Leeb Capital Management Brochure
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Leeb
Capital Management, Inc.
An AffiliAte of the leeb group
SERVING INVESTORS through FORWARD THINKING and UNCOMPROMISING DILIGENCE
LEEB CAPITAL MANAGEMENT, INC. IS PART OF THE LEEB GROUP OF COMPANIES,
WHOSE MEMBER FIRMS OFFER A VARIETY OF FINANCIAL AND EDUCATIONAL SERVICES INTENDED TO HELP BOTH INDIVIDUAL AND INSTITUTIONAL INVESTORS PROFIT FROM ON-GOING RESEARCH AND UNIQUE INSIGHTS INTO ECONOMIC TRENDS AND THE FINANCIAL MARKETS.
W E L C O M E TO A N E W L E V E L of financial security and freedom
s a high net worth individual, chances are you have acquired your assets through strong financial discipline and by being perceptive enough to take advantage of wealth-building opportunities most investors overlook. Now that you can enjoy the fruits of your success—including freedom from excessive demands on your time—you want a professional money manager who understands your goals. You deserve a manager you can trust—who has a history of…
A
* Accurately spotting trends in industries, markets, and the global economy that
create the biggest risks and opportunities going forward.
* Taking steps to preserve wealth during adverse markets and tumultuous events. * Delivering strong performance in both bull and bear markets.
But more than that…you deserve a manager who gives your portfolio the attention it requires, who is available to answer questions and discuss your concerns, who helps you stay informed about developments that may affect your assets, and who provides prompt, personalized service. Leeb Capital Management, Inc. was created to meet the specific needs of investors like you. In fact, we are so confident we can provide the peace of mind, freedom, and financial results you desire, we’d like to offer you a special reward just for taking time to learn about us. Let us start by introducing you to the man responsible for formulating our approach to financial management, our founder…
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Stephen leeb, ph.D. (pSYCh.), M.A. (MAth.), b.S. (eCon.)
Chairman of the Investment Committee
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“To be a savvy investor, there’s nothing that isn’t relevant, from science to economics to international relations to policies in Washington...Knowing how to evaluate what you read, and how to draw together disparate threads of information and apply them to prospects for the financial markets, is the real challenge. But it’s also what we really love to do.” ~ Dr. Stephen Leeb
Dr. Stephen Leeb is a long-standing figure in the investment world, owing to his ability to choose investments in line with developing economic trends. For 13 years (1990-2003), he edited Personal Finance, one of the top three financial newsletters in America, where his insights and investment ideas were read by over 120,000 subscribers. Further, he has appeared many times on financial and broadcast television, and his opinions on stock and commodity prices are regularly quoted in newspapers and journals across the country. Dr. Leeb sits on various corporate boards, where he shares his strategic perspectives on financial markets and natural resources. Since 2006, Dr. Leeb has been head of the advisory board of Leor Exploration & Production LLC, a Houston-based oil and gas exploration company whose Texas operations were sold in November 2007 to Encana for $2.55 billion. Since 2007, he has been a member of the advisory board of Electrum USA Ltd., one of the world’s largest privately held gold exploration companies. He is also on the advisory board of Sunshine Silver Mines Corp., a privately held silver exploration company. Since 2008, Dr. Leeb has been a director of Plain Sight Systems, a Yale University-based technology holding company. Dr. Leeb also sits on the board of two Plain Sight Systems subsidiaries. Water Intelligence plc, a publicly traded London-based company that has developed cutting-edge technology for managing water supplies, and Deep Markets Corp. which is developing next-generation risk management applications.
