CAN YOU GET “SKINNY” IN THE SUBWAY? WHILE YOU ARE WAITING CAN YOU GET “SKINNY” IN THE SUBWAY? NOT EXACTLY BUT CLOSE

EINSTEIN’S DESK ON THE DAY HE DIED

BIGFOOT INVESTMENTS - OPEN FORUM Jun 1, 2017 WELCOME! Volume #293

AGENDA WELCOME! ADMIN NOTES QUOTE OF THE DAY SWAPS AND SPREADS OPTIMISM GAUGE DIAGNOSTICS GAGE FED TRACKER JUNE PORTFOLIO CHANGES SUM AND SUBSTANCE HIGH IMPACT WEEKLY INTELLIGENCE GLOBAL PERSPECTIVE DAVID’S CORNER ADVISOR INPUT QUESTIONS/COMMENTS

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“QUOTE” OF THE DAY: A jackass can kick down a barn…. …But it takes a good carpenter to build one Sam Rayburn

A THOUGHT FOR THE DAY: Eight years into the recovery, it is important to recognize that financial conditions can change rapidly and bear special vigilance…. …Nonetheless, risks to the U.S. financial system do not appear to be flashing red in the way they did in the run-up to previous downturns. Lael Brainard (FOMC)

Optimism Gauge As of: 6/1/2017

>50-day MA/>100-Day MA Change Measuring Our Economy Last Update: 6/1/2017 Weekly Updates New Monthly Updates Indicator Current Value Prior/Metric Value St Louis Fed Financial Stress Index - 1.546 - 1.475 (Rev) +1.0 Chicago Fed National Act Index (3 Mon M/A) +0.23 +0.03 (Rev) +.50 Unemployment 4.4% (Apr) 4.5% (Mar) +2.00 Weekly Jobless Claims (4Wk Mov Av) 238,000 235,500 (Rev) -.50 ECRI Weekly Index (Against 52 Wk Av) 144.1 144.5 (Rev) Conf Board Leading Indicators (NEW) 126.9 126.5 University of Michigan Sentiment – Final 97.1 (Final – Apr 2017) 97.0 (Final – Apr 2017) Monthly Retail Sales – ex Autos (Adjusted) 377,805 (Apr -2017) 376,679 (Mar-2017) Rev NFIB Small Business Sentiment 104.5 (Apr -2017) 104.7 (Mar -2017) ISM Manufacturing 54.9 (Expansion Line = 50) 54.8 Economic Capacity Utilization 76.7% 76.1% (Rev) Stock Market Moving Averages Weekly Data Points >50-day MA/>100-Day MA N/A S&P Case-Shiller 20 City Comp Index (YoY) 5.9% (Mar) 5.9% (Feb) (Rev)

Economic Optimism Index Measuring our Economy 10 20 30 40 50 60 70 80 90 100 Economic Optimism Index Current: Prior: 92.41% READING AS OF: 6/1/2017 Current Reading: 92.41% Trend: Positive Prior Reading: 90.14 (Rev) Bias: Positive

Week of: May 29th, 2017 BigFoot Investments Market Diagnostics Week of: May 29th, 2017 BigFoot Investments

SENTIMENT INDICATORS Week of May 29th - 2017 1. AAII Investor Survey 2. TSP Sentiment Survey 3. NAAIM Survey of Manager Sentiment 4. CBOE Volatility Index INTERNAL INDICATORS 5. S&P500 - 50D MA and 200D MA AND 2/10 MA 6. NYSE Bullish % 7. S&P 500 Bullish % ($BPSPX) 8. Percent of NYSE stocks above 200DMA 9. Percent of NYSE stocks above 10WMA or 50DMA ($NYA50R) 10. NYSE 52-Week New Highs and New Lows 11. Percent of S&P500 stocks above 200DMA 12. Percent of S&P500 stocks above 50DMA ADDED INDICATORS 13. Option Sentiment 14. Option Buyers Sentiment Gauge (OBSG) 15. Consumer Sentiment Index 16. Nasdaq Sentiment Index 17. Rydex Nova/Ursa Sentiment Indicator

