Investment Q&A

Q: Hello Peter:

I decided to buy a small quantity (200 shares) of the HOD ETF to hedge a bit against my oil stock holdings (Ithaca, Iona, Surge and Freeport McMoran). It fell hard yesterday with the news of the 8% cut in drilling rigs on the continental US. I am still expecting the oil price to fall further between now and the next OPEC meeting on June 5th.

My strategy is that I will use the gain that I will get in HOD to eventually buy more of my oil stocks when the oil market turns around. If OPEC in June does not cut their production then the oil price will fall much further before it bounces back. The U.S. inventories have gone up in the last two weeks at unbelievable levels - 10.7M two weeks ago and 8.2M last week. The reduction in rigs will not have a quick effect on the U.S. daily production numbers for at least 6 months. I believe yesterday's bump inthe oil price is a bit of an over reaction and will go down again next week when the inventory numbers come out for last week.

When you look at the HOD it states that it is a daily calculation based on the WTI price. How does the ETF actually work because it has increased more than the stated 2 times the drop in oil price? If my hedge is wrong I will still be very happy because my oil stocks will go up instead. I am banking on a increase in the oil price 2 to 3 years from now so I am not concerned about this blip but would like to hedge a little bit right now to make some money on the downside trend. What is your opinion of this strategy?

Thanks,

Brendan

Q: Boyd Automotive is a canadian company, but the majority of their business is done in the USA. With the Canadian dollar sinking fast and the US dollar rising, does that mean that Boyd's profits will be enhanced as they receive money in the stronger currancy? I'm thinking the improving US economy should also be good for Boyd?

Q: The stock has plummeted and management has been given the boot by the debt holders (albeit not until original management made out like lottery winners).
Do you know anything about new management and whether it is at all possible to turn this baby around. Would a commodity (gold, uranium) reversal of fortune help at all?

Q: Do you believe Avo has broken out of it's recent trading range with it's close on Friday? I maybe watching it too closely as it went through a key price gap at $18.93, just missed $19.60 and I think the next price gap is $ 24.89. I want to add on the way up to the momentum!

Q: For a couple in their late 70s, what what would you recommend for our TSFA. So far we have contributed every year and bought GICs, (2%) with the thought rates would soon be higher. The opposite has happened. What would you suggest we do now?
We don't need the money, but would like to keep it safe. Otherwise we have a diversified portfolio of your income, and some of the model portfolio. Any advice you have would be appreciated. Cheers!

Q: Mcard or Visa, which of the two would you pick? Is it a good time to take a position? Thanks for your opinion.

Q: 1/30/15 - Oil had a big move up of $3.75. Most oil stocks moved up with the oil move - example - SGY up 10.3% - 3 stocks you support ROCK, PRW and QST moved down. Any explanation why didn't participate in the rally?

Dennis

Q: In my last question to you I said that I was over-weight in financials due to the drop in prices of oil stocks. My holdings are AD 14.51%,Counsel 3.14%, DH Corp. 34.6%, EFN 11.77%,Fiera 5.4%, Gluskin GS 12.23% and HCG 18.30. I just bought HCG in the last week of Jan as it was down. Counsel was just a flyer. DH I bought at $18.40 in Apr 2012. I would like to trim something and would like your suggestion. Olso pls keep in mind that I intend to add to my portfolio in Feb so that will also lessen the weight of the financials. Thanks in advance. Gary

Q: For a long term hold (> 5yrs) which has the best long term potential, ABX, FM, TCK.B, G, AEM. What other materials stock has good long term potential?

Q: A further question on deflation. If we do enter deflation, can low to zero interest rates still be used as a positive indicator for the economy?

Q: Hello Peter and Team. Its re balance time and I would like you to share your opinion of the below portfolio asset mix, does anything jump out as needing adjustment?
US Stocks 29%
Can Stocks 21%
Bonds 21%
International Stocks 17%
Emerging Mkts Stocks 4%
Cash 8%

Q: Hello Peter & team, I wish to invest in US Small cap stocks. Which of the 2 following ETFs would you prefer, SLY or IWO (iShares Russell 2000 Growth (IWO)? SLY seems to have a better P/E ratio and a better yield. Both carry about the same fees of 0.20%. Thanks, Gervais

Q: Thinking of picking up some Pembina Pipeline and Brookfield Infrastructure Fund for income. What do you think of these companies? Also I know we are a ways away from a rate hike here in Canada but when rates start to rise, will the stock prices of these companies get hit hard?

Q: In a recent interview Tom Liston said he sees venture capital shifting from resources to technology and believes there are a number of good Cdn tech companies that are IPO capable. In fact he sees a pent up demand in public markets for IPO's.
Do you get the same sense, and if so would this be a catalyst for CF?
Mike

Q: From what I've read today (01/02/15) it seems the reason why oil appreciated on Friday is because of the strike by "USW". It's a nation wide strike. If I remember correctly the last time the "USW" went on strike an agreement wasn't reached until after a month. If this is the reason why oil spiked on Friday what do you make of it?

Q: Hi Peter and team
I hope you can help with this dilemma. I want to open an RESP account for my grandchild and I have like to hold Uas stocks in this account. I have been told by RBC DI that they only set up CAD accounts in RESP's. Do you or any members out there know of what alternatives I have to do this? If there is such a possibility does it qualify for the CESG having USD stocks?

Q: do you think this would still be okay to buy? thanks

Q: I would like to know which Company bought the Rights to Pennsaid, Also, I read that Nuvo reacquires 2% Rights of Pennsaid. I know this is an excellent product, it works wonders for me, it is a bit expensive, but worth it.

Q: This is in reference to the 5i reply to my question on NRI. Fabrice Taylor recently appeared on BNN and said they had $6 in cash. Is that correct. If so can a stock fall much below cash value as it is already at 4.51. What about the other products they are getting money for which are already in the market. Would they count for something. I already own stock with average price of 6.1. Should I bail out and take a loss at this point or wait or waiting could result in more losses.

Q: You mentioned that Nuvo had about 10 million in cash and that more downside is likely. I thought they had over $50 million in cash and that the current price reflected cash /share which would be approximately the floor. Please advise.