Here's the three last appearances of Jason Donville on TV with his three top picks for each of these appearances:
October 24, 2014:
Cipher Pharma
Constellation Software
CGI Group
November 28, 2014:
Directcash Payments
CGI Group
Valeant
December 24, 2014:
Patient Home Monitoring
Biosyent
CRH Medical Corp
I have three things to say:
1- Jason isn't generally that much on TV within 2 months. Sometimes, it takes about 6 months between two appearances.
2- It's strange that the top picks of Jason Donville change so much within only 2 months. Usually, he's consistent over a relatively long period of time with his top picks (Constellation Software comes back often). All the companies recommended have changed since october 24, except for CGI Group that was chosen two times.
3- It's the first time (I may be wrong) that Jason recommends some penny stocks or stocks that were penny stocks not so many months ago. I'm talking about his last top picks that include three small companies. The one that got over 1$ the longest time ago was Biosyent, about 2 years ago. Patient Home Monitoring is still a penny stock at the time of this writing (not for too long I think) and CRH Medical has just got over 1$, a few weeks ago.
I'm not very comfortable with penny stocks. I've had it in the ass with several companies like Loyalist Group, Macro Enterprises, NTG Clarity Network and even Rifco these last weeks.
I don't recommend to put a lot of money on the Venture. In fact, I almost recommend to put no money at all on the Venture stock exchange. Companies listed there are generally too small and don't have a lot of consistency in their results. So, I may be wrong, but if you don't want to get fucked like I've been, look on the TSX or the S&P500 to make your choices. The companies listed there have better chances to give you a previsible growth than almost anything on the Venture. And you could get very good growth with a medium cap. You don't have to choose a micro cap or a very small cap.
So, i'm pretty confused about Jason's last three top picks. I'll probably write again about that in a couple of months.
lundi 29 décembre 2014
mardi 23 décembre 2014
How to balance your portfolio
I haven't read a lot of analysts about how to balance a portfolio. I think it's an important subject because we're never sure about anything with the stockmarket. Also, I think that a lot of investors are buying when prices are low but don't think too much about proportions (this investment VS all the others in the portfolio).
Bernard Mooney, the guy that wears brown suits and wrotes articles in www.lesaffaires.com has written a couple of books about investing. The last one suggests that you shouldn't invest more than 10% of your portfolio on a single stock.
At first, you may say: "Why 10%? Why this guy uses such a nice number as 10% and not 8% or 12,5%? How should I trust a guy with such a funny name?"
Keep calm my friend. Breathe a little ventolin. I know that some guys like Warren Buffet, Bruce Berkowitz, Bill Ackman, Carl Icahn and a lot of other superinvestors who manage more than one billion dollars have more than 15, 20 and even 30% of their portfolio on a single stock. If those fuckers don't mind betting a couple of billions on a single stock, why should you retain yourself about betting 50 000$ on Blackberry? Nothing retains you my friend. Nothing except intelligence. Because don't forget, if you don't shit in the streets and don't fuck all the beautiful girls you cross, it's because you have some intelligence.
I don't know about Jason Donville's portfolio concentration these days, but I know that at the beginning of the year, a little more than 10% of his portfolio was concentrated in Concordia Healthcare and maybe another 10% in Constellation Software. The concentration wasn't abusive. Just at the limit of what I would be comfortable with.
First lesson. Here's my suggestion of a number of positions to hold in a portfolio, depending on the money you've got:
Between 0 and 3000$: One company
Between 3000 and 10 000$: Three companies
Between 10 000 and 20 000$: Five companies
Between 20 000 and 100 000$: Ten companies
More than 100 000$: Fifteen companies
I don't think anybody should hold more than 20 companies at the time in a single portfolio. I think that the best number of stocks is about 15.
I don't think it's useful to hold less than 2% of your portfolio on a single stock.
I think it's dangerous to hold more than 10% of your portfolio on a single stock.
Sure thing, if you hold one or a couple of positions for more than 10% of your portfolio, this position should have a low beta, previsible revenues (growth quarter after quarter for a couple of years) and should be active in a conservative sector. The management must be A1 too (a lot of insider ownership, no dilution of shares or a dilution that goes with high growth, managers with a good reputation and blah blah blah).
