1. Materials Sector November 24, 2009 Ellis Krienik, Minh Le, Brian Mandel

2. Materials Sector Recommendation Sell 50 bps: Trim 150 bps of DOW Buy 100 bps of MON

3. Market Performance Index NameMarket Cap MTDQTDYTD S&P 5009,617B5.33%3.24%20.83% Info Tech1,826B5.06%4.66%51.54% Materials344B11.01%5.09%42.78% Cons Disc911B6.90%4.25%33.21% Financials1,389B3.79%-2.48%16.24% Industrials996B8.24%3.19%15.50% Health Care1,226B7.87%5.38%13.68% Cons Staples1,136B4.34%5.42%12.49% Energy1,154B2.21%5.43%11.70% Utilities344B2.32%-0.97%-0.30% Telecom291B3.47%-1.54%-4.55%

4. SIM Portfolio Structure as of 10/31/09 SectorS&P 500 WeightSIM Weight+/- Consumer Discretionary9.11%7.51%-1.60% Consumer Staples11.94%12.23%0.29% Energy12.35%12.80%0.45% Financials14.66%6.59%-8.07% Health Care12.65%13.13%0.48% Industrials10.09%11.97%1.88% Information Technology19.04%21.97%2.92% Materials3.39%4.52%1.13% Telecommunication Services3.09%3.51%0.43% Utilities3.68%3.19%-0.49% Cash0.00%2.51%

5. Materials Sector Valuation Multiples Absolute Basis HighLowMedianCurrent P/Trailing E258.115.725.0 P/Forward E28.610.515.221.1 P/B3.71.32.92.8 P/S1.5.51.21.1 P/CF13.15.49.413.1

6. Current Materials Holdings in SIM Portfolio $ Unit Cost Market Price % Gain/ (Loss) % of Portfolio Dow Chemicals (DOW) $8.26$27.98238.74%2.58% Monsanto (MON)$82.10$80.13(2.4%)1.94%

7. Current Materials Holdings in SIM Portfolio

9. Dow Chemicals

10. Dow Multiples Analysis Relative to Industry HighLowMedianCurrent P/Trailing E7.90.61.07.9 P/Forward E3.40.680.91.3 P/B1.20.60.90.7 P/S1.10.40.80.9 P/CF1.70.50.91.7

11. Dow Multiples Analysis Absolute Valuation HighLowMedianCurrent #Your Target Multiple *Your Target E, S, B, etc/Share Your Target Price (F x G) P/Forward E61.67.514.922.914.90.679.93 P/S1.60.10.90.70.940.3636.32 P/B5.10.52.61.82.620.0132.15 P/EBITDA17.891.625.898.365.891.9411.43 P/CF16.11.68.911.48.92.6723.76 The ‘average price’ for the stock from the 5 target prices above is 26.20

12. Dow Chemicals DCF

13. Dow Sensitivity Analysis 3.0%3.5%4.0%4.5% 10.5% 29.20 30.4231.8433.49 11.0% 27.2028.2329.4130.77 11.5%25.4526.3227.3128.44 12.0%23.8924.6425.4726.43

14. Benefits/Risks of Selling Dow Benefits Capture some capital gains ~ 250%, since we bought at around $8 per share. End markets do not appear so attractive: automobile and construction, both of which have been slumping. Dow is already trading within 10% of target. Risks Optimists believe the target being > $40. Dow is a golden egg, very well managed. Buffet is still in there, should we? Beta is 2.5, so once economy recovers, Dow will strongly rebound.

15. Monsanto

16. Monsanto Multiples Valuation Absolute Valuation HighLowMedianCurrent #Your Target Multiple *Your Target E, S, B, etc/Shar e Your Target Price (F x G) P/Forward E43.215.426.624.326.63.79100.81 P/S7.12.23.63.73.624.1586.94 P/B7.62.14.24.34.218.4477.45 P/EBITDA34.853.615.110.615.17.74116.87 P/CF34.112.420.514.820.53.5272.25 The ‘average price’ for the stock from the 5 target prices above is 90.86

17. Monsanto Multiples Valuation Relative to Industry HighLowMedianCurrent P/Trailing E1.2.631.01.2 P/Forward E1.3.871.01.1 P/B1.1.71.01.1 P/S1.5.81.01.2 P/CF1.7.91.1

18. Monsanto DCF

19. Monsanto Sensitivity Analysis 3.5%4.0%4.5%5.0% 10.0%95.00100.19106.31113.66 10.5%87.3991.6696.64102.52 11.0%80.8184.3688.4693.24 11.5%75.0778.0581.4685.39

20. Benefits/Risks of Buying Monsanto Benefits 20% Upside Market leader Increasing demand Risks Aggressive profit outlook Intense competition in herbicide business Regulatory risks

21. Recommendation Recap Sell 50 bps: Trim 150 bps of DOW Buy 100 bps of MON