Investment Q&A

Q: Please accept my apologies for what could be a request for a long-winded answer. You welcome to debit my 5i bankroll for 5 question credits in effort to better compensate you for your time.
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If possible, please provide your opinion on something I wish to term "Peak Credit" in Canada. We are all aware that Canadians are spending themselves into a life-long love affair with mortgages, lines of credit and credit cards. With Canadian interest rates at 35 year lows, the availability of loans and credit climb while region-specific real estate prices inflate to valuations that seem to defy logic. Young families in their 30's commonly have mortgage debt over $500k and barely earn the income to cover payments at today's rates.

In general, what is the mix of insured/un-insured mortgage debt on the books of Canadian banks? If wages are not keeping pace with inflation and the cost of living, how are Canadians ever going to own their own home? Are we doomed to a life of the English, where the concept of home ownership is more of a dream than it is a reality?

Do you feel banks in Canada are prepared for higher rates in the next 3yrs?

Is Canada showing the early signs of a credit bubble?

Do bank common stock investors have anything for fear?

Am I a coyote howling at the credit moon?


Thank you for your guidance. This topic should be on the minds of many Canadians.

Q: Hi,

I would like to get your opinion on Laurentian Bank. What are its advantages/disdavantages over the the big banks.

Thank you for your great service.

Q: Laurentian is doing $135 million dollar deal today at a nice discount and the proceed will be used to paid for an acquisition of CIT group What is your opinion on the stock and this deal?

Q: Hi Team, Thanks for the super fast response on my LB question. In closing you say: "We would not see it as an must-own name." I am wondering if you could please expand on that comment. My information shows this stock is a dividend "aristocrat" and LB's stock price performance has exceeded that of the major banks YTD and over the last 1 year. Over the last five years it is a middle of the pack performer. Any further thoughts would be appreciated.
Thanks again, Michael

Q: Hi Team, Can you please let me know what you think about LB's just-announced Treasury Offering of Common Shares via Bought Deal at $52.00. Do you know why they are raising the money and why the shares are being offered below the current market value of $53.89? Is this a positive step for the company and/or shareholders?
Thank you, Michael

Q: What do you think about starting a full position on Laurentian bank today primarily for income? Earnings look good to me. I don't own the stock but I'm considering buying it because if I'm right, they do little lending to companies in the oil industry. They also have the least client borrowers who work in that industry. I like that the forward PE of 8.5 and the 4.5% dividend. On the other hand, the valuation has always been less than the big banks so maybe the cheap PE isn't worth factoring.

Q: Do you have any comments on the drop in Laurentian Bank's unit price the last few days? Being as LB seems solid and has a decent dividend history we are interested in this bank for some retirement income. Maybe it is a good time to purchase some shares? Many thank you,Len

Q: Please give up date laurentian bank (ld). Thank you, your web site is very helpful.

Q: Based on your previous comments, I believe you like National Bank and TD but what are your thoughts on Laurentian Bank (LB)? I have been considering taking a position for some time. It seems to be a conservative bank with steady growth, a good and improving brand (in Quebec at least), good dividend and low payout. Also, its small size and domestic operations seem positive to me. Thank you!