jeudi 30 mars 2017

Giverny Capital's shareholders meeting

Have you ever been to a shareholders meeting? Not me. Nothing ever happens in Quebec City. I live a comfortable life, but not enough to be in measure of taking the plane to Cupertino or New-York each year for a 2 hour conference.

But this blog has disciples. And one of those disciples wrote to me lately, asking me if I'd like to go to the Giverny Capital shareholders meeting on march 29th at some very posh hotel in Quebec City.

Why not.


Robin Speziale told me last december that François Rochon was short. I expected to meet a guy half my height. It wasn't the case. The guy is at least 4 feet tall. Probably more. He looks pretty cool and interested. He welcomed guests at the entrance of the room and shook hands. Really good first contact. The guy doesn't look at all like a fucking peddler.

The meeting had about 100 people. A good number of them were young men (25-30 years old). The questions asked by the public were couçi-couça. It looked to me as many of them did not know that much about stock analysis. But at least, there wasn't any really stupid question. Just some long and very abstract questions about nothing in particular.

At the end of the meeting, I went to see Rochon and his lieutenant, Jean-Philippe Bouchard. I talked a bit with Bouchard, before asking him about the importance of Beta coefficient for Giverny. At that exact moment, his face changed and I felt like a fucking nerd in front of the most beautiful girl of the school.

This guy is surely clever, but he looks a bit cocky. Not my kind of type.

At the end of the meeting, I told them that I was the writer behind this blog (knowing that Robin talked to Rochon in December about my blog) and both knew about it. I don't know why I did that. To see some reaction maybe? I'll probably never do that again because the air started to be a little harder to breathe from then on. Were they uncomfortable about the name and the language of this blog? Did they fear that I would use street language talking about them?

In fact, they probably feared that I would spoil or reveal some information about the event. Bouchard said to me that everything said during the evening should be off the record. Well, I never intended to reveal any secrets about Giverny given the fact that almost everything about the fund is avalaible via

I'm still not convinced about all Giverny's picks, like that fucking Carmax. But at least, I respect the manager of the fund and I believe his approach is intelligent. He picks boring stocks out of the radar. These stocks won't go bankrupt tomorrow or have very little chance to be involved in a scandal because they're from boring and not regulated industries.

Happy to have been there. Merci Yves.

mardi 28 mars 2017

Thought of the day

I'd like to be loved by many people. Because I could reach an interesting level of cruelty.

Have you ever thought about it (it's probably something from Nietzsche). The most cruel thing you can do is to make people love you, them let them down.

If someone doesn't love you, you can be mean to them and they'll hate you. But their heart won't be broken. They'll just hate you.

If you make them love you, then you go away with a good reason or without any reason, they'll cry. They'll keep you in their hearts forever, as a reference. And they'll think about you until they die. That's a form of slight torture. And that's the real cruelty my friends.

Cruelty is not making your ennemies suffer. It's making the people who love you suffer.

That's what we should all aim to do, at least once in a lifetime.

If someone gets on your nerves, don't be rude to them. Be kind to them and make them love you. A little more, day after day.

Then, abruptly, leave them.

samedi 25 mars 2017

The power of the ROE (part II)... Have we missed something?

On august 24th, 2016, I wrote a post about the power of the ROE.

The power of the ROE, is a curious thing. Make a one man weep, make another one sing. That's the power of the ROE.

I wanted to see if the recipe worked well. So, I went back to each of the 30 high and steady ROE stocks mentioned in the post and I took a look at their performance.

Here's the stocks:


The performance of those 30 high ROE stocks since august 24th has been 6,2% while the S&P did slightly better with a performance of 7,3%.

Two things:

First, the period is short (7 months).The shorter the period, the lesser the meaning.

Second, the stocks in this selection aren't probably still the highest and steadiest ROE stocks on the market right now. The article referred is 3 years old, so the selection may be a little different now.

At that point, you may ask: Why the fuck are you writing about something not that relevant and probably not up to date?

Well, first, I like to validate if what I wrote before is accurate. If it's not, I like to lapidate myself in public. Sadomasochist syndrom maybe.

Then, my interesting observation is that I've noticed that there's about one great winner among each 7-8 picks. There's not that much great losers, but many stocks do just OK with a few exceptions doing great. It looks to me that this high ROE selection reduces risks. The basement is not as deep as with others stocks.

It's obvious: a stock generating large amounts of money does generally way better than a stock generating a little amount of money.

mardi 14 mars 2017

Buying a house in Florida

For the last 6 years, each winter, I'm doing my annual pilgrimage to Florida, to visit my parents who live there for about 3 monts.

I realize every year how my parents, who have been married for more than 40 years, seem to want to kill each other. Sometimes, they really do. When I think about it, I realize how very few relations can resist the passage of time. Just think about all those bands of the 60's or 70's like The Who or Pink Floyd, where surviving members hate each other... but still tour together for money.

Except for that, my visits here make me think about the future. How long will I have to live 12 months a year in Canada? How long will I have to bear that fucking weather constituted mainly of clouds, rain, snow and melting snow? I can't wait to be old and retired.

My parents currently reside on a mobile house park. I don't really like the geographical situation of the place, but it's quiet and clean. The criteria to live here is to be more than 55 years old, which indicates clearly the kind of place it is.

