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

Trapeze Value Trust: It had a horrible time last year because of the small caps. Management ability has not changed over last 10 years. Good time to own it now.

We are closer to the bottom of the cliff in the economy. The numbers are showing that the economy WILL turn around. We can expect an economic recover AT SOME POINT. The March lows were based on the prediction that the economy would fall off a cliff and the recover is a change in the prediction that it will recover and there wont be a depression. The November low could the low we will test. We will trade sideways for the next 3-6 months.

Canadian Dollar : Probably pretty close to fair value. Comfortable at current value. Don’t see near term rebound in oil.

Thinks market sentiment has changed from a month ago. There has been some optimism that investors can grasp. Economic data has stabilized. It will be a ‘W’ shaped recovery, rather than a ‘V’ shaped. Look for areas that will see a more sustainable rally. Look at stocks with good balance sheets and without a need to raise capital. This wont be a smooth ride forward.

Jobless claims is the most important number. We have had a spike down in the last two weeks and historically this spike has meant the end of the recession. Stock prices always go up before the economy improves. Doubts we will re-test the lows.

Coal: If he was going to do anything in it he would be a buyer, but not aggressive. He needs to see stabilization of stock prices in this sector before buying.

Don’t worry about the shorts forcing the market down any more.

Steel: Steel should increase in value first when economy improves. He is going to begin to buy steel.

(Top Pick was a Paired Pick) Long on Canadian and Australian dollars (export play); Short the Yen

Top Short Gold

Jury is still out as to whether this is the start of a new bull market. More confidence in the banking sector in Canada. GDP will be in negative territory for the balance of the year (US). Don’t chance stocks that have quadrupled off their lows. Look for quality stocks with a predictable dividend.

His investment style is growth at a reasonable price. Canadian dividend but not preferred shares. Bank CEOs are pretty vocal that they wont cut their dividends. Thinks the worst is over in the markets. Market acted aggressively, perhaps a little two aggressively since March lows. Stay away from the volatile stocks.

Over the last 20 years one of the characteristics of the US economy is the massive buildup of personal debt. Big spending packages in US and Canada will take time to filter down to the blue-collar wage earner. We had a 22% rally in one month and it would be perfectly natural for people to take profits, but we won’t re-visit the March lows.

TD 4.78% bond due Nov/16 and yielding 8.3%. A hybrid bond with fixed coupon payments for 10 years. At the end of this period, the company has the option of deferring the maturity. Trading at $.80 on the dollar reflecting that the coupon is not current. Fairly safe assumption that it will mature as anticipated.

CIBC yielding between 9% and 10%. Recent issue. Hybrid security. Has a fixed coupon for the next 10 years with the possibility that it is not mature as anticipated and then it floats at a higher interest rate. This possibility is very remote.