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

Principal unprotected notes? Effectively a structured note where, most likely, the principal is guaranteed. You have an option on equities, commodities or some other structure. If they are “Principal at Risk” notes, you have a note but your payoff is pretty much uncertain. You have to link this to more of an equity or higher risk type of investment because of the payoff structure.

Preferred US shares equity REITs? Without knowing the specific name it goes to the argument “Would you lend a corporation this much money for this long?” Real estate is a good, long-term asset but you have to look at the REIT specifically. His problem with buying preferreds in REITs is that REITs have a lot of leverage, which ranks ahead of bonds and equities. You have very little protection and usually you are taking a lower distribution. His inclination would be to just buy the REIT.

(A Top Pick Jan 9/12. Up 9.8%.) Videotron 7.125% bond maturing January 15/20. Has had a great run to a point that it’s reached his risk/yield threshold. If you own, you could continue to Hold.

Markets. Thinks we had a very important day today. Market has been going through a correction. Officially, this Friday, it is at 105 day cycle bottom. Market started with the selloff today and we had an inter-day reversal, which is key. This probably signals an end to this corrective period. Energy and materials stocks should start behaving well.

Gold. Gold stocks in general have parted, meaning that the big cap stocks have not been behaving well. Barrick (ABX-T) and Goldcorp (G-T) have been in a really major downtrend. Juniors are doing much better. Has been in a very ordinary rise all the way from $700 in 2008 to about $1800-$1900 in 2011. Went into a corrective period and following this it developed a wedge. After the rise, we then went to a correction. His research suggests that we are going to start moving higher. Gold should do well when currencies are having problems. There is a strong possibility of it going through $2000. (See Top Picks.)

Has high-frequency trading had any impact on the validity of the various technical indicators that you prefer? The short answer is No. The long answer is that high-frequency trading is really dealing with 2 pennies and if you use a charting system like point and figure or even a bar system that is a high-low system, one penny changes will never show up. Creates a lot of volume so it makes a difference if you pay too much attention to volume. He prefers an “On Balance Volume Index” indicator, which washes out the high-frequency trading.

Silver? Chart showed a wedge and it broke out in August. There should be some upside direction again.

Videotron 7.125% bond maturing Jan 15/20. It is safer to own this cable company then the holding company of Quebecor. Treated as noninvestment grade but they gush out a lot of free cash flow.

Markets. Mark Carney is in fact going to be the head of the Bank of England. He wants to curb speculation in real estate in Canada. Consumers are too indebted and he is suggesting he might have to hike interest rates. With oil where it is, the Canadian dollar should be about 5% lower and he thinks it will slide over the next while. The 13% increase in Thanksgiving spending tells you shoppers were eagerly looking for deals.

Gold. CGL-T is a gold bullion ETF. GLD-N if you want US$. A number of funds also hold gold. For trading they are more than adequate.

Educational Segment. PRICE of GOLD. If you take the 4 biggest country balance sheets and compare to their GDP, it is about 36%. Historically that has been about 15%. Central banks need a certain amount on their books to control the money supply. They are creating money and taking the bonds from the system to expand their balance sheet. With the commitments they have made, the percentage of GDP will rise to about 50%. They will do this for years and years until we get out of this economic malaise. Recently, we broke out of a triangle pattern in the price of gold. Take the height of the consolidation and add it to the break-out point. He thinks $2050 would be the target for gold by end of 2013 if central banks do what they say. There will be 30% annualized volatility in Gold over the next few years. But Gold will generally keep going higher and higher in general.

Markets. We are going in a saw tooth formation on the S&P. You go through these corrections and create some value and then go back up to the ceiling. This last correction is perfect for deploying more cash. AAPL-O corrected too. Looks for a Santa Claus rally and then a pull back in January/February. It’s not sector-specific. He believes in a year it will be 18% higher by trading but not in stock valuation. Lots of energy stocks are hitting new lows. A lot of people are pulling back from the commodities at this time. There are big crashes happening in these oil and gas names if you look below the index. A lot of deservedly being crushed because their balance sheets are disappearing as they payout too much.

Markets. We are currently in limbo because of the US fiscal cliff and until we see some resolution we may get another 3%-4% up, which would eliminate the recent decline we’ve had. The other thing we have to face realistically is what is going on in 2013 for the Europeans which will be having elections in Germany as well as the need to come up with a seven-year budget, which he doesn’t think they will be able to do. Convinced that the US housing market is on track. Looking out to 2015-2016, you are probably looking at 1,500,000 housing starts. His cash position for clients was 40 to 50% but is now closer to 15% to 20%.

Gold. He is keen on gold as well as silver until he sees the debt situation come under control, because governments continually botch their paper currencies,. This is going to be a long-term situation of possibly 5-10 years.

Gold. It still looks very good to her and is in a long term uptrend. She has a target of $1,900. If central bankers continue to buy gold, it should move up there. Gold stocks that have been rising consistently will rise with the bullion. We have seen Agnico-Eagle (AEM-T) and Argonaut Gold (AR-T) and some of the royalty golds performing well with their operations and rising, but some are not. Investors have to do their homework in picking gold stocks.