Dr. Leeb has authored seven books. His first, Getting in on the Ground Floor (1986), accurately forecasted the bull market of the 1980s and 1990s. In Defying the Market (1999), Dr. Leeb predicted the downfall of technology shares and the subsequent rise in energy and gold prices. His book, The Oil Factor (2004), warned that oil prices were about to skyrocket. They hit a 21-year high just four months later. His New York Times bestseller, The Coming Economic Collapse (2006), outlined challenges facing the economy and the steps to take to forestall them. Dr. Leeb’s latest book, Game Over: How You Can Prosper in a Shattered Economy (2009), explains how the combination of several key factors— including inflation, the weakening dollar, the rapid fluctuation in oil prices, increasing competition from China and India, and our runaway national debt— are going to make for a very rocky road for Americans for years to come. As Chairman of the Investment Committee for Leeb Capital Management, Inc., Dr. Leeb contributes his deep understanding of macro-economic trends and market conditions, plus detailed research into individual companies, to lead our team of experts in choosing stocks for your portfolio. His leadership and dedication are responsible for much of our success. For example, consider Leeb Capital Management’s approach to one of the most fundamental aspects of portfolio design…
[ PAGE 5 ]
>>>>>> AN ASSET ALLOCATION STRATEGY THAT TREATS YOU AS A PERSON, NOT A STATISTIC
Joining Dr. Leeb at the helm of Leeb Capital Management is the company’s president, Dr. Patrick DeSouza. Dr. DeSouza joined the company in 2008, bringing leadership and operating experience that reinforces Leeb Capital Management’s goal to deliver first-tier performance long-term. Dr. DeSouza is also CEO of the Plain Sight Group, a private equity company centered at Yale University with various alternative investments. Plain Sight and its team of Yale-trained mathematicians and computer scientists have been working with Leeb Capital to develop next generation quantitative and risk assessment tools to provide Leeb Capital with an analytic edge. Moreover, Plain Sight private investments will deepen our expertise in certain strategic vertical markets, such as energy and defense. In addition to Plain Sight, Dr. DeSouza has twenty years of experience on Wall Street in investment banking and practicing securities law with significant experience in respect to billions of dollars of M&A and corporate finance transactions both in the United States and internationally. Dr. DeSouza has also served at the White House as Director for Inter-American Affairs on the National Security Council. In addition to several articles on economic policy, he is the author of Economic Strategy and National Security (Westview, 2000) which includes contributions from former senior members of the Bush and Clinton Administrations. Dr. DeSouza is a lecturer at Yale Law School and a member of the Council on Foreign Relations. He is a graduate of Columbia College, Yale Law School and Stanford Graduate School where he wrote his doctoral dissertation on foreign investment in the United States. Most financial advisors follow a standard formula. Subtract your age from 100, and that gives you the percentage of your portfolio that should be in stocks. The remainder, they say, should be in bonds. Thus, the older you get, the fewer shares you own. At Leeb Capital Management, we feel that approach is overly simplistic and goes against both market history and most investors’ needs. An important fact: Over ten-year periods, stocks have been shown to outperform bonds 90% of the time. So the most certain way to grow your wealth is to make stocks the largest component of your portfolio. Regardless of age, we believe most investors should hold bonds only if they need current income. When you choose Leeb Capital Management as your money manager, we work with you to design an asset mix tailored to address your unique timeframe, risk tolerance, tax situation, and income needs (or lack thereof). Your income component may include not only bonds, but also other cash-generating securities whose values are less likely to be eroded by inflation. In times of market uncertainty or economic weakness, we may allocate a portion of your portfolio to securities that provide protection against falling asset values. The remainder of your portfolio can then be devoted to pursuing what we view as the most promising growth opportunities. Here again, we take a sophisticated approach…
[ PAGE 6 ]
Our stock selection process begins with the S&P 500, a diversified universe of established, well-capitalized companies. Within the overall index, we select the 4 or 5 sectors with the fastest growing revenues, and the greatest likelihood of continued growth. Our Watch List consists of roughly 150 companies that hold dominant positions in our chosen sectors. Our portfolio consists of 30-40 stocks, drawn from the Watch List, that offer the best combination of value and growth potential.
S&P 500
STRONGEST GROWTH SECTORS
MARKET LEADERS
UNDERVALUED OPPORTUNITIES
>>>>>> OUR GOAL IS TO THRIVE IN ALL MARKET CONDITIONS
We believe that a well-designed portfolio should produce superior results even under volatile conditions. Rather than just “mirroring” the market, we focus on finding securities likely to lead the pack when overall stock prices are rising, and also provide solid returns when the market is falling. Our pursuit of this goal starts with the big picture: our ongoing research into the significant trends and developments in science, industry, the economy, global markets, and geopolitics. This tells us which sectors are most likely to outperform in the future. Having identified the top four or five sectors, we perform extensive and diligent fundamental analysis to find stocks within each sector that meet the following criteria… that are unlikely to suffer from competition because they have a dominant position in their industry.
VALUE Ideally, we prefer stocks with a forward P/E less than that of the S&P 500. But where none exist, we look for stocks with a PEG ratio much lower than the market’s. Either way, by buying shares at a discount to their true value, we attempt to position you to enjoy stronger returns going forward. DIVERSIFICATION We make sure your portfolio
is diversified across and within our chosen sectors, with no more than 8% invested in any one company. Research and experience tells us that a portfolio designed according to these principles should produce excellent returns, provided our growth estimates are correct. Fortunately, we’re not afraid of hard work. Our staff gladly puts in the long hours required to derive the most accurate, independent growth projections possible. However, growth is only one part of our strategy…
STRONG GROWTH We look for stocks whose
projected 3-5 year growth exceeds that of the S&P 500. The market leaders, in other words.
