This page shows previous investment updates and our "build-in-public" investment journal entries that we have sent off in our newsletter. Included in the newsletter is our internal operations updates
and our investment performance. If you'd like to be included in current updates, please our About page and send us an email. Below is not financial advice, please consult your own financial planer for investments that work for you.
Past results are not indicative of future results. Please consider the risks of investing and know that you are not guaranteed to make your money back.
These entries are to shwo my thought processes for myself and do not necessarily apply to your situation.
Prospective Investments
Published: February 03, 2026
No prospective investments have been considered for Systems Capital this quarter.
We are still following the few that we had last quarter. OMEX (Odyssey Marine Exploration), and BXBL
(Boxabl) remain interesting, but, in our opinion, no significant changes have enticed us to become owners yet.
The private space industry remains interesting, and the international markets are also very interesting, but no set
company beyond OMEX and BXBL has been anything we have seriously considered buying. Given our current operational capacity,
we'd prefer to raise our ownership stake in our already existing portfolio of companies or solidify our treasury strategy a little more before
integrating a new company into our portfolio. One company that we have identified, and is in early stages of review is Fractyl Health (GUTS) – a
biotechnology company targeting treatments in obesity and Type II Diabetes. Pre-profit companies, such as GUTS, aren’t typically our investment
style – although we have made exception before. This company is one we’ll continue to keep an eye on. We believe there is major growth to be had
in companies that make people live longer.
TREASURY & TAX
Published: February 03, 2026
Treasury and Tax remain at the core of Systems Capital’s operational backbone.
We prefer to put all allocations into our core portfolio and never sell, but when that doesn’t become feasible, or we the
need for liquid cash is high, we take the funds from a well-performing portfolio of gold, bonds, deposit interest, and tax preferable
assets. As we execute a buy-and-hold strategy, our preferred method remains not to sell holdings from our core strategy for capital needs.
We always explore our options in terms of bonds, bills, notes, swaps, derivatives, hard commodities, and all options available to us. Our tax
team has been a fantastic resource for us to bounce ideas off of, and to learn the tax implications of our strategy. Treasury performance is not
calculated in strategy performance.
SELLS
Published: February 03, 2026
We’ve departed the private space industry. We originally found this growth opportunity through a mixed strategy of
analyst ratings, and we purchased Rocket Lab shares near $11. We sold, and repurchased one share each of a 3 stock portfolio of ASTS,
RKLB, and BKSY to track the space industry and analyze trends. However, none of the current public offerings have astonished me. Even
though the industry may not have reached its peak – as we believe it hasn’t - we’ve sold all shares within the private space industry. As we see it, there is no private space industry, yet.
It’s coming. But other than satellite launching to collect and transmit data that is sold to another party, government contracts for navigation
(GPS), and perhaps a few more fringe things, there is no industry in space that has a public Offering.
The closest thing is manufacturing.
ASTS, Rocket Lab, and Space X all engage in rocket or satellite manufacturing, or they provide launch services, and
that is – yes – exciting. However, Systems Capital is not looking to add a manufacturer within an unproven industry to our
portfolio quite yet. What we would like to see from the private space industry is space infrastructure. Satellites, GPS, and laser transmission
are close, but we remain that a company engaging in the harvest or direct use of resources located in space and used for earth is the indicator we would
like to see (as opposed to companies using resources from the earth to venture into space). Until then - which we’ll keep a close eye when it changes -
we won’t invest in what is being called the private space Industry. Additionally, we are reducing our ownership stake in Nvidia. Nvidia is a great company,
and we were happy to be with them while they experienced tremendous growth. We just simply believe that they don’t fit within our current internal goals at the moment.
We think Nvidia is a highly competitive data center company, and we wish Nvidia the best as it transitions into its next generation. As our appetite for risk is greater,
and our buying power isn’t aligned with Nvidia’s value proposition, we are allocating a larger portion of our capital to our more current investments.
