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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: Hello.
I have been looking for a Technology stock to enter. As per an earlier comment today, I too find prices high and given my own investor behaviour have not faired well with some of the high prices and volatility.

So looking at OTEX, would comment on some of the fundamentals. BMO shows P/e of 7.4 at current price. I have seen where you comment previously about positive position this Waterloo company finds themselves in the market. What may be expected of OTEX going forward if bought today?

If there is more you can add to buying high priced names and how to hang on through volatility, it would be great. The only way I can do this is to buy and sell on 5i actions.....which is somewhat inappropriate expectation to place on this service.

Always good responses.
Thanks
Dave
Read Answer Asked by David on March 09, 2017
Q: just a comment about your comments. I am in the real estate business and affordability is not always the driving force in prices. It is demand from offshore money, investors, both locally and from abroad. In Toronto, there is a lot of money that can afford these investments and a collapse in the housing market would mostly hurt the working people who if they had to sell or refinancing would be stressed. If investors have lots of money, they are investing with the risks. they do not need these investments to pay for their own food and accommodation. I have worked through the housing price correction in 1974,1989,2001, 2008 and it was brutal for some people but an opportunity for investors with money. Now we have the additional overseas money which even at 5-10% is paying up for real estate in an already tight housing supply market. Who would want to sell and have no place to live. There may be a correction in Toronto but the investment fundamentals have to change. Keep waiting.....
Read Answer Asked by john on March 08, 2017
Q: This is not a question but just an appreciation of what 5i has done for me and my family. I used to have a wealth MGMT company take care of my funds, but 4 years ago I found 5i. I started small with 5i to test the waters vs. my very expensive wealth advisors (2.5% fee plus 25% of profits over the TSX). In 4 years, my TFSA is up 226%; one of my other portfolios is up 102% in the same period. In 3 years my children's RESP is up 39% and in one year since I transferred all my other accounts I am up 20% in my RRSP; and my largest account is up 19%. The returns are so much higher than my fund managers ever did. In many of my accounts I have not sold any stocks in 2 years, not all have worked out, but my returns have. Just wanted to say a huge thank you.
Read Answer Asked by stephen on March 08, 2017
Q: I have three accounts at my broker as follows: Canadian equities and American equities in my margin account (non-registered); Fixed income including bonds, bond ETFs, bond mutual funds, preferred shares, convertible debentures, REITs, international mutual funds, and Canadian equities (all are income producing and generally have a yield in excess of 3%) and RESP for my children. For diversification purposes you have said no one investment should make up no more than 5% of your portfolio. In my case I would consider RESPs a separate entity and unique investment strategy.For the sake of diversification would you combine the RRSP account and margin account together? I have investments in my margin account which exceed 5% of the margin account holdings which should necessitate a sale for diversification purposes. The result may differ if they are part of the combined margin and RRSP account. I eagerly await your reply. Thank you
Read Answer Asked by Robert on March 06, 2017
Q: Hi Team

Certain companies such as BEP, AQN pay dividends in 'US" dollars. What is the significance to me?

Is there a foreign holding tax on the dividend ? (like for an american equity)


does my taxation change, is there an advantage to holding it an RRSP versus non registered account.

I am with BMO investorline and I think they pay it out converted back to canadian dollars, is that the financial industry way or is it possible to keep it in us dollars ?

thank you

Ernie
Read Answer Asked by Ernest on March 06, 2017
Q: I have subscribed to your 5i Research for a few years and have never learned more throughout my years of investing than I have learned over the few years with you. A question that I should know the answer to is a term used at BNN and by you all the time is a stock is trading at 10 times earnings. Does this mean it takes $10.00 of earnings for the shares to go up a dollar? Thank you. Dennis
Read Answer Asked by Dennis on March 06, 2017
Q: Good Day to all. I'm 63, retired and have $400,000 to invest. Funds won't be required for 8 years, I have a moderate risk tolerance and would target a 4% dividend return on the portfolio.

In this scenario and with current economic/political environment, do you recommend:

(a) an investor buy your model income portfolio as it is currently reported, or

(b) a different portfolio of stocks and perhaps ETFs and

(c) should such an investment be made today, in whole or in part.

Thank you for your valuable and much appreciated advice.

