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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 believe it in the last year or so has not been one of your favourites, however I have held GIB.A for a long time and it has been a stalwart; I (unfortunately) added a significant amount last year. In the last few weeks it has decreased a lot, more than many other tech names. I am still not sure why; any comment about that? I was attracted to the idea of harvesting a tax loss and migrating to another position (eg KXS) but since the drop in GIB.A has been much larger, does it have more potential upside than KXS which is not down as much? Thanks.
Read Answer Asked by Leonard on March 27, 2020
Q: Hi 5I,

In your blog on markets specifically the S&P 500 you state: "If we go back to 1990, the average trailing P/E ratio for the S&P 500 is 19.9. Currently, the P/E ratio is 19.3. Over the last five years, the P/E ratio has averaged 21.5. Looking at forward P/E ratios, the S&P 500 has averaged 15.8 and is currently sitting at 17.6."

My question is what do see for earnings based on current market conditions ? If in the last recession in 2008-9 we saw earnings drop by 50% then how much more can this index drop? The low for the S&P 500 was approx 780 back then, and if makers the same assumptions then we could get to around 1500 to 1800.

Thanks,
Chris M.
Read Answer Asked by Christopher on March 27, 2020
Q: Ray.a did not participate in the last 3 great up days.Today closed@ $3.25 down 0.24 on big vol.of 440k(av.133k) with a 1yr low of $3.18. On Mar 23 increased NCIB to max 4.9m shares from 2.9m As at Mar 20,bought back 2.9m shs at av.price of $6.01. Between Mar 12 to 19 CEO bought 200k shs at av.$4.33 & Chair bought 251.7k @ av.$4.49(total shs held- 2.91m).At last Q div was increased by 7%,now the yield is 9.23% in part due to drop in price. Why the price keep dropping? Is it because of its business?. My p/p $9.10,now 1% position.Is it time to move on to some better stocks(if so,please give 2 names} or stay put. Please comment.Txs for u usual great services & advices.
Read Answer Asked by Peter on March 27, 2020
Q: Just a comment about your answer to Stephan's March 26 question regarding Genworth (MIC). You mention that Genworth's payout ratio was over 95% in 2019, but that was just because of all the special dividends they paid out. The company paid 5 (yes, 5) specials totalling almost $9.00/share between Jan 1, 2019 and Feb 29, 2020. The regular dividend is only 54 cents a quarter, or $2.16 annually, compared to 2019 net earnings of $4.92/share, so the regular dividend is very well covered, and I doubt you will be seeing any more specials for a while. Of course, the net income this year will likely be lower.
Read Answer Asked by Dan on March 27, 2020
Q: I hold a couple of Ford Credit Canada bonds with one issue maturing in 12 months and the second issue in 36 months. With today's downgrade I've taken a hit on the market value of the bonds, particularly the longer maturity. Is there a risk of default by Ford Credit on these bonds?
Read Answer Asked by Brian on March 26, 2020
Q: Hi Folks
can you comment on Enbridge and TransCanada ( TC Energy ) - are they still okay to hold at this time ? In particular are they okay to hold at the same time - I have both BUT not in the same portfolios. I have ENB in my RRSP (2.5% position), in my wife's TFSA (2.5% position) and in my non-registered account (2.5% position) . I have TRP just in my wife's RRSP (4.5% position ).
Appreciate you comments.
Thanks
Read Answer Asked by JOHN on March 26, 2020
Q: I have the above 3 holdings with losses ranging from -60% to -85%. They each now represent less than 0.5% of my overall holdings so whatever happens they will barely move the needle. I am at a point where I feel I need to do some type of clean-up and would appreciate your advice. I see 3 possible choices:
1. Dump them right away regardless of price in the name of cleaning up my portfolio
2. Given that we might be close to a bottom wait (say between 1 month to a year) to hopefully sell at a better price
3. Top them up to at least a quarter or half position and hang on to them long term
They are all in registered accounts so there are no tax benefits in selling. Furthermore I went into this downturn with 30% cash and have since bought into the drop (other positions) bringing my cash down to 15%, with plans to do additional purchases if the market drops further. So at the moment, I have no immediate need for the little cash that selling these right now would bring. What would you suggest?
Read Answer Asked by Steven on March 26, 2020
Q: Hello Peter and co,
Thank you for your voice of reason in these crazy times! My 18-year old granddaughter has been talking about investments, and recently announced that she has decided she wants to invest in a cruise line company, since they are probably way down. Her thinking makes some sense to me, as the cruise industry will survive, and the strongest players may benefit from assimilation of weaker players assets. Similar thinking regarding airlines. In both cases, bankruptcy may be a risk. Is it safe to assume that buying these sectors is a good long term strategy, and if so, which companies would you suggest? Presumably strong balance sheet is a must. I think I read that Warren Buffett bought some Delta Airlines shares recently. Considering all that, what would you suggest for a young 18-year old?
Thanks.
Read Answer Asked by Ed on March 26, 2020
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