I’ve kept one share of Nvidia as a relic in my personal account, but Systems Capital will no longer be an owner of Nvidia moving forward. Nvidia is still shown on
our holdings list on the factsheet, but this is because relinquishing our ownership in Nvidia is a recent decision, taken place between the time of performance
reporting dates, and writing. If Nvidia’s offering reenter’s our strategic goals, we will consider it as we would any other company.
All AbCellera derivates have expired or have been sold at a profit, and Tilray call options have been sold.
Buys
Published: February 03, 2026
Our companies have been growing steadily, and we expect our companies to raise their base-line moat quarter after
quarter. This remains the case this quarter, and we are bullish on all of our positions. However, our positions in our core strategy
have not been increased this quarter, but rather, allocations have been made to gold and fixed income treasury assets – detailed in Treasury & Tax.
As this quarter has required focus for strategic banking needs, and steady, liquid treasury has played an increasingly important role within Systems Capital,
we’ve decided to hold on all core shares of our strategy. This quarter, not all of our companies have had their stock price grow, but increases in revenue,
increases in cost reduction, improvement in credit rating, and increases in business edge has been seen across the board. Additionally, all asset values remain
above our cost. Volatility remains high within for each of the constituents within our portfolio, but we do have some negative correlation between companies.
Investments Update
Published: October 27, 2025
Investments are doing well. It feels as if a lot of the online rhetoric is uncertain, scared, and flocking away from the USD, but I find it best to
ignore the noise. It does feel as though it may be a good time to do another round of buying though. TLRY, ABCL, and ARM – the bulk of my current
portfolio have experienced some recent large gains, but also some recent sharp drops. Unfortunately, I find that that’s the nature of these ‘next in-line’
industry leaders, I find they often have massive 1-5 day gains, drop some, and stabilize at a new, higher price. These 3 companies have all done that, and, in my
opinion, are priming for another cycle, which would lead to a higher, stabilized price, so I may purchase some more – yet to be decided. I think before my AbCellera
Calls for Jan 2026 expire, that will serve as a catalyst for a buying event.
Mueller Water Products hasn’t been this stair-step case, however. It also could mean it hasn’t hit that “jump” point quite yet. That’s okay too.
There seems to be a surge of institutional investors purchasing MWA recently as well. They’ve struggled a little bit to raise their price in the last 6 months.
However, they are doing great work as a company, and it seems like they are focused on building a long-term executive leadership team, which, in my opinion, is their
biggest weakness at the moment, so I’m happy to see that. Upon strengthening their leadership team, I believe they are focused on expanding their water infrastructure
business which is exciting. My hope is that they can over-take American Water Works in being the go-to name for water infrastructure – which I think they are poised for.
Rocket Lab and the private space industry has been fun to watch. I’m still not investing beyond my 1-share ETF of Rocket Lab, AST SpaceMobile, and BlackSky, however.
Upon deeper research, none of them have any ties to space mineral/resource extraction. However, Rocket Lab just purchased a large quantity of equity for a
Laser-communications technology – Mynaric AG. Yes, a scalable communications company that transmits data globally (including space) using lasers. I think the technology
is actually pretty cool, and I’d recommend looking them up. I’m glad RKLB is making acquisitions that can help build their long-term moat, but it’s the first few yearsthat the private space industry has even existed, and I’m not in a rush to put my money into a company that may not even be here in 15 years. It’s entirely possible,
and maybe even likely, that I sell these shares of RKLB, ASTS, and BKSY to help fund another round of buying for other companies. Boxabl is still interesting to me
as well, but there’s been no update on their IPO deal closing. That’ll require patience. They did, however, recently finalize contracts with a few faith-based
organizations for a total of 122 units that are aligned with the ‘Yes in God’s Backyard Act’ (Text - S.3910 - 118th Congress (2023-2024): Yes in God’s Backyard Act
| Congress.gov | Library of Congress) that allows churches to build residential homes on their property. The small, quick assembly, affordable home solution that
Boxabl offers seems to be a natural fit. I’m glad they’re capitalizing on this opportunity. One more company that has been on my radar for a while, but I haven’t
discussed is Odyssey Marine Exploration: an ocean mining company that extracts fertilizer minerals and battery metals from underwater, exclusive zones. I first found
them using the same version of my model that I found TLRY and ABCL with. However, at the time, they had just wrapped up winning their court case with the Mexican
government – the Mexican government attempted to sue the company for not operating within environmental compliance. OMEX (Odyssey) denied these claims and ended up
winning the case. However, there was worry that they weren’t able to cover their litigation costs, and their share price plummeted. After review, it seemed like a
fine company that does great work in the mineral extraction industry. However, I didn’t feel confident in them as a long-term investment. I have been keeping tabs
on them though. They are still doing good work, and their YTD performance is at 261.11% as of writing this. If I can be assured that they are carving out their
moat in a way that establishes a new sub-industry (no pun intended) in underwater mineral extraction, or that they can volley their success in the fertilizer space
into being an effective player in the battery minerals extraction industry (this is also a new line of business for them), then I may consider investing. As it
stands now, I think they have too many balls in the air to feel confident in an investment – I do think they are positioned well for the critical minerals industry,
however. In the meantime, I’ll continue to perform industry tracking.
