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

US Banks: His strategy is all about buying the leader. You want the absolute best companies in sectors that have come out of favour. He has small stakes in Goldman Sachs (GS-N) and Morgan Stanley (MS-N), which stand a very good chance of coming out of this in the right end. Thinks there will be some nationalization. When that occurs, it will be destabilizing and a lot of equity stakeholders will lose their money.

Canadian Bank Bonds: Bubble? Could be one if we are going into an inflationary period but that would mean corporate balance sheets are doing better. He thinks there is deflation. For the next 6 to 9 months he thinks they are stellar relative to global banks but they are facing tremendous headwinds but a great place to hide. Still getting higher on the capital structure but yields aren't as compelling as they were 2 months ago.

My apologies. For some reason,last night's BNN didn't get totally recorded on my computer. Their website only had 8 minutes recorded for the regular program, excluding Top Picks. Checked again today but it's still only 8 minutes so there are a few stocks and comments missed.

Precious Metals: Usually owned as a defence so you have to be aware of the party that is issuing the paper, as you may not actually own the physical metal. Because of counter party risks you have to be aware of the party that is issuing the paper.

Gold: Thinks it will go through $1000 this year. His target is $3000 in the next 3 years. (If he is wrong, he promises to shave his head!) US monetary basis doubled in the last couple of quarters but the value of the US has not doubled and has probably deteriorated.

Oil: Expects oil will go much higher. Good chance that in the next 3 years or so it could go through $140. Once the demand comes back to the market, we'll find out that supply is on a downward trajectory due to the cut back on exploration and development in the last few years.

CI Global Opportunity Fund. Manager Nandu Narayanan has been a huge bear on the US markets for years. Great downside risk controls so he was flat in 2005 and 2006 but was up 100% in 2007 and 45% in 2008.

Short Selling: Tough because it is opposite thinking. Risk is quite a bit different because you have unlimited losses if you are wrong. Short selling managers have a lot of discipline and usually have a view of the macro picture on trends and themes. They also have nerves of steel.

Goodwood Funds. (A Top Pick July 7/08. Down 27.1%.) Even with last year's drop, they doubled the market. When investing in a fund, you should do it in one were the manager has the ability to add value and this one has done it over time. 15% of the fund is invested in ATS Automation (ATA-T) and 30% is in cash. Probably 15% is in a Short position. Still a Buy.

Power Hedge Fund: Even though Hedge is in its name, manager has always made it very clear that he is a Long-Only stock picker using very concentrated positions in small to mid-cap stocks. His thesis told him that the smart place to be in the next 5 years is still commodities.

Arrow Enso Global Fund. (A Top Pick July 7/08. Down 42%.) Always run with a low net exposure but had a pretty high concentration in the resources and that hit them.

Vertex Fund. (A Top Pick July 7/08. Down 38.5%.) Have been in a lot of money over the years in merger arbitrage. Everything blew apart from Sept to Oct last year. Nov, Dec and Jan the fund has been pretty uncorrelated to the market.

Arrow High Yield. Invests in high-yield bonds as well as corporate balance sheets, arbitrage opportunities etc. Basically capitalizing on the dislocation right now in the credit markets. Peaked at about 20%, the difference between payments of high-yield bonds and government bonds. If credit markets are going to straighten out before equity markets, a compression in the yields will give you a 30%-40% gain.

Sprott Opportunities RSP Fund. Run by J F Tardif. From a macro perspective he is very negative about the market. Was flat in 2008 so didn't lose any money. Very low net market exposure right now, 14% long and 13% short and the rest in cash. Low risk way of getting some upside without much downside.

Picton Mahoney Long/Short Equity Fund. Very structured. You know exactly what you have when you buy it. 50% exposure to the market at any time so the beta will be half of what the market is. Last year he was down about 13%.