samedi 27 février 2016

The difference between Warren Buffett and me

Today, the annual letter from Berkshire Hathaway is released.  

It's a good read. But I don't really like Warren Buffett. Don't get me wrong: he's made great investments over time and his picks are worth following. But his life seems to have only been devoted to one goal: making money. And not looking for anything else. Not even caring that much for his family.

His diet is pathetic: it's a well-known fact that Buffett drinks Coca-Cola on a daily basis and he says that he never ate fresh fruit or vegetable (saying that with a kind of pride).

It's also known that Buffett never shown interest in other cultures. He never really wanted to visit something outside the USA.

For example, when visiting China and seeing the Great Wall, he didn't look impressed by the monument. Only saying some stupid shit like: "I wish I had a cement company when that wall was built!".

When I read that bit, I thought: "What a motherfucker."

Buffett and I are very different. I suppose that, in his mind, every minute of his life must be used to get richer. By comparison, my life has a lot of dead times. Many moments and activities of my life are totally pointless and serve nothing.

For example, one week ago, a friend and I went to a karaoke, in Charny (probably that nobody reading this blog knows that place). We sang a lot of classic-rock songs and I eventually had to take a piss. So, I went to the restrooms and I saw for the first time of my life a guy snorting coke or speed right besides the sink. The guy wasn't nervous at all and he didn't care about the fact that I was there. So, while he took a card in his wallet then started to cut two lines of some white powder, I stared at him for maybe 30 seconds resulting that I got about 2 meters of paper (because I stared at him while pushing the machine to get paper to dry my hands). I thought he would feel a little bad, seeing me looking at him while getting an unreasonable length of paper. The guy never showed any stress about it. I asked him and his friend if they didn't fear that some police would come in and find them. They didn't look worried about it.

Yesterday, I went back to that karaoke with some other friends. For the occasion, I said to my friends that we would tell everybody that we were from New-Brunswick, only coming to the Quebec city area because we heard about that karaoke bar and we thought that it was worth a 6 hours ride.

Why lying ?

My personal opinion being that reality is boring. We have to create something special when we go out in bars. Otherwise, the event is ordinary. It's like all those boring moments when you're listening to the TV, eating some ham sandwich or worse, dry bread. When you tell people that you're from another province, it forces you to be creative and it makes them happy to be next to some exotic creatures. So, everybody wins when you're lying.

During the night, I saw the friend of the guy who snorted coke. I realized that he worked at the bar. What the fuck? Those employees aren't supposed to protect their business from drug use?

So, I said to my friends: "Hey, that's the friend of the guy who snorted coke on the counter, next to the sink in the restrooms last week! I'm gonna ask him if it's really him!".

Some of my friends looked worried about what I was going to do. Would I get a punch from that guy?

Me: Hey man, you're the guy who snorted coke in the restrooms last week?
Guy: Eeeeeeeee... yeah...
Me: Hey that pub is great. My friends and I love it and we think that a 6 hour ride is not a problem for such a quality place. I'm with some friends from New-Brunswick! Come with me!
Going to the table where my friends were sitting
Me: Hey guys, check it out! That guy snorted coke on the counter of the restrooms last week! Pretty cool isn't it?! It looks like we have the right to snort coke in this bar! Wow, it's so cool. We never found a place where it was allowed in New-Brunswick.
Guy: Well, well... you don't have the right. You can, but it's not legal!
Me: But if an employee does it, everybody could do it!
One of my friends: In my hometown, Edmunston, everybody is doing coke. It's the headquarters of coke snorting in Canada. How much are you selling your coke?
The conversation lasted maybe 20-30 minutes and my friend told a lot of bullshit to that guy who finished the discussion by saying:
Guy: In the beginning, I thought you were telling me some bullshit when you said you were from New-Brunswick but after all you've said, I'm convinced you told the truth.


Warren Buffett would never have done such a thing. Well, while I was doing that, Buffett was probably sleeping with the objective to get up early to read some annual reports.

If he wasn't sleeping, he was probably reading some annual report.

I prefer my life.

dimanche 21 février 2016

The regrets of Bernard Mooney

I made fun of the brown suit he wore when I saw him a couple of years ago and I disliked a bit his sometimes cocky attitude... but Bernard Mooney was probably the best financial journalist in Quebec.

He's dead or what?

No. Only retired since last summer. But, in this vitual world, when someone isn't active on Facebook, it's like he's dead. So, finally, in a way, Mooney is dead.

