Investment Q&A

Q: Good morning,
Wondering if you could please comment as to Steve Eisman's thesis on Canadian banks ( shorting specifically CM, RY and LB) and the deleterious effects of a shift to positive loan loss provisions for the stage 1 loan book( those loans that are current), where such a shift would, in his words, "crush" earnings( growth?).

Thank you for your insights,

Q: Have any of the big 6 Canadian banks ever cut their dividends and if yes can you please provide specifics as to when, by what magnitude.
Many thanks for your service,
Stevr

Q: Hi,

Do you think the US feds recent comments regarding slowing worldwide growth and less rate hikes will affect the Canadian Banks as well? If so what effect?

Q: With the possible exception of BMO, the Big Five banks seem to be hitting a plateau. At the same time, there's talk of moderating interest rates. But shouldn't lower rates be a stimulus for banks' business - mortages, etc.? I thought it was the insurance companies that benefited from higher rates. Or is the apparent tapering-off of banks' growth just a reversion-to-the-mean phenomenon?

Q: I have the above securities, as well as RBC Cdn Equity Inc, Sentry Cdn Inc, Sentry Global REIT, and fixed income via Fisgard Capital, Annuities, a company pension, CPP and soon-to-be OAS.

I really focus on asset allocation and am a little light on Consumer stocks, holding CGX, PBH and TCL (although some consider TCL to be in the Industrial sector). I am normally a buy-and-hold investor who trims-adds around core positions.

Question 1 = I am looking to add 1 more consumer stock and am looking for a dividend ideally > 3%. Based on my stock-ETF-MF mix, are there a few stocks you could suggest that would fit in my above set of securities.

Q2 = if I was to consider ideas from the Income Portfolio, is there an issue with having multiple food stocks....like PBH and A&W and NWC. Why have more than one food stock?

Q# = because A&W is a ".UN" company, how are their dividends treated for tax purposes? Are they eligible for the dividend tax credit?

Deduct as many credits as you deem appropriate....got loads and will never use them all up.

Thanks as always...Steve

Q: I hold the above banks. Which would you hold right now and which might you liquidate, of you needed the finds and why?

Thanks for all your support,
Mark

Q: Hi,
I have approx 10% weight in these in a long term RRSP following your porfolios(Only 1% WN as spin off)
I have about $!0,000 to add. What are your thoughts?
Add to a few laggards or add new?

Q: I have been contributing to my TFSA since inception and I currently have $90,000. I just put in $6000 as my 2019 contribution and I'm wondering what stocks I should look at. I'm 27 years old, have a long term time horizon, and I'm very comfortable with a lot of risk. Looking mainly for growth at this point. I currently have 30% of my account in the following (wxm, iwo, xsu, tdb3055 and RBF1035) (pretty well equal amounts). In addition I hold T, rY, BNS, JE, Enb, dol, ala, cjr, and fts all set up in Drips in roughly equal amounts. I also hold about 10% of my tfsa in ABM, EDT, loto and GQ for risky plays, all of which are down 50% except abm which is up 50%. what do you suggest adding at this point? Thanks so much!

Q: The short and long term performance of Royal Bank has strongly outpaced CIBC. Would it be prudent to sell my CIBC shares and buy Royal Bank with the proceeds?

Q: Hi Peter and team, I'm just starting to look into setting up my RRIF and wanted to ask if 5i could recommend any good reading materials, with respect to what sort of assumptions I should make? Currently my portfolios are producing income which would equate to about the minimum I would consider withdrawing on an annual basis. This will be my only income other than CPP and OAS. Is there any benefit to equalizing my US/CAD exposures when I'm not really planning much travel to US? For example, I could replace my Telus with VZ or my RY with JPM. Thanks again for your great service.

Q: 2:10 PM 1/29/2019
Hi: I am concerned about deteriorating trade relations between Canada and China. Could you please indicate which of the big 6 Canadian banks and big 3 Insurance have business in China and what percent of their entire business is located there.
Thank you.......... Paul K

Q: Can you please rate these four banks in terms of growth and least affected by a downturn.
.

Q: Could you advise if buys at the above are good value at current levels - looking to hold 3 to 5 years
Tom Allen

Q: Hi,

I'm looking for two good dividend payers, with some growth, and minimal volatility over the next 2 years. If they perform, I'd prefer to hold them long term. What to do you recommend and why? I already own AQN. If theres a better choice I haven't mentioned, pease do.

Q: I am looking for a sanity check. I am a retired income investor so I like covered calls like BMO's ZW series. However I believe the market is at or near a bottom so owning covered calls ETFs is significantly less appealing than owning the underlying stocks, especially since I can claim some capital losses. So, for example, yesterday I sold ZWB and bought RY. Am I making sense? I do realize I am a bit less diversified and I realize I would need to buy a few companies to replace say ZWC.
Thanks
don

Q: Charge as many credits as you see fit...at least 4...got lots. Annually, I follow the O'Shaughnessy system and go through the tedious process of ranking over 90 stocks into deciles. I am screening for stocks that are good value, less volatile and have a good + growing dividend. For value, I use P/E, P/B, P/CF, P/S. For volatility, I use Beta. For dividends, this year I have added 5 year growth % into the process. The resultant summary number is the cumulative of the 7 metrics, with roughly 60% value, 15% volatility and 25% dividend weighting. I then marry this up with a technical screening, using charts with a 200 mda, looking for a rising vs rangebound vs declining chart.

Question 1 = your thoughts on my screening system? I thought of adding in other metrics, but I wanted to keep it relatively simple. Factors such as payout % and ROE can always be a looked at in the next phase. Should I drop any of the metrics if they are redundant?

Most of the stocks screened as expected. However, 3 stocks didn't screen well at all and I am trying to figure out why. It may be that my population of stocks is skewed to value stocks, so if any of the other 3 stocks had growth or REIT characteristics, then they might be seen as outliers.

Question 2 = CSH's fundamentals screened horribly = 10th decile. Could it be that REITs may screen out differently, due to their very nature?

Question 3 =Both PBH and WSP screened poorly = 8th decile. Could it be their fundamental metrics exhibit more growth characteristics?

Question 4 = Reading past 5iR questions on these 3 stocks leads me to believe you are still strongly in favor of all 3. Please confirm.

Thanks...Steve

Q: I think that 3 more increases in interest rates are expected by end of 2019. You commented recently that one of these banks stock dropped due to bad loans. Is the info on bad loans available in the QLY rpts or elsewhere? I understood that the banks generally do well in rising interest rates but will this be offset by fewer mortgages?
Thanks

Q: HI there: I am still in comfortable profit margin from investments in the three stocks above. I wonder what you think about taking profits (now 20 % lower for Apple) now and holding some money on the side, or is buying on this dip a good idea. Especially re Apple.

Q: Following up on a recent question regarding allocating the appropriate amount of monies to each stock, the amount depending on the size, safety, etc of that security. Would you agree with the current split (full, partial, small):

Full = AD (should be partial), AQN, BCE, BNS, FTS, RY, TRP.
Partial = CGX (could be full?), CSH, NFI, PGH (could be full?), TCL, WSP (could be full?).
Small = WCP.

Thanks...Steve

Q: What would your advice be relative to exceeding a theoretical 5% limit for blue chip Canadian companies which have been beaten down by simply market sentiment in a lot of cases? I'm thinking of increasing my holdings of some of those I have listed. I realize I can buy CDZ but have a slight preference for individual companies.

Thanks