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

Banks: - Canadian banks have been overly beaten up in the last couple of weeks. They start reporting earnings later this week and he expects very good earnings and a good outlook going forward. Good biting opportunity. Canadian Imperial (CM-T) looks like it has the greatest upside from this point.

Oil: - Very bullish on commodities, particularly oil. There is no substitute for oil. A substitute would have to be cheaper and offer better functionality. Base metals and oil are levered to world economic growth. Although he thinks the market will get weaker, he expects oil to go higher. Looking for $75-$80 by year-end and outward from there.

Gold: - The whole complex is okay now because it has been so damaging to a lot of gold bugs and a lot of the excitement is all about. Gold was one of the best performers last week.

Buyer asked what he should put money into, if the money market funds are in such a bad state. Suggested a T-Bill fund.

The market is in a panic right now, however if you have picked quality stocks, you don't need to panic. If you have a short term view you will panic, but if you have the long term view then this is a buying opportunity.

Natural Gas: - Just finishing the period where gas is used for air conditioning. Hurricane season follows and lasts for a couple of months. Strong hurricanes could put the price up to $8. Sept., Oct. Nov. and into winter there is a shoulder season where demand is less than the supply. If inventories are in good shape, there may be sloppy prices before we get into winter. Lack of drilling could help create a shortage.

5 major banks - You either Buy at this point or Hold. You will have terrific dividend growth over the years. Looking at Sept/08 earnings, presuming there are no massive write offs, the P/E’s could be anywhere from 10.5 to 12 based on Oct/08 earnings. His favourites are the Commerce (CM–T) and Toronto Dominion (TD-T) and is looking at Bank of Montreal (BMO-T).

Gold:- Likes the outlook. The price is moving in the short term with other commodities, which have been correcting. With a slowing of the US economy, their government may have to lower interest rates, which should be positive for gold.

Financials – Currently there are ripples of discomfort due to the correction and worries because of the sub primes. However, in the long term they are safe. There has been general erosion, which may continue for a while.

Banks - Some opportunities if you don't have a good position. Have far less sub prime exposure than the US banks. Her 2 favourites are Bank of Nova Scotia (BNS-T) and Toronto Dominion (TD-T). Royal Bank (RY-T) would be her 3rd. Lots of rumours on Canadian Imperial (CM-T) on their exposure to sub primes, so be a little cautious.

Gold - The instability in the market created a flight to quality rather than to golds. If the US$ is going to decline appreciably over the next few months or years, gold is likely to rise. She doesn't invest in gold stocks because it is very difficult to forecast gold prices.

Should know this week whether the market is going to go lower or not. Using the S&P weekly charts, draw a trend line across the bottom and another one across the top. The S&P is right at its support level now. If this is violated, the next target is the February low of 1365, so we have to hold at the current level. The Dow and the Transports must hold this week.

All model prices on financials have been eroding significantly. Interest rates will go up. In general, financials in Canada are in for a tough time.

BCE bonds maturing in 2014 are down 10%. If you are a long-term investor, they will mature and they will not default on them. The fundamentals of BCE are good.

Canada Mortgage Backed Securities STST issued in 2003-CC1 maturing 1/12/13 at 5.33%. Yielding about .65 of 1% more than a government of Canada Bond. AAA rated. 45% is retail property. A good time to purchase.