5 years of Don't Fuck with Donville

I wrote my first post on that blog on june 22nd 2014. Exactly 5 years ago.

So, everybody, put your hands on the screen of your computer or your Phone and feel the power of 5 years of great writings.

You'd probably want to ask me: "How does it feel to be a star of the web?". Well, nothing has really changed in my life except for the fact that I can now have sex everywhere with almost anybody. That's how it's always been for superstars. So, everyday, I have a lot of sex with girls and boys and a lot of cocaine and orgies. Sometimes a bit of LSD to get inspiration for my posts. And too, some funny activities like dwarf throw. But essentially, I'm still the good old Penetrator you've met 5 years ago.

On the investing level, what has changed over the last 5 years?

Autonomy.

That's what I've got after all these years and that's my main advice to ALL OF YOU.

Seek that autonomy as soon as possible. Deny everybody. Deny me too. Never believe the opinion of others without verifying the facts. And even if the facts are there, deny the person who gave you the information. Never believe in somebody for too long. Find the best 5% of stocks available and stick with them.

Really, that's the best advice you could get from anybody. And almost no investors will tell you that because they want you to praise and worship them. But sadly, they're all full of shit and only want attention, because they want exposure.

With exposure, they'll meet a lot of investors and will get fucked by them because they're almost all gay.

Net assets for canadians

My last survey was a flop. Investors may be intelligent people, they can't understand a simple indication like "please, indicate the value of your portfolio". Instead, they fucking write long comments about something else. So, they're responsible for the failure of the survey and the impossibility for me to write something intelligent about the average value of the portfolios of readers of this blog.

So, let's seek information elsewhere.

Here's a link about the wealth of canadians on some french-canadian publication.

The first part of the article that caught my attention was the "savings superstars". In other words, that's the money that should be saved at different moments of life for an early retirement. In my humble opinion, these numbers are almost impossible to reach. They're in USD, which is even crazier.

25 years old: 79 000$
30 years old: 250 000$
35 years old: 429 000$
40 years old: 660 000$
45 years old: 914 000$
50 years old: 1 240 000$

OK, perhaps you've got there because you read this blog and you have no other goal in your life than owning as much money as you can. So, you only eat white bread with nothing on it and have no hobbies other than watching hardcore porn on Youporn. But you're an exception.

Another interesting part of the article: net assets per family.

They say that average net assets per canadian family would be 378 000$ (for families between 45 and 54 years old).

What the fuck? Does every fucking canadian own a house or what? I don't understand that number. A lot of people own nothing. There's even some rich people who own almost nothing because they're full of debts. Many people own a house, but their mortgage is at a crazy level. Around us, there's only people with debt.

My main justification is that about 33% of quebecers don't pay any taxes because they're too poor. How could net assets be 378 000$ per family at an age between 45 and 54?

Because everybody is rich in Toronto and Vancouver?

No shit. These fucking cities are full of crackhouses. Fuck you, Vancouver and Toronto and everybody living in those shitholes full of mofos. Fuck you too Montreal, by the way.

Size of your portfolio

Here’s a little survey that will be interesting for me if a lot of people participate and are honest. Don’t hesitate to use another name if you want to be anonymous. I just want honest answers, i don’t need to identify anybody.

So, what’s the size of your portfolio? I’m talking here about all your money invested in stocks or bonds.

A- 0 to 50 000$
B- 50 000 to 100 000$
C- 100 000 to 200 000$
D- 200 000 to 500 000$
E- 500 000 to 1 million $
F- more than 1 million $

To keep or to sell

I'm pretty tempted to sell a part of what I own and wait for a better moment to come back.

I'm pretty tempted, even if all the so-called intelligent investors would say that it's not a good idea. 

They'd probably serve me the usual sentences. I've read them all over the last 10 years:

1- You should always stay invested. Ideally, 100% invested;

2- You shouldn't try to time the market;

3- Never sell a good asset;

4- Sell only when a good asset looks way overvalued;

5- etc…

My favorite sentence is the fifth one. Yeah, "etc" was a lot of food for thoughts for me. So open to interpretation. 

