Roundtable: February 12, 2026
The Stress Test: 14 alerts fire. Tyler crashes on earnings. FICO’s monopoly under siege. The system says: hold everything, buy nothing.
Regime Warning: 13 Triggers (Maximum Intensity)
13 Track 2 triggers in the last 10 days. This is the most intense regime warning since the experiment began. Track 2 entries suspended. Track 3 GTC discipline only. Portfolio at -8.5% vs VOO -1.5%. The internal bear market deepens.
GTC Fill: JKHY @ $160 (2 shares)
Jack Henry & Associates filled at the $160 START target. Community bank software provider with sticky recurring revenue. The system working exactly as designed — patient GTC orders catching volatility without emotional intervention. ADD target set at $150.
The Analysts
Analyst Performance Notes
The Auditor (ChatGPT): Outstanding session. The TYL analysis was the sharpest of the day, correctly distinguishing between a tantrum and a repricing: “Painful hold. Not broken. Not cheap.” Properly flagged that 20x forward P/E on 8% growth guidance is not screaming cheap for a government IT vendor. Emotional averaging risk was called out explicitly.
The Narrator (Gemini): Correctly recommended NONE across all candidates. Properly identified the TYL catalyst as a double-whammy of earnings miss plus macro repricing. FHFA/VantageScore narrative context was useful.
Feature: Tyler Technologies Crashes — Tantrum or Repricing?
Tyler Technologies dropped 15.4% in a single day after reporting Q4 2025 earnings. Revenue of $575M missed estimates of $591M. EPS of $2.64 missed the $2.71 consensus. Management guided for 8% revenue growth in 2026, a significant deceleration from its 15% annualized growth rate over the past five years.
However, management also raised full-year 2026 EPS guidance to $12.40–$12.65, well above the Street consensus of $11.49. SaaS revenue grew 20%. And approximately 50% of Tyler’s customer base is still on-premise, representing a massive cloud conversion runway.
The Auditor’s framework was precise:
| Test | Result |
|---|---|
| Thesis broken? | No — cloud bookings not below 10%, government pipeline not impaired |
| Drop tantrum-like? | Yes — 15% single-day drop on earnings miss |
| Valuation cheap enough to force action? | No — 20x forward on 8% growth is not screaming value |
| Regime allows entry? | No — 13 Track 2 triggers, regime warning active |
| Already have exposure? | Yes — existing position down ~30% |
Verdict: Painful hold. Not broken. Not cheap. This is multiple compression on a high-quality business, not structural impairment. But buying here would be emotional averaging, not disciplined entry. The system says wait.
Thesis Alert: FICO — Monopoly Under Siege
FICO’s credit scoring monopoly is under active regulatory attack. FHFA Director Bill Pulte eliminated the FICO requirement from Fannie Mae and Freddie Mac’s lending guide, allowing lenders to use VantageScore 4.0 as an alternative. VantageScore, developed by the three major credit bureaus (Equifax, Experian, TransUnion), claims to be 13% more predictive of mortgage defaults than Classic FICO.
FICO’s exit criteria states: “VantageScore gains >30% GSE market share.” We are not there yet — adoption is early, with about 40 lenders using FICO 10T so far, mostly for non-conforming products. But the regulatory trajectory is clear: the government wants competition in credit scoring.
Arbiter ruling: Thesis status changed from INTACT to WEAKENING. Hold existing position. Do NOT add. 90-day review to reassess VantageScore adoption trajectory.
Candidates
TYL — Tyler Technologies ($287, -15.4% today)
Catalyst: Q4 earnings miss. Revenue $575M vs $591M expected. EPS $2.64 vs $2.71 expected. FY26 growth guidance decelerated to 8%.
Valuation: Forward P/E 20.1x vs 5Y average 55x. Trailing P/E 47.1x. Lowest valuation since 2011.
Risk type: Execution + Tech Narrative (AI disruption fears across SaaS sector)
Decision: NONE — Regime rules prohibit Track 2 entry. Thesis intact but valuation not compelling enough to override.
