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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: If we are to believe that history is our best teacher, what in your opinion, were the major factors that contributed to the Dow Jones Sell off in Aug 2015 and Jan 2016? Was it mainly global financial events re Greece and China? What are the best tools to monitor the events that could lead to a similar correction? Thanks for your wisdom. Use as many credits as required, as I have 143 left. :)
Read Answer Asked by Allan on December 21, 2017
Q: Milan's question and comments about Warren Buffet's advice to his wife for investing after he passes away makes me wonder: Since DAY 1 (or there abouts) can you tell if he has beaten the market and if he has by how much?

Thank you for your answer; and thank you for a very good year $$$; and best wishes for a merry Christmas and a wonderful New Year ... in every way.
Read Answer Asked by Donald on December 20, 2017
Q: Robert asked about Cannabis and Wine....:
Andrew Peller (ADW.A), Canopy Growth Corp (WEED)
Date: Dec 19, 2017 07:38 AM


This may be of interest from the Financial Post (and in other news feeds):

Canadians are already spending almost as much on marijuana as wine
The $6.2 billion in weed Canadians consume a year is about two-thirds the $9.2 billion beer market and close to wine’s $7 billion tally.

Canadians consumed as much as $6.2 billion of marijuana in 2015, almost as much as they spent on wine, the federal statistics agency said Monday as it gears up to officially track weed when it becomes legal next year....."

http://business.financialpost.com/commodities/agriculture/marijuana-use-may-have-hit-c6-2-bln-before-canada-legalization
............................................................................

"North Americans Are Spending Nearly As Much On Marijuana As They Do On Wine..."

https://www.weednews.co/north-americans-are-spending-nearly-as-much-on-marijuana-as-they-do-on-wine/
Read Answer Asked by Stan (1) on December 20, 2017
Q: Good morning Peter and company,

In his will, for his wife's benefits, Warren Buffett has instructed the trustee to put 10% of the money in short-term government bonds and 90% in a very low-cost S&P 500 index fund such as Vanguard’s.

Would that be a good practice for all retired individuals living off their stock portfolios by withdrawing 4% annually, if they are prepared to live with the market's fluctuations?

Bond values have nowhere to go but down as central banks raise interest rates. Would 10% cash be better than 10% bonds today?

Thank you for your considerate answers to my questions.

Milan
Read Answer Asked by Milan on December 19, 2017
Q: I am a member of American Assoc of Independent Investors (AAII) and subscribe to their wonderful database product Stock Investor. AAII is a fantastic place to learn, search using outstanding strategies and collect investment knowledge through osmosis. But alas there is no Canadian equivalent. Various screeners provided by brokers are rudimentary and do not support well known strategies.

I would urge 5i to create a similar service. They use data from Reuters and so could you. Since Canada is primarily resource based market, many screens may not work as they are. Here is a chance to create a Canadian solution tilting towards resources. 5i could do it independently or even with collaboration with AAII. This service will be completely new idea differentiating you from other advisory services. I hope you will explore this opportunity.

Read Answer Asked by Shah on December 19, 2017
Q: Peter & Team,

I note that you frequently talk about anticipated future revenue growth for certain companies (eg, 2018 projections). I also find that future expectations re sales/eps growth are often an available screening criteria in many online stock screening programs (eg, Finviz). Can you tell me the source of these projections as well as your professional opinion as to how much rigor there is behind behind these estimates? Are they purely based upon company projections and, if so, do analysts ever weigh in as to the integrity of these numbers or lack thereof? Thank you.
Read Answer Asked by Greg on December 18, 2017
Q: I'm new to the system, and unable to access your Reports in the Report section. For instance, under your Report category, I typed in the symbol GWO, and clicked on Great West Life. Great West Life appeared in that area ... but when I ran a search, there were no results. If I get a report in your Question area, it's not identical to the reports in the Report area. For instance, I don't see your Ratings in the Question area Report.
Read Answer Asked by Jean on December 18, 2017
Q: I am starting a Growth Portfolio with $100,000 to be phased in over three years. I purchased DOL and SHOP with each 5% weighting, or $5000 each. What weightings should I consider for each of ECN, GSY, OTEX, PHO? (These positions will be in my TFSA and held for the long-term, more than 5 years.) Are there any other positions that I should consider at this time and if so, what weighting?
.PS...I currently hold KXS and GUD in my balanced portfolio.
Read Answer Asked by Tom on December 18, 2017
Q: I believe we are due for a major correction - What do you think are the best ETF's that will hold up the best in
1) Cdn Equities, 2) USA Equities, 3) REITS, 4) Consumer Staples, 5) Commodities,
Read Answer Asked by Ron on December 18, 2017
Q: I have always thought of ENB and TRP as utilities rather than energy companies, as they are involved in distribution of oil/natural gas, rather than dealing with exploration and refinement of these energy sources. Furthermore, while their revenues may have sensitivity to oil/gas prices, there is always a need for oil/gas distribution, whether energy is in a bull or bear market, which is why I have always considered the, as utility companies. I recently noticed that they are listed as energy companies by Bloomberg. For the purposes of sector allocation, is it reasonable to consider them utilities, or should I consider them purely as energy holdings?
Read Answer Asked by Domenic on December 18, 2017
Q: Peter and Associates,
The question of rising rates and their impact on bond proxy alternatives.

There was a time one could somewhat believe a certain reasonably consistent relationships existed between investment alternatives? There also used to be a principle that government and corporate bonds tended to move in opposite directions depending on the economy, especially downturns? Financial engineering has created paradigm shifts, anomalies/distortions, if not bubbles?

In a low inflation environment as rates went low, one could still find 5 year government bonds ( i.e. Provincials) producing 5% +/- returns. In today's artificially low realities? How many TV guests suggest the last BOC increase was a mistake or at least not wise? Is what we are hearing suggesting the Canadian economy and likely even less, highly indebted consumers are capable of handling significant rate hikes? Are there not suggestions technology and globalization are causing , deflation as part of our new economic paradigm?

Given yields on bond proxy alternatives, how real is the likelihood of fixed income rates becoming a strong competitive alternative in the immediate future? Other than giving central banks dry powder wiggle room, more than a few professionals are of the opinion we are in for years of low rates? Somehow a 2.09% 10yr rate (BOC stats) has not only a long way to go, but multiple hurdles to be a disruptor? Is stagflation a concern?

Using the Buffett principle, if corporations cannot find good uses for excess cash, they should return it shareholders? Are corporations acting like we are entering a period of strong economic expansion ? What message does consolidation and right sizing with closures/ job cuts give? My reading of the tea leaves , a tepid bull market cycle? Low grow and rates for the foreseeable future? Reasons to increase and/or declare special dividends for shareholders?

I n a world where the half empty/full glass is used to divide optimists from pessimists, direction and content are often overlooked, if not lost? The fact is, a lot of money can be made regardless to the direction of any market! Low rates, optimistic pessimism?! My conclusion, rates will remain borrower favorable and if so, what will the likely "new" normalized rate structure look like?

For all, capital appreciation is always desired but for retirees ,economic repression and its consequences on needed reliable income of far greater "interest"? Any feed back or counter opinions would be much appreciated. As usual, thank you for sharing your expertise, it is always trustworthy and extremely useful.

Season's greetings and best wishes for a prosperous 2018!

Mike
Read Answer Asked by Michael on December 18, 2017
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