For the period ended 12/31/14

All-Cap ValueMuhlenkampSMAMuhlenkamp & Companys All-Cap Value SMA (Separately Managed Account) is designedfor investors accounts over $100,000. We employ full discretion, applying fundamental analysis.

Investment ObjectiveWe seek to maximize total return through capital appreciation, and income from dividends and interest, consistent with reasonable risk.

Investment StrategyWe invest in undervalued assets wherever they may be found. Typically, this results in holding a portfolio of companies we believe are materially undervalued by the market. Bonds may be included in the portfolio if they are a good investment.

Investment ProcessWe start with a bottom-up scan of domestic companies, typically looking at most U.S. companies at least four times per year. We add to that an understanding of the sector dynamics in which companies are operating, an assessment of the business cycle, and a review of macroeconomic conditions.

Our primary screening metric is return on shareholder equity (ROE). We are looking for companies with stable returns that can be purchased cheaply, or for companies with improving returns that have not yet been recognized by the market.

We dont believe that a holding period of forever is appropriate in all cases, but are comfortable holding companies as long as they continue to meet expectations.

Investment RiskWe define investment risk as the probability of losing purchasing power over long periods of time, which is quite different from Wall Streets definition of price volatility in very short periods of time. Taxes, inflation, and spending will ALL impact the purchasing power of your assets.

* The S&P 500 is a widely recognized, unmanaged index of common stock prices. The figures for the S&P 500 reflect all dividends reinvested but do not reflect any deductions for fees, expenses, or taxes. One cannot invest directly in an index.

** Consumer Price Index As of November 2014 U.S. CPI Urban Consumers NSA (Non-Seasonally Adjusted), Index

Consolidated performance with dividends and other earnings reinvested. Performance figures reflect the deduction of broker commission expenses and the deduction of investment advisory fees. Such fees are described in Part II of the advisers Form ADV. The advisory fees and any other expenses incurred in the management of the investment advisory account will reduce the clients return. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the above accounts. A list of all security recommendations made within the past twelve months is available upon request.

All-Cap Value Composite Performance (Net of Fees) Annualized Year to One Past 3 Past 5 Past 10 Past 15 Date Year Years Years Years Years

Return 9.37% 9.37% 17.49% 9.80% 2.75% 4.85%

S&P 500 Total Return* 13.69% 13.69% 20.41% 15.45% 7.67% 4.24%

Consumer Price Index** 1.33% 1.32% 1.44% 1.77% 2.14% 2.28%

Top Twenty Holdings % of NetCompany Industry AssetAlliance Data Systems Corporation IT Services 6.89%Hanesbrands, Inc. Textiles, Apparel & Luxury Goods 6.16%Covidien PLC Health Care Equipment & Supplies 4.01%Gilead Sciences, Inc. Biotechnology 3.71%Discover Financial Services Consumer Finance 3.65%J.P. Morgan Chase & Company Diversified Financial Services 3.40%American International Group, Inc. Insurance 3.25%Microsoft Corporation Software 3.23%State Street Corporation Capital Markets 3.10%Apple Inc. Computers & Peripherals 3.08%Celanese Corporation Chemicals 2.98%American Axle & Manufacturing Holdings, Inc. Auto Components 2.95%Celgene Corporation Biotechnology 2.75%DIRECTV Media 2.70%Annaly Capital Management Inc. Real Estate Investment Trusts 2.66%General Motors Company Automobiles 2.60%American Airlines Group Inc. Airlines 2.51%Spirit Airlines Inc. Airlines 2.43%Berkshire Hathaway Inc. - Class B Diversified Financial Services 2.41%ARRIS Group Inc. Communication Equipment 2.37%

Composite holdings are subject to change and are not recommendations to buy or sell any security.

Composite Top Twenty Holdings are presented as supplemental information to the fully compliant presentation on the next page.

Return on Equity (ROE) is a companys net income (earnings), divided by the owners equity in the business (book value).

Jeffrey P. Muhlenkamp, Investment Analyst and Co-Manager, has been active in professional investment management since 2008.

He is a graduate of both the United States Military Academy and Chapman University.

Portfolio ManagersRonald H. Muhlenkamp, Portfolio Manager, CFA, has been active in professional investment management since 1968. He is a graduate

SMA FactsAverage Number of Equity Holdings 31Cash & Cash Equivalents 7.94%Portfolio Turnover 23.90%

Trailing 12 months

SMA InformationCreated in December 1993, Muhlenkamp & Companys All-Cap Value Composite includes separately managed fee-paying accounts over $100,000, full discretion, under management for at least one full quarter. The Composite excludes the Muhlenkamp Fund and any wrap fee account.

Minimum Initial Investment $100,000.00Management Fee* 1% (first $1 million); 0.5% on the remainder

* May vary by account.

Muhlenkamp & Company, Inc. All-Cap Value Composite Annual Disclosure Presentation

The objective of this All-Cap Value Composite is to maximize total return, consistent with reasonable riskusing a strategy of investing in highly profitable companies, as measured by Return on Equity (ROE), that sell at value prices, as measured by Price-to-Earnings Ratios (P/E).

Muhlenkamp & Company, Inc. (Muhlenkamp) claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards. Muhlenkamp has been independently verified for the periods December 31, 1993 through December 31, 2013 by Ashland Partners & Company LLP.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firms policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The All-Cap Value Composite has been examined for the periods December 31, 1993 through December 31, 2013. The verification and performance examination reports are available upon request.

Muhlenkamp is an independent registered investment advisory firm registered with the Securities and Exchange Commission. The firms list of composite descriptions is available upon request.

Returns are based on fully discretionary accounts under management, including those accounts no longer with the firm. Composite may invest in American Depositary Receipts (ADRs).*** Accounts may be shown gross or net of withholding tax on foreign dividends based on the custodian. Past performance is not indicative of future results.

