Investment Q&A

Q: The authorities knew if they dd anything home capital would have issues. I thought it would skate through with a fine and a few firings. Why bring down the whole company? Check the mortgages determine the default rate and then decide what to do.Announce action everyone deserts Home Capital gics and the company swirls into the bowl. Hoop insider probably knows the default rate ponies up the money.Please explain.

Q: In March and February your comments about this company were generally positive. Yet just recently you said that this company was the most likely candidate to be booted out of the balanced equity portfolio. Sounds like you views have changed in the past four weeks. Can you explain the apparent shift in your position please. Thx.

Q: I would like to buy some preferred shares of the canadian banks.
Would you recommend one bank over the other and which series.

thanks,

Q: Hello,

I have read a suggestion that perhaps OSFI or the government might "encourage" a big bank to purchase home capital. Any insight as to what a potential price could be? What metrics do you think someone could base a bid on?

Regards,

Robert

Q: Hi Team,
Would you please comment on Canadian Western Bank !
Time to do a half position ?
Thanks as always,
Tak

Q: Hello Peter,
With regards to the question posed to you for HCG by one of your members, i can relate to the frustration and disappointment that your team did not see it coming. However, at the same time, as investors, we have to realize that you can only advise based on the data you have available. Past data can be used as input to determine Future company or sector trends, but cannot guarantee success as no one can predict the future. I think it is best to focus on how we can avoid such stocks in the future given great metrics in the past (HCG had high ROE, decent PE etc ) and all of a sudden we start hearing issues with the company. Can you please shed light on what investors can watch for to avoid such pitfalls? I am using your service, watch BNN, read newspapers and other letters along with placing stop losses to minimize downside. From what i have seen, it is best to stick to decent paying dividend stocks like BCE, SLF, Banks, etc Growth stocks just seem to have too much hidden which comes to surface later or they are targets for short sellers. Thanks for your valuable input.

Q: In light of the recent HCG drawdown what are your thoughts on subject?

Q: Is the drop in BNS due to negative sentiment around Home Capital? I'm trying to determine if this is another buying opportunity.

Q: Isn't it a a bit too coincidental that we learn that both Royal Bank and BMO are selling uninsured mortgage backed securities, a few days before the Home Capital death spiral? You have an optimistic bias, and typically trusting towards management, so I speculate that you will answer that there is nothing much to think of it, but could you take a distrusting view on this (without being paranoid) and guess what could have motivated them to do that?

Q: In light of the recent events with Home Capital (HCG) would you have any
concerns with continuing to hold FC ? Joe

Q: HCG has hired BMO and RY as strategic advisors and have now secured a 2 billion LOC. Thoughts please??

Q: With the demise of HCG there is plenty of blame to share. I am disappointed with 5I continuing to maintain its rating of B+ right to the end. You extensive experience in the field did nothing for your subscribers. As with most other advisory services your tune only changed when it was far too late to make a difference. I can add DH to the comments. It was only my own common sense and intuition that protected me in both cases. I hope 5I does some soul searching and simply does not write this one off as another miss.

Q: You have commented in the past to the effect that you have never seen a Canadian stock recover from a move below 10 cents- Would you still hold this view with LGQ ? Thanx Robbie

Q: Can you confirm that ZUB is the better from a performance analysis standpoint. My take is that as both are priced (?) in CAN $, ZBK will reflect changes in the US/CAN $ relationship which are separate from the underlying bank performances while ZUB because it is hedged will be a more accurate measure of the underlying assets behaviour. Is this correct?

Q: Since CIBC is the most sensitive to eventual housing downturn, how secure would be my RRSP and TFSA accounts with CIBC Investor's Edge in case CIBC gets into trouble. Thank you for great service. Milan

Q: Worth reading:

How Banks Can Compete Against an Army of Fintech Startups

https://hbr.org/2017/04/how-banks-can-compete-against-an-army-of-fintech-startups

Q: With the information provided, it seems that the company has no choice but to use a LOC with a very high funding rate. How come they can t offer GIC with well above market rates to fund their current needs and stabilize the situation? Would there be no buyer with cdic protection ? Also, why do they need as much as $2B ? Thank you.

Q: what I have learned is that some of these short sellers are very well researched. that cohodes likely knows more about this stock than 99% of the long investors. fundamentals looked good. do you think home capital will go bankrupt or ..

Q: EQB.PR.C - do you think the $4 drop today is justified.
If not I am thinking of adding a little to my position before a possible rebound.

Q: Wow. All that selling. My question is who is brave enough to be on the other side of the trades? How does HCG get itself through 2008 etc with its history and falter like this?