Economies are the cumulative reflection of the myriad of transactions taking place every day. In order for a transaction to take place, there must be a buyer and a seller. Both parties to the transaction believe that they are receiving adequate compensation, no matter on which side of the trade they reside. In financial markets, buyers and sellers are expressing differing expectations for the object being sold. Markets have continued to rise for a long period of time, indicative of there being more optimism that economic conditions will continue to improve. The question is: Will these expectations continue to be validated or will those positive expectations be overwhelmed by economic and geopolitical factors that have underpinned the rising markets to date? Are we at the dawn of a new era or the dusk of an era that has run its course?

1. THIRD QUARTER 2019
RETROSPECTIVE AND PROSPECTIVE
A Crepuscular Moment… But is it Dawn or Dusk?
121 Richmond Street West, Suite 1101,
Toronto ON M5H 2K1

2. 121 RichmondStreet West, Suite 1101,TorontoON M5H 2K1|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. 121 RichmondStreet West, Suite 1101,TorontoON M5H 2K1|Phone:416.607.6642 | www. SprungInvestment. com | P a g e | 3
THIRD QUARTER 2019
RETROSPECTIVE AND PROSPECTIVE
A Crepuscular Moment… But is it Dawn or Dusk?
“Bull markets do not die of old age; they die of excesses…”- Leon Cooperman
Economies are the cumulative reflection of the myriad of transactions taking place every day. In order
for a transaction to take place, there must be a buyer and a seller. Both parties to the transaction believe
that they are receiving adequate compensation, no matter on which side of the trade they reside. In
financial markets, buyers and sellers are expressing differing expectations for the object being sold.
Markets have continued to rise for a long period of time, indicative of there being more optimism that
economic conditions will continue to improve. The question is: Will these expectations continue to be
validated or will those positive expectations be overwhelmed by economic and geopolitical factors that
have underpinned the rising markets to date? Are we at the dawn of a new era or the dusk of an era that
has run its course?
In Canada, the S&P/TSX Total Return Index advanced 2.5% in the third quarter of 2019, bringing the
year to date to 19.1%. The US market advanced 1.7% in the quarter as measured by the US dollar
denominated S&P 500 Total Return Index. The S&P 400 MidCap Total Return Index lagged the 500
with a -0.1% return in this quarter. Markets represented by the MSCI EAFE Price Return index posted a
negative 1.7% return as measured in US dollars or a -0.6% return in Canadian dollars. The Canadian
dollar depreciated 1.1% to its US counterpart in Q3.
Canadian
Dollar US Dollar
Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
Toronto Stock
Exchange 13.3% 2.6% 2.5 % % 19.1%
S&P 500 11.2% 1.1 % 2.9% % 17.0% 13.6% 4.3% 1.7 % % 20.6%
MSCI EAFE* 6.7% 0.5% -0.6 % % 6.6% 9.0% 2.5% -1.7% % 9.9%
91 Day T-Bill 0.4% 0.4% 0.4 % % 1.2%
CUBI** 3.9% 2.5 % 1.2% % 7.8%
CDN/US dollar 2.1% 2.2% -1.1% % 3.0%
* Europe, Asia and Far East Index
** Canadian Universe Bond Index
A crepuscular event occurs twice a day. It refers to those moments in time between night and day: dawn

