Investment Q&A

Q: My goal is to create a list of criteria for the ideal small-cap growth stock. I fully appreciate very few stocks, if any, will meet all the criteria. I have started the list. Please add to it.

1. Experienced management
2. High insider ownership
3. Low debt
4. Low forward P/E ratio
5. Momentum

Q: In reviewing the sector distribution of your reports (C rating or higher), there seems to be a notable absence of reports on oil/gas (none), pipelines (1), and telecoms (none). Is this intentional?

Q: Firstly, new to your site and find it very imformative. Peter you are one of my favorite guest on BNN. I would describe myself as a seasoned rookie investor. I certainly really enjoy doing my own research a lot more than paying a mutual fund two percent plus for picks like Bell, CNQ, and some glossy brochures. I am wondering if something like the Bloom and Burton Healthcare Investor conference
would be appropriate for a smaller retail investor. Btw I am geeky enough that I am sure to enjoy the technical medical stuff. Just did not want to spend a fair bit of money to go to TO and feel uncomfortable in this crowd as I am not a sophisticated investor with big bucks.

Q: Hi 5i team,

In the medium to long term, I believe you would agree that US economy is heading for a much better growth compare to Canada (unfortunately). In which case, wouldn't you advise increasing US exposure for Canadians to 50%, if not much higher? The current exposure recommended by 5i is around 20% as I understand. Can you please shine some light on this, are there implied risks that we are not aware of?

Thanks as always,
Jerry

Q: Hi...just curious how you select companies to cover in your reports? Do you have a schedule for up dating comapny reports?
Thanks!

David

Q: Thank u to Arneh for the clarification on Hxs vs Zsp
I did not mention that it was a non reg account so this was very helpful
Much appreciated

Q: Peter Ryan and team
I have a limited accounting background I understand most of the ratio's eg ROE PE CF but I have great difficulty in figuring out how to calculate them on a complex financial statement

Could you suggest a course or literature to help members calculate the different ratios and determine debt levels etc

Everyone says do your own research and I want to become better equipped

Any suggestions would be appreciated

Thanks
Paul

Q: Hi, where would I look for a listing of the tsx company reporting dates ?? Something that I can print out.

Thanks

Q: Hi Peter,

Can you offer 5 tips for portfolio construction in order to perform well in a rising interest rate environment?

Thanks.

Q: I read this (i've excerpted) over the weekend. I expect you're familiar with the thesis, but I'm wondering what your take is on this for someone with little interest in researching and monitoring individual stocks, asset allocations, etc.
The One-Minute Portfolio consists of two exchange-traded funds (ETFs): the iShares S&P/TSX 60 Index Fund (XIU) and iShares Canadian Bond Index Fund (XBB). There is no requirement for hours of research to pick stocks or time markets. Only an annual rebalancing is needed….

Over the dozen years from 2003 to 2014, the One-Minute Portfolio’s average annual compound rate of return was 8.9 per cent on a total return basis. …

In the most basic form of the One-Minute Portfolio, an investor rebalances back to a fixed asset allocation, a common one being 60 per cent stocks and 40 per cent bonds. A slightly more advanced version, used in the published updates, allows the target asset allocation to vary according to the state of the stock market – as prescribed in Benjamin Graham’s investment book, The Intelligent Investor.

In general terms, the rule is: if stocks are getting frothy, their portfolio weight is cut. Conversely, if stocks are in a deep funk, their weight is raised.

from My OwnAdvisor

Q: Looking to make investments in these stocks for my grandchildren education. Funds will be required in 15 to 20 years. About 12K to start adding cash monthly. As time go by with additional funds increasing the investments to 10 stocks. Your thoughts on the stock selection ? If not agreement, any other recommendations,? Thanks for you great service.

Q: I'm most pleased with the mysterious research you guys are doing over there in Area 5i. You must have aliens from the future advising you.

You mentioned recently that the 5i membership is untested in a bear market. I wonder if a little preventive advice can be given while we're in an atmosphere of relative optimism.

You already have a few blog posts on sell-offs, corrections, and reasons to be bearish. But a post addressing an actual bear market lasting a few months or longer might help prepare people and retain subscribers.

