Stocks you won't touch

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Curmudgeon
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Re: Stocks you won't touch

Post by Curmudgeon »

Sensei wrote: ... especially the comment about Quebec (the province) by Curmudgeon. Good reply by Quebec (the person) by the way.
For me, it's personal. I'm one of the 800,000 or so English-speaking refugees who were forced to leave Quebec with my young family in the early 1970's, along with plenty of good companies like BMO and SLF. As a result, I'm one of a growing group of Canadians who feel that Quebec should have separated long ago and hope they will soon. Investing in Quebec is like betting against myself. Of course I realize that in the event of separation companies like CNR would would still operate, but what would the uncertainty do to revenues and stock prices? I'm not missing any opportunities because there are plenty of alternatives. I avoid Quebec provincial and corporate bonds too. The province feels more foreign to me than the U.S. does.

I didn't elaborate earlier because my reasons are off-topic for this forum.
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newguy
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Re: Stocks you won't touch

Post by newguy »

Curmudgeon wrote:In general, I avoid any dual class non-voting stock. I also avoid any company based in Quebec.
I dunno, they used to get lots of corporate welfare - that can't hurt. I don't like to invest in funds that invest only in Quebec like Fonds de solidarité FTQ.

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Re: Stocks you won't touch

Post by Quebec »

OK then, back to the topic of the thread. Most of my equity portfolio consists of broad ETFs (Canada, US, EAFE, EM), but when selecting Canadian and US stocks I apply a “dividend growth” strategy. So I want to see raising dividends (by at least 5% a year CAGR over 5 and 10 years, preferably more than 10%); I want to see EPS growth that matches the dividend growth, I want to see rising revenues to support the earnings, I want to see reasonable debt:equity ratios, and reasonable payout ratios (below 50% for most companies). If the company lost money (negative EPS) in even a single year (over the last 10) I avoid it. If dividends have been cut, I avoid. If there is a big merger coming up, or the company wants to split in two companies, I avoid buying this stock. I use to look at S&P “quality ratings” too when I had free access to their reports, but you can sort of guess roughly what this ranking would be by looking at the criteria I’ve just mentioned. The stocks I am looking for tend to be in the financial, utility (including pipelines), consumer staples, healthcare and industrial sectors. I avoid thinly traded stocks, small caps, and high-yield.

I avoid strongly cyclical sectors like mining and energy: I don’t even look for individual stocks in these sectors, since I am not expecting to find any stocks that fit my criteria – and if they did now, they probably won’t anymore in 10 years. Plus I am exposed to these sectors already through XIU. I’ve stayed away from consumer discretionary and technology so far, because of the cyclical reputation of these sectors as a whole, but may need to look harder at individual companies within these sectors. Buffet bought some IBM recently (acknowledging he was late to the party)…
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Re: Stocks you won't touch

Post by Quebec »

newguy wrote: I don't like to invest in funds that invest only in Quebec like Fonds de solidarité FTQ.
The main problem I see with this fund is that their main goal is to create jobs, not to make money. That can lead to investments in businesses that would have disappeared otherwise, and probably will end up dying slowly anyway. The results have been OK, but my understanding is that people mostly buy such funds in their RRSPs a few years before retirement, essentially to get the special tax refund.

Along the same lines of thinking, I avoid “ethical funds”. The ones I’ve looked at in Canada tended to have about 50% financials in them, which is way too much. I give 1% of my pre-tax income to charities every year (and I will leave charities a portion of my estate), I intend to do volunteer work when I have more free time, I take public transit to work, etc.: that’s how I intend to do my little bit to “save the world”. As far as investing goes, I am a nearly pure capitalist. Walmart destroys local businesses: possibly true, but if I can shop there (and I do, cause prices are low and I typically find what I need) I can buy their shares as well. My limit would be a company that only makes bombs, that’s a bit too much.
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Re: Stocks you won't touch

Post by Taggart »

Sensei wrote:
As far as retail goes, I sold out of two clothing retailers RET and CTU in 2011. I don't feel there is as much a moat left, if there ever was one, especially with Target moving in.
I make it a point of not trying to make future predictions of competitive pressures on a company. I wait for the company to tell me, either in their financial statements or a cut in the dividend. I lucked out and got out of CTU "before" the dividend cut. If I start predicting, then I would never have had the guts to buy the Telecom stocks a couple of years ago, nor Consumer Staples grocers like Empire or Metro. Too many negative comments around at that time. As for Reitmans, looking forward to seeing their annual report for 2011.
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Re: Stocks you won't touch

Post by Soils4Peace »

Won't touch SNC, given our own company's attitude to corruption. We forego certain "opportunities."

