AAII Silicon Valley Meeting Saturday November 13, 2010

Presented by: Tom Kopaswww.pringturner.com

Since 2000 a “Lost Decade” For Investors…

Are you Prepared for Another “Lost Decade?”

The Secular and Cyclical Outlook for Stocks, Bonds, and Commodities

1

2

3

4

19-years/ 69% decline/ 6 recessions

19-years/ 67% decline/ 4 recessions

16-years/ 62% decline/ 4 recessions

10-years/ 38% decline/ 2 recessions

?

?

Halfway Through Secular Bear

2016-2020

Completed Secular

Bear Target Area

U.S. Stock Prices (Inflation

Adjusted)

U.S. Commodity Prices

Commodity Oscillator

1 2

3

4

(72/240)

1901

1929

1966

2000

1 5

6

7

2

3

4

15

6

7

2

3

4 1

5

2

3

4

1

2

3

4

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

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.

Pring Turner Investment Approach

The Random Noise of Economic News!

Money Supply

Commodities

Bond Prices

Stock Prices

Economy

?

Secular Bear Secular BearSecular Bull

4 to 5 YEARS

Bonds

StocksInflation Sensitive

Utilities

Food Producers

U.S. Treasuries

Banks

Technology

ConsumerDiscretiona

ry

Technology

Transports

Oil Drillers

Diversified Metals

Energy

Oil Drillers

U.S. Treasuries

Diversified Metals

Healthcare

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

Key Points: Investing Around the Business Cycle

…Uptrend still intact.

Oscillator registered sell signal but…

Green/Red highlights show when KST is above/below its 12

Month Moving Average

Green highlights show when our secular model is

bullish

Green highlights show when this cyclical model is bullish

Trading Range likely to be broken

this cycleEarly phase

of Commodity Outperforma

nce over Bonds

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

Class Secular

Cyclical

Tactics

Stocks Bear Bull

Use Business Cycle to Tactically Allocate Assets

Inflation Themes are in Secular BullResourced Based, Foreign-Emerging

MarketsQuality with International ExposureIncome Producers

Bonds Bear?

Bear

Review and Reconsider RisksLower Bond AllocationReduce Bond MaturitiesSet up Short-term Bond LadderHedge Bonds with Inflation Sensitive Securities

Inflation

Sensitive

Assets

Bull Bull

Favor Natural Resource Companies“Chindia” Theme, Global Resource DemandPrecious Metal ExposureResource Based CountriesCanadian Royalty Trusts

Pring Turner Capital Group

Tactics to Protect and Grow Your Wealth

www.PringTurner.com

Secular Trend at Critical Juncture

Thank you for Listening…

You are welcome to visit our website www.pringturner.com for research updates