Investment Q&A

Q: Hi 5i Research team, I have a long term horizon, and more of a growth oriented investor profile. I prefer to well understand the companies I invest in. The technology sector represents a challenge for me in terms of software products, competition, rapidly changing conditions, obsolescence, variety of software portfolio, etc. So I would like to built a sector exposure based on a few companies instead of using an ETF. Based on reading 5i Research, I am thinking a combination of CSU, KXS, GIB.A, OTC, ESL, DSG, TCS, SYZ,SH. Do you agree with this strategy? Would you include some other companies in this list or replace some? In what order would you rank them in terms of total return potential over long term and overall quality? How many of them would be enough? Would you suggest another weighting than equal weight (2% each)? I also need criteria to manage this group since my understanding won't be up to par. How will I know when to sell, or when to over or underweight in some companies? I would not want to react too strongly to short term events (quarterly results). How would you suggest I implement this strategy (buying strategy)? Thank you, Eric

Q: I'm looking for a Canadian ETF similar to TLT in the US, in hopes of shorting it. Anything available to your knowledge?

Q: Hi 5i Research team, what do you think of the idea of not strictly using the official sector classification when calculating sector allocation? Would you agree that I split the sector allocation of some companies when appropriate (an option not available for the official classificator)? For example, would you agree with: SIS (healthcare 75% + industrial 25%), ZCL (industrial 25% + energy 75%), TNC (financial 50% + technology 50%), AF (industrials 25% + consumer discretionary 75%)? Thank you, Eric

Q: I am putting together a portfolio called "Big Dogs"
I broke out the 10 largest stocks by market cap in each of the 10 sectors
I will invest in 3 of those stocks in each sector for a total of 30 stocks.Determining which 3 has been a challenge,looking at the usual--
dividends--eps--p/e-- market cap etc.Also have a bias toward your favourites.
Since I am only looking at the top 10 do you think I will be overlooking some better opportunities?I think perhaps, but I would go
crazy trying to look at the whole sector or even the top 20.I feel my odds of success are better sticking with the "Big Dogs"
Over all I will put 10k in each stock but not until I see a market
pull back which I feel is imminent.Perhaps I could have your thoughts on that as well.
This is not something new---What do you think of my idea and approach?

Q: Hi 5i Research team , I am preparing for my next round of investments when the market decline broadly. I would like to capture the illiquidity premium: What percentage of a stock portfolio would you recommend for an average investor (1) and a lower risk aversion investor(2) to put in illiquid stocks (market cap between 1000 and 100 million $ and average daily trading value < 200 000$) such as VLN, TCS, TC, SCB, RX, RPI-u, PSD, PEO, MRD, MDF, LNF, LGT.B, LAS.A, ISV, HNZ, GDL, EFH, GBT, CXI, BCI, AF?
What would be your top five selections among these from total return/quality perspective over the long term? Would you have other such companies to suggest? Several of these companies do not have coverage from analysts neither conference call after quarterly results. Besides reading documents on sedar (press releases), how do you suggest following/analyzing those companies? Thank you, Eric

Q: Hi Peter and Gang,

My holdings in companies under the Brookfield brand (BAM.A, BBU.UN, BIP.PR, etc...) account for about 15% of my portfolio. Although these companies are in different businesses altogether, I am just wondering if there is too much concentration on the Brookfield brand. Your thoughts and comments would be appreciated.

Harry

Q: BGI.UN has announced its annual redemption date for September, and its average NAV for the month of August, at $7.23. Is this the price at which it will redeem shares tendered?

Q: Hi,

I know you like the following: PPL.PR.M and ALA.PR., TransCanada (series 13), Canadian Utilities (series FF) and Brookfield Asset (series 5). With these type of minimum reset preferreds, where would you expect the prices to be in 3 or 4 years under the following scenarios:
1. Current govt of Canada rates 0.5 point lower than today
2. Current govt of Canada rate same as today
3. Current govt of Canda rate 3 or 4 points higher than today

Regards,

Robert

Q: Hi Peter
Today was a humbling experience for investors in all sectors .But as with all it cant keep going up other than a expected Fed rate hike what other factors caused this sell off.
Also will there be any 5i get togethers in the up coming year
Kind Regards
Stan

Q: I have a $300,000 lump sum to invest for a little more than 10 years before there will be a need to start to taking income. What would you suggest is a reasonable time frame over which to make the purchases? I was considering equal purchases over a 3 month time frame (as opposed to a doing it all right away) but with the US presidential elections, all the talk of interest rate increases and tax loss selling I am wondering if three months is too quick.

Appreciate your insight.

Paul F.

Q: Given the churning FED wordage and today's market reaction what are your thoughts on a September or October mini market correction? I'm looking for a decent entry point as I have a few nice picks researched and lined up. I currently am sitting on 35% cash position (mixed USD & CDN 60/40) awaiting opportunity of a market correction.

Cheers!

Q: Hello Peter and team,

ESL has a A minus rating so far. Do you still hold the rating after the recent quarterly results a and stock slide? I am holding ESL in my TSFA bought around $55 and would like your advice to hold or sell. Thanks

Q: If there is correction what would be your HIGHEST conviction names to watch closely?
Thanks guys

Q: Like most avid investors, I look forward to reading Mr. Buffett's annual shareholder letter he writes as Chairman of Berkshire Hathaway. While I admire the man and his philosophies, I've been pensive about being a shareholder. For someone with a 10+ year timeframe, is Berkshire Hathaway a good investment or is it risky now that Mr. Buffett is likely to be replaced by his successor?

Q: Hi Peter and Team,

Perhaps Wayne (and others) would be interested in Gordon Pape's article on binary trading/binary options. The article was written over six years ago, but the regulators haven't acted yet. Thank goodness that 5i "has our back"!

http://www.forbes.com/sites/investor/2010/07/27/dont-gamble-on-binary-options/#595c41961908

Q: you have mentioned that twenty to twenty five stocks in a well diversified account is optimal. With both US and Can trading accounts in my RRSP would that be 20/25 in each account or combined. Thanks for all you do Ross

Q: All things considered, which is the "better" buy at this point ENB or FTS. Does the share price rise in ENB make FTS the better opportunity? I realize there is integration risk with acquisitions for both.
Also, is Loblaw a pretty good "buy" with today's drop?
Thank you.

Q: I have owned UNS for a while in my TFSA, and could realize a nice profit. After reading the report on MG , which has a PE about half of UNS, and paying about twice the dividend, I am considering swapping. Holding for the long term in the TFSA . Good strategy or not?

Q: I have a Canadian dollar RRSP with a significant portion of US dividend paying stocks, to avoid dividend withholding tax. My RRSP is charged $10 per trade but otherwise there are no fees appearing on my statements. The dividend amounts from US stocks appear in Canadian dollars. Although my investment company has US and Canadian dollar accounts for non-registered investments, there are no US dollar RRSP's. I often wonder if, and how much, I am paying in exchange fees when my US dividends are converted to Canadian dollars. Will those currency fees be included in the new disclosure rules? Thanks!

Q: Hi, folks!
Just wondering what your thoughts are regarding Reitmans'recent report? A significant increase in e-commerce seems a positive development...