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

Market. Pretty ambivalent about the market at this time. There are a lot of things going on, but you have to remember this is summer and liquidity in the summer is low, which is why you can get big moves without a lot of volume. As a long-term investor, he has cash, about 10%-12%, that he is willing to use when an opportunity arises. In 2007-2008, he had up to 35% in cash because he was very, very worried. He is actually looking to buy more in Europe on the dips, which is where he thinks the big values are. Least value is in Canada, partly because of the makeup of the market being 80% financials, resource and material.

Oil. Would you buy juniors, midsize or large cap? Oil is currently in a basic trading range with the bottom at around $70-$80 and the top at around $105. When it is $105-$110, that is very negative for global economy. He would like it low to mid $90's. Forget juniors at this time but midsize and large cap are okay. Until we can get pipeline access into Alberta and Saskatchewan, oil is being shipped by rail, which is expensive.

Resource stocks. Because of what is going on in the currency markets and debt markets in Europe, the area that appeals to him most now are precious metals including gold, silver and even platinum.

Markets. Markets are looking ahead to the Fed hoping that maybe it is going to move with more stimulus. Not sure that there has been enough of a break down yet for them to act. Come September, we're getting a little too close to the politics. He is now feeling that they may just stand pat. TSX chart is showing a decent little trend starting to get established.

Gold versus banks? He likes bullion and thinks the risk/reward is a lot better than the banks.

Markets. The areas where he is finding opportunities are largely geared towards the tech space, healthcare space as well as the low beta type of defence names, those that are less impacted by the overall market uncertainties that take place.

Markets. Expects to see markets accelerate over the next few years at a greater than historical rate but there will be more volatility. If you grow earnings, prices sooner or later will follow. Right now we are trading at a low multiple because confidence is low. Corporate earnings, although soft this quarter, are actually headed towards record territory later this year. However, if earnings come on cost cutting, they are not the same quality. Also revenues have not been nearly as strong as earnings.

Markets. In spite of all the bad news, the North American markets are relatively well behaved. If you look at the holdings of gold a year ago by the European countries, Germany had about 3400 tons, Italy 2450, France 2435, Portugal 421, Spain 281 and Greece 111. One of the great problems is getting new buyers for these countries bonds. What can they do? Instead of issuing short-term bonds, as they have been doing, they extend terms. Italy and France could issue gold backed bonds going out in the future 20, 25 years. The 1st conversion rate might be in 3 or 4 years.

Natural gas. The initial run-up in natural gas was definitely short covering. People started realizing that the conversion from coal to natural gas was gaining steam. He feels natural gas price will go to somewhere between $3.50 and $4.50 in one year.

Gold. He sees this in excess of $2,000 a year out because of the way people are losing faith in paper currency. Even though inflation is at a very low rate, people are going to look at governments inability to get the deficit ship in order.. In China, and similar places where culturally gold is much more acceptable, there will be a continued demand for gold as a savings vehicle.

2 or 3 dividend stocks that would be safe from the volatility of future events that could happen in Europe. To some extent, you can't avoid Europe because the price to earnings multiple has come down because of Europe. If you look at utilities, his core positions are Fortis (FTS-T), Enbridge (ENB-T), Trans Canada (TRP-T). Besides these, he has Pembina (PPL-T) and Altagas (ALA-T). These are going to grow their dividends 4% to 5% a year and are not as volatile as the rest of the market. The caution is, these companies are trading at fairly rich multiples but that will continue for a while because there is no competition from bonds or cash.

Markets. When you see the market selloff this much, there's value and you can pick away at it and potentially realize some good returns in the next 12-18 months. The euro zone is going to take time. You are really dealing with global deleveraging. It's governments, financial institutions and households, which is not something that will get fixed in a quarter or two. Canadian economy has held in pretty well. Household debt is still pretty high but the economy continues to do well and if you are going to look at some dividend paying stocks and some of the REITs, they tend to benefit from this low rate environment.

Natural gas. Feels prices will move up pretty significantly in the next 12-18 months approaching $4-$5 MCF. We had one of the warmest winters on record, which caused storage levels to increase which went 65% above the five-year average to just 15% above. Some producers stopped extracting gas. Feels shale gas production will continue to taper off.

Markets. He has been cautious for pretty much the entire year and expects the current volatility will continue throughout this quarter and possibly the 4th quarter. Europe situation is driving the rest of the global markets right now. He is holding a lot of cash and waiting for opportunities.