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GOT TO BE TOUGH TO BE AN ADVISOR

GOT TO BE TOUGH TO BE AN ADVISOR. BIGFOOT INVESTMENTS OPEN FORUM Mar 21st, 2013 WELCOME!. AGENDA WELCOME! ADMIN NOTES QUOTE OF THE DAY OPTIMISM GAUGE CHARTS OF INTEREST SO WHAT’S UP WITH: THE FED “PRINTING MONEY” A CLOSER LOOK AT: CVLT DAVID’S CORNER SWAPS AND SPREADS

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GOT TO BE TOUGH TO BE AN ADVISOR

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  1. GOT TO BE TOUGH TO BE AN ADVISOR

  2. BIGFOOT INVESTMENTS OPEN FORUM Mar 21st, 2013 WELCOME!

  3. AGENDA • WELCOME! • ADMIN NOTES • QUOTE OF THE DAY • OPTIMISM GAUGE • CHARTS OF INTEREST • SO WHAT’S UP WITH: THE FED “PRINTING MONEY” • A CLOSER LOOK AT: CVLT • DAVID’S CORNER • SWAPS AND SPREADS • LEE’S COMMENTS • QUESTIONS/COMMENTS

  4. “NOTES” • IF YOU USE ANY OF OUR SLIDES, PLEASE REMEMBER TO • HAVE THEM APPROVED BY YOUR COMPLIANCE DEPARTMENT. • WE’LL UN-MUTE YOU ON OUR END SO YOU CAN ASK QUESTIONS. • PLEASE MUTE AUDIO FROM THE MENU ON YOUR SCREEN SO • WE DO NOT GET FEEDBACK. • THANK YOU!

  5. BigFoot Investments is now on Twitter, LinkedIn!

  6. BigFoot On LinkedIn! Don’t Forget To Join Our “Group”

  7. Notifying You! SMS Alert System

  8. QUOTE OF THE DAY: I have missed over 9000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over again in my life… …and that is why I succeed! Michael Jordan

  9. Optimism Gauge As of: 3/21/2013

  10. Measuring Our Economy Last Update: 3/21/2013

  11. Measuring Our Economy READING AS OF: 3/21/2013 Economic Optimism Index NOTES/COMMENTS CURRENT READING: 76.3% PRIOR READING: 76.3% BIAS: BULLISH 11 OF 13 INDICATORS POSITIVE TREND - POSITIVE 45 65 35 75 25 85 76.3% 15 95 Current Reading Prior Reading POSITIVE AS OF: 8/17/2012

  12. Charts of Interest!

  13. LATEST ECONOMIC FORECASTS

  14. Reading the Economy

  15. 2013 • 49 Inputs • Low 1.7% • High 3.98% Source: Wall Street Journal

  16. 2013 • 49 Inputs • Low 1.1% • High 2.7% Source: Wall Street Journal

  17. 2013 • 49 Inputs • Low 7.4% • High 7.9% Source: Wall Street Journal

  18. 2013 • 49 Inputs • Low 0% • High .25% Source: Wall Street Journal

  19. 2013 • 49 Inputs • Low 1% • High 9% Source: Wall Street Journal

  20. A COMEBACK OF SORTS??.....MAYBE BALTIC DRY INDEX 20-day Exponential Average Source InvestmentTools.com

  21. NEW PROJECTIONS – MARCH 2013 RELEASE Source: Federal Reserve

  22. NEW PROJECTIONS – MARCH 2013 GDP Source: Federal Reserve

  23. NEW PROJECTIONS – MARCH 2013 UNEMPLOYMENT Source: Federal Reserve

  24. NEW PROJECTIONS – MARCH 2013 INFLATION - PCE Source: Federal Reserve

  25. NEW PROJECTIONS – MARCH 2013 INTEREST RATE VOTING – TO INCREASE Source: Federal Reserve

  26. NEW PROJECTIONS – MARCH 2013 TARGET FEDERAL FUNDS RATE BY YEAR Source: Federal Reserve

  27. 5 TAKEAWAYS FROM THE FED’S REPORT ALL SYSTEMS GO OKUN’S LAW STILL ON ITS BACK 2015 IS STILL THE KEY YEAR THE ELEPHANT IN THE ROOM IS FISCAL POLICY MIXED ECONOMY. Source: Wall Street Journal

  28. MORNINGSTAR – “TO BE OR NOT TO BE” Neutral is Best? Source: Wall Street Rant

  29. Slow but steady improvement Markit Flash U.S. Manufacturing PMI™ Release 3/21/2013

  30. SO WHAT’S UP WITH: THE FED “PRINTING” MONEY

  31. THANK YOU TO MY FAVORITE BLOGGER! Over the past year I have “preached” that the FED IS NOT PRINTING MONEY. It’s simply not the way a BALANCE SHEET works! Now I have support from Scott Grannis in his March 18th blog entitled: The Fed is not “ Printing Money” Source: Scott Grannis Blog

  32. HIS POINTS: • There is “Fiction” on how monetary policy works • Might WELL be a problem in the future • No evidence to date that would suggest $-debasing Source: Scott Grannis Blog

