EXPLORING NEW INVESTMENT FRONTIERS

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1 @Hywel_D_George EXPLORING NEW INVESTMENT FRONTIERS Markets in context HYWEL GEORGE

2 Source: Google 2017 in context

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5 Share of China s population living in extreme poverty % %

6 30s 40s 50s 60s 70s 80s 30s 40s 50s 60s 70s 80s 30s 40s 50s 60s 70s 80s 30s 40s 50s 60s 70s 80s 30s 40s 50s 60s 70s 80s Does democracy work? The youth do not think so 75 Percentage who say it is essential to live in a democracy EU U.K. U.S. Who needs 45 Democracy % 27.5% CHINA 29.8% RUSSIA when you have Tinder? 15 BCA Research 2017 Source: World Value Survey DECADES OF BIRTH

7 Here s google s full list of the top 10 how to searches of How to make slime 6 How to watch the solar eclipse 2 How to make solar eclipse glasses 7 How to freeze your credit 3 How to buy bitcoin 8 How to play Powerball 4 How to watch Mayweather vs. McGregor 9 How to screen record 5 How to make a fidget spinner 10 How to lose belly fat fast

8 Bitcoin is in classic bubble territory $000 per bitcoin Smart money Institutional investors Public New paradigm Enthusiasm Delusion Greed Denial Bull trap Return to normal Fear Capitulation Take-off First sell-off Media attention Bear trap Median Return to median Despair Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 STEALTH PHASE AWARENESS PHASE MANIA PHASE BLOW OFF PHASE Sources: Thomson Reuters Datastream; Jean-Paul Rodrigue

9 I can say almost with certainty that they will come to a bad ending Warren Buffet Source: CNBC

10 US 2017 After the noise US $ +22% RAND +10 % EUROPE EMERGING MARKETS SOUTH AFRICA +29% +38% +34% +17% +25% +21% Calendar Year 2017

11 1Q65 1Q68 1Q71 1Q74 1Q77 1Q80 1Q83 1Q86 1Q89 1Q92 1Q95 1Q98 1Q01 1Q04 1Q07 1Q09 1Q13 1Q16 Profits matter S&P 500 (LHS) US PROFITS (RHS) Source: Citi Research

12 Synchronised global growth USA 2.3% EUROZONE 2.4% RUSSIA 1.5% CHINA 6.9% GDP calendar year to

13 The long term matters JP Morgan Creditanstalbank Great Depression Tech bust, Lehman Oil Shock Source: Old Mutual Investment Group / end point March 2017

14 Developed economies: Spare capacity running out INDUSTRIAL CAPACITY UTILIZATION INDICATOR COMPOSITE UNEMPLOYMENT RATE [RHS,INVERTED] Source: Topdown Charts, Thomson Reuters Datastream

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23 Oct 2007 Dec 2007 Feb 2008 Apr 2008 Jun 2008 Aug 2008 Oct 2008 Dec 2008 Feb 2009 Feb 2009 Oct 2009 Jun 2010 Feb 2011 Oct 2011 Jun 2012 Feb 2013 Oct 2013 Jun 2014 Feb 2015 Apr 2015 Jul 2015 Oct 2015 Jan 2016 Apr 2016 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Consistent performance NOV 07 - FEB 09 MARCH 09 - APRIL 15 MAY 15 - JUNE 17 Annualised Alpha 1% p.a. Annualised Alpha 1.5% p.a. Annualised Alpha 1.2% p.a. Bear market: 37% Bull market: 271% Flat market: 0% FTSE/JSE SWIX FTSE/JSE SWIX FTSE/JSE SWIX Source: Old Mutual Investment Group

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26 Conclusion AI IS THE FUTURE WE ARE FUTURE FIT MAN + MACHINE

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