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

Dynamic Income Opportunities Fund -One of the best income trust managers in the country. Not necessarily income trusts, but anything that will generate income, so there is real estate, real estate securities, high yielding common stocks, etc. In the past year he is up around 31%.

Picton Mahoney Hedge Funds - Manages about $4 billion, so there is lots of information flow. Mainly mid-to large cap on the mutual funds and on the hedge funds they can take positions in smaller companies. Performance has been absolutely fantastic in the hedge fund. Mutual fund has been great too. The hedge fund will probably close in the next couple of weeks.

Chou Funds - Mr. Chou has been rated fund manager of the decade in the past. He is not a hedge fund, but he does run a more flexible mutual fund strategy. He will build up the cash a lot and if he doesn't see value in the market, he won't invest. Doesn't think he shorts or uses any other hedge fund strategies.

Trapeze Asset Management – These are value managers, so they have a lot of capital preservation as far as their mandate is concerned. They do invest in small to mid cap stocks. Very opportunistic. They do have some proprietary stuff, which tells them what kind of risk there is in the market, which has been very good for them. Have done a good job.

Banks – Canadian banks should be traded, not a buy and hold situation. Watch for dips before buying. His current upside on banks is National (NA-T) +43%, Bank of Montreal (BMO-T) +24%, Royal (RY-T) +16%, Scotia (BNS-T) +15%, Commerce (CM-T) +5% and Toronto Dominion (TD-T) at +4%.

Cdn$ - We’re in the boom phase. Doesn't know where the top is going to be, but there is going to be a bust. We are very small in terms of population and the size of our economy. People love us now, they're buying, money is rolling in, but the hot money will roll out in a big way.

Market - TSX lags the NYSE slightly, so if you watch NY you can get a key from this. It is about 2 weeks behind cyclically. The leaders in Toronto are technology, metals and materials and the rest of the sectors are not keeping up with the market. Leadership is thinning out and it is a worry.

Stop Losses – For a stop-loss, you can use a 10-day, 10 week trailing stop or a true range stop. For the latter, you should check this online.

Principal driver of the markets will be the US$. His numbers show that the US market will decline substantially. Historically when a country’s currency is weak, the stock market has tended to balance it off. The bullish view is that this would be 60% of the decline. You have to hedge (by currency futures or options) the US$ to get rid of the currency risk, allowing you to go into the US market.

Uranium - When you look at the way stocks are trading in this space, at this point you are betting on a turnaround. Long term picture is good but a very volatile space. He would stand clear for now and wait for some buyers to come back to the group and see some strength.

Stop Loss - He uses a point and figure chart because they are quantitative. It also helps to recognize volatility. There are also other ways to calculate these.

National Bank 4.7% Bond maturing Nov 2/15. Usually doesn't like bank debt, but bank that has just recently widened giving him 160 basis points over Government of Canada.

Government of Canada 5.75% Bond 2029. This was a long-term pick. Sold his holdings about 4 months ago and just got back into it again. Cdn$ is so strong, it is going to have to impact the economy and inflation numbers so this is a good place to go.

Ford Credit 4.375% maturing March/08, the financial arm of Ford. Getting closer to maturity and he is slightly uneasy with it because of poor fundamentals.

Sub-primes - There will be more fallout. They have to figure out what these assets are and what their value is. $1.5 trillion is outstanding and $300 billion is going to be written off. These over collateralized obligations are going to be significantly underwater. This is just the sub primes of the CDO’s themselves and then you go to the leveraged loans, which is the next problem. There are some serious write-downs yet to occur.