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March 5, 2009 Navigating the Economic Tempest and Winning We are in uncharted waters, indeed – yet, we remain in control of the ship and we are managing the storm with great perseverance, strength and yes, optimism. What is important to understand is that no investor in the world is immune from the impact of the global economy – not even Warren Buffet. As we have communicated to you before, what is occurring throughout the world appears to be a legitimate and emotional reaction to negative investments tied to a web of worldwide shifts in commerce, finance, politics and culture. The decline in worldwide financial markets is greater in scale because the scope of investors is of a magnitude never seen before. Therefore, every adjustment – positive and negative – is felt heavily as one, large investment society. The future may be easier to predict than we think. As we explained in our 2008 Wealth Journal, in the last 25 years, there have been four recessions – 1980, 1981, 1991, 2001 – and now 2008/09. The longest recession, 1981, lasted eighteen months. The shortest, 1980, lasted six months each with significant contraction in Gross Domestic Product (GDP), all followed by strong and sustained economic growth. Today, the interconnected and interdependent world economy is experiencing a recession and as expected, with heavy impact. Nevertheless, what we have learned of recessions measured since the U.S. Civil War are the following: Recessions end – followed by economic growth Governments engage – with noble intentions People embrace – their neighbor near and far Businesses build – more strategically and efficiently Societies evaluate – priorities and the future Investors invest – intrinsic value reigns As your asset manager, we have been humbled by this worldwide economic experience. At the same time, we are smarter, more efficient and fueled with a positive energy to effectively navigate through the storm. We can handle this and so can you. You may have noticed we are communicating with you more often just as you have been communicating with us as well. The way forward is to keep our dialogue open, honest, bold and frequent. What we are learning and doing is communicated with you right away – whether it is a new investment opportunity, a new service we are designing or information about the economy. Importantly, we are managing your investment portfolio(s) in an attempt to curb the impact of the economic slowdown and of even greater significance we are positioning your holdings in such a way, so as to benefit as the economy and financial markets stage a recovery. Here are some recommendations and areas to watch. As always, the intrinsic value of the company (effective leadership, corporate culture, business model, strategy) drives all successful investing especially during a recession. When we encourage patience, this is not ambiguous. Allow government stimulus policy as well as corporate restructuring to take effect. With the amount of corporate consolidation occurring, we must permit management to make hard The Cannery Village ▪ 517 30th Street ▪ Newport Beach, CA 92663 949-673-9944 ▪ 800-513-5899 ▪ 949-673-9955 FAX Email: [email protected] ▪ Website: www.bantaassetmanagement.com decisions and let strategies be deployed. This requires investors to grant effective corporate executives to do their jobs. We remain optimistic because history is on our side – you know this, the government knows this and the world society knows this. Let’s stay connected and we will ultimately prevail. Respectfully and with continued confidence, Banta Asset Management