This past week, many of the big-name mega-cap technology companies (companies with market capitalization exceeding $200 billion which represents the total value of all outstanding shares) that have driven the indexes to record heights all year long lost favour with investors. In fact, much of this past week’s declines can be attributed to these same companies. This includes Alphabet (NASD: GOOGL), Amazon.com (NASD: AMZN), Apple (NASD: AAPL), Microsoft (NASD: MSFT) and Nvidia (NASD: NVDA).
This rotation is primarily due to a few factors. First, the long-anticipated decline in inflation has led to expectations that the US Federal Reserve (Fed) will lower interest rates, possibly as soon as September. Lower interest rates typically benefit cyclical stocks, such as those in the financial, energy, and industrial sectors, which have underperformed tech stocks in the recent years.
Second, mega-cap tech stocks have enjoyed substantial valuations, fueled by their growth potential and market dominance. However, these valuations have become increasingly stretched, making investors cautious. This has prompted some investors to take profits and reallocate funds to potentially undervalued sectors, such as those mentioned previously. Additionally, smaller-cap stocks have lagged mega-cap tech stocks for some time, creating a valuation gap. As investor sentiment shifts, money is flowing into these potentially undervalued stocks, as investors seek higher returns.
Finally, as the economy continues to grow, investor interest is shifting towards sectors that benefit from increased consumer spending, such as the consumer cyclicals, financials, energy, and industrial sectors. While this rotation suggests a change in market sentiment, it is important to note that mega-cap tech companies still hold considerable influence and are likely to remain key market players.
Now that you have some sense of why the indexes behaved the way they did this past week, let’s see what happened this past week….
Items that may only interest or educate me ….
Canadian Economic news, US Economic news, The second round of investments, The Glitch felt around the world ….
Canadian Economic news
This past week’s key economic data that the Bank of Canada (BoC) considers when deciding whether to raise or lower the interest rate.
Consumer price Index (CPI)
Canada’s June inflation data surprised analysts by coming in lower than expected. Annual inflation dropped to 2.7%, down from 2.9% in May, while analysts had predicted a fall to 2.8%. On a monthly basis, CPI fell 0.1% in June, reversing a 0.6% rise in May when analysts had expected it to remain flat.
In headline CPI, or all items, the biggest monthly price increase was in the ‘Food’ category, which rose by 0.5%, while ‘Gasoline’ saw the steepest decline, down by 3.1%. Year over year, ‘Shelter,’ which includes mortgage and rent costs, saw the largest increase at 6.2%, whereas ‘Clothing and footwear’ was the only category to see a price decrease, dropping by 3.1%.
Core CPI, which excludes volatile food and energy prices, remained flat on a monthly basis after a 0.6% rise in May, and year-over-year core CPI held steady at a rate of 2.9%.
The return to a downward trend in headline inflation, within the BoC’s 1%–3% target range, is reassuring following May’s slight uptick. Although annual core inflation remained at 2.9%, this latest data should give the BoC confidence to consider lowering the benchmark rate in their meeting next week. At the very least, it has boosted investors’ hopes for another rate cut. 😊
Canadian market volatility
Canada’s Volatility Index, the CVIX, saw a notable rise this past week, climbing to 10.77 from 7.97. On Friday morning, the CVIX spiked to 12.94, likely due to the global IT outage, before settling back to 10.77 by the end of the day. Beyond the Friday spike, the week’s increase likely reflects the recent selloff in US stocks and jitters about the upcoming US election. However, the anticipation of a July rate cut by the BoC, and a potential rate cut by the Fed in September is keeping the index relatively low.
The CVIX, tracked via the VIXI on the Toronto Stock Exchange (TSE), gauges expected market volatility. Generally, a CVIX reading below 10 is considered low, indicating a period of relative market calm and stability. A reading between 10 and 20 suggests moderate volatility, which can reflect normal market fluctuations. While a reading above 20 is typically considered high, indicating significant market uncertainty and potential turbulence. Thus, a CVIX reading of 10.77 suggests that investors are relatively confident, with limited market uncertainty.