Total ANNUAL PERFORMANCE THREE-YEAR ANNUALIZED Firm Composite STANDARD DEVIATION* Assets Assets Number S&P 500 S&P 500 Year (USD) (USD) of Composite Composite Total Return Total Return Composite End (millions) (millions) Accounts Gross Net Index Composite Index Dispersion**

2014 541 51 67 10.27 9.37 13.69 9.55 8.97 2.06 2013 585 50 60 35.50 34.39 32.39 11.29 11.94 3.13 2012 491 41 66 11.29 10.34 16.00 12.02 15.09 1.14 2011 555 45 74 (2.84) (3.67) 2.11 16.60 18.70 0.85 2010 724 59 82 2.96 2.15 15.06 1.45 2009 839 90 107 32.68 31.72 26.46 2.80 2008 759 112 155 (40.53) (40.94) (37.00) 1.97 2007 1886 327 289 (7.61) (8.19) 5.49 3.77 2006 3393 371 337 6.09 5.34 15.79 3.70 2005 3471 287 289 10.04 9.22 4.91 3.38 2004 2261 197 206 24.54 23.56 10.88 3.33 2003 1350 132 167 43.36 42.10 28.68 5.57 2002 742 81 139 (19.80) (20.49) (22.06) 3.65 2001 699 97 124 (2.72) (3.51) (11.93) 5.16 2000 428 101 99 16.10 15.23 (9.10) 5.98

The U.S. dollar is the currency used to express performance. Returns are expressed as percentages and are presented gross and net of management fees and include the reinvestment of all income. Net of fee performance was calculated using actual management fees. The annual Composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the Composite the entire year. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

* Three-Year Annualized Standard Deviation is a measure of volatility, calculated by taking the standard deviation of 36 monthly returns, then multiplying the result by the square root of 12 to annualize it. Since standard deviation measures the dispersion of a set of numbers from its mean, higher results indicate more variation in monthly returns over the trailing three years.

** Composite Dispersion is a measure of the similarity of returns among accounts in the Composite. It is the standard deviation of the annual returns for all accounts which were in the Composite for the entire year.

*** American Depositary Receipts (ADRs) are shares that trade in U.S. markets, but represent shares of a foreign company. A bank (the depository) purchases a number of the foreign shares and holds them in a trust or similar account; in turn, the bank issues shares tradable in the U.S. that represent an interest in the foreign company. The ratio of ADRs to foreign shares is set by the bank. ADRs do not mitigate currency risk, but can reduce transaction costs and simplify trading compared to buying the local shares in the foreign markets.

SMA Facts are presented as supplemental information.

of both M.I.T. and the Harvard Business School.

Copyright 2015 Muhlenkamp & Company, Inc. All Rights Reserved.

Investment AdviserMuhlenkamp & Company, Inc.5000 Stonewood Drive, Suite 300Wexford, PA 15090-8395(877)935-5520info@muhlenkamp.com

www.muhlenkamp.com

Muhlenkamp & Company serves individual and institutional investors through our no-load mutual fund and separately managed accounts.

February 19, 2015 Amended Transcript Tony Muhlenkamp, President Ron Muhlenkamp, Founder and Portfolio Manager Jeff Muhlenkamp, Investment Analyst and Co-Manager

Tony

Good afternoon, everyone. Thank you for joining us today as were going to talk about some of the things we are

seeing in the markets and economy, and discuss how were investing your money. With me, of course, I have Ron

and Jeff. Ron is portfolio manager, Jeff is co-manager, and Ill be asking them questions and walking them through

sharing some ideas with us.

Before we start, there are a couple of housekeeping items that I want to address. Everyone should have received a

copy of Muhlenkamp Memorandum #113 by now; if not, you can go to our website and download a copy. The website

is new, brand new as of the first of January, so were interested in any feedback you have, ideas on what we can do

with it further, what you like, what youd like to see changed. Were looking for feedback, so Id appreciate any time

youd spend on that.

Finally, we ask you to mark your calendar for our next seminar. Its scheduled for May 5. Were hoping if youre

nearby, you can join us at the live event; otherwise, there will be a webcast that you can attend and view over the

Internet. Well keep you posted on the details as we get closer. But if youre anything like me, you need to get it on

the calendar early in order to make it. As usual, if you have any questions on any of these things, please give us a call

or send us an email. Were happy to talk with you.

With that taken care of, Ron, I wanted to start with the question that Ive been receiving from clients: performance of

2014. Some of our portfolios were flat for the year and some did well; on average, we underperformed, which we

found disappointing. What happened?

February 19, 2015 Conference Call Page 2 Ron

2014 was a mixed bag. Large U.S. stocks, including the S&P 500 Index1 did well, up about 13% or so. Small U.S.

stocks did rather poorly. International stocks did poorly. Bonds recovered what they lost in 2013.

If youve been coming to our seminars the last couple years, reading our publications, and paying attention to what

we talk about, you know weve been talking about energy and biotech. In 2014, biotech worked well for us; Ill say

more about that in a moment. Energy did poorly. We had been impressed with the spread in the price of energy

between liquid energy, that is crude oil, and gaseous energy, that is natural gas. We hosted a seminar In November

2013 [Natural Gas: An Energy Game Changer] and wrote various essays on it. We believed that the price spread

(between crude oil and natural gas on an energy equivalent basis) had to close and that it would close gradually

over a period of several years. And, in fact, we were saying that we were in the process of cutting the price of energy

in half in the U.S. in the current decade.

What we thought would take a few years in terms of bringing the price of crude oil down, primarily through

substitution of natural gas which was cheaper, occurred in the last six months of 2014. We believe it was helped by

Saudi Arabia changing its mindset as to what level it would try to support the price of crude. They basically took the

stops off. The price of crude oil got cut in half.

We were not invested in oil stocks. We were invested in energy stocks that we thought would benefit from a shift

from crude oil to natural gas. Some of them were industrial stocks, some of them were natural gas stocks themselves,

and we got hit harder than we ever thought we would, given that that was going on. So, we got hurt by that, and that

was probably about two-thirds of our disappointing performance relative to the S&P 500 Index in 2014.

At current prices, frankly, energy stocks are starting to look interesting again, but they hurt us badly in the second

half of 2014.

The lower price of crude oil did help our airlines. We own a number of airline stocks, and the cost of fuel is a major

cost center for airlines. It did help those stocks, but it was not enough to offset what we had in energy stocks.

Biotech for the year did well. People regularly ask us, What are the drivers behind biotech? Everybody's familiar

with the demographics. That is, baby boomers like me are getting older and there are a lot of us, but theres also

amazing things going on within the industry in terms of new drugs and new protocols.

1 S&P 500 Index is a widely recognized, unmanaged index of common stock prices. The S&P 500 Index is weighted by market value and its performance is thought to be representative of the stock market as a whole. You cannot invest directly in an index.

