1. Natural Resources Background & Investment Strategy April 26, 2011

2. What’s a Natural Resource? Something you FIND…not MAKE. Something you NEED…not WANT. 2

3. What do we use them for? Natural resources are used to… Build things 3

4. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 4

5. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 5

6. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 6

7. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 7

8. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 8

9. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 9

10. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 10

11. What do we use them for? Natural resources are used to… Build things Provide energy & power Act as a currency Make friends Make enemies Create policy Make money Bet on growth Diversify an investment portfolio 11

12. Types of Natural Resources 12

13. Types of Natural Resources 13

14. Types of Natural Resources 14

15. Types of Natural Resources 15

16. Types of Natural Resources 16

17. Where are they? 17

18. Power & Energy 18

19. Basic Materials / Precious Metals 19

20. Food & Agriculture 20

21. Investment Characteristics Natural resources generally… act as an inflation hedge 21

22. Investment Characteristics Natural resources generally… act as an inflation hedge act as a portfolio diversifier are highly volatile 22

23. Investment Characteristics Natural resources generally… act as an inflation hedge act as a portfolio diversifier are highly volatile 23

24. Investment Options Commodities Direct exposure to the underlying resource Investor Natural Resource Commodities vs. Equities 24

25. Investment Options Commodities Direct exposure to the underlying resource Can be a physical holding… Commodities vs. Equities 25

26. Investment Options Commodities Direct exposure to the underlying resource Can be a physical holding… or a derivative investment Commodities vs. Equities 26

27. Derivative Investments Regulated by the CFTC Traded on multiple exchanges Agreements to buy/sell pre-determined quantities of a commodity at a date specific in the future Commodity Futures are… 27

28. Derivative Investments Leveraged Commodity Futures are… 28

29. Commodity Futures Benefits Unfettered exposure to natural resources Leverage through futures Financial asset No management Drawbacks Highly volatile Complicated Leverage through futures Financial asset No management 29

30. Natural Resource Equities Equities Own shares of a company 30

31. Natural Resource Equities Equities Own shares of a company Can be directly owned or through funds or ETFs 31

32. Natural Resource Equities Equities Own shares of a company Can be directly owned or through funds or ETFs Traded on standard exchanges 32

33. Natural Resource Equities Benefits Easily traded Less volatile than underlying commodities More diversified Not levered Actively managed Drawbacks Indirect exposure Higher market beta Not levered Dependent upon management Can go out of business 33

34. In Summary Natural Resources are… …found and not made …needed vs. wanted (price inelastic) …a bet on growth …uncorrelated to financial markets …used to diversify a portfolio …available for investors in multiple forms 34

35. In Conclusion Natural Resources are… …to be bought and SOLD, not bought and HELD 35

36. In Conclusion Natural resources don’t make money over time. 36

37. In Conclusion Natural Resources are… …to be bought and SOLD, not bought and HELD …dangerously volatile 37

38. In Conclusion 38

39. In Conclusion 39

40. In Conclusion Natural Resources are… …to be bought and SOLD, not bought and HELD …dangerously volatile …irrational 40

41. In Conclusion 41

42. In Conclusion Natural Resource investments are… …to be bought and SOLD, not bought and HELD …dangerously volatile …irrational …complicated 42

43. In Conclusion 43

44. In Conclusion Natural Resource investments are… …to be bought and SOLD, not bought and HELD …dangerously volatile …irrational …complicated …a key component to a diversified portfolio 44

45. Natural Resources Background & Investment Strategy April 26, 2011