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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: Parex has been on a continual decline. The possibility now of a sale of their mature assets before year end does not look good. As their share price is now very cheap I plan on increasing my holding. If there is no sale with their existing assets there would still be a considerable increase in cash flow in 2019 based on $70-75 Brent.
Your opinions please?
Read Answer Asked by Peter on December 14, 2018
Q: Could I get your opinion on RCL? Looking at it as a 'dividend grower' for the long term. Right now the stock is trading close to a P/E close to 5-year low, stock price down close to 15% for last 12 months, and the Yield at a 5 year high. Should I be concerned about any impending economic downturn that may affect discretionary spending? And it has a LOT of debt (those ships aren't cheap).
Thank you!
Read Answer Asked by Mike on December 14, 2018
Q: Good Afternoon ,
With all this recession talk lately have you ever thought of building a model portfolio that will do well or at least hold its own during a recession? Personally I think the economy is in pretty good shape and the probability of a recession occurring in the next 12 months is less than 20%, odds certainly pick up past that as we are getting later in the cycle and could certainly see a recession within the next 24-36 months. Is a recession portfolio something you are considering? Or will you tweak the B/E model when the time is right to help mitigate some of the downside? For example a larger weight in staples, telecom, utilities, maybe some gold and cash? I feel the Income model is certainly more defensive in nature, perhaps an investor could move from the B/E model to the Income for a period of time ? I realize the average recession only last around 9 months give or take but I also believe that markets can go down significantly during recessions 20-30%. Any thoughts on a strategy here and how to better position a portfolio for the potential of a recession in 2-3 years time?
Thank-you
Read Answer Asked by Chris on December 14, 2018
Q: Being retired I have been slowly moving away from equities to more fixed income. I still am 80/20 equities to fixed. My strategy has been to ladder 5 Year GICs. I don't have much in the way of bonds other then some CBO, XHY, and ZEF. All 3 bond ETFs have gone down which kind of confuses me as I thought that Bonds were to preserve capital and pay interest. Maybe you could explain this to me? I just bought a 5 yr GIC that pays 3.47% compounded annually. Seems to me that laddering GICs returns more than a Bond ETF AND has NO RISK. Am I missing something?
Thanks for the help with this.
Read Answer Asked by Rudy on December 14, 2018
Q: I've done pretty well by simply selling short any company targeted by Spruce Point. XPO is their latest target. It's already had a bad day. What are your thoughts on a short at this entry point? Thank you as always in advance for your answer.

Jason
Read Answer Asked by Jason on December 14, 2018
Q: Would you say this is an accurate way to characterize Knight Therapeutics?

The Globe and Mail reports in its Monday edition that the markets are on edge and trend followers are running for the exits. The Globe's Norman Rothery writes in the Inside the Market column that it is hard for companies to raise money while fear stalks the land. Mr. Rothery says they risk becoming zombie stocks that shamble around a bit before keeling over. He says even in good times, firms with negative earnings fare poorly and are, as a group, best avoided. For the current column, Mr. Rothery says he focused on stocks that are, potentially, in much more dire circumstances. To find them he looked at earnings before interest, taxes, depreciation and amortization or EBITDA. It is bad enough to fall into the red after paying normal and recurring business expenses such as interest and taxes and other expenses; it can be deadly having negative earnings even before these essentials are paid for. Companies with negative EBITDAs are in a particularly precarious position and may be zombies. Matters get worse when the markets tumble and it becomes next to impossible to borrow money or to sell stock. Mr. Rothery's potential zombie stocks are Hexo, Knight Therapeutics, Advanz Pharma, Katanga Mining and Paramount Resources.

Thanks as always,

Rob
Read Answer Asked by Robert on December 14, 2018
Q: If i buy a stock on the 19th and the ex dividend date is the 20th will i recieve the dividend for that month ? Or is it not considerd bought until the settlement date?
Read Answer Asked by Keith on December 14, 2018
Q: Hi - I have no REIT exposure and am considering adding either VRE or XRE. They are both promoted as tracking the TSX/S&P capped REIT index. When I overlay a graph of their 2 year price performance sure enough they are virtually identical. At first glance it would seem a no brainer to go with VRE since the MER is 1/2 that of XRE (.35% vs. 61%). However, it also appears XRE pays a substantially higher dividend ( ~ 4.7% vs. ~ 3% depending on the source I check). Can you shed any light on why the difference in the dividend when they are both tracking the same index? Do you have a preference for one over the other? Thank You
Read Answer Asked by Morgan on December 13, 2018
Q: Crypto mining has driven NVDA's stock price for some years now, but its currencies' decline will surely take a heavy toll on GPU sales into that market. Yes, AI and autonomous vehicle applications could expand, and consumers will continue to play video games, but are these enough to create actual earnings growth, or is NVDA more likely to tread water for a few years?
Read Answer Asked by John on December 13, 2018
Q: The new equity issue by CAR.UN was priced almost $2 below recent trading range - and the market opened the next day with an immediate drop to match. CRT.UN did a similar move a month or so ago - with a corresponding immediate price drop. This appears to be a common industry practice - but that alone does not make it ethically right. I have been burned many times by this. Why are new equity issues not priced more in line with current trading range (e.g. to match closing price on the prior trading day)? Isn't it the duty of the regulator to block transactions that are priced to influence (i.e. manipulate) the market?
Read Answer Asked by Gordon on December 13, 2018
Q: Hi 5i,
I noticed that your recent answer to a question on Tencent came up under the TCEHY symbol for over the counter trading. The company is now trading on the NYSE under the symbol TME, which should make a better market for it in North America and free it up from the warnings about RSP suitability that usually come up with the over the counter stuff. Cheers!
Read Answer Asked by Lance on December 13, 2018
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