COMPETITIVE EDGE We stick to companies
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>>>>>> OUR TEAM OF PROFESSIONALS IS DEDICATED TO HELPING YOU MEET YOUR FINANCIAL GOALS
ROGER S. CONRAD M.A. International Management, American Graduate School of International Mgmt. B.A. Anthropology, Emory University Roger has been working with Stephen Leeb since well before LCM’s formal track record began. As a Portfolio Manager, he works with the LCM team to choose securities for the income portion of your portfolio. Roger is the founder of the newsletter, Utility Forecaster, which advises investors on incomeproducing securities such as utility stocks, bonds, and preferred shares. In 1997, Utility Forecaster was named Best Financial Advisory by the Newsletter Publishers Association. In addition, he has co-authored two books with Stephen Leeb, Market Timing for the Nineties (1994) and The Agile Investor (1996). GENIA TURANOVA, CFA MBA Finance and Investments, Baruch College, CUNY Genia joined LCM in 2001 as a Portfolio Manager and a member of the Investment Committee. Prior to joining the LCM team Genia was a research analyst with Independence Asset Management LLC in New York. She received her B.S. degree in Economics from Kharkiv National University (Ukraine). Genia taught Economics and Management in the School of Economics at Kharkiv National University for more than nine years. She earned an MBA in Finance and Investments from the Honors MBA Program at Baruch College, CUNY. Genia is a CFA charterholder.
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DAVID A. SANDELL, CFA B.A. Finance and Psychology, Washington University in St. Louis David began his career with Leeb Capital Management in 2004. He currently serves in the capacity of Portfolio Manager, Head Trader, and member of the Investment Committee. David’s market observations have been quoted in the media including Wall Street Journal Radio, Reuters, and Bloomberg TV and Radio. David graduated with honors from Washington University in St. Louis with a B.A. degree in Finance and Psychology. David is a CFA charterholder.
GREG DORSEY B.A. Economics and International Relations, University of Delaware Greg joined the Leeb Group in 2004, and currently serves in the capacity of Portfolio Manager and member of the Investment Committee. Greg has more than 20 years of experience as a securities analyst and portfolio manager. He has also written for and served as editor of several award-winning investment publications over the years. Greg holds a B.A. degree in Economics and International Relations from the University of Delaware.
“Building a top-performing income portfolio involves buying interest-producing securities that maximize your income and let you dodge a handful of risks.” Roger S. Conrad Portfolio Manager
>>>>>> A SAFER APPROACH TO MEETING YOUR CURRENT INCOME NEEDS
Bonds are the traditional investment choice when you want current income. But when interest rates rise, bond prices fall. In addition, inflation will gradually erode the value of both bonds and cash. With today’s interest rates being extremely low and rising, and higher inflation on the horizon, we feel it’s important to hold income-producing securities that offer better protection for your capital. Our current strategy includes… funds with * Buying bonds or bondwith interestlow duration or limited correlation rate swings.
The result is an income portfolio designed not only to meet your current income needs, but also to preserve your capital with minimal turnover of securities.
>>>>>> A NOTE ABOUT PERFORMANCE
As an experienced investor, you know that a manager’s past performance is no guarantee of future results, and that all securities carry risk of loss. We are pleased with our track record over the last ten plus years—a period that includes both bull and bear market phases. We will gladly provide you with the latest performance figures on request. In addition, we believe our approach gives us the best chance of producing superior results going forward. Nonetheless, the future always remains uncertain. We therefore suggest that your choice of a money manager should be based on more than just performance. For instance, let’s look at some of the other reasons why you might choose Leeb Capital Management…
* Owning stocks in industries that can keep pace with rising interest rates and inflation. * Choosing only investment grade securities, to reduce credit risk. * Diversifying among various income sectors, such as REITs, utilities, and preferred shares.
We rigorously research and track over 250 income securities using our own five-stage methodology. Our methodology includes a proprietary safety rating system and a value index that compares prospective total returns with a security’s current P/E ratio.
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“A portfolio is not just a collection of stocks. We build in both growth and protection by selecting what our research shows as the best stocks in the best sectors and incorporating hedges, such as hard assets-based securities or zero coupon bonds.” Genia Turanova, CFA Portfolio Manager
>>>>>> REDUCING RISK IN AN UNCERTAIN CLIMATE
As most investors have learned in recent years, simply outperforming the market does not necessarily mean that you are making a decent return on your money. When stock prices are falling, you can beat the market and lose money at the same time. When inflation is rising, you may outperform the index, yet lose ground in terms of real purchasing power. At Leeb Capital Management, our goal is to generate solid gains in all eventualities—both good and bad. So we dedicate a portion of your portfolio to securities that offer insurance against today’s biggest risks. On the heels of the finanical crisis, and still in an uncertain climate, we choose stocks that are likely to do well regardless of whether the economy improves or weakens. With inflation looming—due to record debt levels, a large defense budget, and burgeoning entitlement programs—we diversify into sectors such as oil services and gold that thrived during the high inflation of the 1970s. With the ongoing threat of terrorist strikes, we offer protection in the form of zero coupon bonds, defense and insurance stocks, and precious metals—all of which were safe havens after 9/11. With this small “insurance” component in place, you can enjoy peace of mind without sacrificing the potential returns from our selected growth opportunities.
