Investment Q&A

Q: Good Afternoon: Another question about preferreds. I notice that kml.pr.a, a Kinder Morgan Canada preferred is now trading more than a dollar below its par value of $25. This is a rate reset with a guaranteed minimum of something above 5% yield. My suspicion is that this has something to do with the current deep malaise of anything connected to the energy sector in Western Canada. However, KML surely has a viable ongoing business as long as there is oil and gas to be transported from source to elsewhere. I could see the negativity if the switch away from fossil fuels to renewables was imminent, but this hardly seems the case. Or am I missing some factor that is peculiar to KML and its operations. I actually thought it came out of the deal involving TransMountain pretty well. Your comments please. Don

Q: In response to Stuart, another free tracking tool for equities is on Morningstar.ca. US and Canadian. It is pretty good and has news and other features. Free registration required.

Q: I'm often sitting with ~$5K-$10K in cash reserves, which sit in my TFSA/RRSP account while I wait to decide how to invest that money. Usually the money sits for a Quarter or more. What are your thoughts on investing the money into XBB instead of letting it sit in cash? It pays a 2.95% Yield and historically has been fairly stable (thought it has dropped in value this year).
Given my time-frame, do you think its worth investing the money into XBB while I wait to decide how to invest, or better to simply have the money sit in cash?

Q: In answer to Stuart, who was looking for somewhere which would give him information on his stocks, I have found that Yahoo Finance does a good job of this. Once you put in your list of stocks you'll get a grabbag of the latest stories at the end of the list every day. Or you can click on any given stock, page down past the usual financial information like the stock chart for today and find the latest story on it, including earnings releases. Works for both US and Canadian stocks.

Q: The Globe and Mail seems to have dropped their Stocklist function which used to enable me to go to Stocklist and then bring up all news on my Stocklist including earnings releases and other news. Is there another site offering a similar function. Cannot understand the change at the Globe and Mail it was the most useful feature they had.

Q: In attempting to assess the performance of my (mainly 5i) portfolios, how dividend %ages determined? In other words, do I divide dividend $ by the "book cost" of a portfolio or by the "market value" ?

As always... as learning experience.

Thanks again.

Q: Hi Peter,
I meant to ask this a while ago but it slipped my mind. I saw a reference to an article that I believe you wrote a few weeks ago in either the G&M or Financial Post. I could not locate the article. It was called SOCKS, a Cdn equivalent to FAANG. Would you have a link to that article?
Thanks
dave

Q: Can I have common share dividends paid in US$ or do I have to buy them on the NYSE to have them paid in US$?

Q: Hi 5i,
The majority of my portfolio (70% - i.e. everything non-Canadian) is invested in XAW & XUU, which I add my savings to regularly to keep my geographic allocations where I want them.

I will shortly be receiving a sizable (to me) lump sum from the sale of a small business and will be putting most if not all of it into my portfolio. My question is about currency hedging on ETFs like the ones I use. I don't have any hedged investments now. I've read everything I can find on the subject and it seems smarter money, especially with long term investment horizons, stays away from these hedged options.

I know that fact alone probably answers my own question. But, with a sizeable one-time contribution, I cant help wondering if our current 75/76/77 cent dollar might be hovering at its lows, and maybe hedging should be considered? Looking for your opinion on that subject, and also how you feel in general about the two ETFs noted above. Any better suggestions?

Thanks so much!

Q: I am curious about the parameters of "cyclicality" when it comes to different sectors. For example, the chip stocks (including AMAT) are apparently down because of a cyclical decline across them all. In this industry, how long does such a cycle typically run? In comparison, for example, to the commodities cyclicality, which can be many years (I have heard 10-15). Your answer will help me decide whether to take a tax loss on AMAT or hold on for a year or two. Thanks!

Q: Hi Guys,

I just completed my election of Directors for GS. When voting for directors you had two choices: Vote for a director or withhold a vote for the director. To be ridiculous, let’s say that all shareholders, except one, withheld their votes. The one shareholder votes for the director. Would that director be elected to the Board?

This method is used by many Canadian companies. I want to understand how and why they use this method. It really doesn’t seem like shareholders have a voice in selecting directors if the only vote that counts is a vote for a director.

Thanks for the information.
John

Q: Hi

What are your sources or how can we find that a company or stock is shorted.

Thanks.

Q: Earnings 52 Week Low
Yield (%) Price % Diff
Badger Daylighting 6.7 22.37 15.90
CCL Industries 5.3 52.01 5.59
Methanex 8.7 62.30 28.27
I'm looking at buying one of the above companies. Based on today's stock price, I am torn between what is a more useful metric, Earning's Yield (MX) or 52 week low (CCL.B) or a combo approach (BAD) for an entry point. In your view which metric is more relevant for a 5 year investment horizon?

Q: You've recently mentioned the potential effect of activities of money managers on this market, specifically buying and selling to make targets to ensure their best bonus and keeping up with their competitors.

When does this sort of "bonus securing" activity occur-now near the end of the year? Every quarter?

I suppose I'm hoping to know when large institutional buying and selling are at their highest and lowest, over the course of a year.

Cam

Q: Can you clarify what you meant in answer to Lee’s question on “likes” when you said “We have the 'heart' for personal favourite questions, ”$

Q: Does any market research companies in the USA provide similar information about the American market like 5i does for Canada?

Q: This is a market question. Yesterday, markets were up nicely until news of more US tariffs on China came out, then they plunged. But they plunged deeper in Canada than in the US. Would you have a try at explaining why that would be given our valuations are cheaper and US tariffs on China would have no impact on us? It seems every time US markets drop due to China tariff concerns ours go down more. Are we in a bear market in Canada? Morgan Stanley has said the US is now in a bear market and all rallies should be sold because it's going to get worse. Would you advise that here?

Q: Just a general question about the "market". Do you have an idea about the makeup of the investor population? For example what percentage would be small independent amateur DIY investors like my self? I believe sometimes called retail investors? What percent would be big pension, mutual fund or other advisors or say ETF managers, etc?

I am interested to learn if I am mostly up against professional investors.

And if the market is mostly made up of professional investors I find it even more curious how the market seems to behave. All the ups and downs and seeming panic to euphoria don't seem very professional to me.

Q: How is the term 'Financial Leverage' calculated? I'm referencing the term as used by Morningstar. I believe that the 5i website uses the term leverage ratio, correct?

Q: Have you guys every considered a "like" or "thumbs up" feature for the answers section? I often see answers I really agree with, and would like to acknowledge and display appreciation.
Thanks for all your great work,
Lee