dimanche 29 avril 2018

Patrick Industries (PATK)

Angelo Dallas wrote about Patrick Industries a while ago and I thought that this stock was interesting. But I passed. Probably because the sector didn't appeal to me. And what's the sector of that Patrick stuff?

In a few words, they manufacture and distribute many products for the recreational vehicule. They do some other stuff too, but that's their main mission.

If you're under 80 years old, you're probably not interested in that kind of stuff but it looks that with the aging of the population, there's more and more of these very old people who want to travel in a fortress and sleep in the parkings of walmarts. Do we really have to have an opinion about the stocks we own as long as they produce shit that appeal to specific people and they stay away from controversy? Probably that we don't have to. So I'll just shut up and continue with the facts.

First, they manufacture their stuff. That's a great start. Amazon won't start manufacture RV stuff soon. They perhaps distribute RV stuff but anyway they distribute anything about everything.

Then, what about the numbers?

They're excellent.

Stock performance last 5 years: 530%
Stock performance last 5 years: 1750%
Current ROE: 28
Average ROE last 5 years: 32
EPS growth last 5 years: 22%
Sales growth last 5 years: 30%
Current PE: 17
Forward PE: 12
Debt level: Medium 
Buyback/Dilution: Some dilution, but not excessive
Beta: 0,8
Cash flow growth last 5 years: Steady and great

There's a lot of momentum there: For the last quarter, sales were up 60% and earnings were up 53%. 

The only negative side is that the earnings are not that predictable. But apart from that, I see very little negative about that stock.

Anyway, it's always a question of proportions. If you want to put 80% of your portfolio on a stock like that (or on any other stock), you're dumb. If you want to put 3 to 5% of your portfolio on that stock, I don't think it would be a bad idea.

mercredi 25 avril 2018

My philosophy about money

I have a friend who seems to think that I live in a cheap house. He never said it directly, but he made a few muffled comments about it and I've realized that he probably thinks that it's not a prestige house enough for him.
On instagram and on many other places, you can follow new millionaires. You can follow some douchebag entrepreneurs with their plastic girlfriends, always filming themselves in fancy restaurants or on some beach. And you wonder why the fuck they publish 5 videos a day about what they ate, where they were. Their fucking life looks to be so empty, with all that cash.
You quickly realize that these are not real « rich » people. Real rich people are quiet. They don’t want to create a hype.
You can’t stay rich for too long if you fall into excesses. I deeply believe that everything is a question of discipline. I owe almost everything to discipline : my education, my job, my relative wealth. Luck and genetics have had little impact on where I’m at the moment. It’s probably 80% a question of discipline.
How could you become rich, or at least, comfortable?  
  1. Bring your lunch to your job;
  2. Don’t buy a big car. Ideally, use just one car for your family (another car will cost you at least 400 or 500$ a month (payment + gas + insurance + other fees), which is a lot of money you could put on the stock market);
  3. Buy a small house and don’t move;
  4. Don’t fall into consumerism. Take advantage of consumerism (when you buy things, you lose your money, when you buy stocks, you take advantage of the people who buy things);
  5. Save the biggest part of your income and invest frequently. But don’t forget to eat and dress well. You don’t have to look like a fucking hobo.
If you do that and you have a good income I don’t see how things couldn’t turn well for you. Avoid debts and big payments. It will strangle you and you’ll be unable to save enough money. If you can save 50% of your income each month, you can do a lot of mistakes in the stock market and your “adjusted” performance will be great anyway. And don’t tell anybody what you own. When you show your cash, people make comments, they’re jealous, they expect you to buy things for them. Money has to remain hidden, otherwise, there’s big expectations about your generosity. You don’t owe anything to anybody. You didn’t steal anybody to have this money. You ate fucking spaghettis while others were eating KFC, smoking cigarettes and fucking expensive whores from Russia.
Next year, I’ll be 40. It’s the precise year when things will change for me. I plan to change my relation to money from a perspective of security to a perspective of comfort. Obviously, I won’t change drastically, but I’ll face the other half of my life differently after many years of discipline.
You better sacrifice comfort when you’re young. Why? Because the opposite is crazy. Why spend everything when you’re under 40, then face a lot of stress, trying to save enough  money for your old days, after you’ve lived many years in a rich manner? You can’t change these habits easily.
I owe that philosophy to Stephen Jarislowsky. That’s how he concluded his book and that’s how I plan to live my life. For somebody else, the transition may be before 40. For many others, it would be after 40. But anyway, people should set a specific point of their life when they’ll rest like god on the seventh day and admire what they have created.

vendredi 20 avril 2018

Giga caps: for what kind of people?

You've always heard that it would be very hard for Apple and Intel to double given their actual size. So, you didn't invest your money there.

Was it a good idea? Was it a better idea to gamble on some nano caps? Let's take a look at the 18 biggest caps in the world (all over 225 billion dollars) and let's see what was their performance on the stock market over the last 5 years:
Alphabet: 95%
Apple: 125%
Amazon: 360%
Ali Express: 93%
Bank of America: 74%
Berkshire Hathaway: 62%
Chevron: 5%
Facebook: 176%
Intel: 106%
Johnson and Johnson: 31%
JP Morgan: 86%
Microsoft: 144%
Nestle: 3%
UnitedHealth: 191% 
Visa: 130%
Wells Fargo: 4%
Walmart: 15%
Exxon Mobil: -17%
Average performance: 94%
S&P 500 performance: 64% 
TSX/S&P performance: 28%
Some will say that Amazon did the difference for that group. Well, if we erase Amazon from the list, we have 17 stocks with an average return of 79%, which still beats the market. If you're a real motherfucker, you'll tell me to erase Apple, Microsoft and Unitedhealth, until the numbers will be OK for you to destroy my point.

