GLOBAL MARKET COMMENTARY

June 16, 2016

GLOBAL MARKET COMMENTARY EXECUTIVE SUMMARY

2. Foreign capital is finally flowing into Brazil. The critical factor in global market psychology now is the risk of a British departure from the E.U. Although net capital flows into Brazil turned positive in April for the first time in more than six years, revived and continued market optimism on Brazil will depend on the dissipation of Brexit fears and an optimistic assessment of the reform efforts of Brazil’s acting president, Michel Temer. Prospects for his long-term success are cloudy -- but in the near term, incremental events will be positive catalysts for continued capital inflows, as he attempts to deal with pension entitlements, amend the constitution, and institute responsible fiscal policy. 3. One more step towards the internet being regulated like a utility. “Net neutrality” has won a big battle, with a Circuit Court appeal upholding the FCC policy that puts high-speed internet in the same regulatory category as other utilities. The battle will go on -- likely to the Supreme Court -- but for now, this is a victory for companies that provide content, and a loss for companies that carry the data. In the long run, we think the writing is

on the wall: in every industrial revolution, the disruptors are eventually tamed and integrated into a regulatory framework. Slowly, that’s happening with the internet revolution as well -- and if Europe is a harbinger, it will also happen eventually to disruptive platform services in retail, hospitality, transportation, and other industries. 4. Market summary. It is quite obvious that because of an excess of caution, the U.S. Federal Reserve is waiting too long to raise interest rates. We are modestly bullish on U.S. stocks, and think that fear about Brexit will create buying opportunities. In the U.S., we favor buying oil, gold, and technology stocks on market corrections. We are bullish on the long-term price appreciation of oil, gold, and silver. We remain bullish on Brazilian bonds, stocks, and currency. We remain concerned about the frail condition of European banks, which unlike U.S. banks, have not been forced to raise capital to strengthen their balance sheets. A lower Euro and Pound are resulting from fear over Brexit, but we would not be buyers of Europe, Japan, or most emerging markets. The Fed has opted for a very dovish view; slow U.S. economic growth is part of that view, and fear of world events is another part. We believe that demographics, high global debt levels, and high taxes are causing stagnating world growth. We expect continued slow growth for some years to come. This puts the onus on investors to own companies or commodities that can grow or rise in spite of high government debt and high tax rates. This leaves us invested in the areas mentioned above.

© Guild Investment Management Inc.

1. Brexit polls cause fear -- we’re not focusing on the fears, and are optimistic about the global economy. Brexit fears are gripping global markets, providing an occasion for optimism to retreat and bearishness to reassert its grip on market psychology. We believe that close analysis suggests a British vote to leave the European Union remains unlikely; we are particularly unimpressed by British pollsters, technically and historically. Until the push for Brexit fails, the fear will remain. When the vote happens and if the fears fail to materialize, there will be the prospect for positive data to be interpreted in a bullish light -- which will restore the market’s enthusiasm.

June 16, 2016

2

EDITORS

Chief Investment Officer

Polls, Polls, Everywhere, and Not a Drop of Certainty Markets are possessed by Brexit fears. The market selloff that began last week may have been prompted by dramatic poll data showing the “leave” vote pulling ahead of support by Brits to remain in the European Union. That’s prompting existential fears because no one really understands what all the consequences might be.

Then, we had a horrific terrorist crime in Orlando. The “leave” campaign briefly tried to capitalize on it, and then ANTHONY DANAHER deleted the offending tweet amidst a torrent of condemnation. But clearly, President although it couldn’t be said, let alone used to make some political hay, it is in the top of everyone’s mind. British working-class tabloid newspaper The Sun has come out in favor of Brexit, and it is more apparent than ever that the deepest subtext of the “leave” campaign is the issue of immigration. As our analysis suggested, London and its commuter belt will vote overwhelmingly to remain; RUDI VON ABELE the backbone for the “leave” vote will be the immigration-skeptical and Senior Research demographically weaker English workAnaylist ing-class outside the capital (Scotland, which has oil and gas, will swing heavily to the “remain” vote). CONTACT INFO 1-310-826-8600 [email protected]

