Michael Smedley, Chief Portfolio Manager, Morgan Meighen & Associates

FOCUS: Canadian Equities

Market Outlook: Gold has turned once again into the main market obsession with even the generally quite sluggish major gold groups moving up. This should continue with corrections through the summer and beyond. Unfortunately, sensible portfolios will continue to be afflicted by erosion in the banking stocks which has turned into a troubled group globally. Also unfortunate is what I see as a chronic state of crisis in European financial systems and in the uprisings against dictatorships in the Middle East. Investors in Canada will continue to be relatively well off and will just have to be patient and hold on for the air to clear as we get used to the higher debt ceiling in the U.S. There is little point in exiting all good companies, all good dividend payers and then missing the inevitable recovery longer term.

TOP PICKS:

• Wi-LAN (WIN TSX) Took advantage of the price set back this morning on a minor patent dispute in the courts and bought at $8. Yesterday I added to it at $9.40. I have bought around $6.
  Key stock in the patents infringement business highlighted by the $4.9 billion Nortel patents sale. The company is looking at the 10 times earnings level next year and spicy prospects from its unusual file of new generation 4g/LTE technologies, the patents that Google does not have and the Nortel patents buyers
• Karnalyte Resources (KNR TSX) Bought in January at $11.45.
  Karnalyte is one of the juniors in the ranks of the potash companies along the TransCanada Highway and rails in the main mining area of Saskatchewan. It is headed for solution mining and run, and is heavily-owned by one of the best teams in the business; advanced in its development and a timely subject today because of the good quarterly reports out of the majors.
• TMX Group (X TSX) Last bought in May at $43.38.
  Would you believe, steady as she goes while the Maple Group struggle and bid terms drag on. Downside isif the Competition Bureau demolishes the deal but the worst fall back is a good exchange business, great dividends, perhaps rising and perhaps with extras; feels better than the banks right now.