Anyway, once again, Penetrator destroys stupid myths that made you unable to reach the homo sapiens level. But I'm not sure that you deserve that title. Because you don't think by yourself like you should do. We're still at the point where we believe what's repeated to us several times. That's why humanity is so slow to evolve.

I've came to the point of believing that I'm like that fucking monolith in 2001: A Space Odyssey. At my contact, you evolve and you're ready for another stage of evolution. And that's the less I can compare to.

dimanche 15 avril 2018

Sell in may and go away

You probably know that sentence: "Sell in may and go away". How do you feel about it? My father said to me a couple of times that he thought that it was true.

Once again, Penetrator is there to help humanity to see through myths and go one step further.

First of all, you'll admit that, as an investor or a businessman, only stupid people would sell everything they own in may, hoping to buy everything back a few months later for a lower price.

But things are not always that drastic. What about having some money left and waiting for the right moment to invest during the year? In that regard, waiting for a specific period where stocks are cheaper wouldn't be stupid. It would be wise.

So, here's how the S&P500/TSX composite performed from may 1st to september 1st (approximately because these days aren't always open days for the market). The numbers are from 2017 back to 2008:

2017: -2,5%
2016: 5,9%
2015: -12,1%
2014: 6,6%
2013: 2,7%
2012: -3,1%
2011: -8,9%
2010: -1,6%
2009: 12,6%
2008: -2,1%
Average return: -0,3%

It's not that bad. Well, it's not good either, but not bad enough to justify to sell everything. And probably not good enough to wait for that period to invest your money. That study reveals that, as some great investors said before, "Don't be a cunt. Don't try to do some market timing".

You now can have an opinion about "Sell in may and go away".

mercredi 11 avril 2018

A bunch of players

Today, at the radio, I've heard a very interesting survey lead by "Victoria Milan" (an infidelity dating site).

It's about the top 10 professions of people who cheat the most on their partners. Here's the list:

10- Other sectors;
9- Communications (journalists);
8- Lawyers and judges;
7- Nighlife industry (DJ's, dancers, waiters);
6- Musicians, models, actors;
5- Athletes and instructors;
4- CEO's and managers;
3- Healthcare (doctors and nurses);
2- Aviation;
1- Brokers, bankers and analysts.

I've always assumed that Leonardo Di Caprio, Jack Nicholson, Tiger Woods and most of the public figures fucked much more women than the people of our category. Isn't it amazing? I mean, if I was a woman, the only two people in finance I'd like to be get laid by would be Robin Speziale and Jason Del Vicario, ideally, together. But apart from them, I don't see any other guy.

What's your theory about that survey? Mine is that brokers and analysts are peddlers and women like peddlers. They like bullshit. They are crazy about bullshit. 

dimanche 8 avril 2018

"expensive" stocks

In times of great volatility like the last weeks, it's the time to deploy some money, if we have some left. Things could get worse, but I believe it's a good entry point to buy many stocks.

As I've said before, it's always very important to buy high-quality stocks. That's why one should take a look at "expensive" stocks first. By expensive, I don't talk about stocks with a PE of 50. I talk about stock that are expensive on an absolute way. Like stocks that are selling for 1000$.

If you're an intelligent investor, you probably think it's stupid to talk about the price of the stocks. I don't think so.

There's many many people who say that Google is expensive at 1000 USD. Or that Booking Holdings is expensive at 2000 USD. They prefer to buy Canopy Growth at 28$ (CAN)

These people are not real investors. They're gamblers. Or they're only ignorant and want to make investing as easy as possible.

I don't know which percentage of investors they represent. Perhaps 25% of individual investors? Perhaps more, perhaps less. But a fact remains, you shouldn't search the company of these people because they associate themselves with cheap stocks or hype stocks. And that association with a team of pee-wee is not what you should be looking for.

So, search for the best stocks that are selling for a price that should stop novice investors to look there. There's two great examples in that post.

dimanche 1 avril 2018

If I ever lose my faith in them

Some people seem to have lost faith in Couche-Tard and even MTY.

For these people, a stock should always go up, year after year. A stock that slows down is a stock on the edge of bankrupt or something similar. Don't ask me why. Ask those who think that way.

Something tells me that Alain Bouchard and Stanley Ma are preparing their grande finale. They're both in their late 60's and they've built a large (Bouchard) and medium-small (Ma) empire. They've done very well so far. They didn't fuck up in the last years. I'm sure they're both gonna do something huge in the next 3-5 years.

Like The Police in 1983, they probably want to leave at the top of the mountain, with a last great achievement. Oh yes, the history of rock and roll can learn you a lot of things about the stock market.

Instead of gambling on weed or on Bitcoin, why not betting on Couche-Tard? If you like high emotions, why not putting everything you have on Couche-Tard at about 14-15 times earnings? It's not such a good idea to gamble everything on one horse, but it's probably 100 times a better idea than putting cash on speculative shit that never achieved anything.

And don't forget that the market is not that cheap. Why not buying stocks run by excellent managers that go through a slower period? Because you need an instant performance? In that case, weed is for you. But instant performance usually goes in both directions (up and down).