U.s. Global Investors, Inc. · NASDAQ:GROW
U.s. Global Investors — Cambridge House Presentation 2012
98 slides from U.s. Global Investors's conference presentation, June 2012
Slide 1: Apple is a Want, Resources are Needs
U.S. Global Investors Searching for Opportunities, Managing Risk Apple is a Want, Resources are Needs Frank Holmes, CEO and Chief Investment Officer www.usfunds.com June 2012 1.800.US.FUNDS 12-363
Slide 2: About U.S. Global Investors (GROW)
About U.S. Global Investors (GROW) A boutique publicly listed investment adviser specializing in gold, natural resources, emerging markets and infrastructure opportunities around the world. www.usfunds.com June 2012 12-363 2
Slide 3: Performance and Results Oriented
“Performance and Results Oriented” Investment leadership results in performance Winner of 29 Lipper performance awards, certificates and top rankings since 2000 (Four out of 13 U.S. Global Investors Funds received Lipper performance awards from 2005 to 2008, six out of 13 received certificates from
Slide 4: Focus on Education
Focus on Education 28 MFEA STAR Awards for Excellence in Education www.usfunds.com June 2012 12-363 4
Slide 5: Fund Recognition: Three Funds Rank in Top 25 for 10 Years
Fund Recognition: Three Funds Rank in Top 25 for 10 Years The Global Resources Fund (PSPFX) ranked #12 World Precious Minerals Fund (UNWPX) ranked #13 Gold & Precious Metals Fund (USERX) ranked #24 Rankings were provided to The Wall Street Journal and Barron’s by Lipper and include all mutual funds
Slide 6: U.S. Global Investors is Mobile
U.S. Global Investors is Mobile Get Investor Alert and Frank Talk On the Go Visit www.usfunds.com/apps www.usfunds.com June 2012 12-363 6
Slide 7: www.usfunds.com
www.usfunds.com June 2012 12-363
Slide 8: Global Resources are the Building Blocks of Apple
Global Resources are the Building Blocks of Apple www.usfunds.com June 2012 12-363 8
Slide 9: Compare Market Capitalizations
Compare Market Capitalizations www.usfunds.com June 2012 12-363 9
Slide 10: Tech Stocks Lost More Than Lipper Gold Funds Combined
Tech Stocks Lost More Than Lipper Gold Funds Combined www.usfunds.com June 2012 12-363 10
Slide 11: Are You Underweight? Energy & Basic Materials
Are You Underweight? Energy & Basic Materials 15% of S&P 500 www.usfunds.com June 2012 12-363 11
Slide 12: Global Resources Fund Outperformed – 3 year
Global Resources Fund Outperformed – 3 year Past performance is no guarantee of future results. www.usfunds.com June 2012 12-363 12
Slide 13: Global Resources Fund Outperformed – 10 year
Global Resources Fund Outperformed – 10 year Past performance is no guarantee of future results. www.usfunds.com June 2012 12-363 13
Slide 14: Calling Attractive Tops and Bottoms
Calling Attractive Tops and Bottoms — South Beach vs. Stock Market Priority — Reading Money Magazine www.usfunds.com June 2012 12-363 14
Slide 15: The S-Curve – Where Are We On The Curve?
The S-Curve – Big Question is Where Are We On The Curve? The S-Curve is a type of curve that shows a rapid, exponential increase in growth for a period of time, followed by a tapering or leveling off. www.usfunds.com June 2012 12-363 15
Slide 16: 7 Billion People — Tipping Point
7 Billion People — Tipping Point www.usfunds.com June 2012 12-363 16
Slide 17: China/India Share of World GDP Increased Substantially
China/India Share of World GDP Increased Substantially www.usfunds.com June 2012 12-363 17
Slide 18: Super Shift – Energy
Super Shift – Energy Oil Consumption and Industrialization, 1900 to present Oil Consumption Oil per capita rises rapidly during early industrialization, then levels to rapid real income growth. Rising world trade actually stimulates the industrialization phase. per capita: Lower U.S. labor costs ver
Slide 19: Super Shift – Electricity
Super Shift – Electricity Intensity of electricity consumption Source: BHPB Power consumption has been growing faster than the rate of GDP growth. www.usfunds.com June 2012 12-363 19
Slide 20: Huge Pent-Up Demand for Automotive Transportation in the Developing World
Huge Pent-Up Demand for Automotive Transportation in the Developing World www.usfunds.com June 2012 12-363 20
Slide 21: Tipping Points, Melting Points
