1. An Alternative Market Outlook and Price Perspective
© Henrik Mikkelsen, Managing Partner, Iridis AG 1
Global Investors Summit 2015
Montreux , October 5th - 7th 2015
by Henrik Mikkelsen
Iridis AG

2. DISCLAIMER
THIS PRESENTATION IS FOR EDUCATIONAL USE ONLY. IT DOES NOT CONSTITUTE IN ANY WAY ADVICE OR RECOMMENDATIONS TO TRADE.
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MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF
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© Henrik Mikkelsen, Managing Partner, Iridis AG 2

3. © Henrik Mikkelsen, Managing Partner, Iridis AG 3
Henrik Mikkelsen Managing Partner, Iridis AG
 Investment and Wealth Advice for HNWI’s, Family Offices, Endowments, Funds and Pension Funds & Plans
 Stratetically and Tactical Asset Allocation
 Screening of investment products and management services and platforms
 Corporate Consultancy on financial and operational aspects
 Educational seminars on Rule-based Trading Strategies
2012 - Managing Partner Iridis AG
2004 - 2011 Head of Power Portfolio Management Vattenfall
2000 - 2003 Senior Portfolio and Client Manager Nordea AM & PB
1997 - 1999 Senior Market Maker Fixed Income Nordea IB
1988 - 1995 Interbank Trader FX and FI Danske Bank IB
1993 Thesis at CBS Business University, Finance & Investment Copenhagen Business School, CBS
“Technical Analysis – An Input to Trading and Risk Management in Corporations”

4. © Henrik Mikkelsen, Managing Partner, Iridis AG 4
Questions: What is your Outlook in the next 9- 12 months?
Yields:
- US 10 Y Yields up +50 to 150 BPS?
- US 10 Y Yields unch. -50 to +50 BPS?
- US 10 Y Yields down -150 to -50 BPS?
Stocks:
- S&P500 up 25% +2.400?
- S&P500 unch. 1.800 to 2.150?
- S&P500 Down 25% 1.300 to 1.600?
Commodities(Gold, Copper & Oil):
- Commodities up 50% 1.800 - 3,5 - 75?
- Gold or oil unch. 1.200 - 2,4 - 50?
- Gold or oil down 25% 900 - 1,8 - 35?

5. © Henrik Mikkelsen, Managing Partner, Iridis AG 5
Published at: http://blog.kimblechartingsolutions.com/2015/10/welcome-to-the-4th-quarter-here-is-what-to-expect
Q4 US Market Statistics for the S&P 500
Quarterly Perforance 1950 - 2014 1995 - 2014
Quarter Avg Return (65 years) Avg Return (65 years)
Q1 2,32 % 1,75 %
Q2 1,74 % 2,63 %
Q3 0,57 % -0,53 %
Q4 4,06 % 5,15 %
Q4 in the Presidential Cycle 1950 -
Year 1 3,25 %
Year 2 7,82 %
Year 3 3,04 %
Year 4 1,92 %
Q4 if September is negative 1950 – 2014 (35 times)
Average 3,37 %
Higher in 77,1 % times
Q4 if both August and September is negative 1950 – 2014 (14 times)
Average 6,64 %
Higher in 86,7 % times
Q4 when Q3 down by +5 %
Average 11,08 %
Higher in 100,0 %

6. © Henrik Mikkelsen, Managing Partner, Iridis AG 6
Published at: http://blog.kimblechartingsolutions.com/2015/10/welcome-to-the-4th-quarter-here-is-what-to-expect @Ryandetric
S&P 500 Seasonal October Returns’s

7. © Henrik Mikkelsen, Managing Partner, Iridis AG 7
Goldman Sachs’ EPS forcast and S&P 500- forcast , as pr. September 28th., 2015

8. Annual %-change in 12 mth fwd S&P 500 EPS expectations, SocGen's Andrew Lapthorne, SocGen, September 21st
Based on forward consensus expectations and excludes many of the write-downs and exceptional items that are currently pushing down actual reported profits.
“Operational profits change has never been this negative outside of a recession!”
© Henrik Mikkelsen, Managing Partner, Iridis AG 8
Is the FED fearing an upcomming US-recession or weakning of the
economy?
The input from here and commodities support it!

9. © Henrik Mikkelsen, Managing Partner, Iridis AG 9
Has the sentiment and willingness to take on risk been to positive on corrections?
This time the sentiment is vaning!
Will the correction take longer this time ? Or is the rally over?

10. © Henrik Mikkelsen, Managing Partner, Iridis AG 10
XXX
Sources: Reuters, FED, Martin Pring & AdvisorShares
Bernanke’s hope
Investors fear
S&P Composite and the background of Bernanke’s policies, probably carried on by Mrs Yellen.
What ”gun powder” is left over for the next down turn?

