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

Bank of Montreal bond maturing January 2010 and paying 7% is a very short-term bond and it will amortize downwards back to par. Very little chance of a capital gain here.

Canadian banks - Not keen on the banks in general. Have more issues than the other non-bank financials. Sub primes are causing them to have write offs. Basic Capital Market business is going to be slowing.

Gold - October is typically a weak month for gold, but not sure it will be this time. $800 is an easy objective in the next 3 to 6 months. He couldn't rule out $1000.

Banks - Have been subject to some top forming and some problem areas. Had a strong up leg and then went into a head and shoulders formation and the prices have fallen below the moving averages. This will indicate some problems ahead.

Gold - In a major uptrend, but gold stocks are going to take a pause, with one exception. (See his Top Picks.) They may have to do some meandering around their current trading ranges. In the long term, he believes gold is heading towards $1000.

Liquid Natural Gas (LNG) - Potential of LNG coming into the US has been the prime culprit in putting down Canadian gas prices. Currently there is between 6 and 7 BCF LNG conversion capacity. With plants being built/expanded, there is room for a total of about 12 or 13 BCF a day of capacity in 08. When normal winters come back in Europe, their gas prices will go up and LNG will be shipped into those areas.

REITs could be attractive. Looking out 4, 5 years, inflation could be a factor. They pay a very low tax rate. He doesn't own any but is looking at Calloway (CWT.UN-T), H&R (HR.UN-T), Primaris (PMZ.UN-T) and RioCan (REI.UN-T).

Canadian Banks - Have been lagging year to date and yet are still very good long-term places to be. Looks like rates are not going up anytime soon, which helps. They'll probably end up doing low double-digit again like they always do.

Japanese iShare- doesn’t invest internationally. Complicated cross rate Japanese-American-Canadian. (Feeling) very positive in Japan. They should aggressively hike interest rates, providing them huge growth. Very bullish on Japan.

Biggest producer of LCD panels. Low cost producer. On high end. Better than average margins. Like it, cheap enough to buy.

Sumitomo Trust and Banking (A top pick Sept 29/06. Down 31%) Good opportunity

Esprit - Clothing, based in Hong Kong. Market cap could double in next 3 years. Very profitable company, generate tremendous cash flow. Grown dividend by 50% in last 5 years.

Esprit - Clothing, based in Hong Kong. Market cap could double in next 3 years. Very profitable company, generate tremendous cash flow. Grown dividend by 50% in last 5 years.

Canadian t-bills, the risk free asset. Very safe and guaranteed by Canadian government. Currently at a peak.

Gov’t Canada Bond. 5.75% (Matures June 1st 2033) Considering interest rates you can expect 8-11% total return.