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

Archer Daniel Midland 6.25% (Top Pick May 25/09, Up 20%) As long as you have the mandate for BioFuels, this will benefit.

Genesis Trust 3/15/10 paired with Gov’t of Canada 5 yr (shorted) (Top Pick May 25/09, Up 7.1%) Pairs trades would not work in this market.

Precious metals. Have had a good run and expects they may pull back but suspects we are in a period of out performance so would add on any pullbacks.

Natural gas. He is right out of the sector as he feels natural gas is way too high right now.

Gold. Thanks it will keep going higher.

Canadian banks. Far better shape than the US or European banks. From a safety point of view he has very little worry about them. Doesn't think they will rise as much as they have but there are great dividend yields on them with some growth.

Yield curve is a great predictor of what is going to happen. Bank of Canada interest rates are low while long-term interest rates are high giving a very steep yield curve. Usually indicates a green light for the economy. Expect the government yields will continue to be subdued.

Long US treasury bonds. Doesn't think there is any danger in long treasuries right now if you want that exposure to the US. You have to be concerned about the amount of supply coming down the line as well as inflation 2-3 years out.

5-year convertibles. They are very illiquid so there may be difficulty in trading them. They’re also usually lower quality.

(Caller) Bank Tier 1 capital issues when yields where around 8% but are now about 5.5%. Hold or sell? (Answer) Still thinks there is good value and if you can hang on a little longer you will see more gains but easy money has been made.

Telecoms. He is quite bullish on them right now. Credit rating is in the investment grade. Feels Bell (BCE-T) would be #1, Telus (T-T) would be #2 followed by Rogers (RCI.B-T).

Gold. Trading on weak US$. Other commodities are through their inflation adjusted 1982 peaks but gold is still at about half. Because of this, there could be further upward moves but these are speculative markets.

Market Volatility Index (VIX). If this were stock he would not be a buyer. A very clear trend in place of falling volatility. At some point it will turn around but to pick the bottom your timing has to be perfect.

Likes base metals, especially copper but zinc looks okay too. As long as you think countries globally are going to continue to debase their currency by printing money, base metals are seen as a bucket to hide assets in for protection.

The liquidity crisis is over, but is this a deep recession or are we coming out of it. The US consumer and house markets are the big questions. Consumer is cutting down debt and becoming a saver. Black Friday is coming up this week. If you are a retailer, you have been expecting this for 9 months so expect inventory control has been much higher. Inventory levels are close to lows. There will be inventory buildup in early 2010. He is more in the deflation camp than the inflation camp. There is too big a spread between gov't of Canada bonds and dividend paying stocks. These will have to compress.