SoloFIRE

SoloFIRE Portfolio Update - 2026 August - $972,000

SoloFIRE — Thu, 10 Sep 2026 02:33:05 +0000

💡Monthly Highlight
Updated Stock Analysis and Valuations
🌍International Holdings
- HENNGE (4475.T)
💸Detailed Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Stock Portfolio Value as of Sept 1st 2026, excluding margin and options balance (created with StockUnlock)

💡Monthly Highlight

Net portfolio value decreased 2.5%, or about $24,000 in August, primarily due to price corrections in major holdings such as Alphabet (GOOGL) and Brookfield Corporation (BN). In the absence of any news that could materially disrupt the operations of these businesses, I consider these price fluctuations to be primarily sentiment-driven and of little concern to long-term shareholders.

Two of the five largest holdings in my portfolio, Brookfield and Constellation Software, reported earnings in August. Both companies continue to demonstrate strong progress in terms of per-share earnings growth.

Brookfield’s distributable earnings (DE) before realization increased by 15% in the most recent quarter, compared with just 7% growth in the previous quarter. Its Asset Management segment reported 20% growth in fee-related earnings supported by record fundraising activity. The Wealth Solutions segment added $50 billion of new insurance assets through acquisitions and new annuity sales, expanding its asset base by 35% to $191 billion. While the majority of the segment’s 22% DE growth was driven by acquisitions, the significantly larger asset base should provide a foundation for further earnings growth as Brookfield continues to optimize its insurance portfolio.

Constellation Software also delivered another strong quarter, with revenue increasing 17% and free cash flow growing 18.2% after excluding the IRGA liability. Capital deployed toward acquisitions during the first half of 2026 reached $1.59 billion, more than double the amount deployed during the same period last year. This suggests that the private vertical market software M&A pipeline remains robust and that Constellation continues to have ample opportunities to reinvest capital at attractive returns.

It is also worth mentioning the extraordinary recovery of the Salesforce stock (CRM). While the company only slightly exceeded analyst expectations, its share price surged about 25% within a few days. This is clearly a sentiment-driven repricing unrelated to the fundamental improvements, as AI disruption concerns surrounding the stock appear to have eased significantly. This again demonstrated the high return potential of investing in undervalued stocks in a sentiment-driven market.

Updated Stock Analysis and Valuations

Constellation Software (TSE:CSU)

Constellation reported 17% revenue growth in Q2, free cash flow available to shareholders (FCFA2S) increased 57%, or 18.2% excluding the IRGA liability. FCFA2S per share over the past year reached US$95.81, or approximately C$132. At a stock price of C$3,000, this represents an FCF yield of approximately 4.4%, which I consider an attractive valuation for a company capable of growing earnings and free cash flow by 15–20% annually.

Organic growth in Q2 was 3%, in line with expectations. Capital deployed for acquisitions was $1.59 billion during the first six months of 2026, a 164% increase compared to the same period of last year and more than the total cash generated from operating activities. The significant increase in acquisition spending is a great indication of the ample opportunities currently available in the vertical market software space. If Constellation can continue deploying capital at attractive returns, this robust M&A pipeline should provide a strong foundation for continued long-term growth.

The estimated intrinsic value of CSU stock is about $5,697 per share, or a 26% annual return over the next 5 years, assuming:

15% annual FCFA2S growth (5-year average has been 17.5%)
A future Price/FCFA2S of 25
0% dilution

Figure 2. CSU DCF Model using TTM FCFA2S in Canadian dollar

Brookfield Corporation (BN)

Brookfield reported a 15% growth in distributable earnings (DE) before realizations, compared with 7% growth in the previous quarter. DE before realizations over the past year has been US$2.39, representing a 6% yield on the current share price. The stock has continued to face pressure over the past month, despite continued improvement in the underlying fundamentals. While there was some concern that earnings growth had stagnated in Q1, it is nice to see growth accelerate again this quarter.

Figure 3. BN’s 5-year earnings growth trend

It is also encouraging to see continued progress in two important segments of the business. First, the asset management business reported 19% growth in fee-bearing capital, reaching $672 billion at quarter-end. This resulted in 20% growth in fee-related earnings compared with the prior-year quarter, supported by record fundraising of $77 billion during the quarter. Next, the Wealth Solutions business continued to expand rapidly with Insurance assets increased to $191 billion, including $45 billion of assets added through the acquisition of Just Group and $5 billion from annuity sales during the quarter. Wealth Solutions DE increased 23% compared with the prior-year quarter. The growing pool of insurance assets should provide a substantial source of future earnings as Brookfield continues to optimize the investment portfolio and earn attractive spreads on its insurance capital.

The estimated intrinsic value of BN is about US$61.38, or C$84.59 per share, indicating a potential 20% annual return over the next 5 years. This DCF model uses the more stable DE before realizations metric for our projection, assuming 15% annual growth rate, 0 dilution and a future multiple of 20.

Figure 4. BN’s DCF model using TTM DE before realizations, in US dollar

Salesforce (CRM)

Salesforce stock surged 25% following its latest earnings release, as the results provided strong evidence that AI is not currently disrupting the business. Q2 revenue grew 11% to $11.3 billion, while non-GAAP EPS increased a staggering 103% year over year to $5.90 per share. Note that a large part of the EPS gain was driven by gains on Salesforce’s strategic investments, including its stake in Anthropic. Excluding investment gains, the EPS from operation would have been $3.37 per share, representing a 15.8% growth compared to Q2 last year. AI first ARR including Agentforce and Data 360 reached nearly $3.9 billion, growing more than 210% year over year. Agentforce ARR alone exceeded $1.5 billion, up more than 240% year over year.

I continue to view investments in system-of-record software providers highly attractive in this market, as it has become more and more obvious that rather than disrupting these businesses, AI can help utilize the massive amount of data to create more value for customers, generate new sources of revenue while simultaneously reducing costs and improving productivity. If Salesforce can sustain double-digit revenue growth while expanding margins and returning significant amounts of capital to shareholders, I believe the stock has the potential to deliver outstanding returns over the next several years.

The estimated intrinsic value of CRM stock is about US$432 per share, or a 22.8% annual return over the next 5 years, assuming:

10% annual FCF growth (5-year average has been 22.6%)
A future Price/FCF of 250
2.9% annual share buybacks (This is a conservative projection as Salesforce has bought back 14% of total shares over the past year)

Figure 5. CRM DCF model using TTM FCF

Mainstreet Equity (TSE:MEQ)

Mainstreet revenue grew 5% in the latest quarter, with same asset properties revenue grew 2% and Funds from operations (FFO) per share increased 9% to $2.85 per share. Operating margin expanded 1% to 69%, and vacancy rate declined 0.4% to 4.6%. The company bought back $10 million worth of shares, or 0.6% of total shares outstanding as the stock continues to trade below net asset value.

During the earnings call, CEO mentioned a recent phenomenon that REITs with depressed public stock prices are getting acquired by private equity and sovereign funds. In management’s view, this could reduce competition for property acquisitions and allow Mainstreet to secure better deals.

Management is especially bullish on the Alberta market, citing encouraging population growth and significant economic activity, including massive investments in data centers, to support employment and long-term housing demand. With the majority of its portfolio concentrated in Alberta and approximately $868 million of available liquidity, I believe Mainstreet is in an excellent position to take advantage of the current real estate cycle and Alberta’s strong economic growth.

The estimated intrinsic value of MEQ stock is about $225 per share, or a 16.9% annual return over the next 5 years, assuming:

10% annual FFO growth
A future Price/FFO of 20
0.6% annual share buybacks

Figure 6. MEQ’s DCF Model using TTM FFO

🌍International Holdings

HENNGE (4475.T)

HENNGE posted a robust 17.1% revenue growth in Q3 2026. Operating income grew 17.4% with a slight improvement in margins. Net income increased 28.7% to 1,361 million JPY. Retention rate remained very high at 99.7%. The company has launched a new endpoint security product during the quarter, with 3 more product launch planned for the remainder of the 2026. With increased AI driven cybersecurity risks, I believe HENNGE is in a really good position to continue acquire new customers in the Japanese market with strong product offerings and a proven track record. The company has also started international expansion in the US, which could add anther leg of growth in the near future.

HENNGE stock has surged 40% since last quarter and becoming one of the best performing stock in my portfolio in 2026. The share price still looks undervalued with estimated intrinsic value of about 2,084 JPY per share, or a 15.4% annual return over the next 5 years with the following assumptions:

16% annual OCF growth (guided growth rate for 2026)
A future Price/OCF of 20
1% annual share buybacks

Figure 7. HENNGE DCF Model using TTM operating cash flow

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Portfolio Holdings

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15DEC28 Put US$240
-1 contract ADBE 21JAN28 Put US$200
-1 contract META 21JAN28 Put US$400

Trades in TFSA Account

🟢Bought 4.12 shares of BN.TO @ $57.82

The TFSA account value changed from $201,601 to $197,691, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

No trades in RRSP for August

RRSP account value changed from $194,231 to $186,727.

Trades in Taxable Accounts

Taxable Accounts include my Wealthsimple Cash, Wealthsimple Margin and Interactive Brokers (IBKR) Margin account.

🔴Sold 200 shares of WEN @ US$9.05 (+$294.27 19.44%)
🟢Bought 5 shares of APP @ US$309.27

Total margin balance* decreased slightly from $52,500 to $52000. The average effective cost of margin capital is less than 2% after tax deduction, significantly lower than the average long-term portfolio return. I intend to keep my margin balance below 10% of my total account value to maintain a moderate level of risk.

Summary

Account Name	Value End of July	Value End of August
IBKR (net of margin)	$379,698	$377,536
WealthSimple	$220,769	$210,508
Taxable Accounts Total	$600,467	$588,044
TFSA	$201,601	$197,691
RRSP	$194,231	$186,727
Total Portfolio Net Value*	$996,299	$972,462

*Total margin balance is the sum of margin balance from my Wealthsimple margin and IBKR accounts. This amount includes borrowed funds in CAD and JPY, rounded to the nearest 100s.

*Portfolio net value is calculated net of margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy not recommended for new investors.

$993.14 new contribution
🟢 Bought 34 shares of META CDR @ $29.21

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
AMZN CDR	366	$10,650.60 (+31.43%)
CSU	12	$36,600 (+0.94%)
MEQ	52	$8,450 (-16.38%)
META CDR	548	$16,856.48 (-5.32%)
CRM CDR	1,388	$27,260.32 (+23.40%)
UNH CDR	440	$7,972.80 (+59.09%)
VISA CDR	242	$8,213.48 (+27.85%)
Total Market Value		$116,003.68
HELOC balance*		($95,410.99)
Net Gains (Losses)		$20,592.69

*HELOC interest rate paid: prime + 0.25%= 4.7%, effective interest rate after tax deduction: 2.68%, Invested capital excluding interests paid: $91576.54

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

DISCLAIMER: SoloFIRE is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice. While we strive for accuracy, we make no representations as to the completeness or suitability of any information on this site. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional before making any significant financial decisions.

SoloFIRE Portfolio Update - 2026 July - $996k

SoloFIRE — Mon, 10 Aug 2026 10:00:00 +0000

Figure 1. Stock Portfolio Value as of Aug 3rd 2026, excluding margin and options balance (created with StockUnlock)

💡Monthly Highlight
📈Updated Stock Analysis and Valuations
💸Detailed Portfolio Update

💡Monthly Highlight

As we enter the major earnings season in July, my portfolio has experienced extreme volatility with some major holdings experiencing daily price swings of more than 5%. It is during periods like this that a long-term investment approach becomes especially important, which will help investors take emotions out of the short-term price movements and focus instead on the long-term performance of the underlying businesses.

The companies in my portfolio that have reported earnings so far are mostly showing steady growth in revenue and earnings, with some continuing to invest heavily in AI infrastructure to support future business expansions. I view this as a positive development and will discuss the details in the individual stock updates below.

Software stocks experienced a moderate recovery in July which have helped increase my total portfolio value, but I believe my software stocks are still trading at levels far below their intrinsic values. I have continued to increase my positions in top quality holdings such as Constellation Software and Vitec Software to take advantage of these attractive valuations.

Going forward, as I enter the next stage of my FIRE plan, I will limit additional investments only to my registered accounts and the Smith Maneuver portfolio. All remaining excess cash flow will be redirected toward debt repayment, with the goal of reducing my fixed costs and strengthening my financial position.

📈Updated Stock Analysis and Valuations

United Health (UNH)

United Health Group reported strong Q2 earnings, beating analyst estimates with EPS improved 31% to $6.38 year-over-year. Revenue stayed flat at $112 billion which was in line with expectations. Earnings from operations increased to $8.0 billion from $5.2 billion year-over-year thanks to good performance across both UnitedHealthcare and Optum. Medical Care Ratio (MCR) improved to 86.7% (down from 89.4% in Q2 2025), benefiting from medical cost management, pricing discipline, and better member mix. This is great to see.

The company has also resumed the share repurchase program, targeting $5 billion buybacks in 2026, which is about 1.3% of total shares outstanding. With operations moving in the right direction, I’m more confident now to project a 10% EPS growth for the next 5 years, which suggests about 12% annual return from the UNH investments, assuming the 1% annual share repurchase program continues. The potential returns could be higher if the management further improves EPS growth to the long-term average of 13% per year.

Figure 2. UNH Q2 DCF Valuation Model

MSCI

MSCI Q2 revenue increased 12.2% year-over-year, EPS increased 18.5% year-over-year reaching $4.94 per share. Q2 retention rate was 95.3%, represents an improvement from the 94.4% retention rate recorded in Q2 2025, which highlights the sticky, mission-critical nature of the company's platform as institutional clients rely heavily on its data for portfolio construction. The index segment revenue (50% of total revenue) increased by 17.5% mainly driven by strong asset-based fees growth, benefiting from the global stock market rally during the quarter.

One concern of this report is the decline of the asset based fee rate, which has been happening over multiple quarters as shown in the Figure 3 below. During the earnings call, the management team explained that this is due to the growth in AUM skewed towards developed markets outside the U.S. and all country products, where tend to have a wider (probably lower) range of pricing schedules. They emphasized that the primary focus is on driving overall run rate growth, revenue growth and maximizing the AUM capture with our ETF partners. While this is not ideal, I do agree with the management that maximizing AUM is more important, which should help attracting new clients and incentivizing existing clients to stay in the MSCI ecosystem and unlocks upselling opportunities.

Figure 3. MSCI declining asset-based fee

The current valuation of MSCI stock looks attractive after the recent correction. The DCF model indicates a 18% CAGR over the next 5 years assuming a 12% annual free cash flow growth and 3% annual share buybacks.

Figure 4. MSCI Inc Q2 DCF model

Alphabet Inc (GOOGL)

Google continue to grow rapidly as AI investments from previous years start to pay off. Revenue growth accelerated to 24% in Q2, compared to 22% in Q1 and 14% from the same quarter last year. EPS increased 294% to $9.11, mainly due to investment gains. As the official EPS figure is distorted by investment gains and tax provisions, it makes more sense to look at the operating income instead to access the real profitability of the business. Operating income increased 30.4% in Q2 to $40.77 billion, with operating margin also improved 2% to 34%.

Looking at individual business segments, search and subscriptions revenue increased more than 15%, Youtube ads grew 12.8%, and Google Cloud revenue increased by an extraordinary 82%, mainly driven by strong AI demands. Aside from the major business segments, other high potential ventures such as the quantum computer and the Waymo robotaxi business are also showing promising progress and may deliver outsized returns in the future.

Overall, everything seems to be going well at Google and I’m happy to continue holding this position even if the stock is no longer cheap. The following DCF model projects a 25% annual operating cash flow growth for the next 5 years and assumes 1% annual share dilution now that the company has started to issue new shares to fund its massive capex. While I support the management’s capex decision which has shown real results, I suspect the current rate of growth will not be sustainable over the long-term. Please be aware that the 25% growth projection is still highly optimistic, even if it is lower than the 30%+ growth reported during this quarter, as risks typically increase with heavy capital expenditure with uncertain future return on investments. This DCF model indicates a potential 17% CAGR and a fair price of $491 per share if Google’s capex delivers good returns over the next 5 years.

Figure 5. Alphabet Inc Q2 DCF model

Amazon (AMZN)

Amazon demolished all Wall Street expectations and the company reached $3 trillion market capitalization for the first time after reporting Q2 results. Revenue increased 20% year-over-year to $200.6 billion, operating income surged 43% to $27.5 billion and operating margin improved 2.3% to 13.7% year-over-year. AWS revenue hit $42.2 billion, growing 37% year-over-year, its fastest growth rate in 18 quarters. Venture businesses such as the Project Kuiper (Starlink competitor) and Zoox (robo taxi business) are all making meaningful progress, with Zoox cleared major regulatory milestone which allowed the company to charge for commercial autonomous rides.

Amazon stock still looks undervalued even after the post-earnings price surge. The DCF model below projects a conservative 15% annual operating cash flow growth over 5 years, significantly lower than the current growth rate, yet the result still indicates a 43% upside on the stock price, which implies an 18% annual return over the next 5 years.

Figure 7. Amazon Q2 DCF model (includes 1% share dilution)

Visa Inc (V)

Visa Inc. delivered solid financial results as usual in fiscal Q3, reported revenue of $11.63b and EPS of $3.32, up 14% and 11% respectively year-over-year. Both payments volume and processed transactions increased 10% year-over-year, demonstrating resilience in consumer and business spending. While the stock is no longer cheap after the recent price recovery, it is a solid hold for me personally given its strong moat and stable business model. The stock appears to be fairly priced assuming a 10.6% free cash flow growth over the next 5 years which indicates a 12.3% annual return as shown in the DCF model below.

