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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 guys,

I recently read the intelligent investor and it gives several metrics by which Benjamin Graham would analyze stocks. Given that the book was written so long ago, are the metrics still relevant or have they evolved?

I'm specifically referring to a few, such as:

1- Current assets should be at 2 time Current liabilities

2 - Uninterrupted dividend payments for at least 20 years

3 - P/E Ratio of not more than 15 times when using last 3 year avg of earnings

4 - Long-term debt should not exceed working capital

While a lot of the information is helpful, it seems some of these criteria are nearly impossible to meet in the current low interest rate environment where companies are leveraging themselves to buy back shares or do other things. While we need to keep a close eye on long-term debt, net debt to EBITDA or net debt to total capitalization may be better tools to use?

Thanks,
Jason
Read Answer Asked by Jason on October 26, 2016
Q: Having an Income portfolio including the above companies, I'm unsure of the effects of a potential increase in US rates in say December 2016 when at the same time the Bank of Canada holds rates or even maintains dovish tone signally near term rate cut. Will holding Canadian interest rates steady offset what would otherwise be negative pressure of a US rate increase on Canadian dividend paying stocks? Thanks
Read Answer Asked by Ian on October 24, 2016
Q: Is the following scenario possible?

Let's say there is a stock traded on an exchange and the shares are worth about $1 per share. At a particular time, Buyer A wants to buy 100 shares and puts in a market order for 100 shares. At the same time, Seller X has 100 shares but he puts in his sell order at a price of $500 per share.

Would this trade take place? Could this happen on the TSX? If so, would you recommend that a dollar limit should be placed on all orders?
Read Answer Asked by Ray on October 20, 2016
Q: Reading this article, I can t help but wonder why is the growth rate still so low ? Am I correct to assume that bigger the central banks become, this shoud be a positive for the global growth ?

http://www.bloomberg.com/news/articles/2016-10-16/big-central-bank-assets-jump-fastest-in-5-years-to-21-trillion

We often hear about the level of debt but rarely about the creditors of the global market. Who are the main creditors ? What is the global balance sheet looks like ? I know there is a lot to talk about here but your general comments would be appreciated and suggested reading material or books on the topic as well. Thank you.

Read Answer Asked by Pierre on October 17, 2016
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