Investment Q&A

Q: Hello -

I understand the attractiveness of TOI stock - the management, the CSU model, growth projections, etc. However, I can't understand the current valuation. Even after the recent pullback to $108 (at time of writing), has the company's fortunes really increased by 72% within the last 10 months to reflect the increase to today's price compared to the beginning of Feb. last year? I realize stock price / fundamentals don't follow exactly in parallel, but that is quite an increase.

My other related question is on the sector itself. There just seems to be so many software companies out there. Is there an ever increasing need for software in the world to today that matches the increasing number of companies that offer it? In the U.S. there is a history of 3000 automobile companies at one time or the another. Only a tiny fraction exist today. I know this is an apples / oranges comparison industry-wise, but hopefully you understand my concern.

Thanks for your comments.

Q: Peter,

I love the G and M watchlist to show comparative performances etc. However I am skeptical as tManyo the accuracy of some of their other data when looking at fundamental analysis. What faith do you have in the accuracy of the data when looking at ratios such as Interest coverage, debt / equity, forward p/e etc? Where do they get their calculations from ? Do you know of a better source where we can list a number of companies , for instance with a sector and compare the relative financial strengths all on the screen. Much seems to be latest and loudest with performance being the number one issue of interest.

Thanks

Paul

Q: Hello 5i,
This isn't a question per se, but rather an observation relating to Mary's question today about bonds/fixed income in a portfolio.
Something that was not mentioned which a 5i Portfolio Review and Portfolio Analytics pointed out is that if one has any kind of Defined Benefit pension (private, CPP, OAS, etc.) one can apply that to one's Fixed Income Portfolio allocation.
I am sure there might be some caveats that you could expand upon, but this may help some people with the bond/equity allocation conondrum.
Personally, we hold no bonds currently due to our pension positions which serve as our fixed income.
Cheers,
Mike

Q: Hi
The income model portfolio contains about 2% fixed income/bonds. Is the model portfolio meant to be followed as it is or are investors to decide on their own allocation to fixed income/bonds? I have been disappointed in my bonds. I know they can help soften the blow in a market crash but this is pretty expensive insurance so to speak. What is your position on bonds? Should one be increasing their bonds at this point in the market?
Thanks

Q: Canadian Depository receipts - NEO
I have read the article in the Globe & Mail regarding Canadians ability to purchase factional shares of major us companies, similar to US adr's.

Question: If I purchase 200 shares of PFE what exactly do I get? and do I also participate in any dividends.

Are these a viable investment option

Can I have your opinion on CDR's

Q: Earlier this year I transferred my Magna shares from my non registered Canadian Account to my non registered US account in order to avoid money exchange charges. I am interested in selling the shares and would like to know if the same shares can be sold through my US account so I can use the US funds to purchase some beaten up ADSK and CRM shares this month.
Thanks for all the support in 2021.

Kevin

Q: Hi!

I read something about Canadian CDRs on the NEO exchange. Anything to worry about? Transactional friction etc....

Q: Good day. In various news updates etc. on some of the stocks I own I see press releases from law firms reaching out to investors who have lost money investing in a certain company to contact them regarding potential class action. Are these notifications non-events with law firms fishing for business or is something else going on? Investors in Novavax with losses exceeding $100,00 is the most recent request I've seen. Thanks
Rob

Q: Earlier I asked whether it is allowed to transfer the "dividends" only of a stock that pays those dividends in $US - I have the stock in my Cdn RRSP and I would like to transfer the $US "dividends" to my $US RRSP in order to save fx fees. I beleive it is called "journalling". Your reply noted the word "stock" not dividends.

Q: Everyone, at times when the market is in a short term downward trend I look at the companies 3 or 5 year share price and it always cheers me up. If the fundamentals have not changed then the long term trend will always continue UP :) Clayton

Q: Dear 5i,
I often see and hear the word "growth" describing a particular stock in the media. This term seems very nebulous to me. Does it refer to earnings growth, sales growth, revenue growth, operating cash flow growth, free cash flow growth, others??? Analysts often say a stock is expected to grow 10% but, what does that really mean? Hope you can clarify.

thanks

Q: I have a small amount of shares in this company. My question is if I should take a tax loss, add at this low price or wait a quarter or two.
Thank you!
Albert

Q: A comment, not a question:

Brett asked you a question on 2 DEC 2021 regarding buying US shares in his TFSA --> whether to first purchase USD and buy US stocks in a USD TFSA account or simply buy US stocks using CDN dollars in his (presumably) CDN TFSA account.

My experience in buying US stocks with CDN dollars in a CDN TFSA account is that in the event of a sale of the US stocks, my online brokerage (CIBC's Investors Edge) automatically converted the sale proceeds into CDN dollars. Which I didn't necessarily want done, but I wasn't given a say. Ultimately, I opened a US banking account to transfer USD into my US TFSA account. Sale proceeds of US stocks are kept in USD and I am free to convert back into CDN dollars. Or not. Which I prefer to the alternative.

I hope my experience helps Brett and others.

Q: Please help me understand:
TD has announced a) share repurchase intention for 2022, and b) the Jan 31 2022 dividend DRIP shares will be issued from treasury.
These two would seem to be at odds with each other (despite the, presumably, much smaller quantum of the DRIP treasury shares relative to the repurchase plan)?

Q: My 20 year old grandson is about to step into the investing world. His plan is long term but his portfolio will be small to start. Can you suggest a starting point? I can teach him all the lessons you have taught me since 2013 but we just need a starting point.

Q: I have my RRSP with a full service broker - Canadian dollar & $US account - If I bought a stock on the TSE in canadian dollars and that stock pays it's dividends in $US - is it possible (to save any conversion fees) to have the dividends transferred to my $US RRSP? If YES - is there any cost of any kind to be expected?

Q: If buying US shares in my TFSA am I better to buy USD then purchase the stock? Or just buy the shares using CAD?

Dealing with about 75K CAD

Q: I missed Peter Hodson’s talk at the Canadian money show. Do you have a link for a replay?

Thanks

Q: I want to be better prepared for the next big market correction. I have been keeping ten per cent cash that can be deployed when I correction happens and I know where I want to add to positions and start a couple of new ones, for instance Microsoft. I have never shorted an individual stock but I might consider an ETF that shorts an index. Where should I start my learning? Most of our money is registered accounts which complicates shorting. I am not suggesting I want to do it now but if the market gets forthy next year and the federal banks start to raise interest rates to comabt inflation there is going to be carnage. Thanks for the good service. Glad you informed me about Constellation Software five or so years ago What I gem!!

Q: Hi,

I was wondering if I could get your thoughts on a general trading/investing strategy.

Over the years, I have seen my valuations go up and down, up and down-yet I stick to the buy and hold strategy knowing I am not smart enough to time the market.

I am now thinking of adopting this strategy: selling approx 30% of a security position when I think it looks frothy. If the prices goes up, I still have 70% holding to benefit... BUT if it goes down, I would buy back that 30%.

I am not referring to day trading in and out-this would be a rebalance once/twice a year. What do you think in general of this strategy?

Thanks as always for your sage advice.