Figure 8. Visa Fiscal Q3 DCF model (includes 2.77% annual share repurchase)

International Stocks

Vitec Software (VIT.B)

Vitec Software Group reported strong Q2 results with revenue growth rate re-accelerated to 15%, up from high single digits from the past few quarters. Recurring Revenue was SEK 801 million (86% of total revenue), up 12% year-over-year. Cash EBIT (earnings KPI adjusted for M&A related distortions) was SEK 235 million, up 18% year-over-year, with margin expanding to 25% (up from 24%). The TTM cash EBIT per share is SEK 21.93, indicating a 9% yield on the current stock price of SEK 244.8, which is an incredible price to pay for a high-growth vertical market software business with highly sticky and recurring revenues. The transaction-based revenue started to recovery in Q2, growing 21% year-over-year driven by tailwinds in the Swedish real estate market.

The DCF model below shows that the VIT.B stock is significantly undervalued based on a 15% operating cash flow growth projection over the next 5 years. The stock could potentially deliver 25% annual growth, or a nearly 200% return over 5 years. As the ongoing “SaaSpocalypse“ continue to drive the stock price down to new lows, I was able to add to my Vitec positions at attractive prices in July. You can find more details about my trades below.

Figure 9. Vitec Software Q2 DCF model (includes 3.7% annual dilution)

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Portfolio Holdings

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15DEC28 Put US$240 (-US$372)*
-1 contract ADBE 21JAN28 Put US$200 (-US$396)
-1 contract META 21JAN28 Put US$400 (US$226)

*I have rolled the ADBE 15JAN27 $250 Put option to ADBE 15DEC28 Put US$240 which expires at a later date to reduce risks and earn additional income, see Trades in Taxable Accounts section for details

Trades in TFSA Account

No trades in TFSA for July

The TFSA account value changed from $193,013 to $201,601, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

$5207 of new contribution
🟢Bought 2 shares of CSU @ $2,626.49

RRSP account value changed from $180,190 to $194,231.

Trades in Taxable Accounts

Taxable Accounts include my Wealthsimple Cash, Wealthsimple Margin and Interactive Brokers (IBKR) Margin account. The 2 option trades represents LEAP put option rolling to reduce risks and earn additional income.

🟢Bought 102 shares of VIT-B @ SEK 215
🟢Bought back 1 contract ADBE 15JAN27 US$250 @US$28.84 (Paid US$2884, realized loss US$720.84)
🔴Sold short 1 contract ADBE 15DEC28 Put US$240 @US$51.81

Total margin balance* increased slightly from $52,300 to $52,500. The average effective cost of margin capital is less than 2% after tax deduction, significantly lower than the average long-term portfolio return. I intend to keep my margin balance below 10% of my total account value to maintain a moderate level of risk.

Summary

Account Name	Value End of June	Value End of July
IBKR (net of margin)	$360,470	$379,698
WealthSimple	$221,969	$220,769
Taxable Accounts Total	$582,439	$600,467
TFSA	$193,013	$201,601
RRSP	$180,190	$194,231
Total Portfolio Net Value*	$955,642	$996,299

*Total margin balance is the sum of margin balance from my Wealthsimple margin and IBKR accounts. This amount includes borrowed funds in CAD and JPY, rounded to the nearest 100s.

*Portfolio net value is calculated net of margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy not recommended for new investors. I’ve sold the CBIL position and discontinued the approach mentioned in the previous update about using the CBIL position to avoid automatic HELOC interests charge enforced by the National Bank of Canada. This decision has been made to simplify book keeping since additional buys and sells trigger capital gains tax events.

Net new borrowing of $4,620
🟢 Bought 2 shares of CSU @ $2,560
🔴 Sold 10 shares of CBIL @ $50

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
AMZN CDR	366	$11,331.36 (+39.83%)
CSU	12	$36,035.88 (-0.61%)
MEQ	52	$9,223.76(-8.72%)
META CDR	514	$15,250.38 (-9.28%)
CRM CDR	1,388	$19,473.64 (-11.85%)
UNH CDR	440	$8,360.00 (+66.81%)
VISA CDR	242	$8,082.80 (+25.82%)
Total Market Value		$107,761.99
HELOC balance*		($94,064.51)
Net Gains (Losses)		$13,697.48

*HELOC interest rate paid: prime + 0.25%= 4.7%, effective interest rate after tax deduction: 2.68%, Invested capital excluding interests paid: $90,610.93

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

💸My $1.5M FIRE progress update

SoloFIRE — Thu, 16 Jul 2026 02:09:24 +0000

After 8 years of aggressive investing, I am finally ready to enter the next stage of my FIRE plan, which is to re-focus my cashflow on debt repayment to reduce fixed cost. Here is an overview of my current financial positions as of July 11th (all currency in CAD):

Financial Assets

DIY stock portfolio (taxable/TFSA/RRSP): $1,027,993
WS private Equity: $11,872
Employer RRSP: $54,000
Smith Maneuver portfolio: $99,486
Crypto cold wallet: $10,600
—-
Total: $1,203,951

Portfolio Debt

Margin Loans: $52,335
HELOC Balance: $88,823
—-
Total Debt: $141,158

Current Monthly Fixed Cost

Mortgage: $2,300
Condo Fee: $670
Property Tax: $246
Utilities (insurance/internet/phones/hydro..): ~$300
Food: $600
No guilt spending: $200
Travel budget: $1000
—-
Total: $5,316
Annual burn rate: $63,792
Emergency funds: I keep multiple personal line of credit opened which can cover 1.5 years of expenses.

Based my financial position, I am satisfied with my equity portfolio size which should compound itself to $1.5M within a few years without additional contribution. However, my burn rate is slightly higher than my $60,000 target (covered by $1.5M end goal using 4% rule). My focus over the next 2-3 years will be mainly paying down the mortgage balance to reduce the monthly payment down to about $1500. This will reduce my burn rate to about $54,192, comfortably below the spending limit after FIRE. My future contribution to the portfolios will be mostly for registered accounts only, with the rest of saving goes into debt repayment.

One important consideration is that the mortgage payments in Canada does not decrease even if you accelerates the payment once the term is locked. My workaround will be to use WealthSimple portfolio line of credit (PLOC) to make a significant repayment in the upcoming renewal in October, and aggressively pay it down over the next 1-2 years. This allows me to lock in the fixed cost reduction, aka reducing mortgage payment to $1,500 per month immediately, while also allowing me to continue reducing fixed cost as I'm paying down the PLOC. The WS PLOC currently offers an lower rate of 3.9% compared to my new 4.21% 5-year fixed mortgage rate.

Overall, I'm feeling pretty good about my progress and should be able achieve FIRE in the next 3 years. Checkout my original post on Blossom for comments and discussions.

SoloFIRE Portfolio Update - 2026 June - $955k

SoloFIRE — Wed, 08 Jul 2026 22:12:04 +0000

💡Monthly Highlight
- Better Measurement of Performance
Updated Stock Analysis and Valuations
- Adobe Inc (ADBE)
💸Detailed Portfolio Update
Quick Links

Figure 1. Stock Portfolio Value as of July 2nd 2026, excluding margin and options balance (created with StockUnlock)

💡Monthly Highlight

My portfolio's net asset value declined by about $36,000 compared to last month as renewed fears of AI disruption triggered another selloff in software stocks. Over the past year, my portfolio has underperformed major indices such as the S&P 500, trailing by roughly 14 percentage points.

This underperformance is partly the result of my concentrated exposure to the software sector, which lies within my circle of competence as a software engineer. The other reason is my stubborn commitment to value investing. I continue to avoid chasing the market's hottest stocks and sectors, most notably semiconductors and space-related companies, which have been driving up the market recently. Ironically this very same set of value investing policy has kept me from buying the high-flying software stocks during the 2021 bubble. While it felt frustrating at the time due to the temporary underperformance, it ultimately helped my portfolio decline far less than the overall market in the following year and outperformed the market from 2022 to 2025.

Today it seems that another emotionally driven market cycle is unfolding. This is when value investing becomes difficult, not because the principles stop working, but because it requires patience while everyone else appears to be getting rich overnight. Many of “value“ investors will abandon all their principals and prudence to chase the hot stocks for quick returns, losing themselves to the greed that will eventually lead to permanent capital losses. I have no idea whether my software holdings will outperform over the next year or two, but I do know that I will not abandon my investment philosophy simply because it has temporarily fallen out of favor. I intend to stay within my circle of competence, continue buying businesses rather than stock tickers, and let long-term compounding do the heavy lifting.

Better Measurement of Performance

As stock prices can be heavily influenced by the emotional market participants in the short term, I believe a better measure of investment performance is the growth in per-share earnings or free cash flow, together with the long-term sustainability of that growth, as determined by factors such as the business model, competitive moat, and management quality, rather than short-term stock price movements. Over the long run (5 - 10 years), stock prices should ultimately reflect the earnings power of the underlying business.

When I review my portfolio, I see that most of my holdings including every software companies have continued to grow both revenue and earnings per share. Great buying opportunities are usually created when the fundamentals are improving at the same time as the stock price declines. I believe this is exactly what has happened with the software stocks in my portfolio, which is why I have been aggressively adding to these positions over the past few months.

Risks of Semiconductor Stocks

On page 165 of the book The Intelligent Investor it writes:

This paragraph has perfectly described cyclical memory businesses such Micron Technology. I’ve seen many “value“ investors argue that the stock cheap based on its low P/E ratio and high growth rate, while being ignorant about the fact that the earnings on which their valuation models rely are highly cyclical and may not be sustainable.

There are several reasons why I think investing in the semiconductor industry, especially the memory producers are extremely risky right now:

Demand is heavily concentrated among a handful of hyperscalers. Much of the industry's recent growth has been driven by a small number of large cloud providers investing aggressively in AI data centers. However, these companies have been increasing capital expenditures at an extraordinary pace for several years and are likely approaching the limits of what investors are willing to finance. Alphabet's recent US$80 billion equity raise may be an early indication of these capital constraints. If the ROI does not meet expectations (due to high memory prices), these spendings will face strong push back from investors which can result in contraction in hardware spendings.
Supply will eventually catch up with demand. The three major memory manufacturers are all expanding production capacity as quickly as possible to address the current supply shortage. History has proved that increased supply will eventually restore balance and put downward pressure on pricing. More importantly, the stock market is forward-looking. Share prices are likely to start declining well before the industry reaches peak supply, and no one can reliably predict when that turning point will occur.
Sentiment has become a powerful driver of valuations. The remarkable appreciation in many semiconductor stocks has been fueled not only by improving fundamentals but also by investor enthusiasm and a self-reinforcing cycle. When a particular sector dominates financial headlines and attracts widespread attention, expectations are often already priced to perfection. Rising prices lure in even more buyers, pushing valuations higher until no more buyers are left.

Updated Stock Analysis and Valuations

Adobe Inc (ADBE)

Adobe stock declined sharply after the company reported Q2 results, as the announced departure of its CFO rattled investors just one quarter after the planned departure of the CEO was disclosed. The operation result of the business continued to perform well. Revenue increased 13% year over year, while EPS rose 18% to $5.96 per share. Excluding the Semrush acquisition, annual recurring revenue (ARR) grew 10.5%, a slight slowdown from the 10.9% growth reported in the previous quarter. Following the selloff, Adobe is now trading at approximately 8× forward P/E and offers a free cash flow (FCF) yield of roughly 9%, excluding stock-based compensation.

While the uncertainty surrounding the management transition is not ideal, it has also created one of the most compelling opportunities in years to purchase a highly profitable, market-leading software business at a valuation typically reserved for slow-growing, low-margin companies. During Q2, Adobe continued to make meaningful progress in AI product development, with AI-first ARR tripling year over year. Its freemium user base also grew 20% to 850 million users. I believe prioritizing user growth over short-term price increases is the right strategy in a rapidly expanding content creation market, as having more users should strengthen Adobe's ecosystem, reinforce its network effects, and create greater long-term pricing power. At the current valuation, I believe a great deal of bad news has already been priced into the stock, leaving investors with a large margin of safety even with conservative assumptions.

The updated DCF valuation for Adobe is shown below. To remain conservative, I assume that free cash flow growth decelerates by 15% each year over the next five years and apply a terminal P/FCF multiple of 15×, well below the company's historical average. Even under these pessimistic assumptions, the model suggests an intrinsic value of approximately $419 per share, implying a potential annual return of around 25% over the next five years.

Figure 2. ADBE Q1 DCF Model using FCF

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Portfolio Holdings

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15JAN27 US$250 (-US$2,377)
-1 contract ADBE 21JAN28 US$200 (-US$1,140)
-1 contract META 21JAN28 US$400 (US$249)

Trades in TFSA Account

🟢Bought 1 share of CRM @ US$195.09

The TFSA account value changed from $199,487 to $193,013, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

🟢Bought 1 share of MEQ.TO @ $172.69

RRSP account value changed from $187,138 to $180,190.

Trades in Taxable Accounts

Taxable Accounts include my Wealthsimple Cash, Wealthsimple Margin and Interactive Brokers (IBKR) Margin account.

🔴Sold 1 share of MKL @ US$1828.92 (+34.16%)
🔴Sold 10 shares of HHH @ US$67.31 (-7.82%)
🟢Bought 26 shares of ADBE @ US$215.08
🟢Bought 200 shares of WEN @ US$7.57 (speculative bet)

Total margin balance* increased from $45,800 to $52,300. The average effective cost of margin capital is less than 2% after tax deduction, significantly lower than the average long-term portfolio return. I intend to keep my margin balance below 10% of my total account value to maintain a moderate level of risk.

Summary

Account Name	Value End of May	Value End of June
IBKR (net of margin)	$385,240	$360,470
WealthSimple	$219,840	$221,969
Taxable Accounts Total	$605,080	$582,439
TFSA	$199,487	$193,013
RRSP	$187,138	$180,190
Total Portfolio Net Value*	$991,705	$955,642

*Total margin balance is the sum of margin balance from my Wealthsimple margin and IBKR accounts. This amount includes borrowed funds in CAD and JPY, rounded to the nearest 100s.

*Portfolio net value is calculated net of margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy not recommended for new investors.

You may have noticed that a small CBIL position has been added to the portfolio. This is a new workaround to avoid automatic HELOC interests charge enforced by the National Bank of Canada. By selling CBIL before the end of each interest billing cycle and use it to repay the minimum interest charge, then borrowing it back out and buyback the CBIL in the next cycle, I can eliminate the automatic interest charge to the linked checking account. This allows transactions to only happen between the HELOC and the investment account, resulting in better bookkeeping and better compliance to the tax code.

$9114.61 net new borrowing
🟢 Bought 154 shares of META CDR @ $32.51
🟢 Bought 307 shares of CRM CDR @ $12.999
🟢 Bought 10 shares of CBIL @ $50.06
🔴 Sold 7 shares of CBIL @ $50.01

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
AMZN CDR	366	$10,215.06 (+26.06%)
CSU	10	$28,060.50 (-9.88%)
MEQ	52	$9,021.48 (-10.72%)
META CDR	514	$16,170.44 (-3.81%)
CRM CDR	1,388	$17,363.88 (-21.40%)
UNH CDR	440	$8,536 (+70.32%)
VISA CDR	242	$7,978.74 (+24.20%)
CBIL	3	$150.12
Total Market Value		$97,496.22
HELOC balance*		($88,875.78)
Net Gains (Losses)		$8,620.44

*HELOC interest rate paid: prime + 0.25%= 4.7%, effective interest rate after tax deduction: 2.68%, Invested capital excluding interests added to the balance: $85,990.93

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

SoloFIRE Portfolio Update - 2026 May - $991,000

SoloFIRE — Wed, 10 Jun 2026 02:49:55 +0000

💡Monthly Highlight
Updated Stock Analysis and Valuations
International Holdings
- HENNGE (4475.T)
💸Detailed Portfolio Update
Quick Links

Figure 1. Stock Portfolio Value as of May 31st 2026, ignoring margin balance (portfolio value appears higher due to after-hours rally in software stocks; created with StockUnlock)

💡Monthly Highlight

The stock market reached new highs in May, and my portfolio followed suit as the software sector experienced a significant recovery from the recent “SaaSpocalypse” selloff. Excluding new contributions, net portfolio value increased by nearly 5% to about $991,000, while total invested capital surpassed $1 million for the first time.

I continue to see substantial opportunities in the software sector. The latest earnings reports from 2 of my core holdings, Constellation Software (CSU) and Salesforce (CRM), showed both accelerating revenue growth and improving profitability, providing increasingly strong evidence that the ongoing “SaaSpocalypse” narrative is likely wrong. At the same time, signs are beginning to emerge that the cost of AI agents could rise materially over time, forcing companies to reassess their AI spending and expected returns on investment. Given the discounted valuation of software positions in my portfolio, I expect them to perform well regardless of whether AI adoption accelerates or moderates in the years ahead. More details on this topic can be found in my previous writing.

Over the past month, I increased my investments in Adobe, Salesforce and Constellation Software as their shares continued to trade at bargain prices. I expect these holdings to deliver more than 20% annual return over the next 5 years as long as they can continue to grow earnings per share, successfully integrate AI into their products and workflows, and improve the efficiency of their operations. To fund these additional investment, I trimmed my Alphabet position (GOOGL), which is trading at premium valuations with likely lower expected future returns. Going forward, there will be no changes to my overall investing approach, and I intend to keep trading activity to a minimum and allow long-term business performance and compounding to drive returns with as little interference as possible.

Updated Stock Analysis and Valuations

Constellation Software (TSE:CSU)

Constellation Software reported 20% revenue growth in Q1, accelerated from the 15% revenue growth rate in 2025. Free cash flow (FCF*) grew 28.8% excluding IRGA liability. Organic growth was 2%, inline with historical averages. FCFA2S is growing faster than the revenue, indicating margin expansion.

The company deployed US$726 million toward new acquisitions during the quarter, representing more than 100% of the free cash flow generated from operations. This highlights the abundance of investment opportunities still available in the private vertical market software (VMS) sector. Combined with its new public-market investment strategy (PEMS), CSU now has access to an enormous opportunity set with more than enough avenues to deploy capital for the foreseeable future. I think it is reasonable to expect CSU to continue delivering annual revenue growth of 15–20% over the next decade.

