November 6, 2012 Newsletter

Dear Friends,

Tangents:

Our Lives Are Marked by Trees

-by Laura Sharp Wilson

As a child, I remember a chestnut tree, during fall, littered below with yellow leaves and the prickly green chestnut shells.  My best friend and I would scurry under, obsessively stomping the shells to scoop out the glorious smooth, brown chestnut within.

During the early years of my marriage, there was a black locust tree that loomed over our hilltop backyard in western Maryland.  I was so happy to see that huge dark, gnarly tree every morning.

A divine hundred-year old Gravenstein apple tree graced our backyard in Olympia, Washington.  In the spring its profusion of white blossoms made me feel like I had died and gone to heaven.  In late summer the bounty of apples were made into applesauce, composted, or given to neighbors and the local food bank.  We recently moved away from that house, and I really miss that tree.

I think of a the tree in Kalaloch, Washington, that straddles a stream running to the ocean.  The rush of water created an empty space under the roots, and the tree appeared to hover across the small river.  On a recent stop in the sleepy town of Heber City, Utah, I saw the largest willow tree.  Planted on  a small front yard, it was like an explosion.  I am thankful for the fluttering aspens that block the view of the parking lot across the street from my current home in Salt Lake City.

As I am marked by the living, I am marked by the ghosts of trees.  I imagine what once was on the field of cement behind a local school.  The clear-cuts that appear repeatedly on the drive to Olympic National Park are wearisome.  The logging trucks that rattle down the highways of the Pacific Northwest do not simply transport a load, but a bounty of old souls. –from Speak for the Trees, Andria Friesen.

Trees serve as homes for visiting devas who do not manifest in earthly bodies, but live in the fibers of the trunks and larger branches of the trees, feed from the leaves and communicate through the tree itself.  Some are permanently stationed as guardians of sacred places.  –Hindu Reva Shastra.

On this day in 2001, Michael Bloomberg was elected mayor of New York City. -Steven Russolillo, WSJ, 11/06/2012.

And also on this day in…

1812 – The first winter snow falls on the French Army as Napoleon Bonaparte retreats from Moscow.

1814 – Adolphe Sax, saxophone inventor, was born.

1860 – Abraham Lincoln is elected 16th President of the United States.

1917 – British victory at Passchendaele.

1946 – Sally Field, actor was born.

1962 – U.S. condemns Apartheid.

One thing you can’t recycle is wasted time.

photos of the day

November 6, 2012

A couple stroll past autumnal trees on a sunny autumn afternoon in a park in Vienna.

Heinz-Peter Bader/Reuters

A shopper shows off South Africa’s new banknotes, which features an image of former president Nelson Mandela on the front and images of the country’s ‘Big Five’ wild animals on the reverse, as they go into official circulation in Pretoria, South Africa.

Siphiwe Sibeko/Reuters

Market Closes for November 6th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Nov. 6 (Bloomberg) — Canadian stocks advanced, halting a two-day slump, as commodities gained and U.S. voters headed to the polls to elect a president.

Imperial Oil Ltd. rose 1.1 percent as one of its refineries resumed normal operations following maintenance. Atlantic Power Corp. slumped 11 percent after reporting a wider third-quarter loss than estimated.

The Standard & Poor’s/TSX Composite Index rose 8.42 points, or 0.1 percent, to 12,361.20 in Toronto. The benchmark Canadian equity gauge is up 3.4 percent this year.

“It’s the pause before the U.S. election,” said Robert Sneddon, president of Castlemoore Inc. in Oakville, Ontario.

“Whether Romney wins or Obama wins, people are realizing it’s going to be a slow-growth environment. The leader is going to be leading with a slow pace. The market has its trajectory and today is a detour on the way.”

U.S. voters today will choose between incumbent Barack Obama and Republican challenger Mitt Romney for their next president. The winner will face a so-called fiscal cliff of $607 billion in automatic tax increases and spending cuts scheduled to take effect at the beginning of 2013 unless Congress can reach a budget compromise.