>>>>>> WE’RE NEVER AFRAID TO ADMIT MISTAKES, OR HOLD OUT FOR THE BIGGEST GAINS
Once we are confident about our economic forecast and our chosen securities, we believe the best way to achieve long-term gains is to buy and hold. Trying to trade every short-term price swing generally works against your best interests, and may result in worse performance due to lost opportunities and higher transaction costs.
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“A timeless investment strategy takes a straightforward, disciplined approach built around diversification and finding long-term value.” David A. Sandell, CFA Portfolio Manager
At the same time, we believe that knowing when to sell is as important as choosing the right securities to buy. There are three main conditions under which we would sell a security… major the economic * If we foresee asuch aschange inof a new trend environment, the start in interest rates or inflation that warrants a different asset mix. security to live * Failure of theexpectations. up to our fundamental
>>>>>> COMPETITIVE FEES HELP ADD TO YOUR NET INCOME AND LONG-TERM PROFITS
Like most money managers, Leeb Capital Management charges an annual fee based on the size of your portfolio. This arrangement means we have a vested interest in helping you increase your wealth. At the same time, we keep our rates competitive so you can enjoy a higher net income, and/or have more money to reinvest for compound growth. For further savings, we have negotiated institutional rates with Schwab, Fidelity, and TD Ameritrade. (Or we can work with the broker of your choice.) Should you ever wish to cancel your agreement with us, you are free to do so at any time, and receive a full refund of all management fees paid for the balance of the quarter. No advance notice is required. Here’s what your fees cover…
* Fulfillment of our performance expectations, so that further upside is limited.
By following these guidelines, we aim to maximize your returns, while lowering your transaction costs. And speaking of costs…
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>>>>>>
PERSONALIZED SERVICE AND COMMUNICATION
As our client, we provide you with personal attention and first class service, starting with…
INITIAL INVESTMENT CONFERENCE
Once you open an account with us, we will hold an initial conference to learn about your unique goals, time frames, risk tolerance, tax situation, and other factors which will influence how we structure and manage your portfolio.
Your final Quarterly Appraisal each year will include the tax-related information you need to complete your annual 1040. You can simply pass it on to your accountant. It’s that simple. But there’s one more important point we’d like to make…
>>>>>>
WITH LEEB, YOU’RE NEVER JUST A CLIENT
Although Leeb Capital Management will take over the management of your assets—including portfolio design, security selection, and execution of trades—we never want you to feel out of the loop. We make it easy for you to stay informed about the markets, the economy, and the reasons behind our current investment choices. You will receive regular market commentary from our Investment Team, plus periodic reports on the sectors we’re currently following. Our quarterly market updates, plus recent articles on investment topics are also posted on our website, so you can access them even when you’re away from home.
YOUR PERSONAL PORTFOLIO MANAGER
You will be introduced to your personal Portfolio Manager who is responsible for the day-to-day management of your account. Your Portfolio Manager is always available to answer questions about your account and provide prompt service, such as fulfilling your requests for transfers or checks, or forwarding information to your accountant.
COMPLETE STATEMENTS AND CONFIRMATIONS
Naturally, you will receive written confirmation of every transaction in your account, plus a monthly brokerage statement. In addition, Leeb Capital Management will provide you with a Quarterly Appraisal detailing all activity and performance over the previous three months.
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WE’RE NEVER TOO BUSY TO SPEAK WITH YOU
We make a point of being available by phone, anytime the markets are open. Even in the days immediately following 9/11, we answered every single call from our concerned clients, and helped each person to the best of our ability. We also communicate with you regularly, and shift allocations in accordance with any changes to your required income, liquidity, or any other aspect of your situation or goals you share with us. In short, we prefer to see you not just as a client, but as an important member of our team. But before you decide if Leeb Capital Management is the investment partner you’ve been looking for, let us offer you an easy, no-cost way to find out…
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let us offer you SOME FREE ADVICE ON YOUR CURRENT PORTFOLIO
In appreciation for your willingness to learn about our services, we would like to offer you a free, confidential, no-obligation Portfolio Review. Simply call us at 1-800-524-LEEB (1-800-524-5332) to arrange a time that is convenient for you to speak with one of our Portfolio Advisers. In return, we will give you our current take on the markets, including which sectors we feel offer the best opportunities at the moment.We’ll look at how your investments are currently allocated, and make recommendations on how we would go about designing a portfolio that’s better suited to meet your financial goals. By the time the Review is over, you should have a pretty good idea how Leeb Capital Management’s customized style can serve your needs, as well as some sensible tips for managing your investments. Phone Leeb Capital Management today, and explore further what we have to offer. We look forward to your call, and to helping you enjoy a prosperous future.
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Leeb
Capital Management, Inc.
An AffiliAte of the leeb group
8 West 40th Street, 19th Floor New York, NY 10018 800.524.LEEB (5332) 212.653.1504 phone 212.246.3696 fax
Leeb
Capital Management, Inc.
