Investment Q&A

Q: I really value your monthly updates, which I get in the e-mail. Are these stored anywhere in the 5i website? Is there an archive I can look up? Thanks.

Regards, Shyam

Q: In Constellation Software Annual Meeting voting instructions, we are asked for vote for:

A SPECIAL RESOLUTION AUTHORIZING AND APPROVING AN AMENDMENT TO THE ARTICLES IN ORDER TO (I) CREATE A NEW CLASS OF COMMON SHARES TO BE DESIGNATED AS DE COMMON SHARES, TO BE ISSUABLE AT ANY TIME OR FROM TIME TO TIME AT THE DISCRETION OF THE BOARD OF DIRECTORS OF THE CORPORATION, (II) AMEND AND RESTATE THE RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHING TO THE COMMON SHARES OF THE CORPORATION, AS APPLICABLE, TO REFLECT THE CREATION OF THE DE COMMON SHARES, AND (III) CHANGE THE BASIS UPON WHICH THE MAXIMUM NUMBER OF CLASS A PREFERRED SHARES WHICH MAY BE ISSUED BY THE CORPORATION IS CALCULATED TO REFLECT THE NUMBER OF ISSUED AND OUTSTANDING COMMON SHARES ON A FULLY DILUTED BASIS, ALL AS MORE PARTICULARLY DESCRIBED IN THE ACCOMPANYING MANAGEMENT INFORMATION CIRCULAR.

I have read the Management Information Circular. My understanding: one can convert common shares to DE common shares and must be held for one year from the date of issue. Holders of DE common shares are not expected to be paid regular dividends. DE Common shares will not be listed on any stock exchange. DE common shareholders will be able to reinvest dividends (DRIP) in a more tax efficient manner. If any point is incorrectly, please advise.

My questions are:
1) How would you recommend voting for this resolution?

2) If this resolution was passed and DE Common Shares are made available, what investment criteria would one choose convert to DE Common Share versus keeping Common Shares?

3) Is creation of DE common stocks a common practice in public listed companies (either in Canada or US)? If yes, what other listed Canadian companies have issue this type of stocks?

Thank you.

Q: This has to do with your changes as of today, why can't you continue to list the company symbols on the top of question as previously done ,and also the date that the questions were asked . I am not one for asking a lot of questions but can usually find the answers I am looking for by sorting through previously asked questions and if I now go to the Q&A page I can not find out how long ago the answers are given to a certain question . This is a good site but it was better yesterday . Murray

Q: Hi, This is to send a note of commendation for how you set your stock selection strategy and discipline. It was clearly evident when you recently added PBH and KXS to the Balanced Portfolio with a full 5% position undeterred by the fact that stock traded at $55.69, close to its all time high. I would not have had the guts to initiate a position in PBH at these levels, watching stock price for 3 years, climbing steadily from $15-$16 level to present. New addition of PBH to my favorite 5i Portfolio was a your strong vote of confidence in the co. helping me to finally decide to pull the trigger and I am quite happy about it. I already had a full position in KXS from before. Thanks for the incredible value you offer to retail investors like me, everyday

Q: When researching dividend stocks I always check the "payout ratio". Most of the time this information is not available. Is there a web site that includes this information when researching a stock without doing it mathematically?

Thanks.

Q: A general question, in your analysis of ACQ you include a chart of the stock with the overbought and oversold graph. What metrics do you use to figure out if a stock is either overbought or oversold?

Q: This is in reference to the answer you gave to Edward on Apr. 12. How does one buy ENF at $28.25, the new issue price? I'm with BMO Investorline.

Q: Hello Peter

In my power balanced portfolio I have: CSU, ESL, SJ, CCL.b, BYD.un, ATD.b, MG, KXS, DOL, PBH, DHX.b.

My question is: what is wrong with my portfolio that on the such a good day today on TSX +158 pts., all of my stocks accept for CSU and MG went down!!
What is wrong with my portfolio selection and what would you change.

Thank you Andrew

Q: Can you please advise which ETF is better to hold when market sells off.
Below ETF has to be hold for one /two weeks or I can hold for long time. If below is not right one - Please recommend another ETF.

