World of Investments and Leadership

1. World of Investments and Leadership A fascinating tale, told by Mr. Kralik

2. A Brief History • 1900’s – trend towards mass production • Economy – boom, low unemployment, rising prices, rising wages, increased production, increased productivity • 1914 WWI – good for the economy • Economy good – stock market booming

3. A Brief History…continued • Multiplier effect – spending and re-spending of money • 1929 – Black Friday – stock market crashed • 22% drop in a single day • Prolonged economic crisis begins

4. The Great Depression • 1930’s – a prolonged period of economic contraction • Typified by: • high unemployment • negative GDP • declining prices • GDP – gross domestic product • = C+I+G+(X-M)

5. 1971 • Extremely critical year in the history of the Earth • Kralik born – doctor’s amazed at his superior intelligence • Grew up in Scarborough, a small suburb of Toronto

6. 1973 • Oil crisis • OPEC – Organization of Petroleum Exporting Countries • US supplied Israel military with weapons during Yom Kippur war • In retaliation, OPEC proclaimed an “embargo” on US oil • Embargo – partial or complete restriction of trade with a country

7. Oil Crisis con’t • High oil prices created economic problems for industrialized countries • Steep stock market losses, high unemployment, high inflation

8. Peak Oil • The point where supply of oil “peaks”, and begins to fall

9. Definitions • Poison pill • ABCP crisis • Asset-backed commercial paper • Mortgage securitization • Name of Warren Buffett’s holding company • Total value of his company • Price of 1 share of Buffett’s company (Class A shares) on May 1, 2012 • Value investing • Who was Warren Buffett’s idol • What has Buffett’s salary been for the last 30 years?