Q: Thank you for your very quick answer to my inquiry of todays date - 11/16/16. However, relevant to your suggestions, we also own RY, SLF, BCE & PBH in other cash accounts. Still looking for other suggestions. Thank you.
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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: Being a retired accountant I can't help but feeling compelled to add my two cents on the question raised on goodwill.
Goodwill is simply the difference between the purchase price and the net book value of a company acquired. Say, if Co. A buys Co. B for $12 million and Co. B has a net book value ("NBV") of $10 million, then Co. A will report a goodwill of $2 million in its books. It's that simple.
You can call it an accounting plug if you like and that's not far from what it actually is. As to whether goodwill is good or bad, that really depends on each acquisition.
Using the same example, the $2 million goodwill is considered "good" if Co. B's actual assets are worth more than the $12 million paid for by Co. A. However, if the same assets of Co. B are actually worth less than the $10 million NBV, then that $2 million goodwill is really not an asset. That is the reason why so many acquirer companies have goodwill write-offs a few year after initial acquisition - when the true value of the company they acquired becomes crystalized. Hope that helps.
Goodwill is simply the difference between the purchase price and the net book value of a company acquired. Say, if Co. A buys Co. B for $12 million and Co. B has a net book value ("NBV") of $10 million, then Co. A will report a goodwill of $2 million in its books. It's that simple.
You can call it an accounting plug if you like and that's not far from what it actually is. As to whether goodwill is good or bad, that really depends on each acquisition.
Using the same example, the $2 million goodwill is considered "good" if Co. B's actual assets are worth more than the $12 million paid for by Co. A. However, if the same assets of Co. B are actually worth less than the $10 million NBV, then that $2 million goodwill is really not an asset. That is the reason why so many acquirer companies have goodwill write-offs a few year after initial acquisition - when the true value of the company they acquired becomes crystalized. Hope that helps.
Q: Hello 5I,
I see a lot of questions concerning ETF. Would you consider doing portfolios of ETF along the same same lines of your income and Growth Portfolio?
Paul
I see a lot of questions concerning ETF. Would you consider doing portfolios of ETF along the same same lines of your income and Growth Portfolio?
Paul
Q: We are retired & reasonably comfortable. I have cleaned out several non-performing stocks in a RIF & now hold a full position in the following: FTS, AQN, EIF, KXS, ENG, & IPL.
With surplus cash of approx. $200K, I would appreciate your recommendation to round out this grouping. Thank you.
With surplus cash of approx. $200K, I would appreciate your recommendation to round out this grouping. Thank you.
Q: Hi Peter: I am 81 years. Am considering buying Fidelity Tax-smart withdrawal program. This fund invests 70% S&P/Capped 60 Index and 30% S&P 500 Index. If you can recommend the fund would a 50% to 75% investment of my funds be reasonable? Should I buy on my TD trading account or buy direct from a Fidelity rep? Would I receive the same net income either way? Thanking you for your valuable opinion. Ron Noble
Q: I am considering adding some lifeco to my portfolio due to what appears to be a rising interest rate environment. Currently banks are at 8%. As Sunlife has recently had a run up I was thinking of FLI as a play on both US and Canadian lifeco's with some covered call protection . Do you recommend this strategy as opposed to individual companies and if not what lifeco would you recommend ? Buy now or wait for US policy in December ? And do I need to deduct FLI's mer of .93% from the indicated yield of 5.35% to find the true return ?
Q: My question concerns asset allocation. I understand how rising interest rates can affect utilities that have a lot of debt or low oil prices affect energy companies but I am less clear why other sectors should be declining in what is being generally viewed as an improving economy. For example, why are consumer staple stocks declining in an atmosphere where economic growth is expected? Does sector rotation fully explain this?
In the same allocation vein, my one weighting anomaly is in industrials, where I have a 25% weighting. I hold EIF, MMM,ECI, HEI (a US airplane parts manufacturer), STN and SIS in fairly equal proportions. Most models suggest this sector should be at most a 20% weighting but when I look at the list I see companies in different industries and businesses and I wonder what a water heater rental company and an engineering company have in common. Am I being too slavish to an asset allocation model or is there something that ties these companies together that I am overlooking?
Appreciate your insight.
Paul F.
In the same allocation vein, my one weighting anomaly is in industrials, where I have a 25% weighting. I hold EIF, MMM,ECI, HEI (a US airplane parts manufacturer), STN and SIS in fairly equal proportions. Most models suggest this sector should be at most a 20% weighting but when I look at the list I see companies in different industries and businesses and I wonder what a water heater rental company and an engineering company have in common. Am I being too slavish to an asset allocation model or is there something that ties these companies together that I am overlooking?
