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

Markets. Market is showing a much stronger US$ against the euro, the yen and other currencies. Japan, despite all its quantitative easing, has been horrendously weak. Also, Europe, despite efforts, has been tremendously weak. Because of this, money has been fleeing out of those 2 areas and into the US. However, what is really ironic is that the US isn’t any better. What really saves them is by being the world’s key currency. This continues to drive their stock market higher. Company balance sheets, generally, are in the best condition that he has seen in a long time. They also have the wherewithal to do anything they want. He does not see speculative excesses in the market at this time. The S&P is getting to a level that overall is going to run out of gas, but it did that back in 2004-2005 and then kept going for another 3 years. Increasingly this market is going to favour stock pickers, and less the over all market.

Economy. The Federal Reserve Board is taking the money away from the market. Psychologically, this could impact the market and investor psychology going forward. They may taper it off so quietly that it is not a big impact, but if the bond market does move quickly, that could change the tenure of the stock market quite dramatically. People should be on their toes from here on in as to how they are approaching the market. Everybody should be aware that the easy trade into high-yielding stocks may not be as good a trade as it has been for the last 4-5 years.

Markets. Alibaba IPO blew off the doors. There are signs of bubbles. You have to know how to manage your portfolio post-stimulus. The demographic trend is that we are all aging. People just want that yield and yet safety. Utility type stocks have therefore been caused to trade way above value and when will the bubble burst. Pipeline infrastructure is still a growth area.

Uranium. URA-N is a basket of companies that deal in the uranium space. A lot of commodity stocks are selling off as the Euro and Canadian dollar weaken. We should see a recovery as there is a long term base pattern developing. Right now the market is focusing on currency, rather than commodity.

Gold. Thinks we will break below $1200, below the lows of last year. Silver already took out its lows. There should be a floor below $1200 because supply starts to get shut in. We are seeing lots of basing patterns, but are still seeing lower highs. Longer term it looks interesting.

Educational Segment. Women in Investing. Woman are making more and more decisions in finance. Graphic showing age of population and how many dependants they have, increasing. Women will control most of the wealth going forward. Women are increasingly taking over the reins of investing.

Markets. Markets are overbought. Thinks it could trigger a 5-10% pullback. This is what happens around this time of year. Looking at the 50 day and 200 day moving averages of major indexes you would be hard pressed to see any sign of alarm. Thinks we are on a prolonged upswing still.

Markets. A lot of what has happened on the TSX is commodity driven. There was a breakdown in gold and silver in the last 2-3 weeks. Oil has now fallen about 10%. Coal has broken down. The commodity cycle seems to be done for now. Some things always get sold off too much when we have a correction, but that means you can find some real bargains. The correction that we saw coming out of 2009 has been a moderate, kind of grinding slow recovery. There has been a gradual growth in earnings and gradual growth in employment, particularly in the US. There have also been some negative trends. Europe is flirting with recession and deflation. China is not as strong as we would like. However, we are seeing good, solid earnings.

Canadian banks? The Canadian banks have the wonderful position of basically controlling the entire financial industry in Canada. They have been making money hand over fist. Even through the recession, all the banks just continued on. You can buy them for less than 14X earnings. With companies that have this kind of competitive advantage, paying dividends of over 3% and trading at less than 14X earnings, you would be crazy not to own them. He owns National (NA-T), which he thinks has the best growth prospects in Canada, Bank of Nova Scotia (BNS-T), which he thinks has the best international growth prospects and Toronto Dominion (TD-T) because of its expansion and retail banking.

Markets. Feels people are looking for something that is truly hedged. Believes you should be in the cyclical names, and the defensive “short” should be the classical defensive names, because he believes we are seeing a pretty powerful economic slate of data out of the US. That is where you ultimately want your portfolio to be slanted.

Energy Services. In Canada this would be mainly gas services, which is a little different than global oil services, which is increasingly offshore. Gas does well historically from October to March, and he would start in advance in some of these names such as Trinidad Drilling (TRI-T), Precision Drilling (PD-T) and Arctic Services (?).

Markets. There was a sigh of relief from Scotland last night, the European markets were up, emerging markets were up, the US wasn’t too bad, but he thinks international investors just headed for the exits because of the high US$, which means lower commodity prices. However, there was also weakness in the banks, healthcare, consumer staples, which tells him it was a “risk off” trade that was unique to Canada today. Their real culprit of today’s move is that Europe is weak. This means the euro has to come down, which means the US$ is probably going higher, which will continue to pressure commodities. He is expecting more volatility. We are still in a Bull market, but there is more noise.

Which Canadian bank would you recommend? Likes Bank of Nova Scotia (BNS-T) for its properties and international exposure. Has paused here a little. Capital levels are really good and they can make accretive acquisitions. The Royal (RY-T) is still sensitive to the market that we are in. Toronto Dominion (TD-T) is good. Commerce’s (CM-T) growth rate isn’t as good but they have really good capital ratios so they can make accretive acquisitions. Likes the whole banking group. A good place to put money.

Markets. He is a value investor. Things are not as cheap as they were 2 or 3 years ago, but the economy has improved. He has no problem finding plenty of cheap stocks to buy. Feels good about the outlook for the economy going forwards. There is a lot of pent up demand for housing and car sales with more people getting employment. Corporate profits should go higher. Political events are important, but not important when deciding whether to buy, say, Tim Horton’s, for example.

Alibaba? Read the perspectus. The Chinese government is hugely involved in the company and he does not understand the company. Maybe give it a few years.