Retail Sales
Statistics Canada reported retail sales for May came in much lower than forecast. Headline, or all items, retail sales fell 0.8% in May after rising 0.7% in the month before. Analysts had expected a decline of 0.6%. Annually, retail sales increased by 1%.
Retail sales were down across the board, with eight out of nine subsectors reporting lower numbers. Notably, ‘Floor covering, window treatment, and other home furnishing retailers’ saw the biggest monthly increase, up 3.5%. On the flip side, ‘Other motor vehicle dealers’ experienced the steepest decline, down 5.0%. Year over year, ‘Health and personal care retailers’ saw the largest increase, up 4.7%, while ‘Miscellaneous store retailers’ faced the biggest drop, down 7.3%.
Core retail sales, which excludes gasoline stations, fuel vendors, motor vehicle and parts dealers, dropped 1.4% in May after gaining 1.8% in April. Analysts had been expecting a decline of 0.6%. Year over year, retail sales were down by 0.4%.
Retail sales are a key component of consumer spending, which drives a sizable portion of economic activity. When consumers spend less, it typically signals a slowdown in economic growth. The lower-than-expected retail sales figures suggest that the economy is cooling down, throwing the door wide open for the BoC to lower the benchmark interest rate once again in order to provide some rate relief for consumers and businesses alike. Hopefully, this time next week the rate will be at least 0.25% lower. 😊
US Economic news
This past week’s key data points that the Fed considers when deciding whether to raise or lower the interest rate.
American market volatility
The CBOE Volatility Index (VIX), often dubbed the market’s “fear gauge,” soared from 12.46 to a high of 17.16 before settling at 16.52. This marks a significant increase after lingering below 13 for the past few weeks. The primary driver of this spike was the global IT outage on Friday, but it also reflects growing political concerns about the upcoming election, along with geopolitical and trade risks. Despite this substantial jump from last week’s 12.46 and reaching its highest level since late April, the VIX remains relatively low due to the increasing likelihood of a rate cut in September.
Retail Sales
The Commerce Department reported that retail sales were essentially flat in June, following an upwardly revised 0.3% increase in May. Analysts had predicted a 0.3% drop, so this stability was a pleasant surprise. Year over year, retail sales increased by 2.3%, matching the growth rate in May, despite analysts expecting flat annual sales.
Core retail sales, which exclude autos and gas stations, bounced back with a 0.8% increase in June after a 0.1% decline in May. Annually, core retail sales rose by 3.8%, consistent with May’s growth.
Consumer spending is the heart of the US economy, driving two-thirds of its activity. Retail sales, which include spending on goods and food services, form a big part of overall consumer spending. Despite analysts forecasting a drop, this latest report shows that consumer spending is holding steady, even with higher unemployment. This resilience is a positive sign for the economy, suggesting that consumers are continuing to spend despite the economy cooling. The report provides some evidence of consumer resilience, but it does not signal a need for an immediate rate cut.
The second round of investments in an all-stock portfolio
Following up on last week’s discussion about ‘Initial Investments’ for an all-stock portfolio, this week I will share how I added to my portfolios. Keep in mind, that this strategy worked for me to achieve my goals with a level of risk that was acceptable to me. You risk tolerance and goals are undoubtedly different from mine, so this strategy may or may not work for you.
Adding Growth-Oriented Companies
After selecting a core of 3+ companies, I began adding growth-oriented companies to boost my portfolio’s value. I targeted medium and large-cap companies with robust growth histories and promising futures.
Balancing Growth and Stability
To balance growth companies with core/dividend companies, I diversified across company market capitalization (number of shares outstanding X share price) and sectors. This mix helped manage risk and ensured I could sleep easily at night.
Pairing Investments
When building the portfolios, one strategy I used was pairing investments. For example, I invested in both Visa (NYSE: V) and Virgin Galactic (NYSE: SPCE) on the same day. Visa is a stable, core/growth company with dividends, while Virgin Galactic is a high-risk, high-reward Swing For the Fences (SFTF) company. This way, Visa offset some of the risk associated with Virgin Galactic. I still own Visa but sold Virgin Galactic ten months later when it spiked, netting a 70% profit. One SFTF investment that actually paid off. 😊
Market Capitalization and Sector Diversification
Keep track of market capitalization to avoid an imbalance in your portfolio. A mix of small, medium, and large-cap companies reduces volatility and risk. A portfolio of all small cap companies is a lot more volatile and riskier than a mix of market cap sizes.
