Modern Investing Techniques — Episode 25

Midweek check-in. Today is April twenty second, twenty twenty six, I'm Patrick broadcasting from Vancouver. Midweek — let's reassess this week's positions and look for fresh setups. Quick reminder — everything we discuss here is for education and entertainment. The Practice Investment of the Day uses simulated trades with no real money. I'm not a licensed financial advisor and this isn't financial advice. Always do your own research before putting real money to work. The A I complementarity framework is emerging as a powerful way for software companies to protect their valuations instead of fearing total disruption. That is the reason investors should keep listening today. Markets opened higher in premarket trading but closed mixed. The S and P five hundred closed at seven thousand sixty four, down zero point six percent. The NASDAQ Composite closed at twenty four thousand two hundred sixty, also down zero point six percent. The T S X Composite finished at thirty three thousand eight hundred eight, down one point six percent. Our simulated portfolio stands at year to date negative zero point three eight percent versus the NASDAQ Composite year to date positive four point four one percent, delivering year to date alpha of negative four point seven nine percent. About fifteen days ago we picked SSNLF on an A I memory chip demand thesis that closed flat. This illustrates that even clean catalysts still need sustained buying pressure to generate alpha. With ships attacked in the Strait of Hormuz shortly after the U.S. extended its Iran ceasefire, investors should watch oil volatility. We also need to monitor potential knock on effects for Canadian exporters. For your own portfolio this means staying alert to second order moves in energy and export sensitive names inside your T F S A or R R S P. While macro volatility is rising, one defensive framework is helping certain software franchises stay ahead of A I disruption. That framework is A I complementarity. Instead of assuming A I will cannibalize traditional software revenue, the approach identifies companies explicitly designing A I to augment core products. This expands total addressable market while defending existing moats. Today's conditions make this relevant because multiple A I themed suppliers are guiding higher on tool demand. Yet broader sass stocks face skepticism about replacement risk. To implement, scan earnings transcripts and guidance for explicit language on integration versus replacement. Then cross reference with free cash flow margins. You can do this on Canadian platforms like Questrade by pulling the latest filings and earnings call transcripts. Allocate via individual names or thematic E T F's inside your T F S A or R R S P. Historically this framework performed best from twenty fifteen to twenty eighteen when cloud computing was feared to destroy on premise software yet ultimately expanded spending. The key discipline is sizing positions so that even a twenty five percent valuation haircut on the bet does not breach five percent portfolio risk. Risks include faster than expected disruption that compresses multiples by twenty to thirty percent if complementarity fails. This approach turns A I from a threat into a moat protector when executed with care. No new Practice Investment today. This is a simulated exercise for learning purposes only. Current screens show setups in restricted sectors such as tech and precious metals. Others rely on lesson tags currently in cooldown. We are watching healthcare names with strong first quarter momentum and consumer names exposed to private label rotation. We are also monitoring energy volatility tied to Hormuz developments. None of these meet the full criteria of a fresh analytical approach, allowed sector, and non duplicative story coverage. This no trade discipline preserves capital for higher conviction setups. It also prevents sector creep beyond our thirty percent cap. We will target an industrials or financials name for next Monday's weekly hold once a catalyst aligns with permitted tags. Patience in the absence of edge is itself an alpha generating skill. Yesterday we exited a Flash Trade in CLDX. This was an analyst upgrade play on successful Phase three results and accelerated enrollment. Entry was at thirty five dollars and seventy nine cents at market open. Exit was at thirty four dollars and thirty eight cents at market close. The simulated result was a loss of three point nine four percent, or thirty nine dollars and forty cents on a one thousand dollar notional position. Even when a binary catalyst such as accelerated enrollment is publicly confirmed, the market can still price in expectations ahead of the announcement. This is especially true when broader sector momentum is absent. The absence of verified real time order flow led to the exit on the news. Rule: Verify data availability from multiple providers before declaring a weekly hold closed. Two modern tools can give Canadian investors an information edge right now. First, Hyve’s managed platform powered by Red Hat OpenShift simplifies migration to containers and virtual machines while being explicitly A I ready. This lets investors track which mid market companies are accelerating modernization at lower cost. It surfaces early signals of margin expansion in IT services before they appear in quarterly results. Canadian investors can access related company filings and sector E T F flows via Wealthsimple or Interactive Brokers. The free Red Hat developer sandbox lets you test containerized A I workloads yourself to understand adoption barriers. Second, Open A I’s new cyber offering briefed to U.S. agencies and Five Eyes partners creates a concrete monitoring opportunity. The edge comes from front running procurement cycles that typically follow such briefings by sixty to ninety days. Access the underlying research via public contract databases and pair it with free sentiment scanners on Trading View. Both tools are ideal for T F S A portfolios seeking non correlated exposure in IT services or defense tech. RBC Capital raised its UnitedHealth price target to four hundred dollars on strong first quarter results. This highlights resilience in U.S. healthcare spending even amid policy uncertainty. Consider adding to core healthcare in your R R S P if it holds above its twenty day moving average on Friday close. Citizens cut its Blackstone price target on rate and deal flow volatility concerns. Reduce financials exposure by trimming if portfolio weighting exceeds four percent until the volatility index retreats below eighteen. Reckitt stock dipped as first quarter sales fell short on Europe drag and a soft cold and flu season. Stay on the sidelines for new consumer staples over the counter positions until second quarter guidance clarifies the margin picture. Bank of America released analysis showing accelerating private label gains in packaged foods. Rotate two percent of consumer exposure toward beneficiaries or discount retailers before the next C P I print. Our simulated portfolio has completed eleven trades. The win rate sits at twenty seven percent with three wins, four losses, and four breakeven. Cumulative profit and loss is negative forty one dollars and fifty six cents. Average return per trade is negative zero point three eight percent. Our A I analysis is learning from these outcomes and adjusting parameters around catalyst confirmation. This remains a learning journey rather than a track record to copy. Now here is something that most retail investors get wrong about tariff refunds in registered accounts. Imagine you bought one thousand shares of a small Canadian industrial exporter in your T F S A six months ago at eighteen dollars and twenty cents. U.S. tariffs were compressing margins by an estimated one hundred eighty basis points on roughly two point four million dollars of annual shipments. With today’s refund program that same company could reclaim seventy to ninety percent of duties paid. This potentially adds one hundred forty thousand to one hundred eighty thousand dollars in cash. But only if it meets narrow eligibility criteria and completes a multi step filing. Refunds lag four to nine months and the market may price in only forty to sixty percent of the net present value on announcement day. A strengthening Canadian dollar can offset thirty to fifty percent of the cash benefit inside a registered account. The biggest mistake is treating every Canadian exporter as equally positioned. Always quantify the potential cash windfall as a percentage of enterprise value. Confirm filing readiness in the latest management discussion and analysis before adjusting position size. This asymmetric information and patience on cash timing is where the real edge lives. Before we wrap, watch for continued oil volatility tied to Hormuz developments and any healthcare momentum names that clear volume filters. That's it for today's Modern Investing Techniques. The resources page has links to everything we discussed. Subscribe and share with someone who wants to go beyond index funds. See you tomorrow. This podcast is curated by Patrick but generated using AI voice synthesis of my voice using ElevenLabs. The primary reason to do this is I unfortunately don't have the time to be consistent with generating all the content and wanted to focus on creating consistent and regular episodes for all the themes that I enjoy and I hope others do as well.