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

Infrastructure: - Spending on infrastructure has been dramatically under spent for 50 years. We will pay the price going forward. Don't worry about which stock, as they will all perform well.

REITs: - REITs in general have under performed the market for the last couple of years. This is a sector he should be in at these levels. Likes Allied Properties (AP.UN-T) which has done quite well.

Fertilizer Stocks: - Fertilizer stocks have done very well. The premier company is Potash (POT-T) as well as Agrium (AGU-T). At these levels, the multiples are very high so he doesn't own them. If you buy, be prepared for lots of volatility.

Oil in 6 months: - Not good at short-term predictions, but thinks the oil has gotten ahead of itself due to a lot of speculation. Barring some horrible geopolitical event, she thinks it should pull back to the $90-$100 range.

ETF’s: - She doesn't use ETF’s for her clients but they are a good way to get diversification if you want to make sure that you are buying from well known providers. When buying, you have to look at your industry and geographical diversification as you put them together.

Canadian $: - Cdn$ is in a pretty tight trading range. Where it goes will be partly a function of what happens to US interest rates. The $1.10 figure last year was really an aberration. Expect we will stay in the $.97 to $1.02 range. Bank of Canada has indicated they are going to be quite aggressive on interest rates so there will be downward pressure.

Q: Do you Buy a stock and simultaneously Sell a Call option? A: If you are planning on selling a call option on the stock, this is the way he would do it. On the other hand if you are kind of bullish on a stock, and you want to enter a position and hope it rallies a little bit and then sell a Call, that's a different strategy but it works very well too.

Q: Buying Leaps as opposed to buying stock. A: Not a bad strategy at all. A Leap is just a long-term option, so what you are doing is buying longer-term options and selling shorter-term options against it.

Canadian Banks: - He exited the banks in April/07. In the mid-90s, banks traded between 4% and 7% time’s earnings, which grew to 14X earnings. The recent crisis has hurt their ability to generate revenue from some business lines going forward. At best, you'll see flat to slightly growing earnings over the next couple of years. There might be a bounce, but over time there will be a compression of what the market is willing to pay.

Gold: - Likes gold as an investment. Believes he can calculate the value just by looking at the relative inflation rate of the US$ versus the inflation rate of gold. Based on this, gold at $900 to $1000 is fair value. Inflation rate in the US, measured by M3, is rising by 17% year over year, which bodes very well for the gold price. What concerns him is the 50% rise from last August, which could result in a short-term contraction.

Oil: - There will be some reduction in US demand, but this will be offset by drops in supply. Russians are producing one million barrels a day less than they were a year ago. Thinks the price of oil is relatively in balance and will stay on the high side of $100 this year. Chinese are adding 10 million new cars a year.

Energy Stocks: - He is very bullish on energy right now but there is a discontinuity between oil and natural gas. There could be some catching up by natural gas. Oil is a good place to be for longer-term investors.

Gold: - Likes gold very much. Has a number of attributes going for it including good primary demand as well as growing demand in growing economies. Also expects it to continue increasing against the US$.

Natural Gas: - From a trading point of view, stocks will be higher a year from now but if you are trading on a day to day or week to week basis, she is holding off on some of the stocks just because of the big moves they have made recently. If you are an investor and are looking at a year from now, there will be higher prices.

Royal Bank 5.45% Nov 10/13 bond: - A 5 year AA security yielding roughly 200 basis points over a government bond. Rarely has it been at these levels. There could be some issues, news over write-downs, etc. but this is one of the best run banks in Canada. You will get the 5% every year to maturity. There will be some volatility but it's good money.