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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: My question is regarding the effect of (1) an increase in capital gains tax (2) an increase in taxes on dividends, by our new government. If the first happens, wouldn't money leave higher growth TSX stocks? I am not suggesting that an "exodus" would happen, but certainly a percentage of the holders would reconsider the validity of putting their cash at risk if the government retains (let's say) 25% more tax for the capital gains no? Now, if the second happens, wouldn't 3-4% dividend stocks attract less buyers? Why own a dividend stock with little growth if the government taxes it almost the same as income (for higher income brackets it would be the case)? Other members who are friends of mine have the same question. A blog about this would be awesome. Thank you!
Read Answer Asked by Matt on February 15, 2017
Q: Good Morning
Firstly, thank you for guiding me towards TNC. Although the premium offered is disappointing I will still book a 50% profit in my TFSA on a company that was nowhere on my radar without 5i. I've narrowed down my replacement to either OTEK or PHO. do you prefer one over the other?
Thank you for your continued guidance
Read Answer Asked by Marty on February 15, 2017
Q: RE: "short attack"
Everyday a quarter of US adults with internet access trade as retail and professional investors make it 54 million and probably 6 millions in Canada. For DIY like me they are all my competition.
"THE" market is probably one of the most expensive of the last 100 years, so finding money to make is pretty dam hard and certainly exponentially more than 2009 or 2012 when Peter started 5I.
So retail have a choice to pause for a while, but professional traders have to come home everyday with more money in their pocket that when they started or they will be, at one point fired.
And then there is HF, the most disturbing newbee on the block, accounting for 72% of all orders on all markets.
On top of this any game has become fair game. No punishment, no rule!
So get used to more fake news more volatility (for those worried about 5% drops..) or follow Peter portfolios.
For those DiY that have time to read, I suggest "Dark pools the rise of the machine traders..."
Read Answer Asked by claude on February 15, 2017
Q: I agree that the offer price is a pretty good deal for Paypal and not so much for the shareholders.

Why don't all 5i readers submit their vote, turning down the offer and see what happens.

I'm going to vote no for my 35,000 shares. Why don't the rest of you do the same.

Lets see what happens. Nothing ventured nothing gained. Perhaps we can get a better offer.

Best

Sheldon


Read Answer Asked by Sheldon on February 15, 2017
Q: Hello 5i,

I bought VSN before Xmas on a analyst report from RBC. I have a good return so far, but I know you are not very fond of this company. Therefore I would like to replace it with something more attune to your thinking and values.

My question is what do I replace it with. Possibly ALA.r?

I do thank you all for your good work and valued opinion.

Rick
Read Answer Asked by Rick on February 15, 2017
Q: Good afternoon!
In looking at your comments on Veresen (VSN), I can’t quite pin down reasoning for what seems to be a change in viewpoint here.
On Dec 12th you state: “Because JC was already rejected once, we would not view this as overly significant, and is likely already embedded in the price (after Friday's drop). The company can still grow, and there will be other projects in the future.“
On Jan 5th you state: “We remain quite comfortable with VSN for income, primarily, with some growth. Good earnings growth is expected in 2017.”
On Feb 6th the perspective differs, and you state that you are “... not very big fans of VSN”
On Feb 6th and on the 14th you also now imply that the Jordan Cove rejection is NOT built in to the price, and that the valuation is high. You also stated that revenues are expected to decline, but my brief research into the company, suggests otherwise, particularly their February guidance presentation indicating $1.4 billion of projects in the works, accretive on a per-share basis, quite a bit of growth for a company of less than $4.5 billion in market cap. In a recent Globe and Mail article (published on Stockhouse, also) the following spoke to valuation based on EBITDA: “According to Bloomberg, the stock is trading at an enterprise value-to-earnings before interest, taxes, depreciation and amortization (EBITDA) multiple of 10.5 times the 2017 consensus estimate. This is below the five-year historical average of 13.2 times and below its 10-year historical average of 11.1 times.”

Could you elaborate on what gave you this apparent change of heart, especially in conjunction with your comments about the ‘pro-pipeline’ Trump viewpoint?
Looking forward to your thoughts.
Thanks
Paul
Read Answer Asked by Paul on February 15, 2017