What's New? Feddern Financial Consulting Group

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1 Subject: Feddern Financial Consulting Group Newsletter What's New? Feddern Financial Consulting Group TODAY'S NEWS: It's true! Bloomberg News reported this morning that Berkshire's cash hoard just topped the $55 billion mark in June. How surprising is that? First, Buffett has never had that much cash sitting idle at the end of a quarter in his more than four decades at the firm's helm. Second, cash on hand has surged more than 55 percent in the past year. Third, the overall level is more than double the cushion Buffett says he likes to keep lying around in case of unexpected losses tied to Berkshire's large insurance businesses. Warren Buffett's Berkshire Hathaway has a cash holding of $55 billion. So what should we make of this trend? Well, if you're an optimist, you could say Buffett is probably getting ready to launch another big round of mega-buyouts. He shelled out several billion dollars to buy up the Burlington Northern Santa Fe railroad in several billion dollars more to buy a large stake in IBM back in and several billion dollars more to help privatize HJ Heinz in But if you're more of a pessimist, you could raise an obvious question: "If Warren Buffett isn't out there aggressively buying stocks, why the heck should I do so?" It's not just Buffett who's husbanding cash rather than aggressively deploying it, either. Private equity firms are sitting on their own $1.16 trillion cash hoard - the most ever, per Bloomberg. I'm curious where you come down on this whole debate. Is this a sign that Uncle Warren is nervous, and therefore you should be too? Or is he just getting ready for his next batch of mega-deals, something that should have you licking your chops and scouting out potential Buffett targets?

2 What about you and your own personal portfolio? Contact us for our most recent analysis. In this issue TODAY'S 401-k Asset Allocation Changes. Is the Glass Half FULL...Or Half Empty AAII/LUG's Group Info ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ TODAY'S 401-k Asset Allocation Changes PLAN NAME BUY SELL LINK TO DETAILS and the Five Profiles FFCG-Ultimate: Anderson Law seqsz,rymix Nationwide: Ahead HR Socially Responsible: rymix OneAmerica: VISIT OUR WEBSITE FOR SPECIFIC ASSET ALLOCATION RECOMMENDATIONS We have added several new sets of indicators from NetSignal, VectorVest, and our 20- day MA of the S&P 500 which are used for the broad markets and give a general

3 indicators of BUY or SELL. The following market signal changes were issued by NetSignal as of: US STOCKS - BUY ( ) June 5, 8:20pm CT - US Equity Bull Alert. - netsignal is issuing a US Equity Bull Alert this evening effective for Friday, June 6. The Fed has been all over the place with announcements regarding QE. What is clear is that the Fed will step in at any sign of a slowing economy. It is happening again with the new Fed Chairman continuing the same policy. With our current Alert which is three months old, we finished slightly behind buy and hold which was up 3.5%. FOREIGN STOCKS- SELL ( ) July 31, 7:00pm CT - International Fund Bear Alert. - netsignal is issuing an International Fund Bear Alert this evening, effective for Friday, August 1. The European markets have been showing weakness. German funds have even fallen under their 200 day moving average. Since our Alert on February 18, our International Equity model has performed well. With ishares Japan (EWJ) we were up 4.4% and we were up 2.3% with ishares Msci International (EFA). (see article below)june 20, 8:20pm CT - International equities were mixed. The UK was up.2% and the German DAX was down -.2%. Funds were down as ishares Msci International (EFA) fell -.2% and ishares Germany (EWG) fell -.2%. ishares Japan (EWJ) was up.1%. netsignal issued an International Fund Bull Alert effective for Tuesday, February 18. We are up 3.9% at this point in the Alert which is three and a half months old measured by ishares Msci Emerging Markets (EFA). EMERGING MARKETS - BUY ( ) June 5, 8:20pm CT - Emerging Market Bull Alert. The recent bear alert has failed to hold as the dollar has continued to fall. netsignal is issuing an Emerging Market Bull Alert this evening effective for Friday, June 6. Emerging markets have staged a quick reversal. While both the Shanghai and Hong Kong markets were flat with this Alert, emerging market funds denominated in dollars rose sharply as the dollar fell. With this Alert, we were behind buy and hold by -1.9% measured against the Hanseng. netsignal performance for specific emerging market countries has been mixed. For example, over the past two years since January 2012, netsignal has beat buy and hold with Brazilian ETF's but were slightly behind buy and hold with Chinese funds and ETF's GOLD - BUY ( ) Jun 19 7:30pm CDT - Gold Fund Bull Alert. - netsignal has issued a Gold Fund Bull Alert this evening, effective for Friday, June 20 close. Gold has quickly turned around with a 3.5% gain today. Deteriorating circumstances in Iraq has caused a move to safety. Our Bear Alert was short and gold rose 5.5% while we were in cash. Consider adding gold ETF's such as Spdr Gold Trust (GLD), ishares Gold (IAU) and Market Vectors Gold Miners (GDX) to your portfolios The following market signal changes were issued by VectorVest as of:

