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

The purchase of the balance of Falconbridge is positive as that is where the cash flows are and where the copper and nickel productions are. Will be a much bigger company and new projects will be much easier to fund. Looks pretty cheap presuming the deal goes through.

Has the right product at the right time. Could be a corporate action re: selling the company which could add some juice. Typically, in a longer term basic materials market, you can see these stocks trade at a premium to the S&P multiple.

Believes that China and India which are among the lowest per capita consumers of energy, will drive the energy market. Energy is normally a boom/bust cycle, we've had a boom. China and India's demand will cancel the bust.

Thinks that because the US deficiet is high, the US dollar is heading down more relative to the Asian currancies. Canadian dollar will probably not go to par, (they will print more money, or use interest rates to degrade it, and thereby protect the manufacturing sector in Ontario & Quebue). With all that in mind, gold will start heading up, as it starts to become used as a currancy again. The larger gold companies which may move first are much more fully valued. Better to buy the smaller producers which are struggling at current gold prices, in anticipation of gold going up.

Thinks it's at the top of it's price, however because it's going to be monotized (sold) it will be in play. He doesn't own it but is "permisive" to own it, however put a fairly tight stop behind it in case the commodities "fiddled".

potential take-over. Not big on this company

Financial engineering performance trusts.

Appears that any deal with Chinese is dead. May get split up. Good current management.

Area play is real. Should do well as long as people stay interested.

New management with a good track record. About a 12 year reserve life. 85% gas. A good portion of it's production is in the Olds area of Alberta and they had a setback there with processing facility, but thinks that's behind them. Relatively low payout ratio. Debt to cash flow in or around 1X they should be in good shape going forward.

Oil/Gold Ratio Chart - When it is rising, oil is outperforming gold and vice versa. Oil has gotten into an area where it's been overbought and there will be a correction. Dow Jones/Gold Ratio Chart - After the peak of gold in the 1980's, the Dow has led all the way and really took off in 1984. Made a huge top and since then has been favouring gold. The chart now shows a consolidation triangle which indicates a break to the downside for Dow. Bond Yield/Gold Ratio Chart - Bonds have been falling in yields. Throughout the 80's and 90's, they have basically traded in a huge range, but in the last year or two has broken out hugely in favour of bonds. It's getting extreme, so at some time, it will correct down and favour gold again. Silver/Gold Ratio Chart - Throughout the late 80's gold was favoured over silver. Silver has now taken over and this is the key commodity to be and his TOP PICKS today are all silver stocks. XAU/Gold Ratio Chart - Should you be long "gold stocks" or "gold" chart. The up trend indicates gold is favoured as happened from about 1994 to 2000/2001. The last few years have seen gold stocks more favourable. They are still in that trend and near the top in the consolidation zone. Gold stocks should continue to be favoured over holding gold, but at some point in time, gold will eventually outperform the stock.

Sold their holdings recently because of a disappointing 1st half and not sure how the 2nd half is going to look.

In the mining sector, they've always had good assets, but have not developed them well or have had poor management. Not a fan. If you're owning for a takeover, it's been for sale for a very long time with very little action, even in this good commodity cycle.

(A Top Pick Oct 18/04. Up 40%.) Now absorbed by Magna.

Brascan (BNN.LV.A-T) has given one more month for a potential buyer to come forward. Looking at past results, you should assume that there will be no deal. There are better long term opportunities elsewhere.