11. 1998 M A M J J A S O N D 1999 M A M J J A S O N D 2000 A M J J A S O N D 2001 M A M J J A S O N D 2002 A M J J A S O N D 2003 M A M J J A S O N D 2004 M A M J J A S O N D 2005 M A M J J A S O N D 2006 A M J J A S O N D 2007 A M J J A S O N D 2008 M A M J J A S O N D 2009 M A M J J A S O N D 2010 M A M J J A S O N D 2011 A M J J A S O N D 2012 M A M J J A S O N D 2013 A M J J A S O N D 2014 M A M J J A S O N D 2015 M A M J J A S O N
60
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
140
145
150
155
160
165
170
175
180
185
190
195
200
205
210
215
220
225
230
235
x10
© Henrik Mikkelsen, Managing Partner, Iridis AG
Scenario 1) Correction down already finished = New top coming in H1 2016, Target 2.150 to 2.250
Scenario 2) First part of 3 in correction down it finished = New top coming in H2 2016, Target 2.150 to 2.300
We believe the most probabal is Scenario 2, giving a positive outlook, but it requires time, something is different
Scenario 3) Top seen since base in 2011 = Correction should take 50-60 % down from top to base = 1.550
The more negative scenario and resolution 3 exists, but this would require systematic and/or geopolical issue on large scale.
1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 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 2011 2012 2013 2014 2015 2016
50
100
150
200
250
300
350
x10
S&P500, 1928 - 2015
S&P 500 Scenarions (1998 – 2015)

12. 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 2011 2012 2013 2014 2015
-100
-50
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
900
950
1000
1050
1100
1150
1200
1250
1300
1350
1400
1450
1500
1550
1600
1650
1700
1750
1800
1850
1900
1950
2000
2050
2100
2150
2200
2250
2300
Daily SP500 Bar Chart
© Henrik Mikkelsen, Managing Partner, Iridis AG 12
S&P 500 1979 - 2015, Nom. Scale
Provides structural support in the ares around 1.800 – 1.850 in S&P 500

13. © Henrik Mikkelsen, Managing Partner, Iridis AG 13
Sources: Reuters, OEC, Martin Pring & AdvisorShares
Inflation Adjusted Stock Charts – Give a rather exhausted look
Inflation Adjusted MSCI World
Inflation Adjusted S&P Composit

14. © Henrik Mikkelsen, Managing Partner, Iridis AG 14
XXX
Sources: Reuters, Yale Martin Pring & AdvisorShareshttp://www.etftrends.com/2015/09/a-turn-of-the-tide-revisited/
Inflation adjusted US equities and Shiller P/E
Argues again for exhausted levels and potentially lower prices
ahead, due to timespans of former corrections

15. © Henrik Mikkelsen, Managing Partner, Iridis AG 15
Inflation adjusted US stocks and Shiller PE vs bond yields
The relative valuation looks also stretched relative to yield levels!
Sources: Reuters, Yale, Moodys, Martin Pring & AdvisorShares
Corrective
Signal
Corrective
Signals

16. 1990 2000 2010
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
2 Y Treasury
6 M Treasury
5 Y Treasury
10 Y Treasury
30 Y Treasury
US6MT=RR, US5YT=RR, US2YT=RR, US10YT=RR, US30YT=RR
© Henrik Mikkelsen, Managing Partner, Iridis AG 16
US Treasury Yields since 1985:
The levels as well as the structure of the yield-bottoming process supports higher hields ahead!

17. 1990 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
© Henrik Mikkelsen, Managing Partner, Iridis AG 17
German 10 Year Treasury Yields since 1990 – The Reunion
The levels as well as the structure of the yield-bottoming process supports higher hields ahead
Source: MetaStock Xenith
or at least a sideways basing period ahead of us, but the bottom is most likely put in!

18. © Henrik Mikkelsen, Managing Partner, Iridis AG 18
1990 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
5
10
Source: MetaStock Xenith
German 10 Year Treasury Yields since 1990 – The Reunion, Log Scale
Looking at Log Scale should make dropout/down more clear – Not sustainable

19. © Henrik Mikkelsen, Managing Partner, Iridis AG 19
Courtesy: Strategas Research Partners LLP-12
-9
-6
-3
0
3
6
9
12
15
apr-53
maj-54
jun-55
jul-56
aug-57
sep-58
okt-59
nov-60
dec-61
jan-63
feb-64
mar-65
apr-66
maj-67
jun-68
jul-69
aug-70
sep-71
okt-72
nov-73
dec-74
jan-76
feb-77
mar-78
apr-79
maj-80
jun-81
jul-82
aug-83
sep-84
okt-85
nov-86
dec-87
jan-89
feb-90
mar-91
apr-92
maj-93
jun-94
jul-95
aug-96
sep-97
okt-98
nov-99
dec-00
jan-02
feb-03
mar-04
apr-05
maj-06
jun-07
jul-08
aug-09
sep-10
okt-11
nov-12
dec-13
jan-15
Free Cash Flow 10Y Treasury Yield FCF - 10Y Trsy Yield
“Yields” in Treasuries and Stocks
A change in convention or mispriced?

