Reality Investing at Stern

1. The Michael Price Student Investment Fund April 25, 2006 ________________________________________ Reality Investing at Stern

2. Tonight’s Program Overview of MPSIF – Richard Levich, Faculty Advisor MPSIF Experience – Debbie Jones, President The MPSIF Funds – Fixed Income Growth Small Cap Value Questions & Answers

3. Overview of MPSIF Origin of The Michael Price Student Investment Fund (MPSIF) Organizational Overview MPSIF as an MBA Course MPSIF as an Endowment Fund Goals for the Future

4. MPSIF Established in 1999 Founded with $2.0 million gift - Michael F. Price • Michael F. Price - Managing partner of MFP Investors and former chairman of Franklin Mutual Series funds. Gift enabled establishment of three funds • Three Funds -Red, GreenandBlue- Each allocated $600,000. Each Fund had a different investment objective.Note: $200,000 allocated for administrative expenses Fund part of the overall NYU endowment Fund has a mandated 5% per annum distribution • Distribution provides scholarships to selected students from the Price College of Business at the Univ. of Oklahoma for study at NYU Stern.

5. MPSIF Established in 1999 Advisory Board for MPSIF • Board determines general investment guidelines and provides administrative oversight Management Advisory Council • Council receives annual and semi-annual reports and visits class to review operating practices Executive Committee • The Faculty Advisor, President, Treasurer and Portfolio Managers - • Exec Committee oversees activities of the fund over the semester Individual Funds • Student portfolio managers oversee day-to-day operations, other students perform related tasks

6. Organizational Overview Advisory Board Executive Committee Faculty Advisor, President, Treasurer, Portfolio Managers Growth Small Cap Value Portfolio Manager (2) Portfolio Manager (2) Portfolio Manager (2) Fixed Income Portfolio Manager (1)

7. Pedagogical Objectives We operate MPSIF as a Course not a Club • Course promotes responsibility for managing significant real assets, and a vehicle for selecting and organizing students • To promote continuity, students are required to participate over two semesters. Half register fall-spring, half register spring-fall. “Overlapping generations” setup Goals • An 8-11 month immersion course for honing analytical and presentation skills • A capstone, interdisciplinary course in which managing diverse tasks relies on teamwork • Deeper understanding of governance and fiduciary responsibilities in running an endowment fund

8. MPSIF as an MBA Course Not an ordinary class • Some outside speakers, but very few lecturers • Emphasis is hands-on, experiential, learning-by-doing Students perform all of the key tasks • ~ 45 students populate 3 equity fund teams • Economic, sector and company research • Stock selection, buys & sells, monitoring • Fiduciary duties – Annual and semi-annual reports, minutes of activities, Board presentations The deliverables • Financial writing, oral presentations, financial decision making in a group setting

9. Recent MPSIF Initiatives Management Advisory Council Wilshire analytics portfolio analysis Alumni Panel and Alumni Reunion Annual Report upgrade Web-site upgrade “The Educated Investor” newsletter Resume book Proxy voting, litigation filings Re-balancing of MPSIF portfolio • Gross flows in excess of $400,000

10. Deliverables

11. MPSIF as an Endowment Fund Student run MPSIF, but within limits “Rules of the Game” • MPSIF is a long-only endowment fund. • Permitted securities include: Stocks, bonds, money market instruments, and limited mutual funds. NYU is a tax exempt institution. • Goals include • (a) returns in excess of inflation over a 3-5 year period, • (b) returns exceeding an appropriate benchmark, • (c) focus on long-term opportunities rather than short-term trading gains, (d) an acceptable level of diversification MPSIF Operates on an open book policy • Stands ready to make its results, activities, reports available to anyone within the NYU community with an interest. (Active web site)

12. How has MPSIF Performed? Six year record – Inception March 1, 2000 Since Inception1.8B to $2.01B Does not include $461,000 in distributions 44% Total Returnin first six years (~6.18% p.a.) Well ahead of benchmark 75% Equity, 25% Debt

13. Goals for the Future Enhance MPSIF profile inside and outside Stern Enhance MPSIF as a vehicle for student recruitment and placement, as well as fundraising Attract more funds under management – from NYU endowment or other benefactors

14. The Michael Price Student Investment Fund President: Debbie Jones ___________________________________ MPSIF – Student Experience The Fund