Won't touch companies that have never made money unless they are on the verge with geometric sales increases.
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Re: Stocks you won't touch

Post by flywaysuzy »

I picked up some SNC after the plunge-what can I say? At least they aren't an airline...
Also have National Bank-what a nice stock. Would never occur to me to avoid an entire province's companies.
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Re: Stocks you won't touch

Post by kcowan »

flywaysuzy wrote:Would never occur to me to avoid an entire province's companies.
Me neither. I guess there is separatism at work in the finance industry. I will take my extra basis points on Quebec Hydro bonds (and avoid the old Ontario Hydro entirely)!
For the fun of it...Keith
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Re: Stocks you won't touch

Post by flywaysuzy »

But I totally get the idea of a major mad-on for a single company and avoiding them no matter what. Mine is for the Bay. I had a nightmarish experience in one of their stores when I was on crutches last year. Will never go in a Bay again and would never consider the stock either. (and not just because of Target coming in :twisted: )
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Re: Stocks you won't touch

Post by Quebec »

Quebec wrote: Well I hate Bell...
Bell called me twice since the new year, basically to offer me to lower my phone-internet-TV bill (they did not phrase it that way, but this was obviously one of the goals of their call). The first time, in January, I got discounts on Satellite TV ($20 off a month for 1 year!), and on the landline ($12 off a month for one year). This week I got rebates on the internet service ($5 off a month for one year). On both occasions the reps were quite friendly; they did try to push new products (faster internet, etc.) but only softly, they did not insist strongly as they would have done in the past. So I am now paying $37 less per month in total for the same service. As a customer, I am pleasantly surprised by this change in attitude (but I still hate Bell due to innumerable bad experiences). As a former investor who gave up when the stock was doing nothing for years, but is always looking at potential additions to my portfolio, I am asking myself, (1) is this change of attitude towards the clients (i.e. not taking them for granted anymore) generalized or I am just lucky?; (2) is voluntarily lowering client’s bills really a good idea for Bell’s revenues and bottom line?
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Re: Stocks you won't touch

Post by northbeach »

I have noticed Bell's service improve over past two years. I think you will have to phone them yearly to continue discounts. Meantime there will be yearly increases before the discounts are reapplied.
I have owned BCE for the past two years.
I will not buy stocks like Ballard. I actually still hold 100 shares I purchased at 50 and 100 dollars years ago.
At the time I was buying Ballard, I kept thinking about Apple. Never did buy Apple.
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Re: Stocks you won't touch

Post by kcowan »

northbeach wrote:At the time I was buying Ballard, I kept thinking about Apple. Never did buy Apple.
being in BC, I would never buy Ballard. There is something about Executives sucking on the government teat that make them evasive when asked about business cases for their products...their CEO was slick/slippery.
For the fun of it...Keith
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Re: Stocks you won't touch

Post by formerpatriot »

I am reviving this thread with the following question:
If you are a Quebec resident, why would you not put $5000 per year in the Fonds de solidarité FTQ, in your RRSP?
You would get an extra 30% tax credit on that $5000 contribution.

I am asking the question because I do not know what to tell people when they ask me about this fund.
I have never invested in it. My employer’s DB pension left me with very small RRSP room every year and I just invested my contributions into index funds.
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Re: Stocks you won't touch

Post by robgizz »

formerpatriot wrote: 11 Mar 2024 22:56 I am reviving this thread with the following question:
If you are a Quebec resident, why would you not put $5000 per year in the Fonds de solidarité FTQ, in your RRSP?
You would get an extra 30% tax credit on that $5000 contribution.

I am asking the question because I do not know what to tell people when they ask me about this fund.
I have never invested in it. My employer’s DB pension left me with very small RRSP room every year and I just invested my contributions into index funds.
IMO, this is one of the worst investments you’d want to make regarding equities. I’ve compared their returns, a couple of times, many years ago and they’re absolutely awful. This, even with the large tax deductions. A compounded return of 10% more than offset the paltry returns and tax credit over a long period of time.
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ghariton
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Re: Stocks you won't touch

Post by ghariton »

Simplified prospectus here (in French)

Basically it's a retirement fund. It does not trade and the shares are non-transferrable. You can only start to draw money after age 65 or if you are retiring and have a pension from another source (the younger you are, the more stringent the requirement). So totally illiquid. (The fund may in its discretion from time to time offer to buy back some shares, but it looks as if this is an exceptional event. You can also get your money back within sixty days of purchase.)

The fund invests primarily in Quebec companies (I believe 70% or more of its investments) so lack of diversification. Also 55% of its investments are in private equities or ventures for which there is no market. More illiquidity. MER of 1.5%, which seems high.

Returns to November 2023 are
1 year 4.7%
3 years 4.4%
5 years 6.1%
10 years 6.7%

Tax credit of 30% on $5000 investment, but which you may have to hold for thirty years or more if you are young.

I wouldn't invest in this. YMMV.

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Re: Stocks you won't touch

Post by unskinnybop99 »

Wish I read this thread back in 2012.

I steered clear of the Cannabis industry. They've been hit hard.
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Re: Stocks you won't touch

Post by formerpatriot »

Back to the Fonds de solidarité FTQ:
ghariton wrote: 12 Mar 2024 00:01 Basically it's a retirement fund. It does not trade and the shares are non-transferrable. You can only start to draw money after age 65 or if you are retiring and have a pension from another source (the younger you are, the more stringent the requirement). So totally illiquid. (The fund may in its discretion from time to time offer to buy back some shares, but it looks as if this is an exceptional event. You can also get your money back within sixty days of purchase.)