20. © Henrik Mikkelsen, Managing Partner, Iridis AG 20
Courtesy: Waddel LLC and Strategas Research Partners LLP
S&P 500 Dividend Payout Ratio – Look rather appealing and supportive at first look, but looks deceive here!

21. © Henrik Mikkelsen, Managing Partner, Iridis AG 21
Courtesy: Strategas Research Partners LLP
0%
20%
40%
60%
80%
100%
120%
140%
160%
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
Shareholder Payout (Div + Buybacks)S&P 500 Shareholder Yield Payout (Dividends + Buybacks ) Share of Operating Income
Including buybacks there is no consolidation in the S&P 500 stocks – everything is paid out!

22. © Henrik Mikkelsen, Managing Partner, Iridis AG 22
Pricing in S&P 500 in 12m Fwd Earnings 12m Fwd Dividends 12m Fwd Book Value Index SPX
Vanishing expected earnings and rising dividends = falling S&P 500 and book value

23. © Henrik Mikkelsen, Managing Partner, Iridis AG 23
Pricing in S&P 500 in 12m Fwd Earnings 12m Fwd Dividends 12m Fwd Book Value Index SPX

24. © Henrik Mikkelsen, Managing Partner, Iridis AG 24
Pricing in S&P 500

25. © Henrik Mikkelsen, Managing Partner, Iridis AG 25
Courtesy: Strategas Research Partners LLP
0%
1%
2%
3%
4%
5%
6%
7%
8%
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
S&P 500 Shareholder Yield (Div + Buybacks / Operating Income) 10 Year Yield
Operating Income
S&P 500 Shareholder Yield (Dividends + Buy backs ) 10 Year Yield

26. © Henrik Mikkelsen, Managing Partner, Iridis AG 26
S&P 500 – Earnings yield 30 Year Treasury yield
Ratio S&P 500 vs US 30 Year Treasury yield

27. © Henrik Mikkelsen, Managing Partner, Iridis AG 27
Pricing in S&P 500 - Fading momentum in earnings have earlier meant falling prices ahead

28. © Henrik Mikkelsen, Managing Partner, Iridis AG 28
Constituents Analysis (Internals) - Stocks above and below 200 Days SMA

29. © Henrik Mikkelsen, Managing Partner, Iridis AG 29
Movers in Stock Pricing (S&P 500 )

30. © Henrik Mikkelsen, Managing Partner, Iridis AG 30
1987 M A M J J A S O N D 1989 M A M J J A S O N D 1990 M A M J J A S O N D 1991 M A M J J A S O N D 1992 M A M J J A S O N D 1993 M A M J J A S O N D 1994 M A M J J A S O N D 1995 M A M J J A S O N D 1996 M A M J J A S O N D 1997 M A M J J A S O N D 1998 M A M J J A S O N D 1999 M A M J J A S O N D 2000 M A M J J A S O N D 2001 M A M J J A S O N D 2002 M A M J J A S O N D 2003 M A M J J A S O N D 2004 M A M J J A S O N D 2005 M A M J J A S O N D 2006 M A M J J A S O N D 2007 M A M J J A S O N D 2008 M A M J J A S O N D 2009 M A M J J A S O N D 2010 A M J J A S O N D 2011 M A M J J A S O N D 2012 A M J J A S O N D 2013 A M J J A S O N D 2014 M A M J J A S O N D 2015 M A M J J A S
0
10
20
30
40
50
60
70
80
90
100
Double Stoch
0
PPO
0.1
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.2
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.4
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.5
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.6
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.7
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.8
0.9
0.9
0.9
0.9
0.9
0.9
0.9
0.9
0.9
0.9
50.0%
61.8%
76.4%
Source: MetaStock Xenith Platform MetaStock R/T
Daily MSCI EM vs DM
MSCI Emerging Markets vs Developed Markets Relatively DM, 1987 - 2015
Lost more then 60 %
relative to DM’s.
Is it time to rotate?

