Q: Buy the dip. I hear this all the time. I understand and accept the concept of buying a stock which is down temporarily. But as a conservative investor, I look at the long lists of stocks on my watch lists and in a sea of red, my eyes are drawn to the green, to the stocks which keep chugging forward even on a day when the markets are way down. Unless there is some immediate news driving that stock, my inclination is to think "This is a stock with strong demand, and whose owners don't want to sell. I should buy that, not the ones which are dropping like rocks." What do you think?
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: Hi,
Can you refresh the concept of EV (entreprise value) used by analysts.
Example, Cameron Doerksen (FBN) speak about implied EV of core business of 675mm. what does it really mean?
Can you refresh the concept of EV (entreprise value) used by analysts.
Example, Cameron Doerksen (FBN) speak about implied EV of core business of 675mm. what does it really mean?
Q: Do unused credits carry forward to the following 12 months when membership is renewed ?
Q: Good morning Peter and Team,
I just read about David Driscoll's recent appearance on BNN, where he summarizes his eight steps to a winning "investing recipe":
Here are eight steps to a winning recipe:
Low fees: The lower the fees, the more you make.
Low turnover: By investing in businesses and not trading stock prices, transaction costs stay low and you keep more of your capital for growth.
Invest in companies that consistently grow their free-cash flows: These companies have the financial flexibility to raise dividends, invest in innovation and make strategic acquisitions.
Diversify globally: Long-term returns outside North America have historically been one per cent to two per cent higher.
Re-balance the portfolio when necessary: Having a high concentration in one stock can lead to trouble if that company’s stock price crashes to Earth (i.e. Valeant).
Avoid correlated assets: In 2008, all the Canadian banks fell 40 per cent, not just one of them. Pick one Canadian bank and move on.
Manage your cash prudently: Given that the market has risen for eight years, it’s prudent to hold some cash to take advantage of opportunities if the market corrects.
Choose stocks with above-average annual dividend growth: The average growth rate of stocks globally is about seven per cent. Those that grow their dividends faster provide investors with greater income to use in retirement. Their share prices also tend to grow at a faster rate.
Seems to me that Mr. Driscoll must be a 5i member, since most, if not all, of his points have been mentioned from 5i over the years! In any event, it's always reassuring to see other financial types who share 5i's philosophy!
You may publish at your discretion. Thanks for everything you do to help the small retail investor!
I just read about David Driscoll's recent appearance on BNN, where he summarizes his eight steps to a winning "investing recipe":
Here are eight steps to a winning recipe:
Low fees: The lower the fees, the more you make.
Low turnover: By investing in businesses and not trading stock prices, transaction costs stay low and you keep more of your capital for growth.
Invest in companies that consistently grow their free-cash flows: These companies have the financial flexibility to raise dividends, invest in innovation and make strategic acquisitions.
Diversify globally: Long-term returns outside North America have historically been one per cent to two per cent higher.
Re-balance the portfolio when necessary: Having a high concentration in one stock can lead to trouble if that company’s stock price crashes to Earth (i.e. Valeant).
Avoid correlated assets: In 2008, all the Canadian banks fell 40 per cent, not just one of them. Pick one Canadian bank and move on.
Manage your cash prudently: Given that the market has risen for eight years, it’s prudent to hold some cash to take advantage of opportunities if the market corrects.
Choose stocks with above-average annual dividend growth: The average growth rate of stocks globally is about seven per cent. Those that grow their dividends faster provide investors with greater income to use in retirement. Their share prices also tend to grow at a faster rate.
Seems to me that Mr. Driscoll must be a 5i member, since most, if not all, of his points have been mentioned from 5i over the years! In any event, it's always reassuring to see other financial types who share 5i's philosophy!
You may publish at your discretion. Thanks for everything you do to help the small retail investor!
Q: The Canadian Securities Institute offers a non-licensed course for Investors. I was wondering if it is worthwhile taking.
Q: Convertible bonds are obviously not exactly the same as corporate bonds due to the possibility of converting them into common stock. I was wondering if they are treated exactly the same as the other bonds a company may have issued as long as they are still in the bond form? That is are they they still guaranteed to be paid as long as the company is solvent and are they at the same debt obligation level as other bonds issued? Thanks you.
Q: According to rate hub.ca Oaken Financial has the highest GIC rates. I've never heard of Oaken but they are a member of CDIC so would you say the risk to invest in their GIC is low?
