My portfolio for 2021

It's been another fucked up year. When we thought it was about to stop and we were invincible because of our vaccines, there's a new variant that goes through every protection, just like a fucking X-RAY that goes through concrete. I tell you, lock the doors and put towels at the bottom of every door and window. No oxygen will enter and you may suffocate, but at least, you won't get COVID. In other words, chose the way you want to die.

So, as I lay on the couch with my body full of COVID, I will do like my beautiful friend Jason Del Vicario did on Twitter: I will disclaim my full portfolio as of december 31th 2021. So, all of you, insecure investors, feel free to copy everything if you doubt about every stock you own. 

Penetrator's portfolio on december 31st 2021:

Constellation Software: 12,1%

Alphabet (Google): 11,6%

Meta (Facebook): 10,6%

Microsoft: 8,3%

Mastercard: 7,2%

Keysight Technologies: 6,9%

Amazon: 5,8%

Epam Systems: 5,4%

Copart: 5,1%

Adobe: 5%

Paypal: 4,3%

Five Below: 3,7%

Visa: 3,2%

Lithia Motors: 2,6%

Edwards Lifesciences: 2,2%

InMode: 1,8%

Pinterest: 1,6%

AliBaba: 1,6%

Cash: 1,1%

Here' a little flashback. On may 31st, I wrote:

"Penetrator Portfolio Performance YTD: 6%

S&P Performance YTD:  14%

It's almost certain that my portfolio will be beaten by the S&P this year. I don't plan on changing my strategy to help my portfolio. I just accept, halfway through the year, that an index fund would beat me for the whole year. 

Yep, beaten by something without a brain".

It looks like the market is like a baseball game. All can change with a late home run or some other crap. Because even if I was way behind the market halfway through the year, god knows how I managed to come back. For the whole year, the S&P did 25,8% (24,6% + 1,2% dividend) while my portfolio did 26,5%. It's a tiny 0,7% plus value, but I managed to come back from far far away.  

I just don't know what happened. But I accept the worship that anybody would give me. I probably deserve it.

Happy new year!

I caught COVID!

I just come back from Nova Scotia. It was nice but very quiet. The streets were empty, the shops were almost empty, the hotels were deserted...

And I managed to catch COVID there anyway. Isn't it funny? 

I don't know exactly where I got it but I strongly suspect a restaurant where I ate. Because, the day after my dinner, I got a call from the same restaurant telling me that my reservation for the evening was cancelled because of COVID in the restaurant (I made a reservation two following days at the same restaurant).

So, I probably caught COVID in a quiet province, in a deserted city, in a deserted restaurant with two shots of moderna in my body. 

I'm not an exception. All around me, tons of people get the omicron variant now. I guess that most of you will get it too in the coming weeks. 

What will it be in Brasil, India, Germany, United States with more more population density than in Canada?

So far, it's OK for me. I got a big headache the first day and I was really tired. Since then, I'm much better but I've lost taste and smell. However, I tried to bite an onion today and surprise, it was very strong in my mouth. I had to spit the onion. It was a disappointment because I thought that, for once in my life, I could have eat an onion just like it was an apple. 

I think that we'll have to think about that for 2022: Almost everybody will get COVID. Probably a mild version of it. But a version anyway. Will it be mild for almost everybody and we'll finally get a kind of global immunization? Or will it be hard on every country? I don't know. 

 The world is so unpredictable. 

 

Your picks for 2022

Dear droogies, it may be my last post of 2021 due to holidays (which I will spend outside of my province). 

So, I believe it may be the perfect moment to ask you what are, in your opinion, the 5 best stocks to own in 2021.  

That kind of post usually brings a few new good ideas. So, I hope there will be a lot of comments. 

Here's my top 5:

Constellation Software (CSU.TO)

Alphabet / Google (GOOG)

Meta Platforms / Facebook (FB)

Microsoft (MSFT)

EPAM systems (EPAM)

High-flyers becoming low-flyers

You're a fan of super exciting stocks? You thought that stocks that went up 50% for the first part of the year would never come down?

You didn't see inflation coming, you didn't think that COVID would never stop and you thought that a PE of 100 would be sustainable forever? I can't blame you, everybody does that kind of mistakes. Everybody buys stocks with a PE of 100. 

Here's the performance of a few high-flyer stocks over the last 3 months: 

Sea Limited: -37%

Mercadolibre: -37%

Block (formerly Square): -35%

Paypal: -33%

Wix: -32%

Upwork: -32%

Roku: -27%

The problem with these stocks is that their valuation either didn't make sense or it was very high. When conditions are less exciting (inflation, higher rates, slow economy, etc), these stocks are usually hurt the most.

You've had it in the ass. I just hope that you were intelligent enough to own only small positions of these stocks. Otherwise, you've had it very deep in the ass. 

Internal knowledge

Almost any time I talk with someone about the stock market in real life, I'm disappointed about their approach. 

For instance, last week, a colleague told me that almost all his money (retirement money and everything else) was invested in different mining stocks. He also told me that, since inception, he had an annual performance of 5%.

First of all, it means that this guy doesn't read about stock market. Any serious investor has read multiple times that natural resources are not a good way to make money.

Second, if he had read about the stock market, he wouldn't be satisfied with a 5% annual performance. What's the use of investing when you're beaten by the S&P (8-10% every year). 