An AffiliAte of the leeb group
SERVING INVESTORS through FORWARD THINKING and UNCOMPROMISING DILIGENCE
LEEB CAPITAL MANAGEMENT, INC. IS PART OF THE LEEB GROUP OF COMPANIES,
WHOSE MEMBER FIRMS OFFER A VARIETY OF FINANCIAL AND EDUCATIONAL SERVICES INTENDED TO HELP BOTH INDIVIDUAL AND INSTITUTIONAL INVESTORS PROFIT FROM ON-GOING RESEARCH AND UNIQUE INSIGHTS INTO ECONOMIC TRENDS AND THE FINANCIAL MARKETS.
W E L C O M E TO A N E W L E V E L of financial security and freedom
s a high net worth individual, chances are you have acquired your assets through strong financial discipline and by being perceptive enough to take advantage of wealth-building opportunities most investors overlook. Now that you can enjoy the fruits of your success—including freedom from excessive demands on your time—you want a professional money manager who understands your goals. You deserve a manager you can trust—who has a history of…
A
* Accurately spotting trends in industries, markets, and the global economy that
create the biggest risks and opportunities going forward.
* Taking steps to preserve wealth during adverse markets and tumultuous events. * Delivering strong performance in both bull and bear markets.
But more than that…you deserve a manager who gives your portfolio the attention it requires, who is available to answer questions and discuss your concerns, who helps you stay informed about developments that may affect your assets, and who provides prompt, personalized service. Leeb Capital Management, Inc. was created to meet the specific needs of investors like you. In fact, we are so confident we can provide the peace of mind, freedom, and financial results you desire, we’d like to offer you a special reward just for taking time to learn about us. Let us start by introducing you to the man responsible for formulating our approach to financial management, our founder…
[ PAGE 3 ]
Stephen leeb, ph.D. (pSYCh.), M.A. (MAth.), b.S. (eCon.)
Chairman of the Investment Committee
[ PAGE 4 ]
“To be a savvy investor, there’s nothing that isn’t relevant, from science to economics to international relations to policies in Washington...Knowing how to evaluate what you read, and how to draw together disparate threads of information and apply them to prospects for the financial markets, is the real challenge. But it’s also what we really love to do.” ~ Dr. Stephen Leeb
Dr. Stephen Leeb is a long-standing figure in the investment world, owing to his ability to choose investments in line with developing economic trends. For 13 years (1990-2003), he edited Personal Finance, one of the top three financial newsletters in America, where his insights and investment ideas were read by over 120,000 subscribers. Further, he has appeared many times on financial and broadcast television, and his opinions on stock and commodity prices are regularly quoted in newspapers and journals across the country. Dr. Leeb sits on various corporate boards, where he shares his strategic perspectives on financial markets and natural resources. Since 2006, Dr. Leeb has been head of the advisory board of Leor Exploration & Production LLC, a Houston-based oil and gas exploration company whose Texas operations were sold in November 2007 to Encana for $2.55 billion. Since 2007, he has been a member of the advisory board of Electrum USA Ltd., one of the world’s largest privately held gold exploration companies. He is also on the advisory board of Sunshine Silver Mines Corp., a privately held silver exploration company. Since 2008, Dr. Leeb has been a director of Plain Sight Systems, a Yale University-based technology holding company. Dr. Leeb also sits on the board of two Plain Sight Systems subsidiaries. Water Intelligence plc, a publicly traded London-based company that has developed cutting-edge technology for managing water supplies, and Deep Markets Corp. which is developing next-generation risk management applications.
