Q: Hello Peter,
I am undecided over how to handle my Constellation software holding. I have done well with it and it is 15% of my portfolio. I am vacillating between trimming some and letting it ride until there is a threat from a black swan event. You must have encountered such situations before and your opinion and reasoning may help me take a decision.
Regards
Rajiv
I am undecided over how to handle my Constellation software holding. I have done well with it and it is 15% of my portfolio. I am vacillating between trimming some and letting it ride until there is a threat from a black swan event. You must have encountered such situations before and your opinion and reasoning may help me take a decision.
Regards
Rajiv
5i Research Answer:
By definition, it is hard to time a Black Swan event. CSU continues to do its thing and outperform. It is very close to its all-time highs, and has barely noticed the tech correction this year. We remain very comfortable with it overall. But things could happen: it could screw up a large acquisition. Key management could leave. Inflation/stagflation could impact sentiment. We cannot comment on personal position sizes. That being said, we would say that if WE owned it (we do not own Canadian stocks under 5i guidelines) we would be very comfortable with it as our biggest position. Typically, we start to trim at 10% just so we can sleep better at night. Note we have broken this rule a few times in the past, though.