September 24, 2008 Conference Call Summary

Speakers: Stuart Horowitz and Andrew Rosenberg

Thank you for joining the call this afternoon. We have come to the conclusion that this is the best method of reaching most of our clients on a short notice basis. It by no means replaces our face-to-face get togethers.

Discussion of Current Events:

• It is arguably the worst economic crisis the US has ever faced and having a major impact on investor psychology.



• The housing bubble and the surge in defaults of sub-prime mortgages may have ignited the crisis, but its intensity has been amplified by leverage, volatility and the complexity of modern mortgage securities



• This resulted in liquidity freeze-up and capital market frenzy



• Countrywide (BOA purchased), Bear Sterns (JP Morgan purchased with loan from Fed), IndyMac Bank failed (a spin-off from Countrywide in 1997), Fannie and Freddie (Govt took over and will probably break into 4-5 pieces and go private), Lehman (bankruptcy and bought by Barclays and Nomura), AIG (Govt bridge loan to allow for liquidation of assets), Merrill Lynch (need for capital resulted in BOA takeover)



• Biggest shot to the heart was the "breaking of the buck" - Reserve Primary Fund fell below $1 per share - investors panicked about the safety of their safe $



• Violent end to the investment banking industry



• SEC put a ban on short selling of financial stocks - in normal times it helps boost efficiency. In extreme times, it can exacerbate volatility



• We have dodged some serious bullets

• We seem to be on the edge of our seats waiting for the next catastrophe. Therefore, nothing will be a surprise. When the markets expect things to happen, it doesn't flinch when it is announced. The markets might even flourish because the news may not be as bad as they thought it could be.



• Fix first and punish later…gov't bailout to keep the peace and then put systems in place to avoid a repeat



• In baseball terms, we are probably in the 7th or 8th inning of this mess (close to the end)



• TARP - Troubled Asset Relief Program - $700 billion bailout of troubled assets including residential mortgages



• ABSOLUTE NECESSITY. Without this bailout, we could be looking at the worst case scenario.



• Fed has responded by maintaining low short-term interest rates and injecting liquidity in the market



• Fed is trying to engineer lower mortgage rates to restart the housing market



• If Washington is successful, it could help stocks, mortgages, and high-yield bonds and ultimately boost the $



• The sheer magnitude of the federal response to Wall Street will probably prove decisive



• Eliminating exit packages for CEO who run company into ground (criminal charges)



• Election (whoever wins) is a sparkplug. If Democrats, then healthcare, alternative energy, and automotive industries will flourish. If Republican, then Financials, Discount Retailers will flourish.

• Budget Deficit will go up



• Companies with healthy balance sheets will flourish



• Taxes will go up no matter who wins the election - we have to make up for the $700 billion

• Municipal bonds - since taxes will go up



• Alternative Investments - Harvard and Yale Endowments have returned 15% year over year avg for the past 10 years. They have 45% exposure to alternatives (real estate, hedge funds, mortgages, commodities, private equity funds, etc..)



• Historically, the market has had a phenomenal year immediately following one of its worst

• For investors, short-term losses and extreme volatility is very unsettling. But we have experienced extreme volatility before



• Watching the DJIA drop 500 points does not mean your portfolio is in the crapper. While a 4% drop in DJIA is terrifying, it might impact your portfolio by only 1.5%



• Power of TEDI (40-50% of portfolio in equities, the other half is up or even for the year)



• Your financial plan has not changed. When we developed the plan it was with the expectation that we would experience negative performing years



• Good example: You bought your house for $300,000 in 1995. It was worth $700,000 at its peak in early 2007. It's worth $550,000 now. What do you do? Nothing. You will not sell your house because it came back down from its peak value. You sit tight. No difference with your portfolio.



• For most clients with us for the past 7 years, they have experienced tremendous growth in their portfolio. For example, one portfolio was valued at $1.5 mill in 2003. It was worth $2.4 million in Oct 2007. It is now worth $2.25 million. Doesn't sound bad when you view it this way. But if you only look at the drop since Oct 2007, it is down $175,000. Not very comforting. But overall, the portfolio is up $725,000 since 2003



• Do some soul searching….don't devastate a solid long-term plan with some irrational short-term decisions.



• If you truly can't take the heat, let's re-evaluate your plan. Let's determine what a risk free portfolio can produce in sustainable income for you to live on. It might require some significant cut-backs on your part. Eliminating many luxuries and focusing on only the necessities



• Remember "If you want to live the American dream, you have to have faith in the American economy"

• Times like these require good advice and discipline. The advisors at ASAM provide both.



• A well known name on the front of the building does not mean safety. The big brokerage house era is over.



• The value of independent advice has never been so powerful. NFP, Securities Inc. our B/D is a support firm. They do not offer product. They do not have credit risk. They are designed to support independent advisors like us at ASAM so that we can deliver comprehensive wealth management.



• Now for our marketing push. This is the best time to talk to your friends, family, or co-workers and tell them what ASAM is all about and how we responded during tough times. Let them know that safety sometimes comes in small, boutique packages