Brief Investment Update
Published: October 27, 2025
I’ll be keeping this update slightly more brief, and I’ll separate the update into two sections: Investments (updates on market positions)
and operations (updates on firm). A quick summary: Positions are doing really well. I’m up about 40% since the last update, but what’s more exciting is
that some of the newer companies in the portfolio are showing steady increases in present fair value. In my opinion, ABCL has a current fair value sitting around
~$5.75 and TLRY around ~$1.50. I purchased these companies at an average price of $2.90 and $0.66 respectively. It’s my personal opinion that a price target of
$6 and $2, respectively, by Jan 2026 could be reached. My $5 Calls on ABCL expire Jan 2026, and I plan to exercise them to purchase more shares. My $0.50 Calls
on TLRY expire Jan 2027, and I plan to do the same. More thoughts on these companies, others in my portfolio, and new investment opportunities are provided in the
section below. Systems Capital – as a firm – has been receiving a lot of my attention lately. I’ve been working with my tax and legal team to form a holdings firm
entity so that I can file annual reports, hold intellectual property, and qualify for loans. However, it’s unlikely that this entity would be the final structure
that would allow partnership investment. I imagine it’s more like a holdings parent firm that owns the intellectual property of my model and the other software
I’ve been developing. One thing at a time though and working with legal teams and navigating SEC compliance is certainly not something I’ve done with haste.
Investment Commentary (NASDAQ:NVDA Nvidia Corp)
Published: September 08, 2025
We recently reduced our position with Nvidia in order to fund our investments in TLRY, ABCL, and MWA,
and although analysts have kept NVDA at a Buy rating, and the stock continues to perform well, the fact that CEO
Jensen Huang has been seen frequently selling his shares of NVDA since July, makes me think I did the right thing.
A major point in the earnings was the announcement of the Blackwell series, especially the server GPU designed for AI processing.
However, Nvidia experienced a sharp decrease in Net change in unrealized gains. They also note how Open-source AI, an increasingly
important and agreed upon standard in AI, could severely affect their data center business if they are unable to create competitively viable solutions,
which accounts for 88% of their revenue. I still really like Nvidia, but I feel as if I’ve successfully been able to execute my strategy, and I’ve helped
them grow into the industry leader that they now are. I have no plans to fully remove my holdings from NVDA, but I have exited my position to any
material extent, and I do not plan to purchase more in the context of this strategy. We’ve been able to achieve a 768.33% return from our investment in Nvidia.
Investment Commentary (NASDAQ:ARM Arm Holdings)
Published: September 08, 2025
I was underwhelmed with ARM’s quarterly earnings. Primarily their earnings reporting quality. They used many Non-GAAP measurements,
almost exclusively on items that gave preferential numbers. For example, their Non-GAAP operating margin was 39.1%, while the GAAP reconciliation
for operating margin was at 10.8%. This sort of earnings reporting quality is unfavorable. Additionally, they have stopped reporting the total
number of employees and the total number of engineers at the company, which was previously a key operating metric that they used. My guess is
that this is because of a developing reliance on AI that they may be adopting. Revenue and other performance metrics were stable though.