Third, what about diversification? How could it be a good idea to put all your money in only one sector? And one of the worst sectors possible.

How can you become a good investor if you don't read about investing and thus, learn how to avoid things that make you lose your time and money? It's a big mistake to think that your internal knowledge is sufficient to succed. There's a vast amount of wisdom that's available on the Internet. All your have to do is to triangulate the information by trying to validate and invalidate certains conceptions. 

How can you become a good astronaut if you don't read about space? 

How can you become a good doctor when you can't tell a kidney from a lung? 

How can you become good at anything if you don't put a lot of time and effort in it? It's true for basketball players, musicians, carpenters, lawyers and investors. And for anybody else. 

Semler Scientific (SMLR)

A guy commented my latest post, giving me the advice to take a look at Semler Scientific (SMLR).

Semler Scientific, Inc. is a company that provides technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. Semler Scientific's mission is to develop, manufacture and market innovative products that assist its customers in evaluating and treating chronic diseases (that's from their website).

I took a quick look at the business and numbers were amazing!

2022 PE: 34 (it's expensive, but plenty of stocks are more expensive than that without the following numbers)

Profit margin: 39% (very rare to see such profit margin)

ROE: 64 (very high ROE)

Debt level: Very low

Revenues: Almost multiplied by 6 between 2016 and 2020 (exceptional)

Free cash flows: growing every year over the last 5 years (very rare)

EPS were negative until 2018, but since then, the company has been very profitable.

Now, let's do a collective work: Help me to find negative points about that stock. First, the track record of profitability is short. But apart from that, what can you see?

Who are you?

 I'd like to know more about you.

Please, use the comment section to write:

1- Where you're from;

2- Your sex;

3- Your age;

4- How long you have been reading my blog;

5- Anything else you want to write. 

Thank you!

Ali Baba and other popular chinese stocks (part II)

Two months ago, I wrote a post about chinese stocks, saying that they were risky and that I thought that we should add 20 to the PE before investing in any of these. For instance, if the PE is 15, I'd add 20, making it a company with a PE of 35. If it's still interesting at that price, I may invest in it... But just a little percentage of my portfolio. 

Recent events proved I was right, because many chinese stocks dropped like crazy in the recent days. Mostly because US regulators said that chinese stocks should be audited by american firms to be listed on the american markets. And China doesn't want that. So, there's a risk of delisting. 

Yeah, I was right, but not because I'm a rocket scientist. Just because I repeat what I've read numerous times and because I don't trust China at all about transparence and honesty. 

So, after the recent drop and as of december 5th 2021, we can buy Ali Express (BABA) for about 15 times next year's earnings. That's very cheap given the fact that this company had an average annual growth of 30% over the last 5 years. Of course, that's China and I'm not sure that we can trust the numbers of any company based in that country. But, to me, that's one of the safest names in China because it's a huge company and many superinvestors have invested in Ali Express. Also, it's a chinese company that we can see operate all around us. A chinese company operating only in mainland China would be tougher to understand. 

I wrote many times that superinvestors weren't that super. I still believe that. But I recently bought some shares, thinking that it could be interesting to put a little less than 2% of my portfolio in BABA. I would never put much more money than that on a chinese company. But I don't think that BABA will be delisted from the S&P500. 

That would have way too much impact on the american economy. I think China and USA will find a common ground. Both economies can't live without each other even if they hate each other. 

Portfolio review (december 1st 2021)

Penetrator portfolio:

Number of stocks : 18

Average Forward PE : 34

Average ROE : 35

Average Beta : 1,07

Dividend of the portfolio: 0.1% 

Top 5 positions: 48% of the portfolio

Performance YTD : 20,5%

S&P performance YTD: 13,4%

Not so long ago, I was sure that I wouldn't beat the S&P in 2021. It now looks that I will beat it without any problem. That shows how unpredictable the market is. And that also shows how the exchange rate may help you a bit if you own a lot of american stocks. 

I currently own only one canadian stock. I never held only one canadian stock before. And frankly, I don't think that I will buy another canadian stock soon. 

The false tragedy

Two weeks ago, after an appointment with the optometrist, I wrote with a broken heart that my daughter could become blind. That optometrist bitch told me that one of the optic nerves of my daughter had a bleeding and both optic nerves had something unusual. 

Back home, after a look on the Internet, I saw that these optic nerves couldn’t be operated and a damage could result in blindness. Then, I remembered the worried face of the optometrist and it made me worry that the worst case scenario could apply to my daughter.

I fell in the worst depression. I wanted to kill myself. Yeah. I know we’re not supposed to write or express that, because suicide is some kind of taboo. I never really wanted to die before, but I’ve realized that a very bad thing happening to one of my kids could make me want to hang myself. So, over the last two weeks, day after day, I said to myself that I would rather die than see my daughter become blind.

Yesterday, I had an appointment to the ophalmologist with my daughter. The doctor saw some things deserving a follow-up but nothing worrying. She didn’t see any bleeding. And she didn’t even see any bleeding on the pictures taken by the optometrist. False alarm. 

Then, I took a big breath. And I felt a bit stupid for wasting 2 weeks of my life, wanting to die, day after day. I could have made many joyful things and smile and dance. Fucking optometrist. 

I feel a bit bad for those people writing in the comment section, showing empathy. Well, let’s move on. Another problem will surely happen sooner or later, but for now, it’s OK.