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  Time is ripe for Toronto to turn over a contrarian Leaf

BENJ GALLANDER and BEN STADELMANN

Friday, August 20, 2004

As contrarians, our financial careers are based on choosing points in time to be at odds with the market's mood. When the pendulum swings out of whack on the high side, our arms are raised to sell; when the blood is running in the streets, so to speak, we coolly place our bids.

Currently, in the midst of the summer doldrums, our decision has been to sit and do nothing. We are in no rush to buy anything, zilch has appreciated enough to sell, and there is only one major potential tax loss in the portfolio — Theragenics, which still appeals to us.

This free time affords us the chance to shift our focus to the hockey world. It too is in a state of suspended animation at the moment, amid the very real possibility the 2004-05 National Hockey League season might not begin on schedule.

In one respect, though we are hockey fans to the core, we cannot give a darn about this dispute. When a heap of millionaires line up on both sides of the border plead poverty, it's hard for us to consider holding a tag day.

Maybe all parties involved should don Mickey Mouse ears — the Anaheim Mighty Ducks could supply 'em — and stand in the street looking for spare change. Commissioner Gary Bettman could take up a squeegee.

In anticipation of the play stoppage, teams have allowed a bevy of excellent hockey talent to lapse into the free agent market. This situation piques our contrarian curiosity — there are opportunities to acquire top players at below the going rates. Kind of like the way a glut in the equity market allows us to buy undervalued stocks.

Either way, of course, those who hope to take advantage of such a unique situation need money. And our hometown Toronto Maple Leafs are one team that has been notable for hoarding cash. How sad that such an affluent franchise has not only failed to win the Cup, but hasn't even been to the finals since 1967.

One of our statisticians and Contra the Heard Investment Letter editor Lloyd Davis, whose name is associated with a passel of hockey tomes, informs us that of the other "Original Six" teams, only Chicago has not won a Cup since 1967.

Still, they have at least reached the finals three times. New York has also made three appearances, winning once. Detroit has been in championship form three times in four trips to the finals, while Boston has two titles to show for seven appearances.

At the top of the heap, les Canadiens have made the finals 11 times since '67, winning 10 Cups. Stuff that number in your pantyhose, Toronto.

Of the 15 teams that joined the league through 1979 (minus the dear, departed California Seals), every one except Phoenix — formerly Winnipeg — has made it to the finals.

Heck, if the Leafs were in a "real" business instead of one based on loyalty and passion, the team would have been bankrupt long ago instead of gathering more moolah than that generated by the average oilfield.

Optimists would say that the Buds, who set a team record last year with 103 points, are due to return to glory. However, our crystal ball suggests that past returns are indicative of future returns. The geriatric squad didn't work, and the time has come for a major overhaul of the old machine; otherwise, the faithful will have nothing to do but keep whining about Wayne Gretzky's high stick in 1993.

After waiting so many years for something to celebrate, and as frustrated rotisserie-leaguers ourselves, we felt it was our duty to go public with what the Leafs might do to return the Cup to Canada for the first time since 1993.

Now is the time to buy some players while there is an anomaly in the price/value ratio. Now is an optimal time to restore the championship lustre to this once-great franchise, so that the trim on their jerseys isn't the only silver that Leafs fans see up close.

What we've got in mind is something in the vein of "Moneyhockey," a "cousin" to Michael Lewis's book Moneyball about the success of the small-budget Oakland A's.

Course, the Leafs are no more a small market team than the Toronto Blue Jays, with both franchises able to pay to play better. That would increase revenues.

Our phone lines are open to receive chairman Larry Tanenbaum's call and fill his ear with contrarian hockey theory. While we perch by the phone awaiting his dingle, maybe the fans should consider going on strike!

Next column, we will return to the world of stocks. However, 37 years of futility deserved our attention.


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