February 19, 2015 Conference Call Page 3

As an example, 10 or 15 years ago, HIV was a death sentence. Today, its a managed disease. That is, you take a

number of pills on a daily basis, and you can control the disease. As recently as two or three years ago, Hepatitis C

was a managed disease. Today theres a cure, literally a cure. The first cure out is by Gilead, which we happen to

own, and its done well for us; they now have a competitor brought out by AbbVie. But when you go from a

managed disease to a cure on something as broadly suffered from as Hepatitis C, thats a big thing. So we continue

to look, always, for individual companies that are doing well. But if we can package it within a broader theme thats

doing well, that helps us have confidence in terms of what were doing.

That, in a nutshell, is what happened in 2014.

I wanted to say one more thing. As you know, 2013 was a very strong year. In 2014, we did poorly, the markets did

well, but we took a lot of capital gains. And people have asked how we can have capital gains distributions in a year

when we did very little. The answer comes back to farming or gardening. You want to plant in the springtime.

During the growing season you want to let things grow. Its after they quit growing that you want to harvest some.

Well, the growth that we had, literally, from 09 to

Tony

First half of 2104

Ron

Yes, up to the middle half of 2014 things were growing nicely.

Early on, in the earlier years, we were able to offset capital gains with realized capital losses, but were about to tell

you that, today, we think stocks are fully priced, so were harvesting investments. Harvesting means thats the time

you realize the gains. And the way the tax laws are writtenand the IRS may want to change thisbut the way the

tax laws are written, you dont realize the gain and pay the tax until you sell the stock. And weve been net sellers of

some stocks, so we ended up in 2014 with taxable gains, which, of course, is costing people in their tax bills in

2015.

Our underlying goal is always to try to get long-term capital gains as opposed to ordinary income or short-term

gains. Simply put, its a lower tax rate; and that we were successful in doing. The second thing we tried to do is we try

to delay the realization of the long-term gains so that we delay the tax bill. And, in fact, we did that rather well, too.

February 19, 2015 Conference Call Page 4 We tried to let people know this was coming This is harvesting the crops that we planted, in some cases as long as

five or six years ago. But those are always our goals: To make it long-term capital gains at the lower rate, and to delay

it as long as it makes sense from an investment viewpoint. Thats my sum and summary of what happened last year.

Tony

Before I move forward to what youre seeing today, I wanted to change your phrasing. You said, It so happens we

owned Gilead. I just wanted to make it clear that that was a deliberate decision on our part. That was a result of a

lot of work and some good work on our part. It wasnt just happenstance.

Ron

Thats right.

Tony

So with that as a backdrop, Im going to walk you through some sectors. You had mentioned energy looks

interesting. Tell me more, elaborate on that.

Ron

Simply, the prices have been cut in half. Energy remains a useful commodity, and when prices get cheap, they look

more interesting to us than when they were not cheap.

Tony

You say prices of energy companies, [you mean] the stocks of those companies.

Ron

Yes. In many cases, the price of crude got cut in half. The price of natural gas probably fell by 30% or so. A lot of the

companies that produce these products got hit more than that. The big heavies, for instance, an Exxon did not. But a

lot of the littler companies got hit more than that. So where their markets remain viable and their business remains

good, the prices are far lower than they were.

As you know, we always want to own good companies at cheap prices. We think weve identified good companies;

for a lot of them, the prices are far cheaper than they were six months ago.

February 19, 2015 Conference Call Page 5 Tony

Are you comfortable talking about whether those companies are still the ones we owned a year ago, or are you

finding different names and different opportunities?

Ron

A mix of both. Someits the same companies. Othersthe fundamentals of their business have changed. People

know that there are a number of plans on the books to build LNG export plants.

Tony

Liquefied natural gas.

Ron

Liquefied natural gas. And theres probably, I believe, five or six [LNG export plants] that have been approved,

and theres another dozen that are planned. With the current price of crude oil, rather than a year ago price of crude

oil, my guess is fewer of those will be built. The people who are in the business of building those plants dont face as

much demand for their services as they did for the contracts they signed six months ago.

Its funny how long-term contracts get canceled when the economics change.

Tony

Short-term economics change.

Ron

In that case, its been a difference. In terms of the amount of natural gas used by homeowners or by utilities, those

things are ongoing, so it becomes simply a matter of price. Weve been trying to say for several years that we were

betting on the volumes of natural gas used, not the price of natural gas. In the last six months, the volumes have

not come down, but the prices have come down.

Tony

And enough to change the fundamentals on a number of these companies?

Ron

Yes.

February 19, 2015 Conference Call Page 6 Tony

So let me segue from there. You talked about the impact of energy [prices] on airlines. Is that the only argumentary

driver behind the airlines that weve owned? Where do we stand on that today?

Ron

Thats helped them big time in the last six months as the price of crude came down. The background reason we

owned airlines was that theyve changed; the managers of the business have changed what they do. Historically,

anytime airlines started making cash flow, theyd expand the fleetgo buy new airplanes and fly more routes.

Theyve gotten better at not doing that. Theyre still buying new airplanes and retiring old airplanes, but they are

taking their cash flow and paying down debt rather than expanding the fleet.

In the last six months, airline stocks have benefited big time from the price of crude coming down. But the last three

or four years, theyve benefited gradually from the fact that the managers are running the business differently than

they used to. Both of those are pluses.

Tony

And those continue to be true?

Ron

That continues to be true. The history of the industry says that most airline managers, historically, have been retired

pilots or old pilots, and they love to buy airplanes. So were keeping an eye on that because thats been the history of

the industry.

Tony

Thats been a non-profitable trend.

Ron

Right. Five years ago they swore they werent going to do that anymore. So far, theyve been pretty disciplined about

that. Very few of our decisions are 95% versus 5%. Its mostly 55% and 45% and then you monitor to see whether

those things remain true.

Tony

Speaking of monitoring, energy/crude is certainly huge. Natural gas is huge. Talk chemical companies. Youve

mentioned those in the past. What are you seeing...how has this impacted themare there opportunities there?

February 19, 2015 Conference Call Page 7 Ron

We think so. Weve begun spending some money in chemical companies. I cant yet disclose a whole lot because

were not done.

Tony

Fair enough. Describe chemical companies to me. I think of companies like DOW Chemical or DuPont. What fits

into that sector? Are those the only ones?