They exhibited an increase in the annualized contract value and showed an overall increase in market share, and all divisions of the company
exhibited an increase in market share as well. Additionally, they’ve greatly increased their royalty revenues in recent years which speaks
well for the long-term. Currently, ~50% of all their royalty revenue comes from products that launched +10 years ago. Although their reporting
quality and transparency decreased this fiscal year in my opinion, they are still established to be the premier architecture for AI and computational
ecosystems. We have experienced a 139.38% increase in value with our investment with Arm.
AbCellera Biologics has previously been a hesitant buy for many because of the volume of cash they were spending while making very little revenue.
Not much has changed, but they have starting making significant increases in their licensing revenue, and their operational expenses have begun to decrease
as they are wrapping up the construction of their new facilities. These facilities, they hope, are able to increase their capacity to manufacture
pharmaceuticals and add an additional revenue stream from manufacturing pharmaceuticals for other companies. Their net cash used in operating activities has
significantly decreased as a result from this. However, their key performance metrics have little changed. They measure their primary business objectives
through partner-initiated program starts with downstream revenue, and molecules in the clinic. Both of these metrics in 2025 have seen the slowest rate of
growth since the company’s inception. They have, however, begun clinical trials and announced plans for clinical trials for a few of their drugs in 2025 though.
The largest risk, in my opinion, is the rate at which they use capital. The question if ABCL will be able to generate enough capital to achieve profitability
is still on the table, and I, for a long time, have thought the long-term result of AbCellera will be to be acquired. However, there is no talk about that, and
that is only speculation. ABCL has developed a proprietary antibody discovery process, and it can become a disruptor in the pharmaceutical industry. However,
they have grown fast, and they continue to spend large amounts of money on real estate in the expensive Vancouver, BC market. As the company is in the biotech
industry, future revenue depends upon discovery, development, and commercialization of pharmaceuticals, and the failure of any of these aspects greatly affects
the company’s revenue. They continue to move forward however, and they plan to attend the Wells Fargo Healthcare Conference and the Morgan Stanley Annual Global
Healthcare Conference in September. We have achieved a 28.30% increase in our investment with AbCellera including our $5 Calls that expire Jan. 2026.
Tilray has seen a lot of media coverage lately considering a recent boom in the stock price, and a controversial 10-K.
The ‘controversy’ I speak of is surrounding a large impairment of intangible assets and increased operating expenses.
However, these things are of little worry to me. Tilray recently purchased a large amount of beverage brands from Molson Coors
in a bulk-deal where only a few of the brands are worthy of purchase. Additionally, they are undergoing a massive restructuring strategy
hat includes SKU rationalization, geographic rationalization, distributor rationalization, a synergy optimization plan, and brand and business
investment. Of course, operating costs and impairment of intangible assets will be high. Most of the analysis reports I’ve read cite these points
as their main concern, but to me, it reads as if they don’t understand the business’s current operational hurdles. Beyond these, TLRY exhibits fantastic books,
reducing their debt, continuing to increase profit, and widening their economic moat. My biggest focus with Tilray is their distribution business. Distribution
of adult beverages, cannabis, and wellness has seen volatility in recent years, and Tilray continues forward growing their international distribution business,
and it now represents their largest portion of revenue. Additionally, the management has been seen making frequent purchases of the stock, and it’s clear from
their communications that they all believe in the company whole-heartedly. One of the largest risks to the company are international (and domestic) legislation
regarding cannabis and alcohol markets, and the company cites slower than expected growth in international acceptance. Of course, keeping in mind 91% of their
cannabis market is located in Canada – where cannabis is fully legal – and that Cannabis is only 30% (and shrinking) of their total revenue, makes me think there
is little cause for concern. Upon the announcement that Marijuana could be rescheduled as a Schedule III drug (away from Schedule I), the stock had a huge increase
in price, and the stock got an upgraded rating to a Buy from some analysts. Earlier this year, the stock was at risk of being delisted as it fell below $1,
but this price surge and recent stabilization has made them Nasdaq complaint. We’ve been able to achieve a 146.07% gain since our purchase, including our $0.50 call
options that expire Jan. 2027.