Mon-Fri 6:30-4:30

So shootings in Orlando and Paris are shifting some minds… but likely these are minds in the demographic groups already prone to vote “leave.” Barring another major event on the eve of the vote -- and it would likely need to be

one in Europe itself -- we do not think this will sway the result. Polls Are a Problem Polls are clearly making markets nervous, but when we dig deeper, we get more skeptical that the headlines are meaningful. Most notably, there is a huge divergence between online polls and polls conducted by telephone. The “polls of polls” that capture headlines are usually skewed to favor online polling. Online polls have showed “leave” and “remain” neck-and-neck for all of 2016. But telephone polls, where respondents have more freedom to express themselves with nuanced responses, have showed a comfortable lead for “remain” for all of 2016, and still do. There is also the matter of the polls’ reliability in toto. British pollsters, as pollsters around the world have in recent years, experienced a humiliating failure in 2015, when they utterly failed to predict the upset victory by the Conservative Party. Five days before the vote, they showed a 91 percent chance that there would be no majority in Parliament. They still haven’t figured out what went wrong, and have been desperately tweaking their models ever since.


MONTY GUILD

June 16, 2016

3

Polls, cont’d... What about the bookies? They have historically had a better track record, and as of this writing, they are suggesting a 60% chance that “remain” carries the day. We should note that bookies themselves are not wholly immune to the polls, since a lot of money does watch the polls and is influenced by them. The bottom line: demographic and social analysis; a study of polls, their characteristics, and their failures; and a close watch on bookies’ odds, all convince us that Britain will vote “remain” on June 23. Still, this is the fear that markets have seized on as a justification for bearish anxiety. We can’t fight that negative psychology. Markets need to see Brexit fail. Then, they will wake up and realize that their

fear was irrational… and perhaps become open to interpreting incoming data in a way that will renew their bullishness. Investment implications: Brexit fears are gripping global markets, providing an occasion for optimism to retreat and bearishness to reassert its grip on market psychology. We believe that close analysis suggests a British vote to leave the European Union remains unlikely; we are particularly unimpressed by British pollsters, technically and historically. Until the push for Brexit fails, the fear will remain. When the vote happens and if the fears fail to materialize, there will be the prospect for positive data to be interpreted in a bullish light -- and restore the market’s enthusiasm.

Brazil’s Tough Policy Talk Draws In Foreign Capital April saw a remarkable shift: after more than five years of capital flight, Brazil saw net capital inflows.

Source: Banco Central do Brasil


Brazil Net Capital Flows Turn Positive

June 16, 2016

4

Brazil Policy, cont’d

We have two basic theses: first, the ingredients of a reversion-to-the-mean rally are present. This includes both psychological ingredients and the fundamental data that justify them. Second, though, we do not have tremendously high hopes for Brazil in the longer-term: this is a reversion-to-the-mean trade, not an investment.

The Long Term Looks Rough -- So Why Will Capital Come Into Brazil? We wrote earlier this year, in January and May, about Brazil’s deep, long-term problems. Here’s a recap. First, Brazil suffers from a political culture which has looked for answers to every problem in strong central government action as long as the country has existed. Every problem is a nail… and the hammer is more government. As has happened almost everywhere else where government takes on that role, the result is a sprawling, wasteful, and paralyzing bureaucracy. Second, Brazil got carried away when it got rid of its military dictatorship in the late 1980s. They wrote a new constitution, and in the effort to secure every possible protection for the rights and welfare of citizens, they overreached, with disastrous fiscal consequences. Generous annual increases for 90 percent of Brazilian government discretionary spending items are written into the constitution… which means that it would take a constitutional amendment to slow the exponential growth of entitlements and government programs. Brazilian politics are badly fractured and polarized, so no one has had the will or the political capital to tackle the problem. In the hangover of the last decade’s commodity boom, Brazil has become a mid-

dle-income country with developed-world debt levels and budget deficits, and relatively little to show for it in infrastructure or services. With those negatives, why has capital started to flow into Brazil?

