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

(3 Top Picks theme is on rebalancing portfolios.) There has been a nice run on the markets including equity markets and Corporate bonds. You now need to make sure you have rebalanced your portfolio, which may mean selling some of your winners.

(3 Top Picks theme is on rebalancing portfolios.) Preferred shares have had a very strong run in the last 2, 3 months. These are very attractive tax effective dividend vehicles. These are great things to pick away at for the income.

(3 Top Picks theme is on rebalancing portfolios.) Hard asset commodities. Believes in the inflation story and a declining US$. In both of these scenarios, hard assets like gold and silver will benefit from that.

Uranium ETFs? There are no ETFs that are exclusively uranium. You could look at Uranium Participation (U-) that is really ownership of physical uranium. If you believe in nuclear energy, it is an interesting area to participate in.

Market Neutral Investing is a strategy that attempts to take out the market risk from securities selection. Isolating Alpha and taking out Beta. You are decreasing volatility. Market is pricing in a ‘V’ shaped recovery. Market will have a lift the early part of next year.

We will see a range-bound market for the next 2 years. More downside risk at present than upside potential.

Views have not changed since the spring. He is an optimist. With governments pumping so much liquidity into the system, we saw a market rally. Leverage can take things up and down very quickly. People are resilient. He does not cling to economic data. There are a whole lot of industries that really have not changed. People still use their products. Cautious about opportunities on the debt side. Took profits in the rally.

Calloway Debenture Coupon 10.25%, yielding 7 to 7.5% Apr 14/2014. The company cut their distributions to zero. Exposure is to hospitality and lodging. Would not be surprised if they call it back at par. It would be a speculative buy.

RBC Preferred Shares Series 31. Redeemable in 2012 when it will be $25. As a preferred share that pulled back, he would be holding on. Banks report next week and feels analysts will have to revise their forecasts. These securities are offering more downside protection than ever.

Fairfax 7.35 2018. They have about a billion in cash. Their core business is showing signs of improvement. Underwriting standards are pretty good.

Is there a correlation between heat and market performance. When he was asked to be on today, he said – What a day to be on”: The start of a correction.

Canadian banks are the obviously the best run banks and we have proven that out over the last 24 months. They are reaching their 52-week highs. Starting with Royal and then TD and BNS, would definitely not have a problem adding to portfolio in the long term.

The August series of options expire this Friday so he was doing some Puts today for expected lower prices. He thinks we are within our trading ranges. We had our lows back in March. We aren’t going to have a collapse. Likes financials.

"Options as a Strategic Investment" by Lawrence McMillan. Insight into every possible option strategy. 800 pages so use it like a handbook. “Aggressive Investing” by the host. Montreal exchange is a good link.

What to do when a few days before a covered call expires, it appears it will be exercised but you don’t really want to give up the stock: Go into the options market and re-purchase the position.