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

Uranium. There had been a huge rise in the commodity and then the bubble burst and it has been lingering. Now is a good time to be adding. He owns Uranium Participation (U-T) but has not added to this. Uranium needs patience as it takes many years to build a nuclear plant.

Gold is setting up very nicely. Central banks are becoming net buyers of gold. Small-cap area is where the smart money is going. Gold production is at a standstill and there is nothing in the pipeline.

Cdn$. Thinks it will grow because of commodities. As the world continues to grow, the dollar will get stronger and stronger. There may be US$ strength next year that will put some pressure on it but longer-term he thinks it will go through par.

Uranium. Surprised that uranium hasn't done better over the last year. Pricing sort of stuck in the $45-$50 range. There is a supply/demand imbalance looking out a few years. If you take a position, go for the larger companies first as they will lead the sector.

Gold. Had a tremendous run but is currently pulling back but he sees upward pressure on it. As long as deficits are very large among developing nations, people will be looking for a currency play. Gold companies are selling at very cheap multiples at current gold prices. His 3 principles are Barrick (ABX-T), Goldcorp (G-T) and Silver Wheaton (SLW-T) (precious metals).

Natural gas. Not very optimistic in the short term. A lot depends on the winter in the short term. Would prefer oily names right now.

Tortoise and the Hare. Stocks that faired the worst on the way down have faired the best on the way up. This is coming to an end. Slow and steady wins the race. Tortoise is the dividend paying stocks like utilities, drugs, consumer, and non-durables. The ones that are left behind are resource, cyclicals and have lead the market on iffy fundamentals. Higher quality stocks are starting to outperform. Over the next year or so will be a muted recovery.

GOLD: Bubble bubble, toil and trouble. Gold was starting to go parabolic. It is a big beneficiary of the US$ but has been gaining against all the currencies. Gold does not deserve to be as high as it is now. You only want to own gold when it is moving and it usually results in tears afterwards. It is a commodity and sometimes they go up but usually they don’t. Gold stocks have not kept up with the price of gold. They will be less volatile.

When to invest in US stocks again: No one knows when dollar will stabilize. You should look at your portfolio and if it is not properly diversified, you will have to buy the US. In the long run, currencies go up and down and tend to be neutral. Now is as good a time as ever, with the dollar in the mid-90s.

Lithium. Has recently gone up a lot. Some interesting exploration plays in Canada but it has to be refined and manufactured but no facilities for this in Canada.

Tonight Show is “Technical Investing 101” showing technical basics. Discussion on individual stock is pretty thin. (Don't shoot the messenger!)

India has announced about a month and a half ago they would pick up on the IMF gold sale. He is bullish on Gold long term, but there will be a lot of volatility. If China changes their building codes, it will impact lumber sector. It could be 50% of the Canadian lumber industry, but he would not invest in timber companies directly. He is positive on lumber if building codes change in China. Gold is a global currency and an economic hedge and risk of US economy and dollar.

Fixed Income ETFs: Look at the duration of the exposure (the average term). If you have a longer duration and interest rates rise, you will have more sensitivity and your price will fall. You want lower duration if you believe interest rates are going up. If outside an RRSP, look at CAB-T because it has a tax advantaged income to it. If it is inside, look at XBB, XSB (short term), CLF-T (gov’t bonds), or CBO-T (corporate bonds).

Explain the movement patters of ETF’s: You have to look at what the ETF is investing in. For example in Commodities, there are really 3 baskets: Equity Commodities e.g. XGD-T (gold commodity stocks); Gold futures; and Physical Gold, stored in a vault (spot price). These gold ETFs will act very differently from one another. 1x ETFs mirror the index, but leveraged and commodity ETFs might be a little different.

Two classes of shares – common and advisor. The advisor fund pays the advisor a trailer fee and has a higher management fee.