Investment Q&A

Q: Peter and team, I have a managed RRSP account that I wish to transfer into my self directed account. The account contains some large cap US stocks but mostly medium and small sized Cdn stocks. Is there a preferred strategy to move the account holdings ? I had thought to ask the firm to liquidate and transfer the proceeds but am now thinking the thinly traded small companies would be better sold over time. Is transferring everything in-kind better ? Thanks you.

Q: Do you have suggestions for safe places to park excess cash sitting in a discount brokerage RRSP, perhaps for a few months, while waiting to invest it in the market? I've used HFR (Horizons Floating Rate Bond ETF) previously.

Q: Hi Peter & 5i: Just a comment. I haven’t asked a question for a couple of months but I have continued to read the 5i members’ Q&A daily. I have gained lots of information from others’ questions and your responses. It may seem frustrating sometimes when someone asks a question you really can’t answer or includes a lot of extraneous information that won’t be relevant to your response. I very much appreciate your approach to answering these questions anyway; to try to give people something for their effort, at times despite the way they have asked their question. You are usually able to offer them something useful and sometimes that is useful for me too. If somebody asks for too much or provides too much info, it may just be that they don’t yet understand the turf well enough to ask for exactly what you can give them. But they still need some help and that is the point of their membership; to gain some assistance in an area they have not mastered and to be educated a little bit along the way. Thank you for your patience.

Q: Not a question but a comment to my fellow members. I have noted a number of member remarks as to a shorting suggestion on a recent BNN telecast. I frequently watch these telecasts as well for different views. I would suggest that members go to the guest's fund web sites for performance of their particular fund as a reference point. I find myself that some guests have better advice than others. I do not find that particular recent guest to be in the more reliable camp.

Q: Not a question, but a comment.

As a member who rarely posts questions I am annoyed with individuals who list their holdings and ask for a portfolio review. The latest being Karen who posted today, listing 38 holdings and asked for a detailed review.

My issues are 1) We are members not clients; and 2) Your site is clear on the scope and nature of the information provided.

I think your response on these questions should be that it is outside of the scope of 5i's service and they should consult a financial advisor.

If individuals want to be treated as clients then spend the money on a financial advisor rather than expecting the 5i members to subsidize their needs.

Q: About Catherine's questions on stop losses and when to sell criteria, I read last night Peter's earlier blog posting -

https://www.5iresearch.ca/blog/some-possible-reasons-to-sell

and I thought I would e-mention it as I found it helpful...Tom M

Q: Hello, I am a new client and need some assistance.

% of Holdings % of Gains
ATD.B 2.3% 18.96%
ALA 0.9% 9.06%
ACQ 0.9% 7.25%
AVO 1.5% -1.91%
BAD 7.0% 173.88%
CIX 1.1% -1.63%
CNR 2.6% 10.14%
CTC.A 1.7% 8.93%
CSU 7.5% 34.71%
DII.B 1.2% -7.94%
EFN 0.7% 4.63%
ESL 1.1% 76.50%
GIL 1.2% 4.52%
HLF 1.5% 22.96%
HCG 2.7% 18.17%
IFP.A 1.5% 94.23%
IPL 3.0% 18.54%
KLS 0.2% 6.06%
KEL 1.0% 4.58%
LNR 1.7% 80.08%
MG 3.0% 14.5%
MDA 1.7% 3.78%
MX 2.3% 4.61%
OTC 7.0% 14.64%
PVG 0.3% -40.21%
PSD 0.4% -27.27%
RRX 0.8% -0.69%
STN 1.4% 0.06%
SJ 1.7% 2.52%
TD 2.1% 5.61%
TOU 4.1% 11.82%
VRX 4.9% 30.77%
VET 1.3% --new--
WFT 2.3% 16.92%
WCP 1.7% 14.28%
VDU 0.6% --new--
VUN 0.6% --new--
VCN 0.6% --new--


What should I sell, if any? And what should I purchase to diversify my portfolio?

I think I would like to have no more than 30 stocks to make it easier for myself to look after. What are your thoughts?

I appreciate your time and assistance.

Thanks you very much.

Karen.

Q: Hello. I have read comments regarding stop loss selling but I would appreciate your insight and suggested reading on when to sell a stock. I have heard many say it is a difficult part of investing but have not offered any strategies. And, as you have commented, you don't offer target prices. Thanks as always.

