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

Drillers: have suffered with the downturn in energy. They have not done well. Some had weather problems; US situation is not as good as in Canada. You have to be sure of which company you are buying. They are generally looking good in this environment. Trican and Calfrack look good.

Market. Not sure there is much ride left in the TSX. If you do a nice zone analysis, we are at the top. Whether we go back down to the bottom and then back up to touch again and keep going depends a lot on what happens in Europe. Next week should be quiet and then after that all bets are off. There are a lot of headwinds. Before doing too much investing, he would wait to see what happens in Europe. In this kind of environment you still stay with good dividend payers such as B.C.E., telcos and pipelines.

Oil/gas service companies. A number of companies have cut back on their CapX. Also Cdn$ has gone back up, which has cost. Gas situation has improved but not enough to really encourage the drilling.

Sprott Gold Bullion Fund (Series F- SPR226). He sees bullion taking another good run here.

Markets: After a bit of a quiet period, the markets are beginning to rally. The policy tools will come back into the forefront and QE3 may occur, but they are hesitant to enact it. The impact is reducing as time goes on. There is lots of runway in dividend paying stocks. Especially if they are growth, dividend-paying stocks. In the REIT space there is a difference in the space and you are seeing some dividend increases. Overall, they have been pretty dramatic out-performers but fundamentals remain strong. He has been trimming some profits as they continue to run and out perform in general.

Banks as a fixed investment alternative: Thinks there is good value in them today. Europe concerns are well known and discounted. They are not a direct substitute for fixed income investment. Should outperform fixed income short term. TD and BNS are his preferences if you don’t use an ETF.

Markets. It looks like QE 3 is on the closer side of happening in September. Rates are going to stay incredibly low for at least another year to year and a half. That is really not going to move the needle. Creating new liquidity is not going to create more employment in the US. Banks have plenty of capital and it is up to them to push it out. The summer rally has taken a breather. This is also an election year and usually the market rallies into it. US company earnings have come through incredibly well.

US Markets. Have concerns about the 2^nd half of the year. Volumes have been very low this summer and the recent rally was a low grade one. His worry is on the “fiscal cliff” concern on a variety of different initiatives that will automatically get implemented in the US. Could potentially shave as much as 4% off of GDP out of the equation if politicians don’t get their act together. Doesn’t think it will play out as well as the headlines. Currently he is going to sit aside because he feels there will be better opportunity between now and the end of the year to look at some of the US names. Currently market has gone up because of expectations of a QE 3 by the Fed that he feels they will push out for at least a few more months.

Canadian Market. Being an export-based economy we have to be very careful about some of the industries such as energy and materials. Feels the economic environment in Canada is fine. 2% growth is not great but better than other global regions. Continues to see earnings growth into 2013. Market doesn’t look cheap but doesn’t look really expensive. Still feels there is upside in the market from here.

Gold. The only commodity that he looks at technical charts on. Lower end of the band is about $1525 an ounce and the higher end is $1700 but he thinks it is going to be challenged to reach this so he thinks it’s between $1500 and $1600. Gold stocks have underperformed largely because of significant cash costs and inflation embedded in their operations. His top ranked stock in the gold sector is Franco Nevada (FNV-T).

Markets. US Federal Reserve minutes came out at 2 o’clock and the market turned around. He wasn’t too happy about it and prefers the market to stand on its own 2 feet. Have gone so long with the crutch of low interest rates, which were needed for the market to support itself. Once legislators and bureaucrats are in, it is hard to get them out. It looks like we are more likely to see QE 3 this fall than before the data came out. Doesn’t think the Federal Reserve has much left in the gun. He sees that more of the Risk On trade is back which means more of the commodity-based companies, not the financials.

Markets: Gold has seasonality that is in favour. US 10-year bonds are good today. Some tech stocks are on the go although you have to wait for the kids to go back to school. He doesn’t care so much about gold as a metal but the companies. Crude: Any time it crosses $95 it usually tacks on $10 on the upside. He is positive on oil and longer term on the oil and gas stocks. Copper is trying to break out but there are not any base metal stocks that show up on his buys.

Markets. Action has been fairly positive recently but not sure it is entirely justified by some of the global factors out there. Also, doesn’t think it is as simple as “people aren’t paying any attention because it is holiday time”. There are lots of things that could happen over the course of the fall. There are some interesting value that has been unlocked in companies globally. Company fundamentals have not necessarily been reflected in the equity market. Looking at ROE from a dividend perspective, relative to long-term interest rates, it shouldn’t be as much surprise as to where things have got to. There will be more focus on some of the global factors as we get into the fall. There will be some volatility going forward.

REITs. Have had an amazing run over the last few years. Generally trade very much in line with interest rates. He likes Cominar (CUF.UN-T) and Can Reit (?) but feels that both are nearing the end of their runs. A lot of the push for REITs has come from the declining interest rate picture and he doesn’t see interest rates going any lower.

Yields. Overvalued? If you are looking for yield with some sort of Delta (growth) going forward, stability and peace of mind, you will find that utilities, pipelines and REITs in particular still offer tax efficient incomes with a slope in growth to it with returns that are beating the market as a whole.