  33. THE BALANCE SHEET TELLS THE STORY – LAST 7 YEARS Huge growth in Bank Reserves Elimination of T-Bills Operation Twist Relatively Normal Currency Growth Growth in T-Bonds Unprecedented growth in MBS & Agency Sec

  34. One point of confusion – Although there has been enormous growth in bank reserves (18 times historical) these reserves can’t be spent - they are only a liability on the Fed’s balance sheet. To get the money banks must exchange reserves for currency but as we’ve seen this is NOT HAPPENING. Source: Scott Grannis Blog

  35. BANK OPTIONS: • Can exchange reserves for currency and lend – Not happening • Support increases in deposits – Happening • Just leave it at the Fed and get paid interest - Happening • Now paying .25% on all reserves • Reserves are the equivalent of T-Bills – very safe Sources: Scott Grannis Blog and Federal Reserve

  36. THE NATURE OF MONEY • Over the past 5 years there has been a huge demand for money • The Fed has literally been swapping risk for cash • M2 has grown 26% more than nominal GDP • Now at the highest level since 1950s • Monetary policy extremely accommodative but demand is very strong • Deleveraging has been a major “driver” in $ demand • NOW – IT FOLLOWS THAT IF THE FED HAD NOT SATISFIED THE MONEY • DEMAND WE WOULD HAVE HAD HUGE DEFLATIONARY PRESSURES Largest part of M2 Growth Source: Scott Grannis Blog

  37. OK - SO THEY DON’T PRINT MONEY: WHAT’S THE REAL PROBLEM REVERSE THE FED’S ACTIONS TO DATE HAVE BEEN IN REPSONSE TO A MASSIVE DEMAND FOR RISK AVERSION – CASH+CASH EQUIVALENTS+RESERVES WHAT HAPPENS WHEN RISK AVERSION DECLINES??? Source: Scott Grannis Blog

  38. “THE BIGGEST RISK WE ALL FACE AS A RESULT OF THE FED’S UNPRECEDENTED EXPERIMENT IN QE IS THE RETURN OF CONFIDENCE AND THE DECLINE OF RISK AVERSION” SO, MOVING FORWARD THERE IS THE RISK THAT THE FED WILL NOT COUNTERACT FAST ENOUGH Source: Scott Grannis Blog

  39. WHAT THE FED CAN DO –THE ARSENAL • Monitoring Tools • Watch for buildups of leverage • Assess unsustainable funding patterns • Financial market assessment (largest financial institutions) • Shadow Banking System regulation/reporting • “Fire-Sale” dynamics occurring • Exchange of info with regulatory bodies (FSOC) • Regulation • Continued Stress tests • Adequacy of capital • Communicating changes • Balance sheet tools • Interest on deposits • Keeping accommodative rates after QE • Global accommodation/coordination • Knowing the consequences • Margin Requirements

  40. A CLOSER LOOK AT: CVLT

  41. Enters Portfolio

  42. CommVault Systems, Inc (CVLT) CommVault Systems, Inc., together with its subsidiaries, provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. The company develops, markets, and sells a suite of software applications and services under the Simpana brand. Its Simpana software suite includes solution for the backup and restoration of enterprise data for file systems, applications, databases, and virtual machine systems; integrated data archiving solution that optimizes data tiering and improves information governance; and enterprise-wide storage optimization for email and files reducing space on primary storage. The company also provides solutions for protection of critical applications and data with snapshots and real-time replication; solutions to analyze, discover, track, trend, and report on physical and virtual storage usage; and Web browser, which allows search, sort, select, and retrieval of corporate files and information from online, archive, and backup data copies. In addition, it offers assessment and design, implementation and post-deployment, training, consulting, and customer support services. The company markets and sells its software applications and related services directly to large enterprises, small and medium sized businesses, and government agencies, as well as indirectly through a network of value-added reseller partners, systems integrators, corporate resellers, and original equipment manufacturers. It licenses its software applications to customers in various industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities, and energy. The company has strategic relationships with Dell, Inc.; Hitachi Data Systems; and NetApp. CommVault Systems, Inc. was incorporated in 1996 and is headquartered in Oceanport, New Jersey. Source: FinViz.com, March 2013

  43. CommVault Systems, Inc (CVLT) POSITIVES:CommVault just released its enterprise data management tool Simpana 10. This software allows users to access data outside of the office. More than 300 new features in Simpana 10 combine to reduce risk, slash costs by up to half, reduce administrative overhead by up to 80 percent and lower aggregate support costs by up to 35 percent. Possible concerns:Cloud based data storage is a secular trend that is starting to leak over into the enterprise world. There are a few other companies who have a strong presence in this space the CommVault must compete with. Sources: PR Newswire, February 2013

  44. ENTERS PORTFOLIO 3/1/2013 Buy 3/4/2013 @ $74.42 - Current as of 3/20 = $82.74

  45. March 2013 Stock Picks As of February 28, 2013 - Subject to change.

  46. FINVIZ SUMMARY Needham Upgrade 1/31/2013 Target $83.00

  47. CommVault shares hit record high on takeover speculation, Bloomberg reports Data storage software provider CommVault Systems (CVLT) rose 8.6% to a record level of $84.20 as speculation grew that the company may be acquired, reports Bloomberg. Source: Bloomberg 3/15/2013

  48. Dow Tecnology Index

  49. Application Software

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