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

Had an intermediate cycle bottom in July and we are in a rotational bear. An official bear is not here until most of the subgroups have violated the July lows, so technically it is still a bull market. Major trend lines have not been broken. However, we might have had the first Down leg, but won’t know for sure until the bear is violated. The average investor should just stay long, grin and bear it. Thinks it will go higher through the fall. See what happens when we get there.

Unsecured REIT bonds. Retail investor doesn't often get a chance and this is one of the last cheap bonds out there. Whether it’s Summit (SMU.UN-T), RioCan (REI.UN-T) or Boardwalk (BEI.UN-T), they all issue bonds. They are considered investment grade. You can get them 1%, 1.5% over Government of Canada's.

Government of Canada 2029 bonds. Thinks that deflation is more of an issue than inflation and longed maturity bonds will outperform. Caveat. They have a volatility to them and can be up or down 10%.

Government of Canada 10-Year Bonds. Interest rates have peaked and are probably going to weaken, especially as the economy itself has peaked and will weaken. These yield about 4.4%. Gives good diversification in your portfolio. As interest rates come off, you will make a capital gain as well.

Fairly good environment for gold however, the trading pattern of gold for the last 12 months has had an enormous amount of institutional money investing in hard assets (metal) as a hedge against the US$. Copper, zinc and nickel doubled. Gold went up about 55%. Concerned about base metals, because if the economy is moderating it will mean lower demand for base metals. Question; If metals drop, will gold be dragged down as it was dragged up with base metals?The other side of the story is if there is pressure on the US$ and it drops, everything priced in US$ goes up and gold could go up. He believes in the latter.

(A Top Pick on Apr 4/06 was Government of Canada 5.75% Bond 2029. This is again a Top Pick.)

Tonight's talk was on hedge "Funds" which are not traded on the North Anerican Exchanges, so there are no stocks to show. Sorry!

His market risk and sector risk models are both negative. Went back to the bull market in commodities in the late 70’s and looked at what happened through that period. There were a number of significant corrections, similar to the ones that we've been going through in the last month. You have to be prepared for 25/50% corrections in the biggest stocks. It may be that the bull market continues and we go on to higher highs as it did back then. If we continue to be in a secular bull market, the stocks should come back into the area were they should hold and then should be able to rally from there. You have to decide if you want to bet that this is a bottom or see if it holds and be prepared to pay a little higher price.

Chose a 2029 5.75% Canada Bond as his 3rd Top Pick. Has had an equity like return. Believes that real rates are dropping. Expects there will be a slowdown or recession in the US and that will give bonds a tremendous bid.

Royal Bank of Scotland is not listed on North American exchanges. Trades at 10 X earnings. 4.5% yield. 18% ROE. Have announced they are going to buyback shares.

MacQuarie Bank is an Australian bank. The symbol is MQBKY-N, but is not registered under globeinvestor.com but can be purchased from the Sydney Exchange. Gives exposure to the Australian economy where the market has done nothing for the last 2 years but is starting to wake up. Involved in infrastructure deals.

Paul's 3 Top Picks include Royal Bank Of Scotland which is not listed on the North American exchanges, REIT Bonds and a Government of Canada 5.75% Bond 2029.

Is bullish on silver stocks and is waiting for the ETF on them.

He is bullish on Oil and gas because of the depletion of oil and exploration. He predicts that oil prices will be at the $50 to $60 level, but there will be short term volatility where the prices could go from $50 to $125. He believes oil production has peaked. He also said we will never run out of oil, but the price of oil will increase as the supply decreases. Boom times in Canada, it will be a large run because of the oil sands and reserves. He believes that the Canadian based oil sands will be the largest in the world. For natural gas his forcast will see gas around $7 to $10. Again we could see short term volatility from a day to a week depending on circumstances (eg, hurricanes) Weather was mild in January so now we have extra gas in storage. This time of year prices go down as the heating season comes to the end. It's a buying opportunity for natural gas. Service Sector- He believes the service sector represents an attractive sector to invest in for the long term. As we go after lower and lower grades of gas, we are going to have continually increasing inputs of technology, equipment, investment, manpower per barrel and cubic feet recovered. So there is a real basis of service income and profitability to occur. His investments are mostly weighted to the energy service sector.

White Rock is a very new REIT. They have 220 million in assets, 19 holdings. Stable income flow , a little too much debt. 78% of their leases are government. Good stable base with long term leases with the government, in good buildings and capital cities.