Fundamentals Don’t Need to Be Perfect... Just Perceived to Be Improving First, capital outflows have reversed because investors believe the bottom is near or close, as we do. We’ve written before about the confluence of events that leads them to believe this: commodities, including oil, reaching multi-decade lows and coming off their bottom; an improvement of sentiment surrounding China, perceived to be the engine and bellwether of global growth; and the resolution of Brazil’s long-running political scandal. In the current tired bull market, psychology is critical, and as we watch the markets, we see that psychology is fragile. Mr. Market, who is a pretty capricious character, seizes on negative news -- even on neutral news which can be interpreted negatively -- as an excuse to abandon a lightly-held positive mood. Just as the U.S. stock market recently neared its alltime highs once again, we had a spate of negative news. Perhaps the specter of British voters deciding to leave the European Union was what shifted psychology; then Islamist violence in Orlando and Paris got Mr. Market worried that edgy, immigration-skeptical Brits would be tipped over the edge and bid farewell to the continent and its porous borders and migrant wave. That in turn is making Mr. Market question the hesitant and nervous positive view he’d been starting to take on the whole global economy, and hasn’t been good for risk assets anywhere -- even in markets like Brazil, far removed from British politics and Islamist terrorism. What is necessary for the revival of positive psychology in a tired bull market? First, fears need to pass. Fears pass when feared


This is important for investors who are following a reversion-to-the-mean theme. It shows that others besides us from outside Brazil are also reaching the conclusion that in spite of the severity of Brazil’s long-term problems, there are potential rewards as the crisis and the economy come out of their lows. We want to be slightly ahead (but not too far ahead) of the large investors as they return to the Brazilian markets and the Brazilian currency.

June 16, 2016

5

Brazil Policy, cont’d events don’t materialize. Future events are often not evaluated rationally by Mr. Market; rather they become potent symbols of some incalculable unforeseen catastrophe. When the catalyst fails to occur -- for example, mass Ebola casualties in New York and London; or the plunge of commodity prices to lows below Mr. Market’s darkest imagination; or a paralyzing financial crisis in China; or the collapse of the European Union -- Mr. Market wakes up as if from a bad dream and finds his optimism again. Then all of a sudden, he finds reasons to be positive -- reasons that were there all along, but that in his depressed state he had tried to ignore.

there will be plenty happening that can serve to catalyze further optimism about a recovery of the Brazilian currency and bonds, and some Brazilian stocks, from their lows.

(We note that sometimes, feared events do materialize. We study world events and trends not only for their psychological impact -- i.e., how will they influence market participants’ beliefs -- but also to perceive as best we can the likelihood that they will actually transpire.)

He inherited an awful mess. Rousseff’s administration had chronically underestimated spending and overestimated revenues, and so this year’s $27.5 billion budget hole Mr. Temer’s team thought they were dealing with has turned out to be a $45.9 billion hole -- at 2.65% of GDP, the largest primary budget deficit in Brazil’s history, in the midst of a recession that is about to cross the threshold into being considered a depression (a 10% or greater economic contraction lasting more than two years).

The big proximate fear that needs to pass right now is the fear of Brexit. That fear will pass in one of two ways -- either the U.K. will vote to remain in the E.U., in which case fears will dissipate immediately; or the U.K. will vote to leave, in which case there will be a lot more fear in the near-term which will dissipate slowly as it becomes apparent that the departure will be a positive for the U.K. and a salutary kick in the pants for the Eurocrats. As we write above, we think the U.K. will stay, although terror attacks in the U.S. and Europe are raising the risk of a departure. With Brexit fears resolved, what good news might be coming that will keep Mr. Market enthusiastic about Brazil?

Progress In Brazil When the Brexit dust settles, even though we think Brazil’s long-term problems are pretty intractable,

After Dilma Rousseff was suspended from office to face impeachment proceedings, Michel Temer, the vice president and a member of a different political party, took the country’s helm.

