jonah was timid, very cautious.  I’d ski down, and Hannah and I had to wait a few minutes for him every time.  This year he is Bode Miller, flying down the mountain with perfect form and no fear.  Hannah’s biggest fear is not skiing, actually – she is just afraid I will lose her on the mountain.  Last year I did lose her a few times.  Now she skies with my wife’s iPhone so I can always locate her with the Find Friends app.  I hope when the kids grow up, skiing will be a favorite childhood memory, as it is mine.

So why I am telling you all this?   I’ve looked at Vail Resorts (MTN) for a long time. MTN has some incredible assets, but the stock is never cheap on free cash flows. However, recently I stumbled on a ski resort no less impressive; in fact, it is the largest ski resort in North America: Whistler Blackcomb.  I wrote an article about it for Institutional Investor, I presented the stock at the Value Investing Congress a few days ago (link here), and I even made a karaoke music video.  This is how much I like the stock .  The title of my presentation was “I Love Big Dividends and I Cannot Lie.”  Our multitalented intern Gavin Parsons (we have three interns at IMA – actually we call them apprentices) wrote the lyrics (I contributed maybe 10% at most), and he sang.  Michael Conn (my partner at IMA) and I were the background singers.  You’ve got to watch this video!

While I was presenting WB at the Value Investing Congress and listing all the categories in which WB is #1 – size, amount of snow, vertical drop… – I joked that it is also #1 in number of apologies per square mile.  I thought I’d get a good laugh, but the audience was silent.  It is not a good joke when you have to explain it, but I did anyway: Canadians are known for being very polite and apologetic.  That explanation brought a lot of laughs.  In fact a few people came up to me after the presentation and said, “Whistler Blackcomb – the politest resort, period!”

Vitaliy Katsenelson

I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”

I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).

And if you prefer listening, audio versions of my articles are published weekly at investor.fm.

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