Investment Q&A

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: Can you please provide your thoughts on the stocks listed for a RESP that will start to draw down in 4 years? In addition to these positions the portfolio has a good core position in CDN, US and INTL large cap ETFs. Any that you would get rid of now? If so, please provide alternatives (both Cdn and US).

Q: Dear Peter et al:

Can you give me the names of 3 companies each that fulfill these criteria. I tried to "curate" the list by myself by going through 6 months worth of questions on Energy sector but really couldn't compile a decent selection as the questions exhibited significant variance.

Question # 1.

Mid cap oils (not gas)

Good to great free cash flow

FCF well directed to share buy backs, debt reduction and dividend enhancement.

Solid management
(I know this is subjective but I know that you know the players well!)

Showing good momentum and growth prospects.
You can include a small cap if you think it i soon going to be a mid cap.

Question # 2.

Same criteria but in Large cap oils.

Many thanks.

Q: Is it worth selling a half position in suncor and buying canadian natural resources ? There will be no tax consequences just trading costs.

Q: Considering taking a position (up to 2%) in a dividend paying oil/gas company, and looking at FRU or WCP. Could I get your comments on the royalty structure vs a producer, as well as a comparison of the metrics such as payout percentage, debt, guidance, etc. Do you have a preference, and would you even consider adding an oil producer at this time. I have some ETFs with small positions in some oil companies, but no direct holdings of my own.
Thank-you

Q: I have a RESP for 3 grandchildren under the age of 11.
Would you please suggest 3 or 4 stocks to add or swap with any in the above group. Would prefer a bit more growth. Thank you

Q: With the prices of some oil stocks down significantly in the past 6 months, do you think that some of the larger companies (SU, CNQ, etc) would want to take over some of the smaller players at a nice discount? A bit speculative, but can you identify some of the smaller takeover candidates?

Q: Two questions:

(1) If you could only own one of CNQ or SU, which would you choose, and why?
(2) If both CNQ and SU could be owned, in equal amounts, are their profiles and metrics such that diversification would be enhanced?
Thanks as always for your insight.

Q: In regards to the comment of the energy sector being very very cheap.
If you had zero exposure to the energy sector, and only cared about total return and growth.
What would be your 4 top picks to research?

Q: I have these companies in my tfsa and and I have $7000 to add. How would you rate them right now.

Q: Now that Trans Mountain will soon be in service, are there specific oil producers or energy companies that 5i think may benefit the most to the bottom line and share price.

Best regards,

Tom

Q: Would appreciate your top heavy oil producers in Canada and rank the best buy for long term hold. I have listed a few above . Thank you

Q: thinking of bottom fishing energy with bias to natgas , which producers
would you consider most undervalued.
thanks

Q: Looking to increase exposure to energy in TFSA by either adding to SU (2.7% to 5%) or take-up new position in either CNQ or TOU. Growth and income is the goal over 2-3 year hold. How would you guys proceed?

Q: Are there any particularly compelling resource stocks that are worth buying currently. I have zero exposure to commodities and I am fine with that, but I am open to your recommendations, either CAD or US. I am a moderate-to-agressive investor.

Thank you.

Q: Can you provide me with your analysis of Journey Energy please? Price has gone down more than other O&G plays. WIll continue to hold this if the fundamentals are good. Can they do well with WTI at this price?
Thank you.

Q: This stock has struggled compared to its large cap competitors such as CNQ and SU. I have a position which is underwater and in your opinion is it a buy, sell or hold. Thanks. Rick

Q: Hello,

Can you rank CNQ, SU and Toumaline in order of preference for overall returns? If owning only one which would be your choice? Is the recent pullback in prices a good opportunity to buy into the sector or should a person stay on the sidelines for a bit to see how the economy slows in the next half year? This is for a new account so no position yet. Income with some growth preferred. Please take credits as needed. Thank you! Great service.

Q: I wish to make my holdings in the energy sector more resilient to market turmoil and retain those holdings that have strong economic fundamentals plus pay a reasonable dividend. Can you recommend any that represent a good entry at this time.

Q: As a source of dividends, many Canadian “hydrocarbon energy” companies have a long and positive track record. Today, non-hydrocarbon energy sources have become more economically attractive, are growing quickly through significant investment, are becoming easier to support politically, and continue to improve through ongoing R&D. Against this backdrop of an accelerating shift to lower carbon energy sources…

Which Canadian “hydrocarbon energy” companies do you think are best suited to adjust to this change?