Additionally, track the sectors of your investments to prevent overloading any one sector. Diversifying across sectors spreads risk, as underperformance in one sector can be balanced by strong performance in another. For instance, during the pandemic in summer 2020, the technology sector was hot, while other sectors cooled. But in early 2021, as vaccines rolled out and people once again started going out, money flowed into sectors like Consumer Cyclicals, Energy, and Industrials, while Technology cooled off.
Exploring Emerging Companies
Once my portfolio was well-diversified and I was comfortable with investing (I consider myself a part owner of every company I invest in because I am), I added a few young, exciting companies. These were high growth or SFTF companies. I investigated their products, management, and culture. They sounded interesting and appeared to have immense potential, so I bought a few shares, and monitored their performance through quarterly reports. These were SFTF companies, so their share price was very volatile. If they performed well, I bought a few more shares. Remember, you are investing in the company, not just the share price. Over the long term (3+ years), a well-performing company will see its share price rise despite short-term fluctuations.
Monitoring Riskier Stocks
For riskier stocks, typically SFTF stocks, frequent performance checks are crucial. Stay informed about the company’s health and market conditions to make informed decisions. If I had not monitored Virgin Galactic I would have missed a sizable gain. At the same time, if I had forgotten about the company, I would have lost a most of the investment as the company trades considerably lower (approximately US$ 0.35 per share on a reverse split basis). If you do not think you will be able to monitor these types of riskier stocks, avoid them all together and stick to companies that have a proven record of growth and share price growth.
Investing is a journey. I started with a solid core of companies that balanced growth and stability, and then added a few high-risk, high-reward companies (most of which did not pan out). This strategy worked well for me, but it might not be the right fit for everyone. Define what you want to achieve with your investments, create a plan to reach your goals, and take the plunge. Stick to your plan as much as possible and be ready to review and adjust it if your circumstances change. Happy investing! 😊
The Glitch felt around the world
On July 19, 2024, a faulty software update from CrowdStrike (NASD: CRWD) triggered a widespread global IT outage. The update, meant to enhance security, caused computers running Microsoft Windows to crash upon startup.
CrowdStrike, a market leader in cybersecurity with its Falcon product widely used by Fortune 500 companies and small businesses alike, faced far-reaching consequences from this outage. With their extensive customer base, millions of organizations worldwide were likely affected, resulting in billions of dollars in lost revenue, productivity losses, and emergency response costs. Critical infrastructure and businesses across the globe were hit hard, including airlines, banks, hospitals, and government agencies. The repercussions were severe, causing flight cancellations, disrupted financial services, delays in healthcare, and other significant impacts.
CrowdStrike quickly identified and resolved the issue within a few hours, issuing public apologies and working diligently to support affected customers. However, this incident has undoubtedly damaged their reputation as a leading cybersecurity firm. It highlights the potential risks of software updates and the critical importance of rigorous testing.
In the wake of this event, CrowdStrike will likely face increased scrutiny from regulators and customers. Implementing stringent measures to prevent similar occurrences and restore trust among its user base will be crucial.
Additionally, this outage could spark discussions about the risks of over-reliance on a single cybersecurity provider, prompting organizations to diversify their security solutions.
Ultimately, the long-term impact on CrowdStrike will depend on how the company responds to this crisis, the extent of the damage to its reputation, and the overall economic and geopolitical environment.
Weekly Market Review
Monday: all four indexes got out of the gate quickly and ended the day in the green. The Toronto Stock Exchange Composite Index (TSX), the S&P 500 Index (S&P), the Dow Jones Industrial Average (DJIA), and the Nasdaq Composite Index (Nasdaq) were lifted by comments from Fed Chair Jerome Powell that they are prepared to lower interest rates before inflation fall to their 2% target.