The mobile homes are cheap. It looks like you could buy something for about 40 000 to 50 000$. At this price, you won't get something very classy, but it would be OK and you won't be ashamed to receive some of your relatives.

A few days ago, my mother asked me if I would buy something with her and my father. She told me the same, maybe 4 or 5 years ago, when they rented a condo, in another Florida town.

At less than 50 000$, the price is OK. But I asked what were the common fees. I learned that they were 500$ a month. Yeah! 500 fucking bucks each month in a place where snow doesn't even exist. You'd get a fucking condo in Quebec City or Montreal and these fees would only be something like 150 or 200$ a month and they'd remove snow from the parking at that price. Here, I don't know exactly what they do with that money (they take care of the pool of the park which is pretty small for a 250 houses park, some cheap labour mexicans mow the lawn of each home... and that's about it?). Do they pay the mexican people 50$ for an hour of job? Do they fill the pool with bottled Evian water?  I don't know, but fuck, Restaurant Brands should take over the place and make some clean up.

What about the insurance? I don't know. But it's probably at least 100$ a month.

So, here you are, buying a 40 000$ home with associated costs that are superior to the cost of the mortgage, in a place located 2500 km from your home (in other words, if a tornado or another catastrophe happens, you're very far). And if you're under 55 years old, you can't even reside here. You can only live here if your chances to get a cancer in the next 10 years are important.

These fees are crazy. But the idea to live here isn't.

While they have record minimum temperature in Quebec and the biggest snow storm of the year, I'm there, at 30 celcius degrees, swimming among the jelly fishes, surrounded by an infinite number of breasts.

vendredi 10 mars 2017

Casey's (CASY)

September 2010, Couche-Tard tries to buy Casey's for about 2 billion dollars. Casey's, contrary to the others acquisition of Couche-Tard is a performant convenience stores chain.

The deal is massively rejected by Casey's shareholders. Couche-Tard doesn't whine for to long, looks elsewhere and eventually buys Statoil. And a few years later, CST brands.

I'm not a specialist of convenience stores but I believe that Casey's is one of the best convenience stores stock in America, and maybe in the world. However, for a few quarters, the results have not been that good. More precisely, for the last 4 quarters, the estimates have been missed. And the last results have been pretty bad: Casey's missed the estimates by about 35%. It's very bad.

However, the numbers of the business are great. Let's take a look below:

Stock performance last 5 years: 107%
Stock performance last 10 years: 346%

Average ROE last 5 years: 22
Actual ROE: 17

PE high last 5 years: 22
PE low last 5 years: 18
Actual PE: 22

Debt level: medium (about 8 times earnings)
Dilution or buyback: slight dilution over the last 5 years

EPS 2012: 3,04$
EPS 2013: 2,86$
EPS 2014: 3,46$
EPS 2015: 4,62$
EPS 2016: 5,73$
EPS 2017: it will be below 2016 EPS

I believe that CASY should go lower this year because the PE is at the top of the range for the last 5 years and CASY missed the estimates in the last quarters. There's no reason why that stock should go up. At 22 times earnings, the stock is expensive.

But it may be an interesting prey for a predator like Couche-Tard. And if it's not a prey, I don't think that it's the beginning of the end for that stock. It's probably just a bad period.

Jason Donville may say that he likes healthcare and technology because these sectors offer the highest ROE. However, things can change pretty quickly for these sectors, which is less frequent for sectors like retail stores.

So, not a buy right now, but definetely a stock to put on a watch list.

samedi 4 mars 2017

Portfolio review (march 3rd, 2017)

In the recent weeks, I've made some slight changes to the Penetrator Portfolio. I've lightened some positions like Gilead (not enough growth), Dollar Tree (high debt and slow integration of Family Dollar), Tucows (it became too important in the portfolio with it's recent rise), United Therapeutics (still cheap, but it was too important on the portfolio, just like Tucows). I completely got out of Hardwood Distribution. I bought a little more Couche-Tard but I've been much more active on the selling side than on the buy side.

I have a lot of cash ready and I'll be patient even if it takes time before the right occasion comes.

On my watchlist, there's obviously my holdings and a few high ROE stocks like Mastercard, Accenture, Winmark, Hanesbrand... And some OK ROE stocks like MTY Food Group, Metro, Lassonde and a few others. I like Sleep Country too, but it's track record is short, which can bring bad surprises...

Anyway, for the moment, I don't see anything as a screaming buy. Maybe just some whispering buys.

Here's my portfolio, on march 3rd, 2017:


Alimentation Couche-Tard: 8,5%
Tucows: 7%
Constellation Software: 6,6%
CGI Group: 6,4%
Linamar: 5,3%
Knight Therapeutics: 3,7%
Stella Jones: 2,9%
Ceapro: 1,1%


Ross Stores: 5,8%
Bank of the Ozarks: 5,5%
United Therapeutics: 5,4%
Biogen: 4,7%
Novo Nordisk: 3,9%
Lithia Motors: 3,3%
Mohawk: 3,1%
Disney: 3%
Dollar Tree: 2,8%
Gilead: 2,6%
Bioverativ: 0,4%

Cash: 18%

Average portfolio ROE: 27
Average portfolio forward PE: 14,8
Average portfolio beta: 0,75