When your biggest position is 10% of your portfolio, a drop of 10% in the value of this position affects your portfolio for only 1%. You can see that such a repartition could minimize bad periods or even bad choices of investment.
Be humble. If you think that you could do well with only 4 positions, it's up to you, but I think you could dilute risk a little more by adding 6-7 other positions. It's impossible that only 4 stocks in the stockmarket offer good appreciation potential.
That was the lesson of the day.
Bernard Mooney, the guy that wears brown suits and wrotes articles in www.lesaffaires.com has written a couple of books about investing. The last one suggests that you shouldn't invest more than 10% of your portfolio on a single stock.
At first, you may say: "Why 10%? Why this guy uses such a nice number as 10% and not 8% or 12,5%? How should I trust a guy with such a funny name?"
Keep calm my friend. Breathe a little ventolin. I know that some guys like Warren Buffet, Bruce Berkowitz, Bill Ackman, Carl Icahn and a lot of other superinvestors who manage more than one billion dollars have more than 15, 20 and even 30% of their portfolio on a single stock. If those fuckers don't mind betting a couple of billions on a single stock, why should you retain yourself about betting 50 000$ on Blackberry? Nothing retains you my friend. Nothing except intelligence. Because don't forget, if you don't shit in the streets and don't fuck all the beautiful girls you cross, it's because you have some intelligence.
I don't know about Jason Donville's portfolio concentration these days, but I know that at the beginning of the year, a little more than 10% of his portfolio was concentrated in Concordia Healthcare and maybe another 10% in Constellation Software. The concentration wasn't abusive. Just at the limit of what I would be comfortable with.
First lesson. Here's my suggestion of a number of positions to hold in a portfolio, depending on the money you've got:
Between 0 and 3000$: One company
Between 3000 and 10 000$: Three companies
Between 10 000 and 20 000$: Five companies
Between 20 000 and 100 000$: Ten companies
More than 100 000$: Fifteen companies
I don't think anybody should hold more than 20 companies at the time in a single portfolio. I think that the best number of stocks is about 15.
I don't think it's useful to hold less than 2% of your portfolio on a single stock.
I think it's dangerous to hold more than 10% of your portfolio on a single stock.
Sure thing, if you hold one or a couple of positions for more than 10% of your portfolio, this position should have a low beta, previsible revenues (growth quarter after quarter for a couple of years) and should be active in a conservative sector. The management must be A1 too (a lot of insider ownership, no dilution of shares or a dilution that goes with high growth, managers with a good reputation and blah blah blah).
When your biggest position is 10% of your portfolio, a drop of 10% in the value of this position affects your portfolio for only 1%. You can see that such a repartition could minimize bad periods or even bad choices of investment.
Be humble. If you think that you could do well with only 4 positions, it's up to you, but I think you could dilute risk a little more by adding 6-7 other positions. It's impossible that only 4 stocks in the stockmarket offer good appreciation potential.
That was the lesson of the day.
vendredi 19 décembre 2014
2013=Exceptional, 2014=Very Good, 2015= ?
Last year (2013) was an exceptional year for my portfolio. It was up about 55%.
This year (2014), my portfolio is up a little bit more than 25% (dividends excluded). After an exceptional 2013, the results of this year are way above my expectations. I've never thought that I could get these results back to back.
Until the middle of the year, I thought that 2014 would be a pretty ordinary year. Even a mediocre year for someone who thinks that a flat return is mediocre. But, in the last few months, everything went well for some of my shares and my portfolio got a nice boost.
At the time of this writing, my only real bad move of the year is Rifco for which the share price is 22% lower than my average cost. The last results of the company weren't spectacular but weren't bad either. I'm not thinking about selling my shares for now because I think that it's a great company with a very good ROE. I think the company should get better in 2015 and the share price will probably be back to a more normal level. High Arctic Energy is also down, but the whole sector of energy/natural resources is down, so it's not that much related to the company.