However, his response has been just what Mr. Market wanted to see. Temer has pulled together a fiscal team applauded by global observers: orthodox and hard-nosed figures such as finance minister Henrique Meirelles and the new central bank chief, Ilan Goldfajn. This team shows an evident commitment to fiscal and monetary discipline, in line with the policies that multinational institutions always recommend to troubled developing-world economies but that are seldom actually implemented (and are quite effective when the “tough medicine” gets taken). Now an ingredient has been added to the mix that is, in our view, highly significant. The administration has pledged to seek to change the constitution to undo the automatic ratcheting-up of so much social spending, by putting in place an amendment that will limit that spending growth to the rate of inflation. In other words, if this amendment passed with the 60% majority required in both houses of Brazil’s congress, social spending would be frozen at 2016 levels in real terms -- even as economic recovery raised tax revenues.


When the worst of all worlds fails to materialize, there then needs to be news that Mr. Market can view in a positive light and seize upon as a justification for optimism.

We believe market participants’ attention will return to these developments when their anxiety dissipates.

June 16, 2016

6

Stagnant U.S. Growth, cont’d It is an ambitious attempt to deal with Brazil’s enormous fiscal hole. Will it succeed? Ultimately, we doubt it. Temer will attempt to capitalize on disgust with Rousseff and the momentum of her impeachment campaign to move his proposals forward quickly (and the constitutional amendment is not the only one -- he is also promising aggressive action on pension reform, another albatross around Brazil’s neck). However, he is already finding that momentum hard to maintain. Some senators are defecting from the impeachment camp or declaring themselves undecided, leaving an increasingly slender majority to oust Rousseff permanently. The majority he can muster for such widespread reforms as those he is pushing will surely be thinner still -- if indeed he can muster it at all. One analyst described the reform prospects as “arduous.” However, at this juncture, the market does not need to see his measures fully implemented. The market does not need to see his bold attempt to shrink a state that has been bloated for its entire historical existence actually succeed. The market only needs to see progress in order to make an optimistic assessment, and we believe that further progress on

the reform front -- once other global clouds have dispersed -- will renew and invigorate the flow of capital into Brazil as investors seek cheap goods with the potential to become more dear. Investment implications: The critical factor in global market psychology now is the risk of a British departure from the E.U. Although net capital flows into Brazil turned positive in April for the first time in more than six years, revived and continued market optimism on Brazil will depend on the dissipation of Brexit fears, and an optimistic assessment of the reform efforts of Brazil’s acting president, Michel Temer. Prospects for his longterm success are cloudy -- but in the near term, incremental events will be positive catalysts for continued capital inflows as he attempts to deal with pension entitlements, amend the constitution, and institute responsible fiscal policy. In the mid-term we continue to see opportunities in Brazilian currency, bonds, and stocks. Periods of panic and fear create good buying opportunities for long-term investors. Is the current environment one of those? We think that it is.

Good News for Internet Content Providers

Back in 2014, we wrote on net neutrality while the FCC’s rules were still being drafted. We think some of that piece is worth presenting again, because it gives a good breakdown of who is on each side of the argument and why. Although it is presented as a civil rights or property rights issue by both sides, we see it as being a much more simple and straightforward economic battle;

with the fight being over who will pay to build the roads that comprise the “information superhighway”.

“Net Neutrality”: More Heat Than Light Consumers love data, particularly in the form of movies. NFLX streaming video data account for about a third of peak internet traffic in the U.S. Traffic has to flow along a road, and roads need to be built for that traffic to flow. Both consumers and producers have a strong interest in a good road system -- since without it, they couldn’t buy or sell any goods. The question is: who will pay for the roads that make commerce possible? In the case of the interstate highway system -- one of the foundations of post-WW2 U.S. prosperity -- the answer is sim-


A new decision has come down from the Court of Appeals for the DC Circuit Court, affirming last year’s designation of broadband internet as a utility by the Federal Communications Commission (FCC). Such a designation gives the government much broader power to regulate high-speed internet, and is a victory for the champions of “net neutrality” -- such as Alphabet [NASDAQ: GOOG] and Netflix [NASDAQ: NFLX]. This will not be the end of the matter; most observers expect the battle to find its way to the Supreme Court.

