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

Canadian Banks: A little ahead of themselves as he believes the next 2 quarters they will take some losses on their credit card books and some of their loan books. This will probably cause them to pull back a little. Try to get them 10%-15% below where they are now.

Normally markets do not do very well from May through October. This year it has done so well through the last of months that we are going to be in for a more difficult time. He is not a believer that the market will continue to go up. Wouldn't surprise him to see it go down 15%-20%. He will be waiting before putting more money in.

Natural gas: Likes as it fits in with his contrarian views. Whole sector has been decimated. Some possibilities are Pengrowth (PGF.UN-T) and Harvest Energy (THE.UN-T). You could also try True Energy (TUI.UN-T) but is very dangerous. You could also look at convertible debts. Trouble with all of these is that their balance sheets are all pretty ugly.

Silver: As a monetary investment, he would personally wait for it to be at lower levels. He prefers to earn interest on his investments but it still could be part of a portfolio but he wouldn't go hog wild on it.

Pulp and paper: Thinks this sector will come back because there has been so much cutting and so much abysmal horrific results that a turnaround is in store. The problem is that so many companies have very poor balance sheets.

Gold: He likes gold. The chart is showing a reverse head and shoulders. It's important to have gold in your portfolio. The anchors would be Barrick (ABX-T) and Goldcorp (G-T) and then surround those with a couple of growth such as Agnico (AEM-T), Red Back (RBI-T), Yamana (YRI-T) or Iamgold (IMG-T).

Base Metals: These will lead us out. Has started but had a pullback in the last few days. Anytime we are in deep recession, they will lead us out.

Gold: Nice rally up to about $980 but tumbled because of the rally in the US$. Short term he doesn't see a big spike in gold bullion because he doesn't see inflation. In the mid-to long-term there is a big threat of inflation. That's when you want to trade. Play gold by buying a stock and selling a call option against it. He likes large cap almost exclusively.

US banks: Not out of the woods yet. The worst of the housing may be over but you are just starting to see the effects of bad commercial real estate hitting the US banks. Raised a lot of capital and that is great but still too risky for him.

Natural Gas: Eventually stocks will dry up because of lack of drilling but this could take some time. If you are interested in playing the pure commodity, then go for an ETF. If you're looking for exposure through companies with exploration potential than you look at an Encana (ECA-T), Canadian Natural Resources (CNQ-T or natural gas drilling stocks.

Oil: As a longer-term investor, he likes the outlook for oil. In the near term he thinks it has probably got ahead of itself. Probably due for a correction in the short term. That will give long-term investors an opportunity.

Oil: The decline back to $35 was the speculative bubble unwinding. He can see oil at $85 by the end of the year.

Market: Doesn’t think it is a bear market rally but there could very well be a correction of between 5% and 15%. Fairly unlikely that we are going to retest lows.

REITs: Assuming a weak economy, increasing inflation and higher long-term interest rates, large cap liquid names with pristine balance sheets will do extremely well. Will have access to capital with the opportunity to pick and choose assets from weaker performers. Smaller ones will suffer.

Base Metal Markets: Our economy is still very sick. We are no longer declining but we are not anywhere near growth. The bulk of the reflex rally is over and spills over to the base metals but not as aggressive as on the equity market. You need to be over weighted in gold versus base metals.