lundi 10 avril 2023

CSU: a 28 baggers

It was march 2012. 

I bought 50 Constellation Software shares at about 88$ each (a little less than 4500$). Everything looked great for that company: excellent ROE, excellent growth, great dividend (more than 4% back then) and my hero, Jason Donville, was very enthusiastic about the stock.  

In december 2013, I owned 65 shares and the stock was selling for about 225$. It was already a 2.5 baggers after about a year and a half. 

During the following years, I sold some shares. Bought some. And CSU always was a significant position in my portfolio. 

Now, in april 2023, a little more than 11 years after my first buy, the stock is selling for 2584$. That's about 2500$ more than what I initially paid. And that's completely crazy. 

That's my only extraordinary investment. I've made some good ones, some very bad ones. But CSU stayed on my portfolio all this time and I can't see why I should sell it even if returns may not be as good in the future. It will take something very negative about the company for me to sell my shares after such a ride. 

Now, imagine if I had invested 10 000$ instead of 4500$ (which was a very low amount in hindsight). I'd now own more than 100 CSU shares. 

But no. I sold some to buy something else. Like Valeant or Concordia Healthcare. Because, in december 2015, I owned only 30 CSU shares. And Valeant represented 9.5% of my total portfolio. 


samedi 8 avril 2023

Buying a Toyota - Another great allegory from me

Sometimes, I have discussions about the stock market with Jason Del Vicario and Leo (formerly behind the website 

Sometimes, Vicario gets emotional (excited about a stock or disdainful about another stock) and I don't understand that because I've lost most of my emotions about these things (stocks). Of course, I don't understand why some people buy mining stocks or gas stocks. But I don't care about that. If they're my friends, I try to warn them about the risks related to these stocks but if they want to keep them and they're excited about owning some shitty stocks, that's their problem. I'll focus on my own problems and let them live with theirs. 

For instance, Vicario likes some specific gambling stock and probably thinks that I'm crazy for not buying it one or two years ago. I don't like that fucking industry full of crooks and money laundering. I've had my share of problems with Valeant which was in a "clean industry". I don't need to go where it stinks. 

Truth is, we never know when a stock is truly good or truly bad. All we know is that some industries are better than others. For instance, softwares are definitely better than natural resources (much better margins, much better ROE, much less impacted by the economy and they usually have a moat which isn't there for natural resources). 

The trick is to know that and fish in the right pond. Even then, we'll get bad fishes, but at least, risk is lower. It's like buying a Toyota instead of buying a Jeep. If you've done your due diligence, you'll know that you'll probably have many problems with a Jeep while you'll be able to keep your Toyota for 15 years without almost any problems. 

There's no fucking easy recipe or screaming buy. I repeat it and I'm more and more convinced about that as time passes. Buy I try to buy as many Toyotas as I can. 

lundi 27 mars 2023

RCH has rarely been this cheap


Most investors are looking for the new big thing. Few are looking at Metro (MRU.TO), Canadian National (CNR.TO) or Richelieu Hardware (RCH.TO). 

Nobody will get rich in two years with these stocks, but nobody will lose everything or see a new company coming out of the blue and stealing a lot of consumers. 

Not so long ago, I would have said that these companies weren't aggressive enough for me. But now, after seeing some problems related to a whole sector (banking, techno), I think that it's very wise to own some good players from other industries, like MRU, CNR and RCH. 

And among them, Richelieu has rarely been this cheap. The current PE is about 15 (that graph says it's 12.4 but I think it's more about 15). Anyway, that's a cheap price to pay for a company with a very small debt, a dominant position and a very good track record.  

Growth has been disappointing in the recent years, but I believe in the strenght of this company. It could easily buy another company or be bought by a bigger company. And meanwhile, you'll get about 2% of your investment as a dividend. 

Of course, I wouldn't put 10% of my portfolio on Richelieu. But, to me, it's an obvious 2-3% with one of the best players in the renovation sector. 

vendredi 17 mars 2023

Bad reasons to be satisfied with Meta

Meta/Facebook did pretty good on the market recently. How come?

First, Tik Tok has been banned by a lot of enterprises/governments. Everybody already knew that this chinese company could be a threat, just like all other chinese companies (but I guess that some people will soon say that a new chinese company is "different" and deserves our attention). 

Anyway, about Tik Tok, all of a sudden, a lot of people woke up. Like 5 years later. I don't know what happened but it was positive for Meta/Facebook.

Then, Facebook announced that tens of thousands of employees would be fired. Which would reduce the spendings of the company.

So, as much as you may love Meta, do you really consider it positive that your not-growing-anymore-stock is doing well because a competitor has problems or because it sacked thousands of people?

vendredi 24 février 2023

Margin interest rate

I just saw that the interest rate on my margin was 8%! 

Who wants to borrow money and invest with a margin with such high interest? 

Given the fact that the market has an average annual performance of 9-10%, it makes absolutely no sense to use margin at this time. 

I've decided to reimburse entirely my margin. You should do the same. 

It's time to invest only the money you own. Otherwise, your chances to get poorer are high. 

jeudi 23 février 2023

MTY Food Group (MTY)

 I've been a shareholder of MTY in the past. Sold my shares. Bought back some shares. Sold them again.

I'm not a shareholder anymore. But things look good with the company except for the fact that they carry a heavy debt that represent a high percentage of the value of the company. 

Given the high interest rates, I'd stay away from a company with a large debt. But MTY has steady revenues and a wide offer for consumers. They own so much brands that it's virtually impossible that all of them go bad. They have a very solid business model. 

What are your thoughts on MTY?