Investment Q&A

Q: I am having trouble deciding between market weighted versus equal-weighted ETF's.

Is it true that equal weighted portfolios often have a higher Sharpe ratio (better risk-adjusted return) but exhibit higher volatility (roughly 10% more) than market-cap weighted ones?

Q: 1. Can you please suggest a list of 10 companies suitable for a Smith Maneuver account? Additionally, please provide 3 to 4 ETF recommendations. For each suggestion, please assign a rating from 1 to 5, where 1 is least preferred and 5 is most recommended. Finally, could you let me know if HDIV is a viable option for this type of account?
2. When optimizing or rebalancing an existing portfolio, do you prioritize the Sharpe ratio or the Sortino ratio while still respecting individual sector and stock limits?
3. When adding a new position, if a company passes all your initial fundamental and technical checks, do you utilize correlation or covariance as a final risk-management check?

Please feel free to use all the credits needed to answer all questions in detail.
Thank you.

Q: How much importance do you give ROIC when assessing the merits of an investment?

Q: https://www.nextbigfuture.com/2026/02/ai-demand-and-profits-are-better.html

This comment is to replace the two I sent yesterday. Please delete them.

I wanted to rewrite to say that these charts and video from A16z (venture investors Andressen Horowitz) are a very interesting look at what is happening with Ai. The video goes through the charts with commentary which I think is good.

Thank You
Peter

Q: Well after 50 years in the market, what have i learnt.
Never fall in LOVE with a stock, protect your capital, sell a portion of a stock when you have made your cost back. Thinking that you are up say 50% in a stock, you have not made a PENNY until you SELL. Investors have a thing in there head that is called GREED, i can make more on this stock. I can name all kind of stocks in say 5i that clients would be very happy if they would of taken some profits a couple of months ago. It takes a long time to make up a 50% loss.
Thanks Again

Q: Reflecting on the Software apocalypse... Given that most trading has been automated for years, I assume that it is now largely AI driven.

A question asked only partly tongue in cheek, is it possible that trading AI's see the software companies as adversaries and the stock market as one avenue of attack?

Q: Hello Team 5i & Everyone,

If anyone is interested in a "roadmap" for how new technologies (ie, railroad, electively, telephone, internet, AI, etc) have historically been adopted into society - I'm currently reading this book on the subject: "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages" by Carlota Perez.

It's become a popular reference point for the implementation of AI.

Thanks,

Sandra

Q: Dear Peter et al:

You have alluded to poor "Sentiment" as an important factor in poor performance of certain stocks. (CSU & it's off springs plus SaaS companies)

What kind of metrics and tools that you use to measure "Sentiment"?
Price or volume or Technical indicators or any other tools from proprietary services?

Many thanks.

Q: I cannot find your article on HALO stocks (Heavy Assets, Low Obsolescence). It's not under "blogs" or "reports" or "Questions" or at "home"...

Q: I hope I don't sound naive asking this question, but I keep hearing that proprietary data is something of a moat for TRI, and for companies like X, SPGI, and perhaps even businesses like yours.

What is to prevent an AI engine like Anthropic from simply buying a membership and then having access to that data with which to answer questions?

Q: I want to learn and start option trading, please advice Best books to read and the best place to take cource, in your opinion.

Q: What does the term “correction” mean when used to describe drops in the market like the one we are now experiencing, for example? If it means that prices were too high and the correct price is now in place, why would we expect stock prices to return to the old “too high” prices? Or is that only a few stocks were overpriced and in need of correcting but everything gets caught in the downdraft? To me it seems that stocks are simply dropping in price!

Appreciate your insight.

Paul F.

Q: Since I have lots of question credits, I can't resist getting your take on group-think in the analyst community and their apparent capitulation to the madness of crowds.

In a Feb 2 report, previewing OTEX' upcoming quarterly report, TD reduced their price target from US$40 to US$28 (and I quote) due to lower peer valuations. Is the madness of crowds influencing the analyst?

And yet TD's earnings forecast is US$4.17 in 2026 and US$4.84 in 2027, representing a P/E ratio of 5.5 and 4.75 respectively on a US$23 share price, which is around where it traded today. Even on its old US$40 price target, the 2027 multiple is only 8.3 times forecast earnings Does TD not believe its own earnings forecast? If you are sticking with your earnings forecast, then why not stick to a reasonable price target?

Q: Just a quick question about prices on charts. Do you use log or simple for prices? Using log charts, you don't see the peaks and valleys as much as a simple chart. Also drawing long term trendlines connecting the previous bottoms gives you different support prices when using simple vs log. Is there one that you favor or people use more than others? Thanks!

Q: Hi Peter

I was reading a reply to a question by Shane and wanted to confirm my thinking. Your reply included the following comment "while we are not value investors primarily". I am not trying to box you into a category, but I thought that since 5i encourages long term investing that 5i was primarily a value investor.
Thanks for the great advice here and on the financial times.

Q: Today I received a letter from my broker TD regarding a proposed settlement by a class action suit for purchasers of Lightspeed (LPSD) shares between March 7th 2019 and November 3rd 2021. Since I did purchase 200 shares within that timeframe I am wondering whether it is worth completing the relevant forms? Do you have any estimate of the payment which I might receive if I submit the required information before the deadline of March 4th 2026?
many thanks for your great service.
Geoff

Q: I love "Rockets and Duds" invariably good for a laugh, keep up the great work!

Q: you recently referenced an article on ca.investing.com which i quite liked.
Is that news source one of your favorites?
They seem to have a nice blend of Canadian and US articles...

Q: I normally use DLR to convert currency between CAD and USD. Can you suggest a dual listed stock that might be a better replacement. (price not likely to change, no dividend, good liquidity etc.)

Q: portfolio strategy
the Buffet quote / instruction to his heirs, is to put 90 % of the portfolio in a S&P 500 etf and the remaining 10 % in a fixed income ETF.
I believe his arguments are
1. simplicity for the non professional heir (and not likely to be too interested in managing a portfolio)
2. the S&P 500 is adequately diversified in sector and global diversification is accounted for by virtue of the majority of companies having a global presence, example apple products sell everywhere.

Assuming same parameters, heirs who receive a sizeable portfolio who are too busy with no interest in managing it and don't want to hire "professional" help.

Please provide your opinion on this "Buffet" approach Pros - Cons and how would you perhaps editorialize or tweak this approach to optimize it,