Investment Q&A

Q: Peter & Co. Very difficult question. The supreme Court's decision to grant the Tsilhqot'in First Nations title to land including the current reserve and land beyond its borders. I understand that another band initiated similar legal action within hours of the announcement of the ruling. Many more land claims are at various stages of negotiation.
Although I understand that politics and legal matters are beyond the scope of this forum, I am very concerned about the potential impact of this ruling on BC resource companies, Northern Gateway.... It would appear to me that this might be an opportune time to sell the BC resource stocks in my portfolios.
Understanding there some many unknowns, I would highly value your perspective.
With appreciation,
Ed

Q: Peter, with the improved Cdn $ here, would it be a good time to pick up some additional US positions ? In particular could you give an opinion on Berkshire. Thank you for this and all the great guidance you have provided. I look at the value here and my returns with you, and I cringe at the years I spent with the full service investment outfit I was with. Thank you !!

Q: Peter et al, Considering the latest ruling by the supreme court re Native land rites, what is your opinion on investment in "ALL" pipelines in particular IPL thru BC ? Tks

Q: Stella Jones Inc. is a company with a good rating, but is lightly traded and on a downward trend. Should I continue to hold this stock? Can I expect a turn around?

Q: Could you recommend a couple of high quality Canadian companies with US exposure that might substitute for holding US companies? I own Stantec, TD, and CN, all of which I think quality as having at least some exposure. Thank you.

Q: WFI has recently been sold and I have a 40% return what do you see for this company moving forward under new management, or should I sell and move on I'm looking at maybe swithing over to fsz or perhaps bep

Q: Regarding an earlier remark regarding Canadian Shareowner. It does provide easy diversification, at a cost. But,when you want to get out it can be difficult. You cannot, for instance, just transfer your portfolio to an online broker as a whole, as the broker will not take the partial shares that Shareowner holds. So, then, if you do switch to an online broker, you are left with perhaps many positions in Partial shares at Shareowner, each one of which you must sell individually for about thirty dollars a trade, I believe. A good service but something to keep in mind.

Q: In my Income Portfolio I have half positions in AD,ET and WSP , looking to add to one , at todays levels which would you add to?

Many thanks for the education I receive on your site.

Q: Hi,
I am trying to find a way to capitalize on the mobile space as there is a lot of research out there this is a growing area as people start to use more smartphones. I have come across a London based company call Monitise (MONIF on the OTC). Although its on the pink sheets it’s a 1.8 Billion market cap company. Both Visa and Mastercard hold a chunk of shares. I am looking to get your thoughts on this company, or preferably one that is listed in Canada that I might have overlooked?
Thanks!

Q: Hi 5i Team,

Would you consider building US growth and income portfolios?
I'm sure many clients would find this extremely beneficial.

Thanks for all you do.

Dave

Q: 9:30 AM 6/29/2014

Hello Peter

First I want to thank you for the excellent advice you gave me a couple of weeks ago and I purchased both Surge [SGY] and COS and look forward to holding them for a very long time.

Now I am concerned about the sustainability of North West Company's [NWC] dividend, currently paying 4.85% yield. My yield on my purchase price is 5.47%. I have owned the shares since December 2011 and have an unrealized gain of 10.9%. I have offsetting losses so the gain would not be taxed.

I only own a 2% position but the retail business and especially retail food businesses are having a difficult time with no prospect of improvement that I can see due to cut-throat competition and razor thin margins, and even Sobeys just announced they are going to close 50 or more stores --

From the Medicine Hat News : "Sobeys is closing about 50 underperforming grocery stores across the country as it deals with intense competition and tries to squeeze savings from its operations after the acquisition of Safeway in Canada."

From the Globe & Mail : "Sobeys Inc. is focused on shaving costs to win a tough food fight, with plans to consolidate manufacturing and distribution operations, cut jobs in two regional offices and force suppliers to retroactively reduce their prices."

I do like NWC but now I cannot see much prospect for growth or increased profits, so unless you feel the dividend is quite secure I would sell it and add to an existing position in something that I already own and that is likely more secure, has better prospects for growth, and that is paying about a 5.5% or better dividend, such as SGY, NPI, AW.UN, BNE, BDT, PKI, or BCE.

What would you advise and which stock would you pick?

Thank you.... Paul K

Q: I wish to purchase one or two small caps that have growth and can be bought right now have you got any suggestions. Thank you for your response.

Q: What is your take on the interview of Fernandes, ceo of AVO on Market sense,BNN on 6/26?Will it materially affect the stock price.Txs a lot

Q: Re Energy stocks: Now that US investors have reportedly been buying our energy plays again and they have already run up considerably, retail investors seem to still be willing to chase/pay up for them. In your opinion, how much Iraq/Ukraine strife premium should we be factoring into these CDN energy stories and what do you feel we can expect if/when the risk premium settles down? Thanks

Q: I would like to park some cash in CBO.
Would not the CBO ETF value go down when interest rates increase as I believe they will in the first quarter of 2015?
Net return could be minimal or less going forward during this 6 month time frame.

Q: AZC
I ask for your opinion on the revised takeover bid for Augusta Resources by Hudbay. After calling the first offer "grossly inadequate","opportunistic" and questioning the track record and risk profile of Hudbay, Augusta management are now recommending acceptance of a marginally better offer. They say it is a 10% premium to the previous offer based on unknowable assumptions of what the (small fraction per share) warrants would be worth. Only about 4% of shares were tendered to the original offer despite several extensions.I am inclined to wait until Augusta has all it's permits in place and then see what it is worth. What happens if I don't tender and Hudbay gets over 50% of the shares.
Thanks,
Geoff

Q: Hi I was wondering if it is possible to setup a portfolio of high risk stocks, or fast growing stocks, for those of us who are little more adventurous. Excellent service; I tell everybody about 5i I run into. !! Thanks..as a matter of fact I can not thank you enough.. its like a breath of freash air.

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