It’s a New Year and a chance to reflect on the year just passed. So I would like to start with an
observation.

The news environment last year was pretty ugly. If you had known at the beginning of 2011 that there
would be political turmoil and governments overthrown in the Middle East, starting with Egypt in
February, followed by an earthquake and tsunami in Japan that shut down manufacturing worldwide, a
series of failed attempts to resolve the sovereign debt problems in Europe leaving Greece teetering on
the verge of default, and a failure of the US Congress to deal with their budget deficit that resulted in the
U.S. credit rating being downgraded from “AAA”, how much would you have guessed the market would
have been down? 15%, maybe 20%? Without looking at the results it sure felt like the market was
down a lot. But the fact is, in the U.S. markets, the S&P 500 was essentially flat while the Dow Jones
finished up about 5%. It’s true that the TSX in Canada was down almost 12%, thanks mostly to the
resource sector which gave up some of its 2010 performance as it responded to the worldwide
economic slowdown.