In Canada, the heightened prospects of a US interest rate decrease, which would boost demand for oil, propelled the TSX to its fourth consecutive day of gains. In trading, Energy advanced the most while Utilities had the biggest decline.
In the US, following the attempted assassination of former President Trump, investors believe he is now more likely to win the upcoming election. The DJIA closed at a new record high after strong earnings reports form a few of the big US banks. in trading, Energy saw the biggest gains while Utilities saw the biggest drop.
Tuesday: the indexes surged on the growing conviction by investors that the Fed will start lowering US rates in September. Oil slipped on concerns of lower demand from China.
In Canada, a better-than-expected CPI inflation report increased investors confidence the BoC will lower rates again next week. Investors rotated back into commodity and resource stocks, sending the TSX to its fourth straight record high close. In trading, it was a day of broad gains, led by the Technology sector. Energy was the only sector to end in the red.
In the US, the DJIA closed at a record high for the second straight day after a flat retail sales report boosted the case for a September rate cut. In trading, Industrials posted the largest gain, while Telecommunications Services had the biggest drop.
Wednesday: the DJIA got into positive territory early and stayed there all day, unlike the other three indexes which started in negative territory and drifted lower throughout the trading session. A selloff in technology stocks was spurred by fears of stricter export restrictions on companies selling technology to China and comments from Republican presidential candidate Donald Trump casting doubt on US support for Taiwan.
In Canada, Lower commodity prices, coupled with the ripple effect of the tech stock selloff in the US, dragged the TSX down, ending its streak of record-high closings at four. In trading, Telecommunications Services was the only sector to end higher, while the Technology sector had the steepest decline.
In the US, the Nasdaq was weighed down by a selloff in technology stocks, leading to its worst day since December 2022. The decline in major tech stocks overwhelmed hopes for a September rate cut. In trading, Consumer Staples was the top performing sector, while the Technology was the worst performing sector.
Thursday: yesterday’s selloff continued into today, this time dragging all four indexes into the red. Many investors continue to rotate out of the high-priced big technology companies and into cash as they try to determine which way the market will go.
In Canada, investors seem to have taken advantage of recent run ups in technology companies and commodity prices and taken some profits off the table, causing the TSX to drop for the second straight day. In trading, Consumer Staples and Telecommunications Services were the only sectors to end higher, while Basic Materials (miners and fertilizer manufacturers) fell the hardest.
In the US, a broad selloff caused the DJIA to end its six-day winning streak as investors took some cash off the table. In trading, the Energy sector was the only American sector to advance, while Healthcare suffered the biggest decline.
Friday: not a great day for the indexes, as all four ended in the red amidst the chaos created by a global IT outage. Investors continue to move out of technology companies and into smaller companies that they believe will benefit more from lower interest rates. Oil prices dropped sharply today, giving back all gains from earlier in the week. Dragging oil prices down were concerns of lower demand from China, the world’s second largest economy behind the US.
In Canada, the TSX was weighed down by softer commodity prices and the fall out of the IT outage. In trading on Bay Street, Consumer Staples posted the biggest gain, while Energy recorded the largest loss.
In America, uncertainty caused by the global IT crash weighed heavily on all three indexes, especially the Nasdaq, home of CrowdStrike, the company responsible for the IT crash. in trading on Wall Street, Healthcare and Utilities were the only sectors to end in the green, while Energy suffered the steepest decline.
Weekly Market and Portfolio Review
For the week, the TSX (SPTSX) rose 0.1%, the S&P 500 (SPX) lost 2.0%, the DJIA (INDU) gained 0.7% and the Nasdaq (CCMP) plunged 3.7%.
| Index | Weekly Streak |
| TSX: | 4 – week winning streak |
| S&P: | 1 – week losing streak |
| DJIA: | 3 – week winning streak |
| Nasdaq: | 1 – week losing streak |
The week started off well but went downhill after Tuesday, as seen in the chart above. Both the Nasdaq and S&P had their worst week since April. Meanwhile, the DJIA posted several closing highs midweek, enabling it to extend its weekly win streak to three. Boosted by higher commodity prices, the TSX also extended its weekly win streak to four, setting a record high close along the way. Quietly, the TSX has put together the longest win streak of the four major North American indexes.