Résultats de recherche d'images pour « bernard mooney »
Bernard Mooney: behind that gentle smile lies a guy waiting to tell you that your ideas are stupid

I owe what I know to a handful of people. Jason Donville being surely in the top 3.

Bernard Mooney deserves a mention too. Maybe he's even higher than Jason because he's the one that taught me first about the importance of the ROE. That lesson was learned from his first book which was a very good read. Much more practical than almost any other investment book I ever read.  

Last week, I read once again his latest article. In that text, he said that a regret he had was that he souldn't have bothered about the price of great stocks: he should have bought them even if he thought that they were pricey.  

That's a problem I have and probably of lot of investors share this problem. It explains why I sold almost 50% of my position of Constellation Software in 2015. And that's why I'm reluctant to add to my position of Couche-Tard or to initiate a position in Dollarama or O'Reilly.

There's very few super great CEO's. But it's probably true that some of them deserve to manage your money whatever the price of their stock is (well, almost at any price... but you have to have a lot of faith to pay more than 30 times next year's earnings).

Larry Rossy (Dollarama), Alain Bouchard (Couche-Tard. Ok, the CEO is now Brian Hannasch but Bouchard is still around),  Mark Leonard (Constellation Software), Eric Lafleche (Metro): these guys did very well 5 years ago, 4 years ago, 3 years ago, 2 years ago, last year and this year. In some cases like Alain Bouchard, these guys have been doing well for something like 25 years. You may take a risk at getting these shares at 20-25 times earnings, but the risk is probably higher when you buy some shares of  a company at 15 times earnings managed by a no name CEO that has only achieved 1 or 2 good years of operation.

Reading again that article made me want to add to my position of Couche-Tard and Constellation Software. These companies are on the rise, their CEO are great, the sector in which they operate is great... but the price to pay is a little high (however, remember that they make a lot of profits, unlike some companies like Tesla that's not making any profit and that is selling at an astronomic price).

mardi 16 février 2016

15 great or good companies from Quebec

I may come from Quebec, I'm not so inclined toward my so-called distinct culture. I've never thought that Quebecers were better than Canadians in any way, except maybe for hockey players (in the 70's or the 80's). And Celine Dion may have sold something like 11 billion records all over the galaxy, she sucks cunt compared to Rush in the great book about history of music.

Yeah, Celine Dion has a great voice but she sings like a woman. Geddy Lee is a man and he sings like a girl. Now, that's an achievement.

Even if Quebec looks in many ways as the retard big brother of many canadian provinces, I have to say that there's probably more great companies listed on the TSX coming from Quebec than from the rest of Canada.

Here's a list of some great and good companies that have their headquarters located in Quebec (mostly in the Montreal area). The performance of each stock over the last 5 years is indicated to show that I'm not bullshitting.

Great companies:

Alimentation Couche-Tard (520%)
Dollarama (403%)
Stella Jones (388%)
Valeant (211%)
Metro (175%)
CGI Group (180%)
Richelieu Hardware (129%)
Gildan (122%)
Canadian National (118%)
Jean Coutu (96%)

Good companies:

Logistec (262%)
Lassonde (136%)
MTY Food Group (89%)
Saputo (88%)
Bank of Montreal (21%)

Why are Logistec and Lassonde ranked in the "Good companies" instead of "Great companies" given their performance? Well, their ROE is not as high as the others and their market cap is smaller too. Which means that they're not blue chips, or something approaching a blue chip. But somebody else could have ranked them in the "Great companies" list.

Anyway, I'd buy all these stocks long before 95% of what's on the stock market. A portfolio with all these top 15 Quebec stocks would surely do well over the next 5 years. Because most of these stocks are long term performers.

Did I forget some great/good companies?

samedi 13 février 2016

The next book about successful investors

What strikes me, reading "Market Masters", is that most of the investors in the book are probably millionaires.

It's obvious that Jason Donville is a millionaire, but what about those lesser known names that don't get any media exposure? I've never heard about most of them. OK, I haven't heard about a thousand entrepreneurs that are millionaires too. Which means that I don't know each single millionaire in Canada.

But, what I mean is that:

A- I believe that very very few analysts and investors achieve good results. I've said it before, but on stockchase, we can easily see how much of these analysts make poor suggestions. I believe that, in Canada, there's less than 5 great investors having exposure. There may be more, but I haven't heard about them yet.
B- If there's so few great investors, why most of them look rich?
C- Probably because they all dress well, use Listerine, and know how to sell crap to their clients.

So, most of them are average investors, full of money and happier than you and me. Because money is happiness. All stays in the end is money. Yeah, forget about those classic movies with James Stewart such as "It's a wonderful life" in which family and friendship look more valuable than money. That's complete bullshit.