On the recent annual shareholder meeting, CSU management addressed many important questions from investors, here are some key information:

The majority of business units (BU) does not have seat based pricing. For the BUs with seat based pricing, value based pricing model (such as charging AI token usage) has already been worked on to properly charge for the additional value provided.
Customers of vertical software solutions does not want any changes. Discussions with customers centered around solving problems, and AI is mentioned only when it can help solving the problem at hand.
CSU have only lost customers because of missing features, they have never lost customers due to price (such as switching to cheaper AI solutions).
Management have not seen any customer write their own code using AI. Very few customers modified code on their onsite mainframes, but have later reached out to CSU again when the developers left the company.
Management has put incentives in place to encourage more organic growth
Economy of scale: CSU has negotiated with AI providers to get discounted tokens
There has been no major layoffs. Employee moral is high and people are eager to use AI for more innovations.

Based on the Q1 report and annual meeting, it has become clear that:

AI has not disrupted most of the business units
The management has seen meaningful productivity increase after utilizing AI in software development. This could be partially responsible for the Q1 margin expansion.
There are ample investment opportunities in both private and public markets for CSU to deploy capital and maintain 15 - 20% revenue growth rate.

Based on the above information, it should be reasonable to project a 15% free cash flow growth over the next 5 years and a 25 P/FCF end multiple for our DCF model. The result show that the CSU stock is significantly undervalued, with a fair value of $5,354 per share and could potentially deliver a 25% CAGR over the next 5 years.

Figure 2. CSU DCF Model using TTM FCFA2S in Canadian dollar adjusted for IRGA liability

*FCF = FCFA2S - IRGA liability

Brookfield Corporation (BN)

Brookfield Corporation reported distributable earnings (DE) before realizations of US$1.4 billion ($0.59/share) for the quarter and US$5.5 billion (US$2.32 per share) over the last twelve months (LTM), representing growth of 7% and 6% per share over the prior year periods respectively. Although the company continues to move in the right direction, earnings growth has slowed meaningfully in recent quarters, creating a noticeable gap relative to management’s long-term target of approximately 20% annual growth in its core businesses.

Figure 3. BN’s Q1 Distributable Earnings Breakdown

From the DE breakdown figure above, we can see that DE from the Wealth solution segment were flat during the quarter, primarily due to unfavorable mark-to-market losses in its public equity portfolio. DE for the past year still increased approximately 10% despite this headwind. Brookfield Property Group (BPG) experienced significant decline in earnings as the company continued to sell off non-core real estate assets. The “super-core“ part of the portfolio ended the quarter at 96% occupancy, with new lease achieving net rents 15% above expiring levels, which is good to see.

DE from Asset Management increased about 12% year-over-year. With BN’s focus on AI data centers and energy infrastructure buildout, I expect more growth to be delivered from the Asset Management, BIP (infrastructure) and BEP (Renewable energy) segments. I also expect wealth solution business to resume growth as the public equity market recovers from the March correction.

To remain conservative, I project a 15% annual growth rate in DE before realizations rather than the 20% growth rate targeted by management. Under these assumptions, the DCF model suggests a potential annual return of approximately 16% over the next five years. While this rate of return seems attractive, the outcome will ultimately depend on Brookfield's ability to execute on its growth strategy. I will continue to monitor this position closely and will reassess my investment thesis if the company fails to demonstrate meaningful improvement over multiple years.

Figure 4. BN’s DCF model using TTM DE before realizations, in US dollar

Salesforce (CRM)

Salesforce reported 13% revenue growth in Q1, compared with the 8 - 9% growth rate achieved a year ago. EPS increased 50% to US$3.88. CRM stock continue to trade at historically low forward P/E ratio of 13, even as the business begins to reaccelerate.

The newly introduced value-based pricing model, measured by the agentic work units (AWUs), is showing promising early results, with usage increasing 111% quarter over quarter. Annual recurring revenue (ARR) from AI product suite: Agentforce and Data Cloud, reached nearly $3.4 billion, up more than 200% year over year. Salesforce has also authorized a massive $25 billion share repurchase program and bought back approximately 10% of total shares outstanding in Q1 alone, which should create significant shareholder value given the stock’s depressed valuation.

I believe Salesforce stands to benefit from AI as it continues to leverage proprietary data and deeply integrated platform to build effective AI solutions that enhance existing enterprise workflows. Evidence of this can be seen in the enormous volume of API activity across core products (1 trillion calls in Q1) as well as growing customer adoption of MCPs (APIs for AI agents). Salesforce’s key competitive advantages: high switching costs, a deeply integrated customer base, and the network effects of its AppExchange ecosystem, all appear to remain firmly intact.

Based on the DCF model below, and assuming a terminal P/FCF multiple of 20 and a conservative 10% annual free cash flow growth rate, CRM stock appears to be worth about US$390 per share. This implies a potential CAGR of 26.9% over the next five years.

Figure 5. CRM DCF model using TTM FCF

Mainstreet Equity (TSE:MEQ)

Mainstreet Equity reported 5.4% revenue and FFO (free cash flow for real estate business) growth in Q2 2026. FFO per share increased 5.5% to $2.49, while operating margin improved from 62.3% to 64.4% year-over-year.

The vacancy rate increased from 4.6% to 5.8%, which is not ideal but was largely expected given the weaker market environment. Total capital deployed during the quarter was $12.1 million with 106 new units acquired, this was significantly higher than the $0.9 million invested and one unit acquired in Q2 2025, although it was lower than the level seen in Q1. I hope to see acquisition activity accelerate in the coming quarters.

With $855 million of available liquidity for acquisitions, combined with about 10% of its assets still undergoing renovations, Mainstreet has ample room for future growth. Management is expecting meaningful earnings and asset value growth by 2027 - 2028 as there are much less new housing supply that is being built currently due to challenging economic conditions and restrictive immigration policies.

I consider Mainstreet a stable real estate business with a highly attractive risk-reward profile with opportunity of significant counter-cyclical growth. Based on the DCF model below, MEQ stock appears undervalued at current prices and could potentially deliver annual returns of approximately 16% over the next five years.

Figure 6. MEQ’s DCF Model using TTM FFO

International Holdings

HENNGE (4475.T)

HENNGE reported 17.7% year-over-year revenue growth in Q2, with its core product, HENNGE One, growing 19.2% to ¥5.79 billion and accounting for 94% of total revenue. The company is becoming more profitable with gross margin expanding by 0.5 percentage points to 86.9%. Churn rate declined from 0.32% to 0.26%, indicating improving customer retention and a strong product value proposition. Operating profit increased only 13.3%, reflecting higher spending on advertising and new hires as management continues to invest in future growth. I expect high returns on these investments as it will help the company capture more market shares.

I continue to see significant growth opportunities for HENNGE as more Japanese companies migrate from legacy IT infrastructure to cloud-based systems, increasing demand for the cloud cybersecurity solutions that the company provides. HENNGE has not been spared from the broader "SaaSpocalypse" selloff and continues to trade at what I believe are attractive valuations. Given the higher risk profile associated with small-cap companies, I intend to keep my HENNGE position relatively small at approximately 1% of the overall portfolio.

Based on the DCF model below, Hennge stock appears to be trading at only half of its intrinsic value and could return 26% CAGR for the next 5 years. Due to the risky nature of small cap companies, I intend to keep my Hennge position small at about 1% of the total portfolio.

Figure 7. Hennge DCF Model using TTM FCF

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Portfolio Holdings

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15JAN27 US$250
-1 contract ADBE 21JAN28 US$200
-1 contract META 21JAN28 US$400

Trades in TFSA Account

🔴Sold 16 shares of GOOGL @ US$386.8 (+188.98%)
🟢Bought 23 shares of CRM @ US$181.64
🟢Bought 8 shares of ADBE@ US$242.62

The TFSA account value changed from $191,575 to $199,487, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

$4,950 new contribution
🟢Bought 2 shares of CSU @ $2385.18
🟢Bought 1 share of MEQ @ $169.99

RRSP account value changed from $173,181 to $187,138.

Trades in Taxable Accounts

Taxable Accounts include my Wealthsimple Cash, Wealthsimple Margin and Interactive Brokers (IBKR) Margin account.

🔴Sold 15 shares of GOOGL @ US$399.26 (+198.26%)
🟢Bought 10 shares of META @ US$603.71
🟢Bought 2 shares of CSU @ $2430.01

Total margin balance* increased from about $40,800 to $45,800, reflecting increased margin usage in Wealthsimple Margin account and interest charges. The average effective cost of margin capital is less than 2% after tax deduction, significantly lower than the average long-term portfolio return. I intend to keep my margin balance below 10% of my total account value to maintain a moderate level of risk.

Summary

Account Name	Value End of Apr	Value End of May
IBKR (net of margin)	$366,382	$385,240
WealthSimple	$208,206	$219,840
Taxable Accounts Total	$574,588	$605,080
TFSA	$191,575	$199,487
RRSP	$173,181	$187,138
Total Portfolio Net Value*	$939,344	$991,705

*Total margin balance is the sum of margin balance from my Wealthsimple margin and IBKR accounts. This amount includes borrowed funds in CAD and JPY, rounded to the nearest 100s.

*Portfolio net value is calculated net of margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy not recommended for new investors.

Repaid HELOC $1465.95
🔴Sold 246 shares of GOOG CDR @ $61.968 (+130.96%, entire position)
🟢 Bought 645 shares of CRM CDR @ $13.935
🟢 Bought 149 shares of META CDR @ $32.27

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
AMZN CDR	366	$11,408.22 (+40.78%)
CSU	10	$28,228.30 (-9.34%)
MEQ	52	$8,574.80 (-15.14%)
META CDR	360	$12,157.20 (+2.99%)
CRM CDR	1,081	$15,815.03 (-12.63%)
UNH CDR	440	$7,686.80 (+53.38%)
VISA CDR	242	$7,240.64 (+12.71%)
Total Market Value		$91,110.99
HELOC balance*		($79,429.61)
Net Gains (Losses)		$11681.38

*HELOC interest rate paid: prime + 0.25%= 4.7%, effective interest rate after tax deduction: 2.68%, Invested capital excluding interests paid: $76,376.32

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

AI Cost Inflection Point

SoloFIRE — Sat, 23 May 2026 19:50:46 +0000

I found a great video made by Chris Nour today about AI token price increase and its implication for software stock valuations, and I think it can be valuable for you:

Some evidence start to appear indicating the current rapid AI adoption may not be sustainable as token price increases:

I believe this is just the start of this trend as AI model providers such as OpenAI and Anthropics are currently bleeding money, and they will have to continuously increase token prices. If companies start to scale back AI adoption, they would have to hire more employees to compensate for the lost AI productivity, which will increase software vendors' seat-based revenue. If they continue to adopt AI, software companies ($CRM ( ▼ 0.19% ) $ADBE ( ▼ 2.25% ) ) will still benefits from token based pricing. Either way, I personally think the thesis of a software rebound is getting stronger.

A potential slowing AI adoption could also have strong negative impact on high flying hardware and memory stocks, which I consider expensive and highly risky.

For my personal portfolio, I plan to start trimming a bit more of my Google position as the combination of high valuation (40+ adjusted P/E ratio excluding investment gains), high weighting (24% of portfolio) and increasing AI cost risks making it a less attractive long term investment compared to many software companies currently trading at significant discount compared to their intrinsic values. I plan to use the proceeds to add to my ADBE and CRM positions.

I hope this is helpful, and I plan to send you more information like this once in a while as I continue to observe the market on a daily basis. If you have any feedbacks or suggestions, please feel free to message me on Blossom Social.

SoloFIRE Portfolio Update - 2026 April - $939,000

SoloFIRE — Sat, 09 May 2026 14:15:16 +0000

💡Monthly Highlight
- Updated Stock Analysis and Valuations
International Holdings (Not shared on Blossom)
- Vitec Software Group (VIT-B)
💸Detailed Portfolio Update
Quick Links

Figure 1. Stock Portfolio Value as of May 1st 2026, ignoring margin balance (Created with StockUnlock)

💡Monthly Highlight

The portfolio experienced significant recovery in April, with net assets increasing by more than $100,000 compared to the previous month, driven by a broad market recovery and strong earnings reported by several portfolio companies. Year-to-date time-weighted performance was -0.1%, compared to the S&P 500’s 5.5% return. Over the past 3 years, the portfolio returned 91.8% cumulatively, compared with 77.4% for the S&P 500.

The rapid recovery in April serves as yet another warning to investors of the dangers of trying to time the market. Major market indices surged after news of ceasefire negotiations became public on April 8, an outcome nobody could have predicted in advance. Missing out on this rebound would have had a significant negative impact on performance of any portfolios.

This market behavior continues to reinforce my investment approach, which focuses solely on the operating performance of my portfolio companies, and making investment decisions based on reported earnings rather than short-term movements in stock prices.

Updated Stock Analysis and Valuations

MSCI

MSCI reported Q1 revenue of $850.8 million, up 14.1% Y/Y, marking the third consecutive quarter of revenue acceleration. EPS increased 13.8% to $4.55. The revenue acceleration was mainly driven by the index segment, which grew 17.7% to $496 million, which in turn supported by strong growth in asset-based fees. These fees are percentage-based charges collected from ETFs linked to MSCI indices, calculated based on total assets under management (AUM). The following figure shows a breakdown of the Index segment’s performance.

Figure 2. MSCI Index Segment Results

Asset-based fees increased 26.6% despite the broad market decline during Q1 2026, indicating strong inflows into MSCI-linked ETFs. As markets continue to recover at the time of writing, MSCI stands to benefit from even higher asset-based fee revenue. The company also repurchased $464 million worth of shares in Q1, representing approximately 1.1% of total shares outstanding.

Assuming a conservative 10% annual free cash flow (FCF) growth rate over the next five years, MSCI stock appears to offer attractive value at current prices, with the potential to deliver a 14.6% annual return, assuming an additional 3% annual reduction in share count through buybacks.

One risk facing MSCI is customer concentration, with BlackRock accounting for 11.7% of total revenue. This gives BlackRock significant bargaining power when negotiating fees. Overall, I believe the risk-reward of MSCI stock is still highly positive, and I plan to continue holding this position long term.

Figure 3. MSCI DCF Valuation Model (Created with StockUnlock)

United Health Group (UNH)

UnitedHealth Group stock jumped 8% after reporting Q1 results, driven by stronger-than-expected revenue and EPS. The medical cost ratio came in at 83.9%, below the expected 85.5%, indicating the effectiveness of the cost-control initiatives implemented by the management.

On April 6, the Centers for Medicare & Medicaid Services (CMS) issued updated reimbursement rates that increased Medicare Advantage payments by 2.48%, compared with the previously proposed 0.09% increase. This is encouraging to see and should support the company’s turnaround efforts. In Q1, the share repurchase program was also resumed, with management targeting $2 billion in buybacks (approximately 0.6% of total shares outstanding) by the end of Q2.

Assuming EPS growth recovers to 10% annually from current levels, UNH stock appears to be trading around fair value based on the DCF model below, assuming 1% annual share buybacks. I believe there is potential for higher EPS growth if the company executes well and restores its earnings power to levels achieved several years ago. However, given the remaining uncertainty and the stock’s valuation, I plan to continue holding UNH without adding to my position.

Figure 4. UNH DCF Valuation Model

Alphabet Inc (GOOGL)

Alphabet Inc. (Google) reported a breakout quarter, with revenue reaching $109.9 billion, up 22% Y/Y and accelerating from the 18% growth reported in the previous quarter. The company’s massive distribution advantage and strong network effects continue to propel the business to new heights. Google Cloud delivered significant acceleration in growth, with revenue surging 63% to $20.0 billion, growing faster than all other hyperscalers, driven by enterprise AI solutions and infrastructure services.

Figure 5. Accelerating revenue, EPS and operating cash flow

EPS increased 82% to $5.11, although about half of the increase was driven by unrealized investment gains from private holdings such as Anthropic and SpaceX. As a result, it is more reasonable to look at the operating cash flow to measure Google’s underlying profitability, which grew 26.67% Y/Y to $45.79 billion. The faster growth in operating profits also indicates continued margin expansion, which is great to see.

While Google has performed exceptionally well, its valuation has also expanded meaningfully. Excluding unrealized investment gains, the adjusted P/E ratio now stands at approximately 39, significantly above historical averages. It is also unclear how long the current AI investment cycle will continue. If AI infrastructure spending slows or normalizes, it could materially affect future growth expectations and stock performance, making it important to value the business using conservative assumptions.

Based on the DCF model below, Google stock appears to be trading around fair value after the recent rally. The current valuation makes sense if the company can continue growing operating cash flow by 20% per year, which would allow the stock to deliver an estimated 12.9% annual return over the next 5 years. While Google may ultimately perform even better, the higher valuation is beginning to increase the risk profile of the investment, especially given its 24% weighting in the portfolio. For now, I plan to continue holding the stock, though I may consider trimming the position if valuations rise further or if more attractive opportunities emerge elsewhere.

Figure 6. GOOGL DCF Valuation Model

Meta (META)

Meta continued to deliver meaningful revenue acceleration in Q2, with revenue growing 33% Y/Y compared with 24% growth in the previous quarter. Operating income increased 30%, slightly slower than revenue growth due to the faster rise in operating expenses. Daily active users, ad impressions, and average price per ad all continued to increase year over year, indicating strong network effect and pricing power.

While the increase in operating expense is concerning, Meta has already demonstrated its ability to improve efficiency and reduce costs when necessary, most notably during its “Year of Efficiency” initiative in 2023. As long as the core business continues to execute well, I would not be worried too much.

