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

23% of mining companies on venture exchange of 3 months or less of cash. There are 8-9 hundred companies in platinum, silver and gold on TSX Venture. Not all of those companies all scrambling for the same investor dollar are going to make it. With juniors you have financing risk, commodity risk, and management risk. Thinks in the next few years 50% of them will be gone.

Markets. Thinks the timing and sentiment is starting to change. Some major pipeline projects will tend to alleviate some of the bottlenecks. If/when keystone happens it will be a big positive. Keystone should get resolved in late August. Has heard rumours that it could leak over into 2014, though. Differentials in oil prices have narrowed quite nicely. It is now about $8 and he thinks it will narrow to $5 by year-end.

Gas inventories are tracking a little below their 5-year levels and that has been quite positive. We need an exceptionally hot summer from here. We are seeing some switching back from Nat Gas back into coal. The magnitude is not immaterial in the grand scheme of things. His fund is 2/3rds focused on dividend paying stocks and the rest is small cap (with significant cash flow growth) companies that should eventually get taken over by dividend payers.

Markets. Fundamentals in the oil sector are quite negative. New oil production growth in North America is more than global demand growth. Thinks normal seasonal patterns will occur this year. We are now seeing gas inventories build and if they get more than historical then prices could drop $1 for Nat Gas. You may want to take profits in Nat Gas if you are overweight and wait for a buying opportunity.

Money has moved out of the Bond market, and into large cap defensive equities. They are defensive in terms of the volatility of their cash flow, but there comes a time when they are less defensive. He thinks that there are specific stocks that are worth adding to a portfolio. Something that has a strong balance sheet that can survive a slow growth market, but still able to grow if the market improves.

Doesn't see a correction in the near future, and if we do pull back, that represents a buying opportunity

Rally in the US, Europe, Japan, practically everywhere but Canada, which shows you have to diversify outside of Canada. For 10 years, Canada was the place to invest, but that's not the case anymore, you have to look outside. Almost all the new money they are investing is outside Canada.

Sees the US economy stronger then expected. Europe is in recession but expects that to end by the end of the year.

We are long overdue for a correction, which he would like because it takes the froth out.

Canadian market is 75% to 80% resources, materials and financials. Resources are depressed now. Financials which were really strong, are no longer bargains. US banks are where the growth will occur.

His investment style is value driven, staying away from the index. So very low banking and resource exposure. Tends to invest in sectors that are underrepresented in the index. Won't be talking about banking and resources because, resources are very volatile, and there are better opportunities then banks for dividend yields. The world stock market is anticipating too optimistic an economic scenario. China is devaluing their currency, US is pumping money into the economy and it's barely growing. Try to avoid companies that depend too much on export market. Tend to stick to domestic companies that rely on the Canadian economy. The European and German money is starting to come to Canada these days.

20 something odd dow records this year so far. A bit over blown, but it is sustainable. Employment is still getting better, commodity prices are falling. Still a fair amount of caution. People are buying defensively. Most of his growth portfolios are 45% in the US. Seeing value in the large cap growth names.

Canada is dominated by energies and financials and also the gold sector. He feels that financials have relativily weak earnings going forward. Energies depend on the keystone pipeline being built. Gold has been under a huge strain, gold has been "more or less washed out".

In the US the market is doing very well, up 15% year to date. Will likely continue to do ok.

Large cap investers in Canada need to think long term, 3 to 5 years. Find companies that trade below average multiple of earnings relative to their long term averages. Look for earnings growth and dividend growth in their forecast for the company. If all three things are good then they will take a position.

You don't want to concentrate in any one sector, you should have 6 or 7 sectors to be diversified.

Feels that the market is picking up due to the alternative to buying stocks is so poor. Corporate profits appear to be growing. He looks at longer terms, like 10 years. Never understood why gold was so popular, it was at $800 before the crisis so maybe it should be back at $800 now.. North America may become self sufficient in oil which will change things as well.

GOLD: Gold has had a wild ride. This is due to three reasons: 1) Central bank sales and the potential bank sales out of Cyprus. 2) ETF sales, retail investors dumping ETFs for equities. 3) downgrade of central prominant investment banks.(ie. Goldman Sachs)

Bullion seems to have found a new floor. There has been a huge supply shock coming into the market. He is surprised that it has done as well as it has. There are buyers coming from the Asian markets.

Prospects for Canadian Companies: Used to be that a lot of investors particulary international investors were staying away from Canadian energy stocks and in the last few weeks she is seeing some of the investors coming back. Stimulus from central banks around the world are helping oil prices and oil companies in Canada.

Natural Gas: This is a shoulder season for natural gas, she doesn't foresee a lot of gas coming out of storage in the next few weeks. We will just have to keep our eye on gas prices.

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.