Core Insights - The article emphasizes the importance of selecting income-generating investments that are reliable and sustainable, rather than chasing high yields that may not be sustainable in the long term [2][3] Investment Strategies - Generating recurring income can enhance portfolio value and provide cash flow without selling stocks, which can be used for various financial needs [1] - Investing in exchange-traded funds (ETFs) is recommended for those seeking safe recurring income, as they offer diversification and lower risk compared to individual stocks [3] Schwab U.S. Dividend Equity ETF - The Schwab U.S. Dividend Equity ETF focuses on low costs, fundamental strength, and quality dividends, with an expense ratio of 0.06%, making it suitable for long-term investing [5] - The fund holds 103 stocks, prioritizing quality over sheer diversification, and averages a yield of around 3.9%, which is higher than the S&P 500 average of 1.2% [6][7] - Despite a 1% decline in the past year, the total return including dividends is above 2%, and over five years, total returns exceed 70% [8] iShares Core High Dividend ETF - The iShares Core High Dividend ETF is more selective, focusing on 75 high-dividend stocks, with a yield of 3.5% and an expense ratio of 0.08% [9][12] - The top three holdings—ExxonMobil (8.5%), Johnson & Johnson (6.7%), and AbbVie (5.8%)—account for 21% of the portfolio, indicating less diversification but potentially higher returns from major positions [10][11] - This ETF has seen a 6% increase in value this year, with a total return of nearly 8% when including dividends [13]

Market Concentration & Earnings - Market cap concentration is unprecedented, but those stocks aren't contributing a record amount of S&P earnings [3] - The "Magnificent 7" (Mag 7) have largely driven market returns since April [7] - Earnings for the "forgotten 493" are expected to almost quadruple [7] - Growth value has a 4x multiple, which is unsustainable [7] - The Mag 7 versus the forgotten 493 has been a 4x multiple in the last three months [7] Valuation & Diversification - Valuation eventually matters [5] - Owning the rest of the market has historically been the right move during periods of high concentration [4] - Diversification is crucial [7] Catalysts & Potential Upsides - Takeovers of smaller companies by private equity or larger corporations could be a catalyst [10] - Productivity gains from technology, including AI, are expected to broaden and impact earnings across various sectors like financials, education, and hospitals [8][12] - Tariffs may not be as severe as initially anticipated, presenting a potential upside surprise [13] - Anticipated moves by the Federal Reserve (Fed) in September, December, and March could be accretive to earnings [13]

Financial Data and Key Metrics Changes - For the three months ended June 30, 2025, the company reported revenue of $24.8 million, a slight decrease from $24.9 million in the same period last year. The net income for the quarter was $760,000, compared to a net loss of $2.1 million in the prior year [6][14] - For the first nine months of the fiscal year, revenue was $80.1 million, down from $100.2 million last year, with a net loss of $662,000 compared to a net income of $6.3 million in the previous year [6][14] Business Line Data and Key Metrics Changes - The Smart Water segment generated revenue of $10.5 million for the three months ended June 30, 2025, an increase of 6% from $9.9 million in the prior year. For the nine-month period, revenue was $27.3 million, up 33% from $20.6 million [15] - The Energy Solutions segment reported revenue of $8.1 million for the three-month period, a decrease of 14% from $9.4 million last year. For the nine-month period, revenue was $35.35 million, down 42% from the previous year [16] - The Intelligent Industrial segment's revenue totaled $6.1 million for the three-month period, a decrease of 5% from $6.5 million last year. For the nine-month period, revenue was $17.6 million, down 8% from $19.1 million [17][18] Market Data and Key Metrics Changes - The company continues to face challenges in the ocean bottom node markets, but there are opportunities for revenue generation in the Smart Water and Energy Solutions segments, which have improved operational efficiencies [10][12] Company Strategy and Development Direction - The company is focused on growth through acquisitions and has recently acquired HeartBee Detector, a security technology, to enhance its portfolio and create recurring revenue streams [11][12] - The company aims to leverage its products and services portfolio to exploit high-margin markets and has engaged former US Border Patrol chief to promote its security solutions [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for future performance, citing a strong backlog and ongoing discussions with partners for additional contracts [12][13] - The company is addressing workforce costs and development expenses to achieve sustained profitability [12] Other Important Information - The company announced a significant contract with Petrobras for the supply and installation of a permanent reservoir monitoring system, expected to generate over $80 million in revenue, with installation anticipated to be completed by fiscal year 2027 [8][9] Q&A Session Summary Question: Can you discuss the PRM announcement and its implications? - Management indicated that the contract with Petrobras had been in negotiation for several months and was a significant achievement against competitors [22][23] Question: What is the expected revenue recognition timeline for the Petrobras contract? - Revenue recognition is hoped to begin in the first fiscal quarter, but specific milestones are still being defined [52] Question: Why has the Border Patrol not adopted the heartbeat detector technology? - The current technologies in use are capital-intensive and less efficient, presenting an opportunity for the new technology to improve operational efficiency [53][55] Question: What funding is allocated for tunnel detection in the recent bill? - There is a $30 million allocation, but it is not guaranteed that the full amount will be dedicated to tunnel detection [57] Question: What is the status of the SBIR-3 certification and its implications for government contracts? - The SBIR-3 certification is in place, but the specifics of government procurement processes remain unclear [59][60]

