THEY CAN GNAW THROUGH STUCCO!!!

1. THEY CAN GNAW THROUGH STUCCO!!! People Think They’re Cute

2. BIGFOOT INVESTMENTS OPEN FORUM Apr 18th, 2013 WELCOME!

3. AGENDA • WELCOME! • ADMIN NOTES • QUOTE OF THE DAY • OPTIMISM GAUGE • CHARTS OF INTEREST • SO WHAT’S UP WITH: THE “MYSTERY SUBJECT” • A CLOSER LOOK AT: MX • DAVID’S CORNER • SWAPS AND SPREADS • LEE’S COMMENTS • QUESTIONS/COMMENTS

4. “NOTES” • IF YOU USE ANY OF OUR SLIDES, PLEASE REMEMBER TO • HAVE THEM APPROVED BY YOUR COMPLIANCE DEPARTMENT. • WE’LL UN-MUTE YOU ON OUR END SO YOU CAN ASK QUESTIONS. • PLEASE MUTE AUDIO FROM THE MENU ON YOUR SCREEN SO • WE DO NOT GET FEEDBACK. • THANK YOU!

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8. QUOTE OF THE DAY: If I’d just tried for those dinky singles….. ….I could’ve batted around 600! Babe Ruth

9. Optimism Gauge As of: 4/18/2013

10. Measuring Our Economy Last Update: 4/18/2013

11. Measuring Our Economy READING AS OF: 4/18/2013 Economic Optimism Index NOTES/COMMENTS CURRENT READING: 59.1% PRIOR READING: 67.7% BIAS: SLIGHTLY BULLISH 8 OF 13 INDICATORS POSITIVE TREND - DOWN 45 65 35 75 25 85 59.1% 15 95 Current Reading Prior Reading POSITIVE AS OF: 8/17/2012

12. Charts of Interest!

13. “HEADLINE” DATA Source: NAHB/Wells Fargo

14. BUT REALLY A “TALE OF 3 CITIES!” THE HEADLINE! BUT A REALLY IMPORTANT METRIC Source: NAHB/Wells Fargo

15. CONSUMER “GOODNESS” Source: EIA

16. The ZEW Study Center for European Economic Research • Monthly Data • Up to 350 financial experts • Survey of expectations for the next 6 months • Done for: Eurozone; Japan; Great Britain; U.S.A. • Very respected publication Source: EIA

17. The ZEW Study Source: EIA

18. The ZEW Study Source: EIA

19. CREDIT BAROMETERS IN THE “SAFE” ZONE Source: Chicago Fed

20. 2 GOOD NUMBERS

21. 2 OUT OF 3 IS GOOD Over 1M – High since 2008

22. SO WHAT’S UP WITH: THE MYSTERY SUBJECT?

23. LET ME TELL YOU A STORY ABOUT WHY PEOPLE DO THINGS BECAUSE AFTER ALL….IN THE VALLEY OF THE BLIND THE ONE-EYED MAN IS KING… OR SO HE THINKS!

24. IT’S AN OLD STORY ENTHUSIASM DISILLUSIONMENT • THIS WILL WORK FOR ME • WHY SHOULDN’T I ? • DON’T UNDERSTAND – DON’T TRY • “THEY” SAY SO • RUMOR IS FACT • I BELIEVE…….YES!!! • NOW’S THE TIME! • I’LL DO IT • TIME TO BRAG • GO FOR MORE • SO MANY JOIN ME – GETS EVEN BETTER • THE STORY CHANGES • THE SPELL IS BROKEN • THERE ARE EXPLANATIONS • FINGERS POINT • BLAME, CONSPIRACY • CAN’T BE WRONG…CAN I? • WHY DID I DO THAT??

25. IT LOOKS GREAT NOW SIMPLE….RIGHT?

26. COMPLICATIONS …CAN’T BE! WELL…THERE WERE SOME UPS AND DOWNS

27. DON’T CONFUSE ME WITH DATA …. I’LL BE FINE WHAT THE HECK? ..OR NOT SEE..I’M OK

28. EPITAPH: • It is all so easy until it’s not • You just think you know things –they are not as they appear • Understanding is the key • Adapting to change is difficult • You must adjust to the facts THE END!

29. WELL ….THERE’S A MORAL TO THE STORY • YOU ARE ALWAYS “BEING SOLD” • LIMITS ARE YOUR FRIEND • WARNINGS ARE JUST THAT • LOOKING BACK IT WAS ALWAYS SO OBVIOUS • YOU WILL BE TEMPTED • WHERE WAS YOUR PROCESS? • IS THE ONE-EYED MAN REALLY A KING?

