Had a great discussion with a former Constellation Software ( $CSU.TO $CNSWF ) portfolio manager who now runs a VMS consolidator.

His take on how AI will really impact vertical market software is not what most people expect: AI is expanding what can be automated

Previously uncodable processes are now doable, improving their value proposition.

This opens up new functionality for VMS vendors to serve, rather than threatening current ones

I own 10 stocks.

Here is why I own each one (in 4 points and a visual): Atlas Engineered Products $AEP.V

• Massive TAM
• Disciplined M&A strategy
• Automating a legacy industry
• Major tailwinds in Canadian housing

Warren Buffett's most well-developed skill:

Identifying undervalued stocks with long-term potential.

But 99% of people lack this skill because it's not intuitive.

Here are 5 keys to building this skill for yourself (and improving investment returns as a result): A Strong Competitive Advantage

Many investors fail to appreciate the importance of a company's competitive advantage and focus instead on vanity metrics such as:

• Quarterly earnings
• Predicting stock price movement

But these aren't nearly as important as:

Investors are obsessed with using the price-to-earnings (PE) ratio.

But if you want incredible stocks, you must alter your perception of the PE ratio because most investors have it all wrong.

Here are 4 tips to optimize your use of the evaluation ratio: Is competition "really" competition?

The best businesses do not have competition in a traditional sense.

Just because they sell an optically similar product or service does not mean it competes with others in a traditional sense.

If you understand this ⤵️

The best part of investing:

Finding high-potential stocks.

But most people struggle to find them.

Here are 5 dead-simple steps to propel your stock-picking skills: 1. Have a crystal clear idea of the returns you want

First, you must understand how much money you want to make from any stock investment.

If you want to make 15% per year, then buying $GM isn't going to achieve your goals.

But when something passes this filter...

Let's talk about one of the most boring businesses you've never heard of Atlas Engineered Products:

10yr Rev CAGR: 35%
10yr Net Income CAGR: 41.52%
EPS 2020: $0.00 LTM: $0.08
ROIC: 18%

$AEP.V $APEUF Gross Margins: 2016:1 9% LTM: 31%
Operating Margins: 2016:11% LTM: 14%
Net Margins: 2016: 7% LTM: 9%

Pulak Prasad has soundly beat the majority of the investing competition since 2007, generating 19.1% returns annually.

His high-quality portfolio is full of multi-baggers.

Here's his dead-simple 3-step framework for investing: Here is a short list of a few of his multi-baggers over the years.

Now, the framework:

1.  Avoid big risks.
2.  Buy high-quality at a fair price.
3.  Don’t be lazy – be very lazy.

Avoiding big risks means...

Anthony Bolton has one of the most legendary track records of all time:

His fund compounded at 19.5% annually over 28 years!

Here are 27 simple keys to his success: Ask yourself if the business will be around in 10 years' time, and if will it be more valuable than it is now.

One of the most impressive runs a CEO has ever had:

Roberto Goizueta.

He took Coca-Cola's market cap from $4 billion to $156 billion, a 25.4% compound annual growth rate.

Here are 6 lessons from his shareholder letters (to make you a better investor and business person): Understand how a business creates value

Understanding this allows you to focus on what matters.

"Solid unit case volume growth is the foundation for generating economic profit, which, experience teaches us, is the key to increasing the value of [our shareowners' investment]."

In 2011, Warren Buffett named 2 books that if mastered would mean:

"You don't need to read anything else & you can turn off your TV."

Here is what you need to know from the 2 books that helped shape Warren into the investor he is today ⬇️ First the two books:

1. The Intelligent Investor (Chapters 8 and 20)
2. The General Theory (Chapter 12)

Now that we have that out of the way, let's start with arguable the most important point that Buffett learned...

In 1996, eccentric billionaire Charlie Munger said

" I have assimilated various ultra-simple general notions that I find helpful in
solving problems."

Unleash your problem-solving potential with these 5 key notions: Answer "No-Brainer" Questions First

If you have a destination in mind, find out the simple questions you must first answer in order to get to that destination.