Q: Can you recommend a free method of finding insider ownership as a percentage? I haven't seen this in Google Finance, TMX, or Morningstar. Some of them show insider activity and TMX it can be added to a stock screen but I don't see it in specific stocks info.
Q: Good morning 5i Team:
My question regarding the six companies mentioned is about Equity by Geographical location.
Lets say I only have the aforementioned companies in my portfolio.
With the exception of BCE, all the other companies have a portion and sometimes a sizeable amount of their revenue coming from US or International divisions.
From the Equity by Geography scenarios I have seen; this portfolio would be considered 100% Canadian.
Am I misunderstanding this or should some of this portfolio be considered US or International even though all companies are Canadian.
Thank you as always for your concise, informative and professional advice. Wouldn't have the confidence to be a DIY investor without 5i.
My question regarding the six companies mentioned is about Equity by Geographical location.
Lets say I only have the aforementioned companies in my portfolio.
With the exception of BCE, all the other companies have a portion and sometimes a sizeable amount of their revenue coming from US or International divisions.
From the Equity by Geography scenarios I have seen; this portfolio would be considered 100% Canadian.
Am I misunderstanding this or should some of this portfolio be considered US or International even though all companies are Canadian.
Thank you as always for your concise, informative and professional advice. Wouldn't have the confidence to be a DIY investor without 5i.
Q: Can you explain why there is a difference in quoted Gold prices between Kitco and Comex. Thank You
Q: I'm confused by the following 5i answer excerpt in response to Dave's question on August 16th.
"5i Research Answer:
The key here is that when reading our remarks, our comments are meant to reference the 'company' and not the stock price. A declining stock does not make a company 'bad'. We cannot predict sector movements nor stock prices, but we try to focus on the quality of a company."
Do I take from this that 5i doesn't take into account the fundamental "value" of a stock when making its recommendations? If so, I feel this is missing the point in making profitable investment recommendations. The highest "quality" company may be the worst possible investment if its stock is outrageously over-priced.
There also seems to be some inconsistency here as well. In the same answer, it was stated that a company like CRH may have more investment potential than another company since its stock is oversold. Another answer on the 17th suggested that the asker not chase the stock of Chorus Aviation (CHR). These answers indicate to me that stock price is being taken into account in 5i Research recommendations.
So what is it, is stock price ("value") taken into account in 5i Research recommendations or is the "quality" of a company the only criteria used in making the recommendations?
Thanks,
Colin
"5i Research Answer:
The key here is that when reading our remarks, our comments are meant to reference the 'company' and not the stock price. A declining stock does not make a company 'bad'. We cannot predict sector movements nor stock prices, but we try to focus on the quality of a company."
Do I take from this that 5i doesn't take into account the fundamental "value" of a stock when making its recommendations? If so, I feel this is missing the point in making profitable investment recommendations. The highest "quality" company may be the worst possible investment if its stock is outrageously over-priced.
There also seems to be some inconsistency here as well. In the same answer, it was stated that a company like CRH may have more investment potential than another company since its stock is oversold. Another answer on the 17th suggested that the asker not chase the stock of Chorus Aviation (CHR). These answers indicate to me that stock price is being taken into account in 5i Research recommendations.
So what is it, is stock price ("value") taken into account in 5i Research recommendations or is the "quality" of a company the only criteria used in making the recommendations?
Thanks,
Colin
Q: Hi 5i Team,
I'm still new to investing and in my spare time I enjoy reading the responses you guys give to other member, but I feel like there are always more to know. I'm wondering if you guys have any suggestions on books that can help fill these gaps. Hoping for suggestion on books for new and intermediate investors.
I'm still new to investing and in my spare time I enjoy reading the responses you guys give to other member, but I feel like there are always more to know. I'm wondering if you guys have any suggestions on books that can help fill these gaps. Hoping for suggestion on books for new and intermediate investors.
Q: Hello 5i,
Please post only if you feel this might be beneficial or appropriate.
This is for Dave, who, I hope, gets to read it. I have been with 5i for several years now and find them not only invaluable for my portfolio structuring, but interesting, informative and often even humourous. The members and the Q&A are a huge benefit to me. But now, speaking to Dave's specific concerns: I have had the identical situation happen to me as well with some companies. But, the reverse has been equally true. One of the things I have noticed over time is that time is the crucial element. You must have patience - without it, you will be up the proverbial creek. Sometimes good things happen to bad companies and bad things to good companies and the market reacts, perhaps out of proportion. CGX is a case in point at this time; however either positive returns from their diversification efforts and/or a strong Fall or Christmas movie slate or even an acquisition can change that on a dime. More than once I have a chosen to sell a 5i - recommended stock for a particular reason while it was down, only to see it spiral up to new highs within weeks of my selling it. More patience on my part could have vastly enhanced my profit margin, but the fault is wholly mine, not 5i's because the stock tanked at one point for some reason.