15. My Story…Why NYU, Why MPSIF Why to get my MBA First Annual Student Alumni Mixer • Previously analyzed mutual funds…needed to improve my fundamental stock picking skills Where to get my MBA Deutsche Bank • Met with alum from my undergraduate school who was also the original MPSIF President CMC & NYU Financial Modeling? DCF? How to get a job/internship • Stock pitches are standard for MBA internship and full-time job applicants (both buy side and sell side) MPSIF After Stern • With six years of history there are numerous MPSIF alum working in the investment management profession

16. The MPSIF Experience Placement into Fund (Team) • Generally 15 students per fund – requests are considered. Management seeks a diversified background. MPSIF Pitch/Update Format • Spent three years at a successful start-up biopharmaceutical company. • Spent a year as a post- doctoral fellow at Harvard Medical School, focusing on the research of anti- cancer drugs. • He holds a Ph.D. degree in chemistry from Harvard University. • Investment Summary • Performance • Valuation (DCF, multiples, etc. • Business Description • Industry Outlook • Competitor position • Earnings Outlook • Financial Statements • Standard MPSIF written pitch format Presentation to Individual Fund (mon/weds mtgs) Student Feedback • Question & Answer period – students are required to defend their ideas – Students vote on stock purchase Student Responsibilities • Additionally Students are required to take on an extra role, (e.g. alumni relations, historical analytics)

17. Benefits of Reality Investing You are accountable • Fund Simulation just isn’t the same SEACOR is in the business of owning, operating, investing in, marketing and remarketing equipment, primarily in the offshore oil and gas and inland transportation industries. It also provides oil spill response and environmental remediation services. Seacor (CKH) Russell 2000 Index

18. Performance as of February 28th, 2006 Source: Wilshire Analytics * The Quantum growth/value style score is created from a weighted average of a standardized book/price and forward looking earnings/price (standardized against the Dow Jones Wilshire U.S. 2500 Index, 75% book/price and 25% forward earnings/price). Beating our Benchmark • 25% Russell 1000 Value Index • 25% Russell 1000 Growth Index • 25% Russell 2000 Index • 25% Vanguard Total Bond Index

19. The Michael Price Student Investment Fund Portfolio Managers: Marc Strauss and Michael Flood ___________________________________ The Fixed Income Fund Fixed Income Fixed Income

20. Fund Overview Fund Objective • The fund aims to outperform its benchmark, the Vanguard Total Return Bond Fund (VBMFX) by taking positions in mutual funds and exchange traded funds (ETFs). Fund Strategy • The Fund implements its views through a top-down allocation approach to the main sub sectors of the US Fixed Income [investment grade] market, namely – U.S. Treasuries, Corporates and MBS/ABS, as well as the Foreign investment grade bond market Fund is tax exempt – No municipal bonds Looking forward, we hope to start the next semester with the ability to trade in individual bonds across all sectors Growth Fund Fixed Income

21. Performance as of February 28th, 2006 For the six months ended February 28, 2006, the fund had a negative net return of 69 basis points, trailing our benchmark by 50 basis points • Overexposure to the short end of the Treasury yield curve • Failure to capitalize on the continued strength of the MBS market • Slight overweighting of the Corporate sector After bottoming out in October 2005, the fund enjoyed four straight months of positive returns, with a YTD return of 98 basis points, 70 basis points above our benchmark Over the past three months, we have focused our attention to being more closely aligned with our benchmark, reducing our exposure to the foreign sector and spreading our exposure to Treasuries across the yield curve Growth Fund Fixed Income

22. Performance as of February 28th, 2006 Fixed Income

23. Sector Allocations as ofFebruary 28th, 2006 Fixed Income

24. Fund Holdings as of February 28th, 2006 Fixed Income

25. Sector Update and Outlook U.S. Treasuries • The Federal Reserve, reacting to inflationary fears as the economy remains resilient, is likely to continue to raise rates one or two more times in the short term. Future policy is likely to remain data dependent. • Should the economy start to sputter, rate cuts are a distinct possibility by Q4 2006. • Although the calendar year started with softness in the Treasury market, we are bullish on Treasuries and recommend overweighting the index with longer duration positions. MBS • With mortgage rates forecasted to rise to as much as 6.40% by the fourth quarter of 2006, slower growth in the housing market is expected. Higher rates will slow prepayments and curb home price appreciation, creating potential credit challenges ahead. • As spreads widen we will continue take a slightly underweight position with respect to the index. Growth Fund Fixed Income

