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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: Hello Peter,
I forgot to add the question to my previous one on XLF. ON friday September 16, the ETF was trading in the $23 range. Today, Sept 19th it is trading in the $19 range due to the reasons cite above. Does this mean investors who bought it on Friday will get a special dividend to offset the decline in share price today (I am assuming the decline is approximately the same as the dividend). Please advise. ON another note, do you feel concordia healthcare is very cheap now given the recent decline or is it too risky. Thanks again.
Read Answer Asked by umedali on September 19, 2016
Q: Gentlemen:
Sorry for another in the string of CXR questions. Early last June, Blackstone and Carlyle dropped their bid for CXR when the shares were selling in the $36.00 range. Considering that the shares have crashed since the acquisition of Amdipharm, can you see a company such as Knight GUD making a bid? They have a strong seasoned management team and have had some financial involvement with the firm. Debt apparently does not come due for another 4 or 5 years.
Thank you
Read Answer Asked by Martin on August 18, 2016
Q: Hi 5i - even with all the problems at Valeant, it looks like it has a higher PE than CXR? For an investor willing to accept risk, is staying in CXR a decent decision? Im looking at the revised guidance and earnings and even with the lower expectations, it is expected to make big earnings and seems to be a very cheap stock. Thanks, Neil
Read Answer Asked by Neil on August 17, 2016
Q: I would like to commend Peter, and poster Robert and his post.

Right ON!!!

98% of people need a diversified portfolio and no one gets every investment to work out. No one.

Even though I am one who prefers a more concentrated portfolio with more effort and patience put towards my selections I never get everyone to work out as I had hoped and predicted. However, patience even mends the bad ones over time to some degree if they have good management.

During my continuing education in this investing in businesses thing (25 years) I have learned that even the big guys/girls that manage $1/2 billion and more routinely have an investment go the way of the DoDo bird or at least they end up selling after 2 years for a smallish loss (lottery win size for most people).

We all have to take ownership when we plunk our money down. 5i gives their opinion which is what we pay for. We may not agree always but ultimately it is our choice. 5i cannot get into more detailed explanations and analysis because many members do not want that nor would they understand it. This is just they way it is.

And I agree the markets are at all time highs which is scary. My finger is on the Shorting button, LOL. And am waiting for good companies to go on sale to buy.

The Shiller PE on the U.S. market, an often watched indicator, is at 27.0 today which is considered explosive, unsafe and dangerous area. Anything above 23 is unsafe territory historically. 15 is normal.

So be careful out there. Diversify and have some cash (amo, ammunition) sitting on the sidelines for good buy opportunities as they present themselves. PATIENCE is always rewarded.

Incoming dividends is lower our cost base, ACB, on many of our stocks (at least for me) so my at risk $ is getting lower as time passes.

Heck, even the road from Toronto to Calgary is not a straight ride. It goes up and down, and left and right but it gets one to the destination with some patience. And think of all the things one gets to see and learn along the way.

Have a great day.
Read Answer Asked by Stan (1) on August 17, 2016
Q: For those of us who did not have the opportunity of exiting our CXR position on Friday, Amber Kanwar posted this link from the Royal Bank today rating cxr "outperform rating"
I know 5i feeling on cxr is not great, sometimes as an investor we must thing for ourselves before we push the sell button. I for one was not available to push the sell on Friday, and if I had read your email I would have. Now others still have a positive thesis on this account
John Zechner yesterday also stated he felt things were overdone and was actually buying.

I would appreciate your thoughts?

https://pbs.twimg.com/media/Cp-gcxNWcAABAZF.jpg
Read Answer Asked by Rick on August 16, 2016
Q: from p hodson moments ago.......

"Unfortunately we think too many investors are playing individual stocks and not following a portfolio approach"

bingo!

if you have a balanced portfolio, you hold 25 individual stocks averaging 2 - 5% each

on a 500k portfolio, if you had 5% in CXR and bought at the peak ($117) and sold today at $12.17 you would have lost $22,500 (ish)

on an absolute basis $22,500 hurts, yet a portfolio loss of 4.5% is nothing

even with this loss, chances are some of the other 24 issues were up and you clipped a few divvies and likely your portfolio is flat to + 3 - 4% ytd

yet people are greedy and contrary to accepted wisdom want to
over buy the most risky of assets

and then 'double down' to 'get back my money'.....

5I is not a baby sitting service; sometimes you must put on your big boy panties and learn to read a chart or at a minimum institute a system which will allow you to cut your losses

history repeats again and again and yet again

don't look now but the north American equity markets are at all time highs and sitting on deflating earnings and increasingly lower breadth......

maybe 4.5% was a gift; a wake up call as it were

cheers
Read Answer Asked by Robert on August 16, 2016
Q: I should have dumped CXR immediately after receiving your email on Friday, but incorrectly assumed that the 20% drop at the time was as bad as it would get and that I would just wait until I made some other portfolio tweaks next quarter.

I've decided that I am going to replace CXR with BIIB. Would I be best to do this immediately or wait another quarter? Can CXR really go any lower? Perhaps it will get a bounce and outperform BIIB in the short term as value investors move in?
Read Answer Asked by Andrew on August 16, 2016
Q: I am still invested in CXR.
1) Is CXR going to be bankrupt, or what is the probability of it happening.
2) The current prices are too cheap for a company that has a decent revenues. Missing a quarter earnings and a lower forecast for 2016 is not something that hasn't happened before. I see a reason to be invested in it for say another 2 yrs. Is that reasonable.
3) Is there a thesis to hold rather than selling off now.
Read Answer Asked by Vinod on August 15, 2016
Q: Please help me to understand that if 5I doesn t have any more intel on company management than that of the avg investor,what is the benifit of membership?
I, like so many others in this forum have been ambushed with the recent developments and incurred losses leaving me disillusioned
with 5 I research.
I really thought that with 5 i"s connections to the market they had more insight,(cxr hasn't been the only surprise)
Please understand I am not blaming 5i for this,it was my decision at the end of the day. I just don't see the benifits of renewing my membership.

Thank you for the education.
Read Answer Asked by ron on August 15, 2016
Q: It is easy to fault advisors when things go south but they are only making decisions based on the information given to them and trusting the source of that information. I got burnt on PHM and many very honest and reputable advisors such as Peter and Jason Donneville were believers also. CXR is EXACTLY the same. The events which unfolded at these two companies should prove to us that above all else the number one metric in evaluating a public traded company must be the Quality And Integrity Of Management. When any critic corners that one, let me know, please
Read Answer Asked by Clarence on August 15, 2016
Q: Good afternoon.

Lesson learned on Concordia. You win some you lose some. Just keep the winners high and the losses small. Easier said than done. I am completely out of Concordia as per your email. Walk away and forget. Down about $6,500.00

My question is on Amaya Gaming. How did the earnings look and why the big drop around mid day? Will this turn out better than CXR ? I understand that they are two completely different companies and not the same situation. Lastly my weightings are 4.14 % in AYA and 1.19 in AYA.US Is this an ok weighting or two much.

Thanks
Jimmy
Read Answer Asked by Jimmy on August 15, 2016
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