Investment Q&A

Q: Hi 5i,
Regarding Robert’s inquiry on journaling ENB or MG and the BMO Investorline answer, I journal stocks all the time when I want to increase my U.S. exposure. This is an option in lieu of Norbert’s gambit. With TD, the stocks are moved to the U.S. side. I sell them and have more U.S. currency for new purchases. There is no point in holding the stocks on the CDN side in U.S. dollars as when one sells them, you are hit with FX conversion charges, and end up with CDN cash not U.S. cash. Perhaps there was just some confusion by the Investorline service rep.
Dave

Q: Using ARX as an example of a company with a 10% share buyback approval, through to Sept 2022.
As an owner, I would rather see them leverage and do it sooner, while the stock is still cheap.
Does this ever happen, or it considered as bad form by the TSX ?

Q: Hi
I use BMOInvestorline as my brokerage account. I have a CDN and a US dollar side.

I'm overweight Canada and wanted to increase my US holdings. I thought that one easy way to do that was to journal my Enbridge and Magna positions from the CDN to the US side of my account.

I think I misunderstood what this meant. I had thought that it meant that my existing shares in ENB and MG on the TSE would be exchanged for ENB and MG shares traded on the NYSE. But the fellow at BMOInvestorline said that it's just changing the currency and the shares will continue to trade on the TSE.

Is there a way to take an existing position on the TSE and exchange it for the same shares being traded on the NYSE?

I'm not sure I really diversified my holdings. I just changed the currency.

Thanks,
Robert

Q: RE: Profit Taking -- Asked by Rob on October 15, 2021

Perfect question. Perfect answer. Investors: Keep & read this gem often!

Q: Is "Profit taking" just investment speak for "the price is falling and I don't have a clue why, but because I'm supposed to know I need a term that is very vague and makes sense to the masses"?

It's a term you hear all the time but what does it mean?

It seems strait forward enough. Investors bought lower and are now selling and taking their profits. Good for them; Isn't that what you are supposed to do? According to Will Rogers; "Don't gamble with your money, just buy some good stocks and when they go up, sell them" Take Profit!!!

Who is taking profits?

Is this the so called smart money?

What do these guys know that we don't?

If we are holding a stock that has started to go down because of profit taking, should we be concerned?

At what point does a decline stop being profit taking?

Q: Hi Guys
When using the rule of 40 to determine the performance of software companies. Would using 3 yr Rev Growth be acceptable , as some newer companies aren't profitable yet. ? and regarding margins, what are you looking for, Gross Margins, Net Margins, or EBT Margin.
Thanks Gord

Q: Is there different ways of calculating price to sales figures re this stock. I see morningstar has a price to sale number of 32.17 for this company, while others show numbers around 18.0 - 19.0. Wander what is the right number and why not standardize the calculation. Many tnx for the great work.

Q: In my portfolio 10 top equities (stocks or ETFs) comprise 30.8 % of the total. In your opinion is this an appropriate weighting? Or there is some rule to it? None of the stocks is over 5% in its weighting and one global EFT is slightly over 5 %.
Thank you as always for your advice and recommendations
Miroslaw

Q: How do you confirm positive momentum has been re-established in a stock, to the point of making it buyable?

Q: I have $10K to invest. Is it better to buy Apple shares directly or should I buy Canadian Depositary Receipts (CDRs). If the stock moves up 10% will CDR also move up by the same %. Apple pays dividends will I also get dividends if holding CDR. Is it safe to buy CDR what happens if it gets delisted?

Thanks for the great service

Q: Hello, in your disclaimers at the end of your responses it states whether any staff have a financial interest in the security in question. Could this mean a short position as well? Also could it mean the security is a merely held in an etf?

Thank you

Q: Hi There,

Can you please explain the emergence of the Canadian Depositary Receipts (CDRs), how they work, under what circumstances one should buy them ie. what kind of investor how they trade, and your overall opinion on them?

Thank you!

