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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: Should investors change their goalpost metrics of valuing companies when investing?
Nowadays many complain about seemingly high valuations of many companies.

In the past, companies with a high P/E ratio would raise alarms - now it seems it's de rigeur - Apple has a P/E ratio of 43 for example! Does this go hand-in-had with investors accepting very low interest rates?

At first I thought it crazy that a company like Apple would earn $1 for every $43 dollars of share price but then realaized the US 10yr treasury currently gives me $1.09 for every $100 of principal .

Should the yardstick of what constitutes fair value be changed in light of these lower interest rates?

I know there are many ways to value companies but what would you say would be a 'fair' P/E ratio nowadays? Benjamin Graham had a formula and I'd like to see your opinion.
Read Answer Asked by Neelesh on January 25, 2021
Q: There seems to be lots of buzz in the media lately about dividend stocks being hit hard when inflation/interest rates rise. What are your thoughts on this? Isn't this just short term noise for the long term dividend investor.
Read Answer Asked by Joe on January 22, 2021
Q: Since 1974, with my 1st investment in koffler stores (shoppers drug mart),I have looked for some rational reason to purchase a stock.
Obviously I have seen some times that I cannot explain. Today is one of those days.
I own fdx market cap 60 b more or less
I see door dash has a market cap of the same
How can this be reasonable in any way.
Have investors lost their collective minds or is it possible we are entering a dangerous time in the market .



Read Answer Asked by Leon on January 21, 2021
Q: Hello! Wondering if you still like TMX group and Thompson Reuters. They both seem to be trading sideways when many stocks are gaining. As well, I know you really like BAM but this too, has been heading lower when many stocks like financials and insurers are going higher. In a diversified portfolio is it better to have a mix of different companies and just be patient with stocks that are doing nothing, as opposed to selling those (which may have potential) and moving into something like TD or SLF which seem to have more momentum right now. Dividends and growth are my objectives. Thank you!
Read Answer Asked by Neil on January 20, 2021
Q: 10 Years Treasury Yield is rising fast laterly. Is that a result of Fed asset purchases slowing down? Where can we find such information (such as monthly or weekly purchase amount)? Thanks.

Read Answer Asked by Lin on January 20, 2021
Q: What to you consider the long term consequences of the Democrats now having control of the Senate and House of Representatives with regards to prospects for Enbridge? Of immediate concern is the rumoured pending announcement by Biden to cancel the XL pipeline in an effort to appease the left leaning members of his party.
Read Answer Asked by paul on January 19, 2021
Q: Hello
In Friday's (Jan 15th) Globe & Mail, Clyde Russell warned that the 2020 bullishness on commodities may not continue into 2021 because China's massive buying spree seems to be ending (e.g. Dec imports of copper were down 8.7% from Nov's imports etc). What is your view on commodities for 2021?
thanks
Read Answer Asked by Mary on January 18, 2021
Q: I was wondering if you have an opinion on the risk coming from possible political stability/volatility in the US. While I would guess your answer is status quo, it is hard to think of a more alarming political situation, and right now, increased susceptibility to a subsequent event, such as an outside threat.
Also, somewhat related: with the stimulus package now priced in, do you still think that there is a catalyst ahead for another leg up in the market? Is it any different from our current theses (environment, pot, tech, industrial, gaming etc)?
Read Answer Asked by Peter on January 18, 2021
Q: EMA and FTS are both trading below their 200 dma and at their support prices.
Is there anything fundamentally wrong with either company to account for the drop? Or is money just rotating out of utilities?
I have 1/2 position in each and am thinking to add to them on this dip.
Would you suggest to add now at these prices? Or wait for them to turn up and over the 200 dma as they may just drop further?
Read Answer Asked by Curtis on January 14, 2021
Q: Hi 5i ,
I plan to increase my exposure to oil and agriculture. while doing my research, valuations and the RSIs have increased substantially. For example, stockta.com provides the following Alerts for LUN and TECK.B -"Stochastic Overbought Reversal' which I assume means that a reversal can happen any day. I assume that some holders are likely to take some profit soon. Most of what I have read says that you should wait for the RSI to come down but I also understand that the RSI can remain elevated for some time. Should I wait? or could these sectors be on a tear?
Please advise and thank you for your help
Read Answer Asked by Mary on January 14, 2021
Q: Hello 5i team
As a front line (nearly retired) physician, I recently received a Covid 19 immunization. It's difficult to express the REMARKABLE sense of gratitude and euphoria that I observed among everyone involved . Suddenly, we felt liberated from the danger of this scourge that we face daily. Our next exciting job is to immunize our fellow citizens as fast as humanly possible and as we do, this euphoria will spread to society at large.
After my immunization I bought a new car and we're booking our fall and winter travel plans. This manic behaviour, I believe, represents the tip of the iceberg for pent up demand which will be unleashed upon the world.
At the risk of being labelled a mercenary can you identify some sectors which are still beaten up and likely to surge-I'm thinking energy but other suggestions welcome (prefer etf's with a dividend to keep me invested until the recovery occurs-would supplement with high conviction stocks)
Thank you. As always, I value your opinions, Regards gary


