Beware of Divergences!

Something has to give. With three weeks to go before quarter end, we may be at risk of a more difficult earnings confession season. These two measures can only diverge for so long.

Recent market behavior would suggest that analysts may be clinging to overly optimisitc expectations. Weakness in energy, metals, semiconductors, machinery, and economically sensitive Aussi and Cdn dollars is telegraphing a belief that risks are rising. Complacency is the enemy of investment success. We have to understand the message that the market is sending and pay attention.

When consensus says one thing and the market says the other, the market generally gets it right.

Barometer Readings - June 1, 2011

We continue to experience broad based rotation across asset classes into stable yield generating securities which include high dividend paying common stocks, REIT's, High Yield Bonds and virtually all fixed income including government debt. The Barometer team believes that our investors are best compensated with the generous spreads in the Canadian high yield bond market and common equity that has a record of raising dividends and stable cash flow yield.




Barometer Capital Management's broad cross section of equity risk indicators continue to point toward consolidation. When coupled with a steady stream of weakening economic indicators, our process dictates we remain focused in market leading themes which include defensive sectors, dividend paying equities and an elevated cash position.



Please find enclosed this week's Private Pool Holdings, as of May 30, 2011.

We continue to experience broad based rotation across asset classes into stable yield generating securities which include high dividend paying common stocks, REIT's, High Yield Bonds and virtually all fixed income including government debt. The Barometer team believes that our investors are best compensated with the generous spreads in the Canadian high yield bond market and common equity that has a record of raising dividends and stable cash flow yield.




Barometer Capital Management's broad cross section of equity risk indicators continue to point toward consolidation. When coupled with a steady stream of weakening economic indicators, our process dictates we remain focused in market leading themes which include defensive sectors, dividend paying equities and an elevated cash position.



Please find enclosed this week's Private Pool Holdings, as of May 30, 2011.

http://bit.ly/kMUVdP