June 16, 2016

7

Internet Content Providers, cont’d ple. They’re public, since it would make no sense to have competing privately-run interstate highway networks. So we fund them through our taxes. This same question -- who will pay for the infrastructure? -- is the driving force behind the “net neutrality” debate. As internet-delivered applications get more data intensive, and as consumer demand for them grows, settling that question becomes more contentious. Consumers think of the internet mostly in terms of their own “last mile” provider. If the internet is a highway system, the last mile provider is the road that goes from the off-ramp to your driveway. This provider is your internet service provider (ISP) -either a big national company like Sprint [NYSE: S] or AT&T [NYSE: T], or a regional company like Cox, Frontier [NASDAQ: FTR], or EarthLink [NASDAQ: ELNK]. However, the trip that data takes from a “content provider” like NFLX to your last mile provider can be complex, potentially passing through national internet service providers (ISPs), content distribution networks (CDNs), and your own local ISP. Deals happen and the conflicts arise as players upstream from the final consumer negotiate with one another, jockey for position, and try to get someone else to help pay for the infrastructure to deliver the ever-growing torrent of data that consumers want and producers want to sell to them.

Data cargoes are constantly getting bigger, and big network peers are sparring over who should pay to build the roads.

Content Providers and Broadband Suppliers Are Jockeying For Position The argument goes something like this. Content producers, like NFLX, talk to the national networks and service providers and say, “Retail customers are demanding our content. When they signed up with you, you promised to deliver all the content available on the web -- so you should pay to build the roads and deliver it to them.” In response, the people who build and run the internet’s backbone turn the demand around, and say to the content providers: “Retail customers are demanding your content. Your content has gotten much more data intensive, so clearly you should pay to build the roads that carry it to them.” You could look at either argument and think, “That’s a reasonable position.” If content providers like NFLX are prohibited from paying the various data transit companies (which is what “net neutrality” means), then the burden of building out infrastructure capable of handling ever-increasing data streams will fall on those transit companies themselves, if they want to keep the customers who demand the data. So of course,

Source: Guild Investment Management, Inc.


How That Movie Makes It To Your Screen

June 16, 2016

8

Internet Content Providers, cont’d

Likewise, the transit companies like AT&T or Sprint make a similar pitch to the public and to legislators -- but theirs is about property rights. They want convince the public that something nefarious would be going on if they were the ones who had to pay the price for infrastructure expansion. “Net neutrality,” to them, means that they can’t accept payment from content providers that will help them build out the infrastructure. So they say, “It’s our system -we can make whatever arrangements with content providers we want to. That’s our right as property owners!” All we’re witnessing is a tussle between the two sides -- and we’re watching as they make appeals to the public and to lawmakers to try to get a regulatory regime that’s more economically friendly to them. The recent decision is a victory for the content providers, but it will not be the last word; that will indeed likely fall to the Supreme Court for resolution. In the longer term, we think it is likely that many of the online platforms currently disrupting retail, hospitality, and transportation industries will also come under increasing

Market Summary

U.S. stocks are likely to move sideways and gradually rise over the coming months. Because of an excess of caution, the U.S. Federal Reserve is waiting too long to raise interest rates. The continued low-rate environment will be beneficial for stock prices and will eventually lead to a higher US inflation rate in the fall of 2016. An increase in the inflation rate will eventually lead to a strong rise in commodity prices led by gold and precious metals.

regulatory scrutiny. We see this process unfolding in Europe -- and eventually, it will come to the U.S. as well. Every industrial revolution brings its disruptors -- and then eventually, those disruptors are forced into the system and regulated. Investment implications: “Net neutrality” has won a big battle, with a Circuit Court appeal upholding the FCC policy that puts high-speed internet in the same regulatory category as other utilities. The battle will go on -- likely to the Supreme Court -- but for now, this is a victory for companies that provide content, and a loss for companies that carry the data. In the long run, we think the writing is on the wall: in every industrial revolution, the disruptors are eventually tamed and integrated into a regulatory framework. Slowly, that’s happening with the internet revolution as well. If Europe is a harbinger, it will also happen eventually to disruptive platform services in the retail, hospitality, transportation, and other industries. Although the great tech leaders of the past several years may be excellent investments once the market declines, we need to be careful to differentiate the long-term growth stories, which are content suppliers, from the commodity producers of internet access. Content suppliers can grow for some time to come; access suppliers are becoming regulated.

