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

Wishes he could tell you when the bottom or the top is. All he can tell us is that things look interesting. He sees good valuation for 3-5 year investments. There are good buys if you are going to be patient. Oil sands are questionable as to whether they are viable. If oil goes to $70-$75 then a bit of small oil companies would be sidelined.

Markets. This was a kind of day which reinforces that you should have these things worked out in advance. You should have a hedging platform, you should know in advance what you are going to do and how you are going to react if markets fall like they started to today. You should use markets like this to try to build and add to positions because some of these stocks have great looking yields.

Hedging strategies? Put option on the SPDRs, the S&P, NASDQ or TSX? PUT options are so expensive and when you really need them, they are even more expensive. You Buy one and it expires worthless in about 2 months or you get eaten away by the volatility. For most investors, the way to hedge is to have good asset allocation built in so the cash keeps coming in. Or if you want to be more dynamic, go to Cash when you see the market falling, but this is a tough thing to do.

Fixed Reset Preferreds. These are preferred shares that mature every 5 years and you can either get your shares back or you can have it float to whatever the 5 year Govt of Canada bond is plus the spread. Gives a lot of inflation protection. Have been remarkably successful and he owns a lot of them.

Markets. Technology sector is certainly undervalued given that it has fabulous growth metrics. Many of the good companies in technology are trading at historically low valuation levels. He would probably avoid the Consumer Staples group.

Markets. Heading into earnings season in 3-4 weeks and at that point you’ll start to see some of the good earnings of the good companies come through and that’s were he aims for. Dividends are reasonably important. He likes to have them but he would Buy a stock even if it doesn’t pay a dividend.

ETF Portfolios. He prefers holding the broad market as a core and builds in around the edges with some explorer (?) products. He looks for trends in the market and then buys that trend around the edges of the court.

Vanguard has moved into Canada. How do you compare them with the existing ETF's? You have to love these funds. To be successful you need liquidity and low fees. These have lower MERs.

Regular ETF and Advisor Class ETF. Same liquidity? Trade at similar prices? An Advisor Class ETF has a trailer fee in it so when your advisor recommends to his client that they buy the Advisor series, the advisor is going to get a chunk of the management fee. They both trade at exactly the same price. Liquidity is not at function of volume when it comes to an ETF. Wouldn't recommend the Advisor Class for the average investor.

Options Strategies. This is an excellent time to be using options strategies. When there is a lot of uncertainty, there is typically a lot of volatility. When there is volatility, option premiums tend to be more expensive, which opens the door for some very interesting option writing strategies.

Stock warrants. When is a good time to buy them? This is the same as a Call option but tends to be longer term. The only difference is, warrants are issued by the company. You use the same logic that you would use on a Call option.

Markets. Spain has now indicated they want to be part of the European union. It's a volatile place to be and he wants to steer clear of this area. His strategy is good companies, strong balance sheets, dividend paying yields and that are trading at low multiples. There is going to be slow growth globally. Dividends will be a much larger part of the return in the next couple of years then perhaps capital gains.

Markets. He focuses on companies that are going to grow by 20% next year, almost regardless of what the global economy does. Not particularly looking at economically sensitive companies or globally sensitive companies. Sitting on a fair amount of cash right now but he is nibbling away and finding some very compelling ideas. Now is the time to be buying.

Markets. We have had pretty choppy markets over the last 4-5 months and he thinks it will continue to play out like that. European debt crisis seems to be an ongoing saga. Doesn't really see mechanisms in place to provide a solution any time soon. Key for him is to really cleanse the portfolio of what he calls “basis risk”. Effectively he wants to make sure he is long and short the same amount of liquidity and same amount of market cap. He wouldn't go long on a small gold and short a big cap gold.

If you look at gold, which he insists is not an asset, Gold is rise because it is a question about how low the currencies will go. He thinks currencies will HAVE to go a lot lower because they can’t pay the debt. Either we print money or they default. We WILL NOT have a political implode of the system. We tested the low in May, which he said would have to happen. The big loser in the gold game is Germany because their gold is in the vaults in the US under the control of the financial system and they are prancing around with pieces of paper.