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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Peter,
Your column in the National Post this weekend - "Keys to being a good investor" is a tour de force. I have cut it out and vowed I will read it every day til the lessons you have provided are embedded in my brain. And your line: "we have met very few rich short-sellers" is a beauty.

Thank you so much!

Peter
Read Answer Asked by Peter on March 19, 2018
Q: I need to unload one of the 5 big banks. How do you rate the 5 on a scale from best (keep) down to "worst" (sell)? Thanks for the continuing great service!
Read Answer Asked by Chris on March 19, 2018
Q: hi folks:

not a question; just a PSA for the membership

executive summary: mgmt is likely the most important issue when buying shares in a business

in the case of EFN (as with newcourt) it sure seems like mr Hudson learned nothing

a sad loss of capital

(this from august 2015 )
Asked by Robert on August 27, 2015
Q: hi folks
further to an earlier email on element with respect to mgmt
I remember when newcourt and steve hudson had their heyday in financing in the 1990's and early 2000's

from my recollection there was a lot of 'creative accounting' (a term updated recently to "financial engineering")

question: in light of this 2.2BB issue today (which increases the company capital structure by almost 40%) what makes anyone believe that this mgmt is any more competent than when they near bankrupted newcourt?

one thing of interest being they didn't borrow the whole 2.2bb

comments?

thanks for your insight

robert

5i Research Answer:
Element learned some very good lessons at Newcourt, and has not repeated them in companies since. It was not perfect, but if management takes away valuable lessons we can still support them (Tourmaline management had some issues at Berkley Petroleum in the 1990s, and learned lessons there also). While the ending was not what some expected, keep in mind that Newcourt was still successfully sold (for more than $2.4 billion). We have quoted a Globe article below: We think the key is the short term borrowing switch. This issue does underscore that shift.

Mr. Hudson says he has learned his lessons from Newcourt. Don't expand too fast with acquisitions. Use the most conservative accounting. And perhaps most crucially, don't borrow short-term and lend long-term.

Newcourt funded itself in the commercial paper market, borrowing for a few days or weeks at a time, while lending money for months or years. As a result, the company constantly had to roll over its financing. When markets shut down because of a financial crisis in Russia and Asia, Newcourt was on thin ice.



Read Answer Asked by Robert on March 18, 2018
Q: This is a comment, not a question. Just read your article in the Calgary Herald "Five Keys to Being a Good Investor". I was in the business until retiring a few years ago and your 5 points are so true! Keep up the good work!
Read Answer Asked by Rick on March 18, 2018
Q: I just read the latest member questions and came across "John's" issue with the new updated Globe & Mail Watchlist. I have the same complaint - why would they change something that is totally perfect to something totally useless???

Your answer mentioned some tips to make that new Watchlist format useful. Please share that with all of us so we can keep our sanity. My biggest issue is - I used the "performance %" page to compare the historical results of many stocks (for investment decision reference) and now that seems to have disappeared.

Thanks.
Read Answer Asked by Victor on March 18, 2018
Q: I had recently asked a question for help regarding my frustration with Globe and Mail Watchlist.
I would like to thank all of the 5i subscribers for the helpful suggestions.
I will try them all.
I have found a free watchlist that seems very good. MSN.com.
Thanks again to all of you that made suggestions and comments.
Thanks to 5i for a valuable service.
John
Read Answer Asked by John on March 17, 2018
Q: This Sunday (March 18, 2018) marks the fifth anniversary of the starting date of 5i's balanced equity portfolio (March 18, 2013). Congratulations to 5i on your wonderful work over those five years!
Read Answer Asked by Linda on March 16, 2018
Q: Hi Team, please post for other members
www.bloomberg.com/markets/watchlist

Thanks
Sam
Read Answer Asked by sam on March 16, 2018
Q: Hi Guys,
I'm a little disappointed in the fact that you do not promote the forum section of the site all that much.
I believe the questions about the Globe & Mail should have all been directed to the forum.
The only way the Forums will work is if more members participate.

Thanks for listening.
John

PS. Make public if you think it will help.
Read Answer Asked by John on March 16, 2018
Q: KMB’s shares keep declining. It just raised its dividend by 3.1%. On financial websites financial ratios differ significantly-- ODD. One premium site depicts ROE at over a thousand % ! Yahoo shows ROE at > 400% . Could be function of ROBO-Analysis (?). So, what do you see for PEG, ROE, div payout , FCF and debt?

KMB’s sales are down and yes it says it faces higher input costs. But are there OTHER contributing factors to the continuing decline in share price?
I do not want to fall into errors like the one I made on another long-distance P&G where I am down 30%.
Is KMB worth buying now at these better prices? Does risk-reward make sense here? What do you think of KMB’s prospects? Would you buy , if only as a bond proxy? If you have suggestions for some other reliable dividend growers , I would appreciate names.

Read Answer Asked by Adam on March 16, 2018
Q: Is THOR suitable for a conservative VALUE investor interested in SOME sales and dividend growth? Is debt manageable and is cash flow good? Financial data and ratios point to good value? I was puzzled to see share price down 2.5% today on no news--- one possible reason is aluminum tariffs (?). Tariffs I thought were on hold for now, except for China imports. But Thor would not have to rely on China for aluminum? Do you see the economy reasonably strong for non-essential products like those of Thor?
Read Answer Asked by Adam on March 16, 2018
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