Hopefully there's no hurry for such a blog post! The aliens you guys are hiding will let you know.

Q: Hi 5i,
Not a question, just a further comment for Brenda who asked about selling half on a double. I purchased Keyera in the low - mid 20's and was tempted numerous times over the past several years to sell as it rose in share price - but didn't. It underwent several sharp (for me) corrections, but I hung on. It recently topped at slightly under $100. Didn't sell. Now it is down to about $80 or so but is also going to have a 2 for 1 slit in April. Meanwhile, I get a modest cash dividend every month with which I have the option to re-deploy elsewhere. I will likely hang on to this one indefinitely (i.e. pending some compelling structural change) and see where it goes. The short message from this long missive is merely to reinforce your point that patience can indeed be a virtue on many occasions. Look to the fundamentals and be patient and good things can happen - but NO guarantees........
P.S. I know also that I am not unique in this experience - I think many if not most of your members would have very similar stories.
Publish only if you feel it is worth it. Best of luck to Brenda!

Q: Mr. Dalsin has said in three different calls/interviews now that a dividend, by the company, is one of their milestones once they reach the 20-25 million EBITDA. Do you still consider the initiation of a dividend as being one of the strongest indicators of a company's strength?

Q: Hi Peter,

I just renewed my subscription. I believe you have a great service and I value your opinion(s).

I would like to make a few comments about improving (in my opinion) the service:

Instead of receiving the 24 questions on an annual basis, they should be given on the renewal of a subscription (I renew in April but received my 24 questions in January that I could use prior to not renewing if I so desired). If a member renews for 2 years they would receive 48 questions. If someone has used up the 24 questions early and wants additional questions they could simply renew for another year and get 24 new questions.

I believe too many members are taking advantage of multiple questions in one. I think there should be a charge of 1 question if there are 1 or 2 companies in the question. A charge of 2 questions for 3 to 5 companies and a charge of 3 questions for 6 to 10 companies. A question would not be answered for more than 10 companies.

When you answer a question about a specific company, I believe you should give it a grade (A to F) the same way you do for stocks in the portfolio. Remember, it is your opinion we are after. Giving a grade indicates your opinion on a consistent basis even though you do not follow the company closely. A company such as SGY may have had a rating of “B” in June 2014 and a “C-“in March of 2015. I understand how your grading system works. Using it on all questions would make your answer more understandable.

And lastly, I still think you should have 2 rating systems. One for the strength of the company (what we get now) and a second rating for the current stock price. “A” if it’s a good time to buy and “F” if it’s a bad time to buy. Please remember, these are only your opinions. Members must make the final decision to buy/sell a stock. The second opinion will greatly assist members in making the purchase/sell decision at the current stock price.

Thanks again for a great service.

Regards
John

Do not post if you feel it is not warranted.

Q: At what point does it become ridiculously nonsensical to buy a small number of shares? Since the new TFSA limit restricts us to $5500 once again this year, I was toying with the possibility of picking up CSU stock -- which essentially would give me 12 shares. I have been wanting to own it for a while, but am too happy with the ones I own to sacrifice any of them. This is the only new money I could put into my account for at least 6 months. Perhaps I should look elsewhere?

Q: On the questions from Gary re. transfer to TD: For same reasons, I transfered recently from other institution to TD. The branch can handle the paper work for you and Web broker will reimburse the fees. You need to simply call them and let them know how much once transfer to TD is done.You can them follow the Great suggestions/ideas from 5i.
Good luck
Jean

Q: "Friday was the TSX Index revision day, so stocks that were added to the index (such as Prometic PLI) showed significant volume because of index buying."

Another contributing factor to unusual volume would be that Friday was a "triple witching day".

Q: Hi

I was wondering how come there was so much volume on stocks this last Friday, March 20.

Thank you.

Q: Hi Peter and Team
I'm currently preparing for your portfolio review and nearing retirement. My concern is that my advisor has done little to diversify and several funds in my RRSP have high Mer. The portion in segregated funds is over 3%.
I would like to move everything to my TD self direct RRSP account but I don't understand the charges that may apply. Do you suggest I hire a new fee based advisor to assist or would TD look after the transfers. Any advice would be appreciated.
Thanks to the entire team for your service.