Fall 2026
The market surge seen in the first six months of this year moderated in the 3rd quarter, unsurprisingly. The trend that continued however is the outperformance of a narrow range of stocks related to AI.
For example, in the month of September both the S&P 500 and the S&P TSX composites were down, but the information technology segments of those indices were up. We’ve been expressing caution about the overvaluation of many stocks in that sector and we continue to do so. We do have meaningful exposure to information technology companies that include aspects of AI in their businesses, but our portfolio is diversified over several sectors.
That said, we did achieve a return of 9% from the start of the year to the end of September in the Total Equity Portfolio, well above normally expected returns for a nine month period. We made no purchases or sales in the Total Equity Portfolio last quarter and our cash position in that portfolio remains above 20%. High market valuations are not presenting a lot of new opportunities; margin of safety is hard to find right now.
Although we analyze and consider potential names on an ongoing basis, we view many companies that meet our quality criteria as too expensive and many that appear to be attractively priced are not of sufficient quality. We’ll never sacrifice our criteria for the sake of being fully invested. Effective investing requires patience and that’s something we’re never short of at Lionridge.
At Your Service,
Hardev Bains, LLB, MBA, CFA
President and Chief Investment Officer
The Composite consists of all fully discretionary accounts managed by Lionridge Capital Management Inc., according to the investment objective of the Lionridge Total Equity Portfolio. The objective of the Lionridge Total Equity Portfolio is to maximize long-term returns while minimizing long-term risk by investing in a concentrated portfolio of undervalued securities. The manager seeks to invest in securities only at prices offering a margin of safety, with a view to achieving the dual objectives of outstanding returns along with protection of capital. The strategy has a global focus and the manager has discretion over the geographic allocation of assets. Return figures are presented in Canadian dollars, are gross of management and custody fees but are net of all trading expenses, and include cash holdings. There is no minimum portfolio value required for inclusion.
The content of this report is intended for information purposes only and does not constitute an offer to buy or sell our products or services nor is it intended as investment and/or financial advice on any subject matter. The opinions, estimates and projections contained in this document are those of the author as of the dates indicated and are subject to change. Every effort has been made to ensure the accuracy of the contents of this report. Performance reports may be compiled utilizing information provided by third party sources. Every effort has been made to ensure the accuracy of such third party information but such information cannot be guaranteed to be accurate. The performance returns are before the deduction of any fees and are not guaranteed; values change frequently and past performance may not be repeated.