Investment Q&A

Q: Hi 5i/research,

Just wondering if you were aware of a service "www.shareowner.com"
It would seem to be an almost perfect compliment to what 5iresearch
offers to individual investors. I.E. A new Member to 5i could initiate positions in MOST (approx 85% - 90%) of your Model Portfolio stocks for a single price of $40.00 ($2.00/per stock for up to 20 stocks). Purchases can also be staggered/scheduled via their SPP either monthly, or quarterly. A (true/full) DRIP is also offered that purchaces partial shares (to 4 decimal points). One can tailor their own portfolio with Stocks/ETF's from their list of 450, or select existing pre-selected portfolio's. There is also periodic/automatic rebalancing of stock allocations. Between the recommendations from 5i and ShareOwner.com it would seem to be the perfect combination of "Set-it-and-forget-it" for someone that doesn't want to do the rebalancing themselves. I believe they charge 0.05% on A/C under
$100,000 and a Flat Fee of $40.00/MTH on A/C's over $100,000.

Q: I subscribed to 5i in order to learn about investing, and I have learned a tremendous amount, although not always quickly or painlessly. Here are 3 of the many lessons:

Lesson 1: Stocks sometimes (often?) go down right after you buy them, but that is not a reason to sell. About a year ago I asked Peter about two companies I was considering, DHX Media and C-Com Satellite. I had read all Q/As about both companies and was leaning toward C-Com. However, Peter picked DHX, so I bought shares. But DHX immediately began to decline and C-Com began to rise. Luckily I did nothing. Now DHX is up about 80% and C-Com is down significantly from that date.

Lesson 2: Analyst and money-manager recommendations are not free of conflict. Sometimes (often?) recommendations are designed to generate trading activity so brokers can make money on commissions or to improve returns in a money manager's fund. I bought Avigilon at $14. and it rose to $19. but then one analyst downgraded it and the stock dropped to below $15., but in time, in spite of that analyst downgrade AVO rose to $34. Then the CFO resigned and now it is down around $22., but not because of poor earnings. Recently, I saw a money manager on BNN who is short the stock in his fund, and he suggested that because of increased competition and lower margins AVO is probably only worth about $12. dollars per share. (Now, being short, wouldn't he be happy if he could get the market to sell AVO down to that price.) I am learning that a stock's current share price is not always based on its current earnings or the long term potential of the company, so in order to make my investment decisions, I will rely on the conflict free expert opinion I pay 5i to give me. (How could it have taken me over a year to learn that simple lesson?)

Lesson 3: Re-balancing may either decrease or increase your returns, but it will always definitely decrease your risk. I bought Amaya at $5.20 and it was by far my biggest position. I watched it rise to $9.50 and thought about re-balancing, but decided to wait until after quarterly results came out, hoping to make even more. (Greedy) When the quarterly results came out the market did not like them and the share price declined, very close to my original purchase price. So when the stock rose again, on a rumour, I felt I had learned my lesson and took the opportunity to re-balance my portfolio and sold half my position at $11. Now the stock is around $22., but the weird thing is that I don't regret selling half my position at $11., even though I would have made WAY more money if I had not sold half. Instead, I feel lucky that I had the opportunity to make 100% back then, on a rumour no less. And now I'm thinking of re-balancing again, because my portfolio weighting is again way too high, almost back to where it was in the beginning.

I will probably (definitely?) need to keep re-learning these 3 lessons over and over again, but I feel very lucky that 5i is helping me learn about investing--and making me quite a bit of money while doing so!

Q: LJ I have had investment letters for over 30 years and most have been a complete disaster for me.Finally I have your letter which I find impartial,informative and over the long haul very rewarding.Please ignore e few[so called investors]who should be at a casino losing their money as they have no idea how to invest.Hopefully you get well soon and I wish you well for your bike ride for cancer research.I will certainly will be contributing to your ride.Good luck.Jim

Q: Hello,
A couple of days ago I tried to donate to your ride unfortunately I think wasn't successful because I made a mistake in my email addresses. Could you please tell me is my $100 donation went through or not. If not I will try again and could you please provide the link. ps I hope lj takes your offer. we are so lucky to have a service of this quality and do not need uniformed detractors. Mike

Q: Good morning 5i team,
I know that your main focus is on canadian stocks, but i see that you have graciously responded to questions on american socks as well, which encourages me to ask the following question:
We read that it is often good to add american stocks to a canadian portfolio because of the concentration of the tsx in certain sectors. If you were to balance out your income port along these lines, what american sectors would you choose, and if it is not asking too much, what companies would you choose in these sectors?
Thanks

Q: How much faith do you put on technical events identified by research provider "Recognia Inc.".