Ian
Read Answer Asked by Ian on March 03, 2017
Q: I noticed that ITP shows "share based compensation expense" every quarter (for several years) as an item to be excluded when calculating "adjusted earnings", thereby considerably increasing "adjusted earnings" over what would be otherwise. It is a reasonably consistent number, and a very large component of their earnings. It seems to be just a variable "employee expense". Is this sort of accounting common in financial reporting of "adjusted" earnings, and is it something to watch out for?
Read Answer Asked by David on March 02, 2017
Q: Hello 5i
As I watch several investments plumb new lows, it strikes me that things may have turned and I am unaware.

We have seen 5i exit some names that were originally intended for 5 year hold but today I have to say my investment measurements are lacking when it comes to exit signs.
In some cases, I would get out as the stock price breaks the uptrend but have been ignoring this giving some space for volatility.
Given my experience in finding stock prices equal to zero in my portfolio, I would rather buy stocks that go up.
How does an investor distinguish between a stock going to zero versus one that is just doing the volatility dance and on a temporary path to a short lived low price?

I would rather not be found holding companies indicating 40%, 60% and 80% losses going forward.

Your thoughts on this are appreciated.
Thanks
Dave
Read Answer Asked by David on March 01, 2017
Q: The prospect of some kind of a border adjustment tax remains in the US, and while the market seems to like the other tax proposals, it does not seem to be responding to this risk. I would appreciate your thoughts on what such would mean for the markets, and the best way to defend a portfolio. Certainly Canadian exporters would be at risk, but I would suspect the damage would be much more widespread than that. It would seem to me that it would be highly inflationary, as well as likely to cause various trade wars.
Whether it will or even could happen depends upon which media one reads, but the risk is not zero.
Thanks for your thoughts. Patrick.
Read Answer Asked by Patrick on March 01, 2017
Q: Good morning Peter and Team,

I track my portfolio in real-time using Google Sheets, which has the ability to "fetch" a price of a stock or ETF, but not if it's listed on the new Aequitas NEO Exchange. I was surprised when CLU.C started showing up as an error on my spreadsheet, since I didn't realize that iShares moved this ETF from the TSX to the NEO exchange. I contacted the NEO exchange and have copied their answer below in case other members could benefit from this information.

Jerry,

Thank you for reaching out to NEO with respect to market data on Google. Please accept my apologies for the tardy reply. Your email only just came to my attention today.

NEO has been reaching out to Google for many months with respect to making NEO market data available within their platform, but they have been less than responsive. There are no NEO fees for them to incorporate our data, but they have indicated that is not a priority for them. I encourage you to get in touch with them directly to let them know of your experience. We do have real-time data available for you on our Website and are currently reviewing what we can make available with respect to Excel functionality. Here is the link:

https://aequitasneoexchange.com/en/security-detail?q=CLU.C

Hope this helps. Please feel free to reach out with any further questions. We are expecting momentum to build with more NEO listings, so hopefully Google will get things moving soon.

It would appear that there's no real way at this time to automatically "fetch" a price for a stock/ETF that's traded on the NEO exchange. I will email Google and perhaps if others do this as well, the NEO data will soon be added to the Google platform.

Hope this information is of assistance.
Read Answer Asked by Jerry on March 01, 2017
Q: Hello 5i team,
Your article on hedging for a market downturn is quite timely; thank you.
A 5% or 10% correction is not too worrisome as it could be recovered in a relatively short period of time.
I do not foresee a "black swan" event; do you? In my opinion, the current steepness of the yield curve does not signal the eventuality of such an event.
Regards,
Antoine
Read Answer Asked by Antoine on March 01, 2017
Q: Comment on this question:
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February 28, 2017 - Asked by Sal

Q: Hello 5i
About a month in and wanted to say great service and looking forward to the future. In looking at the companies you cover it seems like your B and higher ratings have been very successful while protecting and growing capital. Curious to know if you have a report on the total returns based on ratings. For example all B rated reports have returned x%, C x% etc.?For me screening by ratings of B and better will be the starting point of my investment selections to be further investigated

Thanks
Sal

5i Research Answer:
We have not done this screening, and historically it may be difficult because of course some ratings will have changed over time, which would mess up the data set.
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Very interesting idea! It should not really mater if your rating for a stock changed. 'Just' calculate the return from your rating date to when the rating changed (or to now if the rating has not changed). Monthly.

I believe the dataset could be normalized in some fashion (statistician?) to account for the number and age of ratings in each category, etc.
Read Answer Asked by J Carl on February 28, 2017
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