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

Oil: - Generally the oil stocks in Canada have been impacted by the general negativity of the market. Not reflecting the potential that, even prices significantly lower than $112, would give to their earnings and cash flow and ultimately share prices.

Oil: -- He has been using a very wide range for the price of oil, $70-$100. At the upper end, which is where we are now, you are discounting some of the greater risks. However, looking at the cost of getting oil out of the ground and getting a decent return, $70 is a justified lower end. Wouldn't be surprised to see some weakness in oil prices. That would be the time to start picking up some oil companies.

Natural Gas: - The shoulder season would normally give a back off in prices. However, he is seeing many stocks that are trading at 2X or 3X cash flow, and should be trading at 6X cash flow. Never got the bounce they should have. Would hold your positions and not try to play games.

US Financials: - He is just writing a newsletter on this subject and it can be accessed at http://www.stockchase.com/www.ackerfinley.com for information. There are a lot of distressed US financials with an amazing amount of small banks that have been crushed and looked like very good Buys.

Gold: - If you are in gold stocks, you are playing with fire. They are so overvalued that it boggles his mind. It's like uranium was over a year ago where everybody was jumping in. He has only one gold stock left in his portfolio, Yamana (YRI-T). He has owned quite a few gold stocks and has made money on them.

Silver: - Costs to mine gold and silver are going up exponentially. This is a true definition of inflation. Only looks for mispriced assets.

Oil: - Normally in Canada, the sweet spot is from January until the 1st couple of weeks in June. The TSE Oil Index from the middle of January has already gone up 23%, so the easy money has been made.

S&P 500: - Has a nice base pattern being built over the last 3 months. If it is truly a base building pattern, you should expect to see the index go up to around the $1,450 level, which would take it to its 200 day moving average. Probably around June.

Gold - Jr Producers and Exploration: - Gold stocks are in an upward trend with the price of gold. The chart on gold shows the upward trend has been broken indicating a little bit of concern. When it gets back down to about the $850 level you could start considering buying gold and gold stocks. Historically, seasonality for gold and gold stocks has been the end of July to the end of October. As you get into the summer, you will have seen the seniors and intermediate stocks move. The next level to go will be the juniors.

Natural Gas: - Historically ratio of 1000 BTUs to oil is 6 to 8. With oil at $100, natural gas should be at $12, but he doesn't think this will happen. This is the shoulder season for natural gas so expect some price weakness. Looking out 2 to 3 years he is looking at Encana (ECA-T) for large caps and Cathedral Energy (CET.UN-T) and Pason Systems (PSI-T) in mid-caps.

Fertilizer Stocks: - There is a generational change in the dietary habits of people in the emerging nations. As wealth increases, they move from a vegetarian rice-based diet to higher proteins, which increases the demand for fertilizers/seeds. Using a 5-year view and these stocks are great Buys. He recently sold off many of his agricultural stocks because he was not sure of the market and wanted to maintain his client's capital. Thinks he will be back in the near future. Favourites are Agriun (AGU-T), Potash (POT) and Mosaic (MOS-N) in that order.

Bond ETFs are probably one of the best areas to look at exchange traded funds. You get the benefit of institutional pricing and very low cost MER’s. There has been a big run-up in treasury securities because of a flight to safety, so yields today are very low. He would look at high-quality government bond ETF and then add to that 30%-40% of with I-shares corporate bond portfolio.

We don’t buy tobacco stocks. The right kind of company for this kind of market, no impact from economic conditions.

Copper- Has gone through a great upswing, it’s making a great move. Copper stocks are not as expensive as they were relative to the copper price 6-7 months ago. Would take profits from the junior companies and stay with the senior cash generators.

Bear Sterns Bonds- There’s a chance you wont be able to get your cash out. If the takeover occurs they can’t allow the company to go into default. You might be paid off. It would be high risk capital to own any bonds in the U.S financials.