Q: Is csx counsel corp a buy? Someone on bnn compared it to home capital group. Said it could be the next home capital? Do you agree?

Q: Any idea when the crtc will make a decision on dhx media acquiring the family channel? I imagine that will be the next catalyst for the stock if favourable decision. Thank you for the best newsletter I have ever subscribed to and over the years I have subscribed to more than my fair share and comparisons are meaningless.

Q: Hi again 5i team,
This is a followup to yesterday's question re Journey Energy JOY. This morning JOY updated their website and unlike yesterday, there is now very good information re this newly 'IPO'd company. Even with the information publicly available now, I would still appreciate your expert opinion on their strategy and managment team.

Q: TMM,you said in the past that mgmt. was quite solid,still believe that? i am down 21% after holding this one for almost a year.your opinion probably sways my vote. tkx pat

Q: I am a 5i member since day 1 and I want to first of all wish Peter a speedy recovery and wish him all the best for his efforts not only to guide so many people in making better investment decisions but also making positive contributions to the society.
I want to particularly comment on the negative comments by one of the members. Making investment decisions is one's own responsibility. Even though I got very good advice from 5i to invest in quality companies, I always went the other way by investing in more risky companies. I wish I had always invested in 5i recommended companies or their growth portfolio and I would have been at least twice as rich. 5i - keep up the good work.

Q: Peter; RE; LJ.s beyond belief rant- I strongly suggest he/she is either a Mutual Fund salesperson and/or
a frustrated Investment Advisor trying to fend off clients questions as to why their portfolios are not performing . I am willing to wager that anyone who
read the outburst would applaud your offer to refund his very large yearly fee you charge - and send him/her out of this platform. Please do us this favour. Rod

Q: Peter,
I'm very glad to hear that you're improving after the bike accident! I enjoy the insightful comments from both you and Ryan, and you have a wealth of company and stock information as well as experience. I am curious about your thoughts on portfolio returns. The results of the 5i portfolios have been outstanding since inception. But I don't know of any fund manager that would ever promise such great returns! My question is - what is a reasonable expectation for annual equity return (capital gain + dividend) over a five year time frame?

Q: I enjoyed your level and straight forward response to LJ (June 28th) somewhat emotional and short sighted question.

Q: I have always put in limit orders and have never worried about putting in orders in 100 lots. I put in an odd lot with a week expiration. Part was filled that day, the other part the next day. I was charged the commission both times. Is that normal?

Q: Hi Team..Peter - I do hope you are mending. I have sent in a contribution to your cancer ride and have my fingers crossed for you.
First question; I would like to increase my Info Tech holdings to be about 15% of my stock holdings. I own DH Corp, Enghouse, Constellation, Syologist and Avigilon all adding up to 11.6% of my entire 3 PFs (which have most of your 2 PFs stocks and a few extra. Any sugguestions for good growth over the next 2 years or so - small cap is OK! Or I can add to one of the above (which would you suggest?)My second question is I now have 38 holdings including some CBO CDZ ZRE and BYD.UN. Am I now too diversified??
thanks so much for all you do ...get better!

Q: Hi 5i,
I have 3 out of 3 dissappointments bot jun 18th wks ago.
DSG just announced dilution at $13.50. current price $15.04(dwn 4%). I got the impression you did not like companies that do this.
SGY down 4%
AVO down 11%
It's nice when you quote a 35% gain in your portfolio but that hasn't help my results to date.
I would have appreciated the advice that the market has outrun itself & Jun 18th was a time of wait, not buy.
What can u tell me that is realistic about these three underperformers & when I might expect to see something more like the 35% returns you tout in your model portfolio.

Q: Hi Peter, I am thinking about selling my WIN stocks at a loss in my TFSA. What would you recommend as a replacement. As I'm underwater I'm looming to make up for this to regain some equity in my TFSA,so maybe not too high risk but still with growth potential, it doesn't have to be in tech.
Thanks

Q: Hi Peter, Manitok Energy (MEI) has had a nice move up recently. Are you aware of any reason for the move? Are you still positive on this company?
Thanks and hope you are back on the bike soon. Rob

Q: HI Peter. My question is how big do you plan to take this newsletter? I hope that you stick with quality over quantity. Better to have fewer great stocks to watch than a lot of sosos. Thanks, and keep up the good work. It will pay off for us all in the end. Cheers, John Dufresne, L'Orignal, Ont.