Thoughts From the Road: Louisiana with Paul Manders

I recently had the chance to get away for a long-awaited family trip to New Orleans and Baton Rouge, Louisiana. Thanks to our amazing team, I don't think any clients missed me at all. We went to visit  my wife's best friend from childhood, who moved down there 25 years ago, back when there was a surplus of nurses in Ontario and many graduates went south for job opportunities. The flights were far more expensive than our last trip to New Orleans, but the Detroit airport was buzzing with eager travellers, a sign of the pent-up demand for post-COVID travel.  

This Deep South is a very interesting place. Often we only hear about significant events, such as hurricanes, flooding and accidents at important energy facilities in the area. Most recently was Hurricane Ida last August, which came after almost 18 months of COVID clouds. Memories of Katrina and other major hurricanes are still on the minds of many. The best word I would use to describe the people there is resilient. They are too busy clearing downed trees, fixing roofs, rebuilding infrastructure and cheering on their sports teams (Louisiana State University first, New Orleans Saints second) to worry about the last crisis or even the next one.  

The growth and investment in the area is noticeable. We stayed in a hotel and casino area that apparently had been renovated from a commercial office space at a cost of $500 million. The hotel was on the Mississippi River, which was a fascinating view of the supply chain at work - decent sized cargo ships and trains moving along the river at all hours (They forgot to mention that in the advertisements for the hotel!). We could also see some of the infrastructure for the vital oil and gas sector, with the area being a key hub for the global production. This sector is still a key employer in the area, and I spoke with many residents about the state of the local energy industry and its importance in today’s volatile global environment.  

In terms of the local feel and atmosphere, any tourist attractions we visited were full. One night, we couldn’t even find a place for our family of five to have dinner without a reservation. Many people mentioned this was partly due to a shortage of qualified labour, in the form of chefs and wait staff, but the restaurants we passed all looked to be at full capacity with no empty chairs. 

This experience is consistent with friends and team members currently trying to organize Disney World trips in May. They are online at all hours of the day trying to book dinner reservations, months before they’ll heading to Florida! 

The trip left me thinking that the real economy is in such an interesting period with this surge of demand for services and experiences as opposed to goods and physical things. I wonder what the level of demand will look like once the first surge is over. The survey of our family resulted in more demand for travel in the future so we will likely see this trend continue. 

Another observation from this area in particular, is that there is a still prevalent North American energy sector. In the past, this industry has solved the problem of higher commodity prices with technological ingenuity such as fracking and other innovations. Given the current state of the global energy market, I believe that the sector will find a way to solve this current problem as well.

This theme of resilience is also an oft-overlooked quality of good, long-term investing and financial plans. We want portfolios and plans that can withstand the inevitable disruptions and setbacks (that simultaneously lay the groundwork for the next move upwards). We must be resilient enough to stay the course because history has shown that when times are uncertain headlines eventually go from “bad” to “less bad” and finally to “good”.  

In closing, our friends in New Orleans are front-line healthcare workers and spending time with them reminded me of the toll that COVID has had on this vital sector. It has been inconvenient for many, but absolutely brutal for those on the frontlines. Yet again, there is resilience at work here. I have to hope that the challenges in this sector, which have led to breakthroughs in vaccines and advancements in other areas, will go a long way in improving the system itself.  

While we were there, we discussed these topics amongst many others over the traditional Louisiana Crawfish Broil you saw in the video above. This is typically a community event with neighbours, family and friends partaking in a full day of sourcing, seasoning, broiling and then eating a massive pile of crawfish. Served at a large table, the only utensils are your hands with perhaps a beer or two to wash things down. The food tasted just as good as it looks!