The stock market experienced a shift this past week as investors moved out of the tech giants in favour of other sectors and small-cap companies with greater growth potential. The Nasdaq, heavily weighted with technology companies, plummeted, while the DJIA and TSX, comprised of more established companies, extended their weekly win streaks.
This market rotation appears driven by several factors. First, Fed Chair Jerome Powell’s remarks that the Fed does not need to wait to hit its inflation target before lowering interest rates boosted investor confidence that they Fed would start lowering rates. As a result, investors turned their attention to cyclical stocks like those found in the financials, consumer cyclicals, and energy sectors. Second, sky-high valuations and prices of tech companies prompted investors to seek the more reasonably priced cyclical stocks. Finally, the attempted assassination of former President Trump could influence market expectations, with a Republican sweep potentially leading to business-friendly policies.
In Canada, this week’s lower retail sales data, along with cooling inflation and a slowing economy, have analysts and investors anticipating the BoC will lower interest rates for the second time this year.
After a couple of weeks of all four indexes moving upward, the sharp downturn by the S&P and Nasdaq caught me by surprise. These two had been leading the way all year. The Nasdaq, and to a lesser extent the S&P, are dominated by a handful of mega-cap tech giants. Riding the wave of big tech stocks was exhilarating on the way up, but now it feels like we are stuck in the doldrums as they drift lower. Hopefully, starting next week they will find some wind to fill their sails and continue their upward journey.
| Portfolio | Weekly Streak |
| Portfolio 1: | 1 – week losing streak |
| Portfolio 2: | 4 – week winning streak |
| Portfolio 3: | 1 – week losing streak |
Given the mixed week for the four indexes, especially the plunge in big technology companies, I wasn’t expecting much from the portfolios. Unfortunately, I wasn’t disappointed as only Portfolio 2 showed a weekly gain, as you can see in the chart below. ☹
Portfolio 1 had the worst week of all. The mega-cap tech companies that had buoyed the portfolio for the last two years became a drag as investors rotated out to other sectors. Almost 60% of the companies in this portfolio posted weekly declines, with significant (more than 10%) losses by CrowdStrike (down over 17% for the week, including an 11% drop on Friday alone), Cameco (TSE: CCO) down 10%, and Navitas Semiconductor (NASD: NVTS) down 10%.
Portfolio 2 was the only portfolio to increase in value this past week. There were no significant movers up or down, but a majority of the companies posted weekly gains, which was enough to extend its winning streak and increase the portfolio’s value.
Portfolio 3 saw its winning streak come to an end, despite a majority of holdings posting weekly gains. Unlike Portfolio 2, where gains by a majority of the companies lifted the portfolio, the gains in Portfolio 3 were not enough to offset the losses of its two largest holdings—Shopify (TSE: SHOP) and Microsoft.
Despite the setbacks this week, it is essential to remember that market ups and downs are all part of the investing adventure. Portfolio 1 may have taken a hit and Portfolio 3 faced some turbulence, but Portfolio 2’s steady performance reminds us of the power of diversification. Here is hoping the winds that buffeted the markets this past week die down, and we return to smoother sailing and brighter days ahead for our investments! 😊
Companies on the Radar
This past week, I came across SolarWinds (NYSE: SWI). At first, I thought it was a solar energy company, but a quick check on Yahoo! Finance revealed it’s actually an IT infrastructure management platform. Curious about its potential, I consulted the Stock Swami, also known as the Dark Lord of the Interweb. His response was swift and alarming: “They were responsible for a massive cybersecurity breach in 2020 that affected thousands of customers, including the US Government.” With a history like that, I quickly decided to move. Cybersecurity is crucial, and I would rather not invest in a company with such a significant lapse, especially when there are plenty of other opportunities out there.