Dr. Leeb has authored seven books. His first, Getting in on the Ground Floor (1986), accurately forecasted the bull market of the 1980s and 1990s. In Defying the Market (1999), Dr. Leeb predicted the downfall of technology shares and the subsequent rise in energy and gold prices. His book, The Oil Factor (2004), warned that oil prices were about to skyrocket. They hit a 21-year high just four months later. His New York Times bestseller, The Coming Economic Collapse (2006), outlined challenges facing the economy and the steps to take to forestall them. Dr. Leeb’s latest book, Game Over: How You Can Prosper in a Shattered Economy (2009), explains how the combination of several key factors— including inflation, the weakening dollar, the rapid fluctuation in oil prices, increasing competition from China and India, and our runaway national debt— are going to make for a very rocky road for Americans for years to come. As Chairman of the Investment Committee for Leeb Capital Management, Inc., Dr. Leeb contributes his deep understanding of macro-economic trends and market conditions, plus detailed research into individual companies, to lead our team of experts in choosing stocks for your portfolio. His leadership and dedication are responsible for much of our success. For example, consider Leeb Capital Management’s approach to one of the most fundamental aspects of portfolio design…
[ PAGE 5 ]
>>>>>> AN ASSET ALLOCATION STRATEGY THAT TREATS YOU AS A PERSON, NOT A STATISTIC
Joining Dr. Leeb at the helm of Leeb Capital Management is the company’s president, Dr. Patrick DeSouza. Dr. DeSouza joined the company in 2008, bringing leadership and operating experience that reinforces Leeb Capital Management’s goal to deliver first-tier performance long-term. Dr. DeSouza is also CEO of the Plain Sight Group, a private equity company centered at Yale University with various alternative investments. Plain Sight and its team of Yale-trained mathematicians and computer scientists have been working with Leeb Capital to develop next generation quantitative and risk assessment tools to provide Leeb Capital with an analytic edge. Moreover, Plain Sight private investments will deepen our expertise in certain strategic vertical markets, such as energy and defense. In addition to Plain Sight, Dr. DeSouza has twenty years of experience on Wall Street in investment banking and practicing securities law with significant experience in respect to billions of dollars of M&A and corporate finance transactions both in the United States and internationally. Dr. DeSouza has also served at the White House as Director for Inter-American Affairs on the National Security Council. In addition to several articles on economic policy, he is the author of Economic Strategy and National Security (Westview, 2000) which includes contributions from former senior members of the Bush and Clinton Administrations. Dr. DeSouza is a lecturer at Yale Law School and a member of the Council on Foreign Relations. He is a graduate of Columbia College, Yale Law School and Stanford Graduate School where he wrote his doctoral dissertation on foreign investment in the United States. Most financial advisors follow a standard formula. Subtract your age from 100, and that gives you the percentage of your portfolio that should be in stocks. The remainder, they say, should be in bonds. Thus, the older you get, the fewer shares you own. At Leeb Capital Management, we feel that approach is overly simplistic and goes against both market history and most investors’ needs. An important fact: Over ten-year periods, stocks have been shown to outperform bonds 90% of the time. So the most certain way to grow your wealth is to make stocks the largest component of your portfolio. Regardless of age, we believe most investors should hold bonds only if they need current income. When you choose Leeb Capital Management as your money manager, we work with you to design an asset mix tailored to address your unique timeframe, risk tolerance, tax situation, and income needs (or lack thereof). Your income component may include not only bonds, but also other cash-generating securities whose values are less likely to be eroded by inflation. In times of market uncertainty or economic weakness, we may allocate a portion of your portfolio to securities that provide protection against falling asset values. The remainder of your portfolio can then be devoted to pursuing what we view as the most promising growth opportunities. Here again, we take a sophisticated approach…
[ PAGE 6 ]
Our stock selection process begins with the S&P 500, a diversified universe of established, well-capitalized companies. Within the overall index, we select the 4 or 5 sectors with the fastest growing revenues, and the greatest likelihood of continued growth. Our Watch List consists of roughly 150 companies that hold dominant positions in our chosen sectors. Our portfolio consists of 30-40 stocks, drawn from the Watch List, that offer the best combination of value and growth potential.
S&P 500
STRONGEST GROWTH SECTORS
MARKET LEADERS
UNDERVALUED OPPORTUNITIES
>>>>>> OUR GOAL IS TO THRIVE IN ALL MARKET CONDITIONS
We believe that a well-designed portfolio should produce superior results even under volatile conditions. Rather than just “mirroring” the market, we focus on finding securities likely to lead the pack when overall stock prices are rising, and also provide solid returns when the market is falling. Our pursuit of this goal starts with the big picture: our ongoing research into the significant trends and developments in science, industry, the economy, global markets, and geopolitics. This tells us which sectors are most likely to outperform in the future. Having identified the top four or five sectors, we perform extensive and diligent fundamental analysis to find stocks within each sector that meet the following criteria… that are unlikely to suffer from competition because they have a dominant position in their industry.
VALUE Ideally, we prefer stocks with a forward P/E less than that of the S&P 500. But where none exist, we look for stocks with a PEG ratio much lower than the market’s. Either way, by buying shares at a discount to their true value, we attempt to position you to enjoy stronger returns going forward. DIVERSIFICATION We make sure your portfolio
is diversified across and within our chosen sectors, with no more than 8% invested in any one company. Research and experience tells us that a portfolio designed according to these principles should produce excellent returns, provided our growth estimates are correct. Fortunately, we’re not afraid of hard work. Our staff gladly puts in the long hours required to derive the most accurate, independent growth projections possible. However, growth is only one part of our strategy…
STRONG GROWTH We look for stocks whose
projected 3-5 year growth exceeds that of the S&P 500. The market leaders, in other words.
