Vol. 75 - THE WISE MAN

Dear member,

First off, our staff would like to wish you all a very Happy Independence Day and a belated Happy Canada Day.

Unfortunately, it is getting harder to find reasons to celebrate after witnessing the Dow Jones officially drop into a bear market on Wednesday. The Dow Jones Industrial Average had fallen more than 20% since its high in October. The index gave way to a horrible jobs report, record oil prices, bank losses, rising inflation and a diminished consumer confidence rating. The TSX Composite came off 432 points (a whopping 3%) on Wednesday, its worst single day decline in months. The major sell off came along with the announcement that the US private sector slashed 79,000 jobs in the month of June. This is the highest decrease since November of 2002. This is a worrisome fact as we have long preached that the health of US economy and consumer is the lifeblood of our markets in North America.

The good news is that we're not alone and this week we've decided to shine light on a man who made much of his fortune during times when the market and society were in crisis.

The most successful and famous investor of all time, Mr. Warren Buffett, is very rarely looking at the market in dismay and even more rarely caught scratching his head. Mr. Buffett's Berkshire Hathaway Inc. has just posted their worst half in 18 years. Their stock has come down over 20% from a high of US$149,200.00 per share in December to close at US$116,700.00 per share Thursday. Berkshire shares have advanced in 17 of the last 20 years.

It is safe to say that if Warren Buffett isn't making money, not many are.

Here's a quick fact: In the second quarter of 2008, not a single company backed by venture capitalists has