ETF: HVU OR HUV

Q: I am sure that this question has been asked in the past however I cannot seem to locate an appropriate answer. I am wondering what would be considered an acceptable percentage of any one stock in ones portfolio. Most of mine are now 3% and I am starting to think I have too many stocks. Would 5% be the general guideline?

Q: I have heard pros and cons of a bought deals vs a marketed deal in order for a company to sell additional equity to raise cash. In a bought deal it is usually offered at a discount benefiting the underwriter at the expense of the existing shareholders. In a marketed deal the prospective underwriters seem willing to short the stock to get it at a lower price until it is priced for a deal, again at the expense of existing shareholders. Am I correct in my assumption and if so which way is the least painful in your opinion?

Q: Until now Keith Richards at ValueTrend was the only technician posting regular blogs about the TSX. There's a new kid on the block, for those interested in charts (Taylor Dart):
http://setyourstop.ca/tsx-turnaround-possible-weighing-daily-weekly-charts-direction/

Q: In response to Paul's question below regarding an iPad app I have been using Real-Time Stock Tracker by W. Tang for a few years now. It is an excellent source of information and well worth the cost.

mobile app mobile app April 07, 2016 (asked by paul)
Question: I am about to purchase my first I-Pad. Does 5-I have a mobile app that I will be able to use?

Thanks

Paul
5i Research Answer:
Our site is mostly mobile friendly, and we have a Google Play app, but not an Apple app.

Q: What are your thoughts of using HUV as a hedge in a down looking market. How would you decide what percentage of portoflio to use and how long to keep it.
Thanks and happy Friday

Q: I am 30 years old and have built a sector diversified portfolio of around 25 names from the TSX worth approx 200k. I also have a pension invested conservatively in bonds/mutual funds worth approx 100k. I would like to invest all additional cash for the next few years in 3 or 4 ETF's to diversify out of Canada instead of adding to my Canadian portfolio. Do you see any major flaws in my theory? also could you suggest 2 or 3 ETF's to start out with. My thoughts were: VOO, VEA, and IJR. Thanks

Q: Hi Peter, I know the question I am asking is very hard to predict/answer. Although I would appreciate if you give it a shot.

I currently have your growth portfolio and some stocks from your balance portfolio on a margin account. I have some US growth stocks too(like AGN, CERN, BIDU). I have enough cushion but I do have 30% of my portfolio on margin. I would appreciate if you just do not advice me not to use margin(like other financial professionals).

My question is do you think considering all current turmoil and risks looming(US election, oil price, global recession), should I be better off taking some profit off the table? I was reading Prem Watsa's 2016 letter and he was very negative things to say regarding current valuation. Basically what do you think Canadian/US market would be at year end? Do you think there might be some opportunity(like last August or October or like Feb 2016)? I would really appreciate your insight. What would you do in this situation if you are in my shoes?

Q: I'm concerned with the exuberant rebound in the markets since the sell off in Jan./Feb. despite earnings estimates falling (e.g. S&P earnings estimates falling but S&P rising). Might it be prudent to insure against a sell off with e.g. SH, RWM, and PSQ? I wonder what the "smart" money is doing right now? I appreciate your opinion. Thanks.

Q: If a young person 26 years old wanted to start a DRIP which stock would you recommend for this?

Thanks
Dolores

Q: Re; my question what is the stock market : As I lay awake in the wee small hours, it came to me that the stock market is a record of sales of stocks listed by and sold through that market, a tally, so to speak, and weight in the market means what percentage of the stocks in that list we collectively hold of any particular stock or class of stocks. Hoping this is less clueless than my question! ( Chose whether or not you think there's any point in publishing)

Prior question.: I was made rudely aware that I don't know something I assume everyone else does. What exactly does market weight mean? Who "holds" the stock market holdings and where and how are they held? I guess the question is what, exactly IS the market? Sorry for what is probably a lame question.

Q: Hello Peter!

I am getting ready to make my 2016 TFSA contribution.So far I had only contributed in CAD dollars and I hold in my TFSA only Canadian stocks.
For 2016 I have room for contibution in my TFSA for $10000.00 CAD.
I have in my US margin account $35000.00 USD ,my question is: can I use my margin USD to make contribution to my TFSA in USD for futer purchase of US stocks and how do I calculate amount to be contributed in USD to cover my limit($10000.00 CAD) for 2016 TFSA.

Andrew