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

Market. We may have reached fair value at 12,000-12,500 so he doesn't expect too much upside. A “show me” market that he'll look at in the 3rd-4th quarters. Doesn't think economy will fall in a double dip recession. Not comfortable with being in the US as he expects Cdn$ to go over par.

(A Top Pick Nov 10/09. Up 3.14%.) Canada Real Return Bond Dec 2021.

Income trusts: We are not in the rising interest rate environment that we thought we would be in thanks to the Greeks. Yields that are sustainable in income trusts still look pretty good. There are a lot of trusts that don’t need to convert because of tax credits. If the trust is a good business and earning its distribution it is going to do fine after its conversion. You need to be very focused on which trusts you hold. Positive outlook for 2010; no major correction, TSX should end up in the high 12,000s. The world isn’t coming to an end and there are people who have made their careers in the last couple of years by coming on TV and saying the world is ending on bad news.

Hedge fund are relevant to a retail environment in terms of diversification. Alternative strategies and hedge funds add diversification, which is harder with the globalization in the markets. Hedge funds are very much misunderstood. 99% of guys running these funds are doing a fantastic job. You get returns that are not as relevant to the rest of the world. You need an advisor that has access to these guys. You shouldn’t do hedge funds yourself. Minimum investment is $25K and there are salary and asset requirements that must be met.

Are they an asset class on their own? Yes, Hedge funds are a separate asset. Percent depends on who you are and what you require.

Authentic hedge fund strategy encompasses about 20 different kinds of funds.

How does a hedge principle work: Buy long and buy a put option, for example. You can buy a commodity company and short the commodity. Hedge funds use a long/short strategy. There are some that simply aim to make significant returns at a risk. This later type get all the press.

AIMA: Alternative Investment Management Association. Their reports will say who the guys are and what they are doing. It protects against fiascoes like Portis.

Definition: Managed strategy with more flexibility than traditional funds. Protect capital.

Picton Mahoney Cdn. Mkt. Neutral (Top Pick Nov 13/09, Up 1%) Authentic long/short strategy with a bond-like volatility. Wouldn’t expect big growth. Fantastic during the 2008 downturn.

Polar Securities Altaris US (Top Pick Nov 13/09, Up 1.6%) Long/short US stocks and a currency hedge. Somewhat active strategy.

Man AHL Diversified (Top Pick Nov 13/09) Fantastic track record with returns when people least expect it. Make their money in volatility.

Fees: 2% of assets and 20% of profit. Possibly above a threshold is the standard fee with hedge funds.

Salida Multi-strategy hedge: It could take you a long period of time. Commit to the time.

Vertex Fund: You have to understand the risk in this trade. If their view of the market isn’t in favour, it could take some time to make money. It isn’t a straight up ride.