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

Market: Today was another blip in a bad month. He calls it a bear market almost. People are tired of all the big gloomy factors that don’t go away. Lots of data out of China today. Market likes the idea that China is alive and kicking and will provide growth. The market has been selling off for days at a time. He is sitting tight on a lot of commodity-related stocks. Gas is extremely weak so of course one day it is going to be extremely strong.

Market. Underlying fundamentals are not nearly as bad as the market is picturing them but people are being motivated to sell. If China or emerging market starts to break down, this is a great risk for the global economy, but these are long-term growth stories and he is not worried this will happen.

Market: There is a lot of negative sentiment. Sovereign debt issues, US concerns on debt ceiling. Over the last 4-6 weeks the market has started to feed on this. He tries always to have a balance of long and short positions. Defensive sectors are favored – consumer staples and tech. Favours smaller cap stocks. Has a modest position in resources. Likes gold, some energy, short some base metals.

Canadian Banks: He is not long, except for a small position in BMO in one fund. Is starting to look at some US financials for long positions. Doesn’t look outside of North America. Looked at JP Morgan, City and other larger players.

Uranium Industry: Has concerns about the sector. Sector is under a lot of pressure as nations re-evaluate their nuclear programs. Even at current commodity process, the stocks are not cheap. Has not looked at shorting either.

Shorting Housing Market in Canada: Doesn’t think it is a bad idea but difficult in Canada because there aren’t a lot of pure play stocks in Canada focusing on housing market, and they are in fact pretty good businesses. Maybe companies tied to housing like Rona.

Mutual Funds vs. Stocks: It comes down to how much time you have to select stocks. A lot of funds are just index tracking, though.

Market: These are more than summer doldrums. There is some kind of correction going on here. Everyone is negative on the US economy because of the debt and the lack of will politically to do anything. You can buy put options; buy inverse ETFs for a week. You need a portfolio with a sufficient number of bonds.

Pleased that vanguard is coming to Canada. They are huge – a battle between them and Fidelity. Unit holders are the owners of the company. Will be a very welcome addition to Canada.

Deep in the money options: Instead of buying the stock. There is not much leverage.

Canadian Banks: You could do an insurance put. Be patient and wait for them to come back. Doesn’t do anything with the US banks.

Market: Ever since the jobs number in June, it’s only been one way and that was down. Looks like we are in for a slowdown. The Fed is trying to their heads around what to do next. We have to wait until the fall and see if this growth comes back. It’s about the economy and where it is going. He looks for value in the market in individual names. He is seeing an unbelievable opportunity. We are pretty fully valued on commodity stocks as well as banks. Likes energy, but the rest looks pricey.

Market: Interesting yields in Corporate bonds and better quality emerging markets. Doesn’t see a lot of value in Government bonds. Current corrective wade will peter out in Mid-July.

Market: OPEC was meeting to increase the official quota. The single factor for oil price is spare oil capacity. He sees a scenario where they reach critical levels by 2012. Oil went up 17% and small cap oil stocks went down 16%. People are trying to migrate to higher cap companies. Seeing opportunities where stocks appear cheap.

Canadian Market: Since April (double top) 5 days when we had > 1.5% drop. We are at the 200 day moving average and January support level. The activity today is not very good. 13,280 is support level, and if it goes below that it could get ugly. He doesn’t look for long term trends. Didn’t get into positive territory last year until August. If we drop it would be about a 400 point drop.