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

Golds: Usually do well at the late stage of any run. Did well through the early part of this year. Market started to come up so profit-taking set in. If there is anything that is going to lead an up leg, it should be industrials. Resources should then follow around late October early November. Golds should have another up leg late this year and early next year.

Russian ETF's: 3 reasons not to invest in Russia are: 1) The venture in Georgia is a concern for NATO and for countries in Central Europe. Cold War? 2) He thinks thugs run Russia. 3) Economy is largely based on commodities, particularly exports of natural gas, oil and gold. Right now, those markets are in flux.

Agricultural Stocks: His timeframe is the next few years. He has a lot of confidence that the agricultural sector is going to do quite well, particularly the fertilizer part.

Integrated oil company is not a bad idea. This could include Shell (SHC-T), Imperial Oil (IMO-T) or Exxon Mobil (XOM-N). Integrateds have the advantage that when oil prices come down, they make more money on the refining.

Energy: Thinks that oil may have based here. OPEC meets September 9 but he doesn't think they will raise production.

Energy: May be a pullback in oil in the next couple of months but is expecting an average of $130 oil next year and maybe even $150 by the end of 2009. Expect there will be a re-focus on energy stocks after a brief period of weakness. There seems to be an upward spike when a large hurricane goes through the Gulf but, as a rule, it is not sustainable.

Gold: There is a bigger story for gold than just the US$. There is physical demand coming out of the emerging nations. Expects the US$ will show some weakness in 2009 and acts as a safe haven in 2010. Looking for gold to be $1000 in 18 months.

US$: Looking at the whole Freddie Fannie issue. There are a lot of financing requirements in the US, so he doesn't think the US$ has found a bottom. On interest rate differential, which usually underpins a currency, the US has far overshot its fundamentals. Expects that gold will go higher and related to that, so will oil.

Bank Preferred Shares: Spreads in the corporate market and what banks have to pay right now are incredibly attractive and preferreds look good. A lot of them have performed quite poorly over the last year as spreads have widened. You get good distribution but not a lot of capital appreciation.

Oil Sector: A most peculiar reaction to recent events. Oil income trusts have been strong and rising on anticipation that oil will recover and payouts will go up. However, the rest of the oil sector has been going down

Asian Growth: Asia will lead global growth and Resource stocks will be the ones to benefit most. A lot of them are quite cheap compared to his fair market value but are in locations you don't want to be in. Lundin Mining (LUN-T) and Uranium One (UUU-T) are 2 of these stocks.

Stock Selection Process: He has 3 criteria and they are very simple. 1) Buy good balance sheets. How much debt, equity and the quality of the equity 2) Fair Market Value – Value of the future earnings. 3) Trends. Historically stocks will fall to old lows and rise to old highs.

Canadian Banks: Slowly and increasingly managed to increase their leverage by getting more stuff off their balance sheets and into investors’ hands so they don't have to use up their own capital to guarantee it. In doing so, their ROE has gone up and up. That trend is now done. Banks now have to take this back but they can't because they don't have the capital.

India and China: India's economy has been growing and is based on technology and service. Stocks have been expensive so he does not own any in India. China's economy has been down this year so he is holding his current stocks.

Decoupling of the Global Market: Thinks the markets are somewhat decoupled. There is quite a difference in performance between the various global markets. Asia right now is highly dependent on what happens in China and their growth is going to be around 9%. If it really slows down it will go down to around 7%.