A Comment -- General Comments From an Expert (A Commentary)

Charting. For weekly charts he uses a 10-week and 40-week moving average, not exponential, regular. For a daily chart he uses a 21, 50 and 200. You watch for the crossovers of all the moving averages.

Korea. If the current situation continues and escalates, this will create volatility so you have to pick your spots and look for individual securities. Doesn’t expect oil prices will fluctuate very much.

Oil sands. Likes this area going forward. The oil is economic at between $70 and $80 a barrel. He owns Cenovus (CVE-T).

My apologies. Comments for Market Call Tonight for Nov 22nd was shown as Charles Oliver. This should have been Michael Smedley. Got the wrong tape. My apologies to Michael and my thanks to Colin Morris for pointing this out. I will redo this. Comments will be dated Nov 22 so you won’t get Michaels Top Picks in your e-mail.

From Labour day, markets in the western world have been doing well. Commodities are always really volatile. We are at a point right now where world economies have, at worst, stabilized. The demand now is in commodities. He is not predicating his call on commodities on the US dollar. It is an emerging market thing. For people who have RESPs, you have to put money in by year-end to get the grant for this year.

DRIPs: Caller has planned to use DRIPs on his ETFs until age 71, then cancel them. John Agreed with this strategy.

TFSA: Amount to contribute could increase but would likely be indexed to inflation in increments of $500. If you want to borrow to invest, he will consider it if the client comes to him and wont touch the market for 10 years.

Many ETFs are at their 52-week highs: This means the index or sector is at a 52 week high. Right now pretty well any market in the world is pretty fairly priced.

TSX. $13,300 is your first point of resistance and the next level would be the peak of 2008 of around $15,100-$15,200. There are a few headwinds. GDP is starting to slow down a bit. It won’t rocket to new highs.

Cdn banks. An opportune time to move into them. Not looking for dividend increases from the big 5 until later in 2011 with the exception of Toronto Dominion (TD-T), which might go a bit earlier. Good dividend yields. (See Top Picks.)

Natural gas. Virtually every commodity on the planet has gone up except for this one because there is a ton of it and demand has been weak. Looking for this to change in 2011 and feels it is attractive. Would invest in something like Encana (ECA-T) as a way of participating. (She owns this one.)

Natural Gas. Recent technological improvements have meant that reserves are coming out in abundance so can’t see prices going up from here.

He is more concerned with valuations. REITs came back to fair valuations in 2010 and then some. The universe if fairly valued at present. If you are in REITs for short-term gains, you should take profits. If you are in them for stable long-term returns, then stay in them. He is seeing money coming out of Income trusts and into REITs. Beginning in August he saw daily net flows into his funds double. New accounting standards will increase volatility in the Real Estate sector. However intrinsic value of a company is still based on free cash flow. Fundamentals at present are great for Real Estate.

Not a lot has changed since 2009 except overnight bank rates. The Canadian yield curve has rallied. There is not really any value at the short end and the risk is too high. At the short end, rates are as low as they are going to go. Prefers corporate bonds. Investment grade bonds are very attractive. Ireland or Greek credit problems will cause volatility.

Aeroplan Bonds: 6.95% 01/26/2017 The improving economic theme and the Aeroplan card attached to purchases. Broad customer base, deep penetration. Not all miles get redeemed (over 20%). Good cash flow, modest debt, and good franchise, higher income individuals.