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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: My TD Waterhouse account shows ZWB { yielding 8.2% } and HMAX { yielding 15.1% } . Could you please confirm both yield numbers at today's ETF prices ? And why one might buy the lower yielding ETF considering that HMAX has nearly double the yield and a little more diversified { 75% banks } ? ...... { I'm not concerned about the short history of HMAX } ..... Hypothetically, if it were " you " and you wanted a covered call financial ETF which one would you pick and why ? { Of if there is another one you would prefer over both }
Read Answer Asked by Garth on March 28, 2023
Q: Hello,
I already have a large position in TD and a small position in BMO, and would like to add to one or two more banks that won't keep me awake at night. Its quite clear that banks have trillion of dollars in loans . Last report that I read $4.12 trillion. And $1.5T of loans come due in Canada by January 2024. So even if 2% default, we have $30B in losses. And that's just Canada. Therefore, of the Canadian banks, which ones have the least exposure to the US. ? Today which ones are your recommendations?
Finally, in terms of deposit insurance, is it $100K per bank account or per individual taxpayer.? Brokerage account like RBC - Direct investing, the $1M is it for the total portfolio or just the cash? Again, per account or per investor?

Thank you
CR
Read Answer Asked by Carlo on March 28, 2023
Q: Hi guys,

On the basis of the strength of your recco on ECN I purchased ECN.DB.A for my RRIF.

It has been steadily falling to todays price of $74.

I bought it at par and frankly am nervous about the CV to maturity.

Can you take a look at it for me and tell me if you feel it is safe to hold to maturity? If not why and what do you reccomend?

Thanks

Sheldon
Read Answer Asked by Sheldon on March 28, 2023
Q: Hi . Bloomberg today (28/3) reports that Cdn banks are pushing for a boost to deposit insurance. Does this mean they want to reduce the risk is of being unable to cover the 100k limit or do they want a higher limit? How do you interpret this move by the banks? Thank you for sharing you much appreciated insights.
Read Answer Asked by TOM on March 28, 2023
Q: Hi, it feels like general tune has changed on ECN. Based on previous questions regarding ECN, it was highly ranked by 5i and most recently as a top 3 small cap growth stock recommendation based on potential and valuation, and management per question raised on Mar 21st. After the latest earnings reporting on Mar 23rd, it has fallen 25% since. Are potential, management and valuation (25% cheaper than Mar 21st) no longer a recommendation to buy, but rather to only hold? Would like to understand the thought process behind this if this and if this is a short term momentum recommendation, rather than a long-term recommendation. As well, were general headwinds not expected on recession and higher interest rates? I understand that magnitude was more than expected but likely temporary? Thanks!
Read Answer Asked by Eric on March 28, 2023
Q: The BPO pref shares, in my view, are trading at levels that indicate serious concern over credit risk.
A question put to you on Jan 30, 2023 was with respect to who held the liability for the BPO pre shares (the questioner was asking about BPO.PR.G specifically). You replied:
“While BPO is a separate legal entity, its preferred shares are under the obligation of BN.”
However, a similar question was posed Mar 20, 2023 with respect to BPO.PR.P and you seemed to reply that the obligation on those BPO pref shares was with something called Brookfield Property Preferred LP.
Forgive me if I have mischaracterized your answers, this is a bit confusing to me. It seems to be a very big difference though.
I am assuming that the Preferred LP is some sort of subsidiary?
If so, that would make the BPO prefs MUCH more risky, in my opinion.
I note that the Financial Post reported in Feb 2023 that yet another Brookfield subsidiary (Brookfield DTLA] has defaulted on loans on two major office towers in downtown Los Angeles. The loan amounts are staggering, by the way.
Can you please clarify all this?
Read Answer Asked by john on March 28, 2023
Q: ECN down 17% so far today . After reading your answer to Bradley I have a couple of questions . What does " Finance originations fell 25% " mean ? And what do you attribute the miss in earnings to ? And what is the insider ownership numbers ? . Would you approve of an investor wetting their toes based on the review ?
Read Answer Asked by Garth on March 24, 2023
Q: Hi, We own above Canadian banks, which makes up the financial sector of our portfolio.

On an YTD basis, interestingly, their performance has diverged significantly, with CM +7%, RY +2.5% and TD -9%. During past 30 days (reflecting impact of recent crisis in financial sector SVB/SB), these names have declined as follows : CM -7%, RY -8% and TD -17%. Does it mean that market is assigning higher risk to TD, relative to its peers ? Does it make one name more attractive than others, and if so why, if we wish to take advantage of the sizable decline in their share prices, and add for long term investment ?

Thank You
Read Answer Asked by rajeev on March 23, 2023
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