Investment Q&A

Q: I have Shopify stock on TSX and am interested in protecting my investment.
1) What are your thoughts about buying a PUT OPTION as security?
2) Are they available on TSX as they are on NYSE?
3) Are they available only for CASH or MARGIN accounts and not for registered accounts?
Please take as many credits as needed.

Q: Investors edge (cibc brokerage) has been unable to update stock prices throughout the day this week(they've had other issues in the past). Have any other brokerages had similar issues or problems? I'm thinking of switching to TD. Do all brokerages have problems, and what might they be?

Thanks to those who can provide insight.

Mark

Q: Hi Peter and 5i,
Thank you for all the valuable advice and insight over the years. It is much appreciated.
I’ve been slowly buying a few convertible debentures as a small part of my fixed income portfolio. Mainly interested in the enhanced coupon rate the convertible debentures pay with the potential of the conversion into common shares.
I just have a few questions to ensure that I am understanding all the terms associated with the convertible debentures. Most of the issues seem to have relatively all the same terms regarding Conversion, Maturity Date Structure and Share Payment Option on Redemption or Maturity.
I’ll use the November 16th issue from EIF as an example.
Maturity Date – January 15, 2029
Coupon Rate – 5.25%
Conversion - The Debentures will be convertible at the holder’s option into fully-paid common shares of the Company (“Shares”) at any time prior to the earlier of 5:00pm (ET) on January 15, 2029 and the business day immediately preceding the date fixed for redemption at a conversion price of $60.00 per Share (the “Conversion Price”), representing a 30% premium, being a ratio of 16.6667 Shares per $1,000 principal amount of Debentures.
Redemption Scenarios:
1. The debentures will not be redeemable by the Co. at any time on or before January 12, 2025.
2. After January 15, 2025 and prior to January 15, 2027, the debentures will be redeemable by the company on not more than 60 days and not less then 30 days prior notice at a price payable equal to $1,000 per debenture plus accrued and unpaid interest, provided that the Current Market Price (CMP is defined as the volume weighted average trading price of the shares on the TSX for the 20 consecutive trading days ending 5 trading days prior to the applicable date) of the shares on the date on which the notice of redemption is given exceeds 125% of the Conversion price.
3. On or after January 15, 2027, and prior to the Maturity date, the debentures will be redeemable by the company on not more than 60 days and not less than 30 days prior notice at par value plus accrued and unpaid interest.
Share Payment Option on Redemption or Maturity – Payment will be satisfied by delivering for each $1,000 due, that number of freely tradeable shares obtained by dividing $1,000 by 95% of the Current Market Price (CMP)
Questions:
1. Do you see any downsides to have a % of fixed income portion of a portfolio in convertible debentures?
2. Redemption Scenario #2. This seems like the critical 2 years.
a. Am I understanding it correctly in that the Company can only redeem during these two years if the price of the common stock is above $75 (Conversion Price $60 x 1.25)?
b. If the company gives a Notice of Redemption during this period, you better take it (provided my understanding of a. was correct). It seems they would really want to pay in shares versus cash.
c. Do the discount brokerages (in this case iTRADE) normally notify you of a Notice of Redemption?
3. Redemption Scenario #3. If you get a Notice of Redemption in the last two years, does the holder have the option to convert into common shares (say the shares were trading at $80) before the redemption date.
4. Is there a general rule as to when you should convert?
5. Is it common for companies to use the Share Payment Option on redemption or maturity?
6. Have I missed anything that you would suggest to watch for?
Thank you so much for helping me understand my small adventure into convertible debentures.

Q: Do you have any recommendation's on an independent financial planner that specifically specializes with early retirement?

Thanks,

Joe

Q: My question is about convertible debenture. What are they? What is the difference between a good one or a bad one? For instance, exchange income corp. Just put one out at 5.25%
Thx

Q: This is not a question. Just sharing. Was thinking that taking profits is hard because after you sell and the stock continues to go up you miss out on more profits.

But holding losers too long is even worse.

So how do you win?

Q: Hello,

There was a question this morning about U convertible senior notes. What are they exactly and is that a positive for the stock? Your insight is appreciated.

Thank you very much!

Marc

Q: Hi Peter,

Maybe we are wrong but it seems that investment sites are approaching the end of the year and 2022 with caution. The topics of correction and reduce risk are common themes mixed in with inflation and interest rates.

If you were a medium risk - just retired person, which 15 stocks and/or ETF's would you hold right now (no bonds)? How much, if any cash would you sit on to buy dips or on corrections.

