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.

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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).

7 commentaires:

  1. Quality is always expensive, but often very profitable too!

    Stock quality refer to quality of growth, quality of operation execution and quality of the management...

    Berkshire and several great companies that you writen about in your recent blog have every year or two a 15-25% pull-back... François Rochon wrote about that several years ago...

    Over a 20 years period there are usually between 12-15 20% pull-back.

    When you find one of the best of breed horse, you will have better results with the ones that won series of races, than the ones who lose all of them... But if the good ones finished 2nd or 3rd for a couple of race, you will have the opportunity to scoop them for less than if you wanted to purchased at the end of streak of wins... But they always gonna be more expensive than lame horses (picouilles)...


  2. Is anyone else noticing how poor, really poor Bruce Campbell's picks have been on BNN? I'm checking out his April 2015 picks for his next appearance and all are down over 50% with one having gone bankrupt. At what point do you ban someone from BNN until they show some level of performance?

    I didn't appreciate the disclaimer yesterday before they went over the past picks saying how it's only a recommendation and for the viewer to do their own due diligence before investing. It's his top picks for fuck sake! These are supposed to be his best ideas going forward. Surely as a professional he can come up with 1 name over 5 appearances that doesn't go down 50% or more! Make cash a top pick if you have nothing to offer or if you have a stop loss in mind how about letting views know?!? I've lost a lot of respect for the guy. He's on there saying how he's positioning for a possible recession yet his fund is already down 25% and he hasn't beaten the TSX over the long term. What are people paying this guy for?

  3. I agree with Twotime!

    I have lost respect for some of these "experts" . They are stating that the price of oil is low when it is actually low. Now if an 'expert ' said that in July of 2014 oil will go lower because of supply and demand. That i have respect for! But most are just stating the obvious and that makes them sheep. Baaaa!

    1. Right. Most of experts are just ordinary people dressing well.

  4. Remember when I talked about Veronika Hirsh...
    She just averaged 30% with last year picks. Not too bad following last few months... see BNN twitter note;
    Veronika Hirsch of @ArrowCapital - Past Picks from March 2, 2015 - $CCLb.TO (+54.60%), $ROST.O (+7.68%), and $ATDb.TO (+26.85%).TRA: +29.71%....

    Today's picks are ATD.B, TSN.N-Tyson Foods & Cash... Don't expect another 30% with that, but 10-15% even if Cash is close to 0%...

    Value Man
    P.S. Bruce is still having the longest solo home run at BNN with a 512% over a year with CXR-T pick between March-2014 & March 2015.. And he is using a momentum strategy instead of a Value or GARP approach, he trimmed the losers quickly as soon as they are fallen below their Moving avg... If you are doing a buy and hold on his picks, you may face very bad surprises...

    1. Just for interest's sake as well as a preliminary pool of further homework on my part, I have tracked almost every BNN analyst for a couple of years based on their 3 top picks. I continue to do more homework just in case some nugget is uncovered or leads to some company in a similar industry or some tangential association for me to continue with more due diligence. You all may be interested in knowing that the picks from December 31, 2014 until November 19th, run on December 19th, 2015 of the approximately 100 analysts there were only 15 analysts that were above water ranging from .07% to 35.4%. I just track now and no longer consolidate the results as the majority of picks are really weeds and few blooming flowers.

      FYI.. # 1 with 3 selections and pony with only a single appearance up to that time was Peter Mann followed by Veronica Hirsch. Only 4 of them achieved 10% +. Best to all.

      PS. Mr. Donville's 4 appearances were # 1 or # 2 until the bottom fell out by short sellers on HCG, VRX and by association CXR, CPH etc... He ended up at #28 on the list... Not very scientific but....