Performance for 2024 and portfolio review

My portofolio's performance in 2024: 29%

S&P500 performance: 24% (+ a dividend of about 1.3% for the year so about 25.3% in total)

There's 14 stocks out of 20 in my portfolio that have been with me for all of 2024. The 6 stocks that are out were all very good (Richelieu Hardware, Lululemon, Pool, Intuit, Agilent, Align) but I felt that I could find something better and usually less pricey. Also, my rule is to stick with 20 stocks, maybe less but not more. They were all small positions which means that these sells are not that significant. 

I spent all of 2024 with 8-12% of my portfolio in cash (or equivalent). If I had been 100% invested all of the year, my performance would probably have been better. However, given the amazing performance of the market and it's valuation, I currently prefer to hold some cash and wait for a correction before becoming once again fully invested. 

Top 5 positions at the end of 2024: 

1- Constellation Software: 15.2% of the portfolio;

2- Alphabet: 11% of the portfolio;

3- Mastercard: 8.5% of the portfolio;

4- Microsoft: 7.6% of the portfolio; 

5- Unitedhealth: 6.3% of the portfolio. 

These 5 positions represent about 49% of my portfolio. Which means that they are my stocks of conviction. Most of my other stocks represent 2 to 3% of my portfolio. 

Obviously, I don't know what will happen in 2025. I can't believe that the market will continue to be more and more pricey because current levels are very high and the market always go back to it's mean level, sooner or later. So, if nothing changes, I'll stick with my 10% cash/bonds and 90% stocks. However, if I see some panic or a second pandemic, I'll be happy to use my cash to be fully invested at a time when the market will be at it's 52 weeks lowest point. 

Happy new year to everybody. I wish you some wealth in 2025 because that's about the only thing in life on which you have some control. 

There's surely someone around you who will get cancer in 2025 and I don't have any wish to protect you from that. 

Watch list for 2025

Today, I saw that a share of Netflix (NFLX) was sold for 932$. 

On may 2nd 2022, that same share was sold for 180$. By then, there was a panic that followed bad numbers for subscription, users sharing accounts and other stuff like that. 

I was very tempted to buy some shares. I noticed that the ROE and profit margin were interesting and everybody knew that it was a dominating business even though there were a few competitors and maybe some price war coming. 

But I didn't buy any share. And today, after only two years and a half, I would have made a profit of about 750$ per share.  

A performance similar to Meta/Facebook that dropped a lot and came back with strength within less than a year (about 88$ a share in october 2022 to more than 600$ today). 

I'm obsessed about what happened to these two stocks. Because they represented huge bargains. It's like seeing a very special and beautiful girl in a bar that looks at you with insistence and you say to yourself: "I'll find a better moment to talk to her later in the evening". 

Then, you wait and you wait, because you're not drunk enough. And eventually, that pretty girl was approached by other guys and there was never another better occasion. 

One of the best metric for me is the profit margin. However, most of the companies with high profit margins are expensive. Sometimes they're very expensive. But, if you find dominating companies (like Meta, Netflix or Nvidia) in a moment were it looks like their fantastic growth of the recent years is becoming to slow down, it's probably a good moment to buy them. 

Here's a list of companies with fantastic profit margins. It's a watch list for everybody because each one of these stocks offer a profit margin way beyond average. But not all of them operate in a high growth environement. Anyway, high profit margin and reasonable PE ratio = low risk (in my opinion). 

Nvidia: 55%

Visa: 53%

United Therapeutics: 42%

Microsoft: 36%

Arista Networks: 36%

Novo Nordisk: 36%

Canadian National: 33%

Copart: 32%

Intuit: 30%

Meta: 29%

Zoetis: 29%

Factset Research: 29%

Adobe: 28%

Crazy fucking performance which makes no sense

Can someone explain me how come my portfolio was up 45% last year and up 31% so far this year? It makes absolutely no sense. It's equivalent to a compound growth of 90% in two years, which is totally crazy. And yet, about 11% of my portfolio is made of which reduced my performance (because they're less performing than the market). 

That's fucking crazy and I'm constantly thinking that it won't last. But, at the same time, even when the market drops, good stocks drop too but not that much. It's usually stocks that have a hard time that fall even lower. Which means that stocks like Dollar General or Canadian National Railway which are close to their 52 weeks lowest point may be the best candidates to fall even lower given a substantial market drop. And Tesla would likely be less impacted. 

It's not because such things happen that such things are rationnal. But it's how it works and that's what I try to consider when I manage my portfolio. Because the performance of a portfolio is a sum of many things: intelligent allocation, stocks picks, a bit of timing, a bit of luck and picks that coincide with what the other investors will consider interesting too. 

I really like my position now regarding to investment. I'm pretty passive. I make very few transactions. I'm much more patient than before. My portfolio is doing well and I could retire tomorrow with enough money to live correctly (but not richly) for the rest of my life. Thus, I won't stop working in a close future because I want to live a bit more comfortably when I'm retired. 

Today, I bought some cannabis pills at the SQDC (Société québécoise du cannabis). I'm slowly sinking in that absurd rich and famous lifestyle where you begin with cannabis and end up fucking animals in some sect in South America. Life is meaningless and sometimes I say to myself that I may find the meaning of life in the ass of a sheep. 

Portfolio review (july 15th, 2024)

THE GREAT PENETRATOR IS BACK!

I'm back with a portfolio review because I'm now fucking rich and I want you to know it, you poor people looking for a guru. 

Getting an extra 100K$ is now a child's play and I can achieve that within a few months, as long as the market is in a manic phase. When it will be on a depressive phase, I guess I'll be able to get as easily a negative 100K or 200K. But a good peddler doesn't talk about the negative side of things. So, let's assume that my portfolio will only go up forever. 

