1. The Power of High-Conviction Portfolios
August 2018
August 2018
September 2018

2. Wisdom
“Wide diversification is only required when investors do not understand what they are doing.” - Warren Buffett

3. Discussion Points
Concentration vs. diversification Active share defined Concentration, high active share, yet lower risk – so what? Introduction: Alta Select

4. Concentrated managers outperform diversified managers
Source: eVestment, Lazard, 15 year period ended December 2014

5. Higher concentration, better performance
Source: eVestment, Guardian Capital, 12/31/2017

6. Portfolios with high active share tend to outperform
Y-axis represents outperformance vs. the benchmark, before fees and expenses.
Source: Petajisto, For the 20 year period ended 2009

7. Higher active share, better performance
Source: eVestment, Guardian Capital, 12/31/2017

8. Rise in ‘Closet Indexing’
“Indexes & closet indexers represented 1% of funds in Today, nearly 45%! The rise of closet indexers as ‘active managers’ helps explain the common perception that most active managers tend to underperform.” - Lazard

9. Examples of “Diversification”
Vanguard Discretionary (VCR)
% of Portfolio
Amazon.com Inc
23.0
The Home Depot Inc
7.3
McDonald’s Corp
3.9
Nice Inc B
3.1
Booking Holdings Inc
Total Top 5
40.4
Other 365 holdings
59.6
Vanguard Healthcare (VHT)
% of Portfolio
Johnson & Johnson
8.8
United Health Group Inc
6.0
Phizer Inc
5.9
Merck & Co Inc
4.4
AbbVie Inc
3.4
Total Top 5
28.5
Other 369 holdings
71.5

10. Higher concentration, greater downside protection
Source: eVestment, Guardian Capital, 12/31/2017

11. Alta Select

12. Quality Defined
Profitability throughout the economic cycle Low earnings per share variability Secular earnings growth Deep competitive moat Financial flexibility Valuation consciousness

13. Holdings Industrials 4.2 Middleby Corp Health Care 12.3
CVS Health Corp
3.6
Novo-Nordisk
2.6
Thermo Fisher Scientific
6.1
Consumer Staples
4.1
Walgreens Boots Alliance
Consumer Discretionary
27.8
Booking Holdings
5.7
Dollar Tree Stores
4.7
Expedia Inc
5.8
Home Depot Inc
4.5
Starbucks
3.3
Walt Disney Co
3.6
Information Technology
32.3
Alphabet Inc
Apple Computer
7.8
Cognizant Tech Solutions
Facebook Inc
5.6
Visa
7.3
Financials
8.2
Markel Corp
4.7
Wells Fargo
3.5
Materials
10.2
Ecolab Inc
3.8
Sherwin Williams Co
6.3
Cash
0.4
Alta Select Composite Portfolio as of June 30, Holdings are to be considered supplemental information

14. Assessment Top 10 Holdings % of Portfolio Apple Inc 7.8 Visa 7.3
Sherwin Williams Co
6.3
Thermo Fisher Scientific
6.1
Cognizant Technology Solutions
5.8
Expedia Group
Alphabet Inc
5.7
Booking Holdings
Facebook Inc
5.6
Dollar Tree Stores
4.7
Capitalization Distribution
Portfolio
S&P 500
Mega Cap ($106.9 B <)
41.1
49.5
Large Cap ($29.5 B to $106.9 B)
39.1
31.0
Mid Cap ($3.8 B to $29.5 B)
19.7
19.5
Small Cap (< $3.8 B) -
As of June 30, Index data sources: Morningstar Direct and Factset.

15. Rolling 5 Year Annualized
Performance
Rolling 5 Year Annualized
Net returns shown are net of 0.40% fee. Please see attached Disclosure and Discussion. Past performance is no guarantee of future performance.

16. Metrics that Make a Difference
Characteristics
Portfolio
S&P 500
% of Index
Number of Holdings 20
506 4%
3 Yr. EPS Growth
13.4
11.1
121%
Net Margin
15.7
14.2
111%
Return on Equity
24.5
19.7
124%
EPS Variability
29.7
41.1
72%
Down Market Capture
86.6
100.0
86%
Data represents Alta Select Portfolio as of June 30, Source: Morningstar Direct and BNY Mellon.

17. Altitude Conference Investment Discipline: Ignore at your own risk
September 2018
Investment Discipline: Ignore at your own risk

18. Importance of Discipline
“The best way to measure your investment success is not by whether you’re beating the market, but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” - Benjamin Graham “We don’t have to be smarter than the rest, we have to be more disciplined than the rest.” - Warren Buffet

19. The Importance of a Disciplined Approach in the Current Market
Maintaining investment discipline will diminish the effect of emotions on your portfolio.
The current bull market we are experiencing is unprecedented and will eventually end.
A strong, disciplined investment strategy will protect you from the dangerous herd mentality.

20. How to Maneuver in the Historic Bull Market
Do not try and time the market. The most important thing is your time in the market.
Hold fast to your investment ideals, review them at least once each quarter.
Take the long-term view, manage for the cycle, avoid the noise and be willing to be contrarian.
Be confident and show conviction in your best ideas, as fortune favors the bold.
Know your strengths and weaknesses, operate within your circle of competence.

21. Margin, ROE, ROIC, Liquidity, FCF …greatest long-term impact
Source: Strategas
Using Russell 3000 data gathered from , Strategas Research Partners analyzed the performance attribution of seventeen factors across four categories: Quality, Growth, Valuation and Market, looking at top quintile vs. bottom quintile companies in each category. Quality factors (Margin, ROE, ROIC, FCF growth) stand out as key differentiators over the long-term. 20

22. Metrics that Make a Difference
Characteristics
Portfolio
R3000
% of Index
Number of Holdings 31
3008 1%
3 Yr. EPS Growth
15.1
11.5
131%
Net Margin
18.1
13.2
137%
Return on Equity
31.4
17.6
178%
EPS Variability
27.5
41.7
66%
Down Market Capture
81.4
100.0
81%
Data represents All Cap Quality Growth Portfolio as of June 30, Source: Morningstar Direct and BNY Mellon. .