Tipping Points, Melting Points Ice Turns to Water at 32º www.usfunds.com June 2012 12-363 21
Slide 22: Chindia – Rising Middle Class
Chindia – Rising Middle Class Source: padanisaa.blogspot.com www.usfunds.com June 2012 12-363 22
Slide 23: Rising Incomes in Emerging Markets Sustain Demand – Love Trade
Rising Incomes in Emerging Markets Sustain Demand – “Love Trade” www.usfunds.com June 2012 12-363 23
Slide 24: Bubble — Negative Press on China
Bubble — Negative Press on China www.usfunds.com June 2012 12-363 24
Slide 25: China's GDP Growth Less Export Driven
China’s GDP Growth Less Export Driven www.usfunds.com June 2012 12-363 25
Slide 26: Possible Contagion
Possible Contagion www.usfunds.com June 2012 12-363 26
Slide 27: Correlation Patterns — Commodities and China
Correlation Patterns — Commodities and China www.usfunds.com June 2012 12-363 27
Slide 28: Trend is Your Friend — China PMI (Manufacturing)
Trend is Your Friend — China PMI (Manufacturing) www.usfunds.com June 2012 12-363 28
Slide 29: China's GDP Growth Tends to Stabilize in Fifth Year of Leadership Transition Cycle
China’s GDP Growth Tends to Stabilize in Fifth Year of Leadership Transition Cycle www.usfunds.com June 2012 12-363 29
Slide 30: China Rail Freight Volume
China Rail Freight Volume www.usfunds.com June 2012 12-363 30
Slide 31: China New Bank Loans
China New Bank Loans www.usfunds.com June 2012 12-363 31
Slide 32: China Power Production
China Power Production www.usfunds.com June 2012 12-363 32
Slide 33: Stay Tuned to the Big S-Curve
Stay Tuned to the Big S-Curve 2009 1966 www.usfunds.com June 2012 12-363 33
Slide 34: China Market Strategy
China Market Strategy: “As long as the government’s intentions for policy adjustment are confirmed, we believe we are going to see economic growth to bottom out in the near future.” www.usfunds.com June 2012 12-363 34
Slide 35: Government Policy Model — Precursor for Change
Government Policy Model — Precursor for Change Ben Bernanke, Chairman President Barack Obama of the Federal Reserve www.usfunds.com June 2012 12-363 35
Slide 36: E7 and G7 Population vs GDP
E7 and G7 Population vs GDP www.usfunds.com June 2012 12-363 36
Slide 37: Compare E7 vs G7 Money Supply Growth
Compare E7 vs G7 Money Supply Growth www.usfunds.com June 2012 12-363 37
Slide 38: Majority of G7 and E7 Countries Have Negative Real Interest Rates
Majority of G7 and E7 Countries Have Negative Real Interest Rates www.usfunds.com June 2012 12-363 38
Slide 39: Gold Fear Trade for Gold Investors
Gold “Fear Trade” for Gold Investors Developed Countries Must Rollover a Massive $8 Trillion in 2012 (Below Inflation Rate) www.usfunds.com June 2012 12-363 39
Slide 40: Trend is Your Friend — Global PMI 15 Year
Trend is Your Friend — Global PMI 15 Year www.usfunds.com June 2012 12-363 40
Slide 41: Gold Demand Drivers
Gold Demand Drivers www.usfunds.com June 2012 12-363 41
Slide 42: Warren Buffett vs. Gold
Warren Buffett vs. Gold Warren Buffett www.usfunds.com June 2012 12-363 42
Slide 43: It's Not the Political Party, It's the Political Policies
It’s Not the Political Party, It’s the Political Policies www.usfunds.com June 2012 12-363 43
Slide 44: Fiscal 2010 U.S. Government Revenues & Expenses at a Glance
Fiscal 2010 U.S. Government Revenues & Expenses at a Glance 58% www.usfunds.com June 2012 12-363 44
Slide 45: U.S. Government Debt in Household Terms
U.S. Government Debt in Household Terms Place the debt situation in terms we all can understand by removing eight zeros. www.usfunds.com June 2012 12-363 45
Slide 46: Great Super Cycle Debt Bust — Contagion
Great Super Cycle Debt Bust — Contagion www.usfunds.com June 2012 12-363 46
Slide 47: History Repeats Itself with Currency Debasement
History Repeats Itself with Currency Debasement Russell Crowe, Gladiator www.usfunds.com June 2012 12-363 47
Slide 48: Declining Value of the U.S. Dollar
Declining Value of the U.S. Dollar Alan Greenspan Ben Bernanke www.usfunds.com June 2012 12-363 48
Slide 49: Gold Reserves Held as Financial Assets
Gold Reserves Held as Financial Assets www.usfunds.com June 2012 12-363 49
Slide 50: Gold as a Percent of Global Financial Assets
Gold as a Percent of Global Financial Assets e denotes estimate. www.usfunds.com June 2012 12-363 50
Slide 51: Fear Trade: Potential Gold Demand
