Investment Q&A

Q: do u think buying cnr shares seeing they are 2 for 1 today a good investment.the macd is 75. high

Q: Hi Peter & 5i: Been meaning to ask you about this for a while. Can you please let me know if you disagree with me on this and, if so, exactly why? I don’t like bond ETFs and bond mutual funds. I have a strong preference for my own ladder of individual bonds. I recognize that the funds offer convenience for retail investment and the advantage of superior instant credit risk diversification. But at this stage they don’t offer particularly inspiring yields and they don’t offer any certainty (not any!) that I will get all of my principal back. The two things I want from my fixed income investments are visibility of investment return and the relative certainty that when a bond matures I get my principal back – all of it. In my view the main point of the fixed income side is to have a portion of one’s assets not be exposed to equity risk. While both bonds and funds’ unit prices may fluctuate with daily trading, the only way out of an ETF is to sell the units at a market price. You simply don’t have the option of waiting for instrument maturity to make you whole. Of course that doesn’t necessarily mean you will lose money relative to your ETF unit purchase price, but you might. A bond maturing inside an ETF puts the bond’s principal back into the fund for the manager to reinvest. But, subsequent to that reinvestment, if rates rise the fund’s unit value will almost certainly decline. Having recently come through a period of about 30 years of declining rates, it ought to occur to people that rates could rise slowly and steadily for a very long time. That scenario could mean that the very investments people most count on to be protected and reliable could end up significantly under water with no certain prospect of recovery. A bond ETF or mutual fund introduces an equity risk component into the fixed income side of one’s investments. I wonder about the extent to which retail investors really understand the implications of that risk. Despite the relatively limited diversification of credits in one’s own ladder of between say 10 to 20 bonds, I prefer managing that credit risk through instrument selection, versus a fund’s market risk, which is entirely out of my control and based on rate movements that are beyond my ability to predict. Thanks for any critique!

Q: TMC-T Has finished there conversion of shares and increased there dividend. Please provide an update of your thoughts on the company going forward. Thanks.

Q: In September you were worried that AM-Automodular would not have any business in 2014. Has your opinion of AM changed ?

Ken

Q: Hi Peter and team. 24 Q's? I'm way behind with an average of 4 or 5 a year. I don't see I need to add to it as I benefit from answers to other members' questions if they are not that specific to their portfolios. Wider coverage (more companies) would be helpful. Thanks as always. Henry

Q: Your model portfolio would suggest that less than board lots have been purchased to arrive at your percentages. I have usually tried to avoid this as it is inefficient and limits options such as stop-losses. Am I correct on this?

Q: This is a comment so don't count it towards my 24 Q limit please! :) Just hoping those 24 Q limit does not cover Q's about the stocks you actually cover. Often a Co. covered by you releases earnings and it is very nice to get a reaction from your team in the immediate term time frame.

Thanks

Q: Hi Peter,when the PTI takeover was announced the US $ was 1.0432 ,today it is 1.0642. At $9.32 US time 1.042= $9.72 Canadian takeover price. At $9.32 US time 1.0642= $9.92. Why is the stock at only $9.76 today.(16 cents less then $9.92)
Secondly I am told that the ARBS are providing liquidity for the sellers, can you explain to me how they are doing that to make a profit. Lastly, is it a good strategy to hold some shares till closing as the US dollar is getting stronger daily.
thanks, George

Q: A new year is approaching. Coming in a little late to your party of great stocks, I am wondering if you are considering a new or possible second portfolio of stocks which have the most upside going into 2014? Or do you feel the current portfolio is still very valid from an entry point of view?

Q: When I open links and then open one of the subjects I get Wyatt Investment Research which asks for my E-mail. What is this? Am I going to start getting e-mails from them selling me their info.
Allan

Q: Hi Peter,

I am one of those members who really appreciates your services, and tries to restrict my questions, to few and far between, but well thought out (hopefully) and worthy of your attention.

I just read your excellent summary of 5i to date and really appreciate the evolving business model. I think the question restriction is a great idea.

In future reports I would be interested in seeing "where are you are intending to go" (which can change of course). Your talents can only be pressed so thin. Perhaps a # of members cap ?

Fee free to publish this note if you want to.

Thanks again,

Q: ATS gets a good write up in today's Globe. What are your thoughts? It looks compelling to me.

Q: Thanks for the review of Tricon (TCN). Are you in a position to comment on the management abilities of the Chairman, CEO and CFO? Thanks

Tim....

Q: I would appreciate your view on convertible bonds (debentures)as an alternative to corporate bonds or preferred shares for income particularly in a rising equity environment and in a potentially rising interest rate environment. Is a laddered approach feasible? I have found only three ETFs devoted to convertible bonds, CVD and CXF in Canada and CWB in the US. The first two fall short of their benchmarks which surprised me as I thought ETFs were supposed to mimic their benchmarks. CWB on the other hand has done well lately. Are there half a dozen or so converts that you could recommend if one wanted to start a ladder? Thank you; I look forward to your reply.

PS: perhaps a listing in "View by Category" for preferred shares and convertible debentures would facilitate searches?

Q: what is the difference between atd.a and atd.b they act quite different

Q: Thanks for the great service. I'm looking to add a ETF (such as IWO) in a non-registered USD account. Given some of these etf's have had large moves I'm worried that if I buy before the end of the year I will get a large taxable distribution. Is this a valid concern? Thanks, Ed

Q: The Nov.25 issue of Canadian Business had a very positive piece on Avigilon and its CEO. It seems the potential for this technology to really take off is explosive. I currently hold a 2% position in AVO; any problem in going to 5%? Thanks, J.

Q: Hello,

We need to add US Healthcare to our portfolio. We already own GSK and MRK. We are looking at Zimmer holdings ( ZMH ) or Stryker corp ( SYK ). With the aging population, knees and hips replacment should be on the rise.
Could you give me your opinion on these two and possibly an alternative if you don't know them.

Thanks

Q: Aside from gold, what other sectors/companies do you believe have been oversold or present an opportunity on a value basis?

Q: Hi Peter,

Can you provide an update (last March 28/13) on your opinion of Dynacor (DNG) given they recently released their quarterly results.

Thanks

Dave