1. 18 th Annual Investment Security Group Client Event September 28, 2011

3. Overview and Current Positioning

4. Today 2008 Today 2008 Stocks 28% 62% “Hybrid” 17% 20% Bonds/Cash 55% 18%

5. Underweight Stocks Underweight Stocks “Textbook” Weighting in Bonds “Textbook” Weighting in Bonds Shifted Bond Strategy Shifted Bond Strategy Raised Some Cash Raised Some Cash Bias Towards Income Bias Towards Income

6. INCOME + Appreciation = Total Return

7. Looking Ahead: Better Ways to Manage Risk Better Ways to Manage Risk More Income-Producing Alternatives More Income-Producing Alternatives Bottom-fishing for Cheap Assets Bottom-fishing for Cheap Assets

8. The World is Flat

9. BRIC’S Brazil, Russia, India, China Large Young Populations – Make and Move Markets Large Young Populations – Make and Move Markets Low Labor Costs with Increasing Productivity Low Labor Costs with Increasing Productivity Low Consumer Debt Levels Low Consumer Debt Levels Motivated Emerging Consumers Motivated Emerging Consumers

10. Demographics Powering EM Growth 74 M (size of France) China’s Population Growth Over the Last 10 yrs 643 MChinese Urbanites 2011 925 M Chinese Urbanites 2025 282 M (size of US) Chinese Migrate to City by 2025 200 M Indian’s Migrate to City by 2025 1.2 B EM Middle Class in 2030

11. Catalysts For Growth 10 M 100 M 408.9%5.5%1.9%10x/3 Miles of Chinese roads/rail lines needed Needed Chinese apartments % Indian’s without electricity CAGR of Chinese per capita income CAGR of Indian per capital income CAGR of US per capital income BRIC’s vs. US population / % car owners

12. Global Consumption 2007201020152020 U.S.30.227.423.520.8 China5.39.316.421.1 Japan8.27.46.55.8 Germany5.65.14.33.8 India2.02.63.95.3 Asia (ex Japan) 12.117.125.832.3

13. Economic Power China China Worlds #2 economy Worlds #2 economy Largest consumer of copper, tin, steel, coal, aluminum & seaborne iron ore Largest consumer of copper, tin, steel, coal, aluminum & seaborne iron ore #2 Consumer of oil #2 Consumer of oil #1 Potash importer #1 Potash importer #1 Internet market (22% penetration) #1 Internet market (22% penetration) #1 Auto sales in 2010 #1 Auto sales in 2010 $2.3 Trillion/Yr consumer spending by 2025 $2.3 Trillion/Yr consumer spending by 2025

14. Economic Power – con’t Asia Worlds # 1 mobile phone market Worlds # 1 mobile phone market Worlds #1 LCD TV market Worlds #1 LCD TV market Worlds # 1 Health Care Market (# patients) Worlds # 1 Health Care Market (# patients) In 2007, 8 of top 50 urban areas In 2007, 8 of top 50 urban areas By 2025, 20 of the top 50 urban areas By 2025, 20 of the top 50 urban areas Shanghai and Beijing GDP’s higher than L.A. or London Shanghai and Beijing GDP’s higher than L.A. or London BRIC’s BRIC’s In 2005, 27 Fortune 500 BRIC based In 2005, 27 Fortune 500 BRIC based In 2010, 67 Fortune 500 BRIC based In 2010, 67 Fortune 500 BRIC based

15. Investment Strategy US Companies with Global Presence US Companies with Global Presence 47% S&P 500 Sales Offshore 47% S&P 500 Sales Offshore Consumer Goods, Farm Equipment Consumer Goods, Farm Equipment 43% of World Market 43% of World Market Developed Markets Feeding EM Demand Developed Markets Feeding EM Demand Australia, New Zealand, Canada and Germany Australia, New Zealand, Canada and Germany 43% of World Market 43% of World Market EM Funds EM Funds 14% of World Market 14% of World Market

16. Corporate Profits

17. Historical Earnings

18. $1,000,000 Profits

19. 16 x $1,000,000 16 x $1,000,000 $16,000,000 or 16 P/E $16,000,000 or 16 P/E Cash Flow 6.25% Cash Flow 6.25%

20. 12 x $1,000,000 12 x $1,000,000 $12,000,000 or 12 P/E $12,000,000 or 12 P/E Cash Flow 8.33% Cash Flow 8.33%

21. P/E Ratio

22. Dr. Brad Nieder The Healthy Humorist