Investment Q&A

Q: Thank you for your reply this morning on my question about ZWB and HMAX . In your reply you indicated a preference for ZWB because of the upside potential being greater . Am I right in assuming that if that is the case HMAX would be the less volatile of the two ?

Also in 2018 I asked 5I to crunch the numbers on the big five banks over the 18 years { 2000 to 2018 }... I would assume that is a long enough segment to determine an average annual return of dividend plus capital gain. The answer I got ranged between 11% on the low end { TD } to 14.3% on the high end { RY }...... Please correct my reasoning but to me it looks like HMAX with its' current 15.1% dividend based on today's cost of the ETF is going to slightly beat those numbers annually, have less volatility, and give me diversification as an added bonus ? ..... Please advise if my reasoning is sound .....Thanks Garth .....

Q: Hello 5I; could you estimate what the cost would be to ENB stock price if their Line 5 pipeline does not get approved by the US government?
Thank you and regards, Ron Lepofsky

Q: Morning, GSY makes us a total of 3.4% (or did lol) of my portfolio with half in a non registered account. My thinking is sentiment will be bad for a while and the true impact of the budget will need to be assessed. I'm contemplating holding the GSY in the registered accounts while tax loss harvesting the non registered. If it were your account would you do it differently?

Rhetorical question - how much of yesterdays selling was leaked information from the budget vs the potential $41M loan loss?... I'm feeling like the latter was a key driver in the 9% fall yesterday.

Q: In a couple of previous questions you have mentioned that the drop in GSY's share price on Thursday was due to the Canada Drive news. There is something else that needs to be considered. I saw a post on Stockhouse on Thursday at 2:35 p.m., well before the close and the budget news, indicating there was a rumour the federal budget was going to include an interest rate ceiling of 35% and this was why the stock price was going down. The poster stated the rumour was likely true as it had apparently come from an unnamed staffer. Obviously the rumour WAS true as the exact ceiling % was mentioned.

Seems to me this is the main reason why GSY's stock price dropped so much on Thursday - some people had this inside info and were selling the stock as a result. I know there is a lot of nonsense on Stockhouse, but occasionally you get something important.

In any event, after reading the press release that GSY put out last night, do you have any change in your opinion on the desirability of GSY as an investment? Does the stock still look cheap?

Q: The last couple federal budgets have had measures that increased taxes on banks and insurers. Personally, I don’t like taxation based upon the nature of a business - I think it’s bad policy - but banks will always be viewed as targets for government revenues. Do you think it is reasonable to reduce/divest bank holdings based on the last few budgets tax targeted measures and concerns of this continuing in the future.

Q: What are your thoughts about the sale of the Montney assets to Crescent point ,and with a prospect of 9.50/ share dividend to Spartan shareholders, do you see any negatives for the shareholders of either company?
Thanks,
Philip

Q: Is the decision by Trudeau to reduce interest rates on loans offered by GoEasy really bad for the business?

Q: In a response to a prior question you mentioned that due the recent outcome of Canada Drives, that it could have a 2.5% impact to market cap and 15% to 2023 estimated EPS for Goeasy. How can there be such a big difference between these two %s? You would think that they would have a bigger correlation. Thanks.

Q: I have built up a position in TIXT and plan to hold it for a very very long time. I now also have some shares of LMN spun out from CSU. The LMN shares are approximately 1% of my CSU position and an even tinier fraction of the overall portfolio. Wondering if I should just roll the shares of LMN into my TIXT position and would be more inclined to do so if there is considerable overlap in their businesses. Your thoughts please?

Thanks.

Q: Hi team,
ON holdings has gone parabolic lately, most recently on good earnings release. Is this move justified or is valuation sky high now for a fashion company? Would you prefer crox to this name or is there a compelling long term story here to ON? Could you also compare Atz to this name too? Atz looks like the cheapest name of the three mentioned with high growth as well. I rarely hear this name talked about. Your comments are appreciated . Thanks

Shane

Q: I retired, fortunately, at age 56 and started to receive a company pension at that time. I am now 68 and am starting to research converting our RRSPs into RRIFs when we turn 71....no rush yet

These past few years BNN has had a Talking Tax show every Friday during March-April. I understand you are not tax experts, but one item came up a few weeks ago, which I tried to dig into.

One of their guests said that one of the advantages of converting your RRSP into a RRIF early was you would then qualify for the $2,000 pension tax credit. You did not quality for this credit with your RRSP. It HAD to be related to your RRIF.

I have done a fair bit of research and come up empty handed. I found some documentation years ago, but can no longer find it....I think I already qualify for this tax credit, simply because I am the recipient of a company pension. I have taken a look at some previous tax submissions and see that I get a "Pension Income Amount" (line 31400). Are we talking about the same $2000 tax credit? Am I interpreting this correctly?

If I am correct, then I would not need to convert our RRSPs into RRIFs at this time.

Thanks for your help....much appreciated,
Steve

Q: I own the above pipeline stocks in various accounts. In my flee to safety and dividends, I am now overweight in this sector. Could you please rank the above securities and which security you would hold or sell.

Thanks
Dave.

Q: Could you please comment on TRI, its valuation and why it defies gravity seemingly independent of its peers? Does it have comparables and what is future growth potential?

Q: Hi, Your thesis about trading of Lumine shares, during initial days makes sense and seems to be proving itself right. Brilliant !!! Based on no of shares already traded and more selling expected in coming days from the Index funds ( appx holding of LMN shares across Index board ), when and at what level, you expect the shares to settle, before it would be safe to start accumulating ? Thank You

Q: Is there any reason why I cannot make a contribution directly into my granddaughter's TFSA account? Thanks

Q: Hi Team,
Any idea why Gsy is getting punished today so bad? I can’t seem to find any news on it to account for a 7-8% drop today. Thanks

Shane

Q: There have been some some media reports today citing a federal source who says today's budget will include plans to go after predatory lending. I've seen some speculative chatter suggesting this could mean lowering the maximum interest charge rate possible from 60% to 30%. In your most recent report on GSY you state they originate loans up to $45,000 with rates between 19.9% and 46.9%. Is it known how much of their loan book is above that speculative 30% threshold, and how much of an impact might this have on their overall business if this 30% ceiling were to occur?

Q: 5i has commented positively regarding Lundin Mining in the past noting its strong balance sheet, valuation, and healthy dividend. On March 27, Lundin Mining announced that it has entered into a binding purchase agreement with JX Nippon Mining & Metals to acquire 51% of the issued and outstanding equity of SCM Minera Lumina Copper Chile. Mr. Market seems to love the deal if today's trading is any indication. Is 5i similarly enthusiastic about the deal?

Thank you as always for your expertise.

Q: Question regarding the topical issue of bank defaults...
I have seen many discussions lately regarding Canadian deposit insurance / investor protection fund (including Peter's recent 5i article) but...
What happens to stocks owned in a brokerage account if the brokerage becomes insolvent?
Am I not the beneficial owner of these stocks?
So I am wondering why the $1M coverage under the CIPF would even be an issue.
Would my stocks not just be transferred to my next brokerage account or directly to me in the case of default?
Would one need to even worry about stock holdings >$1 million at one particular brokerage?
Thank you for answering a question I have never found an answer to.

Q: Does the company look buyable at these levels?