Here's my list of best and worst performers of the year:
Best performers
Biosyent (sold)
Alimentation Couche-Tard
Constellation Software
Cipher Pharma
Ross Stores
Mallinckrodt (previously Questcor Pharma)
Worst performers
NTG Clarity Network (sold)
Rifco
And here's my Portfolio on December 19th, 2014
Canadian stocks
Cipher Pharma: 13,4%
Constellation Software: 9,7%
Valeant: 9,3%
CGI Group: 7,1%
Alimentation Couche-Tard: 7%
Rifco: 6,6%
Carfinco: 5,4%
Concordia Healthcare: 2,8%
High Arctic Energy: 1,7%
American stocks
Mallinckrodt: 7,8%
Portfolio Recovery: 5,5%
Dollar Tree: 4,3%
Gilead: 4%
Ross Stores: 3,8%
Dorman Products: 3,1%
Precision Casparts: 3,1%
Cash: 5,6%
A lot of experts are giving their pronostics for 2015. As all wise men, I don't think I'm qualified to offer pronostics about a year full of surprises (like terrorist attacks, oil price instability, epidemy, alien invasion, etc...) As a fatalistic person, I always feel that bad things are just around the corner, so I wouldn't be surprised about a drop in the markets. But most statistics show that the market is correctly evaluated. In life, most things should be evaluated from a statistic perspective (actual VS average). So, from this point of view, markets should give us a return of about 10% maybe? I don't fucking know. But it should be an okay year. If not, it should be an okay 2-3 years ahead, until markets get overvalued once again and the tower falls down once again.
This year (2014), my portfolio is up a little bit more than 25% (dividends excluded). After an exceptional 2013, the results of this year are way above my expectations. I've never thought that I could get these results back to back.
Until the middle of the year, I thought that 2014 would be a pretty ordinary year. Even a mediocre year for someone who thinks that a flat return is mediocre. But, in the last few months, everything went well for some of my shares and my portfolio got a nice boost.
At the time of this writing, my only real bad move of the year is Rifco for which the share price is 22% lower than my average cost. The last results of the company weren't spectacular but weren't bad either. I'm not thinking about selling my shares for now because I think that it's a great company with a very good ROE. I think the company should get better in 2015 and the share price will probably be back to a more normal level. High Arctic Energy is also down, but the whole sector of energy/natural resources is down, so it's not that much related to the company.
Here's my list of best and worst performers of the year:
Best performers
Biosyent (sold)
Alimentation Couche-Tard
Constellation Software
Cipher Pharma
Ross Stores
Mallinckrodt (previously Questcor Pharma)
Worst performers
NTG Clarity Network (sold)
Rifco
And here's my Portfolio on December 19th, 2014
Canadian stocks
Cipher Pharma: 13,4%
Constellation Software: 9,7%
Valeant: 9,3%
CGI Group: 7,1%
Alimentation Couche-Tard: 7%
Rifco: 6,6%
Carfinco: 5,4%
Concordia Healthcare: 2,8%
High Arctic Energy: 1,7%
American stocks
Mallinckrodt: 7,8%
Portfolio Recovery: 5,5%
Dollar Tree: 4,3%
Gilead: 4%
Ross Stores: 3,8%
Dorman Products: 3,1%
Precision Casparts: 3,1%
Cash: 5,6%
A lot of experts are giving their pronostics for 2015. As all wise men, I don't think I'm qualified to offer pronostics about a year full of surprises (like terrorist attacks, oil price instability, epidemy, alien invasion, etc...) As a fatalistic person, I always feel that bad things are just around the corner, so I wouldn't be surprised about a drop in the markets. But most statistics show that the market is correctly evaluated. In life, most things should be evaluated from a statistic perspective (actual VS average). So, from this point of view, markets should give us a return of about 10% maybe? I don't fucking know. But it should be an okay year. If not, it should be an okay 2-3 years ahead, until markets get overvalued once again and the tower falls down once again.
dimanche 14 décembre 2014
Healthcare stocks
I really like Healthcare stocks.
In times of turbulences like these days, you can appreciate these stocks. Because these stocks usually don't give a fuck about the state of economy which isn't the case of a shitload of natural resources stocks. Or even financial stocks sometimes.
