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

Natural Gas. You are still getting excess production but, although he is not saying he is bullish on it, he doesn't believe the people that say it is going down to $1-$1.50 MCF. It is more likely we have seen the bottom for now. FV is probably around $3 MCF.

Resources. The last 12 months has been an incredible difficult mid-cap, small-cap market where there has been an incredible wave of speculation and things running up and then dying. It gets really complicated and each commodity has to be separated out. He always looks for very high quality project, high quality management team, low-cost producer and reasonable amount of debt. Mining is a bad business. It destroys capital over time. You have a depleting asset base and the incredibly expensive to put new mines into production.

Gold bullion and mining stocks? Gold almost reached $2000 and is pulling back gradually in a consolidation phase but didn't collapse. Valuations have really gotten cheap at the same time that political risks have gone up and costs of building new mines has become punitive. Companies themselves have become compelling and he is just trying to find one in the sweet spot.

Silver? It will probably consolidate in the low $20 with support at $25. If you are playing silver itself, you are speculating on the pure commodity in which case the price has to move and you're not getting any additional benefit by owning a company. Silver stocks are really expensive.

Canadian fracers in the oil patch? You have basically gone from a 6 year reserve life in gas to a 100 year reserve life in gas. This is a technological change that has changed everything. The companies that have benefited are the fracers in this area is so incredibly volatile. If they have a little blip, they don't make any money. The one he likes is Calfrac Well Services (CFW-T) which seems to be a bit more consistent on the profitability side, but it is not cheap enough.

High-yield investments. It is becoming very difficult for people to find traditional places to hide in income oriented equities as they are trading at very high valuations compared to the past. Now is not the right time to sell these as interest rates are very, very historic lows. Doesn't expect interest rates to move significantly higher in the next 12-24 months.

99 Cents Only Stores 11% Bond maturing Dec 15/19. About 300 stores across the US predominately in California. He can see them expanding beyond California and moving into other states.

Markets. Expect the markets to move higher over the next year but not without some volatility. He is constructive on US stocks. There is lots of choice.

Thoughts on a basket of the sin stocks, such as alcohol, tobacco, firearms, etc.? You have to be selective and look at it from a bottom up standpoint. There are many that have done extremely well. His view is that there are lots of opportunities out there and if he is facing moral headwinds, why not go with others?

Markets. Finding some bargains. Market is like a coiled spring. The lower it goes, the quicker it can snap back. Feeling quite positive about the outlook for stocks but we are surrounded right now by headlines and fear. How long this can continue, who knows. You have to use valuations as your benchmark. S&P is trading less than 13X this year's earnings compared to its usual 16X, so there is upside once we get through this.

Europe situation. She is concerned. Voters are revolting there against austerity. Previous governments had promised to put in certain measures to get funding but now there is a big question mark. It is also the risk of contagion of spreading to other countries. Creates a lot of uncertainty going into the summer.

Markets. She had been expecting a pullback and wasn't chasing the market when it was going up. Have been selectively selling certain names where there is no near-term catalyst. Has a list of stocks she is interested in but isn't going to Buy right now because potentially there could be more downside in Europe and she wants to see how that is going to work out first.

Natural gas. It is hard to say where this is going to go short term but you see it moving up because below $2 a lot of shut-ins occur. Longer-term investors are looking ahead knowing that in the $2.40 range is not sustainable. Larger institutional players are starting to move early to be Long natural gas versus Short. Thinks we may have seen the Lows.

Investments. His change in investments is the choppiness that occurred in 2011 and we have kind of reverted to that. There is a clear indication that small cap was winning in the 1st quarter. Some of the best companies are small caps, actually better than some of the big caps. Many of his big caps are fairly sad but he needs them for the dividends. Thinks that will continue.

Markets. We generally have a correction in the spring and that is what we are going through now. He looks more at the earnings then just the corrections in the share price. Earnings picture remains strong. There may be some concern in the commodity-based companies because oil, a lot of the base metals, etc. are easing off. He is happy with the economic performance of companies he has invested in. Feels we will have a quiet summer in then a strong rally again in the fall.