lundi 10 avril 2023

CSU: a 28 baggers

It was march 2012. 

I bought 50 Constellation Software shares at about 88$ each (a little less than 4500$). Everything looked great for that company: excellent ROE, excellent growth, great dividend (more than 4% back then) and my hero, Jason Donville, was very enthusiastic about the stock.  

In december 2013, I owned 65 shares and the stock was selling for about 225$. It was already a 2.5 baggers after about a year and a half. 

During the following years, I sold some shares. Bought some. And CSU always was a significant position in my portfolio. 

Now, in april 2023, a little more than 11 years after my first buy, the stock is selling for 2584$. That's about 2500$ more than what I initially paid. And that's completely crazy. 

That's my only extraordinary investment. I've made some good ones, some very bad ones. But CSU stayed on my portfolio all this time and I can't see why I should sell it even if returns may not be as good in the future. It will take something very negative about the company for me to sell my shares after such a ride. 

Now, imagine if I had invested 10 000$ instead of 4500$ (which was a very low amount in hindsight). I'd now own more than 100 CSU shares. 

But no. I sold some to buy something else. Like Valeant or Concordia Healthcare. Because, in december 2015, I owned only 30 CSU shares. And Valeant represented 9.5% of my total portfolio. 


samedi 8 avril 2023

Buying a Toyota - Another great allegory from me

Sometimes, I have discussions about the stock market with Jason Del Vicario and Leo (formerly behind the website 

Sometimes, Vicario gets emotional (excited about a stock or disdainful about another stock) and I don't understand that because I've lost most of my emotions about these things (stocks). Of course, I don't understand why some people buy mining stocks or gas stocks. But I don't care about that. If they're my friends, I try to warn them about the risks related to these stocks but if they want to keep them and they're excited about owning some shitty stocks, that's their problem. I'll focus on my own problems and let them live with theirs. 

For instance, Vicario likes some specific gambling stock and probably thinks that I'm crazy for not buying it one or two years ago. I don't like that fucking industry full of crooks and money laundering. I've had my share of problems with Valeant which was in a "clean industry". I don't need to go where it stinks. 

Truth is, we never know when a stock is truly good or truly bad. All we know is that some industries are better than others. For instance, softwares are definitely better than natural resources (much better margins, much better ROE, much less impacted by the economy and they usually have a moat which isn't there for natural resources). 

The trick is to know that and fish in the right pond. Even then, we'll get bad fishes, but at least, risk is lower. It's like buying a Toyota instead of buying a Jeep. If you've done your due diligence, you'll know that you'll probably have many problems with a Jeep while you'll be able to keep your Toyota for 15 years without almost any problems. 

There's no fucking easy recipe or screaming buy. I repeat it and I'm more and more convinced about that as time passes. Buy I try to buy as many Toyotas as I can.