“TINA” GOES GLOBALPresentation to Market Technicians

Association Annual Symposium

Jason DeSena TrennertManaging Partner

52 Vanderbilt Ave., 8th Fl.New York, New York 10017

FOUR OUT OF CONSENSUS IDEAS

• ROW doesn’t take U.S. down, global economy surprises on the upside

• Cyclicals outperform defensives

• Downward earnings revisions have overshot the mark

• Bullishness on U.S. Treasuries became consensus

LOWER ENERGY GOOD FOR G7

-100%-75%-50%-25%0%25%50%75%100%125%150%175%-2%

-1%

0%

1%

2%

3%

4%

5%

'90 '95 '00 '05 '10 '15

G7 GDP & Brent Oil Price Growth(Y/ Y Pct Change)

Brent Oil, 18MLead, RHS

G7 GDP, LHS

RIGHT NOW, YOU’RE FIGHTING EVERYONE

526

186

475 499

278

50100150200250300350400450500550

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Assets on Central Bank Balance Sheets (Indexed to 100 in Jan-'07, Local Currency)

BOJ

ECB

SNB

FedBOE

INFLATION PRESSURES STILL QUIESCENT

1.521.51.61.71.81.92.02.12.22.3

'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

U.S. Money Velocity(Nominal GDP/ M2)

THE LIMITS OF QE

56%

58%

60%

62%

64%

66%

68%

6%7%8%9%

10%11%12%13%14%

'47 '54 '61 '68 '75 '82 '89 '96 '03 '10

Corporate Profits as % GDP and Labor Share of Corporate GDP

Corporate Profits as % of GDP, Left

Labor Share of Corporate GDP, Right

STILL-TAME INFLATIONEARNINGS MULTIPLES NOT AT

RISK

16.6x17.9x

17.2x

14.7x

10.9x

9.5x8.5x 8.3x

8x

10x

12x

14x

16x

18x

20x

-2-0% 0-2% 2-4% 4-6% 6-8% 8-10% 10-12% 12-14%

Average S&P 500 LTM P/E by CPI Y/Y Tranche (1950 - Current)

“The biggest big business in America is not steel, automobiles, or television. It is the manufacture, refinement and distribution of anxiety.” -Eric Sevareid

THE BULL NO ONE LOVED

SUPPLY & DEMAND: EQUITIES

8,823

5,2414,500

5,500

6,500

7,500

8,500

9,500

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

Number of Companies Listed on U.S. Exchanges (Sum of AMEX, NASDAQ, NYSE)

Source: WorldFederation of Exchanges

SUPPLY & DEMAND: EQUITIES

0500

1,0001,5002,0002,5003,0003,5004,000

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

Private Equity Assets Under Management($BN, 2000-2014)

Dry PowderUnrealized

Portfolio Value

CAGR: 13.1%

FIDUCIARIES LOVE ALTS, HATE EQUITIES

PERFECT STORM FOR ACTIVISM/ M&A

1. Slow economic growth

2. Excess cash3. Activist

AUM growing

4. Added value

5. Shot clock on cheap financing may have started

- 15 30 45 60 75 90

105 120

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

Global Activist Hedge Funds(Assets Under Management, $BN)