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Tonight’s Agenda

Market RecapEarningsHigh Frequency TradingGoldNext Emerging Market

Announcements

Peter Schiff April 28th – W10 – 6:30-7:30PM

Bar Crawl Friday, May 3rd

Peter Schiff Resume CEO and founder of Euro pacific capital, a

brokerage firm in Connecticut: http://www.europac.net/

Successfully predicted 2000 tech bubble and 2008 housing crisis: http://www.youtube.com/watch?v=Z0YTY5TWtmU

Turbulent Markets log worst week of 2013

2.1%

Nasdaq2.7%

Earnings UpdateQ1 Earnings

Headlines GE earnings top sales, but Europe weights on sales

McDonald's profit rises, falls short estimates

Google earnings beat, but revenue misses

IBM earnings and revenue fall short

Pepsi tops earnings estimates, raises full year forecast

American express earnings beat, revenue misses

Ebay earnings beat by a penny, outlook falls short

Bank of America earnings fall short of expectations

Yahoo earnings beat, but revenue falls short

Intel earnings miss by a penny, revenue hits target

Microsoft tops earnings expectations

Earnings so far… As of Friday, a fifth of the S&P 500

had reported, and two-thirds had better-than-expected earnings.

But an unusually high amount—57 percent—missed their top-line revenue estimates, according to Thomson Reuters.

Chipotle Profits jump, hammer Q1 Earnings expectations

Earnings of $2.45 a share and beat estimates of $2.14

Earnings growth of 24.4% Revenue growth of 13.4%

During the first quarter, Chipotle launched 48 new units. As of Mar 30, 2013, the company operated 1,458 restaurants.

Menu prices expanded 70 basis points (bps) during the year while average check grew 30 bps.

CMG repurchased 164,000 shares worth 51 mil. And announced an additional $100 million next quarter.

Total operating margin increased 50 bps to 16.5% Increased Cash $23 million

Stock up 11.5% after earnings release!

CMG Stock Performance

(10/22/12)

4/20/13

16.35%

11.54%

Apple ContinuedApple may have lost nearly half of its value since its peak in September, but it's still the talk of the town. Only this time, it's all about how low can it go?

Apple, which was once the world's most valuable company, is trading at nine times trailing earnings.

Stock was down 8.43% last week alone

Apple Continued

Is Apple a Buy or Sell Ahead of Earnings?

Next week’s Earnings Game plan

Mon Tue Wed Thurs Fri

GDP

High Frequency Tradinghttp://www.youtube.com/watch?v=2jj8q6Mh5BU

Investments

Vote Yuzhu Chen for Tippie Senate

Investments (2) Examples:

House (assuming proper inflation) Equities (IRA, 401k, retirement plans) Bonds

What is Systematic Trading? First, what’s the difference between

trading and investing?

Investing: Buying and holding securities to profit from their long term appreciation

Trading: Frequent buying and selling of securities to generate returns greater than traditional investing

Trading

So, What is Systematic Trading?

What does systematic mean? Done or acting according to a fixed plan

or system; methodical

Utilizes algorithms and parameters as signals for trading (buy and sell signals) How much? When to? How to? Which to?

Determining Systematic Trading Strategies Observe “anomalies” and create

algorithm/parameters to exploit the anomaly

Typically use computers due to the highly technical nature of systematic trading Removes Human Error

Sell SignalsPurple RedDOWN White Arrow

Buy SignalsBlue GreenUP White Arrow

Will it make money? Systematic Trading provides a

framework to easily test profitability based on historical prices

Retrieving price quotes and running algorithm/parameters to determine profitability using statistical analysis

Past performance doesn’t guarantee future performance

Why is HFT important?

Affects liquidity and price fluctuations

Regulation as a result

Will become increasingly important

http://www.youtube.com/watch?v=J-0jENLaUfk

Questions?

Gold – Monday 4/15

Gold – April 2013

Gold – 2000 present

How bad was it?

Friday was a 4.88 SD move for gold

Statistically, one 5 SD move is seen every 4,776 years!!!!!!!!

Shouldn’t expect to see gold fluctuate similarly until the year 6789

Friday & Monday

GLD – 2 day price change = 16.65

This can be converted to just over 8 SD

“I wanted to share what this comes to, but the table I use only goes up to seven SD. Let’s just say the sun ix expected to burn our first.”

-Russel Rhoads, CFA of CBOE Option Inst.

Statistical Takeaway

The selloff seen in gold is dramatic and substantial

However, we invest in an ever changing financial system that continuously evolves

Example: statistical analysis to storms shows similar frequent “outliers”

Gold & Commodity Selloff

Bull or Bear?

Testing bearish territories this week

Fundamental value of gold

No one can agree what its value should be

Discussion

What does the gold/commodity selloff show?

Bullish or bearish on gold?

What unfolding global issues will impact gold/commodities in the near future?

Antoine van Agtmael Arguably, founding father

of emerging markets investing

Africa, Asia, Latin America, and other less developed areas

“When I started talking about emerging markets 30 years ago, people knew it made sense but they didn’t quite believe it.”

Next emerging market?

The United States of America The US is at beginning of industrial revitalization

10 years ago, 9/10 companies factoriesChina Now, more like 3/10 China

And 5/10 might US

We are becoming more energy independent and on track to be net exporter

Major advancements in shale gas, 3-D printing, and robotics