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

Market: Governments around the world are trying to get more positive action. Concerned about Germany saying they will give time for Greece to work things out. Has no banks, no big oil companies. Cash raising since June. Banks are down 18% and he missed most of that. The quarter we are in he thinks won't be that good.

GOLD: even at these levels he thinks it is going a lot higher. Some firms are only just raising their gold estimates. He thinks we are lagging the story. This is the gold miner’s season. There has to be a catch up between bullion and miners.

Markets: A very tough environment for all investors. All kinds of conflicts. There are certain binary outcomes that are all or nothing and it is difficult for investors to factor the risks. This is one of those times when you don’t want to be all out there. Close to 40% of securities are income producing. Gold, Cash. It is a time to be in things that you could be comfortable in if things turn down. Earnings may decline in the fall.

Silver: He is not a gold bug but gold and silver are the largest weighting. Silver had been lagging gold. Likes silver. There is limited growth in production and a big appetite. He uses the physical silver ETF and Silver Wheaton. Also Allied Nevada. Cannot see fundamental reasons driving the market changing in the near term.

Market: Factoring in over the next couple of years $75-$95. With what’s going on in Europe, it is a big potential problem for markets, but she has not had to change her forecast. A lot of energy companies are using $65 to $70 as to where problems occur. Gas she is pricing at $4.50 in a year. She is not in the bearish camp. Shale gas can decline 75% in the first year. It may not be everything that everybody things it is.

Thinks we are getting to the end of the Greece story. It’s a slow process when they all have to agree in the EU. The market hates uncertainty. One layer of uncertainty peeled off the onion. He is cautiously optimistic that we will miss a double dip recession. Everyone in OPEC Everyone goes full guns except for Saudi Arabia. It took about 6 months when they put extra oil on the market for it to get refined and hit inventories. He sees Oil at $80. The wild card is Libya. If it comes on by end of December we test $70-$75 oil. It would be the best buying opportunity since 2008. China’s demand is changing energy generation from oil to Coal and then to Natural gas and nuclear. The oil will go for auto fuel. If you can stomach the market for 3-5 years there will be LNG exported to China in larger quantities.

Natural Gas: $4 is the place where a lot of companies can’t make money. Certain gas plays are profitable at that rate. Liquid rich gas producers get revenue from the condensates. Dry gas producers cannot make money at $4. $6-$7 is what you need to pay for the costs for all stake holders in a gas company. Bullish on Natural Gas. It will move up $2 in 18 months.

Are Canadian banks good value at these levels? He is a bargain hunter and doesn't think the banks are particularly cheap. Trading anywhere from 1.5-2 times BV. Sees better things in the market place.

Due to technical difficulties I am unable to record Market Call Tonight but do have the Top Picks. The program remarks will be available, but not until tomorrow. My apologies. ---Bill

Can indices go into a bear taking down overall key ratio without the economy being in an a technical recession? Yes. We’ve had the markets go down from 28X PE to 13X PE for the last decade in the developed markets. A recession would contribute to the PE ratio going down further.

S&P 500 dividend yields have recently moved above the 10-year bond yields. Very significant and is telling you that if you can stand the volatility, you have to at least consider equities as being overly cheap. If you extend back and look at where earnings yield is, it hasn't been this high in 20-30 years. When you are buying companies, you are buying their earnings power. You should consider large-cap dividend stocks, those with reasonable balance sheets.

Market - Expecting volatility will continue for a long time. This can give you opportunities as well as problems. There is a shortage of quality income. The only way you can get a growing investment income is through companies with dividend growth.

Payout ratios of banks. At what percent is a red flag go up? Banks currently devote 40%-45% and he would not disagree with this. Looks at what internal capital requirements are and what do they have to spend to sustain the business. What internal growth potential is there and how much is it going to cost to access that and will internal growth give a higher return on equity.

Markets - Range bound and investors are going to have to make decisions on what they want. Be prepared that if the market is up 200 points, it may not be there tomorrow. In a trendless market, dividends will play an important role. When the markets get to their upper range of about 1400, start reducing and raising cash in your portfolio. When it gets down to around 1000-1100 start adding, but always focus on dividend payers.

Gold - With the move by the Swiss franc today, European investors were probably pulling their deposits and going to gold as the Swiss franc is no longer an option for them. This will probably be more positive for gold going forward.