Over the last 8 months, I made as much money as I made money between february 2013 and april 2017. That's how crazy it goes with time with your portfolio if you don't gamble too much on ridiculous stocks. Getting the equivalent of a year of income on the stock market in less than a year? Yes, it's possible, but only when you'll be older and afflicted with diabetes or cataracts or something else. 

Anyway, the S&P500 is at an all-time high. It's probably not the right time to buy stocks. My favorite time to buy stocks is when they're all down because I feel like I can't go wrong. Even if some great stocks of the recent years are at their lowest level of the last year (Five Below, Lululemon, Ulta Beauty, Estée Lauder), I'd prefer to wait for a better entry point because even stocks that lost 50% of their value can go lower. So, my advice would be to get some money ready for a drop of the market (which may still take some time but will eventually come). 

Anyway, here's my portfolio:

Number of stocks: 18

Top 3 positions:

Constellation Software: 15.8%

Google: 12.1%

Microsoft: 9.1%

Cash position: 12,3%

Performance in 2024: 16%

Performance of S&P500: 19%

Metastasis

I recently saw my oldest friend. We first met when he was a baby because we were neighbours back then. 

Over the last 20 years, I haven't seen him a lot. Maybe 5 times. He lives only a few kilometers away from where I live but he had other priorites: he wanted to make money. So he worked a lot. And he bought a big house which he sold, making enough profit to buy a bigger house. And he bought a nice car. And he dated a beautiful blonde girl and had two beautiful daughters. And he traveled in luxurious places. 

He never invited me at his place because I suppose that he didn't want to spend some money on a dinner. 

Last weekend I saw him for the first time in 8 years. He looked good. But he told me that he just had a big cancer. He had a big surgery and a big chemotherapy treatment. The kind of treatment that could kill someone over 50 years old. Also, he was single. 

Was it funny? Was it sad? Was it a tragedy? Was it a comedy? Even though he probably enjoyed life over the last 20 years, I thought about his search for continual profit. He let me down but I don't think that he let down his pleasure. But I know that he didn't have any real friend. Is it so important to have real friends? I don't know. But anyway, I wondered what was the use for money when you have metastasis? Get a comfortable death? His life represented the "ideal life" for many people. But it was artificial. Too clean and beautiful to be true. And now, the house of cards has fallen down. 

I'm a bit shocked by the last lines. I shouldn't write that. But that's what I thought for the last 20 years. Whatever. Even if I wasn't probably very important for him over the last 20 years, I'll try to be more present for his last few years.  

Discipline

It's my birthday. Today, I'm 45 years old. 

Until last year, every year, on my birthday, I used to write a post titled "Discipline" which was about the growth of my portfolio, year after year, to show how discipline and good investments can make a difference over time. 

Last year, many things changed and some unfortunate events made me much less interested in this blog. That's why I didn't write my "Discipline" post. I decided to focus on my problems and let them make me feel miserable.

But, once you condition yourself to be a bit superficial, you realize that not everything is dark and gloomy. At least, I own a very nice portfolio. 

As seen below, here's my porfolio from may 2009 to may 2024 (I started to invest on the stock market during the fall of 2008). Year after year, I saved a big part of my earnings and I bought stocks as much as I could with these savings. 

It helped my porfolio a lot. Because the numbers below show the absolute increase of my portfolio, year after year. In other words, it represents an hybrid growth: increase of the price of my shares and savings added to the portfolio. Usually, people talk only about their portfolio performance but I like to show how things can turn with a mix of discipline (savings) and investing without doing too much big mistakes.

In my case, from may 2009 to may 2024, I managed to get an annual increase of 30%, which is huge. Of course, this performance will surely tend to drop as my savings count for less and less of the total value of my portfolio.

I often wonder how long I will last as a worker or an active citizen. I don't know clearly how things would turn financially if I retired now. But I know that my portfolio is my biggest support in this life. 

I wish much more people would start to invest much earlier and don't feel prisoner of their job for most of their life. 

My investment philosophy

Being an investor for about 16 years (I began during the fall of 2008, in the middle of what was then perceived as the apocalypse), I now trust my judgment more than anything else. 

Here's a bit of my investment philosophy achieved after these years made of hope and despair. 

1- Read as many things and analyze as many stocks as you can to reach as soon as possible the point where you trust your judgment more than any other source of information;

2- Don't trust other investors, don't trust fund managers, don't trust websites except if you triangulate the information by searching many other websites;

3- Invest only in companies that make money and more money year after year (look for stocks where earnings double every 5 years... for instance, between 2013 and 2018, then between 2015 and 2020, and so on...);

4- Invest only in companies where margins are high and ROE is high (if you find a company where margins and ROE are above 20 year after year, you've found a company that is among the 1% of best stocks... however, these stocks are usually pricey);

5- Don't get blinded by investing and money. It's only a tool to reach independance. You'll die and your money won't be useful anymore sooner or later. Also, there is no god, no heaven, no future. So, enjoy life while you're able to enjoy it. Once you're rich, if you're able to help poor people once in a while by buying them food at the grocery store, do it to prove to yourself that you haven't lost your humanity.

6- Look for simple people who don't care too much about money and don't put too much emphasis on investment. These people are more fun. Think about money only when you're alone with your computer and your Excel spreadsheet. Use your money to buy things that make you happy. Do it from 40 years old until the end of your life;

7- Never, ever forget that life brings many unhappy times and unhappy experiences and live your life without waiting for these times to happen. Your portfolio is a tool to be secure and have fun before getting cancer or seeing everyone around you die, one after the other.