Investment Q&A

Q: Hello, your thoughts on the qtr, business performance going forward, price vs valuation - many thanks
Patrick

Q: Hi guys

I read something recent from Vitaliy Katsenelson (love his writing) which really hit home..... his thought that buying a stock is an "act of arrogance." I have copied part of it below. Please make it Public if you think his thoughts have value. You often remind us, like Mr. Katsenelson, that there is always someone else on the other side of a trade - with opposite thoughts on an equity.

Thoughtful Arrogance

Volatility can be both a feature and a bug of investing. Value investors attempt to treat it as a feature. We try to take advantage of the exuberance of the upswing and the pessimism of the downswing. I use the words attempt and try because though this approach sounds great in theory, reality proves to be a lot more challenging. This gap between theory and practice is created because volatility doesn’t waltz in a vacuum.

Upswings are accompanied by optimism and a positive news , or at least the positive spin the crowd puts on the news – this pushes a stock up. Downswings don’t happen in a vacuum, either; they are accompanied and usually driven by negative news, which results in Mr. Market marking down the value of your initial investment. Fear sets in. What if Mr. Market is right? What if this new news and the army of commentators on CNBC are right?

As the great American philosopher Mike Tyson said, “Everyone has a plan until they get punched in the mouth.” Theory gives you the game plan (buy more when the stock is down), but then the market punches you in the mouth.

Our ultimate goal is to narrow the gap between theory and practice and take advantage of volatility. We do this through thoughtful arrogance.

Let me explain.

Investing is an act of arrogance. You are basically saying, “I am right and the person on the other side of the transaction, who is buying a stock from me or selling it to me, is wrong.” Value investing takes that arrogance to an even greater extreme, as you are often buying unloved, if not hated, stocks.

However, arrogance comes in different forms. Plain vanilla arrogance is very dangerous in investing. Softbank CEO Masayoshi Son built Softbank out of nothing. He is one of the richest people in Japan, he is a visionary, and he has had one of the best multidecade investment track records.

However, today his Vision Funds are at the tip of the spear of dotcom 2.0 as it shatters against the rock-hard wall of economic reality, losing his investors tens of billions of dollars this year. Mr. Son is solely responsible for it. He recently admitted, “When we were turning out big profits, I become somewhat delirious.” Success went to his head. He started thinking that he had the Midas touch. This is why temperament is so important in investing: We are our own biggest enemy.

And then there is thoughtful arrogance.

This arrogance requires amnesia of your past successes and failures; it is earned with your current sweat, through thorough research. Your research leads you to conclusions that often disagree but sometimes agree with the prevailing trends in the market. Arrogance – belief in your process and research – allows you to follow through on your conclusions, even if the market scorns them.

Stuart

Q: Hello,

I am looking to get exposure into semiconductors market with 2-5 year time horizon. Which of the two (NVDA or INTC) would you consider as a better investment and would you suggest any other options in the US market. Thanks in advance!

Irek

Q: Do you folks see Xebec being a takeover candidate (ANRG for example)?

Q: I typically only trade options in USD due to the liquidity of their option markets and the general dearth of bids on the TSX. Recently though, I noticed that LSPD, on the Canadian side, had robust interest and trading options was easy. Has there been a general change in option trading volume on the TSX or is LSPD a special case? Thank-you.

Q: If copper is believed to be strongly in demand in the future ,for various reasons,what Cies would be the safest investment ,at least in CDA ,or even elsewhere if possible as suggestion ?

Q: Hello
Just read the Aug ETF publication. Can you give 5i s thoughts on the above bond position comparison?

Q: Hi 5i,

What did you think of the quarter for SPB; is the sell-off a good opportunity to add to a position? Is the dividend covered?

Q: Based on your last comments on June 24th about Sanofi could you please help me understand what's behind the recent drop with the stock recently and is this a good time to buy. Is it now at a "bargain" price what are the financial ratios you like and don't like about this stock? How do you feel about their pipeline of drugs?

Your last comment was SNY: Sanofi is a bit different than the others, being a $130 billion pharma company. The valuation fundamentals look fine, growth expectations are mid-to-low single digits on the top line and it pays a decent dividend. For an 'anchor' type of position, we would not take much issue with a name like this.

Q: how do i convert bamr into bam.a ? is there a cost involved ?

Q: Hi Peter and 5i team,

Could you provide your thoughts on the latest quarterly results and current valuation?

Thanks for the great service,
Angelo

Q: Hi,

Could you comment Sylogist's quaterly results ?

Thanks

Q: I am currently down on the following stocks and etf's and am considering buying more in order to average down. Are there any of the following that you would not purchase at this time?

Q: hello 5i:
ignoring the sector difference (tech/industrials), and having a small position in ATA and a slightly larger one in OTEX; from a growth and reliability of earnings (confidence in projections) point of view, could you discuss the benefit or detriment, of selling the OTEX position and increasing the ATA position. Which would be the more risky position in only one is held?
thanks
Paul L

Q: I would appreciate your comments on the above two securities recently announced earnings. What do you see for both of these holdings in the next few years. Any company specific comments would be appreciated. Thank You.

Q: I’m looking for Canadian exposure to cobalt.

Can you please recommend me two or three options.

Medium risk is ok and I expect to hold for at least 10 years.

Thanks

Q: would appreciate an update here after becoming net 0 debt and initiating a .01/mo dividend

Q: What do you think is the reason behind the recent price boost in TTD? Thank you.

Q: Why have these stock prices been declining, as I believe they are leading firms in their industry, and the industry is buoyant?
thanks in advance

Q: Ignoring sector, would it make sense to swap POW for ZWH for safety and long term income in a registered account? Thanks.