Are You Ready for Another Lost Decade ? How to Prosper in the Current Bear Market

1. Are You Ready for Another Lost Decade?How to Prosper in the Current Bear Market By: Evaldo Albuquerque Editor of Retirement Strategist

2. Perma Bear Perma Bull

3. Buy & Hold Doesn’t Work in Bear Markets • Understanding secular bull and bear markets • Six reasons why secular bear market isn’t over • What could cause the next downturn • Why you need a flexible investment strategy • Using the six stages of business cycle • Three investment ideas

4. Buy and Hold Works in Bull Markets,But Not in Bear Markets • Secular Bull Markets: • Multi-year uptrend • Few recessions • Low volatility • Secular Bear Markets: • Multi-year downtrend • Frequent recessions • High volatility 1,220%

5. S&P 500 Index is up 2% in Last 13 Years

6. The Debt Super Cycle U.S. Debt as a % of GDP

7. P/E Ratio Says Bear Market is Not Over 44 33 23 25 23 5 9 7

8. Dividend Yield Says Bear Market Isn’t Over Dividend Price = Dividend Yield 8% 7% 6% 3.3% 3.2% 3% 1%

9. Tobin’s Q Says Bear Market isn’t Over

10. Why This Bear Market Could Last Until 2018 • Average bear market lasts 18 years… • And has four recessions • Current bear market started from extreme levels

11. What Could Cause the Next Downturn? • European Debt Crisis • Chinese Real Estate Bubble • Another Sovereign Crisis (Japan?) • A Decline in Profits • The End of Fed’s Money-Printing

12. Profits are 70% Above Historical Norms Corporate Profits /GDP Subsequent 5-Year Growth in Profits

13. The Money-Printing Boom "Nobody has the experience of successfully navigating a return home from the place in which we now find ourselves. What I'm concerned about is that we may be painting ourselves into a corner. We've done a lot ... It's not clear to me how we are going to get out of this.“ • “Devaluing a currency is like peeing in bed. It feels good at first, but pretty soon it becomes a realmess.” • —Francesco Guerrera, The Wall Street Journal

14. Should We Trust Bernanke? • October 2005: “Housing price increases largely reflect strong economic fundamentals.“ • February 2006: “House prices will probably continue to rise.“ • March 2007: “Problems in the subprime market seems likely to be contained.” • January 2008:"The Federal Reserve is not currently forecasting a recession.” • June 2008: "The risk the economy has entered a substantial downturn appears to have diminished over the past month or so."

15. Why Jim Rogers Isn’t Buying Stocks “It is very artificial. If you give me a trillion dollars, I'll show you a good time too and a lot of people are having a good time. I know it's going to end badly. I'm certainly not investing in the U.S., because the U.S. is making all-time highs based on money printing.”

16. "Mr. Chairman: Do I Still Have Time To Get In The Market?"

17. Option #1: Buy and Hold

18. Option #2: Get Out of the Market

19. Option #3: Flexible Strategy Stage I Stage II Stage IV Stage VI Stage III Stage V

20. Example of Stage V in 2007 Commodities Energy Stocks S&P 500 Index

21. Where Are We in the Business Cycle?

22. 3 Ways to Play the Stage III • Gold Miners • Market Vectors Gold Miners ETF (GDX) • Platinum & Palladium • Sprott Physical Platinum and Palladium (SPPP) • Short the Japanese Yen • ProSharesUltraShort Yen (YCS)

23. Buy & Hold Doesn’t Work in Bear Markets • Understanding Secular Bull and Bear Markets • Why the secular bear market isn’t over • P/E ratio is too high • Dividend yield is too low • Tobin’s Q ratio is too high • Why you need a flexible investment strategy • Using the six stages of business cycle • Using dividends as a cushion