Investment Q&A

Q: Portfolio analyzer says I need more industrials. I already have a 3-4% position in CNR. What other names in industrial would you suggest and their price points for entry please? can be both US and CA.

Q: Hi Peter, Ryan, and Team,

We need to raise some cash in our non-registered account. Please rank in order of which stock/ETF to sell a partial position first: BYD, CNR, IHI, and TRI . All four of these holdings have done very well, thanks to the continued good recommendations from 5i.

Q: CNR. Have you heard any news re the potential reason for the downhill trajectory in the stock over the course of the last 2 weeks?

PLTR. In an opposite sense, any news re the upside being experienced by this company over the course of the last 2 weeks. I did see a target price of $29 recently but everything I've heard is that the company's forecast was ok (nothing special), I've heard many analysts reiterate that the companies stock was overvalued, ...

Would you be a buyer for either of the above at current prices? If not, would you wait for a better price? Thanks.

Q: With a debt-to-equity ratio to 99.4% does CNR have too much debt to continue operate successfully?

Q: Looking for your advice on stocks with accelerating capital returns, excluding IT, for 5 year hold.

Q: I am looking to get into safer investments and wondering which railway - Canadian or US - to buy. This would be held in a TFSA so growth would be preferred but total return is good too.

Q: Hello, this is about your answer to a member about the valuation of CP versus CNR today. In your answer you stated that “CP is now cheaper than CNR on valuation (21X vs 24X).” Do you refer to the P/E ratio here? It appears there might be some discrepancy between the numbers you provided and what I found on TMX Money (P/E ratio 25.99 for CP vs 20.37 for CNR). Then, is CNR cheaper than CP? I am just trying to understand correctly. Thank you very much

Q: Hi, all

Not loving the ride I'm taking with CP these days. I think you prefer CN, which I also own.

I can stay in my seat with CP for diversification sake or switch and stick with CN.

Your general thoughts on the two?

Thanks,
Robert

Q: Hello Peter and team

To complement my all ETFs portfolio : VEQT 40%, QQQ 10%, VGT 10%, MOAT 10%, I intend to add 6 of the above 7 stocks for 5% each.
Does it make sense, please feel free to substitute and suggest other stocks and explain why.
This is for a 10 years hold with minimum or no trading in this account.
Thank you
Raouf

Q: Good Day,
I currently hold CNR and JPM in my RRSP. I am considering selling CNR and topping up my JPM position with the hopes of increasing the growth profile over the next 5 -7 years. Do you believe that JPM should outperform CNR moving forward?
Thank you.

Q: Which is a better rail to buy currently, for a 5 year hold? My portfolio is very diverse (25 companies) but I do not have any railroads.

Q: I’m trying to form a kind of hybrid of the Hodson and the Buffet approach to investing. Hodson: balanced portfolio. Buffet: a few excellent companies. So I would form a fairly balanced portfolio but be overweight considerably in a few.

Buffet says you are buying a piece of a business; you are not buying a stock. He and Munger don’t care about the stock market. They both say you don’t need very many stocks, no more than 5 or 6. They also say their approach is not for the average person, who usually doesn’t know how to value a business and should just stick to EFFs. Their approach is for someone who knows how to analyze and value a business. Peter Hodson and 5i do know how to analyze and value a business. (And in answers to questions 5i has also said several times that the way to build wealth is to own a small concentrated portfolio.)

On the other hand, 5i is all about building and rebalancing a diversified portfolio, covering all, or almost all, sectors. This approach is more concentrated than an ETF, but not as concentrated as a Buffet/Munger small set of quality companies. I don’t know anything about Sees Candy, Geiko, or Coke. But they certainly do.

If Buffet/Munger were looking only at Canadian companies, which few would they want to own? Any size, any sector. Just outstanding businesses.

Q: From reading your recent answers, you like these 4 companies (CNR, CP, TFII and TIH). Would you please rank these 4 companies for growth and rank them again for dividend growth. Which two companies would be your favorite for a combination of growth and dividends for a 5+ year hold? If you can give a brief explanation for the reason(s) over the other 2 companies? Thank you.

Q: I have just updated my portfolio analytics and am delighted with the results and the advice from it. 5i has been a big part of that, giving me the insight, information and confidence to make mostly good decisions.

I originally put a 30% allocation for bonds when I started 4 years ago, mostly because that's what was usually advised for those in my position (about 10 years out from retirement).

However, I have put no new money into bonds over that time because the ones I own have been the worst part of my portfolio. They did not act as ballast when the market went down - they seemed more volatile than most of my conservative equities. They also did not go up appreciatively when interest rates rose, and overall, even with the payouts, I'm in the red on these bonds over the past 4 years.

I heard you mention bonds in asset allocation on the recent podcast but I didn't sense any great endorsement of them. Other than the traditionally recommended 60-40 or 70-30 split, can you offer reasons not to sell them off and buy conservative stocks like CN, CSU, BN, etc or else broad-based index funds like XIC, XUU etc.?

Q: How would you value above companies for a long term industrial hold.? Are there other companies in the North American industry you would prefer? Thank you.

Q: Can you compare the dividend growth at CN and CP over time? It looks to me that CP hasn’t increased the dividend since Oct. 2020. The longest previous period with no increase in the recent past seems to be July 2012 to July 2016. In contrast, CN seems to increase their dividend every year. But has the rate of increase for both been similar over the long run despite the choppiness at CP? Also, the rate of increase seems to be slowing more recently at CN, it was often double digit increases prior to 2020. Any insights appreciated, thanks.

Q: I recently retired and looking to place some of my savings into the market with a 5 year horizon at which time I will re-evaluate. Will tolerate a moderate to light risk. Could you please recommend 3 or 4 stocks or etf’s for my TFSA and 5-6 stocks for growth. Appreciate all your efforts. Thank you. Brian

Q: Making a large spousal RRSP contribution soon and am looking for guidance as to the best 3 or 4 stocks with a tilt toward growth that would compliment this group with a brief explanation as to thier merits and why they compliment the existing holdings. Initially had my sights set on DOL, ATS, CNR and IFC but not sure these would be the right choice to maximize compounding for someone with a very long investment horizon.

Wife’s portfolios currently include: ITOT, IEMG, XEF, AVGO, COST, SBUX, RY, FTS, BCE, ATD, DIR.UN, SHOP, GSY, BN, TOI, ATZ, NVEI
Most Mag 7 are owned in my own accounts with adequate exposure when considering combined portfolios so not looking for any of those.

Q: I have the above stocks in my TSFA account. All about equal weighted. Which stock would you add the $7000 2024 contribution to?

Or do you not favour any of the above and have another suggestion?

Thanks for everything and happy Holidays to everyone.

Dave.

Q: Hi, What are your thoughts on the CN Rail's deal to acquire Iowa Northern Railway ? Is it material? Financial terms were not disclosed. The deal is still subject to US STB review. How does this deal position CN Rail against its competitors ? Does it make CNR stock more appealing to buy? Thank You