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

Canadian banks. PE Ratios are very high because of coming off worst 2 years in the last 20 years. Earnings tend to be difficult because they always load expenses as things are improving, because bad debts are peaking with low interest rates at a steep positive yield curve. Wouldn't worry too much as they'll come down sharply over the next year.

Gold. Seasonality is typically from July 12 to October 9. 67% of gold is consumed in jewellery and most of it is in India. October gold has tended to correct when central banks dumped gold but not so much this year. Gold can now run through to the end of the year and even into February but then drops off until the summer.

Banks. Canadian banks year-end is the end of October. Traditionally they have cleaned up all their stuff with good positive surprises. Seasonality is from the end of October into mid April.

Oil. Seasonality is February 26th to May 9th. Oil has gone up 24 out of the last 26 times and produced a return of 8.9%. Refineries start switching over from crude to start preparing for the driving season

Volatility Index (VIX). Simply looks at what premiums cost on options on the S&P 500 index. One of the things in the Options Pricing formula is that you have to have some estimate about future volatility. Volatility Index does the reverse. Has been dropping because of the narrowing of the trading range to the market.

Dividends. The core sectors where he thinks you will get dividend increases year-over-year are pipelines and utilities. They are regulated and they know how much they're going to make and typically increase dividends from 5% to 10% a year.

Trading 10- year notes. Bullish on these right now. His duration is long but on a trading perspective, he backed up to 3.50 and it is currently south of 3.40. If it got to 3.25-3.20 that might be a place to let some go. Very difficult to short these instruments for the average investor.

Bank Tier 1 Capital Issues. He did a lot of these earlier in the year and continues to hold a lot of these. Still likes this space.

Short Term Bonds. He would reduce exposure to the short and of the year curve, 1-5 year period. This is very rich. T-bills are 2.5 basis points and government bonds on the short end at 5 years 2.75 so there is not a lot of upside. He favours the 10-year part of the yield curve.

Real Return Bonds. The coupons on these are based off the inflation rate. His view is that inflation is not a problem so this is probably not the best place to invest in fixed income assets right now.

Hedge Fund Industry. Following the Bernie Madoff situation there is a great movement underway to tighten up regulations in reporting. Also a greater amount of transparency.

Hedge Funds. These are designed to produce positive returns no matter what the general markets are doing. They can also aim for outsize returns based on a macro outlook.

Trident Global Opportunities fund. Has done well taking a bearish approach to the US economy. Their protection in the event of a down side is very solidly in place. Have a lot of cash.

Picton Mahoney Cdn Market Neutral. Great idea in terms of a conservative and consistent end of the spectrum. They are navigating Canadian equities with next to zero correlation compared with the market. Opposite of indexes. Use Longs and Shorts. Made money through 2008 and are still making money.

Polar Securities Altairis US Long/Short. No US$ risks. Will rarely buy commodities or financials. Have had positive returns over 12 years.