Most of these healthcare stocks have a low beta (consistent revenue growth however the state of economy). Plus, as long as there will be a humankind, there will be sick people and these sick people will need to take pills or go to the hospital to recieve some expensive treatment. Capitalism means that there's no pity for sick people. Give us your money and get better or die. Fuck you. We don't care about your life. We only care about the value of our shares. If we cared about your health or about humanity, we'd be doing some fucking humanitarian shit in Adis Abeba.
What I like the most about healthcare, is that there's no fashion in this industry. Well, there's fashion everywhere, but when you buy some pills because you have HIV, flu or leper, you usually don't give a fuck about the company that produces the pills. You just want to get better.
Here's some great companies that deserve attention. A patent expiration is always a threat for healthcare stocks. Stocks can get hurt a lot when competition appears. But great companies usually got a fucking pile of money to boost R&D or to buy another company to keep growing. Anyway, if your portfolio is well balanced (with 15 or 20 companies), you'll do well even if one or two of your healthcare stocks have problems. For example, if you have a portfolio of 10-12 healthcare stocks like: Gilead, Celgene, Biogen, Abbvie, Actavis, Merck, Johnson and Johnson, Jazz Pharma, Cipher, Valeant and Concordia Healthcare, I'm sure you'll do very well in the next 5 years. It's impossible that all of these go wrong. I'll even dare to say that it's impossible that more than 3 of these companies have big problems in the next 5 years. All the others will benefit from diseases all around the world which continues year after year, as the population of earth keeps growing.
So, here are 5 good potential investments:
Gilead (GILD):
Forward PE Ratio: 10
ROE last 5 years: 77
Celgene (CELG):
Forward PE Ratio:24
ROE last 5 years: 27
Jazz Pharma (JAZZ):
Forward PE Ratio: 16
ROE last 5 years: 33
Biogen (BIIB):
Forward PE Ratio:21
ROE last 5 years: 20
Cipher (CPH.TO):
Forward PE Ratio: 10
ROE last 5 years: 32
All of these stocks have achieved a surprising growth in the last years. They're all good potential investments. With these numbers, the one that looks the more undervalued is Gilead. But let's face it, Gilead is a mega-large cap with a valuation of about 160 billion dollars.
There's also stocks like Valeant and Concordia Healthcare that are good candidates, but they are harder to evaluate because of their heavy use of leverage.
So, my advice to anybody would be to put a considerable part of your portfolio in stocks like these.
In times of turbulences like these days, you can appreciate these stocks. Because these stocks usually don't give a fuck about the state of economy which isn't the case of a shitload of natural resources stocks. Or even financial stocks sometimes.
Most of these healthcare stocks have a low beta (consistent revenue growth however the state of economy). Plus, as long as there will be a humankind, there will be sick people and these sick people will need to take pills or go to the hospital to recieve some expensive treatment. Capitalism means that there's no pity for sick people. Give us your money and get better or die. Fuck you. We don't care about your life. We only care about the value of our shares. If we cared about your health or about humanity, we'd be doing some fucking humanitarian shit in Adis Abeba.
What I like the most about healthcare, is that there's no fashion in this industry. Well, there's fashion everywhere, but when you buy some pills because you have HIV, flu or leper, you usually don't give a fuck about the company that produces the pills. You just want to get better.
Here's some great companies that deserve attention. A patent expiration is always a threat for healthcare stocks. Stocks can get hurt a lot when competition appears. But great companies usually got a fucking pile of money to boost R&D or to buy another company to keep growing. Anyway, if your portfolio is well balanced (with 15 or 20 companies), you'll do well even if one or two of your healthcare stocks have problems. For example, if you have a portfolio of 10-12 healthcare stocks like: Gilead, Celgene, Biogen, Abbvie, Actavis, Merck, Johnson and Johnson, Jazz Pharma, Cipher, Valeant and Concordia Healthcare, I'm sure you'll do very well in the next 5 years. It's impossible that all of these go wrong. I'll even dare to say that it's impossible that more than 3 of these companies have big problems in the next 5 years. All the others will benefit from diseases all around the world which continues year after year, as the population of earth keeps growing.