I don't know if this has helped, hindered or confused, but I hope that Dave will take heart from my lessons and give 5i a bit of a break and perhaps consider why he is buying any one stock that 5i is recommending and give more weight to the time-frame for holding an equity.
I apologize if this isn't a particularly clear or cohesive post, and for the length, but I really felt compelled to let Dave know that he isn't alone, but also, that being really clear about what you are buying, why you are buying it and how long you can really afford to keep it if/when it does take a downturn are our (5i members') responsibility, not 5i's.
So, Dave, please give 5i another look within the context of the above and you might see more positive than negative.
Wishing you all the best!
Cheers,
Mike
Please post only if you feel this might be beneficial or appropriate.
This is for Dave, who, I hope, gets to read it. I have been with 5i for several years now and find them not only invaluable for my portfolio structuring, but interesting, informative and often even humourous. The members and the Q&A are a huge benefit to me. But now, speaking to Dave's specific concerns: I have had the identical situation happen to me as well with some companies. But, the reverse has been equally true. One of the things I have noticed over time is that time is the crucial element. You must have patience - without it, you will be up the proverbial creek. Sometimes good things happen to bad companies and bad things to good companies and the market reacts, perhaps out of proportion. CGX is a case in point at this time; however either positive returns from their diversification efforts and/or a strong Fall or Christmas movie slate or even an acquisition can change that on a dime. More than once I have a chosen to sell a 5i - recommended stock for a particular reason while it was down, only to see it spiral up to new highs within weeks of my selling it. More patience on my part could have vastly enhanced my profit margin, but the fault is wholly mine, not 5i's because the stock tanked at one point for some reason.
I don't know if this has helped, hindered or confused, but I hope that Dave will take heart from my lessons and give 5i a bit of a break and perhaps consider why he is buying any one stock that 5i is recommending and give more weight to the time-frame for holding an equity.
I apologize if this isn't a particularly clear or cohesive post, and for the length, but I really felt compelled to let Dave know that he isn't alone, but also, that being really clear about what you are buying, why you are buying it and how long you can really afford to keep it if/when it does take a downturn are our (5i members') responsibility, not 5i's.
So, Dave, please give 5i another look within the context of the above and you might see more positive than negative.
Wishing you all the best!
Cheers,
Mike
Q: Peter and His Wonder Team
Recently CDI was bought for $8.25 by a private company to close this quarter. For several weeks it has been trading between $8.20 and occasionally touching $8.25. Today on heavy volume of 837K it traded as high as $8.32. I did not think it would go above the purchase price of $8.25. What do you think is happening here?
Thanks for your speedy reply and great service!
Dr.Ernest Rivait
Recently CDI was bought for $8.25 by a private company to close this quarter. For several weeks it has been trading between $8.20 and occasionally touching $8.25. Today on heavy volume of 837K it traded as high as $8.32. I did not think it would go above the purchase price of $8.25. What do you think is happening here?
Thanks for your speedy reply and great service!
Dr.Ernest Rivait
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Sylogist Ltd. (SYZ)
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Cineplex Inc. (CGX)
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Knight Therapeutics Inc. (GUD)
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Savaria Corporation (SIS)
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Intrinsyc Technologies Corporation (ITC)
Q: While working at buying into 5i investment methodology - invest long enough to see profits grow and stock prices to follow - I find my 5i sourced holdings negatively hitting my portfolio value.
I have to ask, what is the role of 5i and its methodology in preserving capital and/or helping to avoid investment losses?
In reading 5i answers, it is often noted that stocks need 5 years yet I am starting to see this as a way to avoid sell recommendations.
I read from you, HR is a good investment for income so I hold with a profit only to now see a price decline and profits change to losses.
I read from you, CGX was sold from 5i portfolio "but does not need to be sold". Now we are down substantially.
When you write, a stock is expensive, the stock is already up +% in the year, should this be taken that even though you write you are okay with a buy, a smart investor will not purchase as this time - decline is likely. Many of the stocks I have purchased with positive inference from 5i, are now down 20% (sometimes in one day).
I write this as I must determine where 5i fits in investment efforts. My 5i Stock losses have mounted through the past couple months. I need to find a way to interpret when 5i sentiment toward a stock really changes and not wait until the stock is slowly backed away from by 5i.
