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

Move to Financials? – Likes banks. One metric he uses is the TSX’s price/earnings ratio for next year which runs about 15.2. Banks yields are at about 3% and 12.4 X next year’s earnings represents pretty good value.

Time to buy? - For the short-term investor, it will be extremely difficult to pick a bottom. A 15% reduction in valuation is what can be expected with reduced cash flows over the long term. For the long-term investor, a lot of trusts will be able to gain back that 15% over time.

Affect on Yields: - before the tax change announcement, the average yield was about 9% for income trusts. If you were to buy trusts today, you would be looking at 10.5%-11% because of the drop in valuations.

Doesn't really believe we are in a bull market. With US elections coming up, some people are trying to make it appear as positive as possible. Last year, because of Katrina and Rita, a lot of people didn't travel as much and shopped less, so this year, the numbers, year-over-year, appear to be positive, but this is a onetime event. Expect that consumer spending will come down substantially in the next few months.

Currently he is extremely bullish on energy. On a longer-term trend, he is bullish on energy, commodities, gold. Energy is currently in a bull market, and will last for his lifetime because of Peak Oil. This also ties in with a huge demand from Asia. Every correction is an opportunity to buy.

(A Top Pick Oct 21/05.) LIMIT ORDERS – Any time an investor wants to buy a new stock, the best way is to use a limit order. It sets the price you want until cancelled.

Natural Gas - you have to be bullish on energy of all types. It's a local market, because it is hard to move. Moving it as Liquid Natural Gas is complicated. As a group, the natural gas stocks are cheaper than they ought to be. Prefers the exploration companies rather than the larger firms.

Gold - The most under priced of the metals at this time. You can't look at things in terms of US$’s. In terms of today’s dollars, it will go to $2000 an ounce and probably more.

Uranium - A lot of misconceptions about uranium. Nuclear power is the way we are going to fly for mass energy generation. It is by far the safest, cleanest and cheapest. There is a tremendous deficit right now. World is using almost twice what is being mined. Takes about 10 years from discovery to production. Wouldn't be surprised if the price goes to $100/$150 a pound.

Diamonds - even though there is a so-called deficit of diamonds, he is not a fan of diamond mining. There are at least 2 technologies today that allow the creation of real and totally flawless large diamonds for just a few dollars a carat.

Silver - Going a lot higher. Silver is gold on steroids. It is in basic supply deficit. Governments, including the US, have sold all their silver.

Seasonal Buy and Sell on the TSX Comp – Buy near the end of September and Sell in March. Over the last 5 years, charts indicate there is a very important Low at the end of each September. This has happened 9 out of the last 10 years giving an average 8.2% return plus dividends.

Forecasting oil/gas for about 60 years. Into a new era that he calls “scarcity and price rationing”. All easy things in getting supplies has been done and now it is a question of the price required to constrain consumption to match supply. Expects oil will be $55-$65 when things are normal. For every 100,000 barrels per day disruption there is a loss of $1 a barrel. Feels we are close to a bottom for both oil and gas.

Alberta is the most attractive place to invest in energy in the world because of its huge resource base and less exploited than the US. Located adjacent to the largest market in the world that has a voracious appetite for oil and gas. The only area in the world that has the real resources for continually growing oil production as far in the future as we can see.

Close to 100% of his investments are in energy with 60-65% in Canada. Not concerned about the rockiness of the sector as he has been in a lot of them before.