EXTRA EDITION

The financial markets are troubled. So is this a good time to buy? It probably will be for some people, in some areas of the market.

It is not a buying opportunity for me. I am 65 years old. I can’t wait 20 years to come out of a deep trough. Neither can the profoundly injured wait years when they need a guaranteed cash flow to meet their daily needs.

As I dictate this on June 26, 2008, a blizzard of downgrades has created anxiety on equity markets around the world. General Motors Corp. (GM), the largest U.S. automaker, has traded at $11.21. Its share prices have not been this low since December 1974, when shares traded for $11.28. GM shares are now about 75% lower than its 52-week high of $43.20.

GM’s market capital is now at $6.5 billion. That is smaller than the Chinese internet-search company, Baidu.com. Canada’s Magna International Inc. sits at over $7 billion capital; also higher than General Motors.

A day when Goldman Sachs analysts downgraded to “sell”, shares of CitiGroup, the largest U.S. bank, is a day for increasing anxiety.

Where are we headed for the rest of 2008? It does not look good.

This “Extra” McKellar Minute was issued to remind all of us who deal with the profoundly injured that they have zero risk tolerance. I, frankly, grow weary of seeing rosy projections of equity markets which do nothing but go up smoothly. The reality is you cannot provide safe income streams from equities.

In September, there will be the usual McKellar Minute, dealing with the creative uses of guarantees.