Today, I noticed how much I've beaten the index so far in 2019. My 22% performance so far is way better than the very respectable 13% of the S&P/TSX. 

Any annual performance over 20% represents a great year. What could I wait for, for the rest of 2019? An additionnal 10%? I'm too realistic to aim for that. Better case scenario, in my opinion, I'd get another 5%. And the realistic scenario is that the market could easily drop by 10% in the coming months, because it always happens, every year.

It's always a question of  historical means. With a performance of 13%, the market has done better than it's historical annual mean which is a little less than 10% per year for the last 60 years. But not much more. However, there's still 6 months and a half to go in 2019. 

And every question about investment is always a matter of proportion. To like a specific stock is sometimes OK as long as it's not a big position. And to have only 1% of your portfolio with a super stock is not good either. Same for cash. 

I'll never have a portfolio of 50% cash. The PE of the market would have to be very very high for me to have that much cash on hand. Currently, I'm 10% cash. I think I could get to 15-20% and the moment. With a portfolio made of 80% stocks, you can still benefit from what happens on the market. 

That's it. The post is written and I still don't know what i'm gonna do. I'll surely buy nothing. But I don't know if I'll sell something. There's always some spontaneity even if I write big posts about reflexion. Which doesn't always guide my actions. 

How I approach growth

My approach to growth is simple.

First, I'm looking for predictable stocks via Value Line. If a stock has a weak predictability (under 75% for instance), I usually look elsewhere. There's a few exceptions to that rule, but I usually respect it.

Then, the projected growth. I usually use Yahoo Finance for that metric. 

I'm looking for stocks with an estimated growth of at least 10% per year for the next 5 years. Actually, I'm mostly inclined towards stocks with an estimated growth around 15% per year.

How come should we believe that estimated growth? By looking at the growth for the last 5 years. I know it's absolutely not scientific, but it shows us the trend. If the annual growth over the last 5 years has been 5% per year and the estimated annual growth for the next 5 years is around 15%, I usually don't believe it. It means that the stock will do three times better in the near future than what it did in the recent past. It's possible, but highly improbable. 

I prefer stocks with a past growth close to future growth. And if the predictability on Value Line is high, it's fairly probable that the estimated growth will happen. 

Of course, it's a quick explanation of how I work. There's some details missings, but it's close to my mental path. 

That's why I don't buy stocks like Amazon (very high growth but very low predictability) and why I buy stocks like Google (good growth and very high predictability). 

Transunion (TRU) and credibility

In september 2017, I wrote something about Equifax (EFX), saying it was almost the perfect kind of stock (services bought day after day by countless people and institutions). On paper, that's the perfect business: it doesn't have to reinvent itself and everybody needs it.

However, the hacking of Equifax happened earlier in 2017 and I felt that the reputation of the firm would be damaged for a couple of years at last.

Time passed and proved I was partially right. Because about 1 year and a half later, the shares of EFX went from 100$ to 120$. Not a bad performance, but not good either. 

Even tough the recent performance of Equifax has been so-so, it's still a great business that's going through a rough period. And what about something similar? What about Transunion?

Equifax and Transunion. It's like Visa and Mastercard: practically the same thing, with a different name. Let's compare both: 

Forward PE

Transunion: 21

Equifax: 20

ROE last 5 years

Transunion: 11

Equifax: 16

Annual EPS Growth last 5 years

Transunion: 27%

Equifax: 11%

Projected annual EPS Growth next 5 years

Transunion: 15%

Equifax: 3%

Debt level

Transunion: very high (about 20 times 2018's earnings, which is a lot)

Equifax: high

Transunion really looks great to me, but the debt is very high. Once in a while, I have no problems with a company that has a debt a little too high. But this time, it's too high.

Isn't it funny that a credit score company has a high or very high debt level? Doesn't it lack a bit of credibility? Isn't it like an healthcare company would have an obese guy as a CEO? 

Fuck, it happened with Valeant (Mike Pearson was probably 400 pounds with always a donut available in one of his pockets). 

That fucking stock market is such a fucking funny place.

LOLLLLLLLLL.