Investment Q&A

Q: In years past, I attended 3 of Larry Berman's travelling roadshows held in major cities across Canada. I like him and find him very personable. Also, he's a polished seminar presenter. However, what I took away from each of those events was "impending recession" and "lower for longer". Eventually I stopped attending. Since then, when a local roadshow would be planned, I'd be e-mailed (maybe 2x). This past month, I was e-mail 'bombed' with no fewer than eight (8) reminder emails from Larry (over a two week period) inviting me to register for his seminar. What do you think that might mean ;-)

Q: On BNN the other day a portfolio manager said November is the second best month for Stock Markets and December the best month while September and October are the worst months. Is this so ? November is starting off as if this is correct Dow up 301 points on November 1st 2019 alone. Sell in May and go away has not been the case has it ? Your thoughts . RAK

Q: about the recent Update about companies and portfolio....it hit the mark...clear and informative, aka well written executive summary ...appreciated...Tom.

Q: Is there a free site for determining company credit ratings?
Is ENB really rated BBB? Isn't that one step from junk status?

Q: Hi Guys

I came across this good review (printed below) of the book Railroader by Howard Green. The book outlines Hunter Harrison and what made him, and makes, an outstanding CEO. Wondering looking at current CDN companies which stand out as being lead by outstanding, visionary, numbers driven CEOs.

"Book - Railroader

Every so often there is a book that gets circulated around our office that sparks both conversation and action. Railroader, written by Howard Green, recently ignited this spark. You may recognize Howard Green as the founding anchor at Canada’s Business News Network (BNN). Green chronicles the life of Hunter Harrison, the brash railroad expert who grew up on a railway spending five decades in the industry and rose from a labourer to the CEO of multiple railroad companies. Canadians specifically might remember Harrison as he has his fingerprints all over historic Canadian institutions. He ran and turned around both Canadian National (CN) and Canadian Pacific (CP) (as well as Illinois Central and a brief tenure as CEO of CSX before his death in 2017). Howard does a great job providing in-depth and genuine insight into the life and, more crucially, the thought process behind Harrison’s decisions.

The book was engaging from our point of view because we have met with hundreds, if not thousands, of management teams and we’re always on the lookout for what Hunter Harrison embodied. How was Harrison able to rise from lowly labourer to successful CEO multiple times over? Harrison knew more about railroads than anyone else. He grew up on a railroad and did every job along the way. Harrison was described as having an “encyclopedic knowledge of the industry” and used it to transform the businesses he led. There are instances in the book that describe his ability to identify a problem just by the smell. In other words, he had an edge.

Harrison was also a “numbers guy.” He measured everything that could be measured. He was the first to implement computers in the day to day operation of a railroad and went on to pioneer Precision Scheduled Railroading, now an industry standard. When Harrison would look at the railroad’s daily printouts, the numbers would jump off the page and he could see what the issues were. As Green describes, “Soon he was scrutinizing the return on assets, capital spending, depreciation, cash flow and revenue. He also wanted all of the regions on the railroad to be cognizant of these numbers.” The combination of knowledge, measurement, and execution would show up in the railroad’s operating ratio, the industry standard in evaluating performance, which Harrison would improve far beyond what industry experts thought possible, at all of the railroads he led. He knew what trains were capable of when everyone
else couldn't even imagine their potential. The ability to transform a commodity business to a service-based business that customers are willing to pay a premium for is truly remarkable.

Stuart

Q: I recently attended a fall 2019 session of Larry Berman Live. His prediction was for a recession in 2020 or 2021 and he recommended that investors adjust their portfolios accordingly. I am interested in 5i's thoughts about an upcoming recession and whether 5i members should become more defensive with their portfolios.

Q: am looking to invest $5000 (U.S.) in each of these stocks. However I am concerned about the daily volume for Elbit. Would you shy away from a stock just because this?
Ed in Montreal

Q: What would be the effects of China, Russia and the European Union having a common currency on the US and Canadian dollars.

Clayton

Q: I have 300 shares of this stock which are now worthless. If I sell for a tax loss, do I give up my rights to any damages awarded from the class action lawsuit currently underway against the company.

In your experience what are the chances of a positive result for me from this type of lawsuit and will the per share amount of any award be worth waiting for. Thanks

Q: Hi there,

I agree with your previous poster commenting on the ability to journal Cdn companies to the US side of your portfolio. I deal with 2 differnet bank/brokerage and both let me do it without hassle however, you can get the wrong information from a call centre person. If you don't like the answer, ask to speak to a supervisor.

Or move your money to one that will - these days they are all sensitive to losing balances!

Post if you see appropriate

Q: Often, you have people like Richard this morning, writing to you about advice they've received from their brokers that doesn't make sense. One must bear in mind that the people answering the calls are at a call-centre, and some are more knowledgeable than others. When I get a response that sounds iffy or doesn't make sense, I call back a bit later, get someone else on the phone, repeat my question, and more often than not I get a totally different answer.

Q: I bought recently shares of ITP and BPY.UN on the TSE(both companies pay their dividends in US dollars). and naturally paid for the shares in CAD. this morning I asked my broker to journal these shares to the US dollar side of my cash account in order to collect the dividends in US funds he said since the shares were bought on the TSE all future dividends would first be received in Canadian dollars and would then have to be converted to US dollars each time they were paid regardless of the fact the shares were to be held on the US dollar side of my cash acct he said the only way I could have avoided the exchange cost was to have bought these 2 companies on a US exchange! am I getting the correct advice from this large national brokerage firm?

Q: to invest
Good morning
My son has recently opened an rrsp acct where he is putting a small amount every month $400 per month he is ensure how to proceed. i feel that an etf would be the way to go but how does someone get around the trading fees? Are you aware of any financial institutions that would have a program or programs that would work for individuals such as him who would like to get started but have only limited funds?
Thks
Marce

Q: just some back of the napkin calculations... assuming operating income hits the midpoint of SHOP's guidance ($32 million) and the number of shares outstanding is 113.14 million (according to scotia), wouldn't that give us an eps of 28 cents a share?

Yesterday, Thompson Reuters had a 2019 consensus of 68 cents a share and 96 cents for 2020.

Does the above jive with the info you have at your disposal / calculations?

Thanks.

John

Q: hi guys when a fund manager shorts a stock how long would they typically hold it for and what would they be looking for in their entry and exit points

Q: Could you please explain "after hours trading".
It doesn't seem like a very equitable concept.
Thanks
Phil

Q: It has been suggested to me that over the long term, the the average investor like myself is better off buying the indexes VFV with a dividend of 1.64% and XIU with a dividend of 3.61% rather than buying a portfolio of individual stocks. Would appreciate 5I's observation of this comment. Thanks, Bill

Q: I recently came across this website (nickldown.com) which tracks all BNN market call recommendations by analyst.

Congratulations Peter, you've received an A- with 19 of your 36 picks being winners.

Ryan, you've had more winners than Peter, but with less return, thus your score is a bit lower.

Hope others find this interesting, if not useful.

Q: Most Canadian dividend stocks seem to be floundering, of late, particularly REITS, Utilities, and Telcos (though pipelines aren't doing much either). Is there a particular reason given rates are low and unlikely to rise any time soon?

Q: I am considering an account with interactive brokers and i see they have a securities lending program where you loan the shares for shorting purposes and receive a collateral cash amount on which interest is paid. Is there a risk to this? You can sell the shares any time. Do you know if there is a CIPF protection for the shares loaned to interactive brokers?
I know you do not recommend brokerages, but I would appreciate if you can point out any disadvantage (advantage) as compared to self directed brokerage with a Canadian bank.
Regards