Modern Investing Techniques — Episode 33

Happy Monday, welcome to Modern Investing Techniques, episode thirty-three. I'm Patrick in Vancouver. Today is May fourth, twenty twenty-six. Monday means fresh setups. Let's break down the week ahead and find our edge. 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. Oil prices rise on Middle East conflict news while Berkshire Hathaway holds a record three hundred ninety seven billion dollars in cash. The S&P five hundred sits at seven thousand two hundred thirty up zero point three percent. The NASDAQ Composite is at twenty five thousand one hundred fourteen up zero point nine percent. The T S X Composite is at thirty three thousand eight hundred ninety one down zero point two percent. Geopolitical worries from the Middle East are pushing oil higher and overshadowing the strong earnings season. Futures are mixed as investors weigh tariff threats and trade talks between the E U and U S. This reminds us of our CLDX pick where the positive catalyst failed to deliver alpha because expectations were already priced in. Always confirm broader momentum before jumping in. Monitoring institutional cash levels serves as a useful market sentiment gauge for retail investors. It involves tracking how much dry powder major firms hold instead of deploying it into equities right away. When firms like Berkshire Hathaway accumulate record cash piles of three hundred ninety seven billion dollars, it often indicates caution toward current valuations. These firms are waiting for better opportunities rather than buying at present levels. In today's environment of inflation concerns and geopolitical risks, this approach becomes particularly relevant. It signals potential pullbacks where that cash can be deployed effectively later. To implement this as a retail investor, track similar metrics through quarterly filings or news on major institutions. Maintain a higher cash buffer in your T F S A or brokerage accounts, perhaps ten to twenty percent. This strategy has worked well in periods like the twenty twenty two downturn when cash preserved capital for subsequent rebounds. However, the risk is missing out on continued rallies if the cash is held too long without action. Use tools like S E C filings databases to monitor these levels regularly and stay informed. The key is to use this as a signal rather than a direct trading rule for your own decisions. Disclaimer: This is a SIMULATED trade for educational purposes only. No real money is involved. This is NOT financial advice. Our Practice Investment of the Day is CVX, Chevron Corporation. It trades on the N Y S E in the energy sector. We are using a geopolitical premium play on rising oil prices for this weekly hold. The hold period runs from Monday to Friday as usual. The catalyst is oil prices rising as Trump plans to free ships stranded due to Mideast conflict. There is also a tanker hit by projectiles north of Fujairah adding to the tension. The technical setup shows the energy sector benefiting from volume increases amid the news flow. The broader S&P five hundred at seven thousand two hundred thirty provides context for relative strength in the group. For risk assessment, oil prices could reverse on de escalation signals at any time. We set a stop loss at five percent below entry to cap downside exposure. The target is plus three percent to plus six percent if oil sustains gains through the week. Our confidence level is medium given the clear geopolitical catalyst from the oil news. There is uncertainty on how long tensions persist and whether they drive sustained moves. This demonstrates using geopolitical news as a catalyst filter for sector selection while applying strict risk controls. We will track this position all week and evaluate it on Friday against the NASDAQ benchmark. Yesterday's flash trade was on BTC as a macro rotation play on cross asset signals. We entered at thirty three point six seven at market open. We exited at thirty three point eight one at market close. The result was a gain of zero point four two percent. That is four dollars and sixteen cents on a one thousand dollar position. The NASDAQ gained zero point nine percent on the day. So we posted negative zero point four eight percent alpha. The modest gain validated opportunistic use of cross asset signals in the moment. But the underperformance versus the NASDAQ highlights challenges in beating broad indices with volatile assets. The rule reinforced is to always verify price data from multiple providers before entering a flash trade on volatile assets like crypto. One tool worth adding to your routine is the Investing dot com Analyst Ratings Aggregator. This platform compiles real time analyst upgrades and downgrades from firms like BofA and Goldman Sachs. It gives investors an edge by highlighting potential momentum shifts in the market. Examples include the raise on Penske Automotive or the Lazard cut that caught attention recently. Intermediate investors should use the free tier to set alerts for specific tickers they follow. Another useful resource is the Globe and Mail Before the Bell Briefing. This daily summary provides Canadian investors with key market movements and global context at market open. It helps filter noise by focusing on actionable items like premarket futures and geopolitical impacts. Use it as a starting point for your morning routine before checking your portfolio positions. Berkshire Hathaway is now sitting on a record three hundred ninety seven billion dollars in cash. Major institutions are reluctant to invest amid current levels. This sends a patience signal to the broader market overall. Build a cash reserve in your portfolio equivalent to ten to fifteen percent of assets to capitalize on future opportunities. From condos to storage, former Hudson’s Bay buildings find new life in the market. Bankrupt retail properties are being converted to residential and storage uses across Canada. Research Canadian REITs with exposure to commercial real estate for potential gains from repurposing trends. Christopher Liew outlines five ways to soften your mortgage renewal in twenty twenty six. These are personal finance steps to manage rate impacts on renewals this year. Use online mortgage calculators to model your renewal and rebalance your fixed income allocation if rates rise. Melco publishes its twenty twenty five Sustainability Report titled RISE to Go Above and Beyond. The company details progress in environmental stewardship and governance. Integrate E S G factors into your stock selection by reviewing sustainability reports for companies in your T F S A. Our simulated portfolio has eleven total trades so far. The win rate is forty six percent. That breaks down to five wins, five losses, and one break even. The cumulative P and L is negative forty eight dollars and four cents. The average return per trade is negative zero point four four percent. Our best trade achieved plus seven point eight eight percent. The worst trade was negative seven point four nine percent. We are currently on a streak of two wins. Our A I analysis is learning from patterns like catalyst confirmation and adjusting for better risk management going forward. Now, here is something that most retail investors get wrong when using A I tools. It can really cost you if you treat the output as gospel without checking. Imagine you bought an energy E T F last week when oil news broke about the tanker incident in the UAE. Your order filled at the market price without extra context. But here is what actually happened behind the scenes with the data flow. A I tools could have scanned thousands of social media posts and news wires in seconds. They would flag the bullish sentiment shift quickly for review. Using natural language processing, these tools assign sentiment scores from negative one to positive one. If the score jumps from zero point two to zero point seven on news about Trump plans to free ships, it signals potential volume increase. In practice, the bid ask spread on oil futures might widen by five to ten percent in the first hour as retail piles in. What most retail investors do not realize is that A I can also summarize earnings transcripts or ten Ks for efficiency. But always verify the output against the original document to catch hallucinations. The biggest mistake with A I tools is treating them as crystal balls for price predictions. Instead, always use them as research accelerators to speed up your process. Confirm with multiple data sources like yfinance for prices before acting. Before we wrap, tomorrow I will explore how to combine these institutional cash signals with A I sentiment scores for better entry timing. That's your Modern Investing Techniques for today. Every episode makes you a sharper investor. Subscribe, leave a review, and we'll be back tomorrow with more market intelligence. This podcast is curated by Patrick but generated using AI voice synthesis of my voice. 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.