OceanForest Investment Partners

Portfolio Managers Commentary – Q3 2010

A Case for Optimism

“I’m a huge bull on this country…we won’t have a double-dip recession. I see our businesses
coming back almost across the board….”

– Warren Buffett, Sept. 13, 2010

Many people are feeling downtrodden by the economy that has only been reinforced by
the negativity in the media. This past summer we saw investor and advisor sentiment
reach a level of extreme pessimism which usually tends to occur at important inflection
points in the markets.

Brent Woyat, CIM, CMT In this commentary I’d like to share my thoughts on today’s economic outlook, looking
Portfolio Manager beyond the headlines to bring you up to speed on the capital markets.

Suite 102-2168 Marine Drive First, a short summary of how the equity markets performed so far in 2010. The market
West Vancouver, BC activity during the three months ending September saw a continuation of the roller-coaster-
V7V 1K3 like turbulence of the past couple of years.

Tel: 604.921.9222 After a strong first quarter and a big pullback in the second quarter, July saw a strong
brent.woyat@raymondjames.ca recovery across the global markets.
WWW.OFIP.CA
This was followed by a weaker performance in August, while September (historically a
troublesome month for markets) actually saw a nice bounce back.

Here’s how the markets performed in the third quarter and so far this year.

Canada U.S. International

July 3.7% 6.9% 8.0%
August 1.7% -4.7% -3.9%
September 3.8% 8.8% 9.1%
3rd Quarter 9.2% 11.0% 13.2%
Year to Date 5.3% 2.3% 0.9%

Having a Balanced Perspective

One of the keys to success for investors is maintaining emotional equilibrium, preventing
the highs from being too high and the lows from being too low.

Today, many Americans and Canadians are overly pessimistic about the domestic and
global economies. Their mood is being driven by the daunting headlines regarding slow
economic growth, a depressed housing market, high unemployment, and deficit problems
within the U.S. and Europe—not to mention the political discord in Washington.

This pessimism is only being amplified by the media coverage given to voices of gloom
such as well known economist Nouriel Roubini, also known as “Dr. Doom” who keeps
calling for a double-dip recession. As a result, it’s easy to miss some of the good news
beyond the headlines.
 OceanForest Investment Partners
Portfolio Managers Commentary – Q3 2010

Beyond Short-Term Issues

That’s why a conference that took place in mid-September was important but overlooked. Speaking to 2,000 business and
political leaders at the Big Sky Conference in Montana, Warren Buffett, Microsoft’s Steve Balmer, and GE’s Jeff Immelt
provided a different perspective on the mid- and long-term positives for the United States and global economies.

Warren Buffett

“I’m a huge bull on this country…we won’t have a double-dip recession. I see our businesses coming back almost across the
board… It’s night and day from a year ago.”

“I’ve seen sentiment turn sour in the last three months or so, generally in the media. I don’t see that in our businesses. I see
we’re employing more people than a month ago, two months ago.”

“The things that worked for the country through a century of two world wars, a depression and more—all while increasing
the standard of living—will work again.”

Steve Ballmer, Microsoft

“There soon will be more technological advancement and invention than there was during the Internet era, and that will
help drive business growth.”

“I am very enthusiastic what the future holds for our industry and what our industry will mean for growth in other industries.”

“We will see new technologies that move beyond the Internet to tie together computers, phones, televisions, and data centers
to create amazing new products. And the pace of innovation will increase as technology makes workers more productive.”

Jeff Immelt, GE

“Angry political rhetoric is not helpful, and headlines are too focused on finding negative indicators.”

“Business at GE is improving. Signs across the world show growth improving, as evidenced by a rise in GE’s orders.”

“GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because
it is more competitive to do so.”

The Path Ahead

It’s of note that these positive and under-reported views are supported by recent research from McKinsey & Company,
today’s leading strategy consulting firm and the first place many Fortune 500 CEOs look for advice. McKinsey surveyed 2000
executives around the world in early September.

• 60% said their country’s economy is in recovery.

• Most expect profits to rise from last year.

• Nearly 40% expect to hire employees by the end of 2010.

It’s not realistic to suggest there won’t be challenges ahead, both for economies and stock markets across the globe. And given
fragile market psychology, it’s entirely possible that we’ll see a market correction in the next 12 months.
 OceanForest Investment Partners
Portfolio Managers Commentary – Q3 2010

At the same time, it’s my job to look at a broad range of credible points of view, not just those who shout the loudest or take
the most extreme positions. In doing that, I’ve concluded that it’s important to pay attention to the encouraging perspectives
from business leaders on the front lines.

