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

Gold. We are in a low interest-rate environment. Bernanke really wants to raise interest rates. US housing market has recovered and the US is growing. You cannot have interest rates this low but the government has too much debt and the government will be contracting for the next decade so low interest rates will continue so you could have gold going up in the very near term. Right now we are going through that consolidation trade in gold.

Junior Resources. Natural resource business is deeply cyclical and capital intensive. There are too many juniors and there is too much general and administrative expense in the system. Too many listing fees, too many audit fees, too many salaries and too much rent relative to the money that is spent on exploration. We need to cut out some of the penny dreadfuls that got created in the last 10 years in the resource bull market. Market response to excesses is normal and healthy in the exploration business and investment returns from exploration will be much, much, much better after we have this washout.

Precious metals. There are a couple of reasons why the conditions are right for gold and silver and yet the story is not playing out. For one, retrenchments are normal in a bull market. This is the 7^th or 8^th retrenchment for gold since 2000. A 10%-15% cyclical decline in a secular bull market is very common. He wouldn’t be surprised to see gold softness continue because people have some confidence in the economy but he personally wants to own things that can’t be printed.

How are 1^st Nations relations affecting mine development in Canada? Thinks mining industry should look at this as a corporate social opportunity. 1^st Nations have “in place labour” in northern communities and have local knowledge. Relationship between these 2 needs to go another step. They not only have obligations to each other but they have absolutely concurrent interests. We are getting there. The dialogue that has been taking place in the last 5-6 years has been very, very constructive. Need to take it to the next level including partnership.

Graphite and Graphene? Thinks the stories are great. They are wonderful for selling news letters and in better markets they are good for selling stocks. But the truth is, they are fairly small markets and are not markets that are underserved. Right now he has absolutely no use for the stuff.

Markets. You have to look at whether the emerging world story is over when deciding if commodity prices will continue to increase. It is not over. But the Gold mining sector is making new lows. M&A is the way we are going to get growth going forward. The stocks will get punished if they over pay.

Bond ETFs that hold to maturity. “Target date ETFs”. No interest rate risk.

Educational Segment. Look at gold price as a percentage compared to gold mining equities over the last 7 years. Equities are flat while gold has gone up 200-300%. The costs of production are going up at a significant clip. When they find new reserves, the quality of the reserves are declining. They are going after gold dust. The gold industry needs something like Fracking. Or it could be more disciplined in capital spending. A lot of cost inflation in gold mining is related to oil prices. All the central banks have been buying but gold has not broken out.

Markets. Nobody wants these stocks. It is a very tough environment. Budgets are tight. He is seeing some acquisitions but the biggest issue is that investors are just not buying.

Oil. Trading right around the low end of where it should be. The range in the course of the year will be $92-$105. Key for improving prices in oil and all commodities is global growth resuming. In general, resource stocks are challenged, commodity prices are challenged and there are a handful of commodities that look attractive presently, with oil probably being one of them.

Metals. Tin is primarily used as a solder. There has been a very strong uptake in the shipments of electronics, out of Asia in particular, and as well you have the major producing regions rolling over so supply is very tight. Tin is even tighter than copper. There is an ETF on the London exchange, but other than that he can’t think of any pure plays in tin.

Markets. Feels that 2013 will end higher than what it is today. He is looking for deep value plays, stocks trading below NAV and low cash flow multiples. Finding a lot of these in the US. There are trillions of dollars sitting in bank accounts in the US.

Markets. The positive action earlier this week and last week, was really about short covering. On a broad basis, it looks like the indexes are in a Topping phase. Year-over-year the markets have probably had their best run but selectively there are still some great parts to be invested in such as healthcare, biotech, pharma and consumer staples.

Markets. Thinks there will be a lot of headwinds. He was bullish but now he is tempering. He doesn’t know what is going to cause markets to move higher. Bad news with timed deadlines, it never materializes and never causes any grief. The debt ceiling is not worth worrying about.

Stop Losses: Putting it on a white board doesn’t work because you think twice when it is triggered. When setting it you have to look at charts. You can’t just use a percentage. The objective is to keep moving the stop higher as the stock goes up. He is in the dividend camp. It is all about dividend payers and growers.

Markets. He has felt over the last little while that there would be a slight pullback and so increased his cash position to about 7% and also added Government of Canada Bonds. This is a shorter term thing and an opportunity to buy stocks that he likes cheaper (5-7%). He is bullish otherwise. US economy is healing itself and Europe is stabilizing. The ECB has put a line in the sand and that has really helped out. The world is looking slightly better. The world can grow at 2-3% and we can chug along. Companies are in great shape from a balance sheet perspective and can increase dividends. You can own really great companies at reasonable prices and they pay you a nice yield.