FICO — Fair Isaac ($1,338, approaching ADD target)
Catalyst: FHFA regulatory action allowing VantageScore competition. Stock down 42% from peak.
Valuation: Forward P/E 25.4x vs 5Y average 40x. Q1 2026 earnings beat (EPS $7.33 vs $7.07 expected).
Risk type: Structural / Legal-Regulatory
Decision: NONE — Thesis weakening. Monopoly under regulatory attack. Do not add until reassessed.
ROP — Roper Technologies ($320, near 52-week low)
Catalyst: Broad software sector selloff. Down -4.2% today.
Valuation: Forward P/E 13.7x vs 5Y average 30x. Significant compression.
Risk type: Cyclical + Tech Narrative
Decision: NONE — Thesis needs review. Largest position with deepest drawdown. Check organic growth rate before any action.
CPRT — Copart ($36.72, -7.1% today)
Catalyst: Broad market selloff. Approaching GTC target at $34.97.
Valuation: Forward P/E 20.4x vs 5Y average 30x.
Decision: NONE — GTC at $34.97 working. 5% away. Let it fill organically.
MCO, JKHY, NVO, V, VRSN, MSFT, BAC, VOO, IDXX, RSG
All NONE. GTCs working where applicable. Hold zones respected. Regime warning active. No action required.
Final Decisions
| Ticker | Action | Track | Thesis | Notes |
|---|---|---|---|---|
| JKHY | FILLED | 3 | Intact | GTC filled 2 shares @ $160. ADD target $150. |
| TYL | NONE | 2 | Intact | Earnings miss. Not broken, not cheap. Regime skip. |
| FICO | NONE | 3 | Weakening | Monopoly under regulatory attack. 90-day review. |
| ROP | NONE | 3 | Intact (review) | Largest position. Deep drawdown. Thesis review needed. |
| CPRT | NONE | 3 | Intact | GTC at $34.97 working. 5% away. |
| MCO | NONE | 3 | Intact | Cool-down from Feb 10 fill. Hold zone. |
| NVO | NONE | 3 | Weakening | Structural repricing continues. |
| V | NONE | 3 | Intact | GTC at $310 working. |
| VRSN | NONE | 3 | Intact | Hold zone. ADD at $200. |
| MSFT | NONE | 3 | Intact | Hold zone. Regime warning active. |
| BAC | NONE | 3 | Intact | GTC at $48 working. |
| VOO | NONE | 3 | Intact | GTC at $570 working. |
| IDXX | NONE | 3 | Intact | Above target. Watch only. |
| RSG | NONE | 3 | Intact | Above target. Watch only. |
Lesson: The System Under Maximum Stress
February 12, 2026 was the most intense day since the experiment began. 14 alerts fired simultaneously. The largest single-day drop hit our own holding (TYL -15.4%). FICO’s monopoly moat came under direct regulatory attack. The portfolio hit -8.5% while VOO was down only -1.5%.
The system’s response: zero new trades. The regime warning suppressed every Track 2 impulse. The cool-down rule prevented mechanical pyramiding. Cash was preserved for deeper legs. One GTC (JKHY) filled on its own, exactly at target, without emotional intervention.
This is what discipline looks like when it hurts. The system wasn’t built for days when everything is green. It was built for days like this.
Calendar Flags
TYL: Read Q4 earnings call transcript. Key questions: cloud bookings growth rate, government pipeline health, Texas contract termination impact, AI agentic capabilities timeline.
FICO: 90-day thesis review due by mid-May. Monitor VantageScore adoption rate among GSE lenders. Key metric: what percentage of new conforming loans use VantageScore vs FICO?
ROP: Thesis review needed immediately. Check most recent quarterly organic growth rate against the 4% exit threshold.
CPRT: GTC at $34.97 is 5% away. Could fill this week if selloff continues.
JKHY: New position. ADD target at $150 ($7 away). Monitor for drift.
Tracker: Position data needs correction. Several share counts and cost bases appear inaccurate in the automated prompt. Manual verification required before next roundtable.