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

Bond funds? Wouldn’t go this route. With interest rates going higher, it will lose you money.

“Backup in Yield” phrase. What does it mean? Means bond yields are increasing. Today bond yields are backing up and everyone is worried about it so you so you don’t want to be long interest rates.

In oils likes mid-cap exploration/production companies as well as international intermediate companies that are doing some elephant hunting. Interesting that trusts converting to Corps are largely under owned by institutions. Yields are very attractive so dynamics are better than in the large integrated oil companies. (Likes Gran Tierra (GTE-T) and Baytex (BTE.UN-T).)(See Top Picks.).

Banks -Only has a small weight in Cdn banks because the sector that has been under performing. Dividend growth will be muted going forward. Groups earnings growth is a little challenged. This is the time when lagging groups start to join the party but you have to be careful. For a yield play, he would rather have an energy stock.

Market. In a sweet spot right now. Normally markets move higher from Oct 28 to May 5 each year. This year, on a technical basis, they clicked in a little bit later, Nov 18. Looking for a 15% move on the S&P 500 to $1,440 and 15,500 on the TSX. Moved all his cash into the market on Nov 18.

Stochastic. When to Sell? Uses Relative strength Indicator (RSI), Moving Average Convergance/Divergance (MACD) with the stochastic. All 3 indicators moving in the same direction has more impact. Also likes Volume Reversal, which is important when entering into a seasonal trade. Caution, once a chart has established a trend, don’t use stochastics.

Silver. Seasonally you are just in the sweet spot. Price of silver goes higher from October right through to the middle of February. Has a lot to do with trending gold but also silver is an industrial commodity. Word of caution. Some silver stocks are giving short-term Sell signals so you want to Buy on weakness.

Natural Gas. Prices are low and anticipated to stay low by most observers because of US overproduction in shale gas. Expects low prices will persist for most of 2011 with a little recovery at the end of 2011. Bullish on gas prices long but couldn’t say when. Have 20 years at most counting proof reserves. Once people start to realize it is a finite resource, there will be a price recovery.

Natural Gas. He is very much long. Expects market to become aware of limited gas in the latter part of 2011. Prices will start picking up. His portfolios are marginally more gas weighted versus oil and that is likely to increase going in to 2011.

Oil. Expected to return to higher prices. No supply problem yet but there is a production problem. World doesn’t seem to be able to produce more than 90 million barrels a day. Demand is growing globally and projections indicate a scarcity in North America in the next couple of years.

Canadian Financial ETFs? He is Holding and writing covered calls against them to generate income and to operate as a hedge. He prefers Equal Weight Bank ETF (ZEB-T) as he is not interested in the insurance companies.

Maximum time for optioning to maximize premiums? He normally uses 6 to 7 months, which is not as profitable as 3 months but gives him better downside protection.

Is waiting for a pull back or correction before buying more mining stocks right now.

US economy is getting better. The only thing we are not seeing is more jobs. Jobs always lag the economy. Job openings in October were the highest they ever have been. By the end of 2011 he predicts it will get back to 8%. For people with College degrees, the outlook is not too bad. Corporate profits are at record levels. Commodity prices are going to stay high and possibly go higher because there isn’t enough to supply China. He is mostly staying away from commodities. Until interest rates go up, he will not buy bonds for clients.

Tonight's program is a repeat of December 1st so there will be no comments. Presumably they lost a guest so I get tonight off! See you Monday. Bill