vendredi 20 avril 2018

Giga caps: for what kind of people?

You've always heard that it would be very hard for Apple and Intel to double given their actual size. So, you didn't invest your money there.

Was it a good idea? Was it a better idea to gamble on some nano caps? Let's take a look at the 18 biggest caps in the world (all over 225 billion dollars) and let's see what was their performance on the stock market over the last 5 years:
Alphabet: 95%
Apple: 125%
Amazon: 360%
Ali Express: 93%
Bank of America: 74%
Berkshire Hathaway: 62%
Chevron: 5%
Facebook: 176%
Intel: 106%
Johnson and Johnson: 31%
JP Morgan: 86%
Microsoft: 144%
Nestle: 3%
UnitedHealth: 191% 
Visa: 130%
Wells Fargo: 4%
Walmart: 15%
Exxon Mobil: -17%
Average performance: 94%
S&P 500 performance: 64% 
TSX/S&P performance: 28%
Some will say that Amazon did the difference for that group. Well, if we erase Amazon from the list, we have 17 stocks with an average return of 79%, which still beats the market. If you're a real motherfucker, you'll tell me to erase Apple, Microsoft and Unitedhealth, until the numbers will be OK for you to destroy my point.

Anyway, once again, Penetrator destroys stupid myths that made you unable to reach the homo sapiens level. But I'm not sure that you deserve that title. Because you don't think by yourself like you should do. We're still at the point where we believe what's repeated to us several times. That's why humanity is so slow to evolve.

I've came to the point of believing that I'm like that fucking monolith in 2001: A Space Odyssey. At my contact, you evolve and you're ready for another stage of evolution. And that's the less I can compare to.

dimanche 15 avril 2018

Sell in may and go away

You probably know that sentence: "Sell in may and go away". How do you feel about it? My father said to me a couple of times that he thought that it was true.

Once again, Penetrator is there to help humanity to see through myths and go one step further.

First of all, you'll admit that, as an investor or a businessman, only stupid people would sell everything they own in may, hoping to buy everything back a few months later for a lower price.

But things are not always that drastic. What about having some money left and waiting for the right moment to invest during the year? In that regard, waiting for a specific period where stocks are cheaper wouldn't be stupid. It would be wise.

So, here's how the S&P500/TSX composite performed from may 1st to september 1st (approximately because these days aren't always open days for the market). The numbers are from 2017 back to 2008:

2017: -2,5%
2016: 5,9%
2015: -12,1%
2014: 6,6%
2013: 2,7%
2012: -3,1%
2011: -8,9%
2010: -1,6%
2009: 12,6%
2008: -2,1%
Average return: -0,3%

It's not that bad. Well, it's not good either, but not bad enough to justify to sell everything. And probably not good enough to wait for that period to invest your money. That study reveals that, as some great investors said before, "Don't be a cunt. Don't try to do some market timing".

You now can have an opinion about "Sell in may and go away".

mercredi 11 avril 2018

A bunch of players

Today, at the radio, I've heard a very interesting survey lead by "Victoria Milan" (an infidelity dating site).

It's about the top 10 professions of people who cheat the most on their partners. Here's the list:

10- Other sectors;
9- Communications (journalists);
8- Lawyers and judges;
7- Nighlife industry (DJ's, dancers, waiters);
6- Musicians, models, actors;
5- Athletes and instructors;
4- CEO's and managers;
3- Healthcare (doctors and nurses);
2- Aviation;
1- Brokers, bankers and analysts.

I've always assumed that Leonardo Di Caprio, Jack Nicholson, Tiger Woods and most of the public figures fucked much more women than the people of our category. Isn't it amazing? I mean, if I was a woman, the only two people in finance I'd like to be get laid by would be Robin Speziale and Jason Del Vicario, ideally, together. But apart from them, I don't see any other guy.

What's your theory about that survey? Mine is that brokers and analysts are peddlers and women like peddlers. They like bullshit. They are crazy about bullshit. 

dimanche 8 avril 2018

"expensive" stocks

In times of great volatility like the last weeks, it's the time to deploy some money, if we have some left. Things could get worse, but I believe it's a good entry point to buy many stocks.

As I've said before, it's always very important to buy high-quality stocks. That's why one should take a look at "expensive" stocks first. By expensive, I don't talk about stocks with a PE of 50. I talk about stock that are expensive on an absolute way. Like stocks that are selling for 1000$.

If you're an intelligent investor, you probably think it's stupid to talk about the price of the stocks. I don't think so.

There's many many people who say that Google is expensive at 1000 USD. Or that Booking Holdings is expensive at 2000 USD. They prefer to buy Canopy Growth at 28$ (CAN)

These people are not real investors. They're gamblers. Or they're only ignorant and want to make investing as easy as possible.

I don't know which percentage of investors they represent. Perhaps 25% of individual investors? Perhaps more, perhaps less. But a fact remains, you shouldn't search the company of these people because they associate themselves with cheap stocks or hype stocks. And that association with a team of pee-wee is not what you should be looking for.

