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

Canadian perpetual preferred shares vs. rate-reset preferreds We're seeing trough interest rates now--they won't get lower than this. The rate-reset preferreds are benchmarked a 5-year government of Canada bond, sitting around 2.6%. If that moves up, it will benefit the rate-resets. In a portfolio of preferreds, he looks for reset issues that have a high reset spread, north of 350 basis points; abd a reset expiry of 3-4-years which gives time for interest rates to rise. Also, wait for new issues.

The Bank of Canada held interest rates and adopted a dovish tone today vs. a year ago when it sounded more aggressive. The rates won't go anywhere and the BOC will be cautious in tone. He's more positive on the US dollar. The rally's been great, but be cautious about the Canadian market. We had a really tough Q4, then up 19% from Xmas Eve to yesterday. There are reasons to be bullish and bearish, evenly mixed. Ultimately, Trump wants to see better markets and trade will be very big in this, including signing NAFTA and signing a deal with China. Wait and see how things shake out and don't take the wrong risk.

A senior wants to increase US dollar content in an RRSP, given Trump's decisions. Yes, beneficial to do this, to diversify. As a snowbird, you're probably going back and forth to the U.S., so holding more USD makes sense. But be really cautious in handicapping political outcomes, especially with Trump who is unpredicatable and keeps people off-balance. We are in the end of cycle, remember. There's a lot happening in trade, so see how that shakes out. He likes the software and services space. Energy is still shaky. Fintech is good. Don't go broad basket and be ready to exit if the wheels fall off (i.e. something wrong happens in trade).

PDAC, Toronto's major minerals conference happening now, is less busy this year because the show is charging investors to walk to the trade show floor and hitting booth traffic. The Barrick/Newmont/Goldcorp hostile takeover: there's a drive in this space to be bigger and relevant. Newmont would take on a lot of debt from Goldcorp, so there will be divestitures. The mid-tiers will watch the fall-out from the Newmont-Goldcorp deal if it happens. Brent Cook: It's musical chairs now with all the M&As, but this will slow down exploration in this sector and not add any new ounces to production profiles--that's a problem. Discoveries have been decreasing steadily since 2000. He's not sure what the mid-tiers will do in M&A this year.

Gold outlook Gold was oversold in mid-August, then overbought then back to oversold. Higher lows is a positive. When the market goes to pot, then people move to the US dollar again but that depresses gold. Brent Cook: It's all about the US dollar which is rolling over. The US has alienated allies. Foreign countries are buying fewer US bonds. He expects gold to rise in the next few years.

Market Outlook - The climate among old-timers in the industry is of cautious optimism. The companies that are doing well are getting noticed and funded and the others don't. The industry needs more mergers and acquisitions. Administrative expenses should come down. The major themes he sees now are M&A among companies intelligently valued. The second part of the M&A wave is the spin off of smaller companies that aren't important for the majors but are important for the juniors. The second theme is the royalties and streaming business. The third one is exploration. We haven't had an exploration cycle in the last 20 years, It is a lonely space though. The economic difficulties we are having at the moment are good for gold. The US dollar does well only in comparison to other fiat currency. He is a gold bull. He feels good in general in regards to precious metals.

Where uranium is going? Not for an impatient investor. The industry is making uranium for $60 / pound and sell it for $30 / pound. Either the lights go off or the uranium price goes up to the cost of production. He thinks that the scenario where the prices will go up is more likely. He loves this situations because it creates opportunity. There is significant upside based on past experience.

How much gold should you have in a portfolio? A little bit of gold goes a long way. You hold it as insurance. For most people should be 10%. The problem is that most people that subscribe to the narrative they over invest in gold.

Market. The US and China are in the final stage of negotiating a deal that could be announced later this month. He thinks we will see this every Monday morning. There is no new news here. It is mostly priced into the market, if not entirely. We will probably see a sell into the news. The Fed may be trying to engineer a soft landing but if Trump had his way they would never raise rates again. The Fed has said they would be willing to watch inflation emerge for a while longer but Larry thinks this is not a good thing.

Markets. He is cautious for a pull back. He thinks the bear market will play out. This is not a good time to put new money to work. He is more constructive on the Euro in the short term.

US Long Bonds. He is just starting to increase exposure to US long bonds. ZTL-T is a Canadian equivalent. US treasuries.

Educational Segment. The Global Base Metals Sector. XME-T is the ETF that has been around the longest to play a global basket of mining stocks. There is Iron/Steel, Mining and Coal parts of this ETF. He is not sure this is where to invest but it is a place to trade for weeks or months. It is driven by global growth and what is going on in emerging markets. The sector is out of favour when emerging markets are flat. There are short term positives on emerging markets. He does not think coal is coming back.

Market. NMC-T is saying the ABX-T offer is just not good enough. It wants to stick with the plan with G-T to put together a joint venture for the Nevada assets which is really what ABX-T was after. There is key resistance at $1175 in gold. Over the last 6 months we were bottoming in August and have gathered steam ever since. Shorts scrambled to cover their positions. To go above neutral into bullish we have to get above $1375 and are due for a pullback.

Dividend Gold companies to consider. Dividends on a resource company are hard to maintain through a commodity cycle. He would look at a royalty company.

The S&P ranged 50 volatile points today alone till it settled at 2,792. Not surprising that the market came off like this, but it is surprising that it bounced back. The S&P has run from 2,350 to 2,800 in the past few months. Last fall, 2,800 was a support level on the way down, so now it's a major level of resistance--and it appears to have hit resistance today. Volatility is here to stay in the latter stages of this secular bull market. Given volatility, he's sold some stocks to buy ETFs for their diversification and flexibility. He holds 51% cash, but still holds the BOTZ and KWEB ETFs.... Huawei is suing the Canadian and US governments: Huawei is the battle, but the trade treaty is the war. He expects a US-China deal, but that will only be the beginning. After that treaty, both sides will be monitoring each other to enforce the agreement. Trade tensions will continue, and then the US has to agree on a trade pact with Europe.