Don Wharton @donwharton_ss Twitter profile

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Don Wharton

@donwharton_ss

6 months

Understanding Canada’s serial acquirers like $tvk Terravest Industries, $csu Constellation Software, $eif Exchange Income and $de.v Decisive Dividend. 1. Acquisition focused compounders like these are valued ‘NOT’ on what has already been bought, but what’s to come. 2.

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Don Wharton

@donwharton_ss

6 months

@iancassel @jasoncbuck This is powerful information. Over the last 100 years 86 stocks out of 26,000 studied, accounted for over 50% of the returns. Just wow. I’ll Pause, then re-read this.

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Don Wharton

@donwharton_ss

7 months

@GrowthyValue @MoS_Investing I don’t think a lot of people understand that this business model is hard to break and better than an index ETF. By far. Over 1000 streams of cash flow come in every month to buy new cash flows. Repeats Forever.

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Don Wharton

@donwharton_ss

6 months

@CNBC $fairfax_financial would be something Buffet completely gets, the float from insurance And already a proven compounder. Hmmm Also $suncor, Buffett has an appetite for this great company And invested I think 10 years ago.. and he is opportunistic when big energy goes on sale!

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Don Wharton

@donwharton_ss

7 months

Jessie Rittenhouse wrote something that I committed to memory about 35 years ago. It starts like this “I bargained with life for a penny…” Next time you see me on the street ask me to recite the whole poem. It’s a part of me.

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Don Wharton

@donwharton_ss

7 months

@Codie_Sanchez I completely agree. Learning from billionaires, and millionaires for that matter, provide lessons of what works and what doesn’t work and real-life experiences of failed tests that don’t need to be repeated … Self-help books provide inspiration to make these same mistakes :)

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Don Wharton

@donwharton_ss

6 months

@iancassel This is counterintuitive. And, I think it’s really bad advice. Because it’s the EXCEPTIONS that can become the 100 BAGGERS.

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Don Wharton

@donwharton_ss

6 months

Yikes — just horrible earnings from $de.v. 1. Now a lower price in an inexpensive serial acquirer. 2. Latent value is in the acquisition engine and new future cash streams/increased dividends 3. The dividend reduces risk in the interim. 4. Still adding shares. 5. Do your own

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Don Wharton

@donwharton_ss

6 months

@DvdndDiplomats Even though so many great companies don’t like paying dividends they still do, why? 1. dividends are tangible, they are a telling indicator that the numbers add up, that they make sense that accounting funnyness is absent. 2. And for the operators there’s the requirement to

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Don Wharton

@donwharton_ss

7 months

@cap_zay Canadian serial acquirers would fit with pencil a 15% and greater compounding return. The most well known are Constellation software, Topicus and Lumine Group. Lesser known are Terravest Industries, Exchange Income and Decisive dividend. There are several more that are

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Don Wharton

@donwharton_ss

6 months

I wrote this article about $de.v 6 days ago, Before yesterday’s disappointing quarterly report. Has anything changed? Well, yes. The stock is a whole lot cheaper. But for good reason, as short-term risks are up. The most important thing of all is that

Wondering What’s up with Decisive Dividend? You should read this.

I’m Investing heavily in my best ideas.

medium.com

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Don Wharton

@donwharton_ss

5 months

@BrianFeroldi This is such dangerous advice as your odds of choosing the biggest winners of tomorrow, without the benefit of hindsight, are closer to zero than you might think. In contrast, if today you choose to invest in companies that optimize for profits and have predictable returns on

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Don Wharton

@donwharton_ss

6 months

@rationalwalk There’s gold in the data. In this age of A.I. we should be able to narrow down what to look for.

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Don Wharton

@donwharton_ss

7 months

@ValueInvestorAc Thank you, I’ll take this post as a reminder to finish “The man who solved the market— how Jim Simmons launched the quant revolution” by Gregory Zuckerman

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Don Wharton

@donwharton_ss

6 months

@MasteryQuot Old jobs get replaced with new technology… Increasing the productivity of a nation, but leaving the untrained, and those Unwilling to adapt— as carcasses along its path.

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Don Wharton

@donwharton_ss

5 months

I never thought I could be so lucky, wow $de.v has pulled back to around 7 bucks. 1. I continue to add shares here— this is a high conviction forever-hold. 2. Not investment advice, do your own due diligence. 3. It takes time, resilience and patience to build a sizable

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Don Wharton

@donwharton_ss

6 months

@SeekingWinners_ @R21White Oh wow, hot off the presses, 65 million just raised.