Ron

When you get natural gas out of the ground, its called methane. Then you put it through a cracker plant, and it

becomes ethane; and then you put it through another process, and it becomes ethylene; and then it becomes

polyethylene; and then it becomes plastic. When people look at plastic, Im looking at a plastic Coke bottle sitting

on my deskplastics are all over the place. Very few people know the names of the companies in the middle of that

stream.

Tony

They may know the beginning names. They know the ending names. But the three or four names in between

Ron

You may know DuPont and some of the other guys, but most of the chemical companies dont have names that are

well known to the consuming public.

Tony

Consumer brand types.

Ron

But thats where the focus has been. What remains true is that many of the chemical plants in this country use

natural gas as a feedstock. Many of the plants in Europe use crude oil as a feedstock. And when that [price] gap was

huge, it was a great benefit to us. The gap is less, but its still sizeable. So that whole industry is facing lower costs;

i.e. energy to run the plants, and lower cost of the feedstock to make the products.

Where those stocks have dropped more than we think is justified by the change in the prices of crude oil and natural

gas, they look interesting to us. When prices get cut in half, you find more value than what it was otherwise. Any

shopper will tell you that.

February 19, 2015 Conference Call Page 8

Tony

Remind me to tell you about [my wife] Inger buying a piano at auction one of these days. Thats where I learned my

lesson. Im going to shift from energy related [stocks] to healthcare which did work well for us in 2014. What are we

seeing there? Do the drivers continue?

Ron

The drivers continue. Anybody who gets a chance to attend a lecture on whats happening in healthcare, I would

encourage you to do it. What theyre doing is truly game changing, life changing. Tammy Neff [Investment Analyst]

did a nice presentation at our last seminar [Game Changers in Biomedical Science]. We have that presentation captured

in a booklet. Its the best primer I can give you on some of these advances.

Tony

We even have a video [archive] on our website if Im not mistaken.

Ron

Yes, I believe it is. But the long and short of it is, those dynamics remain and the stocks have done well for us, but

the companies have done better.

Tony

That leads to my next question...

Ron

When your sales were up 50% to 100% and your earnings double because you found a cure for Hepatitis C, thats of

ongoing value and we think those stocks are remaining modestly priced, so we still own them.

Tony

So, value can come about in a couple of ways. You can maintain your business and the price of your stock can get

cut in half, theres a value; or the price of the stock can go up, but your business can improveProbability, revenues,

sales, and so on, and it remains a decent [stock] value.

Ron

Yes.

February 19, 2015 Conference Call Page 9 Tony

But just because the price hasnt gotten cut, doesnt mean its no longer a value in the case of our healthcare

[companies]. Am I following you on that?

Ron

Either one can make you money. If you can get them both, thats when they work real well.

Tony

Better yet.

And what about big tech? I dont know if weve owned any big tech or how its working for us.

Ron

We do. Apple is big tech. Microsoft is big tech. Oracle is big tech.

Tony

Im hearing Apple is going to set record-breaking market caps.2 Theres speculation out there.

Ron

They are. Apple, in the marketplace, is worth more than IBM, or General Motors, or Exxon, or Walmart, or other

giants in the industry. Apples [nearly] worth more than all of that. The whole question is can they continue to bring

out new game-changing products that the public loves and is willing to pay for. At the current [stock] price, we think

that remains a good holding, so its something we hold.

Tony

What is Apples price in terms of P/E [price-to-earnings ratio]3? Any idea?

Ron

Next years P/E on 15 earnings is probably 14 or 15.

2 Capitalization, often referred to as Market Cap, is the total dollar market value of all of a company's outstanding shares. Example: if a company has 25 million shares outstanding, each with a share price of $100, the company's market capitalization is $2.5 billion (25,000,000 x $100 per share). This figure is often used to rank a company's size, as opposed to sales or total asset figures. Note: Small Cap is often $250 million to $1 billion capitalization; Mid Cap is often $1 billion to $5 billion capitalization; Large Cap is often over $5 billion capitalization. 3 Price-to-Earnings (P/E) is the current price of a stock divided by the (trailing) 12 months earnings per share.

February 19, 2015 Conference Call Page 10 Tony

On estimated 2015 earnings?

Ron

Yes. Some people say, Well, gee, it [Apples stock] has run up so much. Well, if they continue to bring out products

that your daughters and my grandkids want to own, in fact, everybody wants to own I get laughed at. I still own a

flip phone. People tell me there are things out there called iPhone, something like that. Not everyone yet has an

iPhone.

Jeff

So the same market for healthcare is the remaining market for iPhones, is that what youre telling us, Ron?

Ron

Yes. Something like that. All of those baby boomers remain in the market for iPhones

Jeff

So, you can get a hip replacement and an iPhone in the same year!

Ron

Something like that.

Tony

I did notice that you had an iPad floating around, so youre not completely out of that Apple loop.

So let me move into the broader market because you mentioned Apples selling at something like 14, 15 times 2015

earnings. Whats the market, on average, priced to do, using the S&P 500 or the Wilshire 50004?

Ron

Im going to start with the economy. Weve been hearing for five years that the economy was going to grow at 3%

plus. And for the last four years, each year it came out at about 2 percent. Were hearing once again, that in 2015

people think its going to grow at over 3 percent. My guess is it will be 2%-2 percent. One of the things that

4 The Wilshire 5000 Total Market Index, or more simply the Wilshire 5000, is a market-capitalization-weighted index of the market value of all stocks actively traded in the United States. The index is intended to measure the performance of most publicly traded companies headquartered in the United States, with readily available price data, (Bulletin Board/penny stocks and stocks of extremely small companies are excluded). It can be tracked by following the ticker W5000.

February 19, 2015 Conference Call Page 11 should help in 15 is the price of energys down. So far, that seems to have helped consumer confidence, but its

hard to find that its helped consumer spending very much. It looks like people are putting into savings most of

what theyre not spending, what theyre saving on the price of gasoline.

If the economy grows at 2% and inflation is not a problem, we think stocks, which on average are priced about 18

times earnings, are fully priced. In 09, they were dirt cheap and over the last few years theyve caught up to what we

think is now fully priced. Last year, on average, sales of companies in the U.S. and in the S&P 500, particularly the

big companies, grew about 4% and profits grew about 10 percent.

In big companies like those in the S&P 500, about one-third of their earnings come from overseas. With all thats

going on financially, and we really dont have time to cover that at the moment, but suffice it to say that the dollar

has been stronger versus the euro, or the yen, or the Chinese renminbi. So when companies, even if they dont bring

their money back, when they report their earnings that they earned in foreign lands When the dollar is stronger, it

actually reduces the amount that theyve earned in dollars because the dollar is stronger. And were starting to see

that in reports for the 4th quarter.

