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

Market - TSX lags the NYSE slightly, so if you watch NY you can get a key from this. It is about 2 weeks behind cyclically. The leaders in Toronto are technology, metals and materials and the rest of the sectors are not keeping up with the market. Leadership is thinning out and it is a worry.

Stop Losses – For a stop-loss, you can use a 10-day, 10 week trailing stop or a true range stop. For the latter, you should check this online.

Principal driver of the markets will be the US$. His numbers show that the US market will decline substantially. Historically when a country’s currency is weak, the stock market has tended to balance it off. The bullish view is that this would be 60% of the decline. You have to hedge (by currency futures or options) the US$ to get rid of the currency risk, allowing you to go into the US market.

Uranium - When you look at the way stocks are trading in this space, at this point you are betting on a turnaround. Long term picture is good but a very volatile space. He would stand clear for now and wait for some buyers to come back to the group and see some strength.

Stop Loss - He uses a point and figure chart because they are quantitative. It also helps to recognize volatility. There are also other ways to calculate these.

National Bank 4.7% Bond maturing Nov 2/15. Usually doesn't like bank debt, but bank that has just recently widened giving him 160 basis points over Government of Canada.

Government of Canada 5.75% Bond 2029. This was a long-term pick. Sold his holdings about 4 months ago and just got back into it again. Cdn$ is so strong, it is going to have to impact the economy and inflation numbers so this is a good place to go.

Ford Credit 4.375% maturing March/08, the financial arm of Ford. Getting closer to maturity and he is slightly uneasy with it because of poor fundamentals.

Sub-primes - There will be more fallout. They have to figure out what these assets are and what their value is. $1.5 trillion is outstanding and $300 billion is going to be written off. These over collateralized obligations are going to be significantly underwater. This is just the sub primes of the CDO’s themselves and then you go to the leveraged loans, which is the next problem. There are some serious write-downs yet to occur.

Bankers’ acceptances - These are promissory notes that a small corporation issues to raise short-term money. They can't do it through the money market so they go to a bank who, for a fee, stamps it and the stamp signifies that it is 100% guaranteed by the bank. Very liquid and trade every day. Very safe investment.

Canadian $ - He and it would be imprudent to change currency into the US at this time.

Provincial Bonds - Have a very stable yield spread from Government of Canada's. Every province now has a surplus. If you are biting government bonds, by provincial rather than Canadian, which gives you a better year low.

Molson Coors 5% bonds maturing Sept 22/15. Pays 5.5% at the current price of $96.86. Since the merger, their balance sheets have strengthened considerably and their net free cash flow has tripled.

Advantage Energy convertibles. 8% coupon maturing Dec 31/11. His view is that natural gas side is due for a rebound in the next couple of years.

Bell 5% maturing Feb 15/17. At the present price of $85.34, it is paying 7.17%. Mildly speculative.