So, search for the best stocks that are selling for a price that should stop novice investors to look there. There's two great examples in that post.

dimanche 1 avril 2018

If I ever lose my faith in them

Some people seem to have lost faith in Couche-Tard and even MTY.

For these people, a stock should always go up, year after year. A stock that slows down is a stock on the edge of bankrupt or something similar. Don't ask me why. Ask those who think that way.

Something tells me that Alain Bouchard and Stanley Ma are preparing their grande finale. They're both in their late 60's and they've built a large (Bouchard) and medium-small (Ma) empire. They've done very well so far. They didn't fuck up in the last years. I'm sure they're both gonna do something huge in the next 3-5 years.

Like The Police in 1983, they probably want to leave at the top of the mountain, with a last great achievement. Oh yes, the history of rock and roll can learn you a lot of things about the stock market.

Instead of gambling on weed or on Bitcoin, why not betting on Couche-Tard? If you like high emotions, why not putting everything you have on Couche-Tard at about 14-15 times earnings? It's not such a good idea to gamble everything on one horse, but it's probably 100 times a better idea than putting cash on speculative shit that never achieved anything.

And don't forget that the market is not that cheap. Why not buying stocks run by excellent managers that go through a slower period? Because you need an instant performance? In that case, weed is for you. But instant performance usually goes in both directions (up and down).

vendredi 30 mars 2018

Penetrator's portfolio performance (1st quarter of 2018)

You may always shine if you chose the right index to compare to. Some funds compare their performance to the index they want, playing with numbers like fucking crooks. And we believe them because we don't know how these indexes work. Or we're too lazy.
 
I think we should always compare ourselves to the general market because that's general performance. That's the real market.

My portfolio is made of about 60% US stocks and about 40% CAN stocks.  There's some large caps, many medium caps and some small cap. Should I compare myself to 75% of the S&P500 and 25% to some fucking small cap index? That wouldn't be honest. So I compare myself to the TSX/S&P500 composite index (a mix of Toronto and Wall Street).

So, here's how it looks for the 3 first months of the year:

Penetrator's portfolio performance (PPP): -1,6%
TSX/S&P 500 performance: -5,1%
Penetrator's portfolio domination (PPD): 3,5%

Although it's been a negative performance, I think I did well given the fact that I beat the market and that 2 of my 3 first positions didn't do that well (My top 3 is: Ross Stores, MTY Food Group and Alimentation Couche-Tard).

Looking forward, I think my portfolio is very well balanced (Average forward PE: 16, average ROE: 27 and average beta: 0,8). There's been a lot of movement in my portfolio since the beginning of the year and now, it's mostly composed of very predictable stocks with a good ROE, a forward PE similar or lower than the market and a better growth than the market.

How's it been for you?



mardi 27 mars 2018

5 entrepreneurs to discover

So far, I've read 5 books about entrepreneurs. 

Howard Hughes (Howard Hughes corp);
Steve Jobs (Apple);
Alain Bouchard (Couche-Tard);
Phil Knight (Nike);
Warren Buffett (Berkshire Hathaway).

In my opinion, the most exuberant and fascinating entrepreneur in America and perhaps the world has been Howard Hughes. Many years ago (probably 15 years ago), I read a book about Hughes written by Noah Dietrich (his personal assistant). That was a great book. Hughes directed movies, tried to be an aviator, tried to build a car that worked with steam and many, many, many other things, such as fucking the most beautiful girls in Hollywood. He was a kind of Elon Musk, but much more fascinating.

I really like Steve Jobs too, although he was hard on people. He had opinions. He tried LSD. He stank in his 20's. He went to India. He walked barefoot and drank carrot juice. He loved the Beatles and Bob Dylan and went out with Joan Baez just because she was with Bob Dylan before. He was a character and he had a lot of drive. He knew how to convince people. I think I would have had fun with him.

Phil Knight is a little bit like Jobs because he was curious and he travelled a lot. He was fascinated by Japan. He took big risks with his business, but he put a lot of efforts in it and it eventually paid off. He was interesting but probably not fascinating like the first two names.

Alain Bouchard worked pretty hard to build Couche-Tard. However, his biography doesn't portray a fascinating guy. Just a guy who worked on very small details, earned his money cent by cent, bubble gum by bubble gum. You can't read his book and say he doesn't deserve what he has now.

By far, the most boring guy seems to be Buffett. The guy has always had only one major fixation: making money. He showed little interest for many things including culture and travel. While he seems more friendly than the others, he also seems the most boring. That guy looks like he never did any crazy thing. I have a lot of respect for his financial skills but that's all.

I don't recommend books about these guys to make of you a better investor. I only recommend them to you to discover interesting characters that made their way through life ending them with many billions of dollars... while you'll probably end up yours with only a few hundred thousands of dollars. Or one or two millions, if you're lucky.