I said, last year, sales were on the order of 4 percent. Going forward, my guess is theyre going to be on the order of

2-3 percent. Last years profits increased on the order of 10 percent. Going forward, my guess is thats going to be

more like 5 percent. So the growth that weve had in corporate earnings, reported in dollars, is leveling off. We dont

see a recession, certainly, not in the U.S., but Europes flirting with one and China remains slow. All these things

weve been talking about for the last five years, none of them have been solved. Jeff may want to say a little bit about

Greece

Tony

Well get to that in a second, when you say fully priced

Ron

Yes. On average, stocks are fully priced, and were finding it harder to find Were still finding good companies, but

most of them are fully priced. I dont want to pay sticker price for a Buick or a Cadillac, I want to buy Buicks and

Cadillacs at Chevy prices. Were not finding Chevy prices any more to the extent that we did.

Hence, weve harvested some of the companies weve owned, weve got a little more cash than weve had, and were

less enthused going forward. So you put all of that together, and it says to me that things are fully priced.

February 19, 2015 Conference Call Page 12 Tony

Fully priced implies what for returns on averageany ideas, or hard to say?

Ron

I can tell you that over the next five years the prices wont go up as much as they did the last five years, but Id have

to do a whole essay on how we determine what we think is fair. [To learn more, read Why the Market Went Down.]

All Im telling you is the Buicks, and the Cadillacs, and the Chevys are fully priced. Its hard to find good values

anymore and what that means is, theres less of a cushion. If values are moving up at 10% per year, thats a lot bigger

cushion than when theyre moving up at 5%, because the prices will swing around those values, and they can do

plus or minus 10% for no reason.

If youve ever been to an auction, you know that over time prices make sense, but on any given dayI went to an

auction on Saturday when it was 12 degrees outside and the wind was blowing sideways, great time to buy at an

auction because the crowd was small.

Tony

Nobody was there.

Ron

That remains true, but weve gotten to the point where companies are now fully priced, and its hard to see that

theres going to be good surprises on the upside. We have a whole litany of things that can be bad surprises on the

downside. Those remain true.

Tony

Let me sum that up. You were talking about on average. For example, I cant tell you that you can Buy the market or

the sectors we like, but within the market, within sectors, were looking for companies that are, in fact, doing better

than average, selling for less than theyre worth. Where were finding them, we have opportunities to invest.

Ron

We always look for that stock pickers market. Its just that were finding fewer opportunities than we did.

It was easy six years ago. It was a stomach problem six years ago; it wasnt a head problem. You find all sorts of

opportunities and people say, Oh, but everythings going to h*ll in a hand basket because they were extrapolating

what happened in the prior couple of years. Today, the head problem says; its getting tough to find companies.

February 19, 2015 Conference Call Page 13 One shareholder asked us about bonds. Well, the ten-year [Treasury] is up 2 percent.5 The only reason to own bonds

is if you think interest rates are going downand we dont think they areand the Fed has just told us that theyre

probably going to start raising interest rates in mid-year. So if you dont trust stocks, put the money in cash. Weve

got more cash than weve had in some time. And its probably going to build. We dont own bonds here because we

dont think theyre good value. People think bonds are safe because theyre guaranteed; well bonds are only safe

when interest rates dont go up. If interest rates go up, bond prices go down. Thats an arithmetic certainty.

Tony

So with here in the U.S. [with stocks] being fully priced, Jeff, what are we seeing overseas? Are there opportunities

there? Is there an overlay there? How is that impacting?

Jeff

Well start with the opportunity. Mario Draghi, who is the head of the European Central Bank [ECB], just

announced a quantitative easing program6a program where the ECB is going to buy European bonds. Thats very

similar to what Japan has done, and to what the United States has done. In both Japan and the United States, it

didnt seem to help the economy much, but it did seem to goose the stock market pretty well. So thats interesting to

us.

The European economy remains fairly stagnant. They have a debt problem, particularly in the southern countries in

Europe. Right now, Greece is back in the headlines. The new Greek government ran on a platform of essentially

repudiating their debt, [that is] refusing to pay it. They have made that case to their lenders. The lenders have said

thats nice, but we wont lend you any more money if you do that. And so theyre going through a bit of a difficult

negotiation right now; its hard to predict what the outcome is going to be. It looks to me like the markets are

assuming that that gets resolvedand thats probably the odds-on bet, but that doesnt make it a certainty. And it

doesnt mean that if Greece, in fact, defaults on its debts, that that doesnt create a problem outside of Europe. We

think thats possible, if not probable.

The other thing that youve seen, of course, with the price of crude oil coming down Anybody who produces

crude oil is now getting dramatically less in revenue than they used to. The poster child for that is Russia. Russia is a

5 On February 19, 2015, the interest rate on the 10-Year Treasury was 2.11%; source: www.treasury.gov. 6 Quantitative Easing (QE) is a government monetary policy used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity. Central banks tend to use quantitative easing when interest rates have already been lowered to near 0% levels and have failed to produce the desired effect. The major risk of quantitative easing is that although more money is floating around, there is still a fixed amount of goods for sale. This may eventually lead to higher prices or inflation.

February 19, 2015 Conference Call Page 14 big exporter of crude oil. Theyre also a big borrower of dollars. So when they were selling their crude oil for $100 a

barrel, they were easily able to meet the interest payments on their loans, on their dollar loans. At $50 a barrel, that

gets a little tougher.

When you throw in that theyre engaged in a shooting war in the Ukraine, which has prompted the western

countries to sanction themwhich means nobodys allowed to lend them money againnot only are they having

difficulties paying their existing interest, but they also can't rollover their debt. So Russia and the ruble have been

out of the headlines for about three weeks, but frankly, the problem remains, and we may see that resurface.

So youve got some threats out of Europe; youve got some potential opportunities in Europe. When you look over

on the other side of the globe, frankly, I think Japan remains in a hazardous position. Theyre trying to solve their

debt problem by printing money. It hasnt worked for them yet. I dont expect it will. The risk is that it enters a rapid

decline in terms of the people starting to flee the yen because they dont think it holds its value very well.