Investment Commentary (NYSE:MWA Mueller Water Products)
Published: September 08, 2025
Mueller’s 10-Q showed stable growth. Increased net sales, net income, and profit, but increased cost of sales due to their
current strategic reorganization plans, specifically the decommission, demolition, and replacement of their legacy foundry in Illinois.
All-in-all, the earnings seemed very consistent with their growth rate, and their earnings reporting quality, in my opinion, is very high.
No big surprises. The risks that I see associated with their books come from an increase in Unbilled Receivables, and an increase in effective income tax rate.
However, in my opinion, the largest risk to the company is the relatively new executive leadership. Martie Zakas, the company’s CEO has held the position since 2023,
but has been with the company since 2006, and has a rich history of corporate strategy, business development, and investor relations – including serving as the CFO
of Mueller Water Products from 2018 – 2023. I have no doubt she’ll continue to be a great leader, and I believe her focus on increasing MWA’s stock price has already
proven to be successful, increasing over 100% since she took the position of CEO. Paul McAndrew, COO, and Melissa Ramussen, CFO are new to the company though. I agree
that they both have the background to be successful. However, a high leadership turnover rate is not something I favor. Additionally, the VP, Operations Controller was
promoted to Chief Accounting Officer after the previous executive retired on August 15th. MWA is up 14.92% since we purchased.
Treasury Management
Published: September 08, 2025
Treasury management remains a constant need for attention (as I’ve seen with many of our companies as well). I’ve been utilizing my experience
in Treasury management to explore different options and finding the best practice for today’s environment. Currently, we are exploring consolidating
strategy funds and treasury into a minimal number of accounts within the same bank/broker as to allow for minimal transfer costs. Additionally, bitcoin,
bespoke, or derivative treasury management strategies are always being explored and considered, but currently the vast majority of treasury is held in a
fixed income, liquid strategy with rates above inflation. Treasury accounts for a minority percentage of AUM, and is not currently reflected in the fund statement.
Additionally, my fee and tax expense tracking mechanisms aren’t currently superb. In the fund statement I announce that I’ve had to pay an outrageously high 3.18%
percent of AUM in fees and taxes. This is much higher than what I expect the future value to be. Currently many of our fees come from brokerage fees that are set
prices, and as our AUM is relatively small, these fees account for a larger portion of AUM. With improved treasury management strategies and a reduction in brokerage
accounts I hope to have this percentage be greatly cut down.
New Investments Being Researched
Published: September 08, 2025
I’m still following the private space industry closely. However, I hold tight that it’s difficult to determine which company(s)
are going to remain in the long run and prevail as the leaders of that industry – it very well may be a company that doesn’t exist yet.
ASTS and Rocket Lab are the two I currently favor, and they continue to develop partnerships and have successful launches. This is exciting.
However, I’m beginning to lean towards an indicator – which ever company begins effectively operating in the space mining industry. Space mining is a field I’m very
familiar with, and one that I understand the economic benefits of, the technical processes of, and the value of harvestable minerals. I believe the natural resource
industry is inching toward space-mining, and a company announcing their engagement in this field, I believe, can serve as an indicator of future leaders in the private
space industry. To my understanding, there is no company that is participating effectively in this capacity. That being said, I have gone ahead and purchased a single share
of RKLB, ASTS, and BKSY, primarily so that tracking can become easier. This does not constitute a significant investment in any one company, but more so is the cost of
keeping a close eye on the industry. This is not included in the current fund statement. Additionally, an American modular homes company, Boxabl, that I’ve been
following for many years now has announced that they plan to become publicly listed on the Nasdaq by the end of 2025. I think that the modular homes industry is
exciting and still budding. I won’t rush to purchase Boxabl since I’d like to review its financials before I do. However, I know they are one of (if not the largest)
holder of modular home development permits in the U.S.,and I’ve sat in on a few of their earnings calls in recent years.
I do like them, and I believe they do good business.