Week of May 29th, 2017 23.52% Prior: 29.41%

READY, SET …..HIKE! Williams San Francisco VOTING MEMBER MEMBER DISTRICT TOPIC LINK TO SOURCE Williams San Francisco Still believes a total of three rate hikes by the central bank this year Must improve productivity to grow http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2017/may/risk-resilience-sustainable-growth-us-monetary-policy-in-post-recovery-era/ Brainard BOG “Tentative progress we had seen on inflation may be slowing…may lead me to reassess the expected path of the federal funds rate in the future, although it is premature to make that call today.” https://www.federalreserve.gov/newsevents/speech/brainard20170530a.htm Kaplan Dallas two more interest-rate increases this year, acknowledges recent declines in U.S. core inflation. https://www.bloomberg.com/news/articles/2017-05-31/fed-s-kaplan-sticks-to-rate-forecast-despite-inflation-weakness Beige Book Powell U.S. economy was "healthy" and that the central bank should continue to edge toward a more normal footing after nearly a decade of crisis-era stimulus. https://www.federalreserve.gov/newsevents/speech/powell20170420a.htm

Consumer spending softened in many districts MORE OF THE SAME Most Districts reported that their economies continued to expand at a modest or moderate Auto sales down Consumer spending softened in many districts Moderate growth in manufacturing Residential and non-residential construction grew a moderate pace Lending tended to mirror the general activity of the economy Most Districts reported that firms expressed near-term positive outlooks But optimism waned somewhat in a few Districts Labor markets continue to tighten Modest increases in prices Low inventories for homes pushing prices Source: Beige Book

WELL, TAKE A GUESS AFTER JUNE 44.3% http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html Source: CME; Federal Reserve

Credit Anticipates-Equity Confirms Swaps and Spreads Rate Prior Current Status* Libor/OIS 0.27 0.29   Euribor/Eonia -0.036 -0.032 DTCC Repo - Agency Discontinued DTCC Repo - MBS 0.841 0.998 DTCC Repo – Treasury 0.991 High Yield 3.71 3.74 Fed Reserve Currency Swaps-Short 35 (ECB) 0 (BOJ) 40 (ECB) 1 (BOJ) Fed Reserve Currency Swaps-Long 2-Year Swap Spread 0.268 0.226 TED Spread 0.271 0.222 As of: 5/31/2017 COB *Note: Status = No major impact Status = Negative Impact Status = Moving Worse

JUNE HAS ARRIVED

June 2017 Stock Picks IN: GS OUT: CELG TOP 25 STOCKS June-17 RANK TICKER NAME SECTOR INDUSTRY 1 ULTA Ulta Beauty Inc 09 - Services 0963 - Retail (Specialty Non-Apparel) 2 GOOGL Alphabet Inc 10 - Technology 1018 - Computer Services 3 FB Facebook Inc 4 AMZN Amazon.com, Inc. 0948 - Retail (Catalog & Mail Order) 5 EW Edwards Lifesciences Corp 08 - Health Care 0812 - Medical Equipment & Supplies 6 BABA Alibaba Group Holding Ltd 7 AAPL Apple Inc. 1003 - Communications Equipment 8 V Visa Inc 0909 - Business Services 9 GD General Dynamics Corporation 02 - Capital Goods 0203 - Aerospace and Defense 10 DHI D.R. Horton, Inc. 0215 - Construction Services 11 USCR US Concrete Inc 0212 - Construction - Raw Materials 12 FDX FedEx Corporation 11 - Transportation 1103 - Air Courier 13 DAL Delta Air Lines, Inc. 1106 - Airline 14 HD Home Depot Inc 0960 - Retail (Home Improvement) 15 COST Costco Wholesale Corporation 16 WLK Westlake Chemical Corporation 01 - Basic Materials 0106 - Chemicals - Plastics and Rubbers 17 GS Goldman Sachs Group Inc 07 - Financial 0718 - Investment Services 18 DIS Walt Disney Co 0906 - Broadcasting & Cable TV 19 AGN Allergan plc 0803 - Biotechnology & Drugs 20 C Citigroup Inc 0727 - Regional Banks 21 XOM Exxon Mobil Corporation 06 - Energy 0609 - Oil & Gas Operations 22 DOW Dow Chemical Co 23 CBS CBS Corporation 24 BAC Bank of America Corp 25 ARNC Arconic Inc 0124 - Metal Mining As of May 30th, 2017- Subject to change.

