AIS Capital Management LLC
   Gold Strategy Presentation
      For Presentation in Calendar Year 2010




             AIS...
Definitions and Disclaimers
 Definitions
    Gold, Gold Bullion, Dollar Index, Government Bonds: The spot market price.
  ...
Contents
                                               Page
  AIS Capital Management                       4
  AIS Gold N...
AIS Capital Management, LLC
 Registration:
   Registered Investment Advisor (1992)
 Featured Product:
   AIS Gold Fund LP
...
AIS Gold Strategy
Performance Net of All Fees

                        250%

                        200%                 ...
AIS Gold Strategy
 Goals:
   Outperform U.S. gold equity indexes and gold bullion
          Use leverage by combining futu...
AIS Gold Strategy: Equity Selection
 Equity Selection Process:
    Fundamental selection of individual companies
        S...
Opportunities in Gold Research
  Bottom-up, fundamental research is critical
  AIS focuses solely on companies (among othe...
0
                  500
                        1000
                               1500
                                 ...
Declining World Gold Supply
 The number of major gold discoveries made per year
 is shrinking
 New finds are significantly...
Major Gold Discoveries: 1997-2007




                                    11
Declining Gold Discovery Grade




                                 12
Declining World Supply
from Mine Production




                         13
Economic Environments
                 I                                                     II                           ...
billions




                0
                    500
                                  1000
                            ...
The Impact of Government on Inflation
Producer Prices (1720- December 2009)

1000
                Prior to 1951, price inf...
Gold Priced in Euros
 Data Through 12/31/09
900



800



700



600



500



400



300



200
  1977   1979    1981    ...
Ratio Chart: Gold Bullion / U.S. Treasury Bond
3/20/1968 – 12/31/2009


150
140
130
120
110
100
 90
 80
 70
 60
 50
 40
 3...
Gold / S&P 500 Index
      Through December 31, 2009

6.0
          Gold / S&P500 Index                                   ...
Federal and Agency/GSE Debt
 Held by Foreigners
$5,000
                                                                   ...
U.S. Gold Reserves versus Federal and Agency Debt
Held by Foreigners
5,000.0                                              ...
World Official Gold Reserves Relative to World
  Currency Reserves
100,000
          Band (Dashed Lines): Uses World Offic...
U.S. Treasury Gold Value Relative to Foreign Held
  U.S. Government Debt
100,000
           Band (Dashed Lines): Uses U.S....
Gold Strategy Summary

 Investment in Gold and Silver Equities and Futures
 Exposure Ranges From 100% Short to 300% Long
 ...
Biographies
John R. Hummel, Partner, President and CIO , has 40 years of investment experience. Prior to the formation of ...
Biographies
Robert A. Barbieri, Partner, CAO, has 37 years of investment management experience. Prior to joining AIS, he w...
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AIS Capital Management LLC

