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

Government of Canada 5.75% bonds maturing 2033. Real opportunity in the bond market is the long end of the yield curve. Curve is going to flatten, which means the long end rallies more than the short end. Real rates are too high in Canada with the Cdn$ going higher and the massive overcapacity globally and this will create deflation.

Nat-Gas : Unless we are heading into the coldest winter on record, the good news is in for a while. Take profits and look for something else

A Lot of people were looking for a pullback, but there is a lot of money on the sidelines. It is a liquidity-driven market. Let’s see how the third quarter earnings come in. Not a fan of the financial services sector. They have lightened up. There is not that much more up-side in Canada right now. Likes the liquidity flows in the US, but it’s a little bit stretched. The economy is recovering. He is not playing the market toward a correction, but he is upgrading his portfolio to reduce risk. The Nat-Gas rally has run its course.

Gold: Bullish. The breakdown in the US$ is significant for commodities. We are early in this move in Gold.

Gold: Bullish. The breakdown in the US$ is significant for commodities. We are early in this move in Gold.

Rebalancing portfolio mix. There has been a big run-up in the equity market and people have benefited from it. You should be looking at your portfolio and the asset mix to make sure it is in line.

Dividend biased equities. Dividends are an important part of any equity exposure. Equities have come very far and there is some downside risk. You want to focus on good companies that have a consistency of paying good dividends, have good cash flow and growing dividends.

Hard asset commodities. Consider currency risk of the US$ and inflation. Look at the diversification in your portfolio such as gold, silver and hard asset commodities. They can add a lot of value to your portfolio.

Market outlook. Expecting a pullback in the market. Pick the stocks that you like and a price you would like and wait for the pullback before buying. Caution is the order of the day.

Uranium. Very bullish on this longer term. Growth demand will be coming from China, which are currently producing about 6.8 GW of power and targeted to go to 86 GW over the next 10 years. Planning 68 nuclear plants but recently increase that to 114. Looking out 3, 4, 5 years uranium should be very much higher in price.

Oil/gas. Oil stocks are reflecting an oil price of between $60 and $70 right now so there's not a lot of upside for oil/gas stocks. Would avoid gas stocks until there is a better picture of how the inventories are doing. Likes companies with long reserves so would Buy and Hold Canadian Natural Resources (CNQ-T) or Suncor (SU-T).

Stock market rallied, credit markets rallied. He got invested earlier in the year and has been taking profits. He is stepping back and seeing where it settles. Is waiting to see more earnings before stepping back in. The banks have had a good run so lets see how they will perform at the end of the year. We have to wait for the refinancing of the loans made at the top of the market. This is the next problem to hit us – two or three years from now.

Fairfax 2018 7.35% bonds: They inherited a lot of problems in their acquisitions 2 - 3 years back but claims to them have been declining. They have had some value investments that have done well. The investment portfolio seems to be good.

Dollarama IPO: Likes the business. IPO coming up and pricing needs to be determined. Bonds were a great buy. Management delivered quarter after quarter. Would be good at $18

Market Neutral Investing. Security delivers returns. 1) Income via interest, dividend etc. 2) movement in security price related to the movement of the stock market (Beta) and 3) movement security price specific to fundamentals going on at the company (Alpha). Eliminate the Beta and isolate the Alpha. E.G. If Long and Short 2 gold stocks he wants the company that is Long to deliver positive surprise such as lower costs, increased production. Shorts the company he doesn't like. This illuminates the Beta.