Check Capital Management Inc.

1. Check Capital Management Inc. Client Conference October 18, 2008

2. Check Capital Personnel Steven Check – President Peter Hughes – Managing Director Nancy Kernan – Senior Administrator Helen Myers – Account Services Officer Jock Meeks – Client Services Director / Compliance Officer Jim Waite – Client Services Officer Robert Hill – Trading Manager Tom Schroeder – Investment Officer Karen Vaught – Administrator

4. Current Market Environment From 10/1 – 10/10, the DJIA fell 2400 points (22%) At its low, the DJIA was down 45% from its high Bear markets happen, on average, every 4-5 years and produce extreme volatility We prepare ourselves for these situations; during them we remain disciplined and rational For some investors, bear markets are seen as opportunities, not crises

5. “Well, now, isn’t this in keeping with how the rest of our day is going?”

6. Anatomy of a Bear Market: 1973-1974 OPEC embargo: price of oil quadruples U.S. Dollar plummets as industrialized nations agree to abandon fixed-exchange rate system Inflation rises from 3.3% in 1972 to 11.0% in 1974 Recession lasts 24 months from 1973 to 1975 Vietnam War continues August 1974: Watergate scandal leads to President Nixon’s resignation

7. Dow Jones: 1973-1976 1973: -17% 1974: -28% Total: -40% 1975: +38% 1976: +18% Total: +63% 1973-1976: -2% (With Dividends: +18%)

8. Stock prices always track earnings over the long term, but not over the short term Stock Price Earnings P/E = 15 // Price = $56 P/E = 16 // Price = $64 P/E = 7.5 // Price = $28

9. Anatomy of a Market Cycle Point of greatest risk “Minor setback. It can’t go down any further than this.” “I feel great about this investment.” Euphoria Thrill Anxiety Denial Excitement Fear Desperation Point of greatest opportunity Optimism Optimism Panic Relief Hope Capitulation Despondency Depression “Perhaps the market is not for me.”

10. Blue Chip Value Index

11. “I thought we were just buying a house!”

12. Macro Events • Housing Crisis • Credit Crisis • Government “Bailout” • Energy Costs / Inflation

13. Disciplined Investing • “Ultimately it is not the stock market nor even the companies themselves that determine an investor's fate. It is the investor.” —Peter Lynch • DALBAR Study Results: Over a 19-year period (ending 2002), the average equity investor earned 2.6% annually, versus the S&P 500’s return of 12.2% over that same period. • Stock/Bond Allocation • Solution: Choose a good strategy and stick with it.

14. “I don’t buy stocks simply because other are buying them. I buy them because many, many others are buying them.”

15. Bubbles & Outcomes: International

16. Bubbles & Outcomes: Oil

17. A “Reverse Bubble”: S&P 500

18. “We were wondering if now would be a good time to panic?”

19. Check Capital Management Performance Update Five-Year Annual Annualized YearReturnReturn 2000 26.7% 2001 19.9% 2002 -15.0% 2003 19.4% 2004 5.7% 10.3% 2005 4.1% 6.0% 2006 14.8% 5.1% 2007 2.5% 9.1% 2008 (through 9/30) -12.7% 4.5% [Returns net of 10%-of-profits management fee]

20. Performance Graph

21. Longer-Term Performance • Since 1995: 241% (9.7% annualized) • Since 2000: 77% (7.1% annualized) • Goal: Annualized performance greater than 10% [Returns net of 10%-of-profits management fee]

22. Notes to Check Capital’s Performance Information • The results for 2008 are for the nine-month period ending September 30, 2008. • The benchmark is the S&P 500 Index (a proprietary name of Standard and Poor’s). • Performance results are presented after removal of trading commissions and profit-based (10% of profits) management fees. • Rates of return include dividends, interest and realized and unrealized gains and losses. Leverage has been used occasionally in less than 10 of the accounts; due to the small percentage of portfolios affected, the results have not been recalculated on an unleveraged basis. • A complete list of firm composites and performance results is available upon request. • Past performance is no guarantee of future results.

23. Employ a Logical Investment Approach Characteristics: • Growing Businesses • Attractive Price (low P/E, high free-cashflow yield) • High Return-on-Capital • Low Debt • Stock Repurchases

24. Growth Through Strength-Quality-

25. Growth Through Strength-Valuation & Buybacks-

26. Retirement Planning • Choosing a reliable investment manager is a key step toward achieving financial independence and retirement security. • It’s important to have a roadmap. Check Capital provides retirement planning. Many clients have taken advantage of this—and we’d like to do it for everyone. • It’s FREE!

27. Break Steve will likely be a guest commentator on CNBC this Sunday at 5:00 p.m. By the way, be sure to visit the new CCM website at www.checkcapital.com

28. Wal-Mart -Overview- • World’s largest retailer, with over 7400 stores and 2008 sales likely over $400 billion • Sales, dividends and earnings-per-share have increased every year for over thirty years; growth almost entirely organic • Low prices appeal to value-conscious consumers; firm benefiting from weaker economy • Key to success is low cost structure, achieved through operational efficiency and economies of scale • Shareholder-oriented management: share count down 13% since 2000

29. Wal-Mart-When Did We Buy?- • Newsletter purchase date: 8/29/2005—Price: $45.75 • WMT became a “Buy” because: - In 2004 and 2005, earnings advanced 19% and 9%, respectively • The stock declined 12% in 2004-2005, while the P/E multiple contracted 30% • Since the purchase date, EPS has grown 10% per year Where Is It Now? • Current Price: $53 • Gain of 16% with no P/E expansion • 7% annualized return over three years (including dividends)

30. American Express-Overview- • Founded in 1850; the firm has survived almost every major U.S. financial crisis • Best brand name and most affluent client base in credit card industry; 20% share of U.S. credit-card market • Closed-loop system gives it a big advantage over other card issuers; derives over 50% of revenue from merchants, not consumers • EPS growth has averaged 16% over the past 15 years • Usually trades at a P/E multiple of between 16 and 22

31. American Express -Price/Earnings Ratio-

33. Berkshire Hathaway -Update- • “Warren Buffett Inc.” • 76 different operating companies • Since 1/1/08, Berkshire has committed over $20 billion to very attractive investments • Stock down 20% year-to-date • Book value has grown 12% in the last year

34. Berkshire Hathaway -Price Vs. Book Value-

35. Berkshire Hathaway –Changing Intrinsic Value–

36. Owner-Operator Program • Invests only in companies whose top executives own a significant amount of stock, thus aligning management’s interests with those of shareholders • Sometimes invests in smaller companies with shorter track records than those found in the Quality Growth Program • Examples: Apple, Berkshire Hathaway, Dell, FedEx, Google, Loews, Marriott • Fortune Magazine Study: Founder-run firms outperformed S&P 500 by 7% per year over 10-year period (1995-2005)

37. Presenters Steven Check Peter Hughes The entire staff of Check Capital Management thanks you for attending!