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

Markets: We were due for a correction. We had a strong bull market for 2 years. There is always worries that creep into the market. There will be repercussions that reverberate through the economy. The big thing in Japan is that they lost a huge portion of their electrical capacity. Right now it is far too much in flux. Japanese companies are very large and for the most part pretty fairly priced. We have to see how tings shake out over the next couple of weeks.

Day Trading: It is not investing, but a legitimate part of the market. Day trading is being taken over by very fast computers. One should take computer science courses as well as business courses.

There is not enough information on the stocks that they own to make a decision on how to react to the situation in Japan. He thought the commodities prices were getting a little high anyway. Oil was due for a correction and it only corrected a little bit. He owns several big holdings in China as his biggest holdings in emerging markets.

Markets: It matters what causes a correction. What has happened in Japan impacts oil, etc. What they supply may be interrupted. First we thought there was a rotational correction and now it is a full 10% correction. We are in the midst of a correction and not the start of a new bear market. A lot of stocks and indices are well above their 200 day moving averages, so as long as the pull back stays above these then you can see the long term up trend is still in tact. By mid-year we should see another up-leg in this bull market.

Japan: Wonders about the long-term affect on Oil. What about the number of reactors being taken out by one nuclear reactor. Price of Natural Gas is quite low and will stay low if our fields are allowed to develop, or if nuclear reactors are allowed to developed that they don’t get washed away so easily. It depends on what is really happening in Japan. Wonders if metal prices are squeezed because it is not in their best interests to see metal prices increase.

Markets: have been very well behaved, given the earthquake in Japan. Thinks they were more focused on the middle east – political instability, risks of supply interruption, slowdown in China and European debt problems. Previously he said he expected a 3-5% correction. Doesn’t think they will have a more serious correction but if we did he thinks we would see another 5% down to the 200 day moving average. He previously said he would use a pullback to pick of stocks that he thought was undervalued. Following earthquake in Japan he thinks there will be massive re-construction, perhaps not as quickly as people might have hoped. Japan has always proved to be resilient. There will be immense opportunities. The one thing to worry about is uranium.

Market: The short-term indicators are important to him in these times of rallies. There is concern about profit taking. Market tried to break below 50 day moving average late last year and is trying to do it now. It would have to sell off more before it would be an indicator of a bear market. If we don’t see good news soon, we are going too a sell off. The 200 day moving average is a much more significant indicator. He started selling off energy in the last couple of days.

Markets: The Japan situation does not affect the markets yet because it is not yet clear what the impact is, except money is running to the US$ as the currency of safety. Europe: When you look at the kinds of regulatory issues that have to be resolved, 16 countries with competing interests, it is going to be very difficult for them to come up with an agreement. Grease will probably default, Spain probably not, Ireland probably not, Portugal, who knows. It is time to be looking at the European sector (good businesses). There could be good opportunities to be buying good ETFs. Don’t mix it up with the European economy.

Buying Back Calls: He is looking at buying back some calls that are deep in the money. He looks for the time premium to be squeezed out of the option value. He waits until he has gathered up as many dividends as he can.

ETF Strategy for an RRSP: XIU, XSP, everything dollar hedged. Put some bonds in, in case market turns against you, e.g. CLF. Stay in North America. Half dozen ETFs only.

ETF Fees: They make money from their management fee (MERs), which vary.

Covered Calls: His clients are looking at covered calls as income. He wants option price and stock price as close as possible to each other. He also goes 6 months out. He sells but does not buy.

There are no real signs of interest rates coming up any time soon in North America. The REIT index is tired. Everybody has already raised money and that often tires it off. Generally numbers coming out are pretty good. Yields are pretty good on distributions and are covered better than every before.

4.5% down from Mar 4. It is not panic selling. We were due for a pull back. Very possible there is only a couple more days and then back up. S&P bounced off 50 day about 3 times today. We should thrash around for a week or two. He did some buying already. Energy is a good sector. Believes oil will go back into the 90s. Some have pulled back 10% or so in the last week.

Market: It’s all about small caps right now. Small cap market is very resource oriented. Volatility is in the commodities. She focuses on growth opportunities. She sees the strength on the commodities as well as tech sector.