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

Markets. CNBC (a finance TV Network) has been reported as having a lower viewership recently. He feels this is a good sign as it shows that in the States people are no longer watching or are interested in the market. A lot of the big US pension funds have moved out of the equity markets because of the volotility associated with them so when things are fixed there is a lot more potential for things to move on the upside.

That said, he doesn't think we are there yet. Have to wait for the governments of the world to stop supporting the economies, and for the interest rates to stabilize. Three and a half trillion on the Federal Government balance sheet.

Educational segment 30 year treasury yield, if yields get above 3.5 percent he feels that the bond run isn't over. He fields that bonds are a better bet over stocks for the next 4 quarters. Inflation is the number one fear of bond holders.

Growth will slow towards the end of the year. Has happened in the last few years. View is they will move from Canada towards the States. Information Tech, health care, consumer names are starting points. Looking towards the global consumer. A safer way to play the growth in China.

We are dealing with two kinds of economic growth. Developed economies delivering of financial institutions. Second type wasn't mentioned.

We are in a low interest rate environment and we have coordinated fiscal policy trying to stimulate economic growth and in the US create jobs.

Self fullfilling prophecy of stimulated economy providing long term growth.

Some emerging markets central banks are moving away from export based growth to domestic consumption.

Commenting on Canadian Tire splitting up it's financial and land holdings into two different companies. He thinks it's more of financial engineering then actual change in value. He does mention that if there is real estate that could be monitized by development then it might make sense, but otherwise just financial engineering.

Markets. Slow growth economy is good for corporate profits. Any incremental growth goes to the bottom line. Now there is no alternative. Everyone has thrown in the towel and is into equities. You have to own the profitable companies. Resource stocks don’t fall into that category. Resources are cheap now but you have to do something defensive. There is a ton of oil going into the US hub and that is the problem.

Markets. The bull has gone a lot further in the US than people ever thought it would. Canada is lagging big time because of resources. There is enough nervousness that people are sticking with what works – dividends, blue chip. You would think you would have a pullback and you keep going further without one and there is still money on the sidelines. In the US there are people rotating within a portfolio. A pullback has to be catalyst-driven. 3% growth and low rates are seemingly enough to keep going.

Oil. does well from July to September. Don’t go in now as there is usually a lull. It has not broken out right now. You want to see a breakout.

Markets. Sell in May and Go Away. We came away from a strength on May 5^th. The S&P tends to lower .5% in this period and TSX drops 1.5%. There are opportunities out there. Some sectors do better at this time of year. Buy staples, health care, utilities, and anything that yields do better. Works on both Bay and Wall streets. He looks for a positive trend, wants to confirm the trend before he goes in. Sell in May and Selectively Go Away. You don’t want to end up with a half percent loss. Anything with a yield tends to do very well.

Markets. There are some very clear and long lived themes that continue to perform very well. The companies that are highly economically sensitive are not doing as well and companies that are benefiting from monetary policy and have a good dividend policy. Investors lack income replacement. Highly cyclicals are doing well, but consumer cyclicals are benefiting. Companies and sectors where their ability to pay is improving are doing well. Telecom, Real Estate Investment Trusts, and Pharmaceutical. These companies are willing to pay out more of their earnings. He avoids materials, energy producers, and golds.

When Interest Rates Go Back Up: Banks are good at managing their liabilities. Will not pose a problem. Higher interest rates allow them to widen out their spreads. Higher rates will mean economic growth and this will mean more loan growth, so you would expect banks to do very well.

Markets. On an inflation-adjusted basis we are only back to 1997 levels. But earnings are 45% higher. He feels there is some more room for upside to stocks but we are pushing fully valued. You have to be a really good stock picker. He is a bottom up manager but one has to be aware of where one is from a top down view.

Markets. Seasonality can get moved to left or right. He did not see any of his resource stocks move. But today we saw a little bit of pick-up. Doesn’t know if it will last. It could be a short term play. The TSX is not back to the ‘07’ highs. For the S&P we are at an all time high. We have a breakout from ’07’ high. We have to find out more about this high. Maybe it just sucks in more money. We see strength in defensive names. It is really a trading market.

(Top Pick May 14/12, Down 5.93%) Gold bullion.

Oil and/or Nat Gas Seasonality. We are getting a counter seasonal action. Sometimes it gets shifted. Oil did a little test recently. He would look at oil over Nat Gas right now.