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

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.

Uranium - A lot of uranium stocks look identical. Most of them are in a growth channel, and are currently at the top of it. Feels the bottom will slowly shrink and the stock will go sideways for a while and then walk back into the lower growth channel. Wouldn't be overweight in this. Use the Uranium Participation (U-T) as a guide. When it walks back into the trend line, then you could buy.

Banks - Every institution wants to own a bank and will be reluctant to sell their bank stocks unless they get really nervous. The Financial Services Group long-term chart shows the trend is still up. However, we are at the top of a growth channel indicating we are extended on this group. He does see some negative convergence, which he interprets as a correction down to the lower trend line.

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Longer term, energy is going to be in demand. There is severe depletion in the Canadian oil patch. Globally there are some areas of promising production, but overall demand is going up. Longer-term energy is a good place to be and if there is a cold snap, you are going to see hedge funds and day traders jumping in and you will see some spikes along the way. Right now is a good point to be biting your time and identifying the stocks you think are going to be attractive.

Income trusts is a dying asset class. Outside of real estate, it is eventually going to disappear, but that doesn't mean you can't find some opportunities in the structures that are left behind. They will continue to be priced on their ability to pay distributions on a discounted cash flow approach.

Diamonds: - The key to a lot of diamond exploration is to make sure there is enough cash for the exploration. You want to know the quality of the diamonds and the length of the pipe, what the exploration budget looks like. The real key is management and their experience.

TSX - Banking sector with energy and materials makes up the bulk of the exchange. His analysis shows a 8.8% return for 2007 making it $14,043.

Growth of “stateism” into the private energy enterprise sector is ominous for supplies of oil/gas outside North America. They will increasingly be looking to Canada, particularly the tar sands

For small cap golds, he recommends holding a basket of them, which is what he does in his fund. They are all risky.

Golds: - Had a severe pull back this year and a little one recently. Not a bad entry point.