Another company recently caught my eye and stayed on my radar longer than SolarWinds. Kelly Partners Group (OTCM: KPGHF), an Australian firm, might seem like just another provider of accounting, taxation, and other services to private businesses. But I dug a little deeper and found a fascinating strategy at play. Kelly Partners Group is in the business of acquiring smaller accounting firms across Australia, many of which are facing succession issues within the next five years. What is intriguing is their recent expansion into the US, with plans to extend their reach to other English-speaking countries like Canada, New Zealand, and the United Kingdom. Owning an accounting firm was never something I considered, but their bold move into the US market has sparked my interest.
In addition to the two companies mentioned above, the radar list also included the three holdovers from previous weeks:
- Equitable Bank (TSE: EQB), a mid sized Canadian bank, considered Canada’s 7th bank, that provides financial services to consumers and businesses.
- Vertiv Holdings (NYSE: VRT), an American company that designs and builds infrastructure and continuity solutions to businesses around the world.
- Lumine Group (TSE: LMN), a young Canadian mid sized company that acquires communications and media software companies, and then strengthens and grows those companies.
Please keep in mind that these are only companies that have piqued my interest. This is not a recommendation or financial advice. You should do your own research or contact a professional before making any investment decisions.
The Radar Check was last updated July 19, 2024.
NOTE: Morningstar and Thomson-Reuters analysis is unavailable for Kelly Partners Group from my usual sources most likely because it is a small-cap Australian company with a market value of less than US$360 million and primarily listed on the Australian Stock Exchange. While you can invest in Kelly Partners through the Over-the-Counter Market (OTCM) here in North America, the analysis is not as readily available as it is for companies on major North American exchanges like the Toronto Stock Exchange, New York Stock Exchange, and Nasdaq.
Unlike other non-North American companies I have investigated, even Yahoo! Finance did not have any information under the Analysis tab for Kelly Partners. This means I could not get any ratings during my usual radar check.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended July 19, 2024: DOWN 
- Alphabet is in talk to acquire cybersecurity company Wiz for US$ 23 billion. If the deal goes through it will be Alphabet’s biggest deal ever.
- Amazon.com reported record sales for its two-day Prime Day shopping event. Amazon does not disclose the details of how much it earns during the event. According to third party Adobe Analytics, the annual event generated US$ 14.2 billions in sales, up 11% from last year. Not bad for what is typically a slow time of year for spending. 😊
- Not to be left in Amazon’s Prime Day dust, Walmart (NYSE: WMT) started their own July shopping events and deals.
Activity
Bought: Costco Wholesale (NASD: COST) This past week, a trip to Costco reminded me why I love this company: the warehouse was bustling, the parking lot was packed, and the lineups at the gas pumps were long. With this fresh in mind, I decided to purchase more shares when the price dipped below US$850.
Costco’s business model is a powerhouse, featuring consistently growing revenue, net income, free cash flow, and earnings growth—even during economic downturns. Their strategy of membership fees and bulk discounts ensures recurring revenue and fosters deep customer loyalty. Additionally, their constant expansion increases market share and potential customer base.
Costco’s loyal customer base is drawn to their deep discounts, high-quality products, membership benefits, and stellar customer service, creating a strong competitive advantage. Membership fees are a significant profit generator, helping offset expenses and keep prices low.
Recently, Costco announced an increase in membership fees: ‘Goldstar Membership’ will rise by $5 to $65 per year, and ‘Executive Membership’ will go up by $10 to $130 per year. These are the first increases in seven years and will impact approximately 52 million memberships, generating substantial additional revenue.
The reliability of Costco, even during tough economic times, provides a balance for this technology heavy portfolio.
I saw no other reason for the recent dip in share price besides the announcement of higher membership fees. Seeing this as a temporary reaction, I decided to take advantage of the dip and increase my modest ownership of Costco.
Bought: CrowdStrike Holdings Earlier in this post, I mentioned CrowdStrike had caused a global IT meltdown. In hindsight, I wish I had procrastinated so I could swoop down like a falcon (a nod to CrowdStrike’s cybersecurity platform called Falcon 😊) to pick up shares at a steep discount. So, as you read this, remember that my purchase was made before the global IT outage. Technically, my claim that the company’s cybersecurity platform has not been hacked still holds true. 😊
This past week, I decided to increase my investment in CrowdStrike after its share price fell to a level I found attractive. This marks my third investment in the company as I gradually build my stake in the company. The reasons for my initial investment remain as compelling as ever.