Meta also plans to continue investing aggressively in AI and infrastructure, with 2026 capital expenditures now expected to increase from $115–135 billion to $125–145 billion, primarily due to higher component costs. I believe this elevated level of investment is justified, as the company is already seeing meaningful revenue acceleration. I support management’s decision to aggressively capture this growth opportunity, even if it comes at the expense of lower dividends and share repurchases in the near term.

The stock traded down about 10% following the earnings release, which I believe was an overreaction. Based on the DCF model below, Meta stock is offering significant value at current prices, with the potential to deliver a 22.7% CAGR over the next five years even under a conservative assumption of 20% annual operating cash flow growth, well below the 30% growth rate currently being achieved by the company. I plan to continue increasing my Meta position at prices around $600 per share.

Figure 7. META DCF Valuation Model

Amazon (AMZN)

Amazon reported 17% revenue growth in Q1 2026, with all business lines including online stores experiencing accelerated growth. Profit margins continued to expand, and operating income increased 29% Y/Y in Q1 and 30% over the trailing 12 months. Growth in AWS accelerated to 28%, up from 24% in the previous quarter driven by strong AI demands. . Amazon’s custom AI chip business grew more than 100% Y/Y and surpassed a $20 billion annual run rate, potentially reducing reliance on semiconductor suppliers such as Nvidia while allowing Amazon to capture a larger share of the highly profitable AI hardware market.

I continue to view Amazon stock as an attractive investment due to its ability to steadily expand margins on top of an enormous revenue base. I believe this can be achieved gradually as AI and robotics technologies continue advancing at a rapid pace. In addition, Amazon continues to develop innovative products and services such as Zoox robotaxis and Amazon Leo satellite services, both of which have delivered positive developments and could potentially drive significant revenue growth in the future.

While the market in general dislikes heavy capital expenditures, I view them positively for several reasons:

Recent investments have already driven meaningful increases in revenue and profitability.
All of Amazon’s previous investment cycles have consistently created substantial long-term shareholder value.
Continuous innovation and new product development are essential for long-term success in growth stocks, and Amazon has consistently executed on this strategy since its founding.

On the valuation side, the stock appears undervalued even under the assumption of a slower 17% annual operating cash flow growth rate over the next five years, which could still support an estimated 16% annual return assuming 1% annual share dilution. If operating cash flow continues growing closer to the current 30% rate, the potential returns would be significantly higher. I plan to continue holding Amazon stock as a major long-term position in my portfolio.

Figure 8. AMZN DCF Valuation Model

Visa (V)

I rarely mention Visa in my portfolio updates as it is such as strong business that it does not require much monitoring. The company generated $10.9 billion in revenue and EPS of $3.17, representing Y/Y growth of 17% and 20% respectively, an acceleration from the 15% revenue and EPS growth reported in the previous quarter. Payment volume increased 9%, reflecting resilient consumer spending despite macroeconomic uncertainty.

Share repurchases also more than doubled to $7.9 billion compared with the previous quarter, as management took advantage of the lower stock price. This represented more than 1% of total shares outstanding and should create significant long-term shareholder value.

Assuming annual share buybacks of 2.6% and free cash flow growth of 13%, Visa stock could potentially deliver a CAGR of approximately 17% over the next five years. I plan to continue holding the stock and may add to the position opportunistically.

Figure 9. V DCF Valuation Model

International Holdings (Not shared on Blossom)

Vitec Software Group (VIT-B)

Vitec Software Group reported 9% revenue growth and 11% growth in Cash EBIT (its preferred free cash flow equivalent metric) in Q1. Operating margin expanded slightly to 18%, compared with 17% a year ago. Subscription-based revenue increased 8%, while cyclical transactional revenue grew 2%, finally recovering after a year-long decline.

Figure 10. VIT-B Revenue Components

Vitec completed 2 new vertical market software (VMS) acquisitions during the quarter, contributing about 7% of total revenue growth. Acquisition-driven growth has slowed significantly compared with previous years, reflecting intense competition in the private VMS M&A market, which still does not appear to be meaningfully affected by the broader AI disruption narrative. While this represents a headwind for Vitec’s growth strategy, it is also reassuring to see that private market valuations continue to reflect confidence in the long-term durability of VMS businesses, which provides additional conviction for other software holdings in my portfolio.

It is important to recognize the opportunistic nature of M&A timing and deal availability. Throughout Vitec’s history, there have been periods with very few acquisitions followed by years with significantly more activity. I would much rather see management remain disciplined and avoid deals altogether than pursue acquisitions that destroy shareholder value.

The stock’s valuation remains attractive following its continued decline since the start of 2026. A DCF model assuming only 10% future cash flow growth and 4% annual share dilution results in a fair value of SEK 356 per share, implying a potential 17% CAGR over the next five years. Given the company’s relatively small size and highly capable management team, I believe Vitec still has the potential to reaccelerate annual growth rates back toward the 20% levels achieved in prior years. At this time, I have no plans to change my Vitec position, as the core investment thesis remains intact.

Figure 11. VIT-B DCF Valuation Model

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Portfolio Holdings

Combined portfolio holdings for TFSA, RRSP and all taxable accounts.

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15JAN27 US$250
-1 contract ADBE 21JAN28 US$200
-1 contract META 21JAN28 US$400

Trades in TFSA Account

No trade was executed in TFSA

The TFSA account value changed from $173,293 to $191,575, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

🔴Sold 7 shares of BRB.B @ US$474.94
🟢Bought 5 shares of META @ US$608.34
🟢Bought 1 share of ADBE @ US$243.51

RRSP account value changed from $158,249 to $173,181.

Trades in Taxable Accounts

Taxable Accounts include my Wealthsimple Cash, Wealthsimple Margin and Interactive Brokers (IBKR) Margin account.

🟢Bought 1 share of CSU @ $2,388.25

I have started to use the margin account in Wealthsimple to take advantage of their low CAD borrowing rate for generation clients. Total margin balance* increased from $38,700 to $40,800. The average effective cost of margin capital is less than 2% after tax deduction, significantly lower than the average long-term portfolio return. I intend to keep my margin balance below 10% of my total account value to maintain a moderate level of risk.

Summary

Account Name	Value End of Mar	Value End of April
IBKR (net of margin)	$318,131	$366,382
WealthSimple	$188,993	$208,206
Taxable Accounts Total	$507,124	$574,588
TFSA	$173,293	$191,575
RRSP	$158,249	$173,181
Total Portfolio Net Value*	$838,666	$939,344

*Total margin balance is the sum of margin balance from my Wealthsimple margin and IBKR accounts. This amount includes borrowed funds in CAD and JPY, rounded to the nearest 100s.

*Portfolio net value is calculated net of margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

No trade was executed

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
GOOG CDR	246	$15,055.20 (+128.10%)
AMZN CDR	366	$11,305.74 (+39.52%)
CSU	10	$24,419.50 (-21.58%)
MEQ	52	$9,356.36 (-7.41%)
META CDR	211	$6,876.49 (-1.71%)
CRM CDR	436	$6,156.32 (-32.44%)
UNH CDR	440	$7,471.20 (+49.08%)
VISA CDR	242	$7,291.46 (+13.50%)
Total Market Value		$87,932.27

Invested Principal: $77,842.27
HELOC balance: -$80,605.64
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

SoloFIRE Portfolio Update - 2026 Mar - $838,000

SoloFIRE — Sun, 05 Apr 2026 21:17:47 +0000

💡Monthly Highlight
- Earnings Release and Updated Stock Valuations
  - Constellation Software (CSU)
  - Adobe (ADBE)
💸Detailed Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Stock Portfolio Value as of April 2nd 2026, ignoring margin and cash balance (Created with StockUnlock)

💡Monthly Highlight

As war rages in the Middle East, the S&P 500 dropped 8% before seeing a modest recovery at the start of April. My portfolio was no exception: net asset value declined by 3.1%, or $26,945 in March, bringing the 2026 year-to-date performance down to -11.44%, compared with the 4% decline of the S&P.

The steeper decline in my portfolio was mainly due to concentrated positions in software-related companies such as Constellation Software (CSU), Adobe (ADBE), Salesforce (CRM), and MSCI, which have experienced a heavy selloff not seen since 2022. Many top-quality names are now trading at historically low valuations that are hard to ignore.

CSU reported earnings in March, and the results did not disappoint: 2025 revenue grew 15% year-over-year, while free cash flow (FCF) increased 28% after adjusting for the IRGA liability. At about $2,440 per share, CSU is trading at more than 5% FCF yield, with its growth engine still intact, competent and honest management, and a disciplined capital allocation strategy. I continue to view this as a generational opportunity and added 9 more shares to my position, bringing my total ownership to 57 shares.

War and Stock Market Crash

Fears have been mounting in the market as the armed conflict in the Middle East intensifies. Crude oil prices have risen above $100 per barrel, and the VIX index has reached a new high not seen since the 2025 global tariff announcement. The best way to navigate this volatile market environment is to look at history, and fortunately, the conclusion is simple: the market has always moved higher after periods of conflicts.

As mentioned in my recent post, war is always bearish on money, as major armed conflicts force governments to spend far more than they can possibly collect from their taxpayers. With the US and most major developed economies already running deficits, having a reginal war will likely further devalue the currencies. In such an environment, it will be extremely unwise to sell stocks, hold cash and pay taxes on the meager interest income that has no hope of outpacing inflation.

That said, it is still important to ensure that the business we own will not be materially disrupted by any ongoing conflict. For example, a company may face trouble for the following reasons:

Having significant operations in the war zone.
Weak pricing power, limiting the ability to raise prices more than the rate of inflation.
Excessive debt. As a potential inflationary environment may drive up interest rate.
Heavy dependence on transportation or oil-based energy supply (though depending on duration, this could also create opportunities).

After reviewing all the companies in my portfolio, including their business models, balance sheets and economic moats, I am fairly certain that they are in strong positions to navigate this market really well. As a result, there will be no changes to my investment strategy going forward.

Earnings Release and Updated Stock Valuations

Constellation Software (CSU)

Constellation Software reported revenue of US$3,177 million in Q4, representing 18% year-over-year growth and beating expectations. For full-year 2025, revenue grew 15%. Adjusted FCF increased 15.47% in Q4 after adding back the IRGA liability charge to the reported FCFA2S. For the full year, adjusted FCF reached US$1,935 million (CAD $2,698.8 million ), up 28% year over year.

This implies CSU is currently trading at about 5.2% FCF yield, or a price-to-FCF multiple of less than 20x for a company growing profits nearly 30% annually. In comparison, the S&P 500 index is trading at P/E of about 23x with expected EPS growth of 12-14%. CSU stock is therefore priced at a lower valuation while growing twice as fast. Combined with a strong balance sheet and an exceptional management team, I see an investment with meaningful upside and strong downside protection.

Another key development in Q4 is the adoption of the PEMS (Permanent Engaged Minority Shareholder) strategy, as CSU acquired a 12% stake in Sabre Corporation (SABR). Sabre is a vertical software provider in the travel industry and its stock price has declined 90% over the past 5 years. In contrast, Sabre has actually reported improving profitability and earned US$1.3 per share in the past 12 months.

Figure 2. Sabre Corp EPS trend

CSU paid around US$1-2 per share for the Sabre stock, which suggests they may be able to earn back their investment fairly quickly, given their expertise of buying “cigar butt“ vertical market software (VMS) companies and Sabre’s improving profit potential. As of April 2026, CSU has successfully secured a seat on the board of directors of Sabre, allowing them to directly the firm’s management and potentially guide the company into a better direction. If the PEMS strategy proves successful, it could open up another growth avenue in the public markets which will provide significant opportunities to sustain CSU’s growth for many years to come.

The DCF model valuation below suggests that CSU stock is significantly undervalued, with a fair value of $4,450 per share and a potential return of 24% CAGR over the next 5 years. This valuation is built on the following conservative estimates:

15% annual FCF growth rate, which is significantly lower than the current 28%
20 P/FCF after 5 years, no multiple expansions

Figure 3. CSU DCF model valuation

Adobe (ADBE)

Adobe reported 11% revenue growth and 19% EPS growth in Q4. Again, Adobe’s business is showing no sign of slowing at all, with revenue growth slightly accelerating compared to last year’s 10.6%. Adobe’s AI-related ARR has tripled year-over-year, with Firefly subscription and AI credit pack ending ARR grew 75% quarter-over-quarter. Adobe continues to demonstrate a significant moat around its businesses supported by its ecosystem, network effects, and deep workflow integration, all of which create high switching costs.

Based on the latest earnings call, I believe the overall demand for creative software is increasing rapidly as far more new content is being created with the help of AI. Adobe's major competitor Canva saw monthly active user (MAU) increase by 20% in 2025, while Adobe’s MAU increased 17% in comparison, which is not far behind. Adobe has also reported a 50% year-over-year increase in freemium MAUs, suggesting strong interests from new users.

One meaningful uncertainty surrounding the stock is the upcoming resignation of current CEO Shantanu Narayen, who has successfully led the company for 18 years. No successor has been appointed at the time of writing. I will monitor the development closely and may adjust my Adobe position depending on the new CEO appointment. Until then, I plan to keep Adobe as a core position in my portfolio. Trading at about 10x forward P/E ratio, Adobe stock could withstand many bad developments while still generating a satisfactory return for its investors.

A DCF model valuation shows that ADBE stock is significantly undervalued, with a fair value of US$461.79 per share and could deliver a return of 25% CAGR over the next 5 years. This valuation is built on top of the following conservative estimates:

10% annual FCF growth rate, which is lower than the current 12.2% Y/Y growth
15 P/FCF after 5 years, compared to 5 year average of 29
4% annual share repurchase, compared to 6% share repurchased in 2025

Figure 4. ADBE DCF model valuation

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Holdings Breakdown

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15JAN27 US$250
-1 contract ADBE 21JAN28 US$200
-1 contract META 21JAN28 US$400

Trades in TFSA Account

🟢Bought 0.1 shares of V @ US$300.6

The TFSA account value changed from $178,813 to $173,293, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

$5,070 new contribution
🟢Bought 2 shares of CSU @ $2,550
🔴Sold 36 shares of UBER @ US$74.48 (-0.33%)
🟢Bought 11 shares of ADBE @ US$248.22

RRSP account value changed from $159,010 to $158,249.

Trades in Taxable Accounts

Taxable Accounts include my Wealthsimple Cash account and Interactive Brokers (IBKR) Margin account.

🔴Sold 14 shares of UBER @ US$74.56 (-4.31%)
🔴Sold 81.6 shares of IFC @ $248.63 (+27.78%)
🟢Bought 5 shares of ADBE @ US$245.65
🟢Bought 10 shares of META @ US$529.24
🟢Bought 7 shares of CSU @ $2,436.42
🟢Bought 13.5 shares of BN @ $55.9
🟢Bought 200 shares of 4475.T (Hennge KK) @ JPY 936

Margin loans in the Interactive Brokers Margin account increased from $35,800 to about $38,700 including borrowed funds in CAD and JPY. With effective margin interest rates of about 1.96% for CAD and 0.86% for JPY after tax deductions (my marginal tax rate is 43%), using margin loan is very cost effective to take advantage of market opportunities. I keep my margin balance below 10% of my total account value to maintain a moderate risk level.

Summary

Account Name	Value End of Feb	Value End of Mar
IBKR (net of margin)	$330,657	$318,131
WealthSimple	$197,131	$188,993
Taxable Accounts Total	$527,788	$507,124
TFSA	$178,813	$173,293
RRSP	$159,010	$158,249
Total Portfolio Net Value*	$865,611	$838,666

*Portfolio net value is calculated net of margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

🟢 Bought 28 shares of META CDR @ $35.09

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
GOOG CDR	246	$11,648.10 (+76.48%)
AMZN CDR	366	$8,849.88 (+9.21%)
CSU	10	$24,412.70 (-21.60%)
MEQ	52	$9,232.60 (-8.63%)
META CDR	211	$6,503.02 (-7.05%)
CRM CDR	436	$6,278.40 (-31.10%)
UNH CDR	440	$5,632 (+12.38%)
VISA CDR	242	$6,698.56 (+4.27%)
Total Market Value		$79,255.26

Invested Principal: $77,842.27
HELOC balance: -$80,318.55
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

SoloFIRE Portfolio Update - 2026 Feb - $865k

SoloFIRE — Sun, 08 Mar 2026 01:38:20 +0000

💡Monthly Highlight
Earnings Release and Updated Stock Valuations
International Holdings (Not shared on Blossom)
💸Detailed Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Stock Portfolio Value as of Feb 27th 2026, ignoring margin and cash balance (Created with StockUnlock)

💡Monthly Highlight

The net portfolio value declined about $53,000 in February, or 5.8%, as sell-off in software sector intensified. As mentioned in my previous update, there is no doubt that AI is introducing additional risks such as increased competition and pressure on the traditional seat-based pricing model. However, for many leading software companies in my portfolio, such as Adobe and Constellation Software, these risks have yet to be reflected in their reported earnings 3 years after the initial release of ChatGPT. In fact, both companies have continued to grow revenue and earnings per share at rates exceeding 10% annually.

The important question to ask is, to what extent will AI disrupt the business models of software companies and how much of that risk has already been priced in? Many software stocks are trading at less than 15 P/E or P/FCF at the end of February (6.6% earnings yield). Even if these firms were to stop growing completely, investors could still expect returns much higher than the 4% yield on the 10-year Treasury.

On the other hand, if software companies successfully adapt by integrating AI into their products and development workflows, and transition toward usage-based pricing models, they may be able to sustain their current growth trajectories. In fact, increased productivity could even lead to higher profit margins and faster earnings growth.

As someone working at an enterprise software company, I have not yet observed any significant increase in churn rates, but I have seen some material productivity improvements in software developers. It appears that enterprise software customers are resisting changes that may disrupt their businesses. During the Vitec Software earnings call, the CEO has mentioned that while vertical market software (VMS) customers are asking for AI features, they always emphasize that no changes should be made for existing features, demonstrating the strong stickiness of established VMS products. So far as the evidence suggested, I believe it is more likely than not that the software industry will adapt to this new era of AI, and the incumbents will continue their current growth trajectory for the foreseeable future.

