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

Man AHL Diversified Fund- One of the biggest hedge fund companies in the world, they manage about $70 billion. There is no correlation in their top fund to the world market, which means it’s a good addition. There up over 25% this month.

Risky Hedge Funds- Long, short equity strategies never really have any problems. The more volatile the underlying security, the less leverage you have to use. If you have a low volatility strategy, you will have to leverage it up very high (30:1). Leverage hurts you when liquidity dries up.

Arrow JC Clark- Very none market dependant. Has only around 30% net longs. Very opportunistic, has no resource exposure.

Sprott Hedge 2- Its manager is the biggest Bear in Canada. If financials continue to get hit hard and gold and energy do well, this fund will be up a lot.

Salida Multi-Strategy- An aggressively run fund. They can be very long to the market, they can be short or they can pull off the risk very fast. Volatility has increased with this product quite a bit. Their performance is still great. They’ve developed a good track record.

The difference between a hedge fund and an ETF- An ETF tracks an index wither up or down, not a lot of active management. A hedge fund wants to take away the market risk, they pick their own stocks, which takes away/add risks. They may short an ETF against the hedge fund.

Commodity market- Sprott is very long gold and energy. The fundamentals for these sectors are very good and there is still value there.

A Hedge Fund Portfolio- The general number is 10-15% of portfolio in Hedge Funds. A 20% holding can actually decrease the volatility in your portfolio. Typically you should stick with a hedge fund for quite a while.

Enel Societa Per Azioni- (Top pick, March 28, 2007. unchanged) An Italian utility company. Not exciting here, it’s chugging along. A good yield. Possibly a good source of cash down the road.

Lyondell Chemical- (Top pick, March 28, 2007. Up 21%) Has been acquired.

Preferred shares- We have been buying a lot of preferred shares. They typically have 5-6% dividend yields, which is quite high on bond equivalent basis.

Caller's question was, can a Canadian Bank fail? Answer: No. Canadian banks are generating most of their earnings from deposits and trusts.

The sweet spot for covered calls is between 60 to 90 days for them.

GC/J8- The recent sheer drop in price tends to be associated with bull market. Not bullish on the U.S dollar. The value of the gold stocks are pretty good.

Resource stocks- Don’t rush out of the sector, cherry pick certain stocks. Should come down because of a global economic slowdown.