So, here are 5 good potential investments:
Gilead (GILD):
Forward PE Ratio: 10
ROE last 5 years: 77
Celgene (CELG):
Forward PE Ratio:24
ROE last 5 years: 27
Jazz Pharma (JAZZ):
Forward PE Ratio: 16
ROE last 5 years: 33
Biogen (BIIB):
Forward PE Ratio:21
ROE last 5 years: 20
Cipher (CPH.TO):
Forward PE Ratio: 10
ROE last 5 years: 32
All of these stocks have achieved a surprising growth in the last years. They're all good potential investments. With these numbers, the one that looks the more undervalued is Gilead. But let's face it, Gilead is a mega-large cap with a valuation of about 160 billion dollars.
There's also stocks like Valeant and Concordia Healthcare that are good candidates, but they are harder to evaluate because of their heavy use of leverage.
So, my advice to anybody would be to put a considerable part of your portfolio in stocks like these.
mardi 2 décembre 2014
Should you buy shares these days?
Jason Donville was on BNN last week and his Top Picks were:
CGI group is a good defensive choice, but in the long run, I don't think that the price of the stock should rise as fuck. Of course, the company may buy another company (like they bought Logica a couple of years ago) in the next months, but I don't see a lot of growth in this industry (let's think about IBM for instance). So, if there's growth with CGI, it'll be growth by acquisition in an industry with modest growth. Anyway, the stock is cheap, at about 12 times next year earnings, so you don't take a lot of risks with this company. My personal feeling, based on nothing at all, is that, with CGI, you'll get a 10-12% annual return in the next 5-10 years. It's good, but not extraordinary.
Valeant is probably the best choice of the three because of the very agressive growth of the company. They recently abandoned their Allergan acquisition because Actavis offered more money. In my opinion, the price offered for Allergan was too high even before Actavis made an offer. So, it's not a bad thing to turn around and look somewhere else. I'm sure Valeant could be a 200$ stock in 2015 because they'll surely buy something big next year. For at least a year, they've been searching for a "merger of equals", which says a lot. Valeant has a lot of debt, but interests are low, so it's time to full the credit card and buy everything in sight. A lot of superinvestors are with Valeant. From what I've read, I don't see how Valeant couldn't have a market cap two times bigger in 1 or 2 years.
I think it would be a good idea to wait for a little pullback before buying anything in the market. Non-cyclical stocks aren't on sale. Cyclical stocks are on sale but they could be even more on sale in the next weeks. So, no need to hurry to buy anything at all.
Maybe it's mainly time to invest in Christmas gifts.
- Directcash payment;
- CGI group;
- Valeant.
CGI group is a good defensive choice, but in the long run, I don't think that the price of the stock should rise as fuck. Of course, the company may buy another company (like they bought Logica a couple of years ago) in the next months, but I don't see a lot of growth in this industry (let's think about IBM for instance). So, if there's growth with CGI, it'll be growth by acquisition in an industry with modest growth. Anyway, the stock is cheap, at about 12 times next year earnings, so you don't take a lot of risks with this company. My personal feeling, based on nothing at all, is that, with CGI, you'll get a 10-12% annual return in the next 5-10 years. It's good, but not extraordinary.
Valeant is probably the best choice of the three because of the very agressive growth of the company. They recently abandoned their Allergan acquisition because Actavis offered more money. In my opinion, the price offered for Allergan was too high even before Actavis made an offer. So, it's not a bad thing to turn around and look somewhere else. I'm sure Valeant could be a 200$ stock in 2015 because they'll surely buy something big next year. For at least a year, they've been searching for a "merger of equals", which says a lot. Valeant has a lot of debt, but interests are low, so it's time to full the credit card and buy everything in sight. A lot of superinvestors are with Valeant. From what I've read, I don't see how Valeant couldn't have a market cap two times bigger in 1 or 2 years.
I think it would be a good idea to wait for a little pullback before buying anything in the market. Non-cyclical stocks aren't on sale. Cyclical stocks are on sale but they could be even more on sale in the next weeks. So, no need to hurry to buy anything at all.
Maybe it's mainly time to invest in Christmas gifts.
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