By Brenda Bouw. Source: The Globe and Mail.
Christine Day’s investment strategy was honed early in her career while working at a private-equity firm watching investors drop money into early-stage companies and then seeing it grow exponentially. Ms. Day accumulated wealth a similar way through stock options at growth companies where she has worked, including about 20 years at Starbucks Corp. and more than five years as the chief executive officer at Lululemon Athletica Inc. Today, Ms. Day is CEO of healthy frozen-food company Luvo Inc. and a partner in Campfire Capital, an early-stage venture capital firm. The Globe recently spoke with Ms. Day about her investing strategy and how she and her husband are managing the wealth transfer to their three kids.
When did you first start investing?
I didn’t really understand investing until I had the opportunity to go work for Integrated Resources, a private-equity corporation, after university. I studied finance but hadn’t made any huge investments because I came from a lower-middle-class family. All of the money went to the table. At the private-equity firm, I got a chance to see how companies were built and financed. That’s when I really became interested in it. Then, when I went to work for Starbucks, I was given 2,500 shares of the second offering of Il Giornale, the company founded by Howard Schultz which later bought Starbucks, the first real material investment I had. It wasn’t monetized until we went public in 1992, but from that, I really saw how growing a company in the right way created wealth through equity.
What’s in your portfolio today?
[My husband and I] have a pretty diverse portfolio. Our strategy has gone from wealth accumulation to wealth preservation. We are now switching our portfolio into more dividend, blue-chip stocks like Boeing and IBM and less into growth stocks. We also own bonds and residential real estate. We keep a large cash reserve, including in investments like short-term treasury notes where you’re gaining a little bit of interest. For us, it’s about living the quality of life we want to for the balance of our life. The risk we take is in businesses like Luvo, which I’m investing in myself, and Campfire Capital.
What’s your investment philosophy?
We’ve always been more conservative. The companies also have to match my values. I like purpose-led, differentiated companies where leaders are managing more than just bottom-line profit. They’re also managing how they treat their people and how they lead on both environmental and global issues. For instance, there are a lot of natural resources companies we could invest in and make money on, but I don’t do it if I don’t believe it’s the right environmental strategy as a citizen. I’m not opposed to resources stocks, but it’s more about looking at the company and if they do business ethically and have leaders that I admire. If it was a fracking company, for example, I am probably not going to invest in that.
What has been your best investment strategy to date?
We’ve done well buying early and holding long, if we believe in the company. Years ago, my husband and I started funds not only for ourselves, but also for each one of our three kids. For the kids, we bought as much stock as their birthday was each year until they turn 21.
For example, when they turned 10, we would buy $10,000 worth of shares in a company we felt was worth investing in at the time. Over the years, that included Starbucks, Lululemon, Apple and Microsoft, for example. It was our way of teaching them the value of investing and getting them interested in it.
It’s also about wealth transfer in a smart way. It’s something they have to steward and take care of.
What has been your worst investment?
We gave money to a family group with a cool piece of technology.
They have a great technology, but have struggled with the business model. They’re still fine-tuning it to fit the market. It was a friends-and-family kind of deal. It was high risk. We knew that going in. That’s what angel investing is.
What’s your advice for others?
Start early and build a portfolio. Our ability to invest in equity and companies and share in that capital market structure is what differentiates us and our economic opportunities. It’s one of the great wealth levers that’s available to everyone. Even if it’s just small, taking that opportunity to invest in the market in a smart, conservative way can make a material difference in retirement.
This interview has been edited and condensed.