Raw materials companies led gains on the S&P/TSX Materials Index, rising 1 percent as gold, crude and copper advanced.

Barrick Gold Corp. advanced 0.8 percent to C$35.28 and Yamana Gold Inc. increased 2.7 percent to C$19.57 as the price of the metal rose the most in almost two months. Gold for December delivery added 1.9 percent to settle at $1,715 an ounce in New York.

Teck Resources Ltd., Canada’s largest integrated miner, added 2 percent to C$33.53. Copper for December delivery posted the biggest gain in almost three weeks, adding 1 percent to settle at $3.506 a pound in New York.

Imperial Oil climbed 1.1 percent to C$45.91 after the company reported its Strathcona refinery is working normally after undergoing maintenance.

Canadian Natural Resources Ltd. rose 1.1 percent to C$30.20 as crude climbed amid forecasts U.S. gasoline supplies dropped after Hurricane Sandy. Crude for December delivery rose 3.6 percent to settle at $88.71 a barrel in New York, a two-week high.

Atlantic Power, which holds indirect interests in power plants in the U.S., tumbled 11 percent to C$13.20, for its biggest loss since November 2008. In its third-quarter results yesterday, the company reiterated that its Auburndale and Lake plants will remain weak after power purchase agreements expire in 2013.

Jeremy Rosenfield, analyst with Desjardins Capital Markets, cut his rating on Atlantic Power to hold from buy while lowering his price target to C$16 from C$17.50.

“The shares are likely to remain range-bound in the near term until the company can fully elaborate on the next steps for its Auburndale and Lake assets,” he said in a note to clients.

Penn West Petroleum Ltd. fell 3.5 percent to C$11.19, the lowest in more than three years, after announcing the departure of four executives. Chief Operating Officer Hilary Foulkes, Senior Vice President Thane Jensen and two other vice presidents have left, effective immediately, the company said.

Petaquilla Minerals Ltd., the operator of a gold mine in Panama, plunged 23 percent to 50 Canadian cents for its biggest loss since 2003, after Inmet Mining Corp. said its C$148.4 million ($149.2 million) offer for the company has expired.

US

By Rita Nazareth and Adria Cimino

Nov. 6 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second straight day, as American voters went to the polls to pick a president.

Hewlett-Packard Co. and United Technologies Corp. added at least 2.6 percent to pace gains among the biggest companies.

Computer Sciences Corp., the manager of networks for NASA, surged 17 percent as a cost-cutting program helped boost its profit forecast. Express Scripts Holding Co., the largest U.S. pharmacy benefits manager, plunged 12 percent after saying analysts’ profit estimates for 2013 were “overly aggressive.”

The S&P 500 rose 0.8 percent to 1,428.39 at 4 p.m. in New York. The Dow Jones Industrial Average added 133.24 points, or 1 percent, to 13,245.68. Volume for exchange-listed stocks in the U.S. was 5.9 billion shares, or about in line with the three- month average, according to data compiled by Bloomberg.

“We’re moving closer to a definition on the election front,” said Mark Luschini, who helps manage $54 billion as chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC. “It’s offering investors reason to say: we move from the unknown category regardless of the outcome.”

U.S. voters decide today between giving President Barack Obama another four years in office or replacing him with Republican challenger Mitt Romney. The next president will need to address a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in 2013 unless Congress can reach a budget compromise.

If history is any guide, today’s gain in stocks may be wiped out tomorrow. While the S&P 500 has risen an average 0.9 percent on presidential election days since 1984, the index had positive returns in only two of seven times on the following day, according to data compiled by Bespoke Investment Group. On average, the S&P 500 has declined 0.9 percent on the day after the polls, the data showed.

The options market is implying about a 2 percent move up or down in the S&P 500 over the next four trading days, according to Susquehanna Financial Group LLLP’s head of derivatives strategy Trevor Mottl. That’s equivalent to an even-odds range of 1,389 to 1,445 for the close on Nov. 9 based on options prices as of yesterday, he wrote today in a note to clients.