2024-05-08 | TerraVest Industries Inc. Announces $65 Million Bought Deal Offering of Common Shares...

(2024-05-08 | TSX:TVK) TerraVest Industries Inc. Announces $65 Million Bought Deal Offering of Common Shares

stockhouse.com

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Don Wharton

@donwharton_ss

6 months

Consider serial acquirers like #DecisiveDivCorp The more successful they become —- the more capital they can raise from new investors, banks and institutions —-the more acquisitions they can make —-the more successful they become —-REPEAT Assuming operational discipline - Agree?

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Don Wharton

@donwharton_ss

6 months

@SpencerHakimian @unusual_whales This is super interesting. At a certain size the law of largeness takes over.

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Don Wharton

@donwharton_ss

6 months

Imperfection is part of the process, the journey and the learning. The key is in the learning— There’s no need to make the same mistake twice.

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Don Wharton

@donwharton_ss

7 months

Success in any biz means you are striving for outsized #BusinessGrowth . And, the right investors can make all the difference. Long term investors whose goals are aligned with your own and who stick with you through thick and thin, are always best. Surround yourself with

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Don Wharton

@donwharton_ss

7 months

@IrrationalMrkts Little research means low conviction

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Don Wharton

@donwharton_ss

6 months

@IrrationalMrkts Let a week or even an entire quarter go by — without logging into my brokerage account.

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Don Wharton

@donwharton_ss

6 months

@LeilaHormozi And buy stocks of boring businesses. Some of the best compounders are serial acquirers that buy boring companies.

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Don Wharton

@donwharton_ss

7 months

@Codie_Sanchez Absolutely. Every failure teaches us what not to repeat… increasing our odds of success the next time.

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Don Wharton

@donwharton_ss

6 months

9 - What do you think of serial acquirers? 10 - Buy new businesses. Aggregate cash flows. Repeat forever.

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Don Wharton

@donwharton_ss

7 months

While searching for emerging acquisition focused #compounders to invest in— I came to the realization that listening to what these #founders and #executives have to say… is of marginal value. Because they all say WHAT I WANT TO HEAR. So how do I decide? 1. By looking at

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Don Wharton

@donwharton_ss

6 months

@IrrationalMrkts Thank you for the question. As an example, Gurufocus has been wonderful for finding acquisition-focused compounders in Canada. Here’s a ‘mock portfolio’ of 10 proven serial acquirers researched and tracked on GF…

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Don Wharton

@donwharton_ss

7 months

@dividendology This is better than doubling a penny every day for a month, And we know how big that gets!

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Don Wharton

@donwharton_ss

7 months

@chitchatstocks I like Terravest Industries and Decisive Dividend, both are proven industrial serial acquirers with a perpetual runway and they have a similar CAGR to Constellation software over the last 10 years. Both under the radar I would say…

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Don Wharton

@donwharton_ss

6 months

@SJosephBurns New 52 week highs.

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Don Wharton

@donwharton_ss

6 months

@AlexLathery I so agree with you, there are actually people putting out articles written or commissioned by themselves, saying they are the next #Warren_Buffett or ie Canada’s, Sweden’s, Australia’s Oracle of Omaha, crazy heh? — And so anti-Warren Buffett’ish…

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Don Wharton

@donwharton_ss

7 months

@FluentInFinance Lost time is never to be found again— Benjamin Franklin

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Don Wharton

@donwharton_ss

6 months

@RodneyForrest00 Completely agree. Fortunes will be made with ‘Conviction’ not diversification.

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Don Wharton

@donwharton_ss

6 months

@InvestInAssets Berkshire Hathaway and Constellation software are a very specific type of compounder. Their success is in buying profitable cash flowing businesses. They are repeat acquirers masterfully allocating profits into new cash flow machines.

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Don Wharton

@donwharton_ss

6 months

Opportunities don’t come in boring drops of 1% or 2% each day… When the market opens the window, the VIX tells you when, the weak hands holding great #compounders — rush for the exit. That’s when you rush in. Your favourite #stocks will drop 10%, 20% or more in a day.

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Don Wharton

@donwharton_ss

7 months

Think of Mr. market as an emotional human. Right? Just buy solid businesses and sit tight.