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and dusk.
It has been a decade since the great financial crisis. In that decade, stock markets have generally trended
up as the global economies struggled to regain footing. In this slow, tepid recovery, central banks played
a crucial role injecting liquidity into the markets through outright purchases of financial instruments and
driving interest rates to unprecedented lows. In any recovery, excesses tend to accumulate in the shadow
of the progress being accomplished only to become all too evident when the end of the cycle
approaches.
Investors today should pause to consider: Are we at the dawn of a new era wherein the means to propel
markets to higher levels will prevail, or, are we closer to the dusk of this business cycle?
Economies and markets are driven by productivity, the short-term debt/business cycle, the long-term
debt cycle and the politics within and between countries. Regulators attempt to promote economic
growth utilizing fiscal and monetary mechanisms as the economy swings through expansions and
contractions. At this juncture, it would appear that we are nearer a period of contraction rather than
expansion.
Global economic growth has been anaemic in the expansion since the financial crisis of 2008. US real
per capita GDP has advanced at a rate of 1.5% during this period; the slowest rate of expansion over a
decade since the 1950’s. The Us economy has done better since Mr. Trump took office, but the latest
estimates are for slower growth going forward.
The OECD is forecasting slower global growth in GDP over the next few years. This outlook is
consistent with global trends in manufacturing, transportation and warehousing; all of which have been
impacted by trade disputes.
Central banks have been able to promote investment and spending by keeping interest rates low. Low
rates have promoted massive debt accumulation over the past decade. The ability to promote growth
through low rates has diminished as the growth in incomes and output are not keeping pace with the
growth in debt servicing. Over US$17 trillion dollars of debt are now at negative interest rates,
exacerbating negative real returns. Investors are no longer earning returns commensurate with risk
which is most evident where yield curves are inverted.
The lack of yield in the fixed income markets has pushed investors to take on more risk. In the US,
investors are heavily skewed towards equities. Margin debt relative to GDP is higher than it was before
the last two market corrections. US equities are generally trading at a premium to the rest of the world as
their economic fundamentals have been stronger.
The excesses of the last decade have highlighted the growing disparity between rich and poor resulting
in conflict between capitalist adherents and socialist proponents. Geopolitical tensions are being strained
as China’s economy challenges the US for supremacy.
Volatility in the global markets, particularly the bond markets, in the third quarter of 2019 would suggest
that investors are losing confidence in the markets’ ability to maintain a positive direction. When and by

5. 121 RichmondStreet West, Suite 1101,TorontoON M5H 2K1|Phone:416.607.6642 | www. SprungInvestment. com | P a g e | 5
what degree the markets may correct is anyone’s guess.
In this environment, we remain cautious.

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THIRD QUARTER 2019 FIXED INCOME COMMENTARY
“The phoenix must burn to emerge” ~ Janet Fitch
It was not totally unexpected. The Federal Reserve (Fed) in the US cut its trend setting Fed Funds Rate,
not once, but twice during the quarter. While there were dissenting voices by some members of the Fed,
the majority felt that there was sufficient risk of slowing employment growth and consumer spending
that the rate reductions were warranted, at least as a precaution.
As much as changes in interest rate policy are supposed to be forward looking, it is disconcerting that
with the economy reasonably robust that the Fed had decided to cut twice in three months. The question
is: “What will their strategy be if there is actually a recession, mild or otherwise?” Given that there is not
that much more room to cut rates, will they be forced to resort to another round of Quantitative Easing
wherein they actively purchase securities to provide adequate liquidity in the financial markets?
The Bank of Canada does not appear to share the Fed’s concerns as our interest rate policy has not
changed since 2018. While the Bank has expressed concerns about trade tensions in the world, domestic
employment has continued to be sufficiently robust which has to date allowed the Bank to remain on the
sidelines. However, further interest rate cuts south of the border would exert pressure on the Bank as our
dollar would likely increase in value making our exports less competitive on the world market.
In the UK, Boris Johnson, despite his bravado about exiting the European Community with or without
an agreement on October 31, is in a difficult position. Most of his initiatives have been thwarted. He was
forced to reconvene parliament after attempting to dissolve it. There are major divisions not just
amongst the political parties, but within them. The initial question as to leave or remain in the European
Union has splintered public opinion, created multiple factions within parties and within the constituent
entities of the the UK.
At this stage, the European Union is limited in its desire to negotiate with the UK. The members of the
European Union do not wish to embolden the factions that are promoting the “leave” side. The
governing body of the European Union is intent to present a united front in order to maintain its own
unity and strengthen its negotiating position.
The total return performance of the bond market as measured by the FTSE TMX Canada Universe Bond
Index for the third quarter was an increase of 1.2%. 91-day Treasury bills returned 0.4% over the same
period.
The benchmark ten-year Government of Canada bond yield declined by 0.11% over the course of the
third quarter to end the period with a 1.35% yield. Over the same period the Canadian dollar depreciated
by 0.9 cents from 76.4 cents US to 75.5 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 severalyears with SuccessfulInvestor 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 withSprung InvestmentManagement:
Twitter @SprungInvest
Linkedin http://www.linkedin.com/company/1699967
See Michael on BNN Bloomberg’s Market Call http://www.sprunginvestment.com/videos/