To capitalize on this rare opportunity to buy highest quality software names at significant discounts, I have again increased my position in Constellation Software (CSU) by adding 6 more shares, bringing the total to 48 shares. I have also further increased my share count in Adobe and Salesforce stock.

Earnings Release and Updated Stock Valuations

Alphabet (Google)

Google, or Alphabet Inc released Q4 2025 earnings report and the numbers are great at first glance, but there is more to it if you look deeper. There is no doubt that the revenue growth of the search business and Google cloud are absolutely amazing. Cloud revenue grew 48% and operating margin expanded more than 10% from 23.7% to 35%, surpassing all other hyperscalers.

The main issue with Google stock is its valuation. A large percentage of its net income comes from unrealized gains generated through investments in SpaceX and Anthropic (as highlighted in Figure 2). Once the impact of these “profits“ is excluded, organic net income growth is only about 10% year-over-year, increasing from $92.7 billion to $102.4 billion, which implies an adjusted P/E ratio of roughly 38.

Figure 2. Source: Google Q4 2025 Earnings Release

If we run DCF model to value Google stock based on the latest report, we arrive at a fair value of about $357 per share. This implies a potential 13% CAGR over the next five years, assuming a slight deceleration in operating cash flow growth to 15% annually and a terminal multiple of 17.68.

Figure 3. Google DCF Valuation

A 13% annual return is satisfactory, however it appears relatively unattractive compared to many high-quality software stocks that have been sold off significantly due to excessive fears of AI disruption. As a result, I trimmed my Google position over the past month and reinvested the proceeds in software names such as CSU and ADBE. That said, there is no doubt that Google still commands formidable operating leverage and I plan to hold the remaining position for the long-term.

Brookfield

Brookfield Corporation (BN) reported record earnings for full year 2025, with distributable earnings (DE) before realization grew 10.6% year-over-year to US$5.39 billion. DE after realization declined compared to 2024, which is expected due to a large realized gain from investment sales in 2024. DE before realization should paint a better picture of the underlying business performance.

While DE grew at a rate below the previously promised 15% target in 2025, it is great to see that the management is projecting 25% annual DE growth rate over the next 5 years, mainly driven by growth from the asset management and wealth solutions businesses. Both segments grew rapidly in 2025 with earnings increasing by 22% and 24% respectively. Given management’s strong track record and the solid growth in its core business lines, I am fairly confident in this projection and believe BN stock will deliver market-beating returns if it is achieved.

Proceeding to BN’s DCF model valuation, the stock should be worth about US$71 (CA$97) per share, indicating a 21.5% CAGR over the next 5 years, assuming a conservative 20% annual DE growth rate, a 20 P/DE multiple and 0 dilutions.

Figure 4. BN DCF Valuation

Amazon

Amazon stock (AMZN) fell about 15% after its earnings release, however the business has performed really well in Q4, with AWS growth rate accelerated to 24%. High-margin segments such as third-party seller services, subscriptions and advertising are all growing at double-digits rates. The stock’s valuation also appears very reasonable at around 16 price-to-operating-cash-flow (P/OCF), significantly below its historical average of 26 (as shown in Figure 5).

Figure 5. Amazon stock valuation in Price/Operating Cash flow (P/OCF) over 10 years

Amazon’s custom chip business, including Trainium (AI Training) and Inferentia (AI Inference), now has an annual run rate exceeding $10 billion, with growth of more than 100% year-over-year (Y/Y). Trainium chips are reported to offer 30-40% better price-performance compared with Nvidia GPUs for certain AI workload. With Amazon’s partnership with Anthropic and initiatives such as Project Rainier (AI data centers powered by Amazon’s custom silicon), I believe this business segment has the potential to capture some market share from Nvidia and drive meaningful growth over the next few years.

The DCF model valuation below shows that Amazon stock is currently undervalued, with a fair value of $303 and could potentially deliver 17.6% CAGR over the next 5 years.

Figure 6. Amazon DCF valuation

Salesforce

Salesforce (CRM) Q4 revenue growth re-accelerated to 12% Y/Y with full-year 2025 revenue up 10% Y/Y. Full year free cash flow (FCF) grew 16% Y/Y. The company guided 10% revenue and FCF growth of 10% in 2026. So far, Salesforce seems to be doing just fine with all the AI fears around software businesses.

The company has introduced Agentic Work Units (AWUs) in Q4 to measure tasks accomplished by AI Agent, with 2.4 billion AWUs delivered to date across Agentforce and Slack, growing 57% quarter-over-quarter. This should hopefully address the problematic seat-based pricing model that could be negatively affected by AI driven productivity improvements among customers. The company has also authorized an enormous $50 billion share repurchase program, which worth about 27% of its entire market cap. While I don’t expect the entire amount to be used, it is good to see that the management is buying back as much shares as they can when the stock is undervalued.

CRM stock should be worth about $362 per share based on the DCF model shown below, indicating a market-beating 23.7% annual return over the next 5 years, assuming a 10% FCF growth, a 20 P/FCF end multiple and 3% annual share buybacks. I will keep my position small at about 2.5% - 3% of the portfolio, as there is a material risk of AI disruption, plus the strong competitive pressures from peers such as Microsoft and ServiceNow.

Figure 7. Salesforce DCF valuation

International Holdings (Not shared on Blossom)

Japanese Holdings Sold

I have exited all the remaining positions in Japanese trading companies, Mitsubishi Corp (8058) and Mitsui & Co Ltd (8031). These positions were bought as value plays in 2025 at P/E ratios of around 10, and share prices have subsequently run up more than 100% after 10 short months, wildly exceeding my expectations. The rapid run-ups have mostly been driven by multiple expansion, with P/E ratios now exceeding 20. This valuation is quite high given the slow growth rate of these companies. With many other software companies trading at historically low valuations today, I can no longer justify continuing to hold these positions.

The proceeds of the sale were immediately reinvested into better opportunities such as CSU, ADBE and Hennge (4475).

Hennge KK (4475)

Hennge reported 20% revenue growth in the most recent quarter while operating profits stayed flat. Expenses were up mainly due to increased payroll and advertising costs as the company expands. KPIs are looking good with number of contracted companies grew by 16.9% and contracted users increased by 11.2%. Churn rate declined from 0.33% to 0.3% despite the onslaught of AI. In fact, I believe AI will likely increase demand for cybersecurity solutions like those provided by Hennge.

The company projects 17% revenue growth and 14.7% operating income growth for 2026, with a long-term target of 20% annual revenue growth through 2029. While I believe Hennge has significant potential to outperform as more Japanese enterprises move to Cloud and increasing demand for cybersecurity products, there are potential risks of declining profitability due to competition or unprofitable expansion. Going forward, I plan to keep this position small at about 1% of the total portfolio value.

The valuation of the stock is about JPY 1,667 per share, assuming a 5-year annual net income growth of 20%. This indicates a potential 23% annual return for the next 5 years. The DCF calculation is shown below. The company has also demonstrated a focus on shareholder returns by increasing dividends and reducing the total share count through a buyback program.

Figure 8. Hennge (4475) DCF valuation

Vitec Software (VIT-B)

2025 has been a difficult year for Vitec as the stock continued to decline more and more following my initial purchase. For context, Vitec Software is a serial acquirer of VMS similar to Constellation software. Based in Sweden, it offers a significantly longer growth runway due to its smaller size. If we forget about the 60% drawdown in stock price and only focus on the business performance, all core metrics are still going in the right direction.

The company reported Q4 results last month, with total revenue grew 9% despite a decline in transaction-based revenues (from utility measurement and billing software), while recurring revenue increased 12%, which is encouraging considering the company only completed 2 acquisitions in 2025. In the first month of 2026 alone, the company has already completed 2 additional acquisitions. With this accelerated M&A pace, it is more likely than not that the firm can resume the 20% annual revenue and FCF growth it averaged over the past 5 years.

Assuming a 20% annual FCF growth, a 25 terminal multiple and 4% annual share dilution, Vitec shares should be worth about SEK 540 and could potentially delivering a 28% annual return for the next 5 years. However, I have decided not to increase my existing position due to elevated share dilution and the increased earnings unpredictability caused by cyclical transactional revenues, which remains a significant portion of Vitec’s total revenue (about 19% as of Q4 2025).

Figure 9. Vitec Software DCF Valuation

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Holdings Breakdown

Option Holdings

I have written LEAP puts secured by margin to raise additional capital, taking advantage of high premium when ADBE and META stock was depressed in early 2026.

-1 contract ADBE 15JAN27 US$250
-1 contract ADBE 21JAN28 US$200
-1 contract META 21JAN28 US$400

Trades in TFSA Account

No trade was executed in TFSA. The TFSA account value changed from $189,749 to $178,813, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

$3350 new contribution
🟢Bought 1 share of CSU.TO @ $2299.84
🟢Bought 6 shares of MEQ.TO @ $185.13
🔴Sold 5 shares of BRK.B @ US$487.67 (+138.66%)
🟢Bought 9 shares of ADBE @ US$276.83

The RRSP account value changed from $164,844 to $159,010.

Trades in Taxable Accounts

🟢Bought 2 shares of CSU.TO @ $2345.9
🟢Bought 10 shares of CRM @ US$189.775
🟢Bought 36 shares of ADBE @ US$256.59
🟢Bought 10 shares of HHH @ US$72.94
🟢Bought 300 shares of 4475.T (Hennge KK) @ JPY 968.83
🔴Sold 78 shares of UBER @ US$72.41 (-7.07%)
🔴Sold 100 shares of 8058.T (Mitsubishi Corp) @ JPY 5,220 (+107.11%)
🔴Sold 100 shares of 8031.T (Mitsui & Co Ltd) @ JPY 5,772 (+102.26%)
🔴Sold 1 PUT of ADBE 21JAN28 US$200 @ US$23.6 (Total Proceeds US$2,359)

Margin loans in the Interactive Brokers non-registered account increased from about $33,000 to about $35,800 including borrowed funds in CAD and JPY. With effective margin interest rates of about 1.96% for CAD and 0.86% for JPY after tax deductions (my marginal tax rate is 43%), using margin loan is very cost effective to take advantage of market opportunities. I keep my margin balance below 10% of my total IBKR account value to maintain a moderate risk level.

Account Name	Value End of Jan 2026	Value End of Feb 2026
IBKR (net of margin)	$362,096	$330,657
WealthSimple	$201,995	$197,131
Non-registered Net Value	$564,091	$527,788
Total Portfolio Net Value*	$918,684	$865,611

*Portfolio net value excludes margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

$1,000 new contribution from HELOC
🟢Bought 3 shares of CSU.TO @ $2345.67
🔴Sold 118 shares of GOOG CDR @ $50.93 (+89.82%)

Here are my current holdings at the end of February:

Stock Ticker	Shares Count	Market Value
CSU	10	$25,206.60 (-19.05%)
GOOG CDR	246	$12,354.12 (+87.17%)
AMZN CDR	366	$8,886.48 (+9.66%)
MEQ	52	$9,766.64 (-3.35%)
CRM CDR	436	$6,561.80 (-27.99%)
VISA CDR	242	$7,139 (+11.12%)
UNH CDR	440	$5,953.20 (+18.79%)
META CDR	183	$6,384.87 (+6.18%)
Total Market Value		$82,252.71

Invested principal: $76,859.75
HELOC balance: -$79,107.11
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified whenever I make new trades.

SoloFIRE Portfolio Update - 2026 Jan - $918k

SoloFIRE — Tue, 10 Feb 2026 01:22:52 +0000

💡Monthly Highlight
LEAP Puts On Margin
Earnings Updates & Stock Valuation
💸Detailed Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Stock Portfolio Value as of Feb 4th 2026, ignoring margin and cash balance (Created with StockUnlock)

💡Monthly Highlight

My net portfolio value decreased by about $13,000 in January 2026, despite having contributed $10,000 more. This decline was mainly driven by the recent software stocks selloff which affected many holdings in my portfolio such as Constellation Software (CSU, 10% weighting), Vitec Software (VIT-B, 4% weighting) and Salesforce (CRM, 3% weighting). I took advantage of this opportunity and acquired additional CSU shares, increasing my holdings by another 8 shares to a total of 42 shares across all my brokerage accounts.

While I believe the advancement of agentic AI will significantly affect the software industry, it remains unclear whether the net impact will be positive or negative. Working as a software engineer myself, it has become clear that integrating agentic AI into the programming workflow has substantially improved developer productivity, which should eventually translate into reduced future hiring and margin expansion for software companies.

On the other hand, AI has introduced a genuine headwind to seat-based pricing models used by existing software firms, as their products will have less end users when AI products significantly enhance customer productivity. To counter this, most software businesses in my portfolio, including Adobe, CRM, and VIT-B, have begun transitioning to usage-based pricing models for their new AI product offerings.

Be Greedy When Others Are Fearful

With AI bringing both positive and negative effect to software businesses, it has been fascinating to see the market gripped by fear and selling off nearly all software-related stocks over the past few weeks. While such a drawdown may be reasonable for some richly valued firms, the share prices of leading companies such as CSU, Salesforce and Adobe have reached historically low levels that are hard to ignore.

Figure 2. Just For Fun

I believe the arguments from both sides are logical and AI may ends up disrupting many software companies with weaker moats. Personally, I believe the net effects of AI will be positive for software holdings in my portfolio, and the current drawdown is a perfect opportunity to buy top-quality software names at steep discounts.

I find the idea of AI vibe-coded software replacing existing major players is comically absurd. As Chapters Group’s (a VMS company) CEO wrote in his letter: Clients never bought software. Client bought solutions, and a true solution needs way more than cheaply built code. Here are some key reasons why I think established software providers are hard to be replaced by AI alternatives:

AI depends heavily on training data. Dominant software firms already have an edge with their existing client data accumulated over decades, which can be utilized to train AI effectively and offer better AI features.
Even if software can be cheaply developed by AI, it still requires significant investments for maintenance and customer support once in production. Customer will absolutely need support when something breaks inevitably. The current state of AI simply cannot handle all the complex support cases for highly customized software solutions.
The devil is in the details. Leading software companies have accumulated a massive amount of domain-specific knowledge that solves every single problem customers have ever faced. I work at an enterprise HCM software firm, similar to SAP with a smaller market share, and our software customization documentation is 7,000 pages long. It is simply impossible for a vibe-coded app to capture all these details in a short period of time.
Software costs are usually a small fraction of total expenses, making it not worth it for businesses to switch vendors. For example, CSU’s software costs customers less than 1% of their revenues on average.
VMS specific risks of migrating to new software providers: Disruption of critical services and lost of revenue. For example, if you replace software that manages bus scheduling or a utility billing system, any system downtime will disrupt the service and result in reduced revenue. New software must offer 10x the value before even being considered.

I plan to continue adding to my software positions meaningfully as long as the valuation remain attractively low. To raise the necessary cash, I may further trim my Google position due to the added risk of high valuation and higher-than-expected 2026 capital expenditure projection. Otherwise, there is no change to my long-term buy-and-hold investment strategy.

LEAP Puts On Margin

I have written LEAP puts on Adobe and Meta stock to generate extra income to fund my additional purchases. LEAP puts are options with expiration dates typically 12 to 36 months out, which is especially useful on beaten-down high quality stocks, as the premium on puts are higher than usual due to negative sentiments.

I determine the strike price based on conservative future expected EPS and assign a very low multiple, so that even if the put option is exercised, I would still be happy to buy the stock at the strike price. In January, I have written 2 put contract in total:

ADBE with strike price US$250, expires at 2027-01-15, US$21.65 premium/share
META with strike price US$400, expires at 2028-01-21, US$29.56 premium/share

The total proceeds were about US$5100. In the worst-case scenario, if the stock drops below the break even price (calculated as strike price minus per share premium) and the put options are exercised near the expiration date, these stocks will be valued at a P/E of about 10. This is extremely attractive for high-quality companies like Adobe and Meta, and I believe the possibility of this occurring is very low. In addition, my account has enough liquidity to ensure I can meet all financial obligations.

The downside of this operation is that it will increase the maintenance margin of your account. It is extremely important to ensure your margin level is low enough so that you can sleep well at night.

DISCLAIMER: Option trading is extremely risky when done wrong. Please be very careful if you decide to try out this strategy, make sure you understand everything before proceeding. Always ensure your portfolio can withstand a worst case scenario.

Earnings Updates & Stock Valuation

United Health

United Health (UNH) stock crashed almost 20% after guiding for a revenue decline in 2026, combined with a meager 0.09% increase in government payments to private Medicare Advantage plans for 2027, far below the 4% to 5% increases seen in previous years. Despite the challenges, the company is guiding a 2026 EPS of $17.75, a 8.6% increase over 2025's $16.35. The earnings yield for 2026 will be about 6.4% on the current stock price, much higher than the average yield of 4.68% for the past 10 years.

The estimated intrinsic value of UNH stock is about $345 per share, indicating a 15% CAGR for the next 5 years if the company can continue growing EPS at 8% annually. I view UNH as a turnaround play as the government policy may shift in favor for the company, and the long-term trends of an aging US population and rising healthcare demand should drive additional business for the company. That said, I believe the risk profile of this investment is relatively higher compared to my other portfolio holdings, so I plan to keep my UNH position small without adding more shares in the near future.

Figure 4. UNH DCF Model Valuation

MSCI

MSCI Reports Solid Q4 Results with revenue grew 10.6% and EPS grew 11.5% year-over-year. Margin expanded about 2% to 56.4% which is good to see. The company continues to reward shareholders via its massive buyback program. A total of 4.4 million shares were repurchased in 2025, which is 5.7% of total shares outstanding. MSCI’s best business segment, the indexing business, is seeing strong growth trend, with run rate growth accelerated to 26% compared to 17% from a year ago.

