Investment Q&A

Q: As a bit of a follow-up to Theresa's question regarding where to find information on earnings beats and misses, I would point out that the quarterly earnings history (consensus vs actual) for many companies is available online for free at marketbeat.com.

Q: In terms of positioning I present a scenario. You are 68 years old. You have currently 1M invested. You are 20% Fixed Income. You are 10% cash and 70% equities. You somewhat depend on Dividends so you have slanted the 70% equity portfolio to dividend stocks. (90%) Blue chip BCE, ENB, MFC etc. Is this a mistake? Should you perhaps even out the portfolio to growth stocks that pay no dividend but offer you upside. i.e. CCl.B, SJ, ATD.B. You get the gist. Now supposing you have been diagnosed with a medical condition that tells you will be dead in 5 years. When you kick the bucket (which in end we all do) and want to leave the maximum amount of money to your dysfunctional family how to you structure this now? I have no concerns about running out of money but at the same time I want to leave the maximum money on the table when I die. What do you recommend as a strategy? That’s the there, there!

Q: I have a general question with regards to stock splits. Why is it that companies don't seem interested in doing stock splits any more? I realize that stock splits don't change the value of a stock - you just get more shares at a lower price. But isn't there still logic in a lower stock price being more affordable to individual investors?

Q: Do you have an example of a stock moving from the CSE to the TSX?
Would this result in an increase in the share price?

Q: In response to where you can find information on past earnings, beats or misses is SeekingAlpha. Just enter in the symbol on the home page and select earnings. You will find the history for all US stocks.

Q: Further to Lance's fine suggestion of using CanadaHelps for excess gains I can add TD's Private Giving Foundation as an alternative I've used since 2007. A twist is that contributions are endowed over a period, usually 10 years, with annual disbursements to chosen charities. Undistributed amounts are invested in TD's conservative mutual funds so some growth can be expected and a legacy is established. You get to name it whatever you wish eg: The Jones Family Foundation. Minimum $10,000. Details:

https://www.td.com/ca/products-services/investing/privategiving-index.jsp

Q: Hi Peter and Team - I know this question is a little outside of the regular type of question/answer component of your services and that you are not in the business of predicting macro economic events. However am just wondering if you have any thoughts on how interest rates may play out over the next couple of years both in Canada and the U.S. With the tax reform package now passed in Congress is it quite possible that this could lead to fairly major inflationary pressures in the U.S. and therefore substantial interest rate increases. If so then what might be the effect on Canada's interest rates and resulting stock market movements. Thanks.

Q: I manage my own RRSP portfolio which is in the 7 figures. It is made up primarily of micro and small cap stocks. I spend on average about an hour a day doing research and placing purchase and sale orders. Does this time spent seem typical for anyone who wants to do a proper job managing their own money and hoping to do better than ETFs or mutual funds?

Q: what was the date that 5i started?

Q: In your email of February 15 you provided a list of changes to portfolios and reason for these changes. (Model Portfolio Changes) where can I find a copy of these reports on your website?

Thanks

Q: Hi team,
It is February and time to use another credit. I think I will ask a more general question rather than a stock specific one as most of my equity questions are asked by other subscribers, which is good thing.

I have U.S. accounts that augment each of my Canadian accounts (Cash, RRSP, TFSA). From time to time, I want to transfer some more cash to one of my U.S. accounts. I hesitate at times because of the approximately 2% FX charges that I incur from TD. I suspect most banks charge around the same rates.

I think I recall a few months ago a Q&A on the same subject but I can’t locate it. I think there was a strategy of buying a major Cdn stock such as a bank (where I am typically heavy, along with tech) and offsetting it with another transaction. I am not looking for any exotic approach, as I like to keep things simple, but if it saves me from incurring some FX charges I might consider it. Please advise.

Thanks again,
dave
P.S. Welcome Barkha.

Q: What are the key metrics/parameters of a corporations earnings that one should be looking at and what parameters provide guidance on future performance of the corporation.

Q: Tony Seba's video paints a picture of massive disruption coming by 2020ish. His thesis is that the convergence of electric and autonomous vehicles, solar efficiency, etc. will disrupt many industries and especially transportation and energy business models.

Have you seen any of these types of projections? It’s a bit of a longer video but you might take a peek at it particularly near the end where he connects the dots.

If true, we had best be getting out of pipelines and rethinking renewable energy, let alone the many other industries that this may impact. For example, if people reduce significantly their purchase of vehicles and simply allow autonomous vehicles to drive us around, we won’t need nearly as many parking lots, and this will free up land for housing in urban areas.

Is this guy credible? Any thoughts?

Best regards ... Kirk

https://youtu.be/2b3ttqYDwF0

Q: In this rising interest rate time, are these two
Funds ok or is there a stronger chance that they may have a poorer performance than a g.i.c.
They represent about 30 % of our r.r.s.p.
Between them
Thanks for the advise






Thanks for the advise

Q: Although experts appear to need to constantly leave some measures of doubt, there are overwhelming signs a lot of these massive swings are electronically induced and some forms of ETFs the catalysts with the wishing hour all too predictable. I also find indigenous how clear calculations are presented to how each 1/4% rise means important profits to some industries but when it comes to those which are hurt, no hard numbers only a herd response of bad and avoid! Are not rising rates a sign of a better economy? Consider the avoid list: Electricity and heating, rents, telco bills they do not rise? Fundamentally, is not the formula I/R =V? So only the" R" is going up and the "I" at banks? Are analysts raising/ reducing their target prices on interest sensitive stocks while their prices are falling precipitously and yields rise close to typical average market returns over an extended period? It may be coming but any recent published downgrades I have access to are not sounding loud alarm bells or screaming "FIRE"!

Odd, overtime US TV specials on what is occurring and one of the how to protect yourself go toes is to consider the fundamentals of the stocks you own? It sounds good but to be polite very misguided momentum thinking stills seems to override any sense of good basic underwriting principles. How surprising, currently at the top of the BUY list by the experts putting their two cents in: Invest in companies that benefit from high volume trades! Well that is where the momentum is clearly positive!

Do I have a question? Actually yes, are there ways or signals to indicate the factors which are causing such volatility have burned themselves out and the shakeout over? Values which actually represent investing opportunities? It may be sound cynical but is there any hope of getting back to some resemblance of investing where fundamentals rather than financially engineered products are the real catalysts ruling markets or should we expect one calamity to the next ? Clearly no person can compete with AI programmed responses that override all else!

It would seem due diligence by doing your homework is no longer at the top of making a decent return and more importantly keeping it. Things do not only go in one direction, that is understandable but, what is currently going on, certainly cannot enhance the US system or its markets which again seems at the root of the problem impacting many, if not all markets!

Any insights you wish to make would be gratefully appreciated. Thank you.

Mike

Q: I have a question about bond yields and interest rates. I just read an article on marketwatch saying that the 10 year bond yield "has an effect on all parts of the economy, as it influences everything from borrowing costs for the smallest and biggest companies, to rates for fixed and adjustable mortgages, car loans and credit cards".

I think i understand how it impacts borrowing costs (firms that need to issue new debt have to pay more?) but I thought the fed rate is what influences the prime rate which effects adjustable mortgages and other loans.

I understand that a higher yield on bonds makes some stocks less attractive in comparison (like dividend stocks) but i don't get how the 10 year bond yield is so important/scary for the market.

Could you please explain?

Q: What do you see as the best strategy to benefit from downturns like what we’ve seen lately. Is it just make sure you always have cash to deploy when one happens or is there some stock/fund that is average most of the time but really benefits from the pull backs somehow?

Q: I am curious in your experience in the past with similar corrections 10% or more. What are the companies that benefit from the eventual recovery? Is it the companies hit hardest in the correction that rebound or the companies that weather the storm and continue to outperform?

Q: What are the pros/cons of holding Canadian companies, e.g. banks, in US markets instead of Canadian markets for non-registered accounts?

Q: 5I
When looking at a company's ability to pay a dividend the common ratio people look at is the dividend payout ratio. However from reading some of your information over the years I realize there is much more to it that that. Can you please list the other important factors such as interest coverage, free cash flow etc. Listing them will be fine. I will search and come up with the calculations and then go to the financial statements.

Thank you

Paul