4 Stock Market Call - SELL: ( ) The "Holy Grail" is in CASH as of the above date. 7.82% YTD The following market signal changes were issued by our LONG/SHORT S&P 500 as of: Market Call - Based on the 20-day moving average of the S&P Spyders: SSO/ULPIX are LONG the S&P x2 SDS/URPIX are SHORT the S&P x2 As of this strategy has been added to and is available for all participants in our FFCG "Ultimate 401-k" platform custodied at Lincoln Trust BUY: SDS $ SDS $26.33 = +4.98%

5 Bruce's Comment: Well, who is in charge? The "market" opened down but ended up, $0.05. The Bears (I think) still have an edge, but there is a fight between the Bulls / Bears. The area of 188 (I think) is still a target for the Bears. We will see. Is the Glass Half FULL... Or Half Empty If you're an investor looking for a reason to be worried, there are plenty of headlines to light the fuse. Widening war in the Middle East, turmoil in eastern Ukraine (or is that western Russia?), a debt default by Argentina...problems with some Portuguese bank...ebola...tapering.

6 It's not a short list, and equities are down roughly 3% since their peak on July 24th. Maybe, just maybe, a long-awaited stock-market correction has begun. We can't confirm or deny that prediction. All we know for certain is that this would be about the 43rd correction analysts have called in just the past 24 months. What we do know is that the fundamentals do not suggest anything terribly serious is wrong with the US stock market. Don't take this the wrong way. These events are all important. They matter. But in the long sweep of history, they don't yet rise to the level of world changing events. Most of us have experienced much worse in our lifetimes. Compared to the Yom Kippur War, the recent conflict between Israel and Gaza is small. And an interesting by-product of this current conflict is that more Arab countries are now supporting Israel. Meanwhile, Putin's Russia is playing an increasingly weak hand trying to foment a border crisis with Ukraine. The recent downing of Malaysian Airlines flight 17 has pushed Europe into sanctions that hurt Putin's inner circle in its most vital organ. That would be their wallets. Yes, Argentina isn't going to pay all its debts. But, given its history, why is this news? Since its independence in 1816, Argentina has been in default or rescheduling about 1/3rd of the time. We'd be more surprised if Argentina always paid its debts on time. Ebola is certainly a scary headline, but projecting some turning point for the market due to Bird Flu, Swine Flu or even AIDS back in the 1980s was an overreaction. Fear makes any one of these seem a potentially cataclysmic event, but the same could be said about hundreds of things that have happened in the past 200 years. The one thing we're sure of is that the economic fundamentals haven't changed much and that the market remains undervalued. Real GDP in the second quarter rose 4% at an annual rate after a weather-related drop in Q1 of 2.1%. Moreover, revisions to 2013 show that real GDP grew 3.1% in the four quarters of By the way, some analysts used year-over-year data for 2013 to show a 2.2% gain in real GDP, but this is like using your average net worth for the year to reflect your financial health, not what you had at year-end. The job market is showing steady gains, with another 209,000 added to payrolls in July. That's the sixth straight month above 200,000, the first time that's happened since And it looks like more of the same in August: initial unemployment claims are at a four-week average of 297,000, the lowest since April In addition, the manufacturing sector looks like it's firing on all cylinders. The ISM Manufacturing Index beat on the upside, hitting 57.1 in July, the highest since Construction plunged in June, but that's a very volatile indicator from month to month and the trend is still up, with a gain of 26% since the bottom in early Technical analysis is not our area of expertise, which is why we have to be agnostic about whether we're in a correction. But if it is a correction, we think a rebound would be soon to follow. In our heart pr hearts, we still believe the bull market will remain intact until a recession is on the way, the equity market gets overpriced, or monetary policy gets tight. None of these are here yet and we don't expect them anytime soon.

