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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: With the huge surge in the popularity of covered call etfs, the amount of calls written is also surging. Who is buying this huge increase in call options? Will this increased volume result in lower premiums and thus make the covered calls such as hhl, Zwu and others with a long history under perform their own history?
Read Answer Asked by Paul on October 22, 2023
Q: Hello 5i,

My wife's portfolio is in a 62% cash position(very conservative), with half of that cash amount dedicated to GIC's.
These one year GIC's mature on November 14/23. Any ideas what the re-investment philosophy could look like considering her ultra conservative approach. I am pushing for a 50 to 60% split back into GIC's(2yr. this time) with the remaining balance split evenly between some sort of Bond participation(Bond ETF or Corporate or Govt. Bonds -- no idea on duration though?) and Equities like BCE, ENB, TD and DIV(already owned).
I have decision making authority on her investment accounts and therefore I need to be mostly 'right'. She is 53 years of age and does own stocks like AAPL, GIB.a, CNQ, GRT.un, TCW, CNQ, NFI, etc.

Thank you,

Dean
Read Answer Asked by Dean on October 22, 2023
Q: If you were in possession of a crystal ball, what do you think it would tell you if asked: "When will growth stocks return to favour and revert to the highest performing market segment?"
Read Answer Asked by Andrew on October 22, 2023
Q: In a recent fixed income question, the option of a bar bell approach was suggested using XSB/XLB for short/long bond exposure. Is there an ETF option for this?
I see few questions recently on the covered call version for long bonds (HBND) is there a short bond version of this available as well?

Your comments on up to date pros/cons of this strategy also appreciated.
Read Answer Asked by Arthur on October 22, 2023
Q: Are they high yields associated with CDN banks indicative of a tremendous buying opportunity or a harbinger of doom ?
Read Answer Asked by john on October 22, 2023
Q: hi folks, thoughts on Tamarak sale of non-core assets for $123M, and update on record Sept production 70,000 boed, etc....I know a fav of 5i (thanks, full position)...while another analyst said Sell at $3.50 (said paid to much for Delta??)....anyway, that is why I am a long time, happy customer of 5i...not every pick/suggestion can be a winner...but portfolio has never been better since became a 5i customer...merci beaucoup, jb Piedmont QC
Read Answer Asked by John on October 22, 2023
Q: Dear 5i team.

Just finished reading the past few mths questions on APPS. Obviously, you've thrown in the towel on it.

Do you see a scenerio where they go bankrupt? IE: equity going to zero? You said it's debt/cash flow is 4Xs. Terminal, or does mgmt have a shot at redemption?

Appreciate your updated views on their fundimentals.
Read Answer Asked by Arthur on October 22, 2023
Q: How much more downside risk would there be in Canadian banks and utilities in the next year?

Thanks
Brian
Read Answer Asked by Brian on October 22, 2023
Q: Hello

I am looking to deploy some capital ($8,000) into the new FHSA and was looking for some ideas of how to diversify this $$. I have a 3-5 year timeframe and will likely not be actively trading these positions. Can you please advise how it would be best to deploy the funds given the time frame and with a moderate to high risk tolerance.

Can be the companies mentioned above or others. CSU would be great but given it is almost $3,000 a share, not much room to work with that.

Was thinking along the lines of 100 shares of BN @ $42 range and 200 shares of Lumine @ $19 range

Any other ideas of price points you think might be best?

Thanks as always for your help
Read Answer Asked by Antonio on October 22, 2023
Q: I assume that my question pertains to BN, as that is what I trying to understand. I received the text that follows. Is this for BN, or some other Brookfield company.... ? To my understanding, which must be incorrect, are they asking us to convert BN to Brookfield Insurance ?? Do you think it is wise to take advantage of this tender offer? Any reason why, why not? Thank You.
------------------------

"There is a tender offer on Brookfield Corp Vtg Shs Cl A. Brookfield Reinsurance Ltd. hereby offers to exchange, upon the terms and subject to the conditions described herein, up to 40,000,000 Class A Limited Voting Shares of Brookfield Corporation, including the Brookfield Class A Shares that may become issued and outstanding after the date of the Offer and prior to the Expiration Time upon the exercise of options or any other rights to acquire the Brookfield Class A Shares for newly-issued class A-1 exchangeable non-voting shares of Brookfield Reinsurance.

Important Notes:

Offer to Purchase Circular dated October 11, 2023:

Under the Offer, each holder of Brookfield Class A Shares who has properly tendered Brookfield Class A Shares, and who has not properly withdrawn such Brookfield Class A Shares, will receive one class A-1 exchangeable share for each Brookfield Class A Share tendered, on the terms and subject to the conditions of the Offer, including the provisions relating to pro-ration described in this document.

The class A-1 exchangeable shares are (i) convertible into class A exchangeable limited voting shares of Brookfield Reinsurance, and (ii) exchangeable into Brookfield Class A Shares, in each case on a one-for-one basis. Distributions on Brookfield Reinsurance's class A-1 exchangeable shares are expected to be paid at the same time and in the same amount per share as cash dividends on the Brookfield Class A Shares but are expected to be paid as a return of capital, rather than a dividend, which may be attractive to certain investors.

There is currently no public market for our class A-1 exchangeable shares. The company intends to apply to list their class A-1 exchangeable shares on the NYSE under the symbol 'BNRE.A'. The Company expects that trading of their class A-1 exchangeable shares will commence on November 16, 2023. The listing of their class A-1 exchangeable shares on the NYSE is subject to their company fulfilling all of the requirements of the NYSE. The NYSE has not authorized thier listing application and there is no assurance that the NYSE will authorize the listing application. The TSX has conditionally approved the listing of their class A-1 exchangeable shares on the TSX under the symbol 'BNRE.A'. The listing of their class A-1 exchangeable shares on the TSX is subject to the company fulfilling all of the requirements of the TSX. The Offer is subject to a number of conditions, including the Listing Condition. Brookfield Reinsurance may not waive the Listing Condition
Read Answer Asked by Walter on October 22, 2023
Q: Hi
I have three questions.
I am confused about market cap of a stock. Let me illustrate by way of example.
Company X lists for the first time on a stock exchange. It sells a lot of shares and captures, maybe, a windfall. The money is used to grow the company. Without any rationale, the share price drops and drops until it is worth next to nothing. The company is still operating and generating profits. In theory, can the company operations not be oblivious to the drop in share prices, as long as it still has sell-able products or services and is generating profits? Or do the value of the share price affect the company's operations?
The other thing I'm confused about is the value of the assets, goods and services possessed by a company. Assuming the value of these assets was much greater than the market cap, it seems unfair that the market cap could be seriously skewed by at the whim of shareholders. I don't have any examples but I assume there are some.
Lastly, can you please compare Tesla to BYDDF and fundamental basis?
Read Answer Asked by TOM on October 21, 2023
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