Investment Q&A

Q: Hi team,
I saw a comment earlier today about increasing your U.S. coverage, that I would also like to endorse. I realize that staffing and resources and the sheer breadth of the U.S. markets are significant constraints. Even though you do not officially cover the U.S., your comments are spot on. I discovered BOX from your comments; SQ as well if I recall. I am moving more and more funds to the U.S. these days, mainly for tech, some financials. Tech is a long term secular theme that will be here long after we are all gone. The TSX is such a narrow index; financials, oil and gas and materials. Perhaps you could consider venturing into the U.S. on a sector basis, where the TSX is weak, such as tech. Maybe add in consumer and financials.

I for one would be willing to pay a significantly higher annual subscription for U.S. coverage, just for certain sectors if necessary. I have subscribed in the past to several other investment services that were much higher in price and much inferior in service to yours.

Thanks for your consideration and as always, I appreciate the service.

That’s my 2 cents worth (in U.S., not Cdn).
dave

Q: Hi 5i.

Why would the CT voting shares be up 5% and the non-voting shares down by 5% on the Helly Hanson announcement?

Thanks,

Scott

Q: After a poor quarter, or other "bad" news announcement that causes a stock to sell off, how long typically does it take the security to find its new price level and stabilize (how long does it normally take for selling exhaustion to take effect)? What indicators can one use to see when this new price level has been achieved? Volume? Price stabilizes for x number of days? Thanks!

Q: I understand that many former technology companies such as Google are being re-classified as Communications Sector. These companies are widely held in many ETF's and Index funds. This ultimately changes the ETF and Index components and may generate unplanned capital gains or losses.
Is this correct and in your opinion does it happen often?
thanks

Q: Regarding questions on SIS and other companies that announce earnings release dates. Some announcements are made before the market opens while others are after market close. Do you think there is a tendency to announce after market close if results aren't stellar and to force share holders to sleep on it rather than announcing before market open and having a knee jerk panic sell off? Although some may worry until market opens in the morning and selling could be just as bad. Have you ever pondered release time frame versus good/bad results?

Thanks
Dave

Q: Hi 5i,

This is a general question but I listed Tesla as an example. I am curious about the influence of shorts on a company's stock movement. I have a friend who says that the price of, say Tesla, is held back by a large number of outstanding short positions. And, ... if the shorts start to be removed, Tesla stock will take off. My own belief is that there are many significant factors on what a stock moves up or down, and I would say, shorts play only a minor role in the price movement. So my question, how significant are the short positions in price movement ?

Q: Hi,
Borrowing to invest, Maybe this article will be of interest to some investors, Thx
https://www.theglobeandmail.com/investing/personal-finance/taxes/article-recent-court-ruling-offers-tax-guidance-on-borrowing-to-invest/

Q: Hello Peter/Ryan,
I listed many names on the list in one question in order for other members benefiting from your advises as well. Feel free to deduct as many credits if it needs to be.

4-part questions:
1) Market rotation: Many solid consumer staples and industrial stocks went down significantly, what do you think of their directions in the next two years (I will get pay to wait if buy now) and what causing this downturn?
2) I list them in pair for long term hold over 5 years (pleas suggest a name that you like better)
FLR (Fluor-US) Industrials versus VEOEY/VEOEF (Veolia Env. ADR French) Environment-Water Treatment
DANONE ADR (French) versus Saputo
MDLZ (Mondelez -US) versus HSY (Hershey-US)/NSRGY (Nestle-CH Swiss co.)
KHC (Kraft Heinz-US) versus UL (unilever- UK)
PEP (Pepsi) versus KO (Coca cola)
3) Large international companies listed on US-OTC (over the counter) market instead of NYSE or NASDAQ to lower the listing cost and regulatory complexity of a stock exchange listing.
What to choose and ADR stock ticker ending with a Y (sponsored by a US Bank) or with a F (unsponsored) ? Why such a large price difference between them? In case of unsponsored ADR, how safe will it be time to sell the stock and time to get for the dividend declared.
In this case 52 weeks Low-High Veolia -VEOEY= 20.22 to 26.40 versus VEOEF = 19.50 to 26 (almost same dividend 1.03 versus 1.04)
4) Tax withholding:
Inside RRSP: none on US-UK co. shares and mostly 15% on European co. shares (anyway to get this back?)
Inside: TFSA: 15% in most cases (anyway to get this back)
Outside in investment account.

Thank you!

Q: Hi Peter, I am just wondering what the difference is between accounts payable vs. accounts receivable? Do they play a big role when you evaluate a company? What are the key things to look out (to exceed or not to exceed others) for each? Thanks!

Q: From Jan 01/2014 to today, what is the largest / most significant dividend cut (or dividend "reset") of a large cap company that you have seen in the Canadian and US markets that you are aware of.

Thanks,
Mike

Q: Hi Peter, Ryan, and Team,

Perhaps you could shed some some light on this ETF, as I believe there's a serious pitfall with the product. I sent First Asset an email yesterday, wondering about the so-called "reinvestment" that was "paid" on Dec. 28, 2017. I refer to it as 'so-called' because this $1.63 per share "reinvestment" does not give you cash, nor does it increase your number of shares! In other words, it appears to do nothing for me.

Here's the email I sent First Asset:

Hello,

I purchased 1395 shares of TXF on July 21, 2017. I see that on Dec. 28, 2017, the fund "reinvested" $1.63 per share. This would, in my case, be an amount of 1395 X 1.63 = $2273.85.

