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AAII Silicon Valley Meeting Saturday November 13, 2010 Presented by: Tom Kopas

The Secular and Cyclical Outlook for Stocks, Bonds, and Commodities. Since 2000 a “Lost Decade” For Investors… Are you Prepared for Another “Lost Decade?”. AAII Silicon Valley Meeting Saturday November 13, 2010 Presented by: Tom Kopas www.pringturner.com. 4. 3. 2. 1.

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AAII Silicon Valley Meeting Saturday November 13, 2010 Presented by: Tom Kopas

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  1. The Secular and Cyclical Outlook for Stocks, Bonds, and Commodities Since 2000 a “Lost Decade” For Investors… Are you Prepared for Another “Lost Decade?” AAII Silicon Valley Meeting Saturday November 13, 2010 Presented by: Tom Kopas www.pringturner.com

  2. 4 3 2 1

  3. 16-years/ 62% decline/ 4 recessions ? 19-years/ 67% decline/ 4 recessions 19-years/ 69% decline/ 6 recessions 10-years/ 38% decline/ 2 recessions ?

  4. Halfway Through Secular Bear Completed Secular Bear Target Area 2016-2020

  5. 4 U.S. Stock Prices (Inflation Adjusted) 3 2 1 U.S. Commodity Prices Commodity Oscillator (72/240)

  6. 2000 1966 1929 1901 2 2 6 4 2 4 4 2 4 6 3 1 1 7 3 5 3 1 5 1 3 5 7

  7. Key Points: Secular Trend for Stocks • Long Periods of Alternating Good and Bad Performance • Secular Trends Change at Extreme Valuation Levels • Currently Halfway through our 4th Secular Bear Market • Be Aware of Commodity Secular Bull Market • Capitalize on Cyclical Stock Market Opportunities • Understanding Secular Environment is Key to Success

  8. Pring Turner Investment Approach Financial markets are linked in a logical, rational, and sequential relationship to business activity. Financial markets have tracked these business cycle sequences for over 150 years.

  9. The Random Noise of Economic News!

  10. Money Supply ? Bond Prices Stock Prices Economy Commodities Secular Bull Secular Bear Secular Bear

  11. 4 to 5 YEARS Bonds Stocks InflationSensitive

  12. Utilities Banks Technology Food Producers Technology Transports U.S. Treasuries Consumer Discretionary Oil Drillers Oil Drillers Diversified Metals U.S. Treasuries Diversified Metals Healthcare Energy

  13. Key Points: Investing Around the Business Cycle • Markets are Linked in a Logical, Rational, Sequential Relationship • For over 150 Years, Markets have Tracked Business Cycle Sequences • During Secular Bear Markets Economy in Recession More Often • Pring Turner Organizes the Business Cycle into 6 stages • Currently in Stage 4 • Good for Stocks and Inflation Sensitive Securities • Bad for Bonds • Business Cycle Drives Profitable Asset Allocation Decisions

  14. …Uptrend still intact. Oscillator registered sell signal but…

  15. Green/Red highlights show when KST is above/below its 12 Month Moving Average

  16. Green highlights show when our secular model is bullish

  17. Green highlights show when this cyclical model is bullish

  18. Early phase of Commodity Outperformance over Bonds Trading Range likely to be broken this cycle

  19. Key Points: Secular Trend Bonds/Commodities • Bonds have been in a Secular Bull Market for nearly 30 years • Bond Owners Beware: Secular Trend is at a Critical Juncture • Cyclically Bonds are Vulnerable to Interest Rate/Inflation Risks • Small Rise in Interest Rates Leads to Substantial Losses in Bonds • Commodities Continue Secular Uptrend  Risky for Bonds • Opportunities in Inflation Sensitive Securities

  20. Tactics to Protect and Grow Your Wealth Secular Trend at Critical Juncture Pring Turner Capital Group www.PringTurner.com

  21. Thank you for Listening… You are welcome to visit our website www.pringturner.com for research updates

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