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

Sprott Hedge II is run by Erik Sprott and is up about 15% since it was his Top Pick in March.

Goodwood Fund: Going out on a limb on this one because people are going to look at the performance and see it is down 18% to 20%. It tends to be an activist deep, deep value fund. His track record has been phenomenal for the last 10 years. In 2 or 3 years you will look pretty good in this one.

Arrow Enso: Global fund. Have done a fantastic job over the last few years. You don't look for this one to shoot the lights out or generate 40% return but they've never had a down year in the last 5 years. Up about 10% year to date.

Vertex Fund: One of the best portfolio managers over the last 10 years. One of the longer track records in Canada for long/short equity. Do a lot of merger arbitrage and with the global credit crisis a lot of people are worried and they have taken advantage of this.

Dynamic Power Hedge Fund: Management has done a fantastic job over the last 5 years. You have about 10 X your money if you bought it five years ago.

Sectors of Global vs Domestic Performance: Feels that wind power will continue to outperform. Likes the high barriers to entry. Currently there are 8 players in the global arena.

Solar Technology: He prefers wind to solar because of cost competitiveness. Solar sector has come off quite a bit and there are interesting opportunities for you to start chipping away. He divides the solar sector into 2 key parts. Tier 1 such as First Solar (FSLR-Q), Suntech Power (STP-N) and Qcell (?). Tier 2, which they don't buy, would be Arise Technologies (APV-T).

LNG Gas: Countries like Japan are paying $16 to get LNG shipped, so it won’t be coming in to North America. Any kind of disaster could create a natural gas shortage, so the trend is your friend.

Carbon Tax: Probably $2 or $3 a barrel and will be an additional expense, particularly for the oil sands companies. With oil prices over $100 a barrel, the impact will be fairly moderate.

Precious Metals: Predicting golds to reach $2000 and silver $40 in the next 4 years. Investors should have a bit of both gold companies as well as ETFs. South Africa, which currently has an electricity shortage, is the play for platinum, palladium, etc., which is where you have to go to invest in them.

Rather than an ETF, try to buy the physical gold bullion itself. You will have to buy from the banks and put in a safety deposit box.

Contarian Outlook: Current market condition is good news. Always looking at sectors and cherry picking in them. Financial sector - will likely get a chance later to buy dividend-paying stocks with possibility of capital appreciation. Dividends allow increased returns even if stock does not move. Wait for things to shake out and some tax loss selling. Other sectors, particularily housing, could also be interesting.

Canadian banks are still expensive at 10X cash flow basis. He prefers buying when they are trading at 5Xs. He owns Toronto Dominion (TD-T).

Crude: As it goes up, there is a point where the economy can't stand it. Thinks the magic number is around $130. Dow Transport chart shows a high in 2007 and trying to make a new high in May 2008. Transports are economically sensitive and are a bellwether. As soon as crude broke above $130, transports immediately nose-dived. As long as it stays above 130, the more trouble we've got and it extends the bear. There are signs that crude is getting tired. A lot of the energy stocks are not behaving well and there is some divergence between the stocks and the price of crude.

Financials: Ultimately there will be an entry point for the banks. Financials hit their critical low in March. Dropped today but at a higher low. If the higher low can be held it is probably quite good. If you are a traitor or want to take on some additional risk, buy the bank that has made the lower low. It might spring act more.