Permanent stocks (july 2020)

I see some people always looking for the next big stock. Or people looking at some obscure names that aren't probably that solid but experience some good momentum.

These approaches seem to work well. Actually, a lot of people seem to do better with high-flyer stocks and obscure small caps than me with my not so original stocks.

I'm reluctant on selling a very solid and growing stock for a lesser known name that grows much more. Quality is as important as growth in my opinion and I'm probably wrong to think that way because the markets values much more growth than anything else.

Anyway, it's important to be comfortable with your approach, as good or as bad as it is. Actually, if you're comfortable with a bad approach, you're probably not very intelligent. But, as science tells us, intelligence is inversely proportional to happiness. So, you're probably an happy person.

A few years ago, I wrote a post about my "permanent stocks". Those were the stocks I expected to keep forever, or at least, for a very long time.. But things change. Pandemics happen out of nowhere and destroys business models. Managers do bad acquisition to keep on growing at any cost.

So, a permanent stock is, after all, not something that you should keep forever but something that, so far, did a great job. So, you're only as good as what you did until today. Make a very bad acquisition like Stericycle or, to a lesser extent, Dollar Tree and all the good job done until today vanishes. However, it's obvious that a company that did well over the last 10 years have much more chances to keep on doing well than a stock that did many mistakes. The trend is usually your friend. 

My permanent stocks are as following:

Constellation Software
Alimentation Couche-Tard
CGI Group
Google
Facebook
Ross Stores
Mastercard
Visa