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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: I have access to Morningstar through the broker. Morningstar’s analysis is often useful, but its ratings of companies covered are puzzling. Nuts, actually. A business starts doing better than ever and its shares rise as investors come to appreciate the rising value. Just at that moment, in comes Morningstar with its downgrades. It beats up a company performing very well by downgrading the rating of companies whose results are improving to Hold or Sell. Conversely when a business is stumbling badly and its shares drop, up goes the rating from Morningstar. One understands when analysts downgrade and explain that they still like the company but that they feel they need to go from Buy to Hold on the grounds of valuation . I have not seen Morningstar explain their ratings in a similar manner. If one reads Morningstar’s narrative, is it best to ignore its ratings? This is after all what one tends to with “target prices”. Or, am I missing something important?
Read Answer Asked by Adam on November 25, 2020
Q: I know this company has just been listed on the New York Stock Exchange. And I believe 5i views it quite positively. Can you tell me why are you feel it is a good stock to buy and what are its prospects for the future. I believe they have been around many year's and are not that profitable at this time. Could you give me some insight into the company.
Thanks John
Read Answer Asked by John on November 25, 2020
Q: I originally (this year) bought a 2% position in EFL knowing it was higher risk.
It has since doubled and now 4% of my holdings. I do have a high risk tolerance and like to hold on to "winners" and especially during positive momentum. Has EFL moved too far too fast and should I reduce back to 2% or continue to hold. My initial reaction is to hold to 6% and then reduce.
Thanks John
Read Answer Asked by John on November 25, 2020
Q: Good day team,

currently reading a book on the coffee can portfolio and past 100 baggers. Interesting approach but it would seem that it's very hard to follow the principles in today's instant gratification world. That said, if you personally were to allocate a certain percentage of your portfolio to this approach, what companies on the canadian side give the most confidence that they 'could' provide outsized returns over a 10 year period.

Cheers
Read Answer Asked by Seamus on November 25, 2020
Q: In f/u to my earlier world ETF question, I should have stated I'm looking for CAD $ ETF's
Thanks
Read Answer Asked by Henry on November 25, 2020
Q: I have been investing for a long time, and have always looked carefully at the p/e ratios and other valuation metrics of stocks that I have bought. I've always felt that the valuation of a stock matters. I read 20 or 30 years ago that the ultimate value any stock holds is the long term ability to generate profits and return these to shareholders in the form of dividends. Lately, it seems that a lot of that is being ignored. There are so many well owned, highly regarded stocks that aren't even profitable on a GAAP basis, and p/e ratios are non-existent in many cases because the company is losing money. I like growth stocks, but it just seems to me that there needs to be some kind of reasonable valuation factored in as well. Many of these high flying tech stocks are now trading at multiples of sales instead of non-existent earnings, and many of those at 20, 30 or more times sales. I know that you like a lot of these, so no need to specify any particular stock. I can see that these companies are growing revenues rapidly, but it can't be as simple as that can it? The revenue is going up 40% or 50% or more a year, and it's a good business, without a ton of debt, so it's a buy? Isn't there some kind of limit? Not trying to be critical - I own some of these high priced tech stocks myself. Some of them, I just can't get my head around what looks like astronomical valuations. Thank you for any comments or insight.
Read Answer Asked by Dan on November 25, 2020
Q: May I please have your opinion of AT. Thank you.
Read Answer Asked by Donna on November 25, 2020
Q: I am looking to buy semiconductor company. Was wondering what you thought of the three that I have been following. Could you please rank them in order of preference and if you have one or two others you can include It would be appreciated.
Thanks John
Read Answer Asked by John on November 25, 2020
Q: Just a general question. With markets at all time highs, but the virus is still a big part of our lives. While the market is forward looking, a lot of damage has been done. In addition, this would be the first recession with only 1 wave of selling as opposed to multiple waves. Do you think there are near term risks or are we just headed higher and try not to overthink it, but leave some cash on hand for future opportunities? How much cash? 20%?

Thanks,
Jason
Read Answer Asked by Jason on November 24, 2020
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