Assuming a 12% free cash flow (FCF) growth rate and a lower-than-average end P/FCF ratio of 30, the estimate intrinsic value of MSCI stock is about $757, suggesting a 16.8% CAGR for the next 5 years.

Figure 5. MSCI DCF Model Valuation

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Holdings Breakdown

Portfolio breakdown for TFSA, RRSP and all taxable accounts.

Trades in TFSA Account

$7,000 new contribution
🔴Sold 11 shares of GOOGL @ $336.57 (+162.27%)
🟢Bought 0.9 shares of V @ US$330.13
🟢Bought 12 shares of ADBE @ US$312.21
🟢Bought 2 shares of CSU.TO @ $3,317.95

The TFSA account value changed from $188,503 to $189,749, the principal contribution amount is $88,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

🔴Sold 7 shares of GOOG @ US$335.86 (+186.72%)
🟢Bought 8 shares of ADBE @ US$296.27

RRSP account value changed from $168,816 to $164,844.

Trades in Taxable Accounts

$3,000 new contribution
🟢Bought 2 shares of IFC.TO @ $278.33
🟢Bought 4 shares of CSU.TO @ $2,773.68
🔴Sold 100 shares of 8002.T (Marubeni Corp) @ JPY 5053 (+110%)
🔴Sold 1 PUT of ADBE 15JAN27 US$250 @ US$21.65 (Total Proceeds US$2,165)
🔴Sold 1 PUT of META 21JAN28 US$400 @ US$29.56 (Total Proceeds US$2,956)

Margin loans in the Interactive Brokers non-registered account decreased from about $36,000 to about $33,000 including borrowed funds in CAD and JPY. With effective margin interest rates of about 1.96% for CAD and 0.86% for JPY after tax deductions (my marginal tax rate is 43%), using margin loan is very cost effective to take advantage of market opportunities. I keep my margin balance below 10% of my total IBKR account value to maintain a moderate risk level.

Account Name	Value End of Dec 2025	Value End of Jan 2026
IBKR (net of margin)	$357,444	$362,096
WealthSimple	$216,799	$201,995
Non-registered Net Value	$574,243	$564,091
Total Portfolio Net Value*	$931,562	$918,684

*Portfolio net value excludes margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

$2,000 new contribution (borrowing)
🔴Sold 105 shares of GOOG CDR @ $53.87 (+100.79%)
🟢Bought 2 shares of CSU.TO @ $2776.94
🟢Bought 58 shares of META CDR @ $35.19

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
GOOG CDR	364	$19,554.08 (+100.22%)
CSU	7	$17,340.54 (-28.05%)
AMZN CDR	366	$9,453.78 (+16.66%)
MEQ	52	$8,957.52 (-11.36%)
CRM CDR	436	$6,400.48 (-29.76%)
VISA CDR	242	$7,361.64 (+14.59%)
UNH CDR	440	$5,486.80 (+9.48%)
META CDR	183	$6,602.64 (+9.8%)
Total Market Value		$81,157.48

Principal: $75,859.75
HELOC balance: -$77,810.45
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified when I make trades.

P.S. If you like my content and find it helpful, please share my newsletter with your family and friends. Doing this will motivate me to create more content like this, plus it will also help spread the word of long-term value investing and help people avoid permanent capital loss from frequent trading and speculation promoted on the social media.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

I sold Duolingo and bought MSCI instead

SoloFIRE — Fri, 05 Dec 2025 05:00:00 +0000

I have sold my small position in $DUOL ( ▲ 2.42% ) as I realized I didn't have the required conviction to hold this one long term. Even though the stock looks undervalued and the financials looks attractive, I don't consider it a well established player in the education industry. I have seen other online education stocks such as $COUR ( ▼ 0.2% ) and $UDMY ( ▼ 7.95% ) that started with similar rate of growth but over time they start to struggle as competition grows and profit growth stagnated as customers cutting education budgets under economic pressure.

You can argue that Duolingo is a better run business with a more sticky business model and is more profitable, but I am personally not sure if it will continue this way as more competitors appears and start to take market share. I think it is much more easier for competitor to create an app to compete with Duolingo, compared to creating another indexing business to compete with $MSCI ( ▲ 0.08% ) , or competing with Visa with a new payment network. I think I simply don't know enough to be able to hold this stock through all the big fluctuations in the market.

As a result, I walked away with a small profits and reinvested the proceeds into MSCI, which I consider a much better company with very strong moat, and has become more attractive after its recent drop.

See my original post and tracked trade here.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

Constellation Software (CSU) Stock is a Steal

SoloFIRE — Tue, 11 Nov 2025 05:00:00 +0000

Constellation Software (CSU) stock continued to fall, dropping 5% more after reporting a strong Q3 with 16% revenue growth and 46% free cash flow growth. In my recent portfolio update, I have explained in detail why AI disruption and the resignation of previous president Mark Leonard is not a concern for me. You can read it here.

If we take a look at CSU's current valuation (C$3235 per share) and try to run a DCF valuation with very conservative assumptions below:

12% annual free cash flow growth. This assumes no efficiency gains from AI, and the growth rate slows to 12% (This is the long term growth rate mentioned in 2018 president letter)
P/FCF ratio of 20 in 5 years (avg was 26)
Discount rate of 10%

This gives a intrinsic value of C$3546 per share as shown in the figure below, or a 12% annual return, which is not bad.

Figure 1. DCF Calculation for bearish case (Created with StockUnlock)

Considering the company was able to grow revenue by 15% per year currently by re-investing only about half of the cash flow — $955 million out of $1944 million invested in recent 9 months (See Figure 2) — a slower future growth rate would indicate a failure of finding sufficient acquisition targets, which will result in $1 billion ($1.4 billion) or more of excess cash flow per year. This excess cash will potentially be distributed to shareholders via special dividends (this happened before), and this amount will likely increase over time, resulting in a 1-2% long term dividend yield. Adding the possible dividends to our return projection, we can reasonably expect a long term annual return of 13-14%, which is pretty good.

Figure 2. Cash used for Investments (Source: CSU Q3 report)

Now if we try to be a bit more optimistic about the company, which I believe is reasonable given CSU's track record, we can expect the company to re-invest most of the cash flows into larger acquisition deals, albeit at lower hurdle rates. To reflect this scenario I will adjust my DCF assumptions to the following:

15% annual free cash flow growth.
P/FCF ratio of 25 in 5 years (avg was 26)
Discount rate of 10%

This projection gives an intrinsic value of C$5051, or a 20.3% annual return for the next 5 years (See Figure 3). In summary, investing in CSU stock at current prices could potentially generate 13% - 20% annual return. I personally believe the return could be even higher if CSU can utilize more AI and continue to improve its efficiency. I plan to continue buying this high quality company at current prices whenever I have cash available.

Figure 3. DCF Calculation for normal case

SoloFIRE Portfolio Update - Dec and FY 2025 - $932k

SoloFIRE — Tue, 06 Jan 2026 23:07:25 +0000

Annual Performance
- Macro Outlook
- Stocks To Buy in 2026
💸2025 Dec Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Stock Portfolio Value as of Jan 1st 2026, ignoring margin and cash balance (Created with StockUnlock)

Annual Performance

	SoloFIRE Portfolio	S&P 500	S&P TSX 60
2023	31.87%	26.29%	12.05%
2024	31.47%	25.02%	21.04%
2025	14.58%	17.88%	29.45%
Total	98.65%	86.11%	75.69%

My portfolio has underperformed both the Canadian S&P TSX and the S&P 500 indices in 2025, largely due to lack of exposure to booming sectors such as materials, Canadian banks, and AI "winner" stocks. A significant portion of my portfolio is concentrated in software businesses, most of which have lagged the broader market, with some have seen significant decline in share prices after being labeled as ‘AI losers’ by the market.

As a long term investor with an edge in the software industry, I welcome this market condition as it allows me to continue accumulating shares in my core holdings at discounted prices. One example is Constellation Software (CSU), which continues to grow its underlying business at an exceptional rate despite a significant decline in its stock price. Similar dynamics are playing out across several of my other holdings as well. These businesses (Meta, Amazon, Salesforce, etc.) continue to deliver steady earnings-per-share growth every single quarter, yet their strong performance remains underappreciated by the market.

Going into 2026, I have no plan to change my proven investing strategies, which includes:

Avoid all industries and stocks that are hyped up and overvalued
Stay in my circle of competence
Continue investing in great businesses with proven track record and reasonable valuations
Make investment decisions strictly based on business performance and intrinsic value, not stock prices.

Macro Outlook

As of December 2025, the Fed has restarted monetary expansion by purchasing $40 billion of short-term Treasury bills per month. This move should be supportive for the economy but is also inflationary in nature. The Fed has cut interest rate by a total of 0.75% in 2025, lowering borrowing costs and generally benefiting businesses and the stock market. Considering the overall inflationary monetary environment, I plan to remain 100% invested in equities to prevent any losses of purchasing power.

Figure 2. US M2 money supply since 2015

While I personally tend to place less weight on macroeconomic factors in my investment decisions, it is still something we can’t completely ignore in this markets that are heavily influenced by central banks. There will be 2 important factors I will be monitoring in 2026: AI spending and inflation.

I believe AI spending is the most important engine supporting the current economic growth in North America. The AI build-out requires vast computing recourses, which requires not only AI chips and data centers, but also supporting infrastructure such as power generation and transmission lines to supply electricity to power-hungry data centers. All of this demands substantial capital investments and drives revenue growth across a wide range of businesses that produce the necessary components. Any meaningful slowdown in AI spending could signal an inflection point in the economy and may subsequently trigger a downturn. I will be monitor this by closely following the quarterly reports of major AI spenders such as Google, Meta and Amazon.

The second factor is inflation. Rising inflation would increase the cost of materials and components required for capital-intensive activities such as building AI infrastructure. It could also force the Fed to resume rate hikes, which will place extra burden on businesses that rely heavily on debt financing. This environment would likely create hardships for unprofitable or indebted companies, including many relatively new AI companies. This development will likely force them to rein in spendings, which means reduced income across the ecosystem and quickly spreading stress to related businesses and financial institutions. The resulting negative wealth effect could cause significant economic damage.

I will personally reduce my equity positions and shift more of my investments toward capital-light businesses if I see clear evidence that any of the above scenarios begin to play out.

Stocks To Buy in 2026

Heading into 2026, I plan to primarily invest in high quality stocks already in my portfolio or at the top of my watchlist. The number one on my list is Constellation Software (CSU). I know I have probably mentioned this company too many times, but I can’t help to like the stock even more as the share price continues to drop lower.

CSU stock is currently down more than 30% from the highs while the topline continue to grow 15% per year. With many AI applications help to increase software development productivity, I expect meaningful margin expansion in the coming years which should allow free cash flow (FCF) to grow faster than the revenue, potentially at a 15-20% annual growth rate. If we project a conservative 15% FCF growth rate for the next 5 years and a 25 Price-to-FCF multiple, the stock could potentially deliver a compound annual return of 21%.

Figure 3. CSU DCF calculation (Created with StockUnlock)

The next stock I’m looking to buy more is Adobe (ADBE). This stock has been absolutely destroyed in the market, down 45% since January 2024. Over this 2-year period, Adobe has grown revenue at 10% annually and EPS at an impressive 32% annual rate. EPS growth has significantly outpaced net income growth due to the company’s aggressive share repurchase program, repurchasing an average of 5% of its outstanding shares each year. Management has accelerated buybacks at lower share prices, creating significant value for shareholders.

Figure 4. Adobe business growth (Created with StockUnlock)

Based on a review of the company’s historical financials, I see no clear evidence of AI disruption to Adobe’s core business. The majority of revenue comes from enterprise customers who are likely to continue using Adobe’s products due to high switching costs. In addition, Adobe has been actively developing AI-powered offerings such as Firefly and ChatGPT applications that integrate well with its existing product suite. These initiatives should help sustain current growth rates and keep customer churn low at <10%, consistent with the past several years.

Even if we assume Adobe only grows its FCF by 10% per year, the stock can still generate an exceptional 21% annual return for the next 5 years as shown in the DCF calculation below.

Figure 5. Adobe DCF calculation

The third stock is Hennge (4475.T), a Cloud security services provider based in Japan. I expect the company to continue benefiting from Japan’s national push to modernize outdated software and legacy IT systems. Management is also pursuing expansion into international markets, including the U.S., which could unlock significant incremental growth. That said, Hennge remains a small-cap company with a market capitalization of about US$270 million, making it a higher-risk investment. To manage this risk, I plan to limit the position to 1–2% of the portfolio.

Hennge is currently trading at a very attractive valuation of 15 price-to-FCF ratio, while the company has grown revenue at around 20% annually and free cash flow at 47% annually over the past three years. If we value the stock using conservative assumptions: 15% FCF growth and a 20 price-to-FCF multiple in a DCF model, the stock appears to have approximately 73% upside, translating to a potential 22% annualized return over the next five years.

Figure 6. Hennge (4475.T) DCF Calculation

💸2025 Dec Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Holdings Breakdown

Figure 7. Holdings at the end of 2025 Dec (Created with StockUnlock)

Trades in TFSA Account

🔴Sold 42 shares of DUOL @ US$198.34 (+6.8%)
🟢Bought 15 shares of MSCI @ US$535.74
🟢Bought 1 share of V @ US$333.16
🔴Sold 20 shares of GOOGL @ US$313.21 (+144.15%)
🟢Bought 17 shares of ADBE @ US$352.97
🟢Bought 1 share of AMZN @ US$232.32

The TFSA account value changed from $189,076 to $188,503, the principal contribution amount is $81,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 7 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

🔴Sold 20 shares of GOOG @ US$314.44 (+168.43%)
🟢Bought 18 shares of ADBE @ US$353.11

RRSP account value changed from $172,167 to $168,816.

Trades in Taxable Accounts

$2000 new contribution
🟢Bought 500 shares of 4475.T (Hennge KK) @ JPY 1312.7 (Totaled $5747.61)

Margin loans in the Interactive Brokers taxable account increased from about $33,000 to $36,000 including borrowed funds in CAD and JPY. With effective margin interest rates of about 1.96% for CAD and 0.86% for JPY after tax deductions (my marginal tax rate is 43%), using margin loan is very cost effective to take advantage of market opportunities. I try to keep my margin balance below 10% of my total IBKR account value to maintain a moderate risk level.

Account Name	Value End of November	Value End of December
IBKR (net of margin)	$358,015	$357,444
WealthSimple	$219,288	$216,799
Taxable Account Net Value	$577,303	$574,243
Total Portfolio Net Value*	$938,546	$931,562

*Portfolio net value excludes margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

No trade was executed

Here are my current holdings:

Stock Ticker	Shares Count	Market Value
GOOG CDR	469	$23,815.82 (+89.26%)
CSU	5	$16,507.00 (-11.00%)
AMZN CDR	366	$9,812.46 (+21.09%)
MEQ	52	$9,524.32 (-5.75%)
CRM CDR	436	$8,946.72 (-1.82%)
VISA CDR	242	$7,860.16 (+22.35%)
UNH CDR	440	$6,754.00 (+34.77%)
META CDR	125	$4,451.25 (+12.05%)
Total Market Value		$87,671.73 (+18.70% $13,811.98)

Principal: $73,859.75
HELOC balance: -$75,678.87
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified when I make trades.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

SoloFIRE Portfolio Update - 2025 Nov - $938K

SoloFIRE — Mon, 08 Dec 2025 04:59:08 +0000

💡Monthly Highlight
💸Detailed Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Stock Portfolio Value as of Dec 1st 2025, ignoring margin and cash balance (Created with StockUnlock)

💡Monthly Highlight

The overall portfolio remained flat in November and the increase in value came primarily from new contributions.

I continued to meaningfully increase my position in Constellation Software stock (CSU), adding 6 more shares across all my portfolios. I also reduced my Berkshire Hathaway (BRK.B) position to reallocate capital into two stocks that I believe offer stronger return potential: Meta Platforms (META) and Duolingo (DUOL).

Meta stock was trading below $600 per share in mid-November after a 25% correction. At today’s price, the stock could potentially deliver more than 16% annual return over the next five years, even assuming a significantly lower operating cash flow (OCF) growth rate of 15%, compared to its 26% average annual growth over the past five years (see Figure 2). I believe it is entirely possible for Meta to grow OCF at around 20% annually in the coming years, given that its AI investments are clearly paying off and have already helped re-accelerate revenue growth to 26% in the most recent quarter. If we project OCF growth rate at 20%, the future annual return would be even higher at 21% per year.

Figure 2. Meta stock DCF valuation

The next stock I bought was Duolingo, which appeared undervalued after a 30% selloff following its Q3 earnings report. However, at the time of writing (December 5th, 2025) I have exited my entire position after conducting more research on the company. I concluded that I do not possess enough knowledge about the education industry and enough confidence in the long-term competitiveness of Duolingo’s business model, both of which are necessary for a long term investor like myself to hold the stock through all the market turbulence. My detailed reasoning can be found in this post.

On the international side of the portfolio, I purchased 200 more shares of Vitec Software (VIT-B) to take advantages of the lower share price. No new information has emerged that changed my investment thesis, thus the recent price decline can be safely ignored.

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Holdings Breakdown

Trades in TFSA Account

🔴Sold 16 shares of BRK.B @ US$491.14 (+42.8%)
🟢Bought 42 shares of DUOL @ US$185.72
🟢Bought 3 shares of BN.TO @ $61.31

The TFSA account value changed from $189,860 to $189,076, the principal contribution amount is $81,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 6 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

$9,000 new contribution
🔴Sold 6 shares of BRK.B @ US$503.04 (+146.2%)
🟢Bought 5 shares of META @ US$591.83
🟢Bought 3 shares of BN.TO @ $61.5
🟢Bought 10 shares of MEQ.TO @ $188.51
🟢Bought 2 shares of CSU.TO @ $3,547.72

The RRSP account value changed from $163,031 to $172,167.

