Investment Q&A

Q: Hi,
I read with great interest Lisa and Peter’s questions and your answers on Feb. 10 about Trump, US holdings and economic warfare.
Given Trump is now making noises about how some US debt could be fraudulent, and the US may not owe as much as the Treasury reports, I see new risks.
For instance, as part of his economic warfare against Canada, could he by the stroke of a pen declare Canadian held US debt is fraudulent to put pressure on Canada to become the 51st state? Further, could he freeze Canadian held assets in the US (securities, real estate, business assets, etc.) to further pressure Canada?
Along Lisa’s line of thought, does it indeed make sense to sell some US assets and re-buy in Canada?
Final question: if I hold US cash in a US dollar account in a Canadian domiciled bank, is it safe from Trump’s potential ravages?
(Please take multiple credits.)
Thank you, Michael

Q: At an average price of 111$ today down 14%.I agree with your take on not to sell in the Trump threat but? Already overweight so can not add.Are you confident a hold is best or ? Much appreciate your insight.Thanks Larry

Q: with all the talk about trump forever talking about that there are no u.s. banks in canada [wrong] do you see that this could stall growth of canadian banks in canada in future. Bns and td have already been hit hard the last couple of years and being a bank holder for the dividends in canada and him always talking about this do you see any merit in this. Sure seems to be picking on canada the last couple of weeks

Q: Hi 5i Team,

I'm curious about your thoughts on sentiment turning against US equities in the coming months. I'm already exhausted seeing all the foolish tweets and news clips coming out of the Trump administration and I have to believe many others are too. Trump 2.0 seems much worse than 1.0! Also, I've been hearing that European markets are already outpacing the US market so far this year and I'm wondering if the US market deserves its current valuation given the increased volatility and increased risks?

I own many US stocks (e.g., 5 of the Mag 7, COST, ISGR, HD, TT, SYK, RS, ZS, HON, V) and I'm thinking for the first time of selling/trimming some of these. I would look to increase my dividend-paying Canadian stocks to generate more income. I'm also thinking about European dividend payers?

I'd appreciate your general views along with any comments you might have related to selling/trimming some of the stocks I've mentioned above. I'd look to sell into the end of this month and buy favourite TSX dividend payers (e.g., ENB, SLF, CNQ, BEP.UN, BIP.UN, T) or others you might suggest after the next tariff decision in early March.

Like many members, I have to thank you again for the wonderful service you provide. Your Q&A section and market reviews are fabulous, especially during difficult times! I also realize this is a long question and the answers are worth more than one credit.

Lisa

P.s. I had registered to attend this week's webinar which may have answered some of my questions. Unfortunately, something came up over lunch and I missed the webinar. Please let me know if there's a chance of catching a replay.

Q: Hi Peter and Team,

Across all accounts, our holdings in the Financial Sector include BN, FFH, GSY, MFC, SLF, and the CEW ETF. I feel that this is a fairly good representation but realize that the Canadian banking sector is quite low, and the US banking sector is non-existent in our portfolio. Portfolio Analytics indicates that we need more exposure in this sector.

Several questions; please deduct question credits accordingly.

1. TipRanks shows that BN has a P/E ratio of 125.13. Can this be true?

2. A recent question from a 5i member asked about Sagicor SFC, which prompted me to investigate it further. I realize that it’s a small-cap stock, but noticed that for the 3 month, 6 month, and year-to-date periods, it has excellent momentum (which I know you like) and has a really low P/E ratio of 1.51, which I assume to be correct.

3. Because I feel that Trump tariffs are more of a possibility than not, I’m in the process of adjusting some sectors but not all, in case the tariffs don’t happen.

4. Would you endorse a small holding in SFC, (say a half-position) using proceeds from the sale of more tariff-vulnerable stocks?

5. Finally, could you suggest some Canadian-domiciled ETFs that would give us needed exposure to both the Canadian and US banking sector?

As always, thanks for your assistance that helps us to make informed decisions.

Q: I am a 78 year old investor and have been in the stock market for about 50years. As you are aware, that will be many ups and downs. I have yet to witness the recent turmoil caused by Trump which an analyst referred to 'a staggering level' of chaos.
There have been a 'staggering' series of bluster about tariffs affecting the lives of North Americans. I think I have an idea to soothe your younger investors. Who comes to mind when you read the lyrics to a song from the musical/movie 'Chicago' sung so well by Richard Gere?

"Give'em the old dazzle dazzle
Razzle Dazzle 'em

Give'em the old hocus pocus

Give'em the old film flam flummox

Give'em the old three ring circus
Stun and stagger'em
When you're in trouble go in to your dance

Long as you keep'em off balance
How can they spot you've got no talent
And they'll make you a star!

How can they hear the truth above the roar?"

I just finished reading the 5i recommended book "The Psychology of Money" by Morgan House. Timeless lessons on wealth. greed and happiness. It was while reading the section on greed I thought of Trump and Musk and Razzle Dazzle'em.

Q: All OK with COHR? The market seems to like the latest results posted last night. Any red flags? I'm a "Buy and Hold" investor and I'm not overweight in COHR so I'm just planning to do nothing! I don't think Mr. Trump's tariffs will be an issue with this company and COHR don't seem to be to be overly reliant on AI spending. Any comments you have would be appreciated.
James

Q: I want to invest in the oil and gas service sector; primarily in western Canada, im not interested in the producers as I believe the Trump effect will eventually reduce the price of oil for the producer but not the service sector as I believe they will become busier due to the concept of drill baby drill! I would like to purchase TRP;PD but would also like to ask if you support this idea and provide any service names you like? Thank you.

