Constellation Software Inc. (CSU.TO)

You can keep rolling up businesses, but what happens when the music stops? Now there's AI, but it can't be a complete solution. The business model will come back at some point; in the meantime, sees it building a base.

Are different: CSU buys companies vs. Shopify which is a pure tech company. What PE do you want to pay for CSU? 25x? 20x? SHOP is great and continues to grow. The market perception of AI hurting these companies is wrong. Both are worth buying. He prefers CSU but buy it at a lower PE.

He likes Canadian tech, like this. The chart ran up until mid-2025, topping out, then headed down, and this year it's forming a base. It looks like it's breaking out now. There's hope. Not a bad chart. Leg in, but don't plunge into this.

It's insanely cheap. Is aggressively deploying capital to buy cheap companies, and are aggressively adding AI to their software. He sees double-digit earnings from years.

He bought recently at under $2500, now 20% higher. Still cheap. Once you become this big, can you keep recycling capital fast enough? Generates a ton of free cash. Don't chase here. He's not adding now. If you're a long-term holder, a pullback may be your opportunity.

SaaSpocalypse was blown way out of proportion. If I'm a business that needs to protect client data, I'm sticking with the professionals. But AI tools will help companies like this by employing fewer coders/engineers and increasing productivity.

Sharp drawdown on the AI-killing-software train, now starting to perk up. Second-biggest tech company in Canada, behind SHOP. Revenues are sticky, though growing slowly organically. Exceptional in deploying capital for acquisitions -- slowed down in last years, but reaccelerated in latest quarter. 

New initiative to take strategic long-term stakes in publicly traded software companies. Yield is 0.19%.

He just bought. It buys software businesses, and the price for those is a lot lower than a year ago. Doesn't agree that customers will rip and replace products with AI, especially with no tech support. One of the most interesting risk/reward opportunities today.

Historical valuation was in the 30s; today it's in the teens.

Trying to stabilize after the bigger downtrend. Hardware is working, but software's in a downtrend. Tradeable bounce, but he'd rather wait and catch a confirmed uptrend. He's worried of another leg lower after any bounce.

Another software chart in decay. Incredible capital allocator for so long, but AI is taking its toll. Even though some headline beats, the most important metric here is organic revenue growth (and it's continually shrinking).

Mea culpa, not a timely pick. The AI bear was let out of the cage almost immediately after this pick. Still holds because his firm just doesn't believe AI will totally disrupt these vertical-market software firms.

Demise of software is a narrative right now, but no evidence in the fundamentals. Not all of its business units will be displaced by AI, and some will actually benefit. Tends to buy companies at low multiples and earn back its money in short order.

He continues to add. Everything that could go wrong did last year. Nothing wrong with fundamentals.

Looking at the chart, he exited his remaining position at the plateau at $3500. Technically, it has to get back to that and that's $900 away (a lot of water under that bridge). 

Tough over next 6 months. Need a couple of quarters under new leadership. Still expensive at 74x PE. Business model needs to do bigger deals, which means more risk; though a lot of software stocks are on sale (but for good reason).