Read Answer Asked by Gary on January 12, 2021
Q: I'm now seeing many many people on different social media platforms, including very young people, talking about day trading, leverage, how much money they made on this or another stock. It reminds me very much of the tech bubble when, overnight, everyone became a stock market investor and guru. Are you seeing any of this and is it going to float prices higher do you think?
Read Answer Asked by Rick on January 12, 2021
Q: Helping my son with his investments which are as follows: MAW 106 24%,MAW 106 20%. VUS 21%, VEF 18%, VEE 8%, ZJG 6% and XQQ 3%.Feeling there is a bit of an overlap with some of these investments eg XQQ and VUS also with MAW 150 and VEF to a degree. Any advice is welcome ,stay as is , reduce holdings or increase some..He prefers ETF's and Mutual Funds (Mawer) and is a bit risk adverse but does realize markets go up and down though and is young( mid 30's ) enough to handle declines. ! Thanks.Paul
Read Answer Asked by Paul on January 11, 2021
Q: I am not well diversified into the US market.

I would like to sell some Canadian Banks and put that capital into US equities.

I would like to consider an ETF or a mix of ETFs.

I would like to stick to my investment personality,
long term hold, would not need money for well over 10 years.
Large Cap, Blue Chip dividend paying and "dividend GROWING" equities.

1. Can you make a recommendation for a low cost / mer etf.
2. Do I need more than one ?
3. Should I buy this in Canadian or US funds ?
4. What are the pros and cons of the purchase in Canadian or US dollars

thanks

Ernie
Read Answer Asked by Ernest on January 11, 2021
Q: I currently have 4% of my overall portfolio in Consumer stocks (DOO and GOOS). Having a difficult time trying to talk myself into increasing my overall percentage of Consumer stocks but have noticed you were up to 20% Consumer in a recent suggested sector distribution you made. Why so high for Consumer?
thanks, John
Read Answer Asked by John on January 08, 2021
Q: Hello and thank you in advance for your reply!
We are hearing more and more talk about a disconnect between the stock market and underlying economies. How sustainable in your view is the current market surge (ie: is this typical of any January), or should we be concerned about another significant correction like last March? If the latter, any recommendations you'd make with regards to less volatile or more defensive sectors, or a more balanced portfolio distribution? With best regards, Aaron
Read Answer Asked by Aaron on January 08, 2021
Q: With a Democrat Senate, higher government spending, rising inflation and an expanding 10 yr yield, what would be your fixed income allocation for the next five years? Do any of the above choices make sense? Thanks.
Read Answer Asked by Curtis on January 08, 2021
Q: Good morning - I was reading an interesting GS report which is calling for a structural bull market for commodities, starting in 2021. Let's say GS is correct. Assuming that, what would you suggest for a Canadian investor, both at home and in the US. Also, is there an ETF or two that you would suggest to address this assumed trend. Finally, do you think GS is on or off target here?
Thanks

al
Read Answer Asked by alex on January 08, 2021
Q: Hi guys,

Should the Democrats hold all 3 houses, what is your prediction for the North American markets. Drastic sell off or same as before.

Thanks

Jim
Read Answer Asked by jim on January 08, 2021
Q: Which sectors do you expect to perform best in 2021?
Read Answer Asked by Ron on January 07, 2021