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Don Wharton

@donwharton_ss

7 months

@Stock_Opine Yes the best serial acquirers focus on acquisitions with minimal capital requirements too… as they yield higher and more predictable returns. This is why vertical market #SaaS companies are always in high demand! Really Software as a service in general is capital light,

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Don Wharton

@donwharton_ss

6 months

@compoundersEX @IrrationalMrkts Well, many startup SaaS leaders in the 2021 Circa November era… touted the rule of 40 in order to focus on revenue growth above ALL else. In fact, if revenues grew at 70%, they could run profit margins at -30%. I know absurd. This is what low interest rates for an extended

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Don Wharton

@donwharton_ss

7 months

I love researching serial acquirers and future compounders to personally invest in. But, my day job is buying great SAAS companies from passionate hard-working founders who share our virtues. A significant payout and rolling equity is possible…

Selling Your Business: What Acquirers are Looking For

By: Don Wharton For many business owners, the thought of selling the culmination of years of dedication and…

canadiansme.ca

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Don Wharton

@donwharton_ss

7 months

@mastersinvest I learned some hard lessons in the boom of 1999 to 2000… Just finishing my Econ degree and taking advantage of 3.3 X margin. My 75K became 750K in just 3 months. That Feb the market pulled back and I maxed as had always worked. My 750 K became -50 K Lesson learned.

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Don Wharton

@donwharton_ss

6 months

@kurtisjlin Great perspective. Similarly an entrepreneur that starts a company during a bull market tends to attribute success to their own contributions— so discounting the influence of external factors, this leads to repeated behaviours during down markets and expectations of similar

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Don Wharton

@donwharton_ss

6 months

Recency bias can distort decision-making by causing individuals to overlook historical data or longer-term trends in favor of more recent events. How have you ‘recently’ been guilty of caving to this bias?

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Don Wharton

@donwharton_ss

6 months

@SeekingWinners_ Dillution inappropriately distracts, look at per share profit growth

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Don Wharton

@donwharton_ss

6 months

@iancassel Yes, this is really good, stocks sometimes get ahead of themselves and have to consolidate. It doesn’t mean it’s prospects are receding — Maybe just sorting out who it wants to give huge future gains to… the short term traders or long-term keepers :)

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Don Wharton

@donwharton_ss

6 months

@TraderDivergent Don’t worry about when to sell. Hold on. Put it in the coffee can. Start researching again and figure out what to buy next instead.

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Don Wharton

@donwharton_ss

6 months

@SeekingWinners_ @R21White So did they use equity for an acquisition? To entice the founder to sell to $tvk perhaps, instead of to another company? This can be a good thing, especially if as you say the shares are richly valued— meaning fewer $tvk shares than would otherwise have been needed…

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Don Wharton

@donwharton_ss

6 months

@PaulAndreola Also, a very interesting question would be: What profitable Canadian smallcap do you have such a high conviction level in, that you would allocate at least 25% of your portfolio?

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Don Wharton

@donwharton_ss

7 months

@SteadyCompound Yes really good advice! I would just suggest that if you are after steady compounders, then after you decide to buy it’s better to wait 24 ‘years’ but eh …. that’s just me :)

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Don Wharton

@donwharton_ss

6 months

@atelicinvest @RTelford_invest @TrentBlair19 But maybe rational and emotionless decisions can be exciting no? :)

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Don Wharton

@donwharton_ss

7 months

@SecretCFO A lot of fledgling serial acquirers, business aggregators and roll-ups are indeed learning this.

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Don Wharton

@donwharton_ss

7 months

I love this quote from Warren Buffet: "The most important thing to do if you find yourself in a hole is to stop digging." Stop doing what you know doesn’t work. Like #DayTrading , trying to catch a falling knife… It’s common sense to stop digging but there’s those cursed human

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Don Wharton

@donwharton_ss

7 months

@dirtcheapstocks Yes, I’d like to repeat that. For certain IMO— the best stocks don’t come from a screen.

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Don Wharton

@donwharton_ss

6 months

@caleb_investTML @IrrationalMrkts So true, the smarter people are, the more they think they can out-smart the crowd. But when the crowd gets antsy— geniuses get trampled too!

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Don Wharton

@donwharton_ss

6 months

@Yankeedoodled11 @DevotedDividend Exchange Income, Decisive Dividend and Enghouse are great Canadian aggregators with growing dividends. $eif $de $engh Another example that’s under the radar is Internet services Corp. $isv With a lower yield and payout ratio, there is constellation software $csu and terravest

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Don Wharton

@donwharton_ss

7 months

@LionCubsFund 1. Parklawn 2. Storage vault 3. Converge technologies 4. Well health 5. Dental group 6. Dye and Durham To me, the most interesting of these are the first three Canada has lots of interesting serial acquirers. The CEOs have been learning hard lessons on ‘debt’ lately ….