And in China, theyre trying to restructure their economy. The drivers of their growth in the last ten years have pretty

much run their course. Theyre looking to reorient, letting the consumer drive their growth going forward. So that

gives them a period of transition, and the risk is that some of the debts theyve incurred internally become

unsupportable and they end up defaulting. That has repercussions outside of the country.

China remains an interesting place from the perspective of you have a billion people moving up the prosperity

ladder at a pretty good clip. It remains a hazardous place because theyve incurred a lot of debt recently, which they

havent quite digested yet.

Thats how I would characterize things on a global basis, what Ive seen in terms of threats and opportunities.

Ron

Mixed bag.

Tony

Let me shift gears for a little bit here and ask you to talk about one or two of the companies that are in our portfolio.

Lets remain focused on what we call our top-ten holdings, recognizing first of all, the way they got there was theyve

done well. So its not necessarily were out buying these [companies] todayIve got to qualify this for the people

on the line.

February 19, 2015 Conference Call Page 15 Plus, every now and then, we get an email or a phone call from someone asking about X, Y, and Z company that was

mentioned at a seminarI bought it and its either done great or done badly, but what should I do with it now?

So were always a little hesitant to get sucked into that because we build portfolios knowing that some percentage of

what we do is not going to work. But, Id like to illustrate the process of how the research and the method led to

some names that have, in fact, worked their way up into our portfolio.

Jeff

To begin, at least four times a year, we scan through 3,000 companies. Thats our primary idea-generating activity.

So, we periodically take a pretty decent look at almost every public company in the United States and then, in

addition to that, there are any number of inquiries into other companies that arent on that listwhether theyre

international, or simply not contained in that kind of database. Were continually scanning in a very methodical

fashion for companies that look interesting. And when I say they look interesting, were really looking at the

fundamental data. Were looking at what are their earnings? What is their price to book7? What do their revenues

look like? What are projections for those things? Those sorts of things.

When you find one that looks interesting, then you start digging, because you have to understand whats going on

behind the numbers. You dont select a company simply because the numbers look good; they dont paint the full

picture of whats going on. Its really just a start that piques your attention, and then you start digging to see what

youve really got.

In 2014, two companies that we have released [to the SEC] that we owned, but are not in the top ten, include Arris

and ON Semiconductors.

Arris makes communications equipment primarily for the telecoms and the cable companies. For instance, your

cable box on top of your TVthat may well be an Arris product. Theres a new product cycle where now theyre

allowing you to receive the Internet over top of that box, over top of your cable service.

When we were scanning, Arris looked interesting. It was selling at about 12 times earnings and it had roughly an

18% ROE [return on shareholder equity]8, which meets our screening criteria. So we started digging: Where are they

7 Price-to-Book (P/B) is the market capitalization divided by the owners equity in the business. Note that P/B equals the price-to-earnings ratio (P/E) x (times) return on equity (ROE). 8 Return on Equity (ROE) is a companys net income (earnings) divided by the owners equity in the business (Book Value); ROE = Earnings/Book Value. This percentage indicates company profitability or how efficiently a company is using its equity capital.

February 19, 2015 Conference Call Page 16 at in their product cycle? Whats going on with their customers? What do we think the near-term or mid-term

prospects for their business are? And, frankly, those all looked pretty good.

So, Arris caught our attention. We did some additional research. To find out exactly whats happening with a

company that looked interesting to us, we bought some Arris stock back in May and, frankly, it hasnt done much

for us one way or the other just yet. Its not in our top ten, but it is a holding of ours.

A similar portfolio holding is ON Semiconductors. Theyre interested in producing semiconductors that facilitate

machine vision. So, as you automate production lines, and machines become more like computers and less like a

couple of hydraulic arms and simple mechanical devices, the machine needs to be aware of its surroundings. Thats

kind of like what machine vision is. ON Semiconductor wants to dominate that space, and theyve made a couple of

acquisitions to enable them to do that.

At the time we picked up on them back in August, they were selling at about 11 times earnings, and had an ROE a

little bit north of 20 percent. As we dug into what their business looked like, what the near- and mid-term prospects

for the business looked like was that getting better or worsewe concluded it was likely to get better and, so far,

that ones worked out pretty well for us. Were up something like 20% since weve bought ON Semiconductor six

months ago.

Im going to shift gears a little bit from how we decided on some of last years buys, to how we decided on some of

last years sales. Youve probably heard us talk about Alliance Data Systems [ADS] in the past. It is one of our largest

holdings, and has done extraordinarily well for us. What Alliance Data does, is they run private label credit cards,

and they run rewards systems for different companies. They take the data that they accumulate by doing those

activities and turn it into focused marketing campaigns for the very same customers. So its a vertically integrated

data acquisition and use company. We picked them up back in 2009. Ron, you want to talk about ADS?

Ron

Well, ADS was doing good things as a company, and they were also doing good things in terms of managing their

own assets. When [stock] prices got cheap, we talked with the chief executive. He said, Everything we can see looks

pretty good, so they bought in a third of their own stock at the bottom. We always look for people who are good at

running the companies. If you can find someone whos also pretty good at allocating capitalis buying it when its

cheapthat helps you big time. Its done wondrous things for us and simply became a very large holding.

Tony

As a percentage of our portfolio.

February 19, 2015 Conference Call Page 17 Ron

Yes, as a percentage of our portfolio. We can no longer on the numbers call it [ADS stock] cheap. Everything theyre

doing is fine, so were happy to ride it. But, we cut back on the ownership of it to some extent last year, just because

we no longer wanted to make an outsized bet that they were cheap. They were still good; they were just no longer

cheap.

Jeff

There were some unique things about what was happening in ADS early in the year. They had a fairly high short

interest9 that cleared itself up by about mid-year and we wanted to wait until the short was covered. We thought it

would be beneficial. It worked out for us. So about the time the shorts covered their positions, we reduced our

holdings a little bit. Thats one of the ways in which we sell.

The other company I would like to mention is Asbury Automotive Group, an auto retailer. We bought Asbury in the

middle of the recession when, in the U.S., about nine million cars a year were being sold annually. We thought

normal was more like 15 million to 17 million cars a year, so Asbury was selling quite cheaply.

Our expectation was that the sales of autos would return to 15 million to 17 million cars [annually]. That happened.

Our expectation was that the profitability of those auto retailers would improve, not only because theyre selling

more carsand that returns to normal, but also because there are fewer auto retailers. The OEMs [original

equipment manufacturers]10 shut down some of their franchises. That, in fact, has happened.

