FUHRMANN CAPITAL LLC

Investment Presentation
May 19, 2011
 DISCLAIMER
• THIS PRESENTATION IS FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY
AND SHALL NOT BE CONSTRUED TO CONSTITUTE INVESTMENT ADVICE. NOTHING
CONTAINED HEREIN SHALL CONSTITUTE A SOLICITATION, RECOMMENDATION OR
ENDORSEMENT TO BUY OR SELL ANY SECURITY OR OTHER FINANCIAL
INSTRUMENT.

• INVESTMENT FUNDS MANAGED BY RYAN FUHRMANN MAY OWN STOCK IN THE

COMPANIES DISCUSSED HEREIN. THERE IS NO OBLIGATION TO UPDATE THE
INFORMATION CONTAINED HEREIN AND INVESTMENT DECISIONS MAY BE MADE
THAT ARE INCONSISTENT WITH THE VIEWS EXPRESSED IN THIS PRESENTATION.

• THERE IS NO REPRESENTATION OR WARRANTIES AS TO THE ACCURACY,

COMPLETENESS OR TIMELINESS OF THE INFORMATION, TEXT, GRAPHICS OR OTHER
ITEMS CONTAINED IN THIS PRESENTATION. ALL LIABILITY IS EXPRESSLY DISCLAIMED
FOR ERRORS OR OMISSIONS IN, OR THE MISUSE OR MISINTERPRETATION OF, ANY
INFORMATION CONTAINED IN THIS PRESENTATION.

• PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND FUTURE

RETURNS ARE NOT GUARANTEED.
 RYAN C. FUHRMANN, CFA
• Education
– University of Wisconsin-Madison
• Bachelors Degree Finance 1996
– University of Texas at Austin
• MBA 2002
• Background
– Portfolio management
• Northern Trust
• Bank of America
• Fuhrmann Capital
• Fuhrmann Limited Partnership
• Credentials/Other
– Chartered Financial Analyst (CFA) charter holder
– Advisor to Butler University’s Student Managed Investment Fund (SMIF)
– Eiteljorg Museum of American Indians and Western Art – Agave board
member
– www.RationalAnalyst.com
 MARKET THEMES
• It’s the economy, stupid
• Increasing globalization of financial
markets
• Higher correlations, volatility, etc. --
unable to rely on traditional investing
rules-of-thumb
• Equities extremely compelling today
COUNTRY & REGIONAL CONTRIBUTIONS
to GLOBAL GDP &
EQUITY MARKET CAPITALIZATION

Source: MacroMavens, IMF World Economic Outlook 2008, Standard & Poor’s BMI Global Index weights.
Exhibit provided courtesy of Blackrock Investments.
 ASSET CLASSES
Investable universe for the go-anywhere
portfolio manager consists primarily of:
• Venture Capital
• Commodities/Hard Assets
• Real Estate
• Private Equity
• Hedge Funds
• Public Equity
• Fixed Income
• Cash
REAL RETURNS on GLOBAL EQUITY
SECURITIES, BONDS & BILLS 1900-2008

Source: Dimson, E., Marsh, P. and Staunton, M., Credit Suisse Global Investment Returns Yearbook 2009.
 EMPHASIS ON EQUITIES
• The lost decade for stocks
– A P/E multiple comparison (2000 vs. 2011)
• Wal-Mart (47x vs. 12x)
• J&J (40x vs. 13x)
• Cisco (99x vs. 10x)
• Microsoft (70x vs. 10x)
• Walgreen (47x vs. 17x)
– Bodes well for the coming 3,5,10 years
– Returns over the long-term are compelling
– Have to be willing to accept volatility
REAL RETURNS on GLOBAL EQUITY
SECURITIES
1900-2008, 1990-1999 & 2000-2008

Source: Dimson, E., Marsh, P. and Staunton, M., Credit Suisse Global Investment Returns Yearbook 2009.
 EXTREME LOSSES IN
GLOBAL EQUITY MARKETS
1900-2008

Source: Adapted from Dimson, E., Marsh, P. and Staunton, M., Credit Suisse Global Investment Returns Yearbook 2009.
 INVESTMENT PHILOSOPHY
• Bottoms up • Value approach
– Underlying company – Investments follow
– No sector/industry targets fundamentals over the long
term
• Focused – Free cash flow
– Market leaders – Return on invested capital
• Company-focused (ROIC)
– Emphasis on publicly-traded • Long-term
– Potentially private – 3, 5, 10 years or longer
– Ambition for increased global – Time arbitrage
presence
• Total return
• Low cost
• Fiduciary
• Low turnover
• Skin in the game
• Rational
 IT IS NOT
• Top down • Excessive turnover
• Overly diversified – Tax inefficient

• Short-term • Technical
– Purpose of capital markets • Irrational
» Primary – Hope
» Secondary – Luck
• Momentum-based • Short, long/short
• Performance-chasing
 CORE INVESTMENT CONCEPTS
• Free cash flow
• Intrinsic value
– Definition
– Arrived at via
» Determining free cash flow
» Discounting it back to present value
• Margin of safety
– Buying dollar bills for $0.50
• Investing versus speculating
• Contrarian concepts
• Diversification
• Definition of risk (loss of principal versus volatility)
 FUHRMANN CAPITAL
• Investment management firm
– Portfolio Management
• Individual clients
• Separately managed accounts
• Venture capital
– Advisory services
• Small businesses
• Plan sponsors
– 401(k) plans
– Communicate investment ideas through investment
writing
– Registered Investment Advisor (RIA) in the state of Indiana
FUHRMANN LIMITED PARTNERSHIP
• Investment partnership
– Accredited investors
– Private placement
 MARKET INSIGHT
• Key ingredients for outperformance
– Low turnover
– Reasonable fees
– Focused approach
– Long-term bias
– Eating your own cooking
 RECOMMENDATIONS
• Equities
– Appealing sectors/industries
• Tech
• Healthcare
• Financials
– Individual recommendations
• Hewlett-Packard
• Abbott Laboratories
• HSBC
 Q&A
• Questions?
– Market Outlook
– Recommendations
– Next steps
– Follow up