The economic woes of Greece have dominated headlines and investor concerns over the latest quarter. As the quarter ended, the negotiations between the lenders (Germany and Brussels in particular) and the Greek government had reached an impasse after months of activity with little progress. A default by Greece on 1.6 billion Euros due was a certainty. At the time of this writing, a referendum in Greece was scheduled that would give the current government the authority to accept more austere bailout terms. The mood of the Greek electorate has deteriorated from the great hopes that the Euro loans had created to increasing resentment of the austerity imposed when the debts came due.

1. SECOND QUARTER 2015
RETROSPECTIVE AND PROSPECTIVE
A Greek Tragedy and Other Woes
25 Adelaide Street East, Suite 500
Toronto ON M5C 3A1

2. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 2
Sprung Investment Management our focus is to create investment portfolios for our clients that
enable them to achieve their unique, long-term investment goals. In this endeavour, we strive to act
with the utmost integrity, utilising all of our analytical skills, knowledge and intuitions.
PRIVATE CLIENT FOCUS
Sprung Investment Management is an independent discretionary investment management firm that
serves the investment needs of high net worth private clients including business owners and
entrepreneurs, professionals, family trusts, estates, and private charitable foundations.
OUR PEOPLE
At Sprung Investment Management, the investment team collectively has over 120 years of diversified
investment experience. All of our principals hold the Chartered Financial Analyst designation and as
such adhere to the CFA Institute Code of Ethics. Each has made a commitment to continuing education.
RISK PERSPECTIVE
We understand that our clients have worked hard to get where they are and we appreciate that they don’t
want to lose it. As the chosen stewards of their investment assets, our risk management approach is to
preserve their capital by purchasing under-valued securities, with a margin of safety that we expect will
deliver income and capital appreciation over the long term.
PERFORMANCE
Sprung Investment Management has a track record of low volatility of returns since company inception
in June 2005. This has served our clients well over this relatively difficult investment period that
includes the bear market of 2007- 2008. Our performance numbers are available by request.
CLIENT SERVICE
At Sprung Investment Management, satisfying our client’s financial needs is our top priority. Each and
every client is special and receives individual attention and customized investment advice based on
his/her specific objectives and risk tolerance. Our principals are always available to speak directly to
clients.
INVESTMENT STYLE
In building equity portfolios, individual security selection is based on “bottom up” research that is value-
driven and often contrarian to current popular thinking. We assess quality and continuity of return on
equity, current price relative to intrinsic value, economic value added and quality of management.
Although our typical investment horizon is two to five years, we constantly evaluate our current
holdings against new opportunities that may offer better value. Our view is that a strong sell discipline is
a critical component to long-term investment success.
Our investment approach on the fixed income side is to conduct rigorous credit analysis in the context of
future economic and interest rate expectations.

3. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 3
SECOND QUARTER 2015
RETROSPECTIVE AND PROSPECTIVE
A Greek Tragedy and Other Woes
“Do not confuse motion and progress. A rocking horse moves but does not make progress.”- Alfred A.
Montapet
To have a grievance is to have a purpose in life. A grievance can almost serve as a substitute for hope;
and it not infrequently happens that those who hunger for hope give their allegiance to him that offers
them a grievance. – Hoffer
The economic woes of Greece have dominated headlines and investor concerns over the latest quarter.
As the quarter ended, the negotiations between the lenders (Germany and Brussels in particular) and the
Greek government had reached an impasse after months of activity with little progress. A default by
Greece on 1.6 billion Euros due was a certainty. At the time of this writing, a referendum in Greece was
scheduled that would give the current government the authority to accept more austere bailout terms.
The mood of the Greek electorate has deteriorated from the great hopes that the Euro loans had created
to increasing resentment of the austerity imposed when the debts came due. The government of prime
minister Alexis Tsipras that was elected on a wave of “austerity” grievance has been less than successful
in staring down the country’s creditors.
As a result of this ongoing uncertainty, as well as other global economic and political imbroglios, global
markets had little to cheer in the second quarter of 2015.
Canadian Dollar US Dollar
Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
Toronto Stock
Exchange 2.6% -1.6% 0.9%
S&P 500 10.1% -1.2% 8.8% 1.0% 0.3% 1.2%
MSCI EAFE* 13.7% -1.8% 11.6% 4.2% -0.4% 3.8%
91 Day T-Bill 0.3% 0.2% 0.4%
DEX** 4.2% -1.7% 2.4%
CDN/US dollar -8.5% 1.6% -7.0%
* Europe, Asia and Far East Index
** Canadian Bond Universe Index
Given that the Greek economy represents only 1.8% of European GDP and around 0.3% of global GDP,
it is reasonable to ask why this crisis has caused so much consternation throughout the world. Greece is
only the first of the Euro nations to hit the wall. Not far behind are much larger economies such as

4. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 4
Spain, Italy and Portugal with their own debt crises looming. Either outcome in Greece will not be a
panacea from the point of view of the Euro nations. Above all, they do not want to set a precedent that it
is acceptable to borrow far more money that you can ever repay without substantial consequences.
Alternatively, if a compromise is not reached and Greece leaves the European Union, the resulting
meltdown in the Greek economy may force the nation to turn to Russia for aid. Russia would covet
access to the Mediterranean, particularly with the loss of ports in Syria. In a recent poll by Pew
Research, some 60% of Greeks view Russia favourably. Given the incursion of Russia into the Ukraine
and fears of greater Russian hegemony, this would only foster more geopolitical uncertainty. A vote to
leave the Euro would likely embolden anti-Euro parties in other countries. If by some chance Greece
were to leave the Union and regain a more solid footing in the next few years, pressures to dissolve the
Union would gain further traction.
Problems in China have also been of growing concern to investors. At the end of the second quarter, the
long suspected bubble in the Chinese stock market appears to have burst as the Shanghai declined over
7% in the final month and continued to decline thereafter. As largely margin borrowing financed the
market advance, margin calls are perpetuating this decline for the time being. The slowdown in the
growth of the Chinese economy to around 7% has continued to impact commodity price expectations,
particularly in base metals and coal.
Tensions in the Middle East perpetuate fears of instability spreading from that region. Ongoing
emigration from the Middle East across the Mediterranean is adding to tensions in Europe.
The US economy stands out as it continues to exhibit positive growth. Employment has achieved pre-
financial crisis levels although wage gains have to date been lacklustre. Speculation continues as to the
timing of a rate increase by the Federal Reserve but the strength of the US dollar remains a concern.
Low interest rates, combined with low growth prospects, have exacerbated a global boom in mergers
and acquisitions (M&A). For the year to date over US$2.8 Trillion in global M&A activity has ensued;
half of which is in North America. Much of this activity has been in the energy sector as companies with
the wherewithal take advantage of their weaker compatriots in this sector that is still reeling from the
dramatic decline in oil prices last year.
Despite some recovery in oil prices in the second quarter, the Canadian economy is still adjusting to the
effects of the decline as they reverberate throughout the economy. Recent months have exhibited
negative growth in GDP raising concerns that we may be in a technical recession (two consecutive
quarters of negative growth). There has been talk of a possible rate cut by the Bank of Canada in an
attempt to spur growth despite concerns about the over-indebted consumer. The possibility of a rate
increase in the US and a decrease in Canada will put downward pressure on the Canadian dollar in the
short term.
Within this environment, we are not anticipating robust earnings from the corporate sector over the next
few months. We have already seen some pullback in stock prices that could be further eroded in a
choppy earnings season. This is a good period to be looking to position portfolios for the next few years
in those companies that will ultimately prosper from current conditions.

5. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 5
SECOND QUARTER 2015 FIXED INCOME COMMENTARY
“Beware of Greeks bearing gifts.” ~ Virgil - Aeneid
Or perhaps, beware of Greeks issuing bonds! That certainly must have crossed the minds of European
politicians and bankers as they attempted to negotiate a solution to the current impasse. It would seem
that we are heading towards the last chapter in this modern Greek drama. Or perhaps not?
At first blush it would seem to be a simple matter to negotiate a refinancing of the Greek debt given that
most everybody acknowledges that Greece is unable to pay its debts as it now stands. However, this
ignores the political / economic realities of the situation. Greece needs more money and a more flexible
repayment schedule. Germany and the EU on the other hand are loath to cut too much slack to Greece as
they want to avoid other, much larger, countries following the Greek example in refinancing, or
depending on your view, shirking, their obligations. Unfortunately, the situation appears to be stuck
between the proverbial rock and a hard place. It is unlikely to be a happy ending – for anybody!
The second quarter saw some disconcerting signs of tensions in fixed income markets. Interest rates
reached negative values in a number of credit worthy European countries, such as Germany and
Switzerland. At approximately the same time, liquidity concerns started to come to the forefront. Yield
hungry investors have been bidding up prices on various fixed income securities, especially in the
corporate sector. Now questions are being asked as to what would be the exit strategy if investors
decided to liquidate or trim their positions. Of course there are always buyers at some price. However
trading may become volatile with wildly fluctuating valuations. It’s no wonder that investors are willing
to earn a negative return for safeguarding their cash!
The Canadian economy has been flirting with a recession over the course of the second quarter,
although consumer confidence has remained quite positive. The somewhat inconclusive direction of the
economy calls into question the right stance for the Bank of Canada to take. A second “pre-emptive”
rate cut after this spring’s quarter point cut would be unlikely to have much effect given the already low
level of interest rates. Secondly, it may be well worth retaining the dwindling stock of rate cut
“ammunition” in case the economic malaise deepens. It is worthwhile to remember that rate cuts not
only have an economic impact, but also a psychological one. To cut rates when confidence remains
reasonable, is wasting the “shock” effect of such an action. Perhaps the BOC should wait?
The total return performance of the bond market as measured by the FTSE TMX Canada Universe Bond
Index for the second quarter was a decline of 1.7%. The benchmark ten-year Government of Canada
bond yield increased by 0.3% to end the quarter at 1.7%. Over the course of the quarter the Canadian
dollar increased by 1.1 cents from 79.0 cents US to 80.1 cents US.

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Our Team
Michael Sprung, CFA: Chief Investment Officer
msprung@sprunginvestment.com
• Chief Investment Officer
• More than 30 years experience in Canadian Investment industry, overseeing portfolios up to $2.5B
• Senior level positions with YMG Capital Management, Goodman & Company, Ontario Teachers’ Pension Fund,
Ontario Hydro and Cassels Blaikie & Co.
• Frequent contributor to BNN-TV, Globe & Mail, National Post and Money Sense
Fred Palik, CFA: Vice President, Fixed Income
fpalik@sprunginvestment.com
• Extensive experience in fixed income management in a variety of senior positions, primarily in the insurance
and hospital sectors.
• Member of the Toronto CFA Society and the CFA Institute.
Lois O’Sullivan, CFA: Vice President
loiso@sprunginvestment.com
More that 25 years experience in investment management.
• Co-founder of Sprucegrove Investment Management, specializing in international markets.
• Senior level roles at Confed Investment Counselling and Confederation Life Insurance Company.
• Fellow of the Life Office Management Institute (FLMI), the Toronto CFA Society and the CFA Institute.
Joie P. Watts, CFA, FSCI: Vice President & Portfolio Manager
jpwatts@sprunginvestment.com
• Over 30 years of progressive experience in the securities and investment industry.
• Senior level roles at Burns Fry Limited, Merrill Lynch Canada and Nesbitt Thomson.
• Managing Director of Instinet Canada Limited for over 10 years
• CEO of Shorcan ATS Limited, a specialized marketplace for equity dealers trading as principal.
Robert D. Champion, MSEd: Vice President, Client Services
rchampion@sprunginvestment.com
• Joined Sprung Investments Management in 2012 after several years with Successful Investor Wealth
Management.
• Prior to that, he had a fifteen-year career in OEM industrial sales.
• Manager with investment-publishing division of MPL Communications in the 1980s and early 1990s. MPL
publish Investor’s Digest and Investment Reporter.
Stay connected with Sprung Investment Management:
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