The fund invests primarily in Quebec companies (I believe 70% or more of its investments) so lack of diversification. Also 55% of its investments are in private equities or ventures for which there is no market. More illiquidity. MER of 1.5%, which seems high.

Returns to November 2023 are
1 year 4.7%
3 years 4.4%
5 years 6.1%
10 years 6.7%

Tax credit of 30% on $5000 investment, but which you may have to hold for thirty years or more if you are young.

I wouldn't invest in this. YMMV.

George
One could argue that the $5000 per year investment (in the Fonds de solidarité FTQ), during, say, the 5 years just before retirement, would be a good strategy. You would get the 30% tax credit and after retirement you could sell the investment and buy VGRO (or whatever you like). The lack of diversification of the Fonds FTQ is not a big deal since we are talking about, say, 5 years at $5000 per year.

One important detail: I believe that in order to get the 30% tax credit you need to have a net income below a certain level (and this would have ruled me out anyway).
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Re: Stocks you won't touch

Post by Saintor »

formerpatriot wrote: 11 Mar 2024 22:56 I am reviving this thread with the following question:
If you are a Quebec resident, why would you not put $5000 per year in the Fonds de solidarité FTQ, in your RRSP?
You would get an extra 30% tax credit on that $5000 contribution.

I am asking the question because I do not know what to tell people when they ask me about this fund.
I have never invested in it. My employer’s DB pension left me with very small RRSP room every year and I just invested my contributions into index funds.
Recently I considered selling my shares based on the above 1 yr 4.7% / 3 yrs 4.4%; this is about 6% my portfolio. But until I retire I understand that I am captive with them. So it is not the sweet deal that I thought 20 years ago....
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Re: Stocks you won't touch

Post by ghariton »

formerpatriot wrote: 12 Mar 2024 12:52 One important detail: I believe that in order to get the 30% tax credit you need to have a net income below a certain level (and this would have ruled me out anyway).
I believe that the contributor's taxable income in the year must be below the second highest taxable income bracket for Quebec, which is a bit above $112,000. But this ceiling, which was originally supposed to come into effect in 2022, has been postponed by three years and will now come into effect in 2025. So in theory you could contribute for 2024. This assumes, of course, that the proper legislation will be enacted. With Mr. Girard's recent announcement of an $11 billion deficit, all cards are off the table.

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Re: Stocks you won't touch

Post by afulldeck »

Any individual stock regardless of sector, geography, or fad.
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Re: Stocks you won't touch

Post by GoldCoin »

DJT
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Re: Stocks you won't touch

Post by Clason »

More for financial reasons then philosophical ones:

- Bombardier. Erratic, unpredictable, performance based on political intervention.
- Anything Brookfield. Financial engineering. Too complicated to understand and monitor

At least not directly, as I hold them through XIC
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Re: Stocks you won't touch

Post by brucecohen »

GoldCoin wrote: 26 Mar 2024 10:33DJT
I have virtually no experience or interest in shorting and thought DJT would be an easy play for someone with some patience. Turns out, as explained here shorting DJT is difficult and potentially quite expensive and risky.
Trump's company started out as a Special Purpose Acquisition Company — a funky corporate structure that was briefly popular during the pandemic stock mania — and it's hard to borrow against SPACs in general and Trump's SPAC in particular:

SPAC stock borrowing is usually limited because the usual stock lenders, long shareholders such as mutual funds & ETF providers, do not own SPACs in size and since SPACs are not in most of the larger indexes, passive long shareholders, who are also potential lenders, do not usually hold them. In addition, most retail shareholders are not lenders into the stock loan market, which also limits the number of shares in the lending pool.
As a result, any SPAC with a significant amount of short selling will usually have high stock borrow costs and limited stock loan availability. There is extraordinarily little stock borrow available in [Trump Media] to support new short sales and stock borrow rates are extremely high. [Trump Media] is the most expensive stock borrow in the U.S. with short interest over $100 million.


So that's one reason. The other reason is one that you can figure out without being a shorting expert: Trump Media is the definition of a meme stock — a stock that trades because people on social media think it's valuable, or funny, or because they want to stick it to The Man or whatever.
Shorting specialists S3 Partners says DJT short interest is now about 11% of outstanding shares. That's more than twice the 5% average for companies in general but I was expecting it to be much higher before reading this article.
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Re: Stocks you won't touch

Post by robgizz »

Clason wrote: 26 Mar 2024 21:57 More for financial reasons then philosophical ones:

- Bombardier. Erratic, unpredictable, performance based on political intervention.
- Anything Brookfield. Financial engineering. Too complicated to understand and monitor

At least not directly, as I hold them through XIC
I agree with both.
Bombardier was the first stock I ever bought on speculation I would make a handsome return in a short time. This was when they were coming out with the C-Series and were late all kinds. The Federal government and the Quebec Pension Board were pumping somewhere near a billion dollars each into the company so I figured it was a good time to buy. It felt like catching falling knives but it turned out that I sold and doubled my money in just about one year, for a serious gain. As you say, performance based on political intervention.
Brookfield seems to be all over the place.
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