Investment Style of the Portfolio TOP 25 STOCKS June-17 ULTIMATE SCREEN-BASED LIST RANK TICKER NAME Popular Value Growth Quality Sentiment 1 ULTA Ulta Beauty Inc #N/A YES 2 GOOGL Alphabet Inc 3 FB Facebook Inc 4 AMZN Amazon.com, Inc. 5 EW Edwards Lifesciences Corp 6 BABA Alibaba Group Holding Ltd 7 AAPL Apple Inc. 8 V Visa Inc 9 GD General Dynamics Corporation 10 DHI D.R. Horton, Inc. 11 USCR US Concrete Inc 12 FDX FedEx Corporation 13 DAL Delta Air Lines, Inc. 14 HD Home Depot Inc 15 COST Costco Wholesale Corporation 16 WLK Westlake Chemical Corporation 17 GS Goldman Sachs Group Inc 18 DIS Walt Disney Co 19 AGN Allergan plc 20 C Citigroup Inc 21 XOM Exxon Mobil Corporation 22 DOW Dow Chemical Co 23 CBS CBS Corporation 24 BAC Bank of America Corp 25 ARNC Arconic Inc As of May 30th, 2017. Subject to change.

Beta of the Portfolio – June 2017 RANK TICKER NAME SECTOR INDUSTRY BETA Weight Weighted Beta 1 ULTA Ulta Beauty Inc 09 - Services 0963 - Retail (Specialty Non-Apparel) 0.54 0.04 0.0216 2 GOOGL Alphabet Inc 10 - Technology 1018 - Computer Services 0.95 0.038 3 FB Facebook Inc 0.67 0.0268 4 AMZN Amazon.com, Inc. 0948 - Retail (Catalog & Mail Order) 1.48 0.0592 5 EW Edwards Lifesciences Corp 08 - Health Care 0812 - Medical Equipment & Supplies 0.66 0.0264 6 BABA Alibaba Group Holding Ltd 0.76 0.0304 7 AAPL Apple Inc. 1003 - Communications Equipment 1.21 0.0484 8 V Visa Inc 0909 - Business Services 0.97 0.0388 9 GD General Dynamics Corporation 02 - Capital Goods 0203 - Aerospace and Defense 0.73 0.0292 10 DHI D.R. Horton, Inc. 0215 - Construction Services 1.16 0.0464 11 USCR US Concrete Inc 0212 - Construction - Raw Materials 1.14 0.0456 12 FDX FedEx Corporation 11 - Transportation 1103 - Air Courier 13 DAL Delta Air Lines, Inc. 1106 - Airline 0.90 0.0360 14 HD Home Depot Inc 0960 - Retail (Home Improvement) 1.08 0.0432 15 COST Costco Wholesale Corporation 0.036 16 WLK Westlake Chemical Corporation 01 - Basic Materials 0106 - Chemicals - Plastics and Rubbers 1.68 0.0672 17 GS Goldman Sachs Group Inc 07 - Financial 0718 - Investment Services 1.51 0.0604 18 DIS Walt Disney Co 0906 - Broadcasting & Cable TV 1.19 0.0476 19 AGN Allergan plc 0803 - Biotechnology & Drugs 20 C Citigroup Inc 0727 - Regional Banks 1.62 0.0648 21 XOM Exxon Mobil Corporation 06 - Energy 0609 - Oil & Gas Operations 0.89 0.0356 22 DOW Dow Chemical Co 23 CBS CBS Corporation 1.60 0.064 24 BAC Bank of America Corp 1.35 0.054 25 ARNC Arconic Inc 0124 - Metal Mining 1.00 1.0960 For a Portfolio with 100% invested in Equity – Beta of Portfolio ≈ 1.0960

CHANGE IN BETA Jun-17 NEW GS 1.51 May-17 OLD CELG 1.78 AVG. BETA

June 2017 Growth Stock Picks GS As of May 30th, 2017. Subject to change.

June 2017 Growth Stock Picks As of May 30th, 2017- Subject to change.