Q: Here is a general question. If anyone knew yesterday that Royal was going to report a 2 billion profit and clean beat all over, would they not have backed up the truck before today, in anticipation of a short term bounce? Instead, it is down a quarter. What does this say about the rationality of the markets. Is it possible there is more luck involved than is acknowledged and is a lot of investing similar to the lottery, notwithstanding common sense and a long term horizon. Thanks

Q: Not sure if this has been previously asked, but would it be possible to include another column per your portfolios ('Summary' and 'Model') of an exact date of when you formally recommended a company into your portfolios for subscribers? It would certainly help for backtracking purposes to monitor your track record (a good one at that) in pulling up daily/weekly charts.

I use CF as an example, you posted a writeup on Jan 20/2013 at a price of $7.29 with a 2014 P&L and Total P&L the same of -6.2%. These numbers being the same brings up a further query upon looking at your reports, it says this is a "Review of Canaccord Genuity Group" which has me looking for the "Initial" report (of which I don't think there is a previous report). Just a little confusing in looking for another report, but if there was an initial date recommendation column then no further searching would be required. The 2 same P&L numbers tells me there is only 1 report.

I would find the inclusion of dates to be a valuable data set. Thank you 5I team for the service you provide.

Q: voting vrs non voting shares.

Even with lower volume and a premium to non voting shares, if the non voting do not have a coattail provision, would you buy the voting.
Years ago I lost huge upside when a premium was offered to voting shares only.
thanks

Q: hello 5i, my question today has to do with research information. if a person wanted to open a trading account within any of the Canadian banks which one would you recommend. i would like the one that is most accurate and tilting slightly to resource sector and small caps .also any perks that should be considered. should anything else outside the banks be a possibility ? thanx norm

Q: Hi Peter & 5i Team,

I have seen several questions on the lines of "Do you still like so and so stock that you cover..." In the event you come to know of some major negative news on one of your top rated stocks (A+ to B-) which would cause you to immediately change your rating of that stock to say an F, how would you warn 5i members to immediately sell/not buy that stock. For eg. would you post a banner announcement on the home page regarding that stock downgrade by you ?

If so, absent such a warning, can we assume that your current rating for all covered stocks are still valid, atleast uptil the previous trading session ?

Thanks in advance.

Francis

Q: hello, Peter and your team,
Thank you so much for your good service, could you please tell me where I can learn the basic knowledge of technical analysis ever though I am not a trader. Thank you!
Yingzi

Q: A comment only, to add to your excellent reply to Paul re stop losses. There is a lot more to them than most people realize, even more difficult than when to sell. And I have the scars to agree with 5i Research about them not using them. The only time I would consider them anymore is when I feel a stock is reaching the top from a technical standpoint or of my objective but I want to wait to see if it can stretch out a little more. Then I might set it fairly tightly and watch it closely.

Q: Could you comment on stop loss orders: when to use them, when not to use them, how much of a loss in percentage terms would you use (and would it depend on market capitalization or sector of the company), how long to have them in place, how frequently to review them and adjust them, using technical analysis to find support levels, etc. Some investors have told me they don’t use stop losses on stocks they plan to keep forever (e.g. Canadian bank stocks).

I would like to put some stop losses on my “riskier” stocks (SGY, WCP, CPG, TBE, DR, PPL) and I am wondering if a 10% to 15% stop loss from current levels is OK. I have had some of these stocks for a while and have gains up to 33%, and some are recent acquisitions and are break even.

Can you also comment on this article from the Toronto Star about never using stop loss orders to sell stock:

http://www.thestar.com/business/personal_finance/investing/2013/05/13/why_you_should_never_use_stoploss_orders_to_sell_stock.html

Perhaps you could publish an article in your research blog about using stop loss orders.

Q: I am a senior and have built my portfolio to be able to withstand
a 20% drop in the market.Do you think this is acceptable for safety long term?

Q: Hi Peter,
I noticed that the Dow is on the rise after a head and shoulders pattern. I also saw a superimposed image of the DOW in 1929 that shows a similar pattern. If the market does start to fall off abruptly after this recent rise, where should money go? I am recently retired and have BNS and a GIC with about 50% in cash. I was planning to invest, but a little hesitant now. I would really appreciate your advice. Thank you. Gail

Q: What is your opinion of selling out of the money put options for income on stocks you don't own, but would not mind owning?

Q: I have just read a member`s note thanking you for the new report entitled "5 from 5i" but I haven`t been able to find it on the site.

Thank you for the clear concise (jargon free) helpful answers you routinely provide.
e.https://www.5iresearch.ca/questions#sthash.ZQlmd33K.dpuf