Areas we like: We are modestly bullish on U.S. stocks, and think that fear about Brexit will create buying opportunities. In the U.S., we favor buying oil, gold, and technology stocks on market corrections. We are bullish on the long-term price appreciation of oil, gold, and silver.


content providers like GOOG and NFLX have a motive to convince the public -- and regulators -that something nefarious would be going on if they had to contribute more directly to the infrastructure that makes it possible for their products to reach consumers.

June 16, 2016

9

Market Summary, cont’d

Data Source: Bloomberg

Outside of the U.S., we remain bullish on Brazilian bonds, stocks, and currency. We remain bullish on Indian stocks, and for the bold speculator, the Russian currency and bonds look good. Although, as we’ve written, some European stocks are getting cheap, we are not bullish on Europe. We remain concerned about the frail condition of European banks, which unlike U.S. banks, have not been forced to raise capital to strengthen their balance sheets. A lower Euro and Pound are resulting from fear over Brexit, but we would not buy Europe, Japan, or most emerging markets. The Fed has

opted for a very dovish view; slow U.S. economic growth is part of that view, and fear of world events is another part. We believe that high global debt levels and high taxes are causing stagnating world growth. We expect continued slow growth for some years to come. This puts the onus on investors to own companies or commodities that can grow or rise in spite of high government debt and high tax rates. This leaves us invested in the areas mentioned above. Thanks for listening; we welcome your calls and questions.


Outside of the U.S.:

June 16, 2016

10

GEneralDisclosures Disclosures about thisthis Newsletter General about Newsletter The publisher of this newsletter is Guild Investment Management, Inc. (GIM or Guild), an investment advisor registered with the Securities and Exchange Commission. GIM manages the accounts of high net worth individuals, investment partnerships, trusts and estates, pension and profit sharing plans, and corporations, among other clients. Your receipt of this newsletter does not create a personal investment advisory relationship with GIM although some recipients may also be advisory clients of GIM. GIM has written investment advisory agreements with all its personal advisory clients, which sets forth the nature of that relationship. The newsletter makes general observations about markets and business and financial trends and may provide advice about specific companies and specific investments. It does not give personal investment advice tailored to the needs, objectives, and circumstances of individual readers. Whether investment ideas and recommendations are suitable for individual readers depends substantially on the personal and financial situation of that reader, which GIM, as the publisher of the newsletter, makes no effort to investigate. GIM attempts to provide accurate content in its newsletters to the extent such content is factual rather than analysis and opinion, but GIM relies primarily on information compiled or reported by third parties and does not generally attempt to independently verify or investigate such information. Moreover, some content and some of the assumptions, formulas, algorithms and other data that affect the content may be inaccurate, outdated, or otherwise flawed.GIM does not guarantee or take responsibility for the accuracy of such information. Please note that investing in stocks, other securities, and commodities is inherently risky, and you should rely on your personal financial advisors and conduct your own due diligence in connection with any investment decision.

A Special Comment for Guild’s Clients f you are an investment advisory client of GIM who is receiving this newsletter, please note that the fact that a general recommendation is made of a particular security, commodity, or investment area to its newsletter subscribers does not mean that investment is suitable for you or should be purchased by you. For example, GIM may already have purchased such securities on your behalf or purchased securities in the same industry (and an increase in the position for you may represent too much concentration in one security or industry), or GIM may believe the investment is not suitable for you based on your risk tolerance or other factors. If you have questions about the recommendations in this newsletter in relation to your account at GIM, please contact Monty Guild or Tony Danaher.