Financial Data and Key Metrics Changes - Total investment income for Q2 2025 was $35.1 million, a decrease from $35.4 million in Q2 2024 [19] - Net investment income was $13.9 million, down from $15.6 million in the same period last year [19] - The debt portfolio generated a dollar-weighted average annualized yield of 15.4%, holding flat quarter over quarter and increasing from 15.1% year-over-year [19] - Total operating expenses increased to $21.2 million from $19.8 million in Q2 2024 [20] - Net realized loss on investments was $1.5 million compared to a net realized gain of $6.1 million in Q2 2024 [20] - Net assets decreased to $498.9 million from $503.3 million at the end of Q2 2024 [21] - NAV per share increased by 1.3% to $13.66 from $13.48 at the end of Q2 2024 [21] Business Line Data and Key Metrics Changes - The company executed three investments in new and existing portfolio companies totaling $37.8 million in funded loans during Q2 2025 [8][11] - Significant investments included a $40 million commitment in Auto Books and a $20 million commitment in Swing Education [9][10] - The weighted average portfolio risk rating remained stable at 2.33, indicating consistent credit quality [13] Market Data and Key Metrics Changes - The venture debt market is experiencing a fundamental shift, with companies focusing on demonstrating growth to attract investment [15] - AI deals represented 64% of 2025 deal value and count, indicating a concentration of fundraising momentum in this sector [17] - The company noted a cautious outlook for M&A activity in its target sectors for the remainder of the year [15] Company Strategy and Development Direction - The company aims to optimize its portfolio through diversification of investment size and expanding financing solutions [7] - It is leveraging its integration within the BC Partners platform to enhance origination channels and financing options [6] - The focus remains on high-quality late and growth-stage companies within technology, healthcare, and select consumer sectors [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate economic uncertainties and maintain shareholder value [6] - The outlook for 2026 appears brighter than for 2025, with expectations of increased pipeline activity [67] - Management emphasized the importance of portfolio optimization and diversification in the current market environment [68] Other Important Information - The company has a stock repurchase program approved for $25 million, with 815,408 shares repurchased during Q2 2025 [24] - Total available liquidity was reported at $297 million, including unrestricted cash and cash equivalents [22] - The company has $164.9 million in unfunded commitments, with $135.5 million allocated for debt financing [23] Q&A Session Summary Question: Non-accruals and their impact on total investment income - Management explained that PIK (payment-in-kind) is used for both offensive and defensive reasons, helping to manage cash flow issues and win transactions [29][30] Question: Share repurchase program strategy - The company uses a structured plan based on stock price relative to NAV, being more aggressive when the discount to NAV is higher [31] Question: Refinancing costs and their impact - Approximately $0.04 per share was attributed to increased interest expense, with a portion being one-time costs related to refinancing [35] Question: Unfunded commitments and drawdown expectations - Historically, about 50% of unused commitments expire without use, but performance at or above plan can reduce the likelihood of drawdowns [36] Question: Update on CADMA JV - The CADMA JV is ramping up, with expectations for additional transactions by year-end [56] Question: Market reaction to new products - All new products rolled out have been well received, with structured second lien and revolver products being highlighted [58] Question: M&A activity in the venture market - Management noted that companies are focusing on organic growth rather than M&A, which is seen as a positive trend [62]