Fear Trade: Potential Gold Demand Source: CIBC www.usfunds.com June 2012 12-363 51
Slide 52: Low Real Interest Rates Historically Fuel Gold, Silver and Oil
Low Real Interest Rates Historically Fuel Gold, Silver and Oil 2% Tipping Point for Gold Gold & silver perform well in low or negative real interest rate environments www.usfunds.com June 2012 12-363 52
Slide 53: Driver: The Love Trade
Driver: The Love Trade www.usfunds.com June 2012 12-363 53
Slide 54: Holidays Drive Gold Demand
Holidays Drive Gold Demand www.usfunds.com June 2012 12-363 54
Slide 55: China's Increasing Jewelry Demand
China’s Increasing Jewelry Demand www.usfunds.com June 2012 12-363 55
Slide 56: Gold Love Trade
Gold “Love Trade” Strong Correlation Between Rising Incomes and Gold Price www.usfunds.com June 2012 12-363 56
Slide 57: American Dream Trade
“American Dream Trade” Massive Urbanization Trend in India and China www.usfunds.com June 2012 12-363 57
Slide 58: Tipping Point
Tipping Point Impact is About to Be Felt Quite Soon High Speed Train, China www.usfunds.com June 2012 12-363 58
Slide 59: Emerging High-Speed Rail Hub Cities
Emerging High-Speed Rail Hub Cities Frank Holmes High Speed Train, China www.usfunds.com June 2012 12-363 59
Slide 60: No Bubble in Gold
No Bubble in Gold Past performance is no guarantee of future results. It is not possible to invest in an index. www.usfunds.com June 2012 12-363 60
Slide 61: Gold Undervalued Compared to Rise in Other Areas of U.S. Economy
Gold Undervalued Compared to Rise in Other Areas of U.S. Economy www.usfunds.com June 2012 12-363 61
Slide 62: Inflation-Adjusted Gold Prices in 2009 Dollars
Inflation-Adjusted Gold Prices in 2009 Dollars www.usfunds.com June 2012 12-363 62
Slide 63: Gold Would Need to Be Much Higher to Cover U.S. Money Supply
Gold Would Need to Be Much Higher to Cover U.S. Money Supply www.usfunds.com June 2012 12-363 63
Slide 64: Fear Trade: Aligning Gold Price to Bretton Woods II
Fear Trade: Aligning Gold Price to Bretton Woods II — $46,000/oz? www.usfunds.com June 2012 12-363 64
Slide 65: Managing Expectations — The Math
Managing Expectations — The Math Standard Deviation (as of 3/31/12) based on 10-Year Data Rolling 1 Year NYSE Arca Gold 38.1% BUGS Index (HUI) WTI Crude Oil 35.0% MSCI Emerging Markets 30.7% S&P 500 Index 19.1% Gold Bullion 13.2% 12-month rolling volatility of price action over 10-year period View t
Slide 66: Managing Expectations — 60 Day Rolling Oscillator
Managing Expectations — 60 Day Rolling Oscillator Gold Oversold Based on Historical Math www.usfunds.com June 2012 12-363 66
Slide 67: Managing Expectations — Gold Seasonality
Managing Expectations — Gold Seasonality Past performance is no guarantee of future results. www.usfunds.com June 2012 12-363 67
Slide 68: Seasonality Fluctuations Signal A Weak Few Months – XAU Gold Stock Index
Seasonality Fluctuations Signal A Weak Few Months – XAU Gold Stock Index Philadelphia Stock Exchange Gold and Silver Index (XAU) Source: CIBC www.usfunds.com June 2012 12-363 68
Slide 69: U.S. Presidential Election Year is Traditionally a Weak Year
U.S. Presidential Election Year is Traditionally a Weak Year – XAU Gold Stock Index Philadelphia Stock Exchange Gold and Silver Index (XAU) VS. Federal Election Years Barack Obama Mitt Romney www.usfunds.com June 2012 12-363 69
Slide 70: But 2013 Should Post Better Comebacks
But 2013 Should Post Better Comebacks – XAU Gold Stock Index Philadelphia Stock Exchange Gold and Silver Index (XAU) Post Federal Election Years www.usfunds.com June 2012 12-363 70
Slide 71: Three Price Levels When Valuing Companies
Three Price Levels When Valuing Companies 1. Wholesale Price 2. Retail Price 3. Fairytale Price www.usfunds.com June 2012 12-363 71
Slide 72: The Five M's for Gold Miners
The Five M’s for Gold Miners Management Mine Lifecycle Market Cap Money (Burn Rate) Minerals Weight of Truck: 423 tons Frank Holmes, Mauritania Load Capacity: 240 tons www.usfunds.com June 2012 12-363 72
Slide 73: Life Cycle of a Mining Share
Life Cycle of a Mining Share www.usfunds.com June 2012 12-363 73
Slide 74: Value Drivers for Superior Performance
Value Drivers for Superior Performance www.usfunds.com June 2012 12-363 74
Slide 75: Multiple Compression: How Long Before Revival?
