1. Consumer Discretionary Reza Aditya Hakan Altan Adam Barrick Peter Manuselis

2. Agenda Sector Recommendation Recap Stock Selected Overview Financial Analysis Valuation Analysis Stock Recommendation

3. Current SIM Holdings

4. Sector Recommendations Recap ViewReason BusinessNeutral  Mature, Low Growth EconomicNeutral  Unemployment rate expected to increase 0.1% in April  Expected hold (5.25%) of FFR at next FOMC meeting; FFR is expected to decrease 25 bps by year end  Core inflation still higher than the Fed’s desirable level of 1-2% FinancialNegative  Net Margins Steady  Low Revenue Growth ValuationNegative  Overvalued Recommendation: Hold the Underweight Position at 8%

5. Current Position SharesPurchase Price Current Price (5/11/07) Unrealized Gain/(Loss) Market Value SIM Weight Coach14,000$42.78$47.84$70,840$669,7602.92% Limited Brands 23,400$26.08$27.67$37,206$647,4782.54% Carnival12,000$39.83$48.79$107,520$585,4802.34%

6. Nike Overview –2006 Revenue $14,955 MM (8.8% increase from ‘05) –2006 Net Income $1,392 MM (14.9% increase from ‘05) –2006 EPS $2.64 (17.9% increase from ‘05) –52 week range: $37.76 – $55.10 –Completed a 2 – 1 stock split on April 2, 2007 –Current Price as of 5/14/07 - $52.87 –1.4% Div. Yield

7. Catalysts Strong market position and brand –Number one shoemaker, holding a 40% market share of the global footwear industry –World’s largest manufacturer of athletic apparel –Nike swoosh sign is one the most widely recognized logo –Relatively inelastic demand Robust financial performance –Strong cash position that will provide funding for future expansion strategies Strong product portfolio –Reduced dependence on footwear and has established a strong position in the equipment and apparel markets –Offers specialized sports gear for sports including golf, hockey, skateboarding, and cycling –Allows them to spread risk across its product segments

8. Financial Analysis Stock price, Revenue/share, EPS are increasing.

9. Financial Analysis Relative to Consumer discretionary sector Stock price, Revenue/share, EPS are increasing.

10. Financial Analysis Dividends/share are higher compared to Cons Disc. Growth rate estimates are going up compared to Cons Disc.

11. Valuation Analysis – 5yr CU < ME Trending Down CU > ME Trending Down CU > ME Stable CU < ME Trending Down

12. Valuation Analysis – 5yr CU < ME Trending Down

13. Valuation Summary 5-yr HILOMECU P/E1.000.710.85 > 0.83 P/EBITDA1.750.941.27 < 1.49 P/S1.811.341.62 < 1.71 P/BV1.871.271.54 > 1.35 P/CF2.031.291.56 > 1.54

14. Valuation Analysis - 10yr CU < ME Stable CU > ME Trending Up CU > ME Stable CU < ME Stable

15. Valuation Analysis – 10yr CU < ME Trending Down

16. DCF Analysis

17. Stock Recommendations ViewReason BusinessPositive  Strong market position and brand  Robust Financial Performance  Strong product portfolio FinancialPositive  Revenue, EPS, are going up relative to Consumer Discretionary DCFPositive  Target Price $69, 30% upside ValuationNeutral  On par with the mean Recommendation: Buy

18. Risks Rising raw material cost –Rising oil prices increase the price of synthetic rubber and plastic based products. Increasing raw material cost would increase the production cost and its profitability. Chinese products –Chinese footwear has been flooding the EU and can significantly affect Nike’s market share in the EU Intense competition –The launch of technologically superior products by competitors such as Adidas could lead to a fall in the company’s market share

19. Action Recommendation Correlation with NKE Current Weight Proposed Weight Proposed Change Proposed $ Amount Proposed # of Shares Current # Shares Change # of shares COH.4437%19%-18%$356,398.417,45014,647(7,197) LTD.3733%22%-10%$414,643.2314,98522,038(7,053) CCL.3330%24%-6%$446,293.969,14711,525(2,378) NKE1NA35% $655,488.4012,3680 Sharpe2.204.882.68

20. Questions?