June 2017 Growth Stock Picks As of May 30th, 2017- Subject to change.

June 2017 Growth Stock Picks As of May 30th, 2017- Subject to change.

June 2017 Growth Stock Picks As of May 30th, 2017- Subject to change.

June 2017 Growth Stock Picks As of May 30th, 2017- Subject to change.

GROWTH PORTFOLIO METRICS

PLANNING AHEAD

Target Allocation “All-In Growth”

Adding A Broad Market ETF

Adding Fixed Income Fixed Income: CRUMX and GIOAX

Adding Liquid Alts Liquid Alts: SDRIX – GATEX – QLEIX - JHEQX

Portfolio Construction Comparison 3 Year All-In Growth Adding ETF Adding Fixed Income Adding Liquid Alts Benchmark S&P 500 Standard Deviation 12.88 11.78 9.45 8.73 10.41 Mean 19.72 16.08 13.49 13.64 10.47 Sharpe Ratio 1.58 1.04 1.45 Alpha 6.68 4.12 3.83 4.63 - Beta 1.17 1.10 0.88 0.81 1.00 R-Squared 88.81 94.31 94.71 93.73

Dividend Picks 2nd Quarter 2017 As of: 6/1/2017 RANK # TICKER COMPANY Growth Score Yield Score Dividend Yield TOTAL SCORE Beta Rf* Rm CAPM 1 MIC Macquarie Infrastructure Corp 63.1667 95.00 6.79 79.08 0.88 0.73 0.7009 0.7044 2 VLO Valero Energy Corporation 58.8889 91.00 4.15 74.94 1.38 0.6898 3 RAI Reynolds American, Inc. 62.6667 87.00 3.06 74.83 0.39 0.7186 4 BGCP BGC Partners, Inc. 55.1667 94.00 6.13 74.58 1.32 0.6915 5 ENB Enbridge Inc (USA) 55.8889 5.82 73.44 0.63 0.7116 6 QCOM QUALCOMM, Inc. 56.1944 90.00 3.98 73.10 1.27 0.6930 7 LAZ Lazard Ltd 57.7500 88.00 3.68 72.88 1.93 0.6738 8 KKR KKR & Co. L.P. 56.9167 3.65 72.46 1.64 0.6822 9 CSCO Cisco Systems, Inc. 57.7222 3.66 72.36 1.40 0.6892 10 GIS General Mills, Inc. 57.3611 3.39 72.18 0.57 0.7134 11 ORI Old Republic International Cor 54.8056 89.00 3.89 71.90 1.11 0.6977 12 IP International Paper Co 54.3056 3.47 71.15 1.49 0.6866 13 GSK GlaxoSmithKline plc (ADR) 49.2500 93.00 4.49 71.13 0.98 0.7014 14 ABBV AbbVie Inc 49.5556 3.88 69.78 1.54 0.6851 15 IBM International Business Machine 52.8333 86.00 3.95 69.42 0.96 0.7020 16 MSFT Microsoft Corporation 57.1111 81.00 2.22 69.06 1.04 0.6997 17 KO The Coca-Cola Co 49.7222 3.26 68.86 0.67 0.7105 18 RDS.B Royal Dutch Shell plc (ADR) 41.4444 96.00 6.65 68.72 1.15 0.6965 19 INTC Intel Corporation 52.1944 85.00 3.01 68.60 1.01 0.7006 20 GM General Motors Company 45.1944 4.53 67.60 1.28 0.6927 21 WFC Wells Fargo & Co 53.1111 82.00 2.91 67.56 0.94 0.7026 22 JPM JPMorgan Chase & Co. 52.3056 78.00 2.38 65.15 1.44 0.6880 23 GE General Electric Company 43.1944 3.51 64.60 1.18 0.6956 24 WMT Wal-Mart Stores Inc 37.6667 2.61 61.33 0.11 0.7268 25 CS Credit Suisse Group AG (ADR) 24.5833 92.00 4.95 58.29 Rf Current Portfolio Yield: 4.001 0.6976% Per Month Treasury Bill Rate - 4 weeks 5/31/2017 CAPM of Portfolio 8.70% Annualized Current Portfolio Yield 4.00% * Growth and Yield Score based on 2Q/2017 Screening Expected return of the Portfolio 12.70%

