Updated 6-11 Abenomics: Japans plan of the government taking tax payer money, buying bonds, lowering interest

rates, trying to cause inflation in order to effect the Yen pricing effective because Japan is an export driven society AOCI- Accumulated Other Comprehensive Income. Gains and losses yet to be realized. For instance, gains on stocks that have not been realized would be in the AOCI category. Assets under management: funds under management where the client delegates responsibility to the company AUM: Assets Under Management Bear market: market in which the prices are falling Beige Book: issued by the Fed 8 times per year it is a snapshot of business conditions in each of the Feds 12 regional bank districts; the idea is to detect trends in consumer spending, manufacturing and real estate; the formal title is the Summary of Commentary on Current Economic Conditions by the Federal Reserve District Book value: companys assets Bull market: market in which the prices are rising Cap Rate- Deals with REITs. Cap rates are used as expected return on real estate investments. i.e. if you invest 100k in a REIT with a 6.5% cap rate you should expect to earn $6500 that year. Combined Ratio- A measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. A ratio below 100% indicates that the company is making underwriting profit while a ratio above 100% means that it is paying out more money in claims that it is receiving from premiums. Confessional season: company comes out and preannounces bad news company is often punished for its stock price De novo: new, beginning, start over again Diluted Earnings Per Share: a performance metric used to gauge the quality of a companys earnings per share (EPS) if all convertible securities were exercised. Convertible securities refers to all outstanding convertible preferred shares, convertible debentures, stock options and warrants. Unless the company has no additional potential shares outstanding the diluted EPS will always be lower than the simple EPS. Drop dead date: a finite deadline which, if not met, will automatically trigger adverse

consequences time critical contracts Efficiency Ratio- How well companies use assets and liabilities internally measured through ratios. These ratios are meaningful when compared to peers in the same industry and can identify business that are better managed relative to the others. Also, efficiency ratios are important because an improvement in the ratios usually translate to improved profitability. Fat tail: way far out on the bell curvewill (most likely) never happen FFO: Used in REIT'sdefined as cash flow coming from investments made in REITs. In our meetings, FFO for REITS is comparable to EPS for stocks Float: the number of shares publicly owned and available for trading Implied volatility: the estimated volatility of a securitys price; in general it increases when the market is bearish (risky) and decreases when it is bullish (less risky) Multiples- There are various different multiples to choose from, but the main idea is that in the meetings when we hear a company (ABC) has a multiple that is 10x, and the industry multiple average is 13x, that can be used as an indication that ABC is going to catch up to the industry average and they are undervalued. Vice versa applies. So if you hear that we are recommending selling a stock, and their multiple is above industry average they will probably eventually come back to or close to the average and it is one reason why the price may suffer. NAREIT: The National Association of Real Estate Investment Trusts NIM- Net interest margin. Measures how effectively a companys investment decisions are versus the debt it took on to make them. If Nim is positive, it means average return on investments is greater than interest expenses they are paying. NIM being negative means they pay out more interest than they get back on average from their assets. P/E ratio: (market value per share/earnings per share) high P/E means investors are expecting higher earnings Pro forma: designed to reflect a proposed change, such as a merger or acquisition, or to emphasize certain figures when a company issues an earnings announcement to the public Scarcity Value: An economic factor that increases an items relative price based upon its relatively low supply. Whereas the prices of newly-produced manufactured products depends mostly on the cost of production, the prices of many goods- such as antiques, rare stamps, and those raw materials in high demand- reflects the scarcity of the products themselves. SIFI: significantly important financial institution Tangible book value: companys assets minus intangible assets (goodwill, etc.)

TCE- Tangible Common Equity. Meaning how well a company can deal with losses. Theoretically, the higher the TCE, the better prepared a company is to deal with massive losses. One way to potentially inflate TCE is by converting preferred shares to common shares. Preferred shares are subtracted out of common equity as well as depreciation and goodwill to make it TCE. TTM 12 month- Usually used in referring to EPS or another ratio. TTM means the last 12 months of the companies earnings, because a lot of numbers are reported by quarter. Think of TTM as a live stat where it is an indication of the last 365 days for a company. Anytime you hear trailing just think the last 12 months from current date. Value proposition: the (equity) market is a forward looking (future) indicator Yield: the income return on an investment