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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: Hello Peter, I've been watching CLCT for a few months now, since it was mentioned in one of your responses. It has a dividend over 6% and is 9% cheaper today than yesterday after factoring in the currency move. While I'm tempted to buy, I'm not clear on what the 'China' component of its business entails - and also have some doubts as to how much an American company can count on being dealt with 'fairly', long-term, when doing business in China. Can you please explain the importance of China to CLCT's business, and whether you see the China political/trade risk as a meaningful concern for this particular company. Thank you!
Read Answer Asked by James on September 07, 2017
Q: This may seem like an odd question to some but I would like to make sure I actually understand what is being said rather than assuming I do. On business shows guests say, in different ways, they have increased their cash positions or decreasing their equity exposures. Although such statements might seem rather straight forward, can they actually have different meanings depending on who is saying it? All kinds of guests appear from pure 100% equity fund managers to individuals actually managing diversified portfolios for clients.

Assume one is operating with a vision of a fully invested portfolio having 40% fixed assets which includes their cash portion and 60 % equities.

When guests generally talk of decreasing their equity exposure or increasing cash positions is there a standard meaning? Say someone cut their equity exposure by 10%. Would that typically mean their equity position has decreased to 50% (60%-10%) or does it mean they reduced it by 6% (60% X 10%) to 54%? Conversely, how might one interpret a 10% increase in cash?
Some managers talk of maintaining gold positions. If a balanced portfolio manager referred to a 5% weighting in gold would that generally mean 5% of the total portfolio or the equity portion (60% X 5%=3%)?

Needless to say, substitute a higher number and it would make for meaningful differences depending on how you calculate things? Listening to some business show guests, I get the impression it does not always mean the same thing but no elaborations are ever asked by interviewers.

Could you please clarify what is generally meant? Thank you.

Mike
Read Answer Asked by Michael on September 07, 2017
Q: Hi, CDN Dollar has gone up from $0.73 to 0.82 (+8%) within a span of less than 2 months. BOC did n't wait till October meeting and raised the Prime, indicating their bias towards more hikes in the future. In this environment, I am trying to figure out the currency impact on results of companies like CCL Industries, which have a fair share of earnings globally but report in Canadian dollar. CCL.b has already seen its share price tumble from $68 to present $57, within last 2 months.
(assumption being that CDN$ rise is the major reason)

Which are the other companies, in your coverage, deriving a decent share of their revenue in US Dollars and could see the impact of higher CDN $ ? Should this change in CDN/USD value raise a concern and revisit the holdings/weightings in your portfolios ?

Thanks
Read Answer Asked by rajeev on September 07, 2017
Q: Greetings 5i,

My portfolio is well diversified across all Canadian sectors, but lacking in American holdings. I am therefore making an effort to increase my US exposure, and am considering adding one of the FAANG stocks to augment my Canadian tech holdings of OTEX and PHO. Currently. I am leaning towards AMZN (as I view it as a great mix of established market dominance and growth potential based on its diversification into brick and mortar), or APPL (due to its massive cash position and what appears to be excellent stability going forward).

I am 36, fairly conservative (although not totally opposed to risk), and am looking for something to hold for the long-term.

Do either of these choices sound like a reasonable course of action to you? Do you favour one over the other at this time? Is there another large American tech holding that you feel would be more appropriate?

Thank you.
Read Answer Asked by Lucas on September 06, 2017
Q: My concern is the US is going to move to close tax loopholes on companies doing most of their business in the States, but headquartered in other countries. What companies you cover might be negatively impacted in this case?

CXI and BYD are two that spring to mind.

Thanks as always for your great work.

Phil
Read Answer Asked by Phil on September 06, 2017
Q: We know that CVE has a ton of debt and that there may not be much life until oil prices firm up.
That being said, they did beat the street's most recent earnings predictions, it's selling well under book, it's been basing for the past few months and the dividend is just shy of 2%

What do you think of CVE as a potential 12 month investment?
Read Answer Asked by Gord on September 06, 2017
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