There should only be a few major ones that stick out to you.

How the questions are answered will help guide you.

One of the brightest minds of our time: Charlie Munger

In 1995, Charlie gave a lecture at Harvard called "The Psychology of Human Misjudgement."

In 76 minutes he put together a masterclass on human psychology.

Here's 7 misjudgments that impact investing: Reason-Respecting Tendency

Investors love giving reasons as to why the market loves or hates a stock, yet don't have the background information required to make that observation.

Often, our reasoning is completely wrong, and investors pay a dear price.

Warren Buffett once said:

"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."

But most people take the un-winnable route of trying to outsmart the market

Here are 7 winning keys to simplify investing: Buy businesses that are easy to understand

If you want to simplify things, you should start by buying businesses that are simple to understand and explain.

If you can explain it to a five-year-old with a napkin and crayons, you're on the right track.

You'll want to...

Multibagger stocks are available 365 days of the year IF you know what to look for.

Here are the top 3 resources that will help guide you to know what to look for: Global Outperformers by @dede_eyesan

My favourite quote from the book:

"As expected, a large part of global outperformers was concentrated within the nano caps segment (63%), which was significantly higher than nano caps representation within the broader global public...

Warren Buffett famously said, "The difference between successful people and really successful people is that really successful people say no to almost everything."

Here are Buffett's 8 easily identifiable red flags to say "no" to: Excess production capacity

If competitors can easily flood the market with supply, then you have a commodity-like product.

It's hard to succeed in these industries as there will be a lack of product differentiation.

Warren Buffett says "The stock market is designed to transfer money from the Active to the Patient."

Here are 5 active investing tasks that will keep you busy while being patient: Read about other businesses

If you want to be a better investor, be a better businessman.

Great resources include:

• Blogs
• Biographies
• History books

Learn about BOTH successes and failures.

If you understand business better, you'll invest better

Next...

Today, Warren Buffett is worth $120.3 billion dollars

His success has come from understanding what makes a wonderful business

He categorizes businesses into 3 simple buckets

Here's a breakdown of each (and why you only need to focus on one to become financially independent): The Bad Business

This is the type of business you should stay away from at all costs.

It has 2 major characteristics:

1. It requires significant capital to operate or grow
2. Earns low returns on invested capital (<8%)

In other words, they're money pits.

Examples include...

Youtube has more than 114,000,000 channels.

Here are 7 of the TOP investing videos from one channel that will teach you how to build wealth faster than an MBA: Howard Marks | The Most Important Thing - Origins and Inspirations

Howard's talk is superb, and any and all investors should memorize his points on risk.

@HowardMarksBook

Warren Buffett exclaimed that Chapter 20 of Ben Graham's The Intelligent Investor had a massive impact on his life.

Regarding that chapter, he said, "You don't need to read anything else & you can turn off your TV."

Here are 9 keys from that chapter that will make you wealthy: If a margin of safety works for bonds it can work for stocks as well.

If you buy a bond, there is a coupon you earn, then you get your principal back.

Bond prices take into account the chance of a decline in future income. Which is why they're not always traded at par.

I use 7 simple metrics to say "no" to 99% of stocks from my investable universe:

• Revenue
• Net Income
• Total Debt/FCF
• Free Cash Flow
• Earnings Per Share
• Shares outstanding
• Return On Invested Capital

Here are my hurdle rates and why I use them: Revenue CAGR 12%

Unless you want a business to increase value purely from operating leverage, you will want a business to grow its topline.

You can determine what this hurdle rate is, the higher you make it, the less businesses will pass the filter.

Warren Buffett simplifies investing like no other.

In 2000, at the Berkshire Annual, he said:

"The question is how much you get back, when you expect to get it back, and how sure you are that you’ll get it back... and what interest rates are."

Here's a breakdown of the ideas: To understand investing, realize these four concepts work in concert to help paint a better picture.

Focusing on only one area is likely to yield mediocre results.

The first area you must understand is: