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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: Just a comment
Over the past 3/6 months I have witnessed a significant activity in the micro cap and the small cap "bought deals" at discounted prices that are simply an insult for retail investors (Ie. the suckers..... I am one of those...). Discounts of 30 to even 50% are in the order of the day. The last one Acuity deal for 3000000 units at $ 3.4. Price this morning ... (drums rolling....) $4.25 at the open.
Well I have my idea about this gouging.
1/ Everybody is trying to is trying to grease their wheels before they cannot do it anymore, and nobody Ie. the Pros?? would buy acuity at 4.4 even 4. I agree and I would not except I am frustrated not to be able to get my fair share at 3.4.
2/ The market space has changed drastically with spreads so big that a mammoth would fit easily, Prices quoted are the reflection of TSX while in the meantime The pros are trading on Aequitas, Alpha, CSE, Instinet, Matchnow, Nasdaq CXC, CXD, and CX2...
3/ short sellers have a wonderful time in Canada, IROC nowhere to be seen or heard.

So what to do?
1/If you take ownership of your stocks take advantage of the gift that shor sellers give you (PHM anybody)
2/ Accept the fact that you are not the Alpha one around and that your power is limited, but refuse to be fleeced.
3/ Do not trade blindly Ie. open orders and follow YOUR stocks: Your level of comfort is directly related to your level of ownership.

Peter, your comment would be appreciated as usual.
CDJ

Read Answer Asked by claude on March 13, 2017
Q: Hi 5i
Due to one of the holdings becoming a runaway success it has turned into approx 30% of the overall portfolio value (I know you think this is a bet on one company, leaving that to one side my question relates to the the weighting of the remaining holdings). I'm uncertain as to whether it would be necessary to adjust the weightings of the remaining holdings and in what way. Growth/losses in the other holdings appears to be masked/muted by the overwhelming good fortune that is the 30% holding.

Thanks as always
Mike
Read Answer Asked by mike on March 10, 2017
Q: Hi 5i
When market sentiment turns against a company due to a miss, for example, in this case, like-for-like sales growth (1st slow down in 9 years), but accompanied by a dividend hike and an acquisition among other positives, how significant would you consider one miss? In terms of market expectations are some metrics far more relevant than others ?

I think it's too early to know whether "something has changed" but market reaction was brutal on one of my foreign holdings today (I won't mention which as its not a CDN or US holding).

I know this is a vague question but I guess market sentiment baffles me sometimes.

Thanks for any comment, greatly appreciated.
Mike
Read Answer Asked by mike on March 10, 2017
Q: Gentlemen,
If I want to buy puts to protect $1.5 million in S&P500 Index fund against a 10% decline in the market in the next 6 months how many SPY options do I need and how much do I have to fork out. Does it matter where your broker is? That is do the options listed on TD have the same price as those listed on Scotia.

Let’s say the expiration date is September 15, 2017.

I appreciate it if you detail the math and where you are getting your price from.

Thank you for taking the time to teach me and my fellow 5I members regularly.
Read Answer Asked by Saeed on March 10, 2017
Q: Hi Team,
A quick follow up to my earlier question about Central Fund. When you say "we would simply tender to the offer" can you kindly explain how I do that. The shares are in a discount brokerage account. Do I have to contact the broker? Thank you. Michael
Read Answer Asked by Michael on March 09, 2017
Q: Hello.
I have been looking for a Technology stock to enter. As per an earlier comment today, I too find prices high and given my own investor behaviour have not faired well with some of the high prices and volatility.

So looking at OTEX, would comment on some of the fundamentals. BMO shows P/e of 7.4 at current price. I have seen where you comment previously about positive position this Waterloo company finds themselves in the market. What may be expected of OTEX going forward if bought today?

If there is more you can add to buying high priced names and how to hang on through volatility, it would be great. The only way I can do this is to buy and sell on 5i actions.....which is somewhat inappropriate expectation to place on this service.

Always good responses.
Thanks
Dave
Read Answer Asked by David on March 09, 2017
Q: just a comment about your comments. I am in the real estate business and affordability is not always the driving force in prices. It is demand from offshore money, investors, both locally and from abroad. In Toronto, there is a lot of money that can afford these investments and a collapse in the housing market would mostly hurt the working people who if they had to sell or refinancing would be stressed. If investors have lots of money, they are investing with the risks. they do not need these investments to pay for their own food and accommodation. I have worked through the housing price correction in 1974,1989,2001, 2008 and it was brutal for some people but an opportunity for investors with money. Now we have the additional overseas money which even at 5-10% is paying up for real estate in an already tight housing supply market. Who would want to sell and have no place to live. There may be a correction in Toronto but the investment fundamentals have to change. Keep waiting.....
Read Answer Asked by john on March 08, 2017
Q: This is not a question but just an appreciation of what 5i has done for me and my family. I used to have a wealth MGMT company take care of my funds, but 4 years ago I found 5i. I started small with 5i to test the waters vs. my very expensive wealth advisors (2.5% fee plus 25% of profits over the TSX). In 4 years, my TFSA is up 226%; one of my other portfolios is up 102% in the same period. In 3 years my children's RESP is up 39% and in one year since I transferred all my other accounts I am up 20% in my RRSP; and my largest account is up 19%. The returns are so much higher than my fund managers ever did. In many of my accounts I have not sold any stocks in 2 years, not all have worked out, but my returns have. Just wanted to say a huge thank you.
Read Answer Asked by stephen on March 08, 2017
Q: I have three accounts at my broker as follows: Canadian equities and American equities in my margin account (non-registered); Fixed income including bonds, bond ETFs, bond mutual funds, preferred shares, convertible debentures, REITs, international mutual funds, and Canadian equities (all are income producing and generally have a yield in excess of 3%) and RESP for my children. For diversification purposes you have said no one investment should make up no more than 5% of your portfolio. In my case I would consider RESPs a separate entity and unique investment strategy.For the sake of diversification would you combine the RRSP account and margin account together? I have investments in my margin account which exceed 5% of the margin account holdings which should necessitate a sale for diversification purposes. The result may differ if they are part of the combined margin and RRSP account. I eagerly await your reply. Thank you
Read Answer Asked by Robert on March 06, 2017
Q: Hi Team

Certain companies such as BEP, AQN pay dividends in 'US" dollars. What is the significance to me?

Is there a foreign holding tax on the dividend ? (like for an american equity)


does my taxation change, is there an advantage to holding it an RRSP versus non registered account.

I am with BMO investorline and I think they pay it out converted back to canadian dollars, is that the financial industry way or is it possible to keep it in us dollars ?

thank you

Ernie
Read Answer Asked by Ernest on March 06, 2017
Q: I have subscribed to your 5i Research for a few years and have never learned more throughout my years of investing than I have learned over the few years with you. A question that I should know the answer to is a term used at BNN and by you all the time is a stock is trading at 10 times earnings. Does this mean it takes $10.00 of earnings for the shares to go up a dollar? Thank you. Dennis
Read Answer Asked by Dennis on March 06, 2017
Q: If these inverse ETFS deteriorate in value over time, could I not capitalize on this by shorting the them? If I shorted both HOU and HOD would that not nullify the underlying volatility and just let me benefit from the decay in value?
Read Answer Asked by Rob on March 05, 2017
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