So, how does one differentiate between, a good Buy recommendation and 5i being positive on a stock but there is a great likelihood the stock price will decline? I am not please with reading positive remarks only to see investment profits disappear or losing 20% within days of a purchase.
Is there something in your words that should be interpreted to help me protect my gains and Capital and/or avoid losses within days of buying a recommended investment?
Thanks
Dave
I have to ask, what is the role of 5i and its methodology in preserving capital and/or helping to avoid investment losses?
In reading 5i answers, it is often noted that stocks need 5 years yet I am starting to see this as a way to avoid sell recommendations.
I read from you, HR is a good investment for income so I hold with a profit only to now see a price decline and profits change to losses.
I read from you, CGX was sold from 5i portfolio "but does not need to be sold". Now we are down substantially.
When you write, a stock is expensive, the stock is already up +% in the year, should this be taken that even though you write you are okay with a buy, a smart investor will not purchase as this time - decline is likely. Many of the stocks I have purchased with positive inference from 5i, are now down 20% (sometimes in one day).
I write this as I must determine where 5i fits in investment efforts. My 5i Stock losses have mounted through the past couple months. I need to find a way to interpret when 5i sentiment toward a stock really changes and not wait until the stock is slowly backed away from by 5i.
So, how does one differentiate between, a good Buy recommendation and 5i being positive on a stock but there is a great likelihood the stock price will decline? I am not please with reading positive remarks only to see investment profits disappear or losing 20% within days of a purchase.
Is there something in your words that should be interpreted to help me protect my gains and Capital and/or avoid losses within days of buying a recommended investment?
Thanks
Dave
Q: Could I get an opinion on "Timing the Market" vs "Protecting my Capital"? If I use my RRX position as an example, I have a good company but with big oil industry head winds. I am in at about $9 on the stock (2.5% position at the time so less now). There were a number of "new 52 week lows" where technically I "should" have sold but I held onto the "quality" company.
Basically, whats a good strategy to prevent large losses in these type of situations when they come along----trade technically, or use a stop loss strategy, or other? No single stock more than %3-%5 of my portfolio is helping in this RRX example.
Basically, whats a good strategy to prevent large losses in these type of situations when they come along----trade technically, or use a stop loss strategy, or other? No single stock more than %3-%5 of my portfolio is helping in this RRX example.
Q: are public companies required to host conference calls to discuss results or is this an option of the company?? Thx
Q: Would you recommend for a short term hold?
Q: Does your opinion of cbl change at all after their 2nd q results release? I have about a 2% weighting (as of today) in an rrsp acct, down about 30%. I'm think of selling considering all the quality stocks with far fewer "issues" that are on sale right that I could replace it with. After watching what happened to efn after a rumor and no short interest, it has not recovered at all from it's significant drop so I can't see anything, other than a prompt privatization of cbl, that will turn it around. I don't think this q results will help at all either.
on a side note I think it could be a wise move to basically sell all stocks just before earning seasons and wait for the dust to settle before buying back. all stocks that miss, a lot that meet, and even some that beat get clobbered with very few that make a good run after a beat, dr is a case in point here which I hold. even with trading fees (about $5/trade) this seems like a very profitable possible strategy. I know it's not your style to trade like this but with the markets being as reactionary as they are with the hedge funds and day traders so active a swing of 10% plus swings could be very profitable and more than offset the very few that seem to move up on earnings.
thanks Tom
on a side note I think it could be a wise move to basically sell all stocks just before earning seasons and wait for the dust to settle before buying back. all stocks that miss, a lot that meet, and even some that beat get clobbered with very few that make a good run after a beat, dr is a case in point here which I hold. even with trading fees (about $5/trade) this seems like a very profitable possible strategy. I know it's not your style to trade like this but with the markets being as reactionary as they are with the hedge funds and day traders so active a swing of 10% plus swings could be very profitable and more than offset the very few that seem to move up on earnings.
thanks Tom
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CCL Industries Inc. Unlimited Class B Non-Voting Shares (CCL.B)
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Kinaxis Inc. (KXS)
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Savaria Corporation (SIS)
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Intrinsyc Technologies Corporation (ITC)
Q: Hi, in a bad market, a slight miss of whatever metric leads to a big drop of price. It is Ok for long term investors who got in long time ago and had huge gain already and took some profit. What is your recommendation on the above mentioned stocks for those lone term investors just bought in recently. Buy more, hold or sell? Thanks.