Media Hype

Media HypeRule 1: Don’t fall in love with one stock.

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Questions about Facebook

• When was it first launched?

• How many active users?

• What % of the U.S. population uses Facebook?

Facebook Inc. began trading publicly in mid-May, priced at $38.

– Since the public offering, the stock as of September 30th $21.60.

– The company is the subject of dozens of shareholder lawsuits – Down 45% from IPO price.

Don’t Fall in Love

February 2004

Over 1 billion

42%

Sources: Facebook Inc. and Yahoo! Finance

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These are the best stock picks??

ERICSSON $26 $10FAMILY GOLF CENTERS $23 ZEROGENERAL MOTORS $73 BANKRUPTHOMEBASE $73 BANKRUPT KNIGHTSBRIDGE TANKERS $22 $15LIBERTY MEDIA GROUP $40 $50MCI WORLDCOM $59 GONECHARLES SCHWAB $58 $53STORAGE TECHNOLOGY $37 $88

“Expert” Picks

1998 Today’s STOCK share price share price

Source: Article “Expert” Picks by Vestory, Mar 30, 2012 http://www.vestory.com/2012/03/30/expert-picks/

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-13.42%

2.11%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Cramer Picks

S & P 500

Investment Media Hype

Source: Jim Cramer’s Mad Money Stock Picks for Thursday, January 6, 2011. The S&P data are powered by Standard & Poor’s Index Services Group. Information from sources deemed reliable, but its accuracy cannot be guaranteed. Performance is historical and does not guarantee future results.

Cramer Can’t Beat the Index!!

I’d be mad about my money!

Media HypeRule 2: Understand that they sell fear.

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$31.7 Trillion as of December 31, 2011

In US dollars. Market cap data is free-float adjusted from Bloomberg securities data. Many small nations not displayed. Totals may not equal 100% due to rounding. Dimensional makes case-by-case determinations about the suitability of investing in each emerging market, making considerations that include local market accessibility, government stability, and property rights before making investments. For educational purposes; should not be used as investment advice. 1. An example large cap stock provided for comparison.

Capitalization over time($ trillions):

Developed Markets Emerging Markets

Frontier Markets

Bloomberg Index Affiliation

World Market Capitalization

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What you know that the market doesn’t….

Quotes from the AP Press:

• Before 8 a.m. “Stock Futures Rise on Hope for Greece Bailout.”

• 45 minutes later . . . “Stocks Down on Greece Default Fears

Greece has been in sovereign default during 105 of the last 200 years.

Facts About Greece

Source: Client’s Corner: What Do You Know That The Market Doesn’t? August 2011, Vol 11, Issue 8 – http://www.nickmurraynewsletters.com

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• S&P has increased 11 % compounded annually. Those gains came despite 10 bear (down) markets and 10 recessions.

• Do you think the 2008 financial and auto bailouts were unprecedented? To name a few, remember

$293 billion bailout of the savings and loan industry (1989)

$10 billion bailout of New York City (1975)

First Bailout of Chrysler (1980)

Bailout of Lockheed (1971)• Unemployment = topped 8-10% in 16 out of 61

years.

The Last 61 Years – History Lesson

Source: Schroeder, Richard. “Why You Should Keep Investing in 2012 (And Even Up Your Ante)” Investment Update, 1 Jan 2012, Vol 16, Issue 7

Media HypeRule 3: Ignore them and

keep your emotions in check….

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After hearing the “experts”…

Thanks for listening.

Any questions…..

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The back-tested data used in creating the simulated strategies includes simulated data where live funds were not in existence to provide actual returns. The simulated data was developed in the belief that it represents the historic performance of the live funds. Live funds will differ from simulated strategies. Simulated data does not reflect deductions of fund expenses that an investor would pay and does not represent results of actual trading. Live funds may exclude securities with characteristics not otherwise excluded in certain databases used in some simulated strategies. Sources and Descriptions of Data (following these disclosures) is an integral part of and should be read in conjunction with this explanation.

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