Risk Management - Portfolio risk management prioritizes investing only what one can afford to lose, regardless of the trade's appeal [1] - Isolated trades are preferred over cross margin to limit potential losses to a single trade rather than risking the entire account [1] Portfolio Allocation - Generally, less than 1% of the portfolio is allocated to most trades, varying based on conviction and portfolio state [1] - High leverage is rarely used and is reserved for high-conviction plays believed to have bottomed [1] Investment Strategy with $20,000 Portfolio - $5,000 is set aside as an emergency fund or to recover from potential losses [1] - Approximately 80% of the funds are allocated to spot coins, with 60% in strong memecoins like BONK and FLOKI, and 40% in low-cap, on-chain plays [1] - Around 20% is allocated to leverage trading with the understanding that 100% of this amount could potentially be lost [1]

People’s Bank of China increased its gold reserve in July, marking nine straight months of purchases that are helping it diversify its holdings away from US dollars. https://t.co/sXkZdxjF6Q ...

AMD (NASDAQ: AMD ) (TSX: AMD:CA ) just reported its quarterly earnings. The company reported non-GAAP earnings of 48 cents, which came in line, and its reported revenue of $7.69 billion was significantly above expectations of $5 billionI own separate portfolios for separate goals. I have one portfolio where I have nothing but income plays, another portfolio where I have nothing but growth stocks. I also have another portfolio where I run my options plays. I try not to mix different portfolios because they a ...

Investment Strategy & Market Outlook - The firm maintains a neutral stance on stocks and bonds, balancing potential bubble risks with strong underlying fundamentals [5] - The portfolio emphasizes diversification, with an overweight position in international value and small-cap stocks [5] - The firm is short duration, indicating reduced sensitivity to interest rate changes, achieved by holding fewer long-term treasuries [5][6] Inflation & Interest Rate Risks - The firm anticipates potential upside risks to inflation, citing factors like wage growth, housing shortages, and commodity price volatility, in addition to tariffs [6] - Deficits could exert upward pressure on the 10-year Treasury yield, contributing to the underweight duration strategy [7] Decision Making & Investment Psychology - Sports psychology highlights the importance of differentiating between luck and skill, especially during periods of speculation [2] - Investors should focus on the quality of their decisions, separating outcomes from the decision-making process [4]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The current stock market is characterized by a few multi-trillion dollar market cap companies leading the index, such as NVIDIA, Apple, and Microsoft [2] Group 2 - The article emphasizes the importance of defensive stocks with a medium- to long-term investment horizon [2]

Market Reaction & Data Trust - Market is likely to react to recent data revisions, but a significant fallout is not immediately apparent [1][2] - The market was surprised due to lower volatility and liquidity during the summer months [2] - The industry continues to trust the data, acknowledging that some data points are estimates that are backfilled later [5] - Every report needs to be scrutinized in the context of the Federal Reserve's policy shift [6] Labor Market & Economic Narrative - The focus remains on the labor market, specifically the absence of increased layoffs [3] - The prevailing narrative is that employers are hoarding labor [4] - The market perceives the labor market as more critical than inflation, a sentiment telegraphed by the Federal Reserve [8] - Fears of the Federal Reserve being behind the curve are expected to escalate [9] Inflation & Federal Reserve Policy - Incremental inflationary pressures are considered less of a concern, with a return to the "transitory" narrative [10] - Political challenges of elevated unemployment are expected to be more concerning to the Federal Reserve [11] - It's possible the Federal Reserve would have acted differently on rate policy with correct data [8] Investment Strategy - Current guidance advises clients to remain overly diversified across risk spectrums [12] - Fixed income acted as a ballast during the equity drawdown, and foreign markets have been supportive [12] - The industry is constantly seeking opportunities to add or reduce risk based on the evolving environment [13]