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

American Financials: Trading above their model prices. It’s about the debt. Citi has 360 Billion on their balance sheet. Why should taxpayer pay a penny more? How do we judge a company that accepts such a large amount of cash and then turns around and reports these numbers? This is not an investment, but a warrant. Same for Bank of America. Nationalization is about stockholders getting zero and debt holders taking zero. Run, not walk, away from these securities.

What we have seen over the last two months is a change in the psychology. We are not seeing stocks fall like dominos. People are building some confidence. Thinks manufacturers’ inventories have bottomed out and production will have to resume.

Numbers are suggesting we are still in a little bit of a recession. We expect base building in the near term. You want to see a breakout and volume for the end of cycle.

Going to see a lot of volatility going forward because people don’t know what these stimulus packages are going to do. People are still unsure of the Financials because there are a lot of banks that aren’t Mark to Market. We’ve seen the commodities base. Things will get worse, economically, before they get better. There are a lot of pairs trading these days. Shorting select consumer products and financial companies.

CI Trident Global Opportunities Fund : Fund did not rally when market did over last few years. It is there to make a lot of money if things collapse, as they did last year.

Dynamic Power Hedge Fund: Tough year last year. Performed much better this year than last. Concentrated portfolio.

Man Investments: Haven’t had any down years. Trend followers. Currencies, Oil, Stock indexes. Up or down markets don’t matter to them. Diversifies risk away from long investments.

Picton Mahohey: Shouldn’t matter if the market goes up or down, this one will go up. Zero Beta. Modifies risk in a portfolio.

Front Street Canadian Hedge: Macro Calls, good stock picker, manages risk with cash. His trends and themes are extremely good going forward. Likes agriculture, oil and gas.

Dynamic Contrarian Fund: manager proved himself over the long term to be a good manager. Deep value manager.

Sprott Opportunities Hedge Fund: 5-Year performance of 21%. Good stock picker, not a lot of gold, selectively shorts individual stocks.

Trapeze Value Trust: It had a horrible time last year because of the small caps. Management ability has not changed over last 10 years. Good time to own it now.

We are closer to the bottom of the cliff in the economy. The numbers are showing that the economy WILL turn around. We can expect an economic recover AT SOME POINT. The March lows were based on the prediction that the economy would fall off a cliff and the recover is a change in the prediction that it will recover and there wont be a depression. The November low could the low we will test. We will trade sideways for the next 3-6 months.

Canadian Dollar : Probably pretty close to fair value. Comfortable at current value. Don’t see near term rebound in oil.

Thinks market sentiment has changed from a month ago. There has been some optimism that investors can grasp. Economic data has stabilized. It will be a ‘W’ shaped recovery, rather than a ‘V’ shaped. Look for areas that will see a more sustainable rally. Look at stocks with good balance sheets and without a need to raise capital. This wont be a smooth ride forward.