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

Gold: Has moved quite dramatically because of the weaker US$ and the expansion of the Asian economy. There has been a little bit of weakness, which could continue. With the US economy starting to slow he believes many investors are much too optimistic on growth in the Far East, but the US is still their #1 customer.

Base Metals: He has sold almost all the base metals that he has in his fund because he believes the US is going into recession.

Preferred Shares: These have had a very period from October on. This has to do with the credit crunch. We are getting to the point on the income side where these are pretty attractive dividends. He would buy the preferreds of the banks before he would buy the common.

Pipelines: In this kind of market, these are great stocks to hold. Likes the yield and the constrained capacity. Very predictable. A Buy, but wait until the smoke clears.

Market Strategy: TSX broke a very critical support level today in the next level is at 12,500. S&P 500 and NASDAQ Composite broke key support levels also. Market has been most heavily oversold in a decade. This is the time to buy.

Natural Gas: The price has been trending up lately and in his view, it is only a seasonal thing. You'll have to wait for a while before you see very much of a long-term improvement.

US Banks: Not so sure that all the write-offs have been completed as yet.

Market Outlook: Actually quite bullish. Reaction to what is going on in the economy is overdone. Historically it can be proven that the market does well whether we go into a recession or not. It can be rocky for the next couple of months but if you are an investor over the long run, you have to be optimistic. Sitting with about 7%-8.5% cash.

Canadian Banks: - Given that 10-year yields are 3.9% and you can get 5% on a number of these banks, it's a steal of the century. They will continue to earn a significant amount of money. Balance sheets are in very good shape. Until the Commerce (CM-T) and Bank of Montreal (BMO-T) disclose their full exposure and the risk is, he doesn't think these stocks can go up. Over the short run, there could be some hurt.

Gold: - Bullish on this commodity. Demand will come from Asia as their economies continue to grow. Can easily see the price of gold going through $1000 by this time next year.

Growth vs. Value: 2007 was the 3rd worst year for value investors, so it has been a tough year for them. Could be entering a period when growth outperforms value, but you can still make money in value. If you buy good companies that 1) pay nice dividends 2) have pristine balance sheets 3) cheap and 4) have strong management, you're going to do okay.

The risk of owning BCE Bonds is priced in. He thinks the deal will go through in the 2nd quarter. If the deal doesn't go through, these bonds could be upgraded to investment grade.

Good time to deal in US bonds as long as they are not treasury. Yields on the treasuries are low because of the flight to quality. There are some very good values in short-term financials as long as you stay high up the food chain such as AA or very solid financial institution.

On bank preferred stocks; stick with 2 or 3 of the top banks that have avoided a lot of the structured investment vehicle issues and mortgage and credit problems. These would include Toronto Dominion Bank, Royal Bank or Bank of Nova Scotia. Pick variable and fixed rates. Find ones that are fairly liquid, as some of the illiquid ones don't trade well.

GMAC and Ford Credit bonds have yields exceeding 10%. You are getting this yield because you are taking on a lot of risk.