Investment Q&A

Q: What general question has not been asked that is important for today’s political and financial enviroment, and what is your response.
Clayton

Q: I have not fundamentally changed my portfolio this year, have 25 % in cash and lately have just been reading and waiting for opportunities that are surely to come in the next six to nine months. What else should I be doing?

Q: Hello, according to the company profile of TCL.A, the price-to-cash-flow ratio (P/CF) is 4.70. When one looks at the P/CF ratio of any company, above what ratio would you say that this is a good P/CF? In your opinion, what would be the top 5 utilities company right now? Thanks, Gervais

Q: This is just a share. There is a short TED talk that 5 I members and staff might enjoy. It is titled "Psychopaths in the C-suite" by Fred Kiel.
I wonder if 5-I could rate some management of 5-I covered companies that fit the: Empathy, Others First and I Screwed Up habits of virtuoso CEO's . I'm sure they are a rare breed. Perhaps a new valuation metric may come of this.

Q: Hello,
As I feel to be using more and more your company profiles, I am interested to know how quickly all the metrics are changed (share count, P/E, balance sheet etc...) after a new metric is published from the companies that I am looking at.
Thank you
CDJ

Q: I just signed up for Money Saver then noticed the Mutual Fund/ETF offer. I had assumed that Money Saver would provide the mutual fund and etf information I was looking for including 'best of' tables. Can you explain the difference please.
Thanks Peter.

Q: Hi I’ve read that markets are fairly valued based on forward PE of 15 or so. I’d like to look at this from a bigger picture, the total market cap to GDP ratio, the so-called Buffet Indicator. In the past 100 years, this is showing extreme over-evaluation currently 151% exceeded only by the 2001 Tech bubble, 161p. If rates continue to creep higher I can’t see how this will end very well. Then again, if the they peak and then fall, the over evaluation is at least buffered, Your thoughts ?

Q: Hello, my understanding is that because of our tax rules the tax loss season (November - December) is something Canadian only. Is that correct? Do the American investors also have a tax loss season? Thanks, Gervais

Q: If I don't tender and the offer goes through, will I get the $6.00/share deposited anyways at the same time as those you tendered? I've just been waiting for the offer to go through and get the deposit, should I just tender or is there no difference?

Q: In an earlier answer you quoted the NWC release that stated Q3 EPS at 78 cents and well above consensus of 53 cents. I use Thompson Reuters data and they adjust occasionally for unusual items. In this case the adjusted EPS for NWC is 49 cents. I presume this is due to the insurance claim revenue being removed from the earnings. Do you always take the reported EPS or do you adjust for extraordinary items such as this at times and if so when? Could you comment further on this to clarify as without using consistent data we are not much further ahead than using no data. Thanks.

Q: When I look at TMX and the last 25 trades, the buyers and the sellers go by a number, ex. TD is 007, National bank is 008, I can't understand the number of shares, 100, 10, 50, these are banks and financial companies buying and selling such a small amounts.
What am I missing on this thing??
Thank you, Helen D.

Q: If i buy a stock on the 19th and the ex dividend date is the 20th will i recieve the dividend for that month ? Or is it not considerd bought until the settlement date?

Q: The new equity issue by CAR.UN was priced almost $2 below recent trading range - and the market opened the next day with an immediate drop to match. CRT.UN did a similar move a month or so ago - with a corresponding immediate price drop. This appears to be a common industry practice - but that alone does not make it ethically right. I have been burned many times by this. Why are new equity issues not priced more in line with current trading range (e.g. to match closing price on the prior trading day)? Isn't it the duty of the regulator to block transactions that are priced to influence (i.e. manipulate) the market?

Q: I know that there isn 30 day time limit on margin accounts. Are RRSPandTFSA accounts also @ 30 day limit.Thanks for your great service. Jim

Q: My understanding that there might be hundreds of companies on the Venture and CSE exchanges involved with the BridgeMark Group. Can you comment it seems both exchanges have almost zero monitoring in terms of investor protection. The news was general downplayed and many of the affected companies named continue to attract investors.

“Based on evidence obtained in respect of the other seven issuers (companies), Staff are concerned that members of the BridgeMark Group also executed the scheme with those issuers,” stated BCSC. The other seven companies include: Kootenay Zinc Corp.; Affinor Growers Inc.; Beleave Inc.; Liht Cannabis Corp. (formerly known as Marapharm Ventures Inc.); PreveCeutical Medical Inc.; Speakeasy Cannabis Club Ltd.; and Abattis Bioceuticals Corp.

To date, BCSC has temporarily banned BridgeMark members from buying or selling shares of the 11 companies. It has also blocked all CSE-listed companies from using the consultant exemption to sell shares to BridgeMark members.

Q: This is a comment more than a question. By a review of the questions commonly asked on it appears that too many of us are caught up in the day to day and , week to week volatility. If the investment thesis has not changed and it still seems undervalued I see no reason why one should sell a stock based on its current trading price. For example, I own a large position in Questor and the share price has been on a rollercoaster. I stuck it out because the long term fundamentals had not changed and it is up about 15% on the year. I actually believe the fundamentals have improved materially throughout the year but one would not conclude that by examining the price chart alone.

Q: With the recent volatility, several companies on my watchlist have seen their multiples fall to more reasonable levels compared to the last 2-3 years. In the current climate, I find low debt, strong management and overall quality to be more important than ever.

Considering these criteria, RCH, ADW.A and SJ are starting to stand out. The main issue I have is, growth might not be as high/steady as it was in previous years, so in the end they might not be that much of a bargain; maybe they are just more fairly valued, not "mispriced".

What would be your take on this? Is a 15-16 forward P\E for 8-10 % EPS growth and overall quality a reasonable price to pay? Or is this a case by case basis? What are the main points of reference, aside from industry, competition, company history, etc.?

I understand there are many other factors, but still, am trying to get my head around valuation. Thank you!

Q: Do you think there is any value for this free Semi letter?
I'm thinking it may help for timing names like PHO. Sell when things are booming & buy when there are no new orders?
http://www1.semi.org/en/worldwide-semiconductor-equipment-billings-drop-158-billion-third-quarter-2018-semi-reports
https://blog.semi.org/business-markets/critical-subsystems-orders-fall-off-a-cliff

Q: I AM FED UP WITH BONDS. DURING THE LAST 5 YEARS I HAVE LOST IN ALL OF THEM .I DO NOT UNDERSTAND WHY ALL ADVISER SUGGEST BOND FUNDS AS A PART OF INVESTMENT. ONE HAS BEEN LOOSING MONEY .I APPRECIATE YOUR COMMENT AND ADVISE RE ABOVE STOCKS.EBRAHIM

Q: When the markets sell off, do you have any statistics on the main reason for an investor to sell. Is it more to do with selling a stock to avoid a loss or does it have anything to do with investors selling to raise money to pay off debt (more so when a recession is expected)?
Or is this question just not relevant