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

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.

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.