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

Oil: A lot of volatility at this time but expects to see crude oil back up to $85 or so by the end of March and perhaps $95 in early summer.

Coal: China, about 8 years ago, planned to launch a major increase in coal mining capacity by adding 1.6 billion tons of new capacity to existing 1.1. Built 400,000-megawatt coal fired power plants, bringing 1 on every 5 days. Consumption outstripped production so had to import. If they can complete their mining extension, this will impact their imports.

(His Top Pick is a package of 4 precious metals including SPDR Gold E.T.F. (GLD-N), Agnico Eagle (AEM-T), iShares Silver E.T.F. (SLV-A) and Scorpio Mining (SPM-T).) Right now, hedge funds are paying back their debts in US$’s. Currently, the US$ will is king of the castle but that won't last forever.

Market Outlook: The market will tell you itself when it is finally bottoming. Watch for a basing and stability of the indexes. Also, when you see some traction building with the steps the global governments have taken to get liquidity back into the system. Also look for a deceleration in housing prices and there could be some basing next year.

Economy: Expects this global recession will be longer and deeper than average. You should have a 3 to 5 year time horizon for investing. Anything less than that is short term speculation.

Markets: When you see some sustained improvements in the credit markets, you can then have some confidence that we are looking at a bottoming process in the equity markets. This is not just the LIBOR (London Interbank Offered Rate) but corporate spreads coming in sharply. They’re at levels that have not been seen since the Depression. If you can have more confidence back in the credit markets, then you'll have more confidence in the equity markets.

Oil: Historically oil, on average, goes up from January to May and is flat the rest of the year. This sector also tends to bottom on October 31. This is a good time to starting getting in to this market.

Gold: Gold normally trades in a range of 3X to 6X the price of gold stocks. Hedge funds have sold their positions left, right and centre. Has nothing to do with inflation. Things will correct over time as he is expecting the US$ to roll over.

Cdn$: Fundamentally believes US$ is overvalued on a longer-term perspective. US is printing a huge amount of money but at some time it is going to come back and will erode. Seasonally, the US$ tends to head down about now. Foreign countries tend to repatriate their currencies for accounting purposes.

Top Picks: There will be a delay. Prime Minister's speech pushed the program ahead by a half-hour so taping did not get done and BNN’s clips are not available yet.

TSX will be at 12,000 points by the end of 2009. Typically it takes about 3 years after a bear market fall of the kind we have had, to get back what you have lost.

Bonds: Bond yields are getting quite low, particularly on government ones. He is less enthusiastic about rolling money back into 5 or 10 year Canada government bond. If you were going to buy bonds, he would look at something like a provincial bond that at least gives you a spread or perhaps a very high-grade corporate bond. Even the Canadian mortgage bond that is backed by the Canadian government gives you better yield.

US Currency: US was a source of a lot of the global mess. It was their housing market that collapsed. They are going to run a huge deficit. Why is their currency rallying? It's not that people want to buy US$’s but that they own US$’s. So global investors borrowed US$’s and Japanese yen to buy securities, which have now dropped. They still owe these currencies.

Canadian Dollar will be at $.90 by mid-2009.

Spreads will narrow on provincial and high-grade corporate bonds in 2009. We are currently in a real fear factor. Investors just want the out right safety of government bonds. Eventually, they will have to start dipping their toe in the water and tried to get higher yields. Rational investors will look at some of these better credits and say it's worth taking that tiny bit of higher risk.