So the things that we expected to happen when we bought Asbury Automotive have come to fruition. Were not

seeing a follow-on that will generate the kind of outsized returns going forward that we saw when we first bought it,

so weve been reducing that position a little bit. Again, the idea was: the sale of the cars got hit [during the

recession]; that would recover, and auto retailers would recover with it. Thats happened, but we dont see the kinds

of outsized returns going forward, so weve begun to harvest that holding.

Ron

Just as a summary, of the four stocks that Jeff has mentioned, each of the four companies does about a 20% ROE.

The two we bought recently are selling about 11 times earnings [Arris and ON Semiconductors]. The two weve

9 Short selling is the opposite of buying stocks. It is the selling of a security that the seller does not own, done in the hope that the price will fall. 10 OEMs are companies that buy a product and then incorporate or re-brand it into a new product under its own name.

February 19, 2015 Conference Call Page 18 lightened up on recently are selling about 20 times earnings [ADS and Asbury Automotive]. All are good companies,

but theres a price at which well be heavy, and another price at which well lighten up.

Tony

Theres a price at which well buy and a price at which well sell.

Ron

Amen.

Tony

And on that note Im going to ask the Moderator to see if theres anyone that has questions for us.

Moderator

Thank you. Our first question comes from Mr. Hunter. Please go ahead.

Mr. Hunter

Hi Ron and team. I noticed that weve got some financial holdings and wondering, in general, what you think about

bank profitability.

Ron

Im trying to remember when it was that Draghi in Europe said they would do whatever was necessary.

Jeff

The bumblebee speech in 201211.

Ron

Yes.

11 The euro is like a bumblebee. This is a mystery of nature because it shouldnt fly but instead it does. So the euro was a bumblebee that flew very well for several years. And nowand I think people ask how come?probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what, after the financial crisis. The bumblebee would have to graduate to a real bee. And thats what its doing Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough. Speech by Mario Draghi at the Global Investment Conference in London on July 26, 2012.

February 19, 2015 Conference Call Page 19 Coming off of 2009, much of the contagion was through the financial markets. And, frankly, our fear in going

forward was that the way Europe might affect the U.S. would be financialfar more than I would call trade or

fundamentals. When Draghi said the ECB would do whatever was necessary, we thought things are no longer getting

worse in Europe. The leveraged bet or the aggressive bet would have been to buy European banks. We didnt have

the guts to do that. We did buy JP Morgan and Citigroup.

Weve recently sold Citigroup because [among international banks] there will be less leverage than there used to be.

The regs say they have to keep more assets and equity for their stock. So, we are no longer buyers of international

banks. Domestic banks we really dont own because we havent found enough value there to do it. We had moved

into international banks; were now net moving away We still own some in JP Morgan.

We own some financials like State Street, which is a custodian bank, and Lincoln National, which is on the

insurance side. So we own financials on the custodian or insurance side, not the banking side.

Tony

Are you still bullish on insurance companies because they did such a splendid job of selling annuities? Now, Im not

a proponent of my clients buying them but, is that a factor still?

Ron

An insurance company is basically a holder of bonds. So far, thats been a pretty good business. In fact, one of the

groupswe always monitor who does better in earnings than expected. The re-insurance companies had a great year

last year because there were fewer catastrophes, property casualty catastrophes, than normal.

Tony

They collected the premiums and didnt have to make a payout.

Ron

Yes. So, thats got our attention. But its also a big swingif you have a snowstorm or a hurricane, it can reverse that

big time. But the short answer to Mr. Hunters question is: we own less financials then we did, and were finding

fewer values there than we had several years ago.

Mr. Hunter

Ron, along that same vein, could you speak just for a moment to your heavier cash exposureand I appreciate you

looking to buy Cadillacs at Chevy prices and that its harder to do, and I would agree with you on that. Whats your

February 19, 2015 Conference Call Page 20 thought on dividends in that interim, in terms of at least putting the cash to more productive use than a money

market rate?

Ron

Well, the difficulty with dividends I didnt get to the Money Show in Florida this year, but the last two years, the

public was asking, How can we get more yield out of our portfolio? I can find zero utilities that are cheap.

Everything that is sold on the basis of providing income, with the possible exception of muni bonds If I had

someone who insisted they needed it, what the IRS calls income, there may be room there [among municial

bonds]. But man, I cant find it among the people who talk about having yields.

We mentioned a little bit earlier that we didnt particularly like bonds. You probably noticed in the last few months,

both Apple and Microsoft, which are cash flow machines, are selling bonds to buy in their own stock. At current

interest rates, theyre literally selling bonds to buy in their own stock. What Ive learned over the years is, when the

corporate management is selling bonds to buy their own stock, you want to be on the side of the management, not

the public.

Obviously somebody out there is willing to sell their stock back to them and is buying their bonds. My guess is, its

pension funds. But, at current interest rates, companies that have the choice; they dont need to raise money in any

case, but theyve raised billions by selling bonds and buying in stock. These are not dumb people. Wed rather be on

their side of the equation than the opposite side.

Mr. Hunter

My fear is, sitting on cash. Im looking for value. You and Ive metand I believe in you guys. Its just a case of really

wanting to make sure Im not missing out while youre looking. Even if the market goes up say 5% instead of 10%

and I agree with you on the fact that its an unsustainable growthI dont want to miss out on that while were on

the sidelines waiting to find the values.

Ron

Historically, if you cant find something good to buy, if you keep your money in your pocket, it will come along

fairly soon.

Mr. Hunter

I count on you, Ron

February 19, 2015 Conference Call Page 21 Ron

The reason to own cash is not to make money. The reason to own cash is to have it available whenever somebody

else wants it. That is when forced selling takes place, which means prices are cheaper.

Jeff

And having said that, were probably about 10% cash position.

Ron

Right about 10%.

Ron

If I can find a company with a 20% ROE, selling at 11 times earningsand we think it can sustain the

profitabilitywe will spend some cash.

Mr. Hunter

Perfect.

Ron

That list is getting shorter than it used to be.

Tony

Do we have anyone else in queue?

Moderator

Yes. Our next question comes from Mr. Johnson.

Mr. Johnson

In light of the prices on airline stocks, which have run up in 2014, how do you see airline stocks in 2015? Are you

buying, are you selling, are you holding, or are you reducing? And, in 2015, how do you see Boeing, BA symbol?

Ron

Boeing we dont own. Historically, Boeing stock is tracked with the backlogand the backlog is no longer growing.

