Investment Q&A

Q: Hi, 5i, As you get bigger, isn't it inevitable that you will be pushed away from your position as the best picker of small/medium-sized companies with the best risk/reward ratio for medium/long term holding? This advice, judging from the consistent stream of accolades showered upon you by members (to which I have contributed), is your most appreciated service. By trying to satisfy everyone's other wishes, are you not in danger of being "random-walked" into just a good fund manager? I vote that you stick with your knitting. As ever I am very grateful for what you have done for my portfolio. I just want it to continue a bit longer. Henry

Q: Would the proposed 5i model portfolio ETF be available to 5i members only or open to the general public? If open to the general public does this not mean they would have access to 5i intelligence without paying for a membership?Thanks Dave

Q: Having read the recent survey questions I am unsure of the ramifications of question #4. What potential pros and cons might be associated with third party marketing of 5i portfolios? I envision lesser known 5i followed companies gaining greater investor support and 5i reaping free advertisement. Curious to here 5i Research motives.
I must confess to being a 5i question and answer junky. Truly valuable investing advice.
Thanks
Roger

Q: You mentioned about 'liking to buy into strength'. I understand the idea, concept. What would be helpful to me would be to know what that looks like, aka how to know it, if i saw it......Thanks Tom

Q: Hello 5i. In answering subscribers' questions, you often discuss a security, or a sector not exceeding a specific percentage. In a case where a portfolio consists of Cash, Fixed Income, and Equities, are you referring only to the percentage held in Equities in these replies ? Please elaborate. Thanks T.

Q: Hi Guys, Is there a trading tool you know of where I can back-test a trading hypothesis to see it's success? For example, what I would test today is to examine the trade (long) success of buying equity in a company where the current share price trades at a discount to a bought deal financing such as the one announced today (@22.25). With many many thanks again

Q: I am wondering if it would be possible for you to include in your reports "book value per share growth" over a five or ten year period or if you could direct me to a site where book value per share growth is already calculated.
Thank you for your help.
John.

Q: Hello,

I would like to get into trading options in Canada, mainly by selling covered call options as I intend to own the underlying stock. I recall reading that the options market in Canada is quite thin. Can you point me to where I can get more information on trading options, specifically in Canada.

Thank you

Q: Can you suggest a site to find rolling correlation charts between asset classes

Q: Hi Peter and crew,
Love your service.
Could you expand for me on the concept of smart/dumb money I’ve heard mentioned on BNN.
And where do these folks find such information?

Thanks
Jon

Q: Increasingly, larger and larger corporations with supposedly robust firewalls are being hacked. Also, an article last week on the CNBC website reported that a number of US based online brokerages/dealers had been hacked and account holders had lost their money as a result. This raises the concern that independent Canadian online brokerages (like Questrade, for example) are now vulnerable to being breached and account holders could have their funds stolen. Am I being paranoid or is this within the realm of possibility given the ever greater sophistication of hackers? If so, do you know if these brokerages have government mandated cybersecurity insurance that would compensate account holders for their losses? I wrote to Questrade about this and they seem to be stalling on giving me an answer. It would seem easy for them to tell me whether or not they have this type of insurance. I'm wondering if I might be better off transfering my account to a bank-run online brokerage service. Or is it just as vulnerable to attack?
Robert

Q: Hi 5i gang. I am a new subscriber and appreciate your advice on Canadian stocks. Can you recommend a newsletter/club that will give me similar advice on American stocks? Is there an American equivalent to Market Call on BNN? An unrelated question, is the trip to South Pacific in 2016 tax deductable under cost of investing? Thank you:)

Q: Good morning. I enjoy your service and appreciate the knowledge gained. I look forward to your new growth portfolio.
I was wondering if you would consider implementing a TFSA portfolio. I myself would find this to be most helpful. I understand that the strategy used would be different for different people. Possibly 3 portfolios with one for income oriented, one more balanced and a third growth orientated. My problem is finding the right mix for diversification and growth in mind. Specific TFSA advice would be most helpful since it is such a great avenue for wealth building for Canadians. Each january a new stock could be added. Just a thought.

Q: Hey Team :)

What is the point of price targets on stocks when in my experience the price targets are often miserably out of whack with what the security is trading for in real time? How does this practice continue without vehement discussion? And given the often ubiquitous price mismatch why does anyone give analysts price targets any credibility? Can we take anyone's price targets, valuations seriously?

Q: Re Rick's question/comment to be able to "star" a question for review later.
Perhaps this might work. I know it does for me: I take a screen shot/ picture of the question which then shows up on my desktop. I then drag it into a folder on my desktop simply called "5i" - and then I am able to review these questions whenever I want and do so quite conveniently. Hope this helps.

Q: Please explain in detail how you can find insider transactions by using sedar.com . I went to the web site but could not find any insider trading information after searching for about 20 minutes.

Q: I read in the Intelligent Investor that one good measure of a stock valuation is to multiple the PE ratio with the PB ratio. If the result is under 24, that's good. Canadian banks currently fall under that threshold. However, Glusheff is far above that threshold (PE = 12, PB = 6.6). (1) Do you like this measure (2) Does it apply to most stocks, even money managers? (3) Could educate me on how you use the PB ratio in your evaluation?

Q: Hello Team, I'm considering attending PDAC in March. How do you feel about this conference? Do you think it would be worthwhile for a retail investor like myself to attend & if so, what can I expect to gain from it? Any insight you can provide is appreciated. Thank you.

Q: There are often questions about sectors. I stumbled onto this web page that gives a clear description of each sector along with reasons for considering each sector in the light of economic conditions. I believe the 11 sectors listed (a separate one for real estate) aligns with 5i's view of how sectors should be divided. I found it helpful and thought I'd pass it along: https://www.fidelity.com/sector-investing/compare-sectors

Q: Hi 5I: When I read about a company missing its earnings or some other estimate by a small amount, with the result that the stock sells off, I get frustrated. I guess that's the problem with being a statistician. Two thoughts come to mind: (1) Why are analysts assumed to have such market-moving prescience, when in fact they do not all agree, i.e., they generally give different numerical estimates? And (2) given that they don't all agree, why is divergence from the mean of these estimates (arithmetic average) given such prominence? At the very least, the statistical error of the mean should also be provided so that the statistical accuracy of the mean can be assessed. Such an assessment would most likely result in many small "beats" or "misses" being classed as uninformative which should mean fewer false market moves. As it is, many of the quarterly market reactions just contribute to general market noise. There is enough of that already without unnecessarily adding to it.