26. Sector Update and Outlook cont. Corporates • In terms of business fundamentals, competition from emerging economies has challenged many U.S. companies and industries. • Rising interest rates will likely erode future profitability as borrowing costs rise and consumer spending slows. • We recommend avoiding sectors like consumer discretionary, which may be adversely affected by a slowing housing market and high energy prices. Foreign • A shrinking interest rate differential, coupled with an ever growing current account deficit, could spell trouble for the dollar. • With rates in Europe and Japan likely to rise, we will look to further reduce our exposure in the near term, especially as the Fed looks to put the brakes on future rate hikes. Growth Fund Fixed Income

27. Challenges Looking Forward Challenges • Future Fed Policy • Future of the MBS market • Dollar weakness • Tight credit spreads Switching Platform • Performing our own credit research Fixed Income

28. The Michael Price Student Investment Fund Portfolio Managers: Nelson Shim and Rafael Tejada ___________________________________ The Growth Fund Growth Fund Growth Fund Fixed Income

29. Fund Overview Fund Objective • Achieve returns above Russell 1000 Growth Index benchmark. • Achieve positive absolute returns. Investment Strategy • Search for stocks with long-term EPS growth expectations exceeding 15% that are attractively priced on a fundamental and relative basis. • Search for stocks with a long-term, sustainable competitive advantage. • Such companies may be: • . • pioneering a new product or service that will see dramatic future demand • altering pre-established norms in a static industry and gaining significant market share • applying their business model to new regions or leading in an industry that is experience high levels of growth Growth Fund

30. Fund Performance as of February 28th, 2006 The fund outperformed its benchmark by 365 bps with an absolute return of 8.75% through the six months ended February 28, 2006 Growth Fund

31. Sector Allocation as of February 28th, 2006 Growth Fund

32. Fund Holdings as of April 23rd, 2006 Growth Fund

33. The Michael Price Student Investment Fund Portfolio Managers: Shivanker Saxena and Lei Mu ___________________________________ The Small Cap Fund Small Cap Small Cap Growth Fund

34. Fund Overview Strategy • Focused upon stock selection and Identifying small-cap companies with strong fundamental prospects, and that are under followed by the market. • No explicit bias toward “growth” or “value” investing. • Invest exclusively in U.S.-traded equities, (market cap < $2B). • Concentrated portfolio of 20 to 25 positions, with a standard position size of $20,000. • Security selection driven primarily by bottom-up fundamental research. • In conjunction with the team’s overall sector and economic views. Objective • Achieve returns above Russell 2000 Index benchmark. • Achieve positive absolute returns. Small Cap

35. Fund Performance as of February 28th, 2006 The Fund outperformed its benchmark by an average monthly 100 bps in the last sixth months • An absolute return of 28.22% in LTM ended Feb 28, 2006 (Russell 2000 return – 16.59%) • An absolute return of 15.70% in 6 months ended Feb 28, 2006 (Russell 2000 return – 10.24%) • An absolute return of 9.05% in 3 months ended Feb 28, 2006 (Russell 2000 return – 7.88%) Small Cap

36. Sector Allocation as of February 28th, 2006 Small Cap

37. Winners and Losers Small Cap

38. Current Holdings as of April 23rd, 2006 Small Cap

39. The Michael Price Student Investment Fund Portfolio Managers: Benjamin Macdonald and Chao Mui ___________________________________ The Value Fund Value Fund Value Fund Small Cap

40. Fund Overview Fund Objective • Outperform the benchmark on a total return basis by investing in securities that provide superior returns on a risk/return basis through capital appreciation and dividends. Fund Benchmark – Russell 1000 Value Index New Strategic Implementations • Stronger Discipline • Top-Down Approach • ETFs • Increased Holdings to 30 Positions • Mid-Large Cap Focus (over $2bn) • Minimum 20% Total Return Potential • Stop-Loss on Every Position • Stop-Loss and Sell Limit During Summer and Winter Breaks Value Fund

41. Fund Performance as of February 28th, 2006 (a) Prices as of 4/21/2006 Value Fund

42. Sector Allocation as of February 28th, 2006 Value Fund

43. Winners and Losers (a) Prices as of 4/21/2006 Value Fund

44. Current Holdings as of April 24th, 2006 Value Fund

45. Questions & Answers ___________________________________ Reality Investing at Stern