Investment Q&A

Q: I agree with Joel about the passive response from Canadian companies and sometimes you need to give the antagonist a bloody nose otherwise they will never stop doing this. These shorters need our shares to short and the institutions are only allowed to lend those out from a margin account, so I believe. I do wonder if in fact that is the case.
The only way you can be sure that your shares are secure in your regular account is if you hold those shares physically as stock certificates. Who does that today in this electronic age?

The regulators need to do much more in preventing this rape of our portfolios happening.

If nothing is done, no stock will be safe, this will continue, people will still panic and the long term objective of realizing your nest egg will take a lot longer as these attacks can technicaly damage the stock.

I have been a customer of 5i since 2013 and am in a position that I am very comfortable with my portfolio today thanks to your help. I very rarely need to ask a question and therefore I am happy to donate 3/4 of my 168 question credits.

Keep up the good work

Peter

Q: FYI, I think Citron since last year are no longer publish sell report...

Q: Not a question, just my thoughts.
I understand the need for people to question companies business practices etc. but I think that there should be (monetary) repercussions to the SHORT REPORT authors if they have no facts to prove their thesis. Seems that when a report comes out making accusations of fraud, the affected business is deemed guilty until it can prove it's innocence. Meanwhile, the short seller walks away laughing with a pile of money. Individuals have rights if they are personally attacked and have legal recourse when they are slandered. Why are businesses treated differently?
Comments?

Q: Hi Peter/Ryan can you comment on this short report and why it affects stocks so negatively. Thanks

Q: Its great when companies that are under short attack, such as LSPD and now also NVEI, post earnings in successive quarters to prove up their business and invalidate the short thesis. But why stop there? Why do these companies not take the opportunity to very aggressively buy back their own shares? Even if it requires adding some leverage to the balance sheet with cheap debt if needed. Reducing the float is good for earnings, good for existing shareholders and very bad for short sellers.

The passive response of Canadian companies under attack invites more attacks. Carl Ichan killed some very committed shorts in Herbalife, a truly garbage company, using more aggressive tactics.

Thanks.

Q: When you go to search and you get target price, history and then analyst's recommendations on the stock on NVEI Canadian, it is rated a strong buy. On NVEI US, it is rated a moderate buy. Are these analysts doing the rating third party analysts because Spruce Point analysts have quite a different opinion about NVEI than they do. I am skeptical about the ratings of these analysts - are they the same ones who rate other stocks? Thanks

Q: Good Morning Peter & Team,

You are going to correct me where I am wrong as you should, but I am having a struggle understanding how a company such as NVEI can experience a 50% share value loss in less than 24 hours based on a report generated by a third party the contents of which may very well be exaggerated and dare I say it, even worse be false in nature purely for the purpose of profiteering on a short bet. Are there not laws in place to prevent this kind of market manipulation from taking place? How can investors such as ourselves protect ourselves from this? Maybe the first step is to avoid investing in stocks which have high multiples like NVEI @ 121? That doesn't seem to make sense considering other companies having much high multiples i.e. TSLA @ P/E 341

Thanks for all you do

gm

Q: Hi Guys
I don't see how bonds can have a stabilizing effect on portfolios in todays fast paced electronic trading platforms.
Between Feb 2020 & Mar 2020 my holdings in XLB dropped roughly 23.3 % XRB also dropped a similar amount.
Looking forward to your answer.
Thanks Guys !

Q: Hi

I am currently holding RRSP/TFSA/Non registered accounts with Weathsimple (Both US/CA stocks) and trying move all US stocks to Questrade within same account. So that I can buy and sell US stocks in Questrade and keep CA stocks in Weathsimple. Do do see any issue with this move and any tax implication? I am not planing to withdraw the funds. Just transferring only.

Q: Hi Peter, why does the fear of higher rates cause stocks to decline ? Thanks.

Q: Hello -

I understand the attractiveness of TOI stock - the management, the CSU model, growth projections, etc. However, I can't understand the current valuation. Even after the recent pullback to $108 (at time of writing), has the company's fortunes really increased by 72% within the last 10 months to reflect the increase to today's price compared to the beginning of Feb. last year? I realize stock price / fundamentals don't follow exactly in parallel, but that is quite an increase.

My other related question is on the sector itself. There just seems to be so many software companies out there. Is there an ever increasing need for software in the world to today that matches the increasing number of companies that offer it? In the U.S. there is a history of 3000 automobile companies at one time or the another. Only a tiny fraction exist today. I know this is an apples / oranges comparison industry-wise, but hopefully you understand my concern.

Thanks for your comments.

Q: Peter,

I love the G and M watchlist to show comparative performances etc. However I am skeptical as tManyo the accuracy of some of their other data when looking at fundamental analysis. What faith do you have in the accuracy of the data when looking at ratios such as Interest coverage, debt / equity, forward p/e etc? Where do they get their calculations from ? Do you know of a better source where we can list a number of companies , for instance with a sector and compare the relative financial strengths all on the screen. Much seems to be latest and loudest with performance being the number one issue of interest.

Thanks

Paul

Q: Hello 5i,
This isn't a question per se, but rather an observation relating to Mary's question today about bonds/fixed income in a portfolio.
Something that was not mentioned which a 5i Portfolio Review and Portfolio Analytics pointed out is that if one has any kind of Defined Benefit pension (private, CPP, OAS, etc.) one can apply that to one's Fixed Income Portfolio allocation.
I am sure there might be some caveats that you could expand upon, but this may help some people with the bond/equity allocation conondrum.
Personally, we hold no bonds currently due to our pension positions which serve as our fixed income.
Cheers,
Mike

Q: Hi
The income model portfolio contains about 2% fixed income/bonds. Is the model portfolio meant to be followed as it is or are investors to decide on their own allocation to fixed income/bonds? I have been disappointed in my bonds. I know they can help soften the blow in a market crash but this is pretty expensive insurance so to speak. What is your position on bonds? Should one be increasing their bonds at this point in the market?
Thanks

Q: Canadian Depository receipts - NEO
I have read the article in the Globe & Mail regarding Canadians ability to purchase factional shares of major us companies, similar to US adr's.

Question: If I purchase 200 shares of PFE what exactly do I get? and do I also participate in any dividends.

Are these a viable investment option

Can I have your opinion on CDR's

Q: Earlier this year I transferred my Magna shares from my non registered Canadian Account to my non registered US account in order to avoid money exchange charges. I am interested in selling the shares and would like to know if the same shares can be sold through my US account so I can use the US funds to purchase some beaten up ADSK and CRM shares this month.
Thanks for all the support in 2021.

Kevin

Q: Hi!

I read something about Canadian CDRs on the NEO exchange. Anything to worry about? Transactional friction etc....

Q: Good day. In various news updates etc. on some of the stocks I own I see press releases from law firms reaching out to investors who have lost money investing in a certain company to contact them regarding potential class action. Are these notifications non-events with law firms fishing for business or is something else going on? Investors in Novavax with losses exceeding $100,00 is the most recent request I've seen. Thanks
Rob

Q: Earlier I asked whether it is allowed to transfer the "dividends" only of a stock that pays those dividends in $US - I have the stock in my Cdn RRSP and I would like to transfer the $US "dividends" to my $US RRSP in order to save fx fees. I beleive it is called "journalling". Your reply noted the word "stock" not dividends.

Q: Everyone, at times when the market is in a short term downward trend I look at the companies 3 or 5 year share price and it always cheers me up. If the fundamentals have not changed then the long term trend will always continue UP :) Clayton