Dan Rosen

Only have a minute? ⌚ Here are the top 3 things to think about from RBC GAM's quarterly investment outlook: #GIO

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The TSX is a strong market, but it doesn’t get as much coverage as U.S. stocks. After a detailed fundamental review of Constellation Software Inc. (CSU), I’m confident in its potential and ready to invest. In this post, I’ll focus on its technical side and discuss strategies to maximize risk-to-reward. CSU is a Canadian multinational company specializing in vertical market software for niche industries like healthcare, public transit, and education. Despite its low media profile, CSU has consistently delivered extraordinary results, with its stock price steadily climbing since its 2006 IPO, outperforming the broader market and cementing its reputation as a reliable growth story. The one main thing I always look for when analyzing individual stocks is their performance against the market they trade in. Finding stocks that consistently outperform the market while following its general trends has been one of my most successful investment strategies. Constellation Software Inc. (CSU) provides an excellent example. The stock’s maximum drawdowns, ranging between 25% and 30%, have occurred only during major macroeconomic events, such as the rising interest rates in 2022 or the COVID-19 crash in 2020. Notably, CSU has never experienced a catastrophic "black swan" event driven by company-specific issues, further demonstrating its resilience. This high correlation with the market is complemented by its added upside. When comparing CSU’s drawdowns to those of the market, such as the S&P/TSX Composite Index, the stock often performs similarly or even better during market downturns. My investing approach focuses on identifying historical patterns and using them to craft high-probability trades with defined risk parameters. For CSU, I am looking to add the stock to my portfolio by following a pattern it has consistently displayed over the last six years: reversing its corrections from the 100-weekly moving average. This level has acted as a reliable support during past market downturns and corrections. I plan to buy the stock when it reaches this 100WMA, allocating all my capital with a protective stop loss of 15% for half the position and 30% for the second half, making my total risk approximately 22.5% of the total position. I will add to my position as the stock reclaims older higher levels, reinforcing my conviction in its rebound. Due to LinkedIn’s character limit, this report is a high-level overview. Reach out for a detailed analysis of price action and fundamentals! All analysis and strategies are personal research and not financial advice. Please do your due diligence before making investment decisions #CanadianStocks #InvestingInCanada #StockMarketAnalysis #TechnicalAnalysis #InvestmentStrategies #FinancialMarkets #WealthManagement #MarketInsights #PortfolioManagement

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Crawl, Walk...Fly. Designing a portfolio often begins with small, deliberate steps. It starts with learning, followed by testing, applying, and then adjusting—as the cycle of learning recommences. Introducing Second engine™: Home to Canada's pioneering liquid alternatives indices. These datasets can better equip financial professionals to evaluate the impact of alternative investments on traditional portfolios, without necessitating specific product recommendations. This approach allows for a gradual appreciation of alternative investments [Crawl], before progressing to product consideration [Walk]. Take a look at the efficient frontier chart below and visit our site to see for yourself how the Second engine™ Liquid Alternative Indices can be used in comparing the risk and return influences on portfolios: https://ow.ly/ZqA030sEilX Then [Fly]—the advisor-investor relationship thrives on trust, cultivated through a careful and gradual method of mutual discovery. Second engine supports this journey as it can help enhance trust and understanding in financial strategies. Think about using the Second engine Liquid Alternative Indices to help you in this journey. Think about taking your practice to the next level with Second engine.

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In May 2024, Hawkshaw published a bearish report on Toro (TTC), highlighting 30%+ downside over 12-months. After reporting another disappointing quarter and issuing FY2025 guidance below consensus, TTC was down nearly 10% last week and has provided clients of our research over 30 percentage points of potential alpha on an annualized basis.   In our report, we wrote: “Our research suggests that TTC is likely to lose its reputation as a market leader and quality earnings compounder, as its poor positioning for the shift to electric and autonomous [Outdoor Power Equipment] leads to share loss, decelerating growth, margin pressure, and compressing ROICs. As this deteriorating competitive position becomes apparent, and TTC further misses Street numbers due to its bloated inventory position and soft demand, its valuation is likely to compress. Our bear and base cases suggest 30-50% downside for the stock based on 15-18x P/E (vs. historically mostly trading from the high teens to mid-20x).” In the 7 months since our publication, the story has played out largely as we expected. Sales have disappointed, with TTC reporting FY2024 revenue growth of just 0.8% (adjusted for a small divestiture), and TTC is guiding to FY2025 revenue growth of ~1% (adjusted for the divestiture), a meaningful disappointment versus prior expectations of 4.0%. FY2025 consensus EPS has dropped nearly 10% from $4.72 to $4.32. Although this is above our original 2025 estimate of $3.37, more aggressive use of restructuring add-backs has inflated adjusted EPS (weakening earnings quality). The market seems to be ignoring these adjustments, as the PE remains at 19x (same as when we published). Nonetheless, the market is up 13% since our publication, providing clients of our research nearly 20 percentage points of potential alpha, and over 30 points on an annualized basis. If you’re an institutional investor interested in receiving similar alpha-generating insights, use this link to contact us for more details about our research service (https://lnkd.in/eptiCYSP). Note: we offer customizable subscriptions for long and/or short ideas. Separately, if you find the attached research report of high quality, please help us reach more eyeballs by commenting below and/or hitting the like button. #hawkshaw #valueinvesting #longshort #ttc

