BUY ON WEAKNESS

Tough to find an attractive entry point. Organic growth as well as tuck in acquisitions. Thinks eventually it could get taken out.

WEAK BUY

They have changed their strategy over the last couple of years. Now they are making large acquisitions of portfolios and you get the good, the bad and the ugly.

WEAK BUY

Believes dividend is sustainable. Likes that it is an ag-related name.

DON'T BUY

He has shorted it many times and made a fair amount of money.

TOP PICK

Short. Just came out with Q2 earnings. It reinforced his thesis on the stock. They are in the process of repairing the balance sheet and sold the most stable part of their business. Cut their dividend 40% in the last 18 months. 8.5% yield and 112% payout ratio even after the cut.

TOP PICK

Long FRU-T and Short PSK-T. Thinks PSK is overvalued. Likes both businesses. They are efficient, just collecting a royalty. When FRU gets closer to PSK in terms of PE, cover the short.

TOP PICK

Great long term hold. Indirect play on pipelines. Doesn’t know who builds the next one, but SCL will be in the middle of it. At the end of the day, someone will take this one out. Stock came down this year because it had such a great year last year.

N/A

Golds. History has shown that gold stocks are stocks, so as stocks decline, gold stocks will decline as well. Looking into the intermediate longer-term, it will be a function of why a correction occurred in the broad market. If a correction occurs in the broad market as a consequence of market nervousness about the euro or the dollar, that could theoretically be very good for gold. Conversely if there is a global liquidity crunch, it would probably be bad for all asset classes. With the situation in the Ukraine, sabre rattling has generally been good for gold. Gold can tend to act as catastrophe insurance. As an American, he juxtaposes gold against what he calls anti-gold, which is the US 10 year treasury. Thinks the US treasury has had a spectacular run. Believes the underlying premise of the U.S. Treasury, paying 2.7%, in a world where it feels like purchasing power is depreciating at 5% compounded, suggests that the promise behind the U.S. Treasury is that they will take 2.3% of his wealth, guaranteed every year, for 10 years. Looking at this, he feels that gold is very cheap, or conversely that the US 10 year treasury, i.e. the US$, is very expensive.

N/A

Ring of Fire. Are any of the companies in this area in North Western Ontario of interest? They are. He hasn’t played the game yet because the exit of Cliffs as a consequence of their exit strategy, means that the area is going to be under funded for 1-1.5 years. He will be very interested in that area, but it is probably a year too early.

COMMENT

The ``prospect generator`` business model to him is the only part of the exploration sector that makes any mathematical sense. He is a very large shareholder of this company, and has an extremely high regard for management.

N/A

Prospect Generators. With this, you are investing in process. You are buying a portfolio of them because you are going to participate in discoveries. Statistically it is the best chance to participate in a discovery. Which name is going to work? He doesn’t know. When is it going to work? He doesn’t know. What he does know is that if you have a group of 5 to 7 Prospect Generators, you will participate in a large discovery. The probabilities of that are better than any other probabilities in exploration financing in Canada or any other country.

COMMENT

This is a controversial name, but he thinks they have executed fairly well. He would suggest that it is low risk, and he wouldn’t describe it as a pick for a portfolio if he didn’t know the investor very well. This is not for the faint of heart.

COMMENT

An absolutely top quality team. First-class implementers. Stock has had a reasonably good run. It might be a safe place to hide out right now, but if you own it now, you need to be prepared to own it for awhile while it consolidates the gains that it has enjoyed, and while it puts the rest of the Elgin assets to account. 3% dividend yield.

COMMENT

High-quality deposit and very good grade. It’s going to make money. He would suggest that after a 100% run in 12 months, the stock needs to digest some gains. Looking out longer, it is going to be a bit gold price sensitive. It really depends on your patience and duration and your feeling towards the gold price.

N/A

Uranium. Expect you will have to be in the uranium business for 1.5 or 2 years to begin to see real dramatic increases in the spot and term market. Uranium equities are beginning to anticipate that so there has been strength in the uranium equities outpacing the strength in the uranium market.