GO FIGURE – MATH CAN LIE (A BIT)

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GO FIGURE – MATH CAN LIE (A BIT)

SO IF: 1/3 = 0.333WHAT DOES 3*0.333 = ?

0.999 RIGHT?

3 X 1/3 = 1 (RIGHT?)

ACTUALLY NO: IN MATH 0.999(REPEATING DECIMAL) = 1

HERE’S PROOF:X= 0.99910(X) = 9.99910X – X = 9.999 – 0.9999X = 9X = 1

GOT TO LOVE THIS STUFF????

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BIGFOOT INVESTMENTS OPEN FORUM

Mar 28th, 2013

WELCOME!

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AGENDA WELCOME! ADMIN NOTESQUOTE OF THE DAYOPTIMISM GAUGECHARTS OF INTERESTSO WHAT’S UP WITH: CONVERTIBLE BONDSA CLOSER LOOK AT DAVID’S CORNERSWAPS AND SPREADSLEE’S COMMENTS QUESTIONS/COMMENTS

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IF YOU USE ANY OF OUR SLIDES, PLEASE REMEMBER TOHAVE THEM APPROVED BY YOUR COMPLIANCE DEPARTMENT.

WE’LL UN-MUTE YOU ON OUR END SO YOU CAN ASK QUESTIONS.

PLEASE MUTE AUDIO FROM THE MENU ON YOUR SCREEN SO WE DO NOT GET FEEDBACK.

THANK YOU!

“NOTES”

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BigFoot Investments is now on Twitter, LinkedIn!

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BigFoot On LinkedIn!

Don’t Forget To Join Our “Group”

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Notifying You!

SMS Alert System

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Screening/Scoring for AprilACTION POSTING DATES

Stock Screen By 5pm CDST – Friday 3/29/2013*

Dividend Screen

ETF Selections

Stock Screening

*Note: We will attempt to have all postings completed AMC on 3/28/2013

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QUOTE OF THE DAY:Take time to deliberate; but when the time for

action arrives……

Andrew Jackson

…STOP THINKING AND GO ON!

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Optimism Gauge

As of: 3/28/2013

Indicator Current Value Prior/Metric Value Current Value

St Louis Fed Financial Stress Index -.696 -0.639(Revised) +1.0

Chicago Fed National Act Index (3 Mon Mov Av) 0.09 0.28(Revised) -.50

Unemployment 7.7 7.9 (Revised) +.50Weekly Jobless Claims (4Wk Mov Av) 343,000 340,750 -.50

ECRI Weekly Index 6.3 6.4(Revised) +.50Conf Board Leading Indicators (NEW) 94.1 93.9 +1.0

University of Michigan Sentiment - Final 77.6(Final – Feb 2013) 73.8(Final-Jan 2012) -.25Monthly Retail Sales (Adjusted) 416,990 416,070 +.50NFIB Small Business Sentiment 90.8 88.9 -.50ISM Manufacturing 54.2

(Expansion Line = 50) 53.1 +.50

Economic Capacity Utilization 79.1 79.3(Revised) +.50Stock Market Moving Averages Weekly Data Points >50-day MA/>100-Day MA N/A

+.50

S&P Case-Shiller 20 City Comp Index 146.14 145.95 (Revised) +.50

Total +3.75Last Update: 3/28/2013

Measuring Our Economy

NOTES/COMMENTS CURRENT READING: 67.7%

PRIOR READING: 76.3%

BIAS: MILDLY BULLISH

9 OF 13 INDICATORS POSITIVE

TREND - NEGATIVE

EconomicOptimism

Index

15

25

35

45 65

75

85

95

67.7%

READING AS OF: 3/28/2013

POSITIVE AS OF: 8/17/2012

Current Reading Prior Reading

Measuring Our Economy

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Charts of Interest!