7 The presentation scheduled for AAII and LUGs meeting concerning the END OF CASH could be good OR could be a catastrophy. Come to one of the AUG meetings and decide for yourself! AAII Group Info ============================ AAII will Meet on THURSDAY at 6:00 PM at the AUDUBON CC The Audubon Country Club is conveniently located off Preston Highway, approximately one mile South of Eastern Parkway in Audubon Park on the left. After entering Audubon Park, take the first right and go all of the way to the end and you will be at the entrance to the Club. Parking is very convenient. Since this meeting is sponsored by the Louisville Chapter of the American Association of Individual Investors, you are always asked to preregister by to attend this program, in order for the country club to provide appropriate seating arrangements. Also, indicate if you plan to have dinner. Please confirm your attendance by to Otto@fedderngroup.com There is a charge for attending the meeting of $10 to help defray some of our expenses And this is not a "prospecting seminar" conducted by a financial services firm selling financial products, and your addresses will remain private and protected. You are also certainly invited to participate in the buffet which is an additional $15 (which makes the total $25 for the meeting AND the dinner.) AUG 21, PM TENTATIVE Agenda: S&P LONG/SHORT - Bruce Richards UPDATE: A New Dividend Portfolio from the Highest Yielding Stocks in the DOW When the Dow Hits 31,000+ in 2016-How Rich Will You Be?...Larry Edelson Reverse Mortgage - Is it Right For You? - Special Guest Speaker THE END OF CASH - Happens on Sep 14 UPDATE: A diversified Portfolio of GOLD and Gold Miners UPDATE: A New Portfolio of REITS 19 Stock and Bond Indicators to Help You Determine "Where We Are" UPDATE: The "Holy Grail" Stock Portfolio Using VectorVest Rules

8 Developing a new Watchlist for Fun and Profit by NEXT Christmas - LAST CHANCE TO ENTER You don't need to be a member of AAII to attend this meeting DINNER: $25 MEETING ONLY: $10 Reservations Requested and Appreciated =================================================================== Louisville Users Group (LUGS) Info ============================ The next LUGS Will Meet on SATURDAY - AUG 23-10:00 AM FREE - No Reservations needed AUG 23, :00 AM TENTATIVE AGENDA: How to mitigate the Downside risk in your portfolio while participating in the Upside o S&P LONG/SHORT - Bruce Richards o A New Dividend Portfolio from the Highest Yielding Stocks in the DOW o A NEW Portfolio of REITS o A NEW Portfolio of GOLD ETFs and MINERS. o THE END OF CASH - Happens on Sep 14 o 19 Stock and Bond Indicators to Help You Determine "Where We Are" o The "Holy Grail" Stock Portfolio Using VectorVest Rules - UPDATED o Developing a new Watchlist for Fun and Profit by NEXT Christmas-LAST CHANCE TO ENTER MY Conference Room Coffee and rolls provided FEDDERN FINANCIAL CONSULTING GROUP 603 North Shore Drive - Suite 102 Jeffersonville, IN (502) Office (502) Otto Cell otto@fedderngroup.com Quick Links...

9 Visit our Website Otto G. Feddern Feddern Financial Consulting Group 603 North Shore Drive Suite 102 Jeffersonville, IN (502) Office (502) Cell Forward This was sent to by Update Profile/ Address Rapid removal with SafeUnsubscribe Privacy Policy. Feddern Financial Consulting Group 603 north shore drive suite 102 jeffersonville IN 47130