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📣 NEW PAPER OUT! 📊🤖 After months of conception, non-stop running servers, and writing, Minghui Chen, CFA, Tobias Kalsbach, and I are excited to share our latest research: "Design choices, machine learning, and the cross-section of stock returns." 🚀 Machine learning algorithms for predicting stock returns are gaining increasing traction among academics and practitioners. However, as a still developing field, key design choices—such as algorithm, target variable, feature selection, and training process—vary substantially across studies, underscoring the lack of common research standards. In our paper, we analyze 1,056 machine learning models and uncover how different design choices directly affect the performance of ML portfolios. Key findings: 📈 ML returns vary substantially across design choices (see the graph below)! 🔍 Non-standard errors arising from design choices exceed standard errors by 59%. 💡 Practical recommendations: We provide actionable guidance for ML model design. 🚀 Non-linear models tend to outperform linear models only for specific design choices. Our study highlights the importance of domain knowledge for successfully implementing machine learning models in finance. 📑 Read the full paper here: 👉https://lnkd.in/dWkjHHUS #MachineLearning #AI #Investing #Finance

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[New Compounders Podcast] My guest on the show this week was Mathieu Martin, CFA, the Portfolio Manager of the Rivemont Microcap Fund. Mathieu is a microcap specialist who focuses on Canadian stocks. I have personally become fascinated with the differences between the US and Canadian markets, and I was excited to talk to Mathieu about: ·      Where his love for microcap stocks began; ·      The level of inefficiency he sees within Canadian microcaps; ·      Why US-based investors don’t venture up to Canada as often as they should; ·      What he learned after having a tough year in 2022; and ·      Just how cheap Canadian microcaps are at the current moment. Please enjoy the full episode here: https://lnkd.in/gPjUq4_Z

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🌟 Insightful Analysis on Precious Metals 🌟 Just read this informative article on Kitco NEWS about the current dynamics in the precious metals market. A big shoutout to Robert Minter, CFA, CMT, CAIA, Director of Investment Strategy at abrdn Investments, for his outlook on silver’s potential. Robert highlights that silver has historically outperformed gold during rate cut cycles, and he expects this trend to continue as the Federal Reserve starts to cut interest rates. 📊 👉 Check out the full article for more insights: https://ow.ly/6qRw50SNwQR 👈 #preciousmetals #gold #silver #realassets #inflation #fed #commodities #ETFs #investing

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More to come I am certain. "Georgian Partners—Canada’s largest independent #VC firm with $5.6 billion USD in assets under management—wrote down 28 investments in 21 companies across five funds, representing a whopping $430-million USD loss in value." #BDC also wrote down their #venture holdings in September - see comments for the link. #venturecapital #privateequity #valuations #CanadianVC

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One Thing I Don’t Like About my company Growing Big, and you might too (about yours) Back in Hexaview Technologies Inc.’s early days, every idea felt like a spark ready to ignite. Have an idea? Great, try it out! No approvals No long meetings Just pure execution. But as we’ve grown, things have... evolved. Now, even my most creative ideas need to pass through layers of discussions and approvals. I get it—9 out of 10 ideas should be questioned, debated, and refined. But hey, can I at least have one to run with? Just one? 😅 And honestly? It can be a bit frustrating. Some days, it’s like playing Shark Tank with my own team—pitching, defending, and waiting for a “Yes.” Don’t get me wrong, I love how far we’ve come, proud of it and I know processes and structure are essential for scaling. But sometimes I miss the simplicity of the startup hustle: quick decisions, fast execution, and the freedom to try (and fail) without overthinking. Growth is great, but oh, the freedom of those early days!  Who else misses the good ol’ “just do it” startup days? Ankit Agarwal #Hexaview #StartupJourney #GrowthChallenges #EntrepreneurLife

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AI isn't magic—it's advanced statistical analysis. Joe Lonsdale, at SIC 2024, reminded us that models like ChatGPT predict words and actions based on vast data sets, making them seem intelligent. It's a powerful reminder of the technology's roots and potential. #AI #MachineLearning #Technology If you are interested in these topics, I invite you to read my letters and join the conversation. You can subscribe to my free weekly newsletter, Thoughts from the Frontline. https://lnkd.in/ecpVCyuN

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Canadian ETF inflows continued at a brisk pace in May, bringing the year-to-date number to more than $24 billion (handily beating their mutual fund counterparts). Total assets now stand at more than $432 billion with 1407 ETFs to choose from. With all this selection, how do investors know which ETF to buy? In our latest episode, Rob Duncan sits down with Patrick McEntyre of National Bank Financial Group to discuss ETF strategies, liquidity, and the shift to International and Emerging Market equities. Listen to the full episode: forstrong.com/podcast #Forstrong #Finance #podcast #EmergingMarkets #FinancialEducation #Investing #Economy

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A lot of attention has been placed on #gold markets, as a behemoth mystery buyer scoops up the yellow metal at a curiously aggressive pace. #Silver could be the one to watch over the next years, however. Tune into this great conversation with Greg Bonnell on MoneyTalk Live. TD Securities #TDCommodities #TDStrategy

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