COMPETITIVE EDGE We stick to companies
[ PAGE 7 ]
>>>>>> OUR TEAM OF PROFESSIONALS IS DEDICATED TO HELPING YOU MEET YOUR FINANCIAL GOALS
ROGER S. CONRAD M.A. International Management, American Graduate School of International Mgmt. B.A. Anthropology, Emory University Roger has been working with Stephen Leeb since well before LCM’s formal track record began. As a Portfolio Manager, he works with the LCM team to choose securities for the income portion of your portfolio. Roger is the founder of the newsletter, Utility Forecaster, which advises investors on incomeproducing securities such as utility stocks, bonds, and preferred shares. In 1997, Utility Forecaster was named Best Financial Advisory by the Newsletter Publishers Association. In addition, he has co-authored two books with Stephen Leeb, Market Timing for the Nineties (1994) and The Agile Investor (1996). GENIA TURANOVA, CFA MBA Finance and Investments, Baruch College, CUNY Genia joined LCM in 2001 as a Portfolio Manager and a member of the Investment Committee. Prior to joining the LCM team Genia was a research analyst with Independence Asset Management LLC in New York. She received her B.S. degree in Economics from Kharkiv National University (Ukraine). Genia taught Economics and Management in the School of Economics at Kharkiv National University for more than nine years. She earned an MBA in Finance and Investments from the Honors MBA Program at Baruch College, CUNY. Genia is a CFA charterholder.
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DAVID A. SANDELL, CFA B.A. Finance and Psychology, Washington University in St. Louis David began his career with Leeb Capital Management in 2004. He currently serves in the capacity of Portfolio Manager, Head Trader, and member of the Investment Committee. David’s market observations have been quoted in the media including Wall Street Journal Radio, Reuters, and Bloomberg TV and Radio. David graduated with honors from Washington University in St. Louis with a B.A. degree in Finance and Psychology. David is a CFA charterholder.
GREG DORSEY B.A. Economics and International Relations, University of Delaware Greg joined the Leeb Group in 2004, and currently serves in the capacity of Portfolio Manager and member of the Investment Committee. Greg has more than 20 years of experience as a securities analyst and portfolio manager. He has also written for and served as editor of several award-winning investment publications over the years. Greg holds a B.A. degree in Economics and International Relations from the University of Delaware.
“Building a top-performing income portfolio involves buying interest-producing securities that maximize your income and let you dodge a handful of risks.” Roger S. Conrad Portfolio Manager
>>>>>> A SAFER APPROACH TO MEETING YOUR CURRENT INCOME NEEDS
Bonds are the traditional investment choice when you want current income. But when interest rates rise, bond prices fall. In addition, inflation will gradually erode the value of both bonds and cash. With today’s interest rates being extremely low and rising, and higher inflation on the horizon, we feel it’s important to hold income-producing securities that offer better protection for your capital. Our current strategy includes… funds with * Buying bonds or bondwith interestlow duration or limited correlation rate swings.
The result is an income portfolio designed not only to meet your current income needs, but also to preserve your capital with minimal turnover of securities.
>>>>>> A NOTE ABOUT PERFORMANCE
As an experienced investor, you know that a manager’s past performance is no guarantee of future results, and that all securities carry risk of loss. We are pleased with our track record over the last ten plus years—a period that includes both bull and bear market phases. We will gladly provide you with the latest performance figures on request. In addition, we believe our approach gives us the best chance of producing superior results going forward. Nonetheless, the future always remains uncertain. We therefore suggest that your choice of a money manager should be based on more than just performance. For instance, let’s look at some of the other reasons why you might choose Leeb Capital Management…
* Owning stocks in industries that can keep pace with rising interest rates and inflation. * Choosing only investment grade securities, to reduce credit risk. * Diversifying among various income sectors, such as REITs, utilities, and preferred shares.
We rigorously research and track over 250 income securities using our own five-stage methodology. Our methodology includes a proprietary safety rating system and a value index that compares prospective total returns with a security’s current P/E ratio.
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“A portfolio is not just a collection of stocks. We build in both growth and protection by selecting what our research shows as the best stocks in the best sectors and incorporating hedges, such as hard assets-based securities or zero coupon bonds.” Genia Turanova, CFA Portfolio Manager
>>>>>> REDUCING RISK IN AN UNCERTAIN CLIMATE
As most investors have learned in recent years, simply outperforming the market does not necessarily mean that you are making a decent return on your money. When stock prices are falling, you can beat the market and lose money at the same time. When inflation is rising, you may outperform the index, yet lose ground in terms of real purchasing power. At Leeb Capital Management, our goal is to generate solid gains in all eventualities—both good and bad. So we dedicate a portion of your portfolio to securities that offer insurance against today’s biggest risks. On the heels of the finanical crisis, and still in an uncertain climate, we choose stocks that are likely to do well regardless of whether the economy improves or weakens. With inflation looming—due to record debt levels, a large defense budget, and burgeoning entitlement programs—we diversify into sectors such as oil services and gold that thrived during the high inflation of the 1970s. With the ongoing threat of terrorist strikes, we offer protection in the form of zero coupon bonds, defense and insurance stocks, and precious metals—all of which were safe havens after 9/11. With this small “insurance” component in place, you can enjoy peace of mind without sacrificing the potential returns from our selected growth opportunities.
