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

Natural Gas - There are 2 things different this year than in previous cycles. The resource plays in the US are so profitable, that even at $5/$6 gas, drillers are making 2X their money. LNG is now being landed from ships 2 miles offshore. Over the next 2 years there is likely to be a wall of gas hitting the North American markets.

Preferred Shares – Are currently down. A lot of blue chip stocks are down because of credit concerns. There is a bit of a supply glut. A lot of companies are issuing preferreds because other venues are too expensive, or even closed down to them. Once the glut clears trading will go back a bit more to the fiundamentals.

Short Sales: - Have been tough in the last few years because we have been in the middle of a bull market. Also, when stock prices drop, there has been prevalence for takeovers. Theoretically, your portfolio should benefit from having Shorts in it.

Gold - Very much depends on what happens with US interest rates. As long as they keep lowering interest rates, the US$ weakens. Once they stop lowering rates, you'll see how the market interprets it and short-term, you could have a correction in commodities. She would bet on the US$ going lower.

He is diversified in all sectors, not heavily weighted in one area.

A softening in the whole Real Estate market. US has really weakened. Credit spreads have widened. He emphasises REITs that have very little debt. They get hurt when the whole market goes down, but they are also the first to recover.

Gas is taking a big chunk out of the U.S. consumer's disposable income. The U.S. consumer is living pay check to pay check. Recommends not being exposed to stocks with a major exposure to a domestic U.S. consumer.

Big 5 Banks: Has significant exposure in the banking sector. You want to be around market weight. Bank of Nova Scotia and Bank of Commerce are our biggest exposures. Doesn’t like TD so much.

This is a good time to get your money in. Most gains occur in this 6 month favourable period (now-May). October 28th is buy date. Not a lot of gains occur in unfavourable period.

Seasonality Currency: The U.S dollar should drop until December, but in January it will come back up. Think the Canadian dollar has climaxed.

It is hard to find value in the market in the last few months. Canadian financial services sector is starting to look interesting.

Apple, RIM, and Google stocks are leading the Nasdaq. He believes that without these three stocks Nasdaq is going down. It makes him nervous and he feels the market is in trouble.

Resource sector has a lot of attention. Chinese growth rate is not slowing down. The demand for resources will continue. Oil prices may see a correction but he sees prices being around $72-74. If the oil pipelines in Turkey are attacked, prices will go a lot higher. Drilling activity of natural gas has decreased.

Feels that the US "has been robbing Peter to pay Paul, and Peter's tapped out". Feels Bush, before leaving office, will take some direct action against Iran. That will not ne good for the stock market, but will be good for oil and gold.

Believes that in the next 52 weeks there will be continueing change in the space and more take outs will occur. Business trusts are not being helped by the high Canadian dollar.