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

Lithium. Has recently gone up a lot. Some interesting exploration plays in Canada but it has to be refined and manufactured but no facilities for this in Canada.

Tonight Show is “Technical Investing 101” showing technical basics. Discussion on individual stock is pretty thin. (Don't shoot the messenger!)

India has announced about a month and a half ago they would pick up on the IMF gold sale. He is bullish on Gold long term, but there will be a lot of volatility. If China changes their building codes, it will impact lumber sector. It could be 50% of the Canadian lumber industry, but he would not invest in timber companies directly. He is positive on lumber if building codes change in China. Gold is a global currency and an economic hedge and risk of US economy and dollar.

Fixed Income ETFs: Look at the duration of the exposure (the average term). If you have a longer duration and interest rates rise, you will have more sensitivity and your price will fall. You want lower duration if you believe interest rates are going up. If outside an RRSP, look at CAB-T because it has a tax advantaged income to it. If it is inside, look at XBB, XSB (short term), CLF-T (gov’t bonds), or CBO-T (corporate bonds).

Explain the movement patters of ETF’s: You have to look at what the ETF is investing in. For example in Commodities, there are really 3 baskets: Equity Commodities e.g. XGD-T (gold commodity stocks); Gold futures; and Physical Gold, stored in a vault (spot price). These gold ETFs will act very differently from one another. 1x ETFs mirror the index, but leveraged and commodity ETFs might be a little different.

Two classes of shares – common and advisor. The advisor fund pays the advisor a trailer fee and has a higher management fee.

Rebalancing portfolio mix: There was a strong run in equity markets in the last 9 months. It is critical that investors look that they are balanced and not overweight in any equity class. Prepare in case of a market downturn.

Dividend Based Equity. Likes to see an equity position as a dividend-paying stock, since there may be a re-trenchment over the next couple of months.

Gold: Will see $1300 soon. Gold is a very attractive asset. If we do see some re-trenchment and some US$ appreciation, all assets will come down, but gold will hold up much better. Loves the long-term fundamentals of gold.

We are having a very good rally heading into the end of the year and markets have done so much better than anyone could have expected at the beginning of the year. There’s always a concern that the high unemployment rate could lead to a double dip or negative GDP growth. But high unemployment could be good for the stock market because it could lead to continued fiscal stimulus and spending. We have the best stimulus spending going on right now. Leading indicators indicate continued growth for 6-9 months and high beta stocks will do well but over the long run defensive stocks are where you want to be. TRP at 5% dividend is better than .25% interest.

Fear regarding Dubai default and recent history of banking collapse drove markets down yesterday. But it was not as significant as Lehman Brothers. Bonds are a little over bought right now.

Interest rates would have to ratchet up substantially in order to hurt preferreds. He prefers bank common stock to preferreds.

Fairfax Financial Holdings 7.75 4/26/12. You are seeing a proxy on the augmentation on book value. You have the upside on the book value and the coupon is pretty good. Have amalgamated all the subsidiaries into the holding company so they don’t have to dividend that out.

Fusion Trust. One of his top 3 holdings. May be tough for retail investors to get. You are playing the banks in a way. It is distressed, asset-backed paper of National Bank. He would also buy National Bank.

Income trusts have not rallied like stocks and REITs. It is because of the steady stream of distribution