30. SO WHAT’S GOING ON WITH GOLD? SO WE’RE TALKING ABOUT GOLD BUT YOU KNEW THAT!

31. SO WHAT’S GOING ON WITH GOLD? OUR LITTLE STORY TELLS A TALE OF MISUNDERSTANDING BUT THERE ARE SOME PERTINENT THOUGHTS, ANALYSIS, & POSSIBILITIES Source: Business Insider/ETF Trends

32. SO WHAT’S GOING ON WITH GOLD? • SOME THOUGHTS • The price pattern is broken when demand no longer outstrips supply • The declining price, in turn, further reduces price • And so on…. • Fear “arrives” Source: Business Insider/ETF Trends

33. SO WHAT’S GOING ON WITH GOLD? • SOME ANALYSIS • Gold is a commodity • In the past we “pegged” it to something – now it’s difficult • It’s not the ultimate currency – AS ONCE THOUGHT • Subject to many forces in a global economy • Will probably continue to trend down until we have a strong • external influence • The reasons gold has gone up may continue to pull it down: • Economic environment • ETF holdings • New/revised estimates (think Goldman Sachs) • Cyclical pattern Source: Business Insider/ETF Trends

34. SO WHAT’S GOING ON WITH GOLD? • OTHER FACTORS: • Failed technical levels • Bank of Japan actions • U.S. Dollar • Margin Calls • Piling on by hedge funds • Momentum/Model based trading • FOMC minutes suggesting earlier rise in rates Source: Business Insider/ETF Trends

35. SO WHAT’S GOING ON WITH GOLD? • POSSIBILITIES: • Large hedge funds moving out of gold • Federal Reserve sales • Central Bank selling • Cypress unloading gold reserves Source: Business Insider/ETF Trends

36. SO WHAT’S GOING ON WITH GOLD? • WILL IT STAY DOWN? • Depends on your macro view • Depends on your definition of “investing” • World debt burdens are a threat • Fiat currencies erode faith • Secular trend still in place • Gold supply is getting more limited • Emerging market buying? • Recent sell-off is very technical • Weaker dollar on horizon with debt issues • Large short positions could trigger covering Source: Business Insider/ETF Trends

37. THREE SLIDES TO THINK ABOUT

38. HISTORICAL RELATIONSHOP BETWEEN GOLD/INFLATION RATIO OF GOLD TO INFLATION Now 6.84 Average 3.33 Source: FRED

39. GOLD DOES NOT CORRELATE WELL WITH INFLATION DATA Source: FRED

40. GOLD AND THE STOCK MARKET (S&P 500) Source: FRED

41. A CLOSER LOOK AT: MX

42. Enters Portfolio

43. MagnaChip Semiconductor Corp (MX) MagnaChip Semiconductor Corporation designs and manufactures analog and mixed-signal semiconductor products for high-volume consumer applications. It operates in three segments: Display Solutions, Power Solutions, and Semiconductor Manufacturing Services. The Display Solutions segment offers source and gate drivers, and timing controllers that cover a range of flat panel displays used in liquid crystal displays (LCDs), light emitting diodes (LEDs), 3D and organic light emitting diode televisions and displays, notebooks, and mobile communications and entertainment devices. The Power Solutions segment develop, manufactures, and markets power management solutions, including metal oxide semiconductor field effect transistors, power modules, analog switches, LED drivers, DC-DC converters, voice coil motor drivers, and linear regulators. This segment offers its products for a range of devices, including LCD, LED, 3D televisions, smartphones, mobile phones, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for industrial applications, such as power suppliers, LED lighting, and home appliances. The Semiconductor Manufacturing Services segment manufactures various products comprising display drivers, LED drivers, audio encoding and decoding devices, microcontrollers, touch screen controllers, RF switches, park distance control sensors for automotives, electronic tag memories, and power management semiconductors. This segment offers semiconductor manufacturing services to fabless analog and mixed-signal semiconductor companies. MagnaChip Semiconductor Corporation provides its products and services to consumer electronics OEMs, subsystem designers, and contract manufacturers through a direct sales force, as well as through a network of authorized agents and distributors in the United States, Korea, Taiwan, China, Japan, Hong Kong, and Macau. The company is headquartered in Seoul, South Korea. Source: FinViz.com, April 2013

44. MagnaChip Semiconductor Corp (MX) POSITIVES:MagnaChip is a leading designer and manufacturer of analog and mixed signal semiconductor products. These chips are a main driving force behind touch solutions for mobile phones and PC applications. Possible concerns:The company has a high receivables rate. As a percentage of current assets it’s sitting around 35.88% Sources: PR Newswire, February 2013 Seeking Alpha, February 2013

45. ENTERS PORTFOLIO 4/1/2013

46. Trade Data

47. Performance

48. April 2013 Stock Picks Industry: Semiconductors As of March 28, 2013 - Subject to change.

49. Dow Tech Index

50. Dow Semiconductor