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

(A Top Pick Nov 13/09.) Polar Securities Altairis US Long/Short. An authentic long/short hedge fund strategy for US allocation, which is expected to give positive returns no matter where the market goes. This fund is closing on Friday.

(A Top Pick Nov 13/09.) Man AHL Diversified. British based. Have a long history of making money when you least expect it. The fund is designed to follow trends and momentum in currency, equity and bond markets.

Aluminium? Commodities work on cycles than this one has been at the low end for some time. Thinks it will come back around.

Fierra Market Neutral. This is North American equity in a pairs trading strategy.

Picton Mahoney Income Opportunity. In the face of a rising interest-rate economy, this fund has more tools in the bag. They can work dynamically across the fixed income space.

North Pole Multi-Strategy. In a broader macro sense of things, they find opportunities and find arbitrage situations within the Canadian market. (Canada's oldest operating hedge fund.)

Yield curve says interest rates are going up. His fear is that interest rates may rise quicker than expected. His worry is on the supply side, rather than on the inflation side. For dividend paying stocks, the real rate of return will be better than a growth stock. Earnings expectations are looking punchy, 20-25% growth by next year.

Natural gas. Greatly undervalued in terms of fundamentals. Peaked in the US 40 years ago and will inexorably decline long-term. Increasing use and current prices would create 8 billion foot a day and gas prices would have to almost double. Recent shale gas diversion is only about 13% of total gas supply and of that, 60% is Barnett shale that peaked a year ago and is in significant decline.

Oil sands. There is not a wide enough realization yet that we have absolute peaking of world oil production. We are entering a totally new era where there will be a continuing decline of global supplies creating higher prices. Oil sands is the only resource in the world that he forecasts a continuing rise of supply in the future.

Short selling. You don't want to do it on trusts as you will be responsible for the distributions. You could consider gas weighted names such as Compton Petroleum (CMT-T) or Iteration (ITX-T).

Would buying the US$ be a good investment? Thinks the US$ is going a lot lower as it is the only way they can deal with the mounting liabilities.

Canadian Banks. Small increase in rates and not a huge drop in loan demands is probably a positive. Expect later this year or early next year there will be a round of dividend increases. His favourite is Toronto Dominion (TD-T).

Short Selling from a Value respective. As long as fundamentals of a stock continue to improve, an expensive stock can become even more expensive. You have to try to find a company that you believe its fundamentals and fortunes are going to change. Find balance sheets that are weakening, cash flows are dwindling, declining margins and increasing CapX.

(A Top Pick Jan 10/08.) Canadian banks.

We are at the middle of the range of oil price, creeping toward the higher end of the range ($30-$130). Stocks are relatively under priced compared to the price of oil. China’s only reason for investing in Canadian oil companies is for the oil. We Canadians invest in oil stocks only for return on investment.