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

Where would you put cash if a double dip were in sight? If we are in the double dip, as investors we don't need to figure that out, but just what the market trend is. Market blindsided us this week making new buys very unreliable.

Trade Template. Use an S&P 500 chart and draw a line from the high in April down to the high in June. That is the range the market is trading in. Market is unable to cross over the line on a short-term basis. Most investors should not try to make any money in a correction. If you are going to trade, do it in a trading range the chart shows.

Not buying anything right now and hasn't for 6 months. Has about 10%-20% cash depending on the asset mix of the portfolio. He is looking for a signal of global de-leveraging before buying. Would like to Buy when there is capitulation but hasn't seen it yet. Will watch to see what happens when the Q2 and Q3 earnings coming out in the fall.

Christine Poole's Top Pick of SNC Lavalin (SNC-T) was shown as a Buy yesterday. My apologies. This was a Top Pick and didn't go out with last night's e-mails. Will try to do better from now on. Sorry Christine. Bill

Canadian banks. Posted fairly good earnings last few quarters. Past quarter didn't surprise on the upside like they had in the prior quarter. Loss provisions are declining in a stronger economy. Might get 5%-10% upside this year and dividend yields are 3.5%-5%. Expect very positive returns 2-3 years out. Dividend increases will probably be put off until next year when the capital requirements are sorted out.

Oil drillers - ETF, land driller or ocean driller? Generally doesn't buy ETF’s. Prefers specific stocks. Too early to buy deep-water drillers as there is not enough clarity on the long-term outlook. Wants to see the well gets capped and what new regulations will be and if moratorium gets extended. Would prefer a land-based driller.

The market is in a bit of a no man’s land right now. Correction in May happened mostly because of problem in Europe. Since then there was quite a bit of recovery in the last couple of weeks and now question is where do we go from here. He is taking a wait-and-see attitude. The big picture is that we have been having a good recovery but the momentum is slowing down. Thinks we will risk a double dip. There will be some challenges over the next few months.

REITs: Best risk adjusted sources of good income flow. You can go and pick specific REITs or you can go and buy a fund. Canadian REITs have way outperformed the US ones. If interest rates go the wrong way you can get caught. Look for steady income because there is very little growth anywhere else.

Triple witching today. REITs are in very good shape. The environment is right for them. The economy is in good shape. They’ve taken on debt, extending it at lower rates. Payout ratios have gone down. Income is safer. Economy is not going to take off – certainly not the global economy.

Natural gas. Feels prices will go substantially higher. Headlines would indicate that we have a natural abundance from shale as far as the eye can see. However looking at the supply of gas today, particularly US, only 13% comes from shale and over half is from the Barnett shale, which saw peak production about a year ago. Only 6% of the 13% is actually growing, nowhere near enough to offset the declines from the other 87%. Questions if the EIA is supplying accurate data on supply. Looking for $8 gas over the next 6-12 months.

Oil. World is operating in 80 million barrels a day of production. Gulf spill of 60,000 barrels a day doesn't move the needle too much as far as what the price should be. Expect it will become much more costly to drill offshore and that will position Canada very well because we have the 2nd highest reserves globally, in the tar sands.

Alberta oil sands. Medium to long-term, a very attractive area to invest in. 180 billion barrels of proven reserves, 2nd only to Saudi Arabia. Most production currently is from Suncor (SU-T) and Syncrude but there are some emerging players like Cenovus (CVE-T) that are bringing some SAGD technology and this is where real production growth is going to come from.

Markets are telling us, because they were oversold, were due for a bounce. People look at the 50-day and 200 day moving averages. It was a good rally. How far is it going to go – neither you nor I know - through the month end and into the earnings season, but if there are any mishaps (Europe situation, for example) then it ends. We are in for an era of broken promises. People in unions will have to accept cuts to benefits. 10-15% cash.

Natural Gas: Not sure it is bouncing off bottom and going higher. With new legislation, power companies in the US are going to look hard at what fuel they will use. He thinks Gas will be much higher in 3 years.