You have to accept what is written below even if it hurts:
  • After a few years with your wife or husband, he or she will gets on your nerves and you'll probably want to kill him or her. Usually, people tend to chose a softer way to evacuate their frustration, such as cheating;
  • Friends will come and go. You'll lose most of your childhood's friends (probably all of them) but you'll meet other people that will become your friends. You'll get tired of some of them and some of them will get tired of you. It's gonna be a cyclical thing until the end of your life;
  • Your parents will die and you'll understand that you are really alone;
  • Your kids will grow and you'll understand that they don't belong to you. Once they're adults, you'll see them much less often. They may find a stupid boyfriend or girlfriend and that'll disgust you. You'll be stucked with that. The precious flesh of your flesh being fucked by some retard.
  • Your job will sooner or later bore you. You may have an income of 25 000$ or 150 000$, the same will happen. Change your job and see how it will happen again and again...
  • Fuck, life is such a shitty moment. I long for the great sleep.
Wait a minute!

There's a lot of reasons for us to get down and suicidal. But we almost forget that there's money. And better than money, there's lots and lots of money.

Yeah, those average investors are richer and happier than us. But we surely can reach an acceptable level of wealth and happiness if we focus on that goal. We can stay clean and avoid to jump on that boat of selling crap to ignorant people. We can just save money and make the right investment choices (easier said than done) for 20 years of our lives. Then, after working for our money, our money will work for us.

The proof has been made: human interactions will make you unhappy and sad. If you get lots of money, you can find an isolate place to live your life (like Patagonia or Iceland), import some russian whores, grow weed, listen to old rock clasics all day long and live like a fucking animal until the end of your life. 

I want to be in the next book about successful investors. 

mardi 9 février 2016

Gilead's last results

I got my first Gilead shares on september 2014. At that time, the stock was selling at 101$ and the EPS were 2,20$.

About 18 months later, the stock is selling at 86$ and the EPS have been 3,18$ for the last quarter.

During the same period, the PE ratio went from 13 to 7, while the EPS rose by 44%.

Isn't it crazy? It's a great example of how markets work.

The price of a stock is made of two things: the results (earnings or sales) of the business and the excitation of the market about that stock. That's why Amazon and Netflix are selling at such a high multiple. The market is crazy about these stocks even if they don't get high earnings. The market believes that the future of humanity is linked to those stocks.

In the case of Gilead, even if the results are very good, the market anticipates the worst and there's a big contraction of the PE ratio instead of an expansion. The market believes that Gilead doesn't have a pipeline of drugs large enough to protect the future of the company. It also believes that the US government will do something to stop big companies to sell their drugs at a high price.

I'm frustrated about it, because I think Gilead should be selling much higher (about twice it's actual price). But it's life. It's been the same for years with Home Capital Group.

Our duty, as investors, is not to give up and don't sell the stock in which we believe. Even if the market is negative towards a high as stratosphere ROE stock with exceptional growth. Of course, there's risks associated to Gilead.

But to justify a PE ratio of 7 for such a company, risk should be bankrupcy, not a slight decline in revenues.

lundi 8 février 2016

Market masters : product placement

Last november, a guy wrote me a message with this proposition: I'll send you 2 copies of my new book about canadian investors if you accept to write something about my book on your blog.

Could I really help the sales of this guy with my blog? No fucking clue. But I accepted the deal.

So, last week, I received via mail the book of this special guy. Please, notice the majestic joke here because this guy's name is Robin Speziale.

The thick book (almost 600 pages) gathers interviews of 28 investors, most of which are canadian with the notable exception of Bill Ackman. Yeah, no shit. That little 28 years old no-name special guy from Toronto managed to join Bill Ackman for a fucking interview!

Of course, there's a chapter about Jason Donville. That chapter begins with a familiar sentence: "Don't fuck with Donville". When I first opened the book, I went straight to that part and when I read it, I laughed, thinking: I'm such a fucking star now! Speaking of Donville, he looks pretty cool in the book and he shares a memory full of swearing, which is funny.

There's a lot of work behind the book. Taking the time to contact 28 investors (probably more), trying to convince them to spend some time with an obscure guy still in his twenties, prepare the interview, keep your calm in front of great investors (some looked pretty cocky), etc... It surely wasn't an easy task.

It's a great work and I recommend the book. I've only read the introduction and a few chapters so far (Jason Donville, Norman Levine, Bill Ackman and Francis Chou), but it's very interesting and I think that all the people reading this blog could like the book. Yeah, I'm not kidding.

