Pring Turner Capital AAII Presentation (March 2010)
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Transcript of Pring Turner Capital AAII Presentation (March 2010)
AAII San Francisco Meeting Saturday March 20, 2010Presented by: Tom Kopas
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Since 2000 a “Lost Decade” For Investors…
Are you Prepared for Another “Lost Decade?”
The Secular and Cyclical Outlook for Stocks, Bonds, and Commodities
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19-years/69% decline/6 recessions
19-years/67% decline/4 recessions
16-years/62% decline/4 recessions
10-years/43% decline/2 recessions
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www.pringturner.com Pring Turner Capital Group
19011929
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Price Moves in Excess of 25%
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 the Secular Bull Market for Commodities
Capitalize on Cyclical Stock Market Opportunities (Today)
Understanding Secular Environment is Key to Success
Financial markets are linked in a logical, rational, and sequential relationship to business activity. Financial markets have been tracking these business cycle sequences for over 150 years.
Pring Turner Investment Approach
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Key Points: Investing Around the Business Cycle
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
Just Entered Stage 4 Good for Stocks and Inflation Sensitive Securities Bad for Bonds
Business Cycle Drives Profitable Asset Allocation Decisions
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(Inverted)
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Inflation Barometer is at 100%.
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Key Points: Secular Trend Bonds/Commodities
Bonds Have Been in a Secular Bull Market for Almost 30 years
Bond Owners Beware: Secular Trend is at a Critical Juncture
Cyclically Bonds are Vulnerable to Interest Rate and Inflation risks
Small Rise in Interest Rates can Lead to Significant Losses in Bonds
Commodities in Secular Uptrend Adds to Risk in Bonds
Opportunities in Inflation Sensitive Securities
Tactics to Protect and Grow Wealth
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
March 2010
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