GeneralofDisclosures about this Newsletter Conflicts Interest As of the date of this newsletter, GIM’s investment advisory clients or GIM’s principals owned positions in areas that are the subject of current recommendations, commentary, analysis, opinions, or advice, contained in this newsletter. GIM’s advisory clients or principals are currently long U.S. and foreign equities. The Guild Recommendation Tracker sets forth all investments recommended by Guild in its newsletter since the newsletter’s inception in 2002. Investment/Security Recommended With Bloomberg Symbol* refers to country equity market index, country currency, commodity, or specific security as indicated. Recent Price/Value refers to the closing price of investment/security on the date before this newsletter is published. In addition, GIM or its principals may reduce or eliminate their positions in an investment that is recommended in the newsletter prior to notifying the newsletter subscribers of such a reduction or elimination. The publication by GIM of a “target price” or “stop loss” for a particular security or other asset does not necessarily represent the price at which GIM intends to sell or will sell any such assets for its advisory clients or the price at which GIM’s principals intend to sell any such assets. To help mitigate these conflicts, GIM seeks to avoid recommending the securities of individual companies where GIM or its principals have an ownership position and where the issuer is small or its securities are thinly traded?that way sales by GIM in advance of possible sales by newsletter subscribers would not be likely to cause any significant decrease in the sale price to newsletter subscribers. GIM has a fiduciary relationship with its investment advisory clients and cannot agree on behalf of such clients to refrain from purchases or sales of a security mentioned in the newsletter for a period of time before or after recommendations for purchases or sales are made to its newsletter subscribers.1---The Guild Recommendation Tracker sets forth all investments recommended by Guild in its newsletter since the newsletter’s inception in 2002. 2---Investment/Security Recommended With Bloomberg Symbol* refers to country equity market index, country currency, commodity, or specific security as indicated. 3---Recent Closing Price/Value refers to the closing price of investment/security on the date before this newsletter is published. 4---Guild Investment Management (acting for its clients) and/or Guild’s principals own 0 shares of Vanguard FTSE Emerging Markets ETF (NYSE: VWO). 5---Guild Investment Management (acting for its clients) and/or Guild’s principals own 0 shares of iShares MSCI Global Gold Miners ETF (NYSE: RING).

GIM encourages you to do independent research on the securities or other assets discussed or recommended in the newsletter prior to making any investment decisions and to be especially cautious of investments in small, thinly-traded companies, which are usually the most risky investments that you can make.

General Disclosures about this Newsletter

Disclaimer of Liability GIM disclaims any liability for investment decisions based upon recommendations, information, or opinions in its newsletters. GIM is not soliciting you to execute any trade. Nothing contained in GIM’s newsletters is intended to be, nor shall it be construed as an offer to buy or sell securities or to give individual investment advice. The information in the newsletter is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject GIM to any registration requirement within such jurisdiction or country. COPYRIGHT NOTICE: PRINT ONCE ---- ONCE----DO DO NOT FORWARD----DO NOT COPY COPYRIGHT NOTICE: PRINT NOT FORWARD----DO NOT COPY


To help mitigate these conflicts, GIM seeks to avoid recommending the securities of individual companies where GIM or its principals have an ownership position and where the issuer is small or its securities are thinly traded?that way sales by GIM in advance of possible sales by newsletter subscribers would not be likely to cause any significant decrease in the sale price to newsletter subscribers. GIM has a fiduciary relationship with its investment advisory clients and cannot agree on behalf of such clients to refrain from purchases or sales of a security mentioned in the newsletter for a period of time before or after recommendations for purchases or sales are made to its newsletter subscribers.

Guild’s current and past market commentaries are protected by U.S. and International copyright laws. All rights reserved. You must not copy, frame, modify, transmit, further distribute, or use the market commentaries, without the prior written consent of Guild. This email or any download from a secure website is meant for only the intended recipient of the transmission, and may be a communication privileged by law. If you received this email in error, any use, dissemination, distribution, or copying of this email is similarly prohibited. Please notify us immediately of the error by return email and please delete this message from your system. Although this email and any attachments are believed to be free of any virus or other defect that might affect any computer system into which it is received and opened it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by Guild Investment Management for any loss or damage arising in any way from its use.

GLOBAL MARKET COMMENTARY

GLOBAL MARKET COMMENTARY

Suggest Documents