So who will get the second book I got?

It will go to the first person to write me ( giving me the answer to those 2 questions:

1- What's the movie I've been referencing a couple of times on this blog, talking to the readers (clue: 1971)?
2- What's the singer related to the title of a recent post on this blog?

To conclude, here's a few questions I sent to Robin to know him a little better.


Robin R. Speziale interviewed by Penetrator (february 7th, 2016)

1- Please, disclose at least your 5 biggest positions? 
Here are my top 10 largest holdings in my personal portfolio:
BlackBerry, Starbucks, Rogers Communications, Luxottica, Yum Brands, CCL Industries, McDonald's, Nike, Loblaw, and Alimentation Couche-Tard‎.
2- You're a good looking boy, given the picture on the back of your book. After having met many investors, do you think that, physically speaking, you're an anomaly in the investment field?

I guess I clean up well. Obviously, aptitude trumps beauty in the investment field. It's all about returns.
But that doesn't mean the 28 Market Masters I interviewed don't look good, too. For example, in my book,

I write that Norman Levine was an impeccable dresser. He wore a fine tailored suit to our interview. 

3- Except for investment, what are your interests and hobbys?
‎I'm a movie and videogame geek. In my condo, I've setup a premium entertainment system with a large screen TV, and surround sound system, that makes watching or gaming a fully immersive experience. I even have the old N64 hooked up... that catches people's attention. My favourite movie: Wall Street. Videogame: Metal Gear Solid.
4- Who's your favorite Beatle and why?
I didn't grow up with the Beatles, and frankly, I don't enjoy their music.‎ I much prefer classic rock if I were to listen to the 'oldies'.‎ But if I had to pick: John Lennon. Not because of any Beatles song but because of his song, Happy Christmas, which I do like very much. It's sad yet inspiring in that he paints a dismal world that we can improve together for the betterment of everyone. "War is over ‎if you want it. War is over now"
5- After reading some chapters of your book, I've had the impression that some investors are cocky. What's your general opinion about so-called great investors? You can have a specific opinion too (about a specific investor). 
What seems cocky on paper was mostly sheer confidence in-person‎. I appreciate that successful investors have their ups and downs, and so I did also elicit from the 28 Market Masters their mistakes over the years, which serve as 'cheap' lessons for the reader. I will say, though, that the most down to earth investor that I met was Peter Hodson. He had a great sense of humour. But Bill Ackman was the most serious. He has high conviction in everything that he does.
6- Which investor was the coolest?
It would be a tie between Jason Donville and Martin Braun. I'm sure you'd agree with my picking Jason. I'll parallel 'cool' to cliques in high school. I assume Jason would be the accomplished jock while Martin would be the strong and silent type. Both very different from each but "cool" in their own right and as perceived by the general population.
7- If you get rich, what will you do of your life?
I will keep working on passion projects. Anything that I'm interested in at the time. And, this sounds cliche, but I'll also live life to the fullest with the surplus money that I have. I'll pay for nice things if they can enrich my life, such as vacations to Europe every year. After all, I can't take money to the grave with me. But through and through, I won't change. I'll still be the same person.
8- When did you discover my blog? 
While conducting research on Jason Donville before meeting him in person for the interview. When I typed "Jason Donville" in Google, your blog was (and still is) on the first page (high Google PageRank!). Reading your blog made me more excited to meet Jason as I saw that he had a strong following.
9- I have to tell you that if your book had been bad or not my cup of tea, I would have written it without any remorse. I would have written that it was a crappy piece of shit. Otherwise, I'm surprised at the quality of the book and it has nothing to do about the fact that the chapter about Jason Donville begins with the line "Don't fuck with Donville". A couple of lines follow, all related to my blog. Your book has been a very good read so far. The only "negative" thing I have to say is that it's a heavy read and you have to breathe between the chapters. Well, it's investment, not a Mary Higgings Clark novel. Which leads me to a question: in your opinion, who will buy your book?
I hope that millenials buy my book. All Canadians in my generation. I say that because most people, regardless of their generation, don't educate themselves and start investing until much later in life. I honestly want people to be rich, early in life. It's liberating not having to work paycheque to paycheque. And investing is too much fun to pass up.‎ But I don't want to limit my readership. It's a long shot, but my dream is that Market Masters ends up in millions of Canadians' households, much like David Chilton's The Wealthy Barber book did upon its release and many editions. But, yes, I do agree that Market Masters is long; an investment of one's time. Once you read through the book, though, you will be an investment master in the making, yourself, and onto beating the market, making more more, and financial independence.