Nine out of 10 groups in the S&P 500 rose today as energy, financial and industrial shares gained more than 1 percent. The Morgan Stanley Cyclical Index of companies most-dependent on economic growth increased 1.5 percent to the highest level since March. Hewlett-Packard rallied 2.8 percent to $14.40. United Technologies added 2.7 percent to $79.97.

Computer Sciences jumped 17 percent to $36.80. The company has cut jobs and worked to better manage its contracts, helping boost cash flow. Computer Sciences said today that it continues to reshuffle operations. That includes divesting “non-core assets such as a smaller business in Italy,” the company said.

Chipotle Mexican Grill Inc. added 5.5 percent to $279.69.

The burrito chain criticized by hedge fund manager David Einhorn was raised to buy from neutral at Bank of America Corp.

Lam Research Corp. gained 2.3 percent to $37.69. The chip- equipment company was raised to positive from neutral at Susquehanna Financial Group by equity analyst Mehdi Hosseini.

The 12-month share-price estimate is $48.

EOG Resources Inc. climbed 4.4 percent to $121.98. The largest oil producer in Texas’ Eagle Ford shale reported profit that exceeded estimates and boosted its output forecast.

Express Scripts plunged 12 percent to $55.15. A “weak business climate and the unemployment outlook” may lead to a loss of members, depressed drug utilization and “increased client demands and expectations,” Express Scripts said in a statement.

Vivus Inc. slumped 21 percent to $11.82. The maker of the recently approved obesity drug Qsymia reported a larger third- quarter loss than analysts expected. The company told investors today that some patients are abandoning prescriptions at the pharmacy on discovering they must pay a large portion of the cost out-of-pocket, Andrew Berens, senior health-care analyst with Bloomberg Industries, said in a telephone interview.

Fossil Inc. tumbled 10 percent to $84.24. The maker of the namesake watch brand reported sales that trailed analysts’ estimates.

THQ Inc. dropped 50 percent to $1.50. The money-losing video-game company posted a loss and announced it hired Centerview Partners LLC to evaluate its options and raise cash.

Zillow Inc. retreated 18 percent to $28.15. The operator of the largest real estate information website posted a record decline after forecasting fourth-quarter revenue that trailed analysts’ estimates.

The cost of health-care options jumped to a two-year high versus the rest of the U.S. equity market, pushed up by bets that a victory for Romney would endanger President Obama’s industry overhaul.

Implied volatility, a gauge of option prices, for contacts closest to the Health Care Select Sector SPDR Fund jumped 23 percent since hitting a low on Sept. 21 to 14.37 yesterday, according to three-month data compiled by Bloomberg. The measure reached its highest level since May 2010 relative to the SPDR S&P 500 ETF Trust two weeks ago. The U.S. exchange-traded fund, tracking companies such as Aetna Inc. and WellPoint Inc., has climbed 16 percent this year.

Romney has said he has the option of issuing waivers to states allowing them to get out of the Affordable Care Act’s requirements. The law, championed by Obama, is designed to expand insurance coverage to at least 30 million people. A repeal effort would confront hospitals and insurers that have already begun preparing for changes in the health-care system that mostly kick in by 2014.

The health-care ETF “will go up if Romney wins because the market considers him better for the sector,” Les Funtleyder, a fund manager focused on the health-care industry at New York- based Poliwogg, said yesterday in a phone interview. “If Obama wins, it’s going to be status quo.”

The Affordable Care Act marks the biggest change to the U.S. health system since Medicare and Medicaid were established in 1965. Romney said in June that he disagreed with the Supreme Court’s decision to uphold the constitutionality of the plan and that what the justices failed to do he would “do on my first day if elected president of the United States.”

Have a wonderful evening everyone.

Be magnificent!

Meditation can take place when you are sitting in a bus,

or walking in the woods full of light and shadows,

or listening to the singing of the birds,

or looking at the face of your wife or child.

Krishnamurti, 1895-1986

As ever,

Carolann

If your success is not on your own terms, if it

looks good to the world but does not feel good

in your heart, it is not success at all.

-Anna Quindlen, 1952-

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7