Investment Q&A

Q: Norbert's Gambit appears to work well to convert CAD to USD. However, this Gambit does not work for the reverse conversion. Do you have any suggestions as to how to limit your foreign exchange conversion fee, while limiting risk, when converting from USD to CAD?

Thank you for your insightful advice.

Q: What do you make of the failed financing that GSI just spent the last month working on?

The thing that leaves the worst impression to me is that they had a deadline to close by Dec. 1, and I doubt that talks broke down this afternoon - I am sure they knew for awhile if this would / wouldn't close. If they knew that they weren't going to meet the Dec. 1 deadline why wouldn't they announce it sooner?

Q: Hi Peter,
Can we buy options from registered account like TFSA or RRSP? If we buy from these account is there any restrictions or penalties?
Thank you,
KT

Q: Good evening to you all - Thanks to 5i, I loaded up on BPEC eighteen months ago and now have a utility bulge in my portfolio that needs trimming. I am only underweight in "energy" and herein lies my problem. Energy in Canada seems to mean non renewables like our wonderful SU, Canadian Natural Resources and TOU. Is not BEPC an energy company as well as a utility? If say half it's valuation is in production, then could that be construed as energy sector allocation for my purposes and I don't have to sell, just mentally reallocate? Or, is this just mental gymnastics on my part and I should just sell to reduce, pay my taxes ( i'm out of losses, hopefully forever), and invest the proceeds in a normal energy company to satisfy my portfolio analytics?
Many thanks

al

Q: I just asked a question about having a U.S. account vs just buying U.S. securities in your Canadian account. I still don't quite understand.
I have some U.S. securities in my canadian cash account. Are you saying that that I will be paying some kind of "fee" on this even though they are just sitting there?
thank you for clarifying
Margaret

Q: If you plan to buy U.S. securities, I was told you should set up a U.S. trading account. Is there an advantage to this? If you transfer Canadian dollars into this account and then eventually sell the stock, i am aware that you have to figure out the "cost" in canadian dollars on the day you purchased and also "cost" in canadian dollars the day you sell it for tax purposes.
thank you
Margaret

Q: Good morning, I am looking to invest in Amazon, but if I was to buy 5 shares, what would be more than US$15,000 and represent 15% holding. What would an alternative way to invest as I assume this is too large of a position, even for Amazon.

Q: In a previous question your replied "The 17% discount makes sense considering the stock has only traded above $1.40 for two days."
I would have expected the price would have been set/negotiated at some point prior to the announcement and so would have been at a premium while this was in "the works" which I thought would have been prior to the increase. But I suspect I'm not correct on this. Can you explain how this bought deal pricing is set? Thanks John

Q: Hi 5i team : what level of cash do you recommend in a portfolio ?, this outside the requirements of cash required for our own expenses (so not to sell stocks when the market had crashed/bottomed due to cash needs) . In the market environment as today , is 5%, 10 % ?, or in between ?, does it change according to the market condition ?, thanks

Q: When looking up price and volume information for some ETFs on the TMX website I noticed that for each symbol there are to other listings ending in :APH and :PUR. E.g. in addition to XEI, there is XEI:APH and XEI:PUR. Prices are almost the same but volumes differ. What do :APH and :PUR represent?

Q: This is a question regarding your answer to my previous question regarding taxes for options. Thank you very much for your perspective, by the way.

But, my question was not on taxes on premiums. I know they are taxed. It was about when one buys back a stock which one has previously sold a a covered call option on. Is the underlying stock considered to have been sold?
thanks

Q: Here is what Taxtips.ca gives as a reason for not selling options:
We traded options for about a decade, and in the end finally decided to quit, because

bullet there was too much record keeping to be done
bullet we always had to keep on top of whether the stocks were close to exercise price
bullet when we used a full-service broker, it seemed we would be warned before anything was exercised and that we could have some input, but once we used a discount brokerage options would be exercised without warning, and we would find out after the fact.
bullet it was impossible to quantify true gains and losses, and it certainly didn't seem worth all the effort we put into it
They undoubtedly know more than I do but I find their analysis a little extreme. Wondering what you think of it.

I was looking at their site in order to get an idea about paying taxes on options. wasn't really clear to me. My question is whether you pay capital gains on the stock, not the option premium, but the stock capital gain, when you buy back a call option?
thanks

Q: GOOG is now about 10% of my holdings excluding the fixed portion of my total portfolio. At what % would you let this one run before scaling back? In previous response to members you indicated an 8% start make you nervous but, this is GOOG a member of the trillion company.
Thanks.

Q: You recently responded to a question regarding Lightspeed: "We don't typically get scared off by stock strength, and that would be the case today. We might do a partial position as it is not going to be a one way up move for this stock."

My question is: Given your theoretical perspective of NOT averaging down, what would be the point of buying an initial partial position? It seems to me that you may as well just purchase your whole position right at the start rather than holding back for a later purchase (always at a higher price, because you don't average down).

Am I missing something? Could you elaborate and clarify please.

Q: I understand that there are tax advantages to holding different types of equities in your TFSA, RRSP and open accounts. I would appreciate some information on the preferred types of equities to be held in the various accounts – US stocks, Canadian stocks, International stocks, dividend paying stocks, non-dividend paying stocks, ETFs, etc. Thank you for your information.

Q: I need to get access to a data base such as Compustat in order to back test an investment thesis. I have been able to get data (EBITDA, Revenue from operations, Good Will, Total Assets) for 2018 and 2019. I would like to access data back to 1998 for all NYSE and NASDAQ companies.
Results for 2019 are 57.37% and 2020 YTD22.46 %.
Happy to discuss system with you if you are interested.
Any suggestions on accessing a database?

Q: Can you please give your opinion on the below Options ratio?
Is that means bullish or bearish for stocks

https://www.alphaquery.com/stock/TSLA/volatility-option-statistics/120-day/put-call-ratio-oi

Thanks for the great service
Hector

Q: Can you please explain what Bitcoin and the crypto industry is all about. How can Bitcoin be worth $20,000.00????

Will this move to Digital currency make our portfolios as we know them now worthless?

Any insight you can provide on this topic would be greatly appreciated.

Q: How can I ascertain from the average Morningstar/others report if a fund is Leveraged ,2x,3x or not at all. for example BLK????
Art

Q: I have access to Morningstar through the broker. Morningstar’s analysis is often useful, but its ratings of companies covered are puzzling. Nuts, actually. A business starts doing better than ever and its shares rise as investors come to appreciate the rising value. Just at that moment, in comes Morningstar with its downgrades. It beats up a company performing very well by downgrading the rating of companies whose results are improving to Hold or Sell. Conversely when a business is stumbling badly and its shares drop, up goes the rating from Morningstar. One understands when analysts downgrade and explain that they still like the company but that they feel they need to go from Buy to Hold on the grounds of valuation . I have not seen Morningstar explain their ratings in a similar manner. If one reads Morningstar’s narrative, is it best to ignore its ratings? This is after all what one tends to with “target prices”. Or, am I missing something important?