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WE CAN HOPE

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WATCH CAREFULLY

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EVER HEARD OF THE MSDP? It’s the Monthly Statement of Public Debt

Published by Treasury Direct??? Summary of Debt Holdings Last published in Feb, 2013 Also includes Statutory Limits

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MOST OF ‘EM STILL LOVE US

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THEY’RE STIILL BORROWING DESPITE THE RUMORS

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THINK THERE IS CONCERN IN THE MIDDLE EAST?

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SO WHAT’S UP WITH:Convertible Bonds

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A bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the

discretion of the bondholder. It is much like a Call Option that is attached to a bond.

As such, there is a premium “attached” - a lower interest rate

The conversion feature is a RIGHT NOT AN OBLIGATION!

Sometimes called "CVs” or “Converts”

Source: Investopedia

DEFINITION

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THE BASICS: Par Value: Price when issued Conversion Price: Set when bond issued Conversion Ratio: Components

Par Value of BondConversion Price

Bond Description (Sample): Acme Company 5-year CB with $1000 Par Value and Coupon

of 5%; Conversion Price = $40

$1000 $40

25

Conversion Value

Current Stock Price ($30) X Conversion Ratio (25) = $750AS YOU CAN SEE THIS BOND IS SELLING AT A PREMIUM

= orPar Value of BondConversion Ratio

$40Conversion

Ratio

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MORE :Parity – Bond’s conversion is equal to stock price

Conversion Premium - Price of Bond exceeds market price of stock an investor would receive upon conversion

Stock Split – Original Conversion Ratio/Split Ratio

Dividend Declared - Conversion Ratio increases by dividend amount therefore the Conversion Price decreases.

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PROS AND CONS FOR PURCHASING CONVERTIBLES

CONS: Often issued by companies with poor credit ratings Can be dilutive to EPS of company If stock of company performs poorly – no conversion If issuer goes bankrupt have lower priority than common bonds Sell at premiums Usually “callable” – capping gains Can have limited upside

PROS: They pay interest Typically offer better returns than conventional bonds (Kiplinger) If stock falls – they can only call so far since they eventually pay principal You may get to convert for a profit Offer some degree of protection against market fluctuations You can get dividends from companies that don’t normally pay such

Sources: about.com BONDSBioStockspro.com

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INVESTING OPTIONS:

Buy the bond ETF – CWB (SPDR Barclays Convertible Securities)

YTD - +3.51% 1 – Year - +9.03 CVRT Closed in Feb, 2013 (Invesco)

Mutual Funds – Next Pages Best option – ETF or Fund

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Ranked Based On: 3-yr Return Expense Ratio Earnings Growth Rate High YTD Return High 5-yr Return High Star Rating Low P/E

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INDEX COMPS

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INDEX COMPS

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WHAT’S A REVERSE CONVERTIBLE BOND?

While a CONVERTIBLE BOND gives the BONDHOLDER the right to convert the asset to equity, a REVERSE CONVERTIBLE gives

the ISSUER the right to convert to equity.

In this case it is like a PUT OPTION that is held by the bond’s issuer on company shares. The company has the right , but

not the obligation, to convert the bond into shares of company stock at the set date – and are exercised when the

stock is below a “strike” price.

Why would you buy one? Higher interest rates – sometimes 10%+ Sideways markets

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DAVID’S CORNER

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SWAPS & “SPREADS”

IGNORE AT YOUR PERIL

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SWAPS AND SPREADSRATE PRIOR CURRENT STATUS

Libor/OIS 14.01 14.56

Euribor/Eonia .146 .148

DTCC RepoIndex

Agency .167 .139

MBS .193 .158Treas .160 .143

High Yield 4.78 4.78Federal ReserveCurrency Swaps

(ECB)USD million

7 Day 25 2Open 7,963 7,963

Note: Status = No impact Status = Negative Impact

As Of: 3/27/2013

CREDIT ANTICIPATES – EQUITY CONFIRMS

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QUESTIONS & COMMENTS

THANKS FOR JOINING US!

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