I initially invested in CrowdStrike because of its leadership position in cloud-based cybersecurity. Since then, the company has shown impressive revenue growth and expanded its customer base to include large enterprises and government agencies. With its subscription-based business model, CrowdStrike ensures a steady stream of recurring revenue, driving consistent growth in revenue, free cash flow, and earnings. After years of posting a net loss, CrowdStrike posted net income for the first time, a significant milestone in their financial journey. Their product’s quality is reflected in their customer retention rate of over 95% and a net retention rate exceeding 120%, indicating that not only do customers stay, but they also expand their use of CrowdStrike’s services.
In addition to these successes, CrowdStrike has recently joined the S&P 500, underscoring its position as one of the top 500 companies in the USA.
What I find particularly appealing about CrowdStrike is its substantial competitive edge. The high switching costs, strong network effects, and growing brand recognition create a robust moat. Switching to a new cybersecurity provider involves significant costs and risks, making it more likely that companies will stick with a trusted name like CrowdStrike. Moreover, the network effects enhance the platform’s value as more users join, providing CrowdStrike with more data to improve threat detection, which benefits all clients.
However, there are some risks to consider. A major concern would be if a significant security breach affected a CrowdStrike customer. Despite being a prime target for years, CrowdStrike has yet to experience a breach (to my knowledge). The crowded cybersecurity market is another risk, with competitors potentially impacting CrowdStrike’s market share. Additionally, as a high-growth stock, CrowdStrike’s current share price is elevated, and any shortfall in future growth expectations could lead to a significant drop in its price.
On a positive note, the cybersecurity market is projected to keep expanding as businesses and governments invest more in safeguarding their digital assets. With the rising frequency of cyberattacks, the demand for robust cybersecurity solutions like those offered by CrowdStrike is likely to increase.
Investing in CrowdStrike provides exposure to a critical and expanding sector of the high growth technology market. The company has not disappointed since my initial investment back in 2020, and I am confident that adding to a proven winner will benefit the portfolio. I am more than happy to take advantage of the recent pullback in share price to increase my stake in the company. 😊
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Andlauer Healthcare Group Inc. (TSE: AND)
Dream Industrial Real Estate Investment Trust (TSE: DIR.UN) DRIP
BCE Inc (TSE: BCE) DRIP
US $
BSR Real Estate Investment Trust (TSE: HOM.U)
Innovative Industrial Properties Inc (NYSE: IIPR)
Quarterly Reports
No quarterly reports this past week.
Portfolio 2
Portfolio 2 for the week ended July 19, 2024: UP 
- TC Energy (TSE: TRP) said its claim to recover US$ 15 billion after the cancellation of their Keystone XL pipeline project by the Biden administration had been tossed out. The tribunal decided they did not have the authority to decide if the cancelling of the Presidential Permit violated US obligations in the North American Free Trade Agreement.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Dream Industrial Real Estate Investment Trust (TSE: DIR.UN) DRIP
Alimentation Couche-Tard Inc (TSE: ATD)
SmartCentres Real Estate Investment Trust (TSE: SRU.UN) DRIP
US $
No US$ dividends this past week.
Quarterly Reports
No quarterly reports this past week.
Portfolio 3
Portfolio 3 for the week ended July 19, 2024: DOWN
- Microsoft was one of the most severely impacted companies by the CrowdStrike-induced global IT outage. The incident led to widespread disruptions across its ecosystem, including Microsoft 365, their Azure cloud computing platform, and other Microsoft services causing significant inconvenience to users worldwide.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Companies followed by DRIP (Dividend Re-Investment Plan) indicate additional shares were purchased with the dividend. Any cash leftover was added to the cash balance.
Canadian $
Goeasy Ltd. (TSE: GSY)
TD U.S. Equity Index ETF (TSX: TPU)
Alvopetro Energy Ltd (TSXV: ALV)
SmartCentres Real Estate Investment Trust (TSE: SRU.UN) DRIP
US $
No US$ dividends this past week.
Quarterly Reports
No quarterly reports this past week.