dimanche 12 janvier 2020

Donville Kent performance

Once in a while, it's interesting to look back to old influences, just to look if we've followed the right track or not. Just like when we take a look at that ex girlfriend on Facebook and we see that she's now very fat and spends her summer weekends on camping grounds with her retard-looking boyfriend and their three ugly kids. And under her profile pictures, she writes song lyrics. Holy shit, how could you ever have been interested by that kind of girl?

It's about the same when I look at Rifco, Cipher Pharma, Concordia, PHM, Pulse Seismic and many others, I realize how wise it was to stay away from these stocks... or to have been only shortly invested with some of them. They're my reference when I now firmly say that a penny stock or a few-bucks stock is almost always a bad investment.

And let's take a look at the portfolio of the guy who made me know about all these stocks.

Because the performance of Donville Kent is out for 2019 and here's how it looks (I've used that website to get a benchmark):

S&P/TSX: -11%
Donville Kent: 4%

S&P/TSX: 18%
Donville Kent: -2%

S&P/TSX: 6%
Donville Kent: 11%

S&P/TSX: -12%
Donville Kent: -5%

S&P/TSX: 19%
Donville Kent: 19%

How would I qualify this performance?

Everything is relative. If you're a beginner and you make a lot of mistakes, that performance may look good. If you have a few year of experience and you know many things about investment, the most positive comment you could say would be "So-so".

But if you take account of the fact that Donville Kent employs professionals that have been active in finance for many years and run an office in expensive Toronto, I would say that this performance is disappointing. I consider myself as a medium-good investor, but not an outstanding one. Nonetheless, for the last 5 years, I've beaten Donville Kent by a wide margin. In 2015, my portfolio had the same performance as Donville Kent, but after that, I've beaten them, year after year.

When we compete against people that sit in front of their computers in their underwear (like I do currently), we must stay humble. But when we manage to beat people with suits and ties that work in an office that costs 50 000$ a month to rent, it's a very strange feeling.

A kind of unease.

3 commentaires:

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    1. I would also like to add that I am still very grateful for the message that Mr. Donville has publicized about owning wealth creating / compounding / high ROE companies. In my own overconfident naivety, I have suffered catastrophic losses because of not doing all of the necessary leg-work and piling into the health care stocks during a mis-opportune time (~100% CXR loss, ~93% CPH loss, 57% BHC/VXR loss etc.), but reading his newsletters has also changed my perspective on investing and helped me discover P.B.'s blog, concept of Economic Value Added, Chuck Akre, Terry Smith, and read more about business model of great capital allocators like Constellation Software. I have read some online stuff from some people like Joshua Kennon from US and some stuff put out by endowment funds and asset managers like Mawer, QV Investors, Van Berkom, and KAR before, but Mr. Donville was the "gateway drug" who really sparked my interest and one who has helped me "click" many of the concepts in place (further re-"clicked" after reading Mr. Smith's reports in the past couple of years - particularly the non-dilution and reinvestment part of compounding and how BRK performance would have sucked if they paid out dividend or how counter-intuitive can be owning an expensive high ROIC stock over a long time even if its multiple will be compressed in the future). Picking where to start when learning about investment for a DIY investor can be paralyzingly overwhelming and Mr. Donville has helped to create a pretty marketing package with an intuitive story that seemed to work in the earlier years and that came with an interesting personal hard-work-to-success life story involving sailing, early days of opening of Asian markets, bad bosses when he was buying his first MTY shares etc. As someone who is educated in biological sciences and not economics or finance, these snippets of information have also inspired me to read more about accounting and money creation process and how the economic world around us works. I am very grateful for all of this and only wish that I would have discovered Jason Donville, Penetrator's blog, and all of the above information much earlier when I was still a kid. I have lived without parents since I was thirteen and I never learned any of these things from home. Learning this information would have helped me become a more informed DIY investor as well as probably help me make a better education/career/life choices growing up (picking a more in-demand field relevant for the future rather than what interested me as fresh-of-the-boat teenager). Learning about investing in compounders (Donville/Smith), basic economics (money creation and bank vs debtor asset/liability accounting relationship, international trade, more easily digestible libertarian/neoliberal economic-political perspectives of Hayek/Milton, economic history and public debt / Euro crisis counter-arguments by Blyth, etc.), and possibility of early retirement through cutting down (Lund-Fisker) have all had very big impact on my worldview and my understanding of my surrounding and future outlook. It might be silly, but I owe a big part of my maturing due to randomly coming across BNN when trying to google videos about a specific company on the internet and one day randomly seeing Mr. Donville, thinking "this guy finally makes some sense" instead of the technical chart charlatans, and then reading more about his perspectives on the DKAM website... but all of us have different experiences.