That's probably why I now hate to see some investors try to convince us about the greatness of their stocks. I now associate all that promotion to a very self-interested purpose. And I believe that most people acting like that are not interesting investors.
Here's a few things that I think everybody should know and apply: never invest too much money on a single position (the usual maximum is 10% of a portfolio), never take as a guarantee of quality the picks of superinvestors and, most of all, know what you're doing.
Today, I know that there isn't any fucking stock in the market that deserves adulation. Even Google and Constellation Software, which are two stocks that I love, may bring bad surprises, one day or another.
You never know. Capitalism and profits are a great excuse for many illegal things.
Here's what I wrote, about 5 years ago, on june 20th, 2015, about Valeant. I hate myself for writing that. If I would read something like that today about any stock, I would probably write a post about the author telling how much that guy is stupid.
Three of my favorite superinvestors (that achieve great returns year over year as said in a recent post on this blog) own big positions of their portfolio in Valeant;
- Robert Goldfarb (Sequoia Fund): 30%
- Bill Ackman: 26%
- Lou Simpson: 13%
With these guys beside me, I feel pretty safe. It's one of my advice to you: sometimes, it may be a good idea to select an investment in which you'll have great companions. These guys had excellent returns in the last few years and if they have so much money invested in Valeant, it's surely because they believe that it's one of the best companies to contribute to their returns.