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

(A Top Pick April 13/09. Up 1.6%.) Government of Canada Real Return Bonds. Bought this when inflation expectations were low and securities were priced at a discount. She rotated into government bonds.

Wednesday night's program is on investing on art so there will be no comments by me. Bill

Natural Gas. Down about 40% year-to-date were oil is up 50%. There have been dramatic supplies through the shale plays in the US. Rig count has dropped off dramatically meaning the cost for them is going to come down and could cause a shift in the price of natural gas. Weather is always a factor. His choice is XTO Energy (XTO-N), a shale play and one of the better managed companies.

Interest Rates. Longer-term there is going to be pressure on interest rates to go up. With the amount of paper that the US is going to have to put out to finance their deficits there will be tremendous pressure to move rates up. This would also affect interest rates globally.

Hotel REITs. Hotel vacancies are way up and will become taxable in 2011. If you sell your holdings now you are selling at the bottom of the cycle. Hopefully there will be some recovery in the next couple of years and his tendency would be to Hold unless you have some were the balance sheet is vulnerable.

Gold: Not a big believer that gold will be taking off to high levels. When it hit $1000 this year, he shorted it and made very good money. If it hits $1000 he will Short it again.

Natural Gas: With the drop in prices, drilling activity has fallen from about 2000 rigs in September to under 1000 now. Monthly production has started to decline and will accelerate. Expects any surplus will have dissipated by the end of this year and there will be a doubling of prices from now. Looking for $6 by year end and averaging $7 in 2010.

Oil: Looking for oil to reach $80-$85 by the end of the year. Doesn't think that equity prices are discounting higher oil prices.

Company Consolidations: Expecting a great step up in the coming years as oil production will be declining and this is one of the few places in the world where companies can acquire new assets and grow production. Anticipates that larger global companies will buy out most of the operators in Canada in the next 5 years or so.

Canadian Banks: Have been one of the best global financial sectors. Everyone is on to that story now. Hard to see them being the leadership going forward. With positive economic changes, investors could be switching out of banks and into the more cyclical sectors.

Gold: Over the next year you will see gold break through $1000 and could go a few hundred higher than that.

Oil. Continues to look for oil to continue to improve to something in the $80-$90 US range by the end of the year and looking for an average of $72.

Markets: Expecting a bit of a reprieve during the summer but really worries about the end of Q2 and Q3. Great possibility that March/09 lows could be tested and we need to prepare portfolios for that. Need to consider Shorting as well as insuring portfolios with Options strategies. Also, there is nothing wrong with Cash and July-Aug would be a good time to raise some.

Put Options. Thinks of these as insurance contracts. If you own a stock at $33 and want to defend against the stock dropping down to $25 you can Buy a Put Option; say at $30, which allows you to Sell at $30. The other side of the transaction is Selling a Put so that if the stock goes down to $30 you are forced to Buy the stock at $30.

Natural gas service industry. There is plenty of production capacity out there. Thinks the economic activity will remain muted for the next year and natural gas is a big input to this. You might prefer playing the pipelines that transport it. (See Top Picks.)