Q: Don’s question of October 7 asked about Canadian vs. US dollars and whether to buy a stock on the TSX or NASDAQ. While many investors are confused on this point, Don should understand that once he buys the stock (on either the TSX or any US exchange) the future performances of the Canadian and US dollars have no effect on the actual value of his gains or losses. In other words (and for doubters), if you were to decide to split your purchase and buy half the shares in Cdn on the TSX and half in USD on a US exchange, each half of your shareholding will worth exactly the same thing regardless of any future movements in the value of the respective currencies.)

Q: Voluntary lock-ups - Why would early stage investors or VCs, voluntarily extend lock-ups periods in pre-ipo or early ipo-ed companies?

Would they typically receive warrants in exchange for this restriction in liquidity?

Is the motivation by the company to prevent sales of large blocks since they are anticipating a rapid rise or fall in share price?

I know this is hypothetical, but trying to understand the concept/reasoning.

Thanks!

Q: What are your thoughts on the recent Canadian Depositary Receipts that are now being made available through CIBC. Seems like an excellent means of gaining exposure to the large u.s. caps for the average diy investor. Any thoughts as to when other sources than CIBC will come into play.

Thanks

David

Q: Hi,
I am a member of 5i for over 6 years and I am glad I made the decision to be become a member. Thank you for the wonderful service.

Over the years I have been looking at the reports and now I am seeming more A's and A-'s..is that because these companies have met all your expectations or have you become a more lenient marker?

Also there used to be a page which lists all the coverage companies (irrespective of the portfolio they might be in ) where can I find this page?

Thank you and have a very happy Thanksgiving!

Shyam

Q: A general question about shipping/transport that may affect the consumer stocks. I'm increasingly hearing about shortages of truckers and back ups of containers in many major ports around the world. Fuel shortages in England (due to too few transport drivers), weeks of back logs at ports in NY and CA. Costco's recent comments on this topic...

All this has me wondering if there will even be enough goods to sell to meet expectations - and what will happen to high flyers (SHOP, AMZN), when sellers/merchcants simply can get stuff to sell.

Simply put, how significant is the driver/transport shortage and should we expect worse?

C

Q: NO PROFIT... NO PROBLEM...

This is a story in the Globe and Mail dated Sept 25th 2021. The article made all lot of sense and there seems to be a disconnect with growth at all cost with no profit. Maybe this is how things are done just look at how our government is run.

I don't have a specific question to any of the companies mentioned above but with LSPD in the news lately maybe it will apply. I know there has been a short report put out on LSPD and from some of the comments that I am reading from 5i that they are false.

My question is how do you know?

We don't know the real workings of a company and what we get from them is what they want us to hear. Take for example XBC, that wiped out all of value from investors because we didn't get the correct information from Management. It's what they wanted us to hear and we believed them.

I think there should be some healthy skepticism with regards to what Management says and does and investors should take away that capital preservation is paramount.

If LSPD or any company that gets shorted and can't explain the reasons for the discrepancy in a respectfully dialogue then maybe there is some truth to it but like I said we don't really know.

Who is right? The short trader or the Stock promotor?

Until we get all the information it will always be Buyer Beware and don't fall in love with any stock.

Sincerely.

Q: I have a U.S. RIF account with TD Waterhouse (Webbroker). I have requested that they transfer the monthly payment from this RIF account to my US Margin account. I am concerned over currency exchange issues.

Here is what they do - in January, they use my Dec. 31st RIF balance and "convert" it to Cdn. Dollars to arrive at a Canadian Monthly Withdrawal. Then each month they convert this Cdn. amount to U.S. dollars & then transfer to my U.S. Margin account.

I have challenged them on this, but they insist these are the Gov't RIF's rules?! (I do not have a Cdn. RIF account with them.)

Would you comment on this - thanks.

Q: Dear 5i,

I know there isn't an exact answer for this but, what approx. loss % would trigger a margin call. Is it broker, investor, net worth and stock specific?
What threshold do you think it might be for a Robinhood type investor owning ARKK ETF, Tesla, bitcoin, AMC, GameStop on margin?
With the recent market turbulence I was concerned that there might be a wave of margin calling from many brokers that would put even more downside pressure on the overall market. I would appreciate your thoughts.