Trades in Taxable Accounts

$2,500 new contribution
🔴Sold 5 shares of GOOGL @ US$322.85 (+141.15%)
🟢Bought 1 shares of CSU.TO @ $3391.45
🟢Bought 200 shares of VIT.B (Vitec Software Group) @ SEK 307.8

Google shares were sold to reduce margin balance and the amount represents less than 1% of total shares held. In November, margin balance in the Interactive Brokers non-registered account increased from $25,000 to about $33,000 including borrowed funds in CAD and JPY. With effective margin interest rates of about 1.96% for CAD and 0.86% for JPY after tax deductions (my marginal tax rate is 43%), using margin loan is very cost effective to take advantage of market opportunities. I keep my margin balance below 10% of my total IBKR account value to maintain a moderate risk level.

Account Name	Value End of October	Value End of November
IBKR (net of margin)	$351,717	$358,015
WealthSimple	$221,923	$219,288
Non-registered Net Value	$573,640	$577,303
Total Portfolio Net Value*	$926,531	$938,546

*Portfolio net value excludes margin balance and include cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

$3,250 new contribution (borrowing)
🟢Bought 3 shares of CSU.TO @$3242.31
🟢Bought 125 shares of META CDR @ 31.78
🔴Sold 82 shares of GOOG CDR @ $48.84 (+82%)
🔴Sold 23 shares of IFC @ $279.57 (+7.1%)
🔴Sold 2 shares of VISA CDR @ $31.06 (+17%)

Here are my current holdings:

Stock Ticker	Shares Count	Value
GOOG CDR	469	$24,008.11 (+90.8%)
CSU	5	$16,596.95 (-10.51%)
AMZN CDR	366	$9,947.88 (+22.76%)
MEQ	52	$9,588.28 (-5.11%)
CRM CDR	436	$7,874.16 (-13.59%)
VISA CDR	242	$7,410.04 (+15.34%)
UNH CDR	440	$6,622.00 (+32.13%)
META CDR	125	$4,330.00 (+9%)
Total		$86,377.42 (+16.95% $12,517.67)

Principal: $73,859.75
HELOC balance: -$75,387.72
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified when I make trades.

P.S. If you find my content helpful, please share my newsletter with your family and friends. Doing this will motivate me to create more content like this, plus it will also help spread the word of long-term value investing and help people avoid permanent capital loss from frequent trading and speculation promoted on the social media.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

You Can't Earn the $$$ outside of your Knowledge

SoloFIRE — Thu, 04 Dec 2025 21:59:35 +0000

This is a repost of my recent Blossom writeup. I think the info is important especially in this multi-year bull markets we are experiencing now, so I am sending this to you mailbox in case you missed it:

As retail investor communities grow, I begin to see more and more contents are being created suggesting questionable investing practices.

If someone claim to be making huge profits but is being ambiguous about how they made it, it's probably a scammer trying to sell you a course, and earns their profits from the course, not from investment.

There are no tricks in investing, you save a portion of your salary every month, invest it into a broadly diversified index ETF or a portfolio of diversified stocks and earns 10% annual return. With good stock picking it maybe possible to achieve 20% per year return but it will take a lot of work and the result is not guaranteed. There are NO shortcuts to make a lot of returns on small efforts.

There will be people who try to sound smart by using a lot of complex economic "analysis" to try to hook you in and buy their products, which most likely won’t add any value. The legend Peter Lynch has said "If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes", and I agree. There are simply too many variables in our economy and I think it is beyond us to completely understand how it works.

The best way to invest is sticking to index funds, or investing in well-established companies that you know about. For example, as a software engineer, I mainly invest in software/tech companies as I either use their products frequently or I understand how they operate.

Here are some rule of thumbs I use:

1. Avoid any complex investment/trading schemes, stick to simple all-in-one ETFs or blue-chip individual stocks and hold them long term.

2. Avoid any investment loans unless you understand the risks completely

3. Believe no one except yourself (my posts included, always verify)

4. Stay away from any investment products you don't 100% understand. Simpler is always better when investing.

5. Don't believe any claim unless it's backed by facts. For example, I've seen people on Blossom showing massive all time gains on their portfolio but it is not linked to broker, and some of their holding has impossible gains (For example, when you check the all time stock chart on Google, the most gains you can get from absolute bottom to top is 100%, but is showing 900% gains on Blossom)

I hope this helps and happy investing.

SoloFIRE Portfolio Update - 2025 October - $920k

SoloFIRE — Fri, 07 Nov 2025 03:38:39 +0000

💡Monthly Highlight
- Notable Earnings Report
  - Meta
- International Holdings
💸Detailed Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Public Portfolio Value as of Oct 31st 2025, excluding margin and cash balance (Created with StockUnlock)

💡Monthly Highlight

The net portfolio value increased from $881,484 to $926,531 in October, this includes a new $23,668 contribution to the RRSP account which was the proceeds of withdrawal from my Wealthsimple private credit investment. The private credit investment returned approximately 9% per year for 2 years, which was satisfactory but significantly lower than the rate of return achieved with common stock investment. The growth in value was $21,379 excluding the new contribution.

Year-to-date, the portfolio returned 14.3%, lower than the 16.7% gain in the S&P 500. This is normal for a portfolio with individual stocks that’s significantly different from the index components. While I cannot control the market prices of my holdings, I get to choose which stocks to put in my portfolio, and I make sure that all of them are reasonably valued and deliver above-average earnings growth every single year. In the long run, the stock price will eventually catch up with the fundamentals, though it could take years before that happen.

One example of an undervalued holding is the Constellation Software (CSU, a roll-up vertical software company), in which I increased my position by another 20%. This stock dropped 30% based on speculation of AI disruption and the resignation of its legendary CEO, Mark Leonard. Here are some reason why I think the stock has enormous potentials:

The new president, Mark Miller has extensive work experience and has been with the company for more than 30 years. He mentioned there will be no change with the company’s proven grow-by-acquisition strategy going forward.
The cost of CSU’s vertical software represents very small percentage of their customers' revenue, often around 1% or less. It is simply too much pain for clients to change the critical business software for no meaningful cost savings.
There are more than 40,000 potential acquisition targets (CSU owns about 900 business units now) so there is no risks of running out any time soon.
AI will likely help CSU save on cost and improve profit margins.

I expect CSU to continue growing its revenue at around 15% annually for the foreseeable future. The company will report Q3 earnings on Nov. 7th, and I plan to review the report in detail and write a post about it soon.

Notable Earnings Report

Several of my core holdings have released their latest financial reports over the past few weeks. All of the reports look strong, and I intend to continue holding my positions regardless of short-term price movements. Brief updates are provided below.

Meta

Meta stock dropped 15% after releasing its Q3 report, mainly due to concerns about increased infrastructure spending and a faster expense growth rate relative to revenue growth. While this is a reasonable concern for investors, I am personally not concerned, as the management has a strong track record of effective capital allocation. This is reflected in the Q3 results: accelerated revenue growth (26% vs 22% last quarter), 14% more ad impressions, and 10% higher average price per ad.

The CEO mentioned in the earnings call the importance of front-loading the infrastructure buildout so that the company can capture the ongoing significant opportunities in AI. Even if too much infrastructures ends up being built, any excessive compute resources can be redirected for difference use cases such as enhancing features for the existing services. Overall, this is a great quarter for Meta.

MSCI - A Global Market Index Provider

MSCI shares are up 8% after reporting strong Q3 earnings. Revenue is up 9.5% and EPS grew 15.8% to $4.47 per share. Operating margin increased from 55.4 % to 56.4%. The company bought back $1.249 million or 2,23 million shares (2.8% of total shares) in the past 4 months at an average repurchase price of $559.95, which is a reasonable price to pay for the stock. The combination of organic growth, margin improvement and aggressive share buybacks resulted in EPS growing much faster than revenue, which is great to see. A slight increase in customer retention rate suggests good pricing power.

The highlight of the report is the 17% increase in asset-based revenues, which scale extremely well with minimal additional expenses as more money flows into funds linked to MSCI indices. I expect this part of the business to perform well over the long term as the global fiat money supply continues to expand, driving more inflows into MSCI-linked funds and ETFs. I also like the fact that MSCI is focusing on international markets (international stock indices), as U.S. stocks have generally become expensive, and I believe there is strong growth potential in non-U.S. markets.

Amazon, Google

Both companies reported great earnings with their cloud businesses experiencing accelerated growth. Amazon's high-margin advertising business is doing extremely well in addition to the AWS segment, growing 24% YoY. Going forward, I expect Amazon to increase robotic automation to continuously improving efficiency and profit margin of their fulfillment network and online retail business. There has been report about Amazon intends to hire 600,000 less workers and instead relying on robots to handle the work.

One thing to note is that the reported net income and EPS data for both firms are overstated due to the capital gains from investments, which does not reflect the true results of their operating businesses. This figure can be found under the “other income“ of the income statement, and should be subtracted from the reported net income to arrive at a more accurate net earnings figure.

For a detailed Google stock analysis, please check out this blog post.

International Holdings

Vitec Software (VIT-B, a roll-up vertical software company) reported earnings mid October and the stock has dropped another 10% at the time of writing. Vitec’s revenue growth has slowed down compared to last year due to the weakness in their transaction based revenues. Since these revenues can be volatile, I believe investors should focus more on the subscription-based revenue, as shown below.

Figure 2. Vitec 2025 Q3 Revenue Breakdown

In Q3 the recurring revenue is up 18% year-over-year, compared to total revenue growth of 6%. This figure excludes a new acquisition completed at the end of the quarter, which should help strengthen Q4 results. The stock is currently trading at a 4.5% free cash flow yield, which is attractive valuation for a company growing at an average annual rate of around 20% (Vitec has been growing revenue 20% annually over the past 3, 5 and 10 years). I will continue holding this stock for the long term.

💸Detailed Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Holdings Breakdown

Trades in TFSA Account

No trades was executed in October. The TFSA account value changed from $183,230 to $189,860, the principal contribution amount is $81,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 6 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

$23,668 new contribution (Direct transfer from WS RRSP private credit)
🟢Bought 6 shares of CSU.TO @ $3640
🟢Bought 10 shares of MEQ.TO @ $191.5

The RRSP account value changed from $132,775 to $163,031.

Trades in Taxable Accounts

🟢Bought 5 shares of MSCI @ US$545.49
🟢Bought 2 shares of CSU.TO @ $3601.25
🟢Bought 5 shares of AMZN @ US$216.6

Margin loans in the Interactive Brokers non-registered account increased from about $10,000 to $25,000 including borrowed funds in CAD, and JPY. With an effective interest rate of about 2.28% after tax deductions and decreasing policy rates, the margin loan is very cost effective to take advantage of market opportunities but it comes with significant risks, and I intend to keep it less than 10% of the IBKR portfolio and gradually pay it down going forward.

Account Name	Value End of September	Value End of October
IBKR (net of margin)	$339,794	$351,717
WealthSimple	$225,084	$221,923
Non-registered Net Value	$564,878	$573,640
Public Portfolio Net Value*	$881,484	$926,531

*Portfolio net value includes margin and cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors. No trades was executed in October.

Here are my current holdings:

Stock Ticker	Shares Count	Value
CSU	2	$7,382
IFC	23	$6,017
MEQ	52	$9,815
GOOG CDR	551	$25,252
AMZN CDR	366	$10,427
VISA CDR	244	$7,732
CRM CDR	436	$8,833
UNH CDR	440	$6,991
Total		$82,452.16

Invested principal: $68,418.6 (+20.51% $14,033.7)
HELOC balance: -$71,915
HELOC interest rate paid: prime + 0.25%= 4.7%, after-tax rate: 2.68%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified when I make trades.

P.S. If you enjoy my content and find it helpful, please share my newsletter with your family and friends. Doing this will motivate me to create more content like this, plus it will also help spread the word of long-term value investing and help people avoid permanent capital loss from frequent trading and speculation promoted on the social media.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

Google Q3 Earnings are Worse Than it Looks

SoloFIRE — Mon, 03 Nov 2025 02:55:37 +0000

Analysis
Stock Valuation
Holdings Disclosure

Analysis

Google (Alphabet) reported outstanding 15% revenue growth and 35% EPS growth in Q3, all major business segments are experiencing accelerating growth which is mind boggling given Google’s size:

Subscriptions, Platforms & Devices revenue of $12.87 billion, up 21% (20% in Q2)
YouTube Ads revenue of $10.26 billion, up 15% (13% in Q2)
Google search revenue of $56.57 billion, up 15% (12% in Q2)
Google Cloud revenue of $15.16 billion, up 34% (32% in Q2)

However, there is a catch for the reported EPS figure, which includes unrealized gains from Google’s investment portfolio that are not part of the operating businesses. This data can be found under “other income“ marked in the figure below, which has ballooned by more than $9 billion compared to last year. The majority of this gain is likely coming from the dramatic appreciation of the Anthropic and SpaceX investments.

Figure 1. Google Q3 Unrealized Investment Income. (Source)

To properly assess Google’s business performance, any investment gains and one-time items should be removed from the calculation. This also includes a one-time $3.5 billion fine charged by European authorities recorded under the “General and administrative“ line of the expenses. The resulting adjusted net income figure is $28.9 billion, or an EPS of $2.37. The adjusted EPS growth rate ends up being 11.8%, much lower than the reported 35% growth. The net income growth rate is lower than the revenue growth rate is due to significant higher income tax provision compared to last year, resulted in a 10% higher income tax rate ($3.5 billion more tax paid) which in my opinion is not important and should normalize over time.

Stock Valuation

Given the strong performance of all main business segments and the success of emerging product and services such as Gemini and Waymo, I believe it is reasonable to project a 12% annual net income growth for the next 5 years. In my previous Google stock analysis I have used operating cashflow (OCF) to run DCF valuation, however considering that OCF does not include non-cash items such as depreciation and stock based compensation, I believe net income is a better metric to use. With the on-going heavy capex, I expect depreciation to become a real cost for Google in the near future.

After adjusting the net income as mentioned above, the estimated intrinsic value of Google stock is about $300 per share, which can potentially generate 11.4% CAGR for the next 5 years. The stock is no longer looking cheap at its current price, I plan to continue holding my current positions without buying more shares.

Figure 2. Google Q3 DCF Valuation (created with StockUnlock)

Holdings Disclosure

SoloFIRE GOOGL & GOOG ownership: 21.3% of public portfolio
GOOGL Average cost paid: $133.85 (+109.8%)
GOOG Average cost paid: $125.45 (+124.3%)
Holding time: 4 years

For on-going changes of my holdings with in-depth analysis, make sure to check out my portfolio updates. To keep track of my full stock portfolio and get live trade updates, please follow me on Blossom Social.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and must NOT be considered financial advice.

$880K Portfolio Update - September 2025

SoloFIRE — Tue, 07 Oct 2025 02:05:16 +0000

💡Monthly Highlight
Public Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Public Portfolio Value as of Oct 2nd 2025, excluding margin balance (Created with StockUnlock)

💡Monthly Highlight

What’s happening in the market recently is starting to look disturbingly similar to the market in 2021, when people showed off their huge gains on social media post after post, often achieved within months or even days. You may find it hard to stay as a fundamental based value investor as you see even newbie investors are getting ahead of you, the FOMO is real. At times like this, it is extremely important to remember: once you lose capital, it’s much harder to earn it back, as a 50% loss must be compensated by a 100% gain.

Many of the stocks that topped in 2021 never recovered, a prime example is Zoom (ZM) which stock price is still down 85% from its all-time-high. Zoom was growing like crazy and trading at more than 100 P/E ratio in 2020 when the pandemic started. Most people believed that remote work and online meetings are the future, and Zoom was on the way to take most of the market shares. Things have worked extremely well for Zoom until it doesn’t, as the expectations were simply too high for the company to keep up with. Fast forward to 2025, if you replace Zoom with Palantir today, the situation starts to look very similar— except that Palantir is trading at an even higher valuation at 600 P/E. History has proven it again and again that over the long-term, the stock market almost always re-adjust itself to reflect the real intrinsic value of companies.

Figure 2. Zoom Stock Valuation 2020 - 2022

Turning to my portfolio, the net value increased $50k compared to a month ago, with about $30k from new contributions and $20k from gains delivered by Brookfield Corp. (BN) and Google stock (GOOGL), offset by significant decline in Constellation Software stock (CSU). Going forward, I will continue to invest with the same strategy as usual, which is to:

Avoid permanent capital loss. This includes avoiding overvalued stocks trending on the social media.
Maximize the future cash flow earned from the invested capital. This is achieved by investing in companies that can consistently grow its per share earnings or free cash flows at 10% or more over the long-term, and of course, without overpaying even for the best quality companies.

Google (Alphabet) Stock Surged

Google (Alphabet) stock has performed extremely well in the past 2 months, gaining 28% in price and it is now the largest holding in my portfolio with 20% weight. With the latest court ruling at the beginning of Sept, Google has successfully dodged the antitrust bullet and I expect its valuation to continue expand, potentially matching other Mag 7 stocks such as Microsoft and Apple. The stock is now trading at 26 P/E ratio, which I think is still low given Google's leadership position in AI and its diversified fast-growing business lines.

Google's case has shown that it can be very profitable to invest in companies troubled with major lawsuits. These situations usually result in very low valuations for the companies involved due to the risks and uncertainties. However the potential returns could be phenomenal if things work out well. The most important things to look for in these cases are the quality of the underlying business and the margin-of-safety implied by the valuation. For example, Google stock has been trading at valuations below a 20 P/E ratio while growing its earnings 20% annually earlier this year. The low valuation provided such a large margin-of-safety that investors won’t lose much even if things go south.

Constellation Software Stock Crashed

I see this as a rare opportunity to purchase CSU shares at some discount. The stock crashed due to concerns around AI disruption and the resignation of its legendary CEO Mark Leonard.