In recent months, we added some American Airlines, which is on the swing end of airlines, and we lightened up,

somewhat, on Delta because, frankly, theyve gotten heavy. If the managements remained disciplined about not

February 19, 2015 Conference Call Page 22 adding capacity, as long as theyre doing that, my guess is well probably hold the stocks. Jeff, do you want to add to

that?

Jeff

For Delta and American Airlines, the story is really about generating cash flow and doing useful things with it. It has

been true for probably 2 1/2 years for Delta. American Airlines has been a little bit behind that. I would echo what

you say. As long as they, a) continue to generate the cash flow; and, b) invest it wisely, as opposed to expanding

capacity, which drives down pricingI think they probably continue to provide good value and good returns to

their shareholders.

There are two other airlines that we own, Allegiant and Spirit, that are, frankly, growth stories. Spirit, of course, is an

ultra-low cost carrier. Allegiant isIm not even sure how you would characterize it. They both have very different

models for how they operate their business. Theyre both very profitable, and they both appear to have quite a few

years of growth yet ahead of them. They do not operate on the same models that the large carriers follow, either

traditionally, or are operating now.

So, these airlines are a little bit different. We bought them for different reasons, and were watching different things

with them. Im not disappointed yet by anything that either Allegiant or Spirit has said theyre going to do or, in fact,

currently doing. Does that help you, sir?

Mr. Johnson

Yes, thank you.

Moderator

Our next question comes from Mr. Ferguson.

Mr. Ferguson

Hello. You said earlier that you thought the biotech sector had been good recently, and you imply that thats going

to continue for a while. Do you see anything else is going to get good?

Tony

The phrase stock pickers market comes to mind.

February 19, 2015 Conference Call Page 23 Ron

If you want to get me bullish on a five- to ten-year horizon, we can talk about energy. If you look around you,

everything you see is just organized energy. We can talk biotech We can talk robotics Sometimes you see

different pieces that look together, and you wake up in the morning and you say, Son of a gun, those three different

industries are all feeding into a common theme which seems to be going on.

Computer power has become a commodity, which is why IBM sells dirt cheap. Ten years or fifteen years ago, we

were taught we had to own Ciscoand everybody loved it at 60 times earnings. Nobody likes it at ten times

earnings. What has been happening is the consumerkids now running around with iPhones; who would have

thought that even ten years ago? Those types of products have gotten so cheap that the consumer is going to find

ways of buying. If we pay attention correctly, hopefully, we can latch onto those trends while theyre still fairly

young and have a ways to go. I can get very excited about all those things.

Tony

The driver, as youve said before, in a relatively free economy, the consumer is king. What we try not to do is predict

what the consumer is going to latch onto or how or why, but pay attention enough, and recognize it as its

happening. You dont have to predict it if you can catch it early, and you dont have to be there at the turn.

Ron

Mr. Ferguson, what youve just asked is what we spend our time doing.

Tony

Who else do we have on the line?

Moderator

We have Mr. Brightman on the line.

Ron

Mr. Brightman, how are you doing?

Mr. Brightman

Hi, everybody. Ive got a quick question. I listened to what you said about things getting to the point of being fully

priced. As you look forward in 2015, and maybe even into 16, what type of yearly return would you think we could

expect on our investments with you?

February 19, 2015 Conference Call Page 24 Ron

When I say stocks are fully priced, the way I get to that is: If inflation is at 2%which is what the Fed is trying to

dothen, interest rates Lets say, the long bonds should be on the order of 4-5 percent. Its not there. For me to

put up equity money, I need to see 7-8 percent. And 7-8%, if everything else were equal, would imply a 12 to 14 P/E

and with a little bit of growth in there. So, on average, over a ten-year period, I would say things are priced to do

about 7-8 percent.

Historically the markets have done 7-8%, but [annualized] that might be a plus 30 and then a minus 20. There is so

much going onand so much of the short-term market is psychologicalthat its easier for me to put a number on

a five- to ten-year basis, than it is a one- or two-year basis. Its like saying, In Boston, on average, they get a foot of

snow a year. That wasnt too pertinent this year.

I think its counterproductive to try to say what the price of goods will be on a one-year basis. Over time, prices

make sense. Long-term, the markets a weighing machineI think Warren Buffet said once upon a timewhich

means it comes out in ways that make sense. Short-term, the markets a voting machineits a psychological

process. And, right now, there is so much going on that the short-term changes are politicalnot economic, which

makes them harder to peg.

Ive said for years, if you can tell me what the consumer will do, the rest of the job is pretty easy. I still dont know

whether the consumer is going to spend or save what theyre saving on buying gasoline. Youre asking me a question

I dont have an answer forand I am also trying to warn you, if somebody gives you an answer, dont trust it.

Tony

Lets wrap it upFinal thoughts.

Ron

Most of the big questions are the same as theyve been for five years. I cant find any that have been solved.

The incentive for the powers that beand I dont care if its American politicians, or European, or Asian, or whatever

they areis to continue current trends as long as possible. Part of the problem that weve been having We had

such a serious recession in 08 and 09 because they tried not to have one in 05 and 06. And by trying to prevent a

recession, we ended up with a bigger one. It got delayed, but it was bigger. I hope the Fed moves back toward

economic interest rates, as opposed to political interest rates.

February 19, 2015 Conference Call Page 25 Much of economicsand a certain amount of investingis trading the short-term for the long-term, but the

political pressure is always to avoid pain in the near-term. Ive never seen it happen where you could avoid it

indefinitely. So far, politicians have been pretty good at pushing it out into the future. Because of the business were

in, we sort of have to participate as long as, who was it at Citigroup said, As long as the musics playing you have to

dance.12 Well, there comes a point where the dance isnt worth it.

Tony

Thank you, everybody for joining us. If we raised more questions than we answered, or didnt get to your question,

shoot us an email, give us a call, well be happy to address it, and we look forward to hearing from you.

The opinions expressed are those of Muhlenkamp & Co. and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current

income tax regulations and is not exhaustive. Investors must consult their tax adviser or legal counsel for advice and

information concerning their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.

12 As long as the music is playing, youve got to get up and dance Were still dancing. Charles O. Prince, CEO, Citigroup; Financial Times; July 9, 2007.

Tony Muhlenkamp, PresidentRon Muhlenkamp, Founder and Portfolio ManagerJeff Muhlenkamp, Investment Analyst and Co-Manager