Multiple Compression: How Long Before Revival? Baywatch www.usfunds.com June 2012 12-363 75
Slide 76: Gold Stocks Are Getting Cheaper
Gold Stocks Are Getting Cheaper www.usfunds.com June 2012 12-363 76
Slide 77: Gold Stocks Underperform Bullion
Gold Stocks Underperform Bullion www.usfunds.com June 2012 12-363 77
Slide 78: Gold Equities are Undervalued Relative to Gold Bullion
Gold Equities are Undervalued Relative to Gold Bullion The stocks today are almost as cheap as they were during the depths of the credit crisis. www.usfunds.com June 2012 12-363 78
Slide 79: History Repeats Itself — Cash Flow Multiple Collapse
History Repeats Itself — Cash Flow Multiple Collapse and Bottom in Late 1970s www.usfunds.com June 2012 12-363 79
Slide 80: Managing Expectations: Promises Versus Delivery
Managing Expectations: Promises Versus Delivery Tom Cruise, Jerry Maguire www.usfunds.com June 2012 12-363 80
Slide 81: Managing Expectations: Rising Cash Costs Should Not Be A Surprise
Managing Expectations: Rising Cash Costs Should Not Be A Surprise Tom Cruise, Jerry Maguire www.usfunds.com June 2012 12-363 81
Slide 82: Delays and Disappointments: M&A Deals
Delays and Disappointments: M&A Deals Days In The Dog House — 18 Months Tom Cruise, Jerry Maguire Source: CIBC www.usfunds.com June 2012 12-363 82
Slide 83: Managing Expectations: Show Me the Money On a Per Share Basis
Managing Expectations: Show Me the Money On a Per Share Basis Tom Cruise, Jerry Maguire www.usfunds.com June 2012 12-363 83
Slide 84: Gold Stock Costs Rise
Gold Stock Costs Rise www.usfunds.com June 2012 12-363 84
Slide 85: Gold Grades Fall
Gold Grades Fall www.usfunds.com June 2012 12-363 85
Slide 86: Changes For Cash Taxes Per Ounce Of Production Over Time
Changes For Cash Taxes Per Ounce Of Production Over Time Source: CIBC www.usfunds.com June 2012 12-363 86
Slide 87: The Replacement Cost for an Ounce Of Gold
The Replacement Cost for an Ounce Of Gold is $1500 with $1700 as a Sustainable Number (2012) www.usfunds.com June 2012 12-363 87
Slide 88: World Gold Production Is Flat
World Gold Production Is Flat www.usfunds.com June 2012 12-363 88
Slide 89: Exploration Spending Has Skyrocketed Without True Success
Exploration Spending Has Skyrocketed Without True Success At $9 billion/year plus replacement requirements of 90 Million oz/year a discovery cost of $100/oz is needed. This is low. www.usfunds.com June 2012 12-363 89
Slide 90: BHP Exploration Offices and Explorationists
BHP Exploration Offices and Explorationists www.usfunds.com June 2012 12-363 90
Slide 91: Managing Expectations: Few Discoveries Get Developed
Managing Expectations: Few Discoveries Get Developed www.usfunds.com June 2012 12-363 91
Slide 92: +3 Million Ounce Discoveries Becoming Scarce
+3 Million Ounce Discoveries Becoming Scarce www.usfunds.com June 2012 12-363 92
Slide 93: Apple is a Want, Global Resources Are Needs
Apple is a Want, Global Resources Are Needs: Energy, Food, Water, etc. www.usfunds.com June 2012 12-363 93
Slide 94: Fund Performance
Fund Performance www.usfunds.com June 2012 12-363 94
Slide 95: Come Visit Us at…
Come Visit Us at… Facebook: www.facebook.com/usfunds Twitter: www.twitter.com/usfunds Frank Talk: www.usfunds.com/franktalk Investor Alert: www.usfunds.com/alert www.usfunds.com June 2012 12-363 95
Slide 96: Disclosures
Disclosures Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US- FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Gl
Slide 97: Disclosures
Disclosures Morningstar Ratings are based on risk-adjusted return. The Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance does not guarantee future res
Slide 98: Disclosures
Disclosures Investment Objective: The Global Resources Fund is an actively managed fund that takes a diversified approach to the natural resources sector by investing in energy and basic materials. The fund invests in companies involved in the exploration, production and processing of petroleum, nat
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