31. © Henrik Mikkelsen, Managing Partner, Iridis AG 31
MSCI EM vs DM, 1987 - 2015
S O N D 2009 M A M J J A S O N D 2010 M A M J J A S O N D 2011 A M J J A S O N D 2012 A M J J A S O N D 2013 A M J J A S O N D 2014 M A M J J A S O N D 2015 M A M J J A S O N
50
Double Stoch
0
PPO
500
600
700
800
900
1000
1100
12000.0%
50.0%
61.8%
76.6%
100.0%
Weekly MSCIEmergingMarkets
Source: MetaStock Xenith, Platform MetaStock R/T
1
A
B
C
MSCI Emerging Markets 1987 - 2015
Lost 55% since 2011!
Time to rotate?

32. © Henrik Mikkelsen, Managing Partner, Iridis AG 32
Rusian RTX
Returning to old supportive levels and trading at PE’s
of 4,5!!!

33. © Henrik Mikkelsen, Managing Partner, Iridis AG 33
MSCI EM vs DM, 1987 - 2015
Egypt US Investeble
Given back 60 % of gains since the Egypt Spring with
continuous GDP growth, PE 4,5

34. © Henrik Mikkelsen, Managing Partner, Iridis AG 34
MSCI EM vs DM, 1987 - 2015
Indonesia Investeble USD
Given back +60 % since the top in 2013 and bottom in 2008

35. © Henrik Mikkelsen, Managing Partner, Iridis AG 35
MSCI EM vs DM, 1987 - 2015Brasil Bovespa
Given back +60 % of gains earned 2008 - 2011

36. © Henrik Mikkelsen, Managing Partner, Iridis AG 36
Gold Gold – Correting, but structural corrections normally take much longer!!
Structural supports are at 1.085, ca. 1.000, 820 and 680 USD

37. © Henrik Mikkelsen, Managing Partner, Iridis AG 37
Gold in other currenciesStructural and psycological support below 1.000
Mathematical support in 1.085 reached!! = 50 % corr.

38. © Henrik Mikkelsen, Managing Partner, Iridis AG 38
Gold in other currenciesGold in different currencies – Gold isolated from USD strength seem to be in stronger position!

39. Summery - Primo October 2015
Stocks markets:
US, Europe and Japan major stock markets seem to tracing out a medium term correction, which all already have fulfilled their minimum corrective targets
and structures. The road is still open for new highs in the major US, European and Japanese indices, but the road may turn out bumpy and long, and it could
be time to rotate both sectors as well as geographical less loved in the last 3 years. Technically it could be argued that it is premature, but fundamentally a lot
of value is contained in some of these areas relatively, so fundamentally the rotation can be supported.
Emerging markets stock markets looks to be a place to be forward. The MSCI Emerging Market index have lost more then 55 % of its up-move from 2008 to
2011 (page 31) and lost more then 60 % relatively gain towards MSCI DM made from 1994 to 2011 (page 30), giving some attractive entry multiples like
Price/Earnings around 4 in several countries like Russia and Egypt.
The underperformance and relative cheap position of the emerging markets have been driven by falling commodity prices exagerated via falling local
currenties and secundary access to financing. The overlooked parameter here could be the implicit debt situation on both public as well as private debt. EM
and DM contains about 50 % of the GDP in the world each. DM’s holds 81 % of the debt leaving only 19% of the debt to EM’s. Looking forward, this could for
me be the overlooked factor which and the error of the western investor. Consensus belief is that EM’s would suffer more if the US starts normalizing their
monetary policy – the numbers 81 and 19 % does not support this view, in my view.
So both relatively as well as nominally, technically and fundamentally like PE-ratios and debt wise, it seems that the emerging markets have started tracing out
a bottom of generational magnitude, not to be missed. Setup is clear, triggers like debt focus and commodity prices just needs to be executed.
Fixed Income:
The Fixed income markets in Europe and Japan does not contain value and look to turn as if they have turned a corner. Here again the emerging market bond
markets, both investment grade as well and higher yielding grades and local as well as hard currency denominated debt contains much more value -
interesting yield levels of 5 – 8 %. Arguments could also be made that the extra yield from local currencies is worth taking, but that would require lower
exposure. We would argue, from a risk allocation perspective, to keep the local currency exposure below 50 % and mainly take the hard currency denoninated
debt issues, also to embed a tail risk hedge, especially here in the early and maybe to early part of the rotation process. Remember that all EM assets hold the
local currency risk indirectly.
Else value in European and Japanese debt seems non- existant. Growth, if or when it comes , should support equity multiples. Finally real estate in core
regions like Germany and the Nordic countries should also be usefull and provide inflation hedge. Real estate seem to be the safest asset class in core Europe.
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© Henrik Mikkelsen, Managing Partner, Iridis AG 39

40. © Henrik Mikkelsen, Managing Partner, Iridis AG 40
An Alternative Market Outlook and Price Perspective
Thank you for listening
Henrik Mikkelsen
Iridis AG
hm@iridisag.com
+41 76 610 1325
www.iridisag.com