Given the likely rise in profits reflected in the comments from Warren Buffett, Steve Ballmer, and Jeff Immelt, and by the
McKinsey research, I believe today’s pessimism is overdone and I remain positive on the long-term outlook for the global
economy.

That is why I am recommending that all my clients have their full target allocation to equities, reflecting their own personal
situations and strategies.

Many of my clients are already well positioned to benefit from rising profits. In other cases, however, concerns about the
economy have caused investors to make large allocations to cash and bonds. Our feeling is that the current yield you receive
on cash and bonds is about all one should expect in the coming year. Dividend paying stocks will likely provide the bulk of
the returns going forward.

Portfolio Strategy
In our previous commentary, we discussed the unsettling trend of government cutbacks and rising taxes. This trend is expected
to continue as governments are getting desperate to raise revenue in an effort to pay for the out of control deficit spending
that’s resulted in massive national debts. Debt levels have now reached crisis proportions in many countries around the world.

The mismanagement and corruption of government will lead to a shift in confidence from the public to the private sector.
We are seeing serious capital move on a global scale into private sector investments which means the demand for equities
will continue to grow.

Once capital stops flowing into government debt securities we expect to see a major trend change in interest rates as institutional
investors become impatient with extremely low rates of return on fixed income investments.

At the current juncture, markets are trying to tell us something critical. The markets are shifting into private hedge mode
against government incompetence.

Our feeling is that we are only half way through the current bull market that began in early 2009 as our Tactical Asset
Allocation Model continues to signal a full equity weighting within all of our mandates.

During the third quarter our most conservative Enhanced Income Portfolio returned 6.4%, year-to-date it’s up 8.7% and
11.4% over the past year. The current yield on this portfolio is 5.5%.

In our balanced Global Growth & Income Portfolio the third quarter return was 7.4%, year-to-date the gain is 7.2% and over
the past year the return was 11.0%. The current yield on this portfolio is 3.6%.

The all-equity Dividend Growth Portfolio had a strong quarter, up 12.2% with a year-to-date return of 9.4% and a one year
return of 12.6%. The overall portfolio yield is 2.1%.

Our U.S. dollar portfolios were not as strong as the Canadian Dollar portfolios. The Global Market Leaders Balanced
Portfolio mandate was up 5.8% in the third quarter. 3.6% year-to-date and 8.5% year-over-year. The portfolio yield is 3.3%.
 OceanForest Investment Partners
Portfolio Managers Commentary – Q3 2010

The all-equity Global Market Leaders Portfolio was up 5.3% in the quarter, down -3.2% year-to-date and down -3.3% in
the past year.

Highlighting some of our investment positions, we find that there were some pretty good gains across the board. A few of
the standouts within our five portfolio mandates include:

Valeant Pharmaceutical (formerly Biovail) was up 32% in the quarter, Toromont Industries gained almost 24%, SNC Lavalin
returned over 23%, Brookfield asset Management was up over 21% along with Shoppers Drug Mart.

Saputo saw a gain of just over 20% followed close behind by Shaw Communications which returned 19%. There were several
other positions that posted returns in the 15-20% range.

With interest rates moving lower we saw decent gains in our corporate bond positions and preferred shares.

Overall, we saw the majority of our investment positions moving in the right direction. We could see a near term pause or
a moderate correction, however we are optimistic that the bull market will continue as we are entering a period of strong
seasonality that should continue into next spring.

Once again, my thanks for the opportunity to work with you. As always, should you have any questions on this note or any
other matter, my team and I are always happy to take your calls.

Sincerely,

Brent Woyat, CIM, CMT

Portfolio Manager

OceanForest Investment Partners

November 4, 2010

The information contained in this report was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or
complete. This report is provided as a general source of information and should not be considered personal investment advice or solicitation to buy
or sell securities. The views expressed are those of the author and not necessarily those of Raymond James Ltd. Raymond James Ltd. is a Member
CIPF. Within the last 12 months, Raymond James Ltd. has undertaken an underwriting liability or has provided advice for a fee with respect to
the securities of Brookfield Asset Management and SNC-Lavalin.