>>>>>> WE’RE NEVER AFRAID TO ADMIT MISTAKES, OR HOLD OUT FOR THE BIGGEST GAINS
Once we are confident about our economic forecast and our chosen securities, we believe the best way to achieve long-term gains is to buy and hold. Trying to trade every short-term price swing generally works against your best interests, and may result in worse performance due to lost opportunities and higher transaction costs.
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“A timeless investment strategy takes a straightforward, disciplined approach built around diversification and finding long-term value.” David A. Sandell, CFA Portfolio Manager
At the same time, we believe that knowing when to sell is as important as choosing the right securities to buy. There are three main conditions under which we would sell a security… major the economic * If we foresee asuch aschange inof a new trend environment, the start in interest rates or inflation that warrants a different asset mix. security to live * Failure of theexpectations. up to our fundamental
>>>>>> COMPETITIVE FEES HELP ADD TO YOUR NET INCOME AND LONG-TERM PROFITS
Like most money managers, Leeb Capital Management charges an annual fee based on the size of your portfolio. This arrangement means we have a vested interest in helping you increase your wealth. At the same time, we keep our rates competitive so you can enjoy a higher net income, and/or have more money to reinvest for compound growth. For further savings, we have negotiated institutional rates with Schwab, Fidelity, and TD Ameritrade. (Or we can work with the broker of your choice.) Should you ever wish to cancel your agreement with us, you are free to do so at any time, and receive a full refund of all management fees paid for the balance of the quarter. No advance notice is required. Here’s what your fees cover…
* Fulfillment of our performance expectations, so that further upside is limited.
By following these guidelines, we aim to maximize your returns, while lowering your transaction costs. And speaking of costs…
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PERSONALIZED SERVICE AND COMMUNICATION
As our client, we provide you with personal attention and first class service, starting with…
INITIAL INVESTMENT CONFERENCE
Once you open an account with us, we will hold an initial conference to learn about your unique goals, time frames, risk tolerance, tax situation, and other factors which will influence how we structure and manage your portfolio.
Your final Quarterly Appraisal each year will include the tax-related information you need to complete your annual 1040. You can simply pass it on to your accountant. It’s that simple. But there’s one more important point we’d like to make…
>>>>>>
WITH LEEB, YOU’RE NEVER JUST A CLIENT
Although Leeb Capital Management will take over the management of your assets—including portfolio design, security selection, and execution of trades—we never want you to feel out of the loop. We make it easy for you to stay informed about the markets, the economy, and the reasons behind our current investment choices. You will receive regular market commentary from our Investment Team, plus periodic reports on the sectors we’re currently following. Our quarterly market updates, plus recent articles on investment topics are also posted on our website, so you can access them even when you’re away from home.
YOUR PERSONAL PORTFOLIO MANAGER
You will be introduced to your personal Portfolio Manager who is responsible for the day-to-day management of your account. Your Portfolio Manager is always available to answer questions about your account and provide prompt service, such as fulfilling your requests for transfers or checks, or forwarding information to your accountant.
COMPLETE STATEMENTS AND CONFIRMATIONS
Naturally, you will receive written confirmation of every transaction in your account, plus a monthly brokerage statement. In addition, Leeb Capital Management will provide you with a Quarterly Appraisal detailing all activity and performance over the previous three months.
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WE’RE NEVER TOO BUSY TO SPEAK WITH YOU
We make a point of being available by phone, anytime the markets are open. Even in the days immediately following 9/11, we answered every single call from our concerned clients, and helped each person to the best of our ability. We also communicate with you regularly, and shift allocations in accordance with any changes to your required income, liquidity, or any other aspect of your situation or goals you share with us. In short, we prefer to see you not just as a client, but as an important member of our team. But before you decide if Leeb Capital Management is the investment partner you’ve been looking for, let us offer you an easy, no-cost way to find out…
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let us offer you SOME FREE ADVICE ON YOUR CURRENT PORTFOLIO
In appreciation for your willingness to learn about our services, we would like to offer you a free, confidential, no-obligation Portfolio Review. Simply call us at 1-800-524-LEEB (1-800-524-5332) to arrange a time that is convenient for you to speak with one of our Portfolio Advisers. In return, we will give you our current take on the markets, including which sectors we feel offer the best opportunities at the moment.We’ll look at how your investments are currently allocated, and make recommendations on how we would go about designing a portfolio that’s better suited to meet your financial goals. By the time the Review is over, you should have a pretty good idea how Leeb Capital Management’s customized style can serve your needs, as well as some sensible tips for managing your investments. Phone Leeb Capital Management today, and explore further what we have to offer. We look forward to your call, and to helping you enjoy a prosperous future.
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Leeb
Capital Management, Inc.
An AffiliAte of the leeb group
8 West 40th Street, 19th Floor New York, NY 10018 800.524.LEEB (5332) 212.653.1504 phone 212.246.3696 fax