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

Trident Global Opportunities fund. This is a hedge fund of sorts. Has done well when his thesis plays out. More of a view than a hedge fund.

Fiera Market Neutral Fund: Conservative end of spectrum. Buy N.A. equities in a pairs fashion. Long a stock in one area and short another stock that isn’t doing well. 60% over 4 years. Low, low volatility.

Picton Mahoney Income Opportunities fund: If you are concerned about your Government/corporate bond portfolio, this is a diverse, nimble strategy in the income space. He’s up 8% since start of year.

Spartan Multi Strategy Fund: Experience and discipline from managers that are former floor traders and market makers. Strength is capitalizing on volatility. Held up well over 4 years. Not a buy and hold strategy.

Opec would like to see oil in the $75 range. Year to date, European demand has been down. Resurgence in jet fuel in the US. Chinese demand has been up. Natural gas rally is still very weak. We are testing the limits of storage of natural gas. Is paring back natural gas exposure in his portfolios. You get the most torque in the small caps. There’s enough opportunity in Aberta.

Looking for an overall 1% increase in oil demand. OPEC spare capacity is 5.5 Million Barrels per day. Until we chew through excess capacity we will stay in the $75-$80 range for 2 to 3 years. Natural gas rally last week is nothing more than a ‘suckers’ rally. The fundamentals are awful. We are looking at 10% growth in Nat Gas supply this year in the US. He buys good, liquid companies with good balance sheets, existing production, with meaningful upsides, good management teams.

The Euro-debt crisis: We are the most important market for the US. Europe is only about 5%-10%, so Euro-debt crisis will only have a modest impact. Bernanke may be right but he didn’t predict the last recession very well. Continues not to see a ‘V’ shaped recovery. Gold has become a currency. Almost all currencies are racing for the bottom.

REITs – after in 2011 will they have more capital appreciation? Investors are attracted to the yield – stable, although not likely to grow. Not affected by income trusts going out. Some income trust investors will cycle money into REITs.

S&P 500 – we have been below the 200-day moving average for about 3 weeks. The action today was very negative. 1120 was a 50% retracement level from 2008 and we are below that. There is support at the 1066 level and we are below that. He can see another 30 point drop and then we run into some resistance. 1020-1030 – if we break through this support we are in trouble. He is 40% exposed to equity and will continue hedging and selling.

Average of the stocks in his portfolio have been held for 3.5 years of more. His VP has started a portfolio that allows cheaper stocks and more dividends.

Sell stocks to buy a condo – is Toronto Condo market overheated? Thinks condo prices will come down – HST a factor. Housing prices are relatively high. This is not the season to buy. He would wait. They will slip or maybe they will fall. He loves paying down debt.

Asset allocation is so important in this market. You also have a strong bond component. He is more likely to use an ‘insurance’ put. You should avoid the 2x leverage in ETFs. Doesn’t hold European stocks. He owns 60% ETFs and 40% bonds. Covered calls provide an income stream.

Oil ETFs: Has been buying them in small amounts.

Oil ETFs: Has been buying them in small amounts.

This is a good time for bonds. It’s a volatile time, but a good time. A good time to put new money to work. US Financial space is good. Tread carefully for the below investment grade. If we saw a sustained dip in he housing market and we saw GDP dip he would be more concerned about a double dip. European restraint is going to cause a restraint in growth in N.A. Should be 2/3rds in corporate bonds vs. government bonds.