  1. 1. AIS Capital Management LLC Gold Strategy Presentation For Presentation in Calendar Year 2010 AIS CAPITAL MANAGEMENT LLC A Registered Investment Advisor 187 Danbury Road, Suite 201 Wilton, Connecticut 06897 (203) 563-1180 info@aisgroup.com
  2. 2. Definitions and Disclaimers Definitions Gold, Gold Bullion, Dollar Index, Government Bonds: The spot market price. (Source: CSI Data) Price Ratio: The spot market price of one market divided by the spot market price of another Disclaimers Any decision to invest in any AIS product must be made solely on the information provided in the necessary documents to effect the transaction which will be provided upon request. All of the material presented here is either historical fact or AIS’s opinion of the future. As such, any characteristic of AIS products portrayed on an individual basis or in combinations with other AIS products or other more common traditional investments, including the ability of AIS products to mitigate volatility, declines in account value, or even make positive returns are historically based and may or may not continue into the future. One must invest in AIS products with the knowledge that any opinion presented is just that, an opinion of AIS and not a statement of fact. AIS is confident about its research and ability to continue to add investment value going forward and its principals back this belief by having sizable personal investments in AIS products, however, markets continually change and the ability for AIS to add value going forward is uncertain. In fact, it is possible that an investor may lose all of his or her investment in any AIS product either gradually or suddenly. Past performance is not necessarily indicative of future results. The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation.
  3. 3. Contents Page AIS Capital Management 4 AIS Gold Net Returns 5 AIS Gold Strategy 6 AIS Gold Strategy Equity Selection Process 7-9 Declining World Gold Supply 10-13 Economic Environment :Why Gold Now? 14-23 Summary 24 Biographies 25-26 3
  4. 4. AIS Capital Management, LLC Registration: Registered Investment Advisor (1992) Featured Product: AIS Gold Fund LP Investment Structure Available: Individualized Portfolios The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 4
  5. 5. AIS Gold Strategy Performance Net of All Fees 250% 200% 189.5% 150% Yearly Return (%) 100% 62.4% 67.4% 67.8% 42.9% 50% 0% -7.4% -50% -71.4% -100% 2003 2004 2005 2006 2007 2008 2009 Compound Annual Return - 3 yr 6% Compound Annual Return - 5 yr 27% Annualized (since inception 12/31/2002) 26% The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 5
  6. 6. AIS Gold Strategy Goals: Outperform U.S. gold equity indexes and gold bullion Use leverage by combining futures positions and equity positions Ability to be long or short precious metals futures Invest in individual mining companies Protect assets during gold market declines by being flat or short To outpace inflation and avoid dilution of wealth Rising market: long futures and equities, leverage available, no hedges Declining market: hedges in excess of positions creating short exposure The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 6
  7. 7. AIS Gold Strategy: Equity Selection Equity Selection Process: Fundamental selection of individual companies Screen universe of mining companies for minimal hedge activity Select companies based on numerous criteria including size, quality and location of reserves among other factors Adjust holdings between companies as relative valuations shift Discretion to choose net exposure through use of hedges Portfolio exposure ranges from 300% net long to 100% net short The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 7
  8. 8. Opportunities in Gold Research Bottom-up, fundamental research is critical AIS focuses solely on companies (among other variables): In “safe haven” areas In mining-friendly jurisdictions With higher-grade deposits Who do not hedge production With low production costs per ounce, to maximize cash flow Portfolio companies must have attractive valuations Majors Range AIS At Purchase Enterprise Value To Company $200-$500+ $40-$200 Reserves & Resources 8
  9. 9. 0 500 1000 1500 2000 2500 3000 3500 4000 9/30/01 1/30/02 5/30/02 9/30/02 1/30/03 5/30/03 9/30/03 1/30/04 5/30/04 9/30/04 1/30/05 5/30/05 9/30/05 1/30/06 5/30/06 9/30/06 1/30/07 5/30/07 S&P TSE CDNX Composite Index 9/30/07 1/30/08 5/30/08 9/30/08 Index of Junior Mining Companies 1/30/09 5/30/09 9/30/09 1/30/10 5/30/10 9
  10. 10. Declining World Gold Supply The number of major gold discoveries made per year is shrinking New finds are significantly smaller than earlier ones Average gold grade of these discoveries has declined, and is now half of what it was in 1980 In addition to this decline in discovery quality, overall productivity is slipping: global mine production has been steadily dropping since 2001 10
  11. 11. Major Gold Discoveries: 1997-2007 11
  12. 12. Declining Gold Discovery Grade 12
  13. 13. Declining World Supply from Mine Production 13
