THEY CAN GNAW THROUGH STUCCO!!!

Built By Advisors For Advisors

THEY CAN GNAW THROUGH STUCCO!!!

People Think They’re Cute


BIGFOOT INVESTMENTS OPEN FORUM

Apr 18th, 2013

WELCOME!


AGENDA WELCOME! ADMIN NOTESQUOTE OF THE DAYOPTIMISM GAUGECHARTS OF INTERESTSO WHAT’S UP WITH: THE “MYSTERY SUBJECT” A CLOSER LOOK AT: MX DAVID’S CORNERSWAPS AND SPREADSLEE’S COMMENTS QUESTIONS/COMMENTS


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“NOTES”


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QUOTE OF THE DAY:If I’d just tried for those dinky singles…..

Babe Ruth

….I could’ve batted around 600!


Optimism Gauge

As of: 4/18/2013

Indicator Current Value Prior/Metric Value Current Value

St Louis Fed Financial Stress Index -0.632 -0.678(Revised) +1.0

Chicago Fed National Act Index (3 Mon Mov Av) 0.09 0.28(Revised) -.50

Unemployment 7.7 7.9 (Revised) +.50Weekly Jobless Claims (4Wk Mov Av) 361,250 358,500(Revised) -.50

ECRI Weekly Index 6.2 6.2 (Revised) +.50Conf Board Leading Indicators (NEW) 94.7 94.8 -1.0

University of Michigan Sentiment - Final 78.6(Final – Mar 2013) 77.6(Final-Feb 2012) -.25Monthly Retail Sales (Adjusted) 416,990 416,070 +.50NFIB Small Business Sentiment 89.5 90.8 -.50ISM Manufacturing 51.3

(Expansion Line = 50) 54.2 +.50

Economic Capacity Utilization 78.5 78.3(Revised) +.50Stock Market Moving Averages Weekly Data Points >50-day MA/>100-Day MA N/A

+.50

S&P Case-Shiller 20 City Comp Index 146.14 145.95 (Revised) +.50

Total +1.75Last Update: 4/18/2013

Measuring Our Economy

NOTES/COMMENTS CURRENT READING: 59.1%

PRIOR READING: 67.7%

BIAS: SLIGHTLY BULLISH

8 OF 13 INDICATORS POSITIVE

TREND - DOWN

EconomicOptimism

Index

15

25

35

45 65

75

85

95

59.1%

READING AS OF: 4/18/2013

POSITIVE AS OF: 8/17/2012

Current Reading Prior Reading

Measuring Our Economy


Charts of Interest!


“HEADLINE” DATA

Source: NAHB/Wells Fargo


BUT REALLY A “TALE OF 3 CITIES!”

BUT A REALLY IMPORTANT

METRIC

THE HEADLINE!

Source: NAHB/Wells Fargo

Built By Advisors For AdvisorsSource: EIA

CONSUMER “GOODNESS”


The ZEW StudyCenter for European Economic Research

Source: EIA

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


The ZEW Study

Source: EIA


IN THE “SAFE” ZONE

Source: Chicago Fed

CREDIT BAROMETERS


2 GOOD NUMBERS


2 OU

T OF 3 IS GO

OD

Over 1M – High since

2008


SO WHAT’S UP WITH: THE MYSTERY SUBJECT?


LET ME TELL YOU A STORYABOUT WHY PEOPLE DO THINGS

BECAUSE AFTER ALL….IN THE VALLEY OF THE BLIND THE ONE-EYED MAN IS KING… OR SO HE THINKS!

ENTHUSIASM 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??

IT’S AN OLD STORY

DISILLUSIONMENT

IT LOOKS GREAT

SIMPLE….RIGHT?

NO

W

COMPLICATIONS …CAN’T BE!

WELL…THERE WERESOME UPS AND DOWNS

DON’T CONFUSE ME WITH DATA ….I’LL BE FINE

SEE..I’M OK

..OR NOT

WHAT THE HECK?

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!

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?

SO WE’RE TALKING ABOUT GOLD

BUT YOU KNEW THAT!

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


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”


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



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



POSSIBILITIES: Large hedge funds moving out of gold Federal Reserve sales Central Bank selling Cypress unloading gold reserves



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



THREE SLIDES TO THINK ABOUT

HISTORICAL RELATIONSHOP BETWEEN GOLD/INFLATION

Average

3.33

RATIO OF GOLD TO INFLATION Now6.84

Source: FRED

GOLD DOES NOT CORRELATE WELL WITH INFLATION DATA

Source: FRED

GOLD AND THE STOCK MARKET (S&P 500)

Source: FRED


A CLOSER LOOK AT: MX


Enters Portfolio

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

Sources: PR Newswire, February 2013Seeking Alpha, February 2013

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%

MagnaChip Semiconductor Corp (MX)


ENTERS PORTFOLIO 4/1/2013


Trade Data


Performance

April 2013 Stock Picks

As of March 28, 2013 - Subject to change.

Industry:Semiconductors


Dow Tech Index


Dow Semiconductor


FINVIZ SUMMARY


Schwab Earnings Report


Nasdaq.com Research


THE CHARTS PLEASE!


DAVID’S CORNER


SWAPS & “SPREADS”

IGNORE AT YOUR PERIL


SWAPS AND SPREADSRATE PRIOR CURRENT STATUS*

Libor/OIS 14.55 14.00

Euribor/Eonia .133 .130

DTCC RepoIndex

Agency .209 .193

MBS .228 .208Treas .202 .180

High Yield 4.87 4.78Federal ReserveCurrency Swaps

(ECB)USD million

7 Day 505 1,200Open 7,551 7,551

2-Year Swap Spread .146 .150 *Note: Status = No impact

Status = Negative Impact

As Of: 4/17/2013

CREDIT ANTICIPATES – EQUITY CONFIRMS


LEE’S COMMENTS

Built By Advisors For AdvisorsSource: Gartner Research

UNDERSTANDING EMOTION IN THE MARKET

PROCESS DESIGNED IN 1995 TO CYCLES IN THE TECH MARKET IDEA WAS TO EXPLAIN PRODUCT CYCLES AND DETERMINE IF A PARTICULAR TECHNOLOGY WAS “READY” SINCE THEN – APPLIED TO DIFFERENT INDUSTRIES COULD WELL BE APPLIED TO MARKETS GET’S TO THE HEART OF OVER-ENTHUSIASM POINTS TO PROCESS

Built By Advisors For AdvisorsSource: Gartner Research

UNDERSTANDING EMOTION IN THE MARKET


QUESTIONS & COMMENTS

THANKS FOR JOINING US!


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THEY CAN GNAW THROUGH STUCCO!!!

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