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

Economy. The economic data in the US, Europe and Asia is not bad. Particularly in the US where it has been quite strong with a lot of signs of firming. Job numbers are getting better and housing seems to be bottoming. There are a number of tail risks in the form of the European debt crisis that have to be resolved and moved forward.

Markets: Fed going to keep rates exceptionally low through 2014. Lots of reaction in markets including gold shooting higher. You can borrow cheaply and buy gold. There is fear about how far the US recovery can go and can it tip over. They are keeping rates low to keep money in Europe. All in all it is probably a good move. US may be printing more money and that is good for gold. Keep in mind we are in a negative interest rate environment. You are not really getting any return on your bonds. The yield players are still a good place to be, even though they are fully priced.

Markets: Chesapeak production cut: They are sending out a message that after they meet their minimum commitments, they aren’t making money, so are cutting back production. A 1.5% cut in US gas production. Others have cut back also. We are slowly starting to see this message.

Markets: 10 year low on nat. gas price last week ($2.22). It is the beginning of a ticking point. Chesapeak is the beginning of producers reducing production due to the price. It is one of the warmest winters in the last 60 years. Huge inventories. Physical storage levels will be filled by next October/November. He feels we need a price of less than $2 to get more companies holding production due to negative free cash flow. CNQ and and ENC have announced they are not shutting in production. Will have a decoupling of nat gas pricing from the stock pricing. He is looking for shut-ins, which we got on Monday’s and capitulation. The fear level is not there yet. We need later nat gas prices to get that. He thinks Gas prices will go below $1.50.

Canadian banks? A lot of people have been buying for dividends in the last year or so and have been looking for companies that can grow and sustain dividends. The banks still fall into this framework. There are some headwinds coming up including basil 3 with their capital requirements banks will have to put up. Overall they are in a relatively good shape. Good for people that are looking for long-term holds.

Oil coming into its peak seasonality. Good investment? Thinks it is fairly priced right now at about $100 a barrel. Based on the current tepid recovery we seem to have now, if this continues then oil will probably go up rather than down. Probably a good buy.

RESP suggestion? On his own children, he put the money into equities until she was 9 and from age 10 to 18, he put the money into income. But a few years ago, some ETF companies came out with 1-ticket balanced portfolios with a 60/40 mix consisting of some stocks and some bonds. This would be a good thing to buy to keep your costs down.

65 years of age with $60,000. Where to put it for stable growth until age 71? If you are genuinely a long-term investor, diversify broadly including US and emerging market products.

Markets. US economy is functioning a little better than it was coming out of 2011. People should not forget that there are still some rough patches ahead, but there is no reason to be overly pessimistic. Europe has addressed to a degree the short term bank liquidity side of things and are starting to talk longer-term fiscal European issues and the structures they need to change. It will take a long time to reform European politics. Doesn't think Greece is that relevant in the long-term theme of things.

Markets: There is a sentiment shift and we could be in for a good market run in the short term, especially if the Greek owners sort out their haircut problem. Bond issues have been going reasonably well. The bigger problems with debt piling up still have to be solved, but it at least buys some time. Corporate earnings are up and dividends are increasing. Some stocks are bargains on a long-term basis. A lot of people are very afraid of the market. Telcos are not going under. Just sit back and relax. The tightening in China has stopped and real estate has been hit. They are concerned they don’t over do it. They would like to see the real estate market correct a little more and he believes they are in for a soft landing.

BMG Bullion Fund (Top Pick Jan 21/11, Up 22.29%) Wanted tot get into the actual bullion. This has gold, silver and platinum in thirds. He decided to sell when silver and platinum weren’t looking that good.

Sprott Gold Bullion Fund. Low management cost. Pure gold fund. Held up well in this market and outperformed gold stocks in recent times and he things this will be the pattern going forward.

Markets: When he was into the US, people asked him why, given the economy and the US dollar. But now people are worried about Europe and the Euro. He is not buying in Europe.

Semi conductors: are the most attractive area of high tech. AMAT-O is the biggest maker of equipment that is sold to semi conductor manufactures. The other is TSM-N, which is the biggest, and best.

Markets. We are due for a bit of a pause but we are safely above the November low. The ranges that you get in the fundamentals as well as the technicals makes you think “Are we going to get something that no one thinks about?”. This could be the fly in the ointment.