Contrary to the market, I consider AI a tailwind for CSU as it provides a huge productivity boost for software developers, which will likely reduce cost and improve margins. I also disregard the narrative that CSU’s customers will develop their own software solutions using AI or seek alternatives. Remember, these are non-tech customers operate in highly specialized sectors such as healthcare, energy and public services. I highly doubt if they have any incentive to spend extra resources to develop new software to replace something that’s already working well. As a professional software developer myself, I can say that developing new software is usually the easiest part, what’s difficult is the maintenance and troubleshooting process after the initial implementation. With AI at its current level, it is impossible for it to handle every part of the software development process.

Regarding the management change, CSU’s new president, Mark Miller, has been with the company for 30 years and I believe his extensive experience should serve the shareholders well. CSU is a large decentralized organization, and I don’t think a change of CEO will have any material impact on the business.

With the above in mind, I have increased my CSU positions significantly by purchasing 8 more shares. To raise the required capital, I had to sell my entire EQ Bank (EQB) position. I have held my EQB shares for about 4 years and it produced about 50% return including dividends. EQ Bank has failed to grow its EPS since the start of 2024 due to its troubled equipment financing business. Things have only worsened this year as Canadian housing market slowed and bad loans increased. In comparison, CSU is the obvious better business to invest in, which is why I made this trade.

International Holdings

Vitec Software (VIT B.ST) stock continues to struggle in the market without any sign of recovering. The stock is now down 46% from the all-time-high reached in February 2025. It is now trading at around the same level as 5 years ago, while the underlying revenue per share has grown 144% and free-cash-flow per share has grown 228%. This is exactly what we look for when purchasing a new position, we purchase when the stock price is below the company’s intrinsic value. A DCF projection suggests that the stock could potentially produce 20% CAGR in the next 5 years even under conservative growth assumptions. I will continue holding this position for the long-term.

Figure 3. Vitec Software stock DCF projection (StockUnlock DCF Tool)

Public Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Current Holdings

Trades in TFSA Account

No trades was executed in September. The TFSA account value changed from $183,831 to $183,230, the principal contribution amount is $81,815.

TFSA portfolio long-term performance

My TFSA portfolio performance is closely tracked below since its inception 6 years ago:

SoloFIRE TFSA Portfolio

6 Figure TFSA portfolio built from scratch. Market beating 18% annual return since its inception in 2019, outperformed S&P 500. Data will be updated every month.

www.solofire.ca/tfsa

Trades in RRSP Account

🔴Sold 87 shares of EQB.TO @ $91.75
🟢Bought 40 shares of MEQ.TO @ $199.3

RRSP account value changed from $129,424 to $132,775 in September.

Trades in Taxable Accounts

💵New contribution of US$20,930 ($29,228)
🟢Bought 8 shares of CSU.TO @ $3,745.78
🟢Bought 7 shares of IFC.TO @ $267.5
🔴Sold 253.3 shares of EQB.TO @ $93.66
🟢Bought 5 shares of MSCI @ US$552.33

Margin loans in the Interactive Brokers non-registered account decreased from $30,000 to about $10,000, including borrowed funds in CAD and JPY. With an effective interest rate of about 2.28% after tax deductions, the margin loan is very cost effective to take advantage of market opportunities but it comes with significant risks, and I intend to pay this down gradually going forward.

Account Name	Value End of August	Value End of September
IBKR (net of margin)	$303,985	$339,794
WealthSimple	$214,714	$225,084
Non-registered Net Value	$518,699	$564,878
Public Portfolio Net Value*	$831,954	$881,484

*Portfolio net value includes margin and cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

No trades was executed in September.

Here are my current holdings:

Stock Ticker	Shares Count	Value
CSU	2	$8,059.06
IFC	23	$6,189.53
MEQ	52	$9,547.20
GOOG CDR	551	$22,100.61
AMZN CDR	366	$9,380.58
VISA CDR	244	$7,944.64
CRM CDR	436	$8,161.92
UNH CDR	440	$7,409.60
Total		$78,793.37

Invested principal: $68,418.6 (+15.16% $10374.65)
HELOC balance: -$71,729.02
HELOC interest rate paid: prime + 0.25%= 4.95%, after-tax rate: 2.82%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified when I make trades.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

$830K Portfolio Update - August 2025

SoloFIRE — Sat, 06 Sep 2025 02:12:50 +0000

💡Monthly Highlight
- Thoughts on Nvidia Stock
- International Holdings
Public Portfolio Update
Smith Maneuver Portfolio Updates
Quick Links

Figure 1. Public Portfolio Value as of Sept 2nd 2025, excluding margin balance (Created with StockUnlock)

💡Monthly Highlight

The earnings season continued throughout August, with many of the core holdings in my portfolio reporting results. Main Street Equity (MEQ), Brookfield Corp (BN), and Constellation Software (CSU) all delivered robust double-digit growth. EQB, however, reported a significant decline in profits, which prompted me to reduce my position and rethink my investment thesis for the stock.

🏠MEQ has built up $800 million in liquidity—nearly half its market cap—ready to deploy in a slumping Canadian housing market. The company has a strong track record of counter-cyclical growth, and management is expected to ramp up property acquisitions which will accelerate future growth. Same-property rent rose 6% despite weakened Canadian economy, while the vacancy rate remains low at 4.4%. With MEQ still charging below-market rents, there is significant room for continued growth.

⚡BN signed a landmark deal with Google to deliver up to 3,000 MW of hydroelectric capacity across the U.S. Its renewable energy arm is well-positioned as electricity is becoming a key bottleneck for AI development. On top of this, the Wealth Solutions (mostly predictable annuity insurance business) grew 34% in Q2 and an incredible 60% over the past 12 months. These positive developments are good indications that BN will perform extremely well for the next 5 - 10 years. (A recent BN sock analysis can be found here).

📈CSU’s revenue growth slowed to 15%, down from ~20% just a few quarters ago. The stock crashed after reporting earnings, as investors worrying about further deceleration. While this is a valid risk, I’m not too worried—CSU has weathered slowdowns before, and management has a strong track record of reigniting growth. In recent quarters, the company has started acquiring larger software companies (Cipal Schaubroeck NV, an Belgium software company for public services) and has also invested in public equities which has already produced significant capital appreciation (CSU paid 85 PLN per share for Asseco Poland SA stock in Q1, which is now selling for 201.80, a 200%+ return). I am fairly confident that CSU can sustain a 15% top-line growth, which should continue to deliver solid long-term returns for shareholders. (You can find a more detailed CSU analysis here).

📉Another core holding of the portfolio, EQB Inc (EQ Bank), reported earnings significantly below estimates. I have realized that EQB’s business model is sensitive to economic cycles. The company’s profitability heavily relies on interest income, and as higher deposit and funding costs outpaced the increase in mortgage yields—and a slowing Canadian housing market, which reduced new mortgage originations. While EQB’s loan assets continued to grow, the incremental income from new loans was not enough to offset the lost revenue due to lower margins.

As a result, I believe EQB is no longer the right fit for my portfolio. I am looking for dominant businesses that can thrive in almost any business environment. I still think EQB has meaningful growth potential as it continues to steal market shares from the big Canadian banks, and the company is pushing hard to expand non-interest revenue. But until it becomes more diversified, its earnings may remain vulnerable to economic headwinds, leading to weaker returns compared to businesses with more durable growth. With that in mind, I have significantly reduced my EQB position and reinvested the proceeds into MEQ.

Thoughts on Nvidia Stock

🚀 One of the most anticipated earnings in August came from NVDA. The stock slipped despite reporting stellar results—revenue up 56% and earnings up 54% year-over-year. Nvidia is undeniably a phenomenal company, but I don’t view it as a good investment at today’s valuation. The business remains heavily reliant on its top customers, and to justify its current price, earnings would need to grow 20–30% annually. While Nvidia has exceeded that rate of growth in recent years, sustaining it long term could be a challenge.

Unlike software companies with highly predictable recurring revenues, Nvidia’s sales are highly dependent on market demand—something I view as much less reliable. Report has shown that major cloud providers such as Google Cloud and AWS account for roughly 50% of Nvidia’s data center revenue, and the data center revenue made up 88% of total sales in Q2. I believe this concentration creates meaningful risks, as demand could weaken for a variety of reasons—power bottlenecks, slower customer demand in GPU computing power, or simply reduced spending by cloud providers—all of which could materially slow Nvidia’s growth. Given these risks, I believe it is prudent to demand a large margin of safety for NVDA stock, which today’s valuation does not provide.

International Holdings

The recently added Vitec Software stock continued to sell off throughout August, despite there being no new negative developments with the company. We must accept that the market sometimes becomes overly pessimistic, and we should view these moments as opportunities for bargain purchases. I took advantage of this decline by purchasing another 100 shares of Vitec stock.

The three Japanese trading companies in my portfolio—Mitsubishi, Mitsui, and Marubeni Corp—all reported earnings in August for the April-June quarter. Mitsubishi and Mitsui Corp saw their revenue decline by approximately 10%, which is understandable due to the impact of the U.S. tariffs. Marubeni Corp's revenue grew by 5%, benefiting from a new business acquisition and growth in its metal and mineral resources business.

Overall, these companies maintain consistent profitability through their highly diversified business lines, with growth in some segments compensating for challenges in others. They have consistently grown their revenue at an annual rate of 6-10% over the past 5 years. While this growth isn't spectacular, their valuations remain attractive at a price-to-earnings (P/E) ratio below 15, even after the significant price advances in recent months. The management of these companies has a proven track record of rewarding shareholders through a combination of stock buybacks and consistent dividend growth.

Public Portfolio Update

(All $ represents Canadian dollar, US$ represents US dollar)

Current Holdings

Figure 2. Public Portfolio Stock Holdings

Trades in TFSA Account

🔴Sold 117 shares of EQB.TO @ $92.68
🟢Bought 55 shares of MEQ.TO @ $198.2
🟢Bought 1 share of BN.TO @ $89.13

The TFSA account value changed from $178,067 to $183,831, the principal contribution amount is $81,815. My TFSA portfolio performance is closely tracked here since its inception 6 years ago.

Trades in RRSP Account

No trades was executed in August. RRSP account value changed from $123,731 to $129,424.

Trades in Taxable Accounts

🟢Bought 10 shares of CRM @ US$247.57
🟢Bought 100 shares of VIT.B (Vitec Software Group) @ SEK 363.4

Margin loans in the Interactive Brokers non-registered account increased from $22,200 to about $30,000 including borrowed funds in CAD, USD, JPY and SEK. My current margin balance, which is about 10% of the total IBKR account value, is the maximum amount I am comfortable with. I have recently sold shares from my employee stock plan and made a deposit of US$19,000. This amount is expected to arrive in my IBKR account within a few days, which will then significantly reduce the margin balance. Here is the summary of the non-registered account assets.

Account Name	Value End of July	Value End of August
IBKR (net of margin)	$294,126	$303,985
WealthSimple	$214,705	$214,714
Non-registered Net Value	$508,831	$518,699
Public Portfolio Net Value*	$805,015	$831,954

*Portfolio net value includes margin and cash balances. This value is lower than the stock portfolio value shown in the figure 1.

Smith Maneuver Portfolio Updates

This is a leveraged portfolio tracked separately, which invests borrowed fund from a HELOC. This is a higher risk strategy which is not recommended for new investors.

🟢Bought 440 shares of UNH CDR @ $11.39 (Equivalent of US$244 per original share)

Here are my current holdings

Stock Ticker	Shares Count	Value
CSU	2	$9,137.56
IFC	23	$6,351.68
MEQ	52	$10,190.96
GOOG CDR	551	$19,053.58
AMZN CDR	366	$9,640.44
VISA CDR	244	$7,964.16
CRM CDR	436	$8,615.36
UNH CDR	440	$6,366.8
Total		$77,321.1

Invested principal: $68,418.6 (+13.1% $8902.05)
HELOC balance: -$71,428.19
HELOC interest rate paid: prime + 0.25%= 5.2%, after-tax rate: 2.96%

Quick Links

You can checkout my full Smith Maneuver setup in this blog post.
See my previous monthly portfolio updates here.
Follow me on Blossom Social to see my full portfolio and get notified when I make trades.

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

EQB Reported Significant Profit Decline in Q3

SoloFIRE — Sun, 31 Aug 2025 02:25:44 +0000

Business Update
Valuation
Holdings Disclosure

Business Update

EQB has been going through a challenging period recently, and the Q3 results indicate that the company is moving further in the wrong direction:

Revenue fell 5% (Year-over-year comparison, same for all points below)
EPS fell 30% to $2.07 per share.
ROE decreased from 15.9% to 10.1%.
Net interest margin narrowed from 2.09% to 1.95%.
A 74% jump in provisions for credit losses (PCL) drove faster decline in EPS relative to revenue.

EQB’s revenue decline was likely driven by a combination of margin compression—as higher deposit and funding costs outpaced the increase in mortgage yields—and a slowing Canadian housing market, which reduced new originations. While loan assets continued to grow, the incremental income from new loans was not enough to offset the lost revenue due to lower margins. The management has already started addressing this by cutting savings account interest rates which should help with the margins going forward.

On the bright side, EQB was able to grow loans under management by 10%, gained 21% more EQ Bank customers and grew book value by 9%. As an EQ Bank customer myself, I believe the EQ Bank app still offers great value by offering one of best savings rates and charging 0 fees for almost all banking services. I have set up my entire banking process (Payroll, bill payments, e-transfers, ATM withdrawals, etc.) around my EQ Bank accounts, and I don’t see any other competitor that are providing enough value to worth switching to. This indicates a customer switching cost which should protect EQB’s business to some extents.

I believe EQB should be able to resume growth when the Canadian housing markets and the overall economy recovers, which I believe will happen sooner or later. However, achieving a turn around requires a competent CEO and management team, which I am not sure anymore after the loss of the previous CEO Andrew Moor, who has a proven track record of delivering market beating growth.

📉EQB stock traded down 10% after the earnings release, the company now trades at close to book value of $82 per share, lower than the historical long-term average P/B ratio of 1.2. The bank is still very small compared to major banks in Canada, and as the management continue to focus on the Canadian market (as mentioned in the earnings call), there will be significant opportunities to take market shares from competitors which may fuel future growth.

In conclusion, I think EQB’s growth potential is still significant, however the negative developments in recent quarters has greatly reduced my confidence in EQB’s management. As a result, I have reduced my EQB position by 30% to about 3.5% of the portfolio. For now, I plan to hold the remaining shares as I need to access the new management’s ability before further actions. In future quarters, I’d like to see PCL comes down and improvements in interest margins as suggested by the management in the earnings call. I may still sell the remaining shares if better opportunities arise.

Valuation

For the DCF calculation, I believe it is more accurate to project future value using book value instead of net income, as the net income is being suppressed due to external economic conditions that’s outside of EQB’s control. The estimated fair value of EQB stock is about $92 per share, indicating a 10% CAGR in the next 5 years. Here are the assumptions:

Latest Book Value of CA$3.3 Billion
Book Value growth rate of 10% (5YR AVG 16%)
0% Share dilution (5YR AVG 0%)
Future P/B ratio of 1 (5YR AVG 1.08)
Discount rate of 10%

Figure 1. EQB stock valuation (Calculated with StockUnlock)

Holdings Disclosure

SoloFIRE EQB ownership: 3.6% of portfolio
SoloFIRE EQB Average Cost Paid: CA$62.41 (+44.9%)
Holding time: 4 years

DISCLAIMER: Solofire is not a registered financial advisor. This post contains author's personal opinion only and it should NOT be considered financial advice.

SoloFIRE

SoloFIRE Portfolio Update - 2026 August - $972,000

Table of Contents

💡Monthly Highlight

Updated Stock Analysis and Valuations

Constellation Software (TSE:CSU)

Brookfield Corporation (BN)

Salesforce (CRM)

Mainstreet Equity (TSE:MEQ)

🌍International Holdings

HENNGE (4475.T)

💸Detailed Portfolio Update

Portfolio Holdings

Option Holdings

Trades in TFSA Account

TFSA portfolio long-term performance

Trades in RRSP Account

Trades in Taxable Accounts

Summary

Smith Maneuver Portfolio Updates

Quick Links

SoloFIRE Portfolio Update - 2026 July - $996k

Table of Contents

💡Monthly Highlight

📈Updated Stock Analysis and Valuations

United Health (UNH)

MSCI

Alphabet Inc (GOOGL)

Meta

Amazon (AMZN)

Visa Inc (V)

International Stocks

Vitec Software (VIT.B)

💸Detailed Portfolio Update

Portfolio Holdings

Option Holdings

Trades in TFSA Account

TFSA portfolio long-term performance

Trades in RRSP Account

Trades in Taxable Accounts

Summary

Smith Maneuver Portfolio Updates

Quick Links

💸My $1.5M FIRE progress update

Financial Assets

Portfolio Debt

Current Monthly Fixed Cost

SoloFIRE Portfolio Update - 2026 June - $955k

Table of Contents

💡Monthly Highlight

Better Measurement of Performance

Risks of Semiconductor Stocks

Updated Stock Analysis and Valuations

Adobe Inc (ADBE)

💸Detailed Portfolio Update

Portfolio Holdings

Option Holdings

Trades in TFSA Account

TFSA portfolio long-term performance

Trades in RRSP Account

Trades in Taxable Accounts

Summary

Smith Maneuver Portfolio Updates

Quick Links

SoloFIRE Portfolio Update - 2026 May - $991,000

Table of Contents

💡Monthly Highlight

Updated Stock Analysis and Valuations

Constellation Software (TSE:CSU)

Brookfield Corporation (BN)

Salesforce (CRM)

Mainstreet Equity (TSE:MEQ)

International Holdings

HENNGE (4475.T)

💸Detailed Portfolio Update

Portfolio Holdings

Option Holdings

Trades in TFSA Account

TFSA portfolio long-term performance

Trades in RRSP Account