  14. 14. Economic Environments I II III most likely scenario going forward Low/declining inflation Deflation/liquidity trap Quantitative Easing Creates Distortions Strong economic growth Economic contraction Depreciating currency Accelerating raw material prices Profit margins under pressure Examples: Examples: Examples: U.S. 1950-1965 U.S. 1930s U.S. 1970s 1982-2000 Japan 1990s Germany 1920s Japan: 1970-1989 Argentina 2000s Characteristics: Characteristics: Characteristics: Expanding profit margins. Profits non-existent. Operating profits squeezed by costs. Expanding P/E ratios. Financial defaults. Rising physical asset value. Declining interest rates. Preference for liquidity. Hoarding and inventory profits common. Leveraged reward. Balance sheet de-leveraging. Leverage rewarded, but cash flows less certain. Strong dollar. Shrinking P/E ratios. Weak dollar. Investment opportunities: Investment opportunities: Investment opportunities: Equities Cash Select equities (pricing power) Long-term bonds High quality bonds Gold Leveraged buy-outs Short selling Physical commodities Venture capital Select short selling: Dollar Equities w/limited pricing power. The material presented here is only relevant when combined with the “Definitions and Disclaimer” page included in this presentation. 14
  15. 15. billions 0 500 1000 1500 2000 12/31/83 12/31/84 12/31/85 12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 Chart courtesy of AIS Futures Management LLC Data Source: Federal Reserve Bank of St. Louis 12/31/94 (Not Seasonally Adjusted) Through 12/31/2009 12/31/95 12/31/96 12/31/97 12/31/98 Adjusted Monetary Base Y2K 12/31/99 12/31/00 9/11 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 15
  16. 16. The Impact of Government on Inflation Producer Prices (1720- December 2009) 1000 Prior to 1951, price inflation occurred during wars and other times of shortage. After the event ended, prices deflated back to where they had been. Since 1951, our government has fought deflation at the cost of inflation. 100 March 31, 1951 10 1 1720 1740 1760 1780 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 16
  17. 17. Gold Priced in Euros Data Through 12/31/09 900 800 700 600 500 400 300 200 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 From 2001 – 2004 gold’s price strength was primarily tied to dollar weakness. However, since 2005 gold has been strong versus all major currencies. This may be signaling a more difficult environment for all financial assets. The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 17
  18. 18. Ratio Chart: Gold Bullion / U.S. Treasury Bond 3/20/1968 – 12/31/2009 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 - 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 18
  19. 19. Gold / S&P 500 Index Through December 31, 2009 6.0 Gold / S&P500 Index 1.55 Rising Relative Price to 12/31/09 (Gold Outperforms) 1.35 5.0 1.15 0.95 4.0 0.75 0.55 0.35 3.0 0.15 1999 2001 2003 2005 2007 2009 2.0 1.0 0.0 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 19
  20. 20. Federal and Agency/GSE Debt Held by Foreigners $5,000 $4.5 trillion $4,500 $3.95 trillion $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Fed Debt HBF Agency/GSE HBF 20
  21. 21. U.S. Gold Reserves versus Federal and Agency Debt Held by Foreigners 5,000.0 140.0% 4,500.0 120.0% 4,000.0 3,500.0 100.0% 3,000.0 80.0% 2,500.0 60.0% 2,000.0 1,500.0 40.0% 1,000.0 20.0% 500.0 ‐ 0.0% 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Fed Debt HBF Agency/GSE HBF US Gold Res in $ US Gld % DHBF 21
  22. 22. World Official Gold Reserves Relative to World Currency Reserves 100,000 Band (Dashed Lines): Uses World Official Reserves at Market Prices (1971-1980) Relative to World Currency Reserves. Band after 1980 Indicates Price Level of Gold Necessary to Support Foreign Currency Reserves, if 1971-1980 10,000 Relationship Reestablished. 1,000 100 10 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 22
  23. 23. U.S. Treasury Gold Value Relative to Foreign Held U.S. Government Debt 100,000 Band (Dashed Lines): Uses U.S. Treasury Gold Holdings at Market Prices (1971-1980) Relative to Total U.S. Government Debt Held by Foreigners. Band after 1980 Indicates Price Level of Gold Necessary to Support Foreign Held Debt, if 10,000 1971-1980 Relationship Reestablished. 1,000 100 10 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 23
  24. 24. Gold Strategy Summary Investment in Gold and Silver Equities and Futures Exposure Ranges From 100% Short to 300% Long Real Added Value in Equity Selection Inflation Protection Still In Early Stages of Gold’s Bull Market The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 24
  25. 25. Biographies John R. Hummel, Partner, President and CIO , has 40 years of investment experience. Prior to the formation of AIS, Mr. Hummel was a partner of Cowen & Co.(1990-1993) where he managed equity, balanced, and fixed income portfolios for the Asset Management Division, a partner of Matuschka & Co.