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

In the event of a significant market correction, which categories of Cdn large cap stocks will be best able to continue their dividend payments in $ terms? If we had a big correction, the banks would be the place to be. Right now they are trading at around 11X earnings and 10X forward earnings. Payouts are roughly around 50%. They will be able to maintain their dollar dividends fairly substantially. Look for companies that have very strong balance sheets and payout ratios of 50% or less.

Markets. There are a couple of specific things that are needed to get the Cdn market moving again. On the energy side we need a catalyst such as the Keystone XL to get the Americans interested in our stocks again. You also need people to realize that we are not the same as US banks and are probably not going to have a mortgage crash. China is the biggest external thing beyond the US.

Markets. Market was arguably overbought so the pullback was probably needed. There could be a bit more. It is obviously being driven by the uncertainty of the fed pulling back on their asset buying program. Her view is that there will be a gradual withdrawal. Feels that longer-term, we are in a slow global recovery environment and would use this opportunity to add exposure to companies that will benefit from the ongoing recovery. She still likes Canadian banks and pipeline stocks.

Markets. We will be well supplied in energy markets for years to come. The theme has been oil trapped in the province. Not convinced rail car loading is viable. Pipelines are safer. The US believe the liquidity measures are helping in the US. When the Fed can pull back the support then he will be roaring bullish on the economy. He feared a downgrade in the US but now it does not look like that will happen into next year. September will culminate the debt ceiling negotiations.

Silver. Economic numbers are questionable. S&P saying things are looking better takes the shine off gold. If we get to last month`s lows that would be the next trigger to get into silver. September-October are the seasonal strength entry point.

Doesn’t think any government will confiscate anyone’s gold. For trading purposes, liquidity of ETFs is fine.

Education Segment. He is looking at the spread between WTI and Western Canadian Oil. On his blog is a link for tracking this. CLO-T is an ETF, the oil sands ETF. Showed a chart of this against spread and it is inverse. The sector is not responding yet. A bottom is starting to come in. 3-5 years the sector is fairly cheap right here but there will be volatility here right now.

Markets. Firm believer gold will go a lot higher than where it is today. We may be setting up for a bottom. We tested the current level a couple of times. We could be higher by the end of the year. 66% of silver is industrial demand. Supply / demand is very tight.

Markets. US market has risen to a point where, historically, there has been a lot of resistance to going any higher. The leading sub index, transportation, has hit a valuation level that it hasn’t reached in 40 years and, when it got there, it just seemed to start to come back. Doesn’t know if it can go any further at this juncture or not. 60% of the stocks that he is following have earnings forecasts downtrends. At the same time, there are some questions about what is happening in China which worries people in the global trade implications. In Canada, we have the issue that if China slows down and the US is just dabbling along, what happens to our resources. In the last month or so, he has been taking money off the table.

Markets. Seeing good signs on the economy in the US. Europe is showing signs of bottoming. Things are definitely improving in Japan. China doesn’t have as fast growth as they’ve had in the past but still growing, 6% to 8% instead of 8% to 10%. This is definitely a great time to be investing globally, outside of Canada, which is going to be faced with a slowdown because of what is happening in China. Resources are going to grow slower. Also, housing growth in Canada is moderating whereas in the US there is acceleration in housing.

Markets. Markets. Right now we are seeing a shift of money out of the Canadian market and into the US market. This will change in time. Feels the US market is being very influenced by the QE3. Until that ends, maybe they’ll continue to outperform. The fundamentals in Canada are fine.

As a very conservative “buy and hold” investor, is it time to start adding to my REITs? Thinks REITs are at the end of a long cycle. They did get overpriced in this particular cycle. You can still hold onto them on a long-term basis but don’t expect the kind of capital appreciation we have had. He also does not expect to see any additional payouts.

Markets. Be cautious during the summer. It seems the economic data is one step forwards and 3 steps back. We need to see more solicitation on things like Chinese growth. There is no rush to get in. There is a lot of value in the opportunities. Be opportunistic but don’t be fully positioned for the seasonal play. Wait until the kids go back to school. Differentials in oil prices have contracted and there is a risk that they will blow out. That is an opportunity. Pipelines under construction, aside from XL will protect the differential from blowing out.

Economics. Looking at the S&P versus the yen, there is a perfect correlation to the weakening yen. Sort of started last year and in November it really blew outwards. Today, the yen continued to selloff but the market did a little spike up. This indicates the market is being wagged by the weakening yen against the S&P.

Is it better to use charts that are adjusted for stock splits/dividends or charts that are only adjusted for stock splits, when doing technical analysis? Dividends are already factored into the price movements. However, splits should be adjusted because otherwise you get a very distorted chart.