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

Gold – Overshot in the spring of last year when it went up to $700. That was full of buy a correction, but since then it is very much in a horizontal trading range, which is a good thing to have. It is about ready to start moving again and there is a good chance it will go back to $700 and maybe even higher.

Financial Services - Environment for banks right now is one of the most stable you can find. Not a lot of pressure for rates or from credit conditions. Doesn't see a big correction coming for financials. Expecting high single-digit plus good dividend yield.

First Capital Realty five-year 5.08% bonds. This is a call on the REIT bond market. There is still some value on a very tight credit spread market.

30-year government of Canada bond. Over the long term, there is a sustainable rate. Real rates are going to be low and inflation will be nonexistent.

Interest rates: - Going to go a lot higher. Gold has gone higher which means the paper you are carrying around in your pocket is not worth as much as it was 2 or 3 years ago. How do you get back so that money is worth more than “ stuff”? Rates have to be hiked to such a point that it gets more value.

Silver - The chart shows a semi triangle. If it breaks out through the mid-$14’s it's a pretty strong sign. It has beautiful support. Watch for the breakout and then buy yourself a silver stock. If silver breaks out, gold will follow.

Uranium _- It has been on a tear and looks like it wants to go further. Would be inclined to go with Uranium Participation (U-T), a purer play in uranium. A high-risk play.

His pick of government 10-year bonds has not been as good an investment as he had hoped. In the near term, interest rates may be levelling off.

Natural Gas- Stocks performed poorly in 2006 because of poor commodity prices. Currently there is only a surplus of 253 BCF over last year and we are going through unseasonably cold weather. Over the next 2-3 weeks, inventory levels are going to fall below last year's. This should be a good year for natural gas. Play this with gas companies that are unhedged such as Duvernay (DDV-T), Cyries Energy (CYS-T), ProEx Energy (PXE-T), any of the large weighted producers that have good growth profiles.

Posko - A steel company out of South Korea. Has very reasonable valuation metrics, good earnings quality and really good growth characteristics.

Deutsche Lufthansa (airline) - Underlying factors were very compelling. A very cheap stock with reasonable valuation characteristics and good earnings. Most importantly, investors are buying it. Has great 3, 6 and 12 month price appreciation.

Royalty Trusts Distributions: Use current cash flow per unit, current Cap X, knock off something for taxes and the remainder is what is there for distribution.

US$ - We are in the early stages of a new, but not great, bull for the US$, which could persist through 2 or 3 quarters of 07. It had a top 2-3 years ago and then started a long slope down with a bottom being set in late 04. This was followed by a rally and then fell back again, but it did not make a new low. Generally speaking, most commodities will operate in a countertrend to the US$.

Commodities – Commodities have been dropping for about 3 months. He now senses a countertrend rally in commodities, which could persist for a couple of weeks and could pull the TSX up. EG. If you are heavy in oils and metals, enjoy the uptrend and take the opportunity to lighten up.

Gold – You always have to look at the US$. He feels the US$ is going to rally through early 07, which would throw a blanket on gold. It won't be a disaster. There are too many people bullish on it.