My broker, Scotia iTrade, increased the adjusted cost base (book value) of this fund, so I now show a slight loss when not considering the cash distributions received on Oct. 4, 2017, Jan. 4, 2018, and Mar. 29, 2018.

Here are my questions:

Should I see the amount of $2273.85 on the statement from my broker?
If I were to sell my shares of TXF today ($16.69 at this moment), would I receive 1395 X 16.69 = $23282.55?
What happened to the "reinvested" amount of $2273.85?

I look forward to an explanation of the above questions.

Here's the response from First Asset:

Hi Jerry,

The $1.63/unit amount is a non-cash distribution that was reinvested in the fund, which is why you see an increase in the Adjusted Cost Base. To answer your questions:

The amount of the distribution should be reflected on your statement but only as an increase to your Adjusted Cost Base. It wouldn’t increase the amount of units or the market value of your position in TXF.
If you were to sell your shares based on a unit price of $16.69 you would receive approximatively (1,395 x 16.69) – Adjusted Cost Base (including the $2,273.85) minus any other fees your broker my charge you.
The amount of $2,273.85 has been added to your Adjusted Cost Base.

I realize that 5i doesn't really care much for the covered-call aspect of TXF, but I was prepared to live with that. However, I certainly didn't expect the ACB (book value) to increase by the amount of this non-cash distribution! How does this help the investor? Am I correct in my assessment of TXF?

What would you replace TXF with to stay in the same sector, and one where the "reinvestment"is actually paid to the investor?

Thanks in advance for your guidance. I realize that this is a long and detailed question and your answer would be helpful to others. Please deduct as many question credits as you deem necessary.

Q: Hi, one of the apps I use to follow different stocks and news is Yahoo finance. It lists the 1 year target price. Can you say how exactly this is calculated? Is there somewhere to find the track record for these estimates? Is there a better app you’re aware of for following different stocks that may offer more metrics or more accurate information?

Q: In my will ½ of the assets are to be shared between my grandchildren until the age of 25. There current age range is 2 year to 15 and new grandchildren are still potentially on the horizon. I would like to be able to direct the executor to invest in funds in your balanced portfolio transitioning to the income portfolio in the final 7/10 yrs. However your continued service is not guaranteed.
The prudent route for executors is to safeguard principle and stick to GIc’s. However for grandchildren that have a 10/15 or 20 time year horizon Gic’s seem to be a worst option compared to a well-balanced equity/bond portfolio.
I know this is outside of the scope of your service but I don’t know where to go and hope that you can give me some directional advice in this regard.
Thanks
John

Q: In answer to Victor's query for free/inexpensive portfolio tracking websites, I actually think Yahoo Finance is pretty decent for this now (free, 15-minute delay on Canadian stocks), and the corresponding Yahoo mobile app is very good.

Q: Greetings,

Can you provide a link or point me in a direction of where i would find a master list of Canadian companies whose dividends are eligible for the dividend tax credit.

Thanks for all you do.

Q: Hi for the person looking for a site to carry his portfolio the TMX has a excellent on that is free and you can have up to 4 different portfolios for free
I have been using it for years
Just go to the tmx website go to portfolio alerts and registered
Kind regards
Stan
Kind regards
Stan

Q: In response to Victor, here is a suggestion for a free app I use to monitor equities in real-time on my Android phone. The app is called Webull and is available on Play Store.
Some advantages are as follows: Easy to set up. You can have as many portfolios as you want, for example, with names such as Indexes, Core, Fin, O&G, Small Cap, Bonds, etc. You can have an equity in as many portfolios as you want, for example, TD in Core and Fin. Convenient to track equities you own plus others you want to follow. Easy to add and delete an equity. Each portfolio displays the equities with their current price, % change or the absolute price change in a convenient visual colour code (green, red, light gray). Tap on an equity and you can see a graph which you can set to a default time limit, for example, 1m, 3m, 1yr, 5yr, max. Dividends & past earnings dates are displayed on the 1m, 3m, and 1yr graphs.
You can quickly check on the market action of your equities anytime whether at home, at work or anywhere else you happen to be.
It does not track the monetary values of equities like a spreadsheet can do.
Share with your 5i audience as you wish.

Q: Can you recommend a free (or not too expensive) website that you can monitor your portfolio of approximately 20 stocks on an up to the minute or (at the 15 minutes delayed) basis?

The old Globeinvestor used to provide such a perfect service for free and for reasons unknown they launched a new version that is hard to use and gives you much less useful information. For example, the new portfolio can only add new stocks, but I looked all over and don't know how to delete an existing stock. Very frustrating.

It would be greatly appreciated if you can direct us to a comparable website to the old Globeinvestor site. Thanks.

Q: For investors living on 4% of portfolio income and growth is there any difference between withdrawing 1/3% monthly or 1% quarterly or 2% semiannually or 4% annually or would the result be the comparable?

If the portfolio is entirely invested in a US index ETF such as SPY or VOO, is it likely to grow over the long run?

Q: Hi Folks,
Further to the question I asked about Bank Bail-Ins, could you explain this a bit further: "The best defense is to have a cash account only, where securities are segregated"?
Does this mean an "investment account" where we only have cash or perhaps GICs, T-Bills, etc? In other words, no equities? I'm not sure what you meant by that.

thanks again,

Paul