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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: Annual mandatory RIF payouts will result in a negative RIF account balances which will incur high interest charges by the broker. Is this not a general
problem and how are interest charges avoided?
Read Answer Asked by Russ on January 12, 2021
Q: Hi 5i team.
Re ZTL, this long term US Treasury Bonds ETF has been declining since May. With the blue sweep in the US, additional benefit spending to come, possible rate increase and inflation in a year or two, would you recommend to sell this ETF now? What needs to happen to see this ETF reverse the fall? Given the current world economic situation, what other bond etfs would be safer bet? (amount of interest income is not important) Thanks.
Read Answer Asked by Willie on January 12, 2021
Q: I want to increase my holding in Photon Control considerably. It has an amazing balance sheet and it seems cheap given technology valuations. However, can you help me understand Photon's market and customer base? For example, i read that Apple has begun creating their own semiconductors for optimal hardware/software synergy. Will Photon's clients eventually do this, too?

Best,
Jacob.
Read Answer Asked by Jacob on January 12, 2021
Q: Hello 5i Team

1 – Who decides on what Sector/Industry/Sub-Industry is assigned to a company?

Two companies for which the Sector/Industry/Sub-Industry changed were Altagas (ALA) which changed from Energy/Oil&Gas/Midstream to Utilities/Utilities-Regulated/Utilities-Natural Gas and Mullen Group (MTL) which changed from Energy/Oil&Gas/Oil&Gas Services to Industrial/Transportation/Trucking

2 – I have noticed different providers (TMX and RBC Direct Investing) appear to provide different Sector/Industry/Sub-Industry for the same company – is there not a standard that all data providers are to follow?

3 – TMX used to provide the “Sub-Industry” for companies, but with their revamp of their stock screener, they are no longer providing it. Does your data service provide this information and can it be added to your company information page?

Thank you for the great service you provide.
Read Answer Asked by Stephen on January 12, 2021
Q: Hi there,
I see I have quite a backlog of question credits so, I thought I should put some of that to work. I have a general question about rate reset bonds. I have been thinking about reset bonds in etf form if there is such a thing. This would be for using new money to start a small quarter of a position over the coming year. I am closing in on retirement within the next few years and would be interested in hearing your thoughts when compared to preferred shares or laddered bonds. Maybe resets are similar to taking a laddered bond etf - but I am not sure of the merits given the paltry income for bonds. My concern is this market cannot keep up this parabolic growth much longer and the market appears to be pretty frothy right now. As a survivor of the tech wreck, I am worried about what I see as a significant correction (up to 20%) within the next 24 months or so. I am not afraid of risk but I do want to explore a variety of hedging options out there without exiting some of my growth stock positions. Cake and eat it too I expect. I still have about 6 or 7 years in the market. Thanks as always for your thoughts.
Read Answer Asked by Erna on January 12, 2021
Q: If the hoped-for consumer spending rebound happens in say the second half of 2021, which companies ( us or cdn) should benefit the most? Are there ETF's that would cover the category that you would suggest? Many thanks

al
Read Answer Asked by alex on January 12, 2021
Q: Good Morning 5i Team,

Can you please give me your thoughts on Digital Turbine going forward. I have done very well on this stock (unlike a couple of other high-risk plays!), as my purchase price was under $9. I know you used to own it, but I believe you have moved on. APPs is only a 2% position in my portfolio, but I'm wondering if it's time to jump on the next elevator going up. I know you don't like to sell your winners, but do you think there are a few other names out there with high-flyer potential. Would CELH be a replacement or possibly SPT? Thsnk you!

Brad

Read Answer Asked by Bradley on January 12, 2021
Q: It seems commodities have risen and many are hopping aboard this train.
However at some point, will we not reach a limit to the amount of appreciation from demand destruction? Not many people have rising incomes which would boost demand.
I speculate that rising commodity prices without rising demand and incomes is a currency play only on a weakening $USD and one that could reverse.
What is an investment strategy that benefits from deflation of a commodity trade not including short-based approaches?
TIA
Read Answer Asked by Neelesh on January 12, 2021
Q: Peter have you read the article from The Beacon Newsletter re battery storage in California . At location of Moss Power Plant.
Looks like it might provide some investment opportunities in this growing space.
Might not be too many in Canadian market.
Worth a look.
Read Answer Asked by Roy on January 12, 2021
Q: Hey 5i,
Just looking for some clarification. When you reference your favourite growth companies like XBC, WELL, and LSPD in general or against larger cap stocks you usually say they are “higher risk”.

I understand that smaller, younger businesses are higher risk but when you say this- is this more as a “volatility risk”, “default/failure risk”, “downside risk”, “explicitly relative risk against larger caps but you remain very comfortable with the stock outlook”, etc.?

I’m asking since I am in my late twenties and holding these for long term. I actually enjoy volatility since I’m able to swing in and out of the stocks. I just want to make sure that I have this captured correctly.
Read Answer Asked by Michael on January 12, 2021
Q: Hello Peter,
Constellation Software will give existing shareholders Topicus shares (based on their formula) as part of the spinoff but it does not look like Telus will be doing the same(give existing shares the international arm shares in the form of dividend).. What are the plus and minuses of what both companies are treating the spin offs? I was expecting XBC to surge slightly going to TSX as it the stock would attract more institutional buyers but looks like the stock is taking a pause.. . Well seems to be doing the same.. Any comments on this? Thanks very much.
Read Answer Asked by umedali on January 12, 2021
Q: Hi 5i,
In answer to Dan's question on 6 tech stocks this morning (Jan. 11) you rated DCBO second last as a candidate for a long term hold.
I also wonder about DCBO. I'm currently up 50% and I wonder if you think it still has runway - like you think about LSPD for example - or if you would conclude it may well be at or near the top of its ascent? Without a dividend I have no reason to continue holding DCBO if it's given me all or most of what it's got to give but, frankly, I don't know how to set a target price for a tech stock with either its metrics or its momentum.
I'm cognizant of your oft-given advice to guard against selling winners too soon (which I've done my share of and which I'm trying to avoid) but I also think there must be times when one has to conclude a stock has met its potential, or nearly so, and it's time to realize the profit and deploy the funds elsewhere. Could you advise what you think about DCBO in this regard?
Thanks for this, and for all the rest of your very helpful guidance that I benefit from.
Peter
Read Answer Asked by Peter on January 12, 2021
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