(1987-1990), and a managing director of Mitchell Hutchins Asset Management (1977-1987), where he managed equity, balanced and fixed income portfolios for Fortune 500 retirement plans, the Federal Reserve retirement plan and high net worth individuals. Mr. Hummel holds a B.S. degree in Investment Management from Northwestern University(1967) and serves on the boards of the North Atlantic region of Young Life, and Tyndale Seminary. Bradley C. Stern, Partner, Portfolio Risk Manager and CCO has 19 years experience in investments with emphasis in statistics and capital markets theory. Prior to the formation of AIS, Mr. Stern worked with Mr. Hummel at Cowen & Co. in the asset management department. Mr. Stern holds a B.B.A. from Emory University(1988). Robert F. Ward, Partner, Portfolio Manager, has 29 years of investment consulting and investment experience. Prior to joining AIS he was a Senior Vice- President, Investments with Morgan Stanley (2000-2005), Paine Webber (1988-2000), and Kidder Peabody, Inc. (1983-1988). His business relationship with AIS and John Hummel has spanned over two decades. Bob holds a B.A. in History from Metropolitan State College. Nancy Stuebe, Partner, PM / Equity Analyst, has 23 years of investment experience. Prior to joining AIS she was an Analyst at Gabelli Asset Management. Ms. Stuebe was also an analyst at Weiss, Peck & Greer and Advent Capital Management. Ms. Stuebe holds a B.A. in Economics and English form Wellesley College (1985) and an M.B.A. from Columbia University. Michael J. Benenson, Partner, Director of Sales and Marketing, has 24 years of experience in the securities industry. Prior to joining AIS he was Chief Operating Officer of P.A.W. Capital Partners, advisor for several long/short hedge funds. Mr. Benenson was an Executive Managing Director and Head of US Equity Sales for GKM/Harris Nesbitt (a division of the Bank of Montreal). Prior to his 10 years at GKM/Harris Nesbitt, Mr. Benenson spent 10 years as a Senior Vice President of institutional sales at Lazard Freres & Company. Mr. Benenson holds a B.A. from Dartmouth College (1984). Linna Ru, Partner, CFO, has 25 years of experience in computer programming and analysis. Before joining AIS, Mrs. Ru was a computer programmer for Texlnnova Company. Mrs. Ru holds a M.S. in Computer Science from WuHan University (1985) and a M.S. in Applied Mathematics from Toledo University (1993). Roger A. Wilkin, Partner, Client Services, has 36 years experience in both corporate and non-profit organizations. Prior to joining AIS, Mr. Wilkin served as National Director of Development and as Regional Director of the New York metropolitan area for Young Life. Prior to that he was with AT&T Bell Laboratories from 1969-81. Mr. Wilkin holds a B.S. in electrical engineering (Magna Cum Laude) Union College, Masters in Operations Research, Cornell University, and Masters of Divinity, New Brunswick Reformed Seminary. The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 25
  26. 26. Biographies Robert A. Barbieri, Partner, CAO, has 37 years of investment management experience. Prior to joining AIS, he was a vice president for Wright Investors’ Service performing economic and securities analysis and product development while supervising composite performance accuracy and compliance. He received a B.A. from Southern Connecticut State University and is a member of the Hartford Society of Security Analysts (HSSA) and the Association for Investment Management and Research (AIMR). Jennifer Stanley, Investment Consultant, has more than 11 years of investment marketing experience. Prior to joining AIS, Ms. Stanley was a financial consultant for a brokerage firm in the Virgin Islands. Her experience also includes management of marketing and client services for a systematic CTA and marketing for a large mutual fund firm. Jennifer holds a BA in Journalism from the University of New Hampshire (1988). Pallavi Moorthy, Programming and Operational Support, has 8 years experience in web design, programming, and market research. She managed an inventory management trading system for IBM and has done web development at AT&T. Ms. Moorthy has an MBA in Marketing and Finance from Pace University (2005), an MIS degree from Pace University (2002) and a BA from Smith College (2001). Jarvis R. Roque, Controller,, graduated from The Pennsylvania State University, Smeal College of Business with a B.S. in Accounting and Finance in 2006 where he earned Dean's List honors. Prior to AIS, he received leadership training through the LIFT Discipleship Program, NY (2007) and served as Assistant Recruiter at New England Wealth Strategies (MetLife affiliate), NY (2004). Lu-Ann Roth, IT and Administration, has 18 years of corporate experience beginning with administrative support and ending with over 10 years of information technology management . Prior to joining AIS, Mrs. Roth spent 15 years with GE Capital Corp where she provided leadership in information technology and LAN management. Marie Constantino, Administrative Operations, holds a B.A. in Political Science and is a Certified, Licensed Real Estate Salesperson,. As well she possesses multiple interdisciplinary certifications and diplomas, including in Web Design & Development. She is active in her community, having served as Justice of the Peace, Conservation / Inland / Wetlands Commissioner, and Founding Commissioner of a Town Housing Partnership / Affordable Housing Committee. Other Contacts: Auditors: Arthur F. Bell, Jr & Associates, L.L.C. McGladrey & Pullen CPA Marcal Systems (Offshore Administrator) Attorney: Sidley Austin LLP The material presented here is only relevant when combined with the “Definitions and Disclaimers” page included in this presentation. 26

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