SUM SUBSTANCE

WEEKLY MACRO DATA FOCUS ON THE DOT

THE BOTTOM LINE Growth PMI Data Sentiment Output Inflation Housing

BETTER…Q2 PRELUDE???? Capex, was revised up to an 11.4% annual rate from 9.4% PCE revised up to a 0.6% annual rate from 0.3% Government spending revised to a -1.1% annual rate from -1.7% Inventory investment was revised down to $4.3 billion from $10.3 billion, and subtracted 1.07 percentage points from growth versus -0.93 points originally Real final sales to domestic purchasers, which exclude inventories and net exports, were revised up to a 2.1% annual rate from 1.5% previously, indicating that final domestic demand remains stellar, despite softer headline real GDP growth Corporate profits from current production fell 1.9%, the most in five quarters Source: BEA

GROWTH ON THE HORIZON Source: Chicago Fed

THIS IS NOT GOOD…BUT THEN AGAIN IT’S THE CBO https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52370-budeconoutlook.pdf Source: CBO

UNIVERSITY OF MICHIGAN SENTIMENT TICKS UP 97.1 from 97.0 Source: University of Michigan

CONSUMERS SOMEWHAT LESS UPBEAT BUT OVERALL REMAIN OPTIMISTIC Source: Conference Board

EIGHT-MONTH LOW IN MAY – BUT STILL IN EXPANSION Source: Markit; Investing.com

UP FRACTIONALLY IN MAY Source: ISM; dShort

DOWN FOR THE FIRST TIME IN FIVE MONTHS (BETTER THAN FORECAST (-1.8%) Source: Census Bureau

INFLATION STILL MEANDERING – INCOME AND CONSUMPTION MOVE UP Source: BEA

HOME PRICES CONTINUED THEIR RISE ACROSS THE COUNTRY

NEW HOUSING TAKES A BREATHER Source: Census Bureau

……AND SO DO EXISTING HOME SALES Source: NAR

FIRST YEAR-OVER-YEAR DECLINE SINCE LAST DECEMBER “Double whammy: Inventory down 9.0 percent from a year ago and rapid price appreciation that's rising much faster than incomes” Source: NAR

BEST GUESS FOR NOW – BUT BETTER 3.8% Source: Atlanta Fed; New York Fed

INTELLIGENCE Cycle Volatility “Risk Factors”

EXPECT MORE VOLATILITY BUT DON’T PANIC…YET

WATCH THE “HIGH” SIDE

DEFAULTS IN THE OIL PATCH

SOME THOUGHTS ON RISK Source: Federal Reserve – Lael Brainard; SIFMA

OVERALL: DATA POINTS STATUS Comments Business Cycle Manufacturing Still expanding but late stage in some areas Manufacturing Expanding but showing some declines Housing Strong in pricing – Sales fall due to supply issues – overall good Production M/M weakness in durable goods output – looking for trend Growth GDP better but wait and see for second quarter. Signs good Inflation Weak Sentiment Some declines in signals but good for now Employment Tight market but strong Still in expansion but faltering

THE GLOBAL CHURN Eurozone China CRITERIA SCORE Deficient 0-1 Poor 2-4 Satisfactory 5-7 Good 8-9 Excellent 10

PMI DATA INDICATE THAT EUROZONE GROWTH 8.0 PMI DATA INDICATE THAT EUROZONE GROWTH REMAINED IMPRESSIVELY STRONG IN MAY

NOMINAL AND CORE BOTH DOWN 6.0 NOMINAL AND CORE BOTH DOWN 1.4% down from 1.4% Source: Eurostat

6.0 NOT TOO MUCH TO FRET

RENEWED DETERIORATION IN OPERATING CONDITIONS 4 RENEWED DETERIORATION IN OPERATING CONDITIONS Contraction 49.6 China General Manufacturing PMI fell 0.7 points to 49.6 in May, marking its first contraction in 11 months. “China’s manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory.”

0.250 0.250 U.S. Macro Last New

DAVID’S CORNER

ADVISOR INPUTS

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WHAT WE WOULD BUY AT THIS LEVEL REASON STRATEGY THOUGHTS