Q: What are your thoughts on FNV moving forward? Is there a chance that the Cobre Panama mine reopens?

Q: I am a retired investor and am concerned of the current state of the Markets in Canada and US.
While we go back and forth on tariffs one thing is becoming clear, the next four years will be filled with uncertainty and disruption. I am hopeful that common sense will prevail and we can move forward in a positive and productive manner, but who knows!!

Given the uncertainty around the current markets and another deadline in 30 days, is there sectors that you would avoid right now or lighten up on? How should investors prepare for this period of uncertainty?

Thank you
Tim

Q: I'm recently down fast with MDA and I know why. Will it turn around or should I invest the money elsewhere. Thanks

Q: We've been reading of lots of deregulation coming in the U.S generally, but especially in the financial sector. Pundits have taken to saying 'animal spirits will be unleashed'. Additionally, I wonder if orange imperialism will tend to trickle down to C suites. Can you suggest a Canadian name or two in relevant sectors that might be more likely to be taken out?
(With the proviso that their debt levels be on the low side for sector average.)
Deduct as you see fit.
Thank You,
Tim

Q: Hi Peter and team,

I'm wondering how resilient TFII is in the face of prolonged tariffs (if it ever comes to that). The business section of the Toronto Star had an article with a scary introduction:

MONTREAL - Truckers say the sweeping tariffs threatened by U.S. President Donald Trump would wreak havoc on their industry as trade between Canada and the United States takes a hit.

“If these tariffs came in at those levels for a prolonged period, this could be the final nail in the coffin for many trucking fleets,” said Stephen Laskowski, president of the Canadian Trucking Alliance.

“It’s a grim picture.”

Realizing that TFII is a large company, does it have what it takes to 'weather the storm'?

Thanks for your insight.

Q: Can you please help me understand why these two names are underperforming while the BOC is easing interest rates? I hold both names in my unregistered account. Please rate them as buy, sell, or hold for a 3- to 5-year holding period

Q: Any reason for Etherum [ETF] drop close to 20% on monday?

Q: As one of 5i’s early subscribers, I find it a useful thought experiment to give my answer to a question before clicking on the 5i answer. I have found over the years our answers converge and so I rarely send in questions and comments. However my sense is that DeepSeek is a significant change.

On one level it is a clear lesson in the reality that, as Keynes said many decades ago, it’s real resources that matter, not money.

The American approach to AI development was that if you don’t have a $1billion you're not in the game. The Chinese have shown that if you have the pool of talent, amazing things can be done with relatively little money. The prevailing narrative that the Chinese are just copy cats was also blown out of the water. DeepSeek not only upends every assumption underlying the American approach to AI, it shows that the Chinese can out Silicon Silicon Valley and that means that, unlike in the past, China’s most talented minds will want to work for Chinese companies not American ones.

How will the Americans respond? Having staked political capital on the $500 billion Stargate, Trump and his entourage of billionaires have no choice, they will double down. We are hearing the narrative already, they are now saying that $500 million invested in DeepSeek’s advancements will produce even more amazing advancements in AI.

At a moment in history, as America consumes itself, China has taken a leap forward. Not only have they bloodied Trump, they have shaken the world in ways Napoleon could never have foreseen.

There are actually lessons to be learned in how Canada might deal with Trump but the political bobble heads and corporate Canada have actually come to believe the myths of neo-liberalism they started purveying in the 80’s, and are now incapable of rising above their paralysing fear.

Every investor has to ask, what are the implications of DeepSeek for their investments? Doubling down by the Americans will keep the party going for a while but it seems reasonable to expect a reckoning. Where would 5i look for alternatives to AI investments? Please suggest 5 US and 5 Cdn stocks that have strong balance sheets and reasonable growth prospects (without stretched valuations) that would benefit from using much less expensive AI? Also, please suggest a couple of ETF’s for Europe and China that would benefit should those markets surprise to the upside?
Mike

Q: I wondered what Trump would do to support the market, and now we have it.
A sovereign wealth fund!
A ludicrous idea for the U.S. which is not only a currency issuing government, it is also the reserve currency.
However, a deep pocketed buyer of U.S stocks will inevitably push p/e's higher.
While the insanity grows, we might as well make some money.
Hopefully Ryan speaks to the potential impact of this for investors in his webinar tomorrow.
Mike

Q: You say the Canadian market is up 5% since trump started talking about tariffs, how much is the US market up since then?

Q: I have been trying to get my head around what will happen with Trump's war against Canada. I have tended towards devastation to the Canadian economy and as such have shifted some investments to the US and taken a 25% cash position at least until we get some clarity on the situation. I would really like to get an understanding of just how devastating it would be. Assuming Trump does put a 25% tariff on Canadian goods just how bad does 5I think things could get . Unemployment numbers ? How deep a recession ? How or even can we weather the storm ? .... And any other thoughts you may have if we get the full brunt of a 25% tariff ? .....
I have been questioning my fears simply because Mr Canadian Market is so far not panicking { but I am } ......

Q: In an answer to Terry this morning on industries that are vulnerable to tariffs 5i put pipelines as the second most vulnerable . When I asked the same question about the stocks in my portfolio's vulnerability, 5i said about ENB ....." ENB may not be impacted much and in fact is planning on expanding pipeline operations if there is a surge in US drilling under Trump. " ....Could you please clarify ? If I'm vulnerable ENB is going to be sold ..... Thanks for your terrific service .......