Cheers,
Debbie and Jerry

Q: Hi 5i,
A while ago i wrote and asked about selling ATZ because it had risen substantially, and you advised "we think one of the worst reasons to sell a stock is because it is up". I heeded your advice, did not sell and presently, I'm very happy I asked and that you answered as you did.
Which brings me to my question(s):
I hold DBM and after I bought in it dropped considerably and I was down just over 20% for what seemed like quite some time. Recently it's been climbing, to the point I'm now down 5%. I put a fair amount in (for me that is) so the money involved is significant to me. Along with hoping for capital gain, the dividend was a motivating factor in my buy in.
EQX did the same thing after I bought in and at one point I was down just over 40%. It has now recovered to the point that I'm down about 18%. Monetarily speaking I don't have nearly as much on the line as with DBM, so my level of concern is considerably less.
If these stocks continue their recent trends and continue to rise, would the advice you gave for ATZ hold true for them, or would you advise me to let them go if they get to or near my buy in?
I ask because I expect - but am not sure - that the advice not to sell just because a stock is up may not hold true in every situation, depending on the names in question. Your thoughts regarding DBM and EQX in this context will be greatly appreciated.
Thanks!
Peter

Q: Retired, dividend-income investor, who trims-adds around core positions. I have owned PBH since 2012 (bought at $17, now at $135) and WSP since 2014 ($35, $185) and have trimmed each multiple times to keep my asset allocation near targeted levels.

How much weight to you assign to technicals? When I look at a linear chart for WSP, it appears to be going parabolic. Some of the metrics I track (P/E, P/BV, P/CF, P/S) appear on the high side, but they always have. I conclude that is because it is a growth stock. I am definitively not considering selling....I plan to continue with my trim-add strategy. Just trying to understand how WSP is defying both the fundamentals and gravity (technicals). Is a logarithmic chart better to use? Is it as simple as WSP is executing on all cylinders?

One could ask a similar question related to PBH.

Again...even though you aren't supposed to get attached to any stock, I love both PBH and WSP, made a bunch of $ from each, and will continue to trim-add where appropriate.

Thanks...Steve

Q: Peter and Ryan - This isn't a question but rather a warning to those members like Jason who are constantly heaping praise on you regarding your service. Don't these people understand that by fawning over you they pave a slippery slope that inevitably leads to higher annual fees. Far better to remain silent. Or how about zinging you with the odd critique to insert an element of doubt regarding the wisdom of any increase. Come on fellow members, learn some basic psychology! I long for those questions some years ago that lambasted you occasionally when markets were weak. Could the absence of that negative sentiment towards you of late be a sign of market froth? Frankly though if I'm to be completely honest your service is irreplaceable and your fees damn reasonable! Oops. Good thing I just renewed.

Q: I wanted to thank you for the excellent service you provide. As a self-directed investor, it is always nice to check out the Q&A's and my results have been far superior I believe thanks to your sound comments, advice and recommendations. Thank you,

Jason

Q: What does this mean when you mention 'other interest' on a US stock? Thanks

Q: Hello 5i team

I would like to know your opinion on the resistance that can represent the crowd of potential sellers who can take advantage of the return of the price of a stock to their purchase levels after it has fallen sharply below that same level. I'll give you an example: EGLX. When the stock was rising to new highs, the only potential sellers were those who had bought lower, but now in the case of a rise in the stock, it will be necessary to add a part of those who bought higher and who will take advantage of it to recover their capital. Does this make sense and can it represent a significant brake, especially when the rise is recent. I imagine that if several years have passed, many shareholders will have liquidated their positions tired of waiting and that the effect would be much weaker.

Thank you

Q: Just a question about "Sell on news stocks", I find it quite confusing that so many stocks nosedive with exceptional earnings reports and your response is it looks like investors are selling on news?? Wouldn't it make sense to dump the stock the day before earnings came out after a big run up and buy back in later??? Thanks.

Q: Is a Canadian company like Abcellera, that trades only on a U.S. exchange, considered foreign property?

Q: My question involves a Co. which has doubled in value and pays a 4% dividend.

Example Paid $5. per share with 4% dividend. Now Co. worth $10. so dividend
rate is now 8%.

Hold or sell the Co.? What is your rational on long term holds where the dividend effectively doubles with the doubling of the fmv of the stock?

Q: hello:
This is a question about a private company.
About 10 years ago, we invested into a company called "Redev". Over the years we've collected a small amount of dividends. Recently, I've been interested in selling some shares to raise cash but haven't been able to contact the company. I've left voice mails and email messages.
Do you know this company at all? Is there some other way to go about contacting them (eg. a public entity like OSFI or ???). We're very disturbed that there is no communication. Can you help on this one?
thanks
Paul

Q: What would you recommend be the weightings for a particular stock, what is half and full positions referred in some of the questions.

Q: Good morning 5iteam: Do you still compile a list of your most promising growth prospects for the year.Seam to remember such a list in the past but can not find it if you do . Tks. Larry