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

Auto Sector: - A possible Chapter 11 in the making for both Ford (F-N) and General Motors (GM-N). They have to get rid of their pension and medical liabilities.

Auto Sector: - Owns General Motors (GM-N). They are making a lot of tough decisions and getting their act together.

Natural Gas: - Everyone is negative on natural gas and prefers oil. This commodity is very levered towards natural disasters and is not politically sensitive like oil. Likes the sector.

Natural Gas: - Has been lightening up on this, although value in these stocks is coming along. There will be a staggering good buying opportunity. A little bit too early.

Averaging Down: - He will average Down on a stock that has dropped but he thinks is still good.

Averaging Down: - Never average Down on a losing position. Don't throw good money after bad. A terrible way to invest.

Likes the i shares and its sector. When you are in a volatile sector, this is probably a good choice. Had a rally, pulled back and thinks there’s another advance to come.

Massmart Holdings, a South African stock under the symbol ofMSM-SJ. Large retailer which includes food stores, etc. South Africa and is a leading exporter to the rest of Africa. 4% yield. 20% increase in earnings.

Macquarie Bank is an Australian investment bank listed on the Australian exchange under MBL-ASX. Stock has gone virtually sideways over the last 52 weeks which he likes allowing him to accumulate more.

2 of his Top Picks include Ford Bonds maturing March/08 and Government of Canada 5.75% Bond 2029.

Concerned about gas prices. Had a slight rebound in the summertime reflecting the 2 first time withdrawals during the summer months to use for cooling. Have very full inventories, 3 months of a shoulder season between winter and summer when temperatures are comfortable, so gas consumption will be very low. Will run out of storage space, and when that happens, there will be some softness in gas prices. This will be a buying opportunity and, over the long run, he is very bullish on gas.

A general comment on oil. Because China and India are coming to the point of becoming self-sustaining and are having a significant impact on the commodity price as well as geopolitical risk, oil prices will stay higher than people have been accustomed to. $85 oil is a possibility later in the year. Oil prices have been stuck around $70 for a year and a deterioration of corporate profit growth has started in the energy area. A little concerned that the profitability of the energy sector is not as strong as it was.

Believes we are only 60% through the economic and equity cycles. Doesn't think the Fed will be forced to intentionally cause a recession before 2009/2010.

Usually, when companies are trading below 5 X price to cash flow, it's a signal to buy. When trading at 10 X price to cash flow, that is a signal to sell.

We are near the top in the metals cycle. There has been phenomenal economic growth in North America that has spread to Europe. During this period, there has been a displacement of manufacturing capacity to Asia. Commodity demand in Asia is “displacement demand” with products going back to North America. In spite of the fact that China is growing phenomenally and they have 4 times as many people, their economy is much smaller. Expansion may have already rolled over so there will be less demand for metals. He has sold all his base metal stocks.