Investment Q&A

Q: I ask your opinion on equity diversification. Does diversification improve returns or merely reduce volatility. If I invest in the same proportions as the TSX make-up (30% financials etc.), will I achieve similar (or better/worse) returns than a well diversified portfolio over time (5 years for example). The equity investments would still have to meet the requirement of being at least satisfactory equities as indicated by 5i.
A second question is - do I need the to invest in other than equities if I believe that I have at least twice the investments to fund a reasonably comfortable retirement and keep sufficient cash on hand for about 2 years expenses. As a sombre/humorous note what is at risk (I think) is our children’s modest inheritance, and they are all in middle aged and in reasonable shape financially.
I understand that there are no perfect answers, but experienced, informed opinion is of high value.
I greatly appreciate the rational unbiased advice on 5i. Thanks.

Cyril

Q: I understand that one of WSP recent purchases The Focus Group is involved mostly in Oil and Gas contracts.What percent of total revenue comes from Focus and do you think it will have a serious effect on the bottom line? Thanks again for your fantastic service and great help.Jim

Q: Hello Peter and team,

On Feb 2nd deletions from the S&P/TSX Canadian Dividend Aristocrats Index will include Evertz Technologies (ET) (in your income portfolio), and two of your covered companies (CSU and HLF).

As of Jan 23rd the iShares Canadian Dividend Aristocrats Index ETF (CDZ) had $21,797,887 worth of ET shares. My math equates this to 1,371,799 ET shares. This represents 5.2% of the floating shares.

Similarly CDZ had $12,124,809 of HLF shares, which equates to 598,756 HLF shares. That is 5% of the floating shares.

The number of CSU shares held by CDZ would be 0.2% of the floating shares, which is negligible.

How does the ETF go about disposing of such a large quantity of ET and HLF shares? Does the ETF have to sell all of them exactly on Jan 30th, or does the ETF have days or weeks before and after Feb 2nd to gradually dispose of their shares (so as not to flood the market)?

If the ETF has to dispose of all their shares on Jan 30th, do they wait until the last minute of trading? And being that it is 5% of the floating shares in the case of ET and HLF, won’t this have quite a negative impact on the share price (in the short term)?

I may be interested in acquiring some ET and HLF shares. Is it possible to take advantage of this situation? How would I do this? Should I place a low ball order on Jan 30th and see if I get filled?


Paul J.

Q: There is an interesting and cautionary article on Auto Canada by David Milstead (writer for the Globe & Mail) regarding the current structure of the company. The article was in the G&M on Jan 26/15, and may be of interest to members that either own shares of AutoCan or are looking to buy shares.

It can be found by googling "Why I am still cautious on AutoCanada" by David Milstead.

Publish this at your discretion.

Q: what is your opinion on the guggenhiem equal weighted rtfs. thanks

Q: with a recently announced reduced (74%) 2015 capital program and a 50% dividend reduction, how do you feel about PGF? Continue to hold? Buy some more? Sell?

Q: Hi Peter, I rode the wave and cashed out on Concordia. Thanks to you I did all right! I am looking for another healthcare company,suggestions?

Q: Are you aware of any news that would drive this stock down 20% today??

Q: Dear Gentlemen,
Your answer to Jim today : US based ETFs will get captured under the US tax reporting rules, where Canadians need to declare assets in the US above $100,000.
You had about same question, last year, I remember that you corrected your answer, I understood 10000$ by holding not in total
I am wrong ?
Thanks
Best Regards

Q: The last time you commented on CSIQ you were cautious. Would your views change now and would you buy it. I am thinking of selling CLCT and buying either CSIQ or HACK. Please advise. Thanks

Q: Could you please provide an update on Orvana. Do you see it as a buy?

Q: Hi Team,

Just wondering if you could provide an update on crt.un (valuation metrics) and your opinion. With the withdrawal of target and the Cdn tire stock doing well, does this affect the upside potential of the REIT?
Thanks

Q: STX was down almost 12% today. Should I be worried and sell or keep holding. I am breaking even.
Thanks

Q: With the continuing decline in can dollar which companies will benefit the most?

Q: I believe I am past the minimum holding periods and am trying to salvage what I can from the venture fund disaster (originally was a Vengrowth fund). I can't see holding this but would appreciate your insights. Publish if you wish. Thanks.

Q: I noticed in an earlier Answer you like AD, however it has come off about $3.oo.I noticed a reference to AD being involved with oil service firms. Do we know how much exposure AD has to OIL and is it going to be continuing downward drag on the price . Is it time sell into non oil position?
Westernone is in the oils gas service is it time to sell or hang in there. Assume a Dividend cut is a sure thing soon?

Q: Hello,

I'm currently reviewing some 5i reports to inform new purchases.

In your recent report on MDA you mention Russia as one of three significant customers for MDA. In light of the current meltdown of the Russian economy, how may this effect MDA? Not to mention expected belt tightening of the Cdn federal budget.

Thx.

Cam.

Q: Comment to David's question this morning:
Assuming that the 5-yr BoC rate (used to determine the reset rate of the preferred shares) at the reset date of March 2016 remains at today's (historically-very-low) value of 0.82%, a discounted cash flow analysis indicates, that at the current bid price of $14.10,the long-term yield of FN.PR.A is 5.3%. This is OK but perhaps a bit on the low side for a sub-investment grade preferred ("Pfd-3").

On the other hand, if you believe that the 5yr-GoC will rise to 1.10% (still low by historical standards) by March 2016, the yield-to-perpetuity increases to 5.8%.

Q: Yahoo has about $37B in Alibaba. An Activist Investor who owns about 7.7M Yahoo shares is pushing Yahoo CEO/Marissa to release some of that value to her shareholders and she has committed to outline her Alibaba plans by Wednesday. I'm thinking of Buying some of the stock. what do you think.
Thanks Austin

Q: Hello 5i.
We would like to increase our Healthcare sector alloc.
We purchased JNJ Aug2014 @ $100. We are currently up ~ 2%. It represents only 1% of Pfolio. Have read your reply to Satesh today re etfs XLV and PSCH, and we are considering selling our JNJ, and purchasing 2-3% position in XLV (it holds 10% in JNJ), and 1-1.5% position in PSCH.
What are your thoughts on this idea. Thanks