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Don Wharton

@donwharton_ss

6 months

@FoundersPodcast Fabulous advice

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Don Wharton

@donwharton_ss

7 months

Terravest announced a new acquisition today. Full steam ahead on this great serial acquirer with Total returns over 10 years (CAGR) even rivaling Constellation Software.

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Don Wharton

@donwharton_ss

7 months

You’ll be a better investor if you: Follow those who do the right things… paying little attention to whatever people say.

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Don Wharton

@donwharton_ss

7 months

@Bonhoeffer_KDS The inability to continue making new acquisitions is neg 1. High Debt/bank covenants 2. The inability to raise new capital for any of a number of reasons. 3. A depressed valuation makes new capital raises too dilutive to early shareholders 4. Dreaded holding company discount

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Don Wharton

@donwharton_ss

7 months

@TheAlphaThought @DividendGrowth Exactly.

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Don Wharton

@donwharton_ss

5 months

@sidecarcap I wholeheartedly agree. Especially for proven compounders, businesses where the product isn’t a product at all, but the austere allocation of capital.

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Don Wharton

@donwharton_ss

6 months

@vanessaosheaa If you bargain with life for a penny, life will pay no more… Why not ask for 1 billion or health & happiness for 110 years, or to discover a cure for cancer? Set a goal & plan the path to achieve it, why ask life for just a penny, a pittance— that ignores a life’s potential?

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Don Wharton

@donwharton_ss

6 months

3 - Compounders like $csu, $toi, $lmn, $tvk may go up and down with market sentiment, but as they go down, they become SCREAMING buys! I love this market.

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Don Wharton

@donwharton_ss

4 months

@rusholmecapital It takes two sides to make a market— I bought your $de.v shares :)

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Don Wharton

@donwharton_ss

6 months

@IrrationalMrkts @chriswmayer Chris Mayer for me and Chuck Akre, Nasim Taleb too

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Don Wharton

@donwharton_ss

6 months

My investment rules 1. NEVER invest in a business that ‘needs’ your money. 2. And be wary of the words ‘burn’ or any reference to series A, series B etc. in a pitch deck. Many #founders ignore the dillution factor. As #investors we should know better. Clearly, I’m an

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Don Wharton

@donwharton_ss

7 months

@LionCubsFund Great acquisition announced by Terravest today. Did anybody catch the multiple paid, revenues, or any other details?

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Don Wharton

@donwharton_ss

7 months

Are you new to #Investing in #stocks ? 1. Buy great businesses, compounders. 2. Hold them for the long term. 3. Dismiss the noise. Trite sayings that are easy to remember and broadly spewed, are costly -REALLY costly- Don’t fall for it.

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Don Wharton

@donwharton_ss

7 months

@Bonhoeffer_KDS For a serial acquirer to continue growing shareholder value the pace of new acquisitions should gently accelerate overtime. Ever-increasing margin improvements at the business level and accelerating rate (not just$) of free cash flow generation— leads to mult expansion & happy SH

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Don Wharton

@donwharton_ss

7 months

If I recall correctly, Constellation Software has only ever pulled back about 30% from highs, in even the worst market environments. Apple has had painful drawdowns of 75’ish %. Nassim Taleb might call this useless info, But it makes me like $CSU and companies like it, More :)

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Don Wharton

@donwharton_ss

6 months

@FromValue This may be the most valuable advice most people will ever read. And yet they’ll skip over it— completely missing its PROFOUNDNESS. Don’t sell your winners.

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Don Wharton

@donwharton_ss

5 months

@appalachiangabe @patientinvestt Every once in a while— an opportunity presents!

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Don Wharton

@donwharton_ss

6 months

@uboat159 @MarketPalmer_ @GHadjia @Matthew_Garasic @rich_toad @BrianFeroldi @ValueIn84502221 @IrrationalMrkts @pommelhorse9 @BornInvestor @iancassel @StockMKTNewz @MicroCapClub @TheMattCochrane @PaulAndreola Great list!

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Don Wharton

@donwharton_ss

7 months

@SixSigmaCapital Absolutely true, fight all biases to do the opposite!

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Don Wharton

@donwharton_ss

7 months

@TheAlphaThought We work for our money, or our money works for us. I too choose the latter!

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Don Wharton

@donwharton_ss

7 months

@IrrationalMrkts Excellent, something we all only learn through experience. And, usually pay for dearly!