Appreciate your insight.
Paul F.
Q: Hi Peter,
I'm just curious ... Who are your heroes are in the investment world that have shaped your investment philosphy? Are there any books or insights that describe your investment process?
5i, thanks for the great work that you do. You're doing a great service to Canadian investors.
Elliott
I'm just curious ... Who are your heroes are in the investment world that have shaped your investment philosphy? Are there any books or insights that describe your investment process?
5i, thanks for the great work that you do. You're doing a great service to Canadian investors.
Elliott
Q: Hi Peter /group I presently have around $300,000 cash (in a tradable business account)I do not want to take any /little risk with this hard earned $. What should I invest in with Capital preservation being the #1 focus. Thanks for your valued advise
Q: We have sold cottage and have 600,000$ to invest. Looking for 12 safe(!!!) or safest dividend paying stocks with an understanding that stocks can go down but good companies usually come back.
Thanks
Jean
Thanks
Jean
Q: Could you outline the best strategy when the underlying stock for a covered call goes significantly higher or lower prior to the expiration of the call? Thanks!
Q: Is it best to hold Canadian bank stocks in an rrrsp or tfsa, advantages or disadvantages?
With thanks. Rose
With thanks. Rose
Q: I have Ryan's read excellent article dealing with the impact of the US election on Canada.
However, I am somewhat bewildered by recent market activity - especially on the downside here in Canada.
The opinion has been expressed that interest rate incrases are/were already baked into the market. Can you quantify that in any way? e.g. 3-5%; 1-2% .... to what degree they are "baked in".
The reason I ask is that, it seems like all the media had to this week was mention the likelihood of inflation driven interest rate increases in the USA and sectors here like utilities and REITS took it on the chin.
How much more downside can we expect given the impact of just a few words about possible Trump moves to drive the USA economy when the decision(s) are made to actually increase rates in the USA?
Could this downward pressure be magnified if, in addition, we see US corporate taxes reduced and see some companies start to shift production to the US.
How likely is it that we are facing the prospects of a signicant bear market lasting a few years here?
Or is this a knee jerk reaction right now like Brexit that will likely reverse itself over the next few weeks?
Any light you can shed on this will be greatly appreciated.
However, I am somewhat bewildered by recent market activity - especially on the downside here in Canada.
The opinion has been expressed that interest rate incrases are/were already baked into the market. Can you quantify that in any way? e.g. 3-5%; 1-2% .... to what degree they are "baked in".
The reason I ask is that, it seems like all the media had to this week was mention the likelihood of inflation driven interest rate increases in the USA and sectors here like utilities and REITS took it on the chin.
How much more downside can we expect given the impact of just a few words about possible Trump moves to drive the USA economy when the decision(s) are made to actually increase rates in the USA?
Could this downward pressure be magnified if, in addition, we see US corporate taxes reduced and see some companies start to shift production to the US.
How likely is it that we are facing the prospects of a signicant bear market lasting a few years here?
Or is this a knee jerk reaction right now like Brexit that will likely reverse itself over the next few weeks?
Any light you can shed on this will be greatly appreciated.
Q: A number of the companies that grow by acquisition seem to be under greater pressure right now. I was wondering, if we are now in a context in which interest rates are likely to increase, whether companies of this kind (and thus their stock prices) will be impacted in terms of their capacity for growth and their ROEs. Decisions regarding any given company require more detailed financial assessments, so your general thoughts are what I am wondering about.
Thanks for the wonderful guidance that you provide.
Thanks for the wonderful guidance that you provide.
Q: What's the matter with these very good companies?
Thank you Peter.
Thank you Peter.
Q: could u please send a list of all the best 25,50, and 100 year dividend increase paying stocks and what sector they are in.
Q: Good Morning.
I would like to buy stocks in this dip. Which would you recommend of the ones I noted or others? As well, a small position in each or full positions? I currently own full positions in SIS, OTC, EFN, ECN, GOOGL and HOT.UN and small positions in TIO and CXI (to name some). I also have a large position in US cash. Any suggestions for it?
Thank you!
cathy
I would like to buy stocks in this dip. Which would you recommend of the ones I noted or others? As well, a small position in each or full positions? I currently own full positions in SIS, OTC, EFN, ECN, GOOGL and HOT.UN and small positions in TIO and CXI (to name some). I also have a large position in US cash. Any suggestions for it?
Thank you!
cathy
Q: portfolio- with recent scenario (new us president) looks like people moving to more growth oriented names. as such what would be recommended sector allocation. thanks
Q: Given the "new" political landscape in the US, which sectors should do well ?
Q: Now that people have had time to digest news of the election, what are some names you feel have been unfairly punished and are good buying opportunities?