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Don Wharton

@donwharton_ss

7 months

@This_is_Kaan @NavalismHQ @naval Oh I like this.

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Don Wharton

@donwharton_ss

7 months

@LSequityguy @patientinvestt Periods of mass disagreement are actually ‘opportunities’ for acquiring compounders like ULTA. I’m a buyer, just a little to start…

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Don Wharton

@donwharton_ss

6 months

@SixSigmaCapital We still need a VIX spike, preferably.

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Don Wharton

@donwharton_ss

5 months

@Frances51954497 @SeekingWinners_ @acquirers_club Great acquisition focused compounders are often generously valued in the short term but hugely under-valued in the long-term. This likely applies to Chapters too…

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Don Wharton

@donwharton_ss

6 months

@stoicvalue_ @InvestorJared Exactly.

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Don Wharton

@donwharton_ss

6 months

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Don Wharton

@donwharton_ss

7 months

@acquirers_club Yes 100%. I prefer programmatic serial acquirers buying 5+ biz per year but, I have some slower paced ones as well. Business aggregators aka serial acquirers is a trust based business model that is all about capital allocation. The plan IMO is finding the best and holding on!

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Don Wharton

@donwharton_ss

6 months

@RaiTrades It’s Tesla that’s gonna need the biggest policy! Different kind of insurance…

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Don Wharton

@donwharton_ss

6 months

@jayvas This is insightful, the concern is not lost on me. Is the same graph available for the #UnitedStates ?

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Don Wharton

@donwharton_ss

6 months

@capitalemployed Most people yawn at dividend payers, but #Decisive_dividend is a sub-200M market cap manufacturing #rollup . The banks love them and they have 107 million of dry powder, always hunting for new accretive acquisitions. Stock price has grown over 30% CAGR over the last 10 years.

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Don Wharton

@donwharton_ss

6 months

1 - Was your portfolio up today? Buy compounders, then it doesn’t matter.

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Don Wharton

@donwharton_ss

7 months

Deep dive into this compounder. 100 bagger compounder potential. Soon I’ll share my portfolio of 7 companies similar to this, with Cumulative annual growth rates CAGR of 25% to 35% over five and 10 year periods.

Decisive Dividend Corporation— A business model with Perpetual Repeatability

This deeper dive goes into what’s included in the box, so to speak— But, it’s the future acquisitions and proven systems to continuously acquire, that will unleash the real value of this compounder.

donwharton.substack.com

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Don Wharton

@donwharton_ss

7 months

AccordIng to #Warren_Buffett , most investors cannot do any better than holding a low cost market index #ETF . What about the rest of us?

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Don Wharton

@donwharton_ss

6 months

8 - So pick the good ones with five or 10 years of accretive acquisions on record— and hold on!

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Don Wharton

@donwharton_ss

6 months

Nice move back up for @DecisiveDivCorp Decisive Dividend. My thoughts to close the week-

Wondering What’s up with Decisive Dividend? You should read this.

I’m Investing heavily in my best ideas.

medium.com

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Don Wharton

@donwharton_ss

6 months

2 - I’m 100% long and 100% into ‘busy’ compounders - #serial_acquirers .

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Don Wharton

@donwharton_ss

5 months

@T_Gatzemeier Part of your stock into cash? No.

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Don Wharton

@donwharton_ss

6 months

@dennisleoca It’s a terrible saying— who would trust such a person that believes in this?

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Don Wharton

@donwharton_ss

7 months

@BrianFeroldi Great idea to graph this

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Don Wharton

@donwharton_ss

5 months

@chriswmayer Interesting, so we now have proof that — selling your losers is less important than holding your winners.

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Don Wharton

@donwharton_ss

6 months

For every success that an entrepreneur shares, they’ve probably had plenty more failures. And the failures have much-much more to teach, to help, to guide. Did you skip the entire book, save for the last paragraph— then tell your teacher, you’ve read the book. Be honest, be

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Don Wharton

@donwharton_ss

6 months

@rusholmecapital Dustin Hawe and $TVK— absolutely amazing. Their businesses are completely different than Jeff Schellenberg’s $de.v, which seems to have too heavy exposure in the hearth business (I think I heard demand was down over 40% there??) so not sure this is a question of the operator…

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Don Wharton

@donwharton_ss

7 months

@IrrationalMrkts I’m going to say ‘not necessarily’ to your #4 contrarianism. If you find predictable compounders, run by disciplined and ethical management… “The price you pay is less important than your conviction to hold.”

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