U.S. Global Investors, Inc. · NASDAQ:GROW
U.S. Global Investors — Oil & Gas Forum 2012
109 slides from U.S. Global Investors's conference presentation, June 2012
Slide 1: Applying Super S-Curves
U.S. Global Investors Searching for Opportunities, Managing Risk Applying Super S-Curves Frank Holmes, CEO and Chief Investment Officer www.usfunds.com June 2012 1.800.US.FUNDS 12-365
Slide 2: About U.S. Global Investors (GROW)
About U.S. Global Investors (GROW) A boutique publicly listed investment adviser specializing in gold, natural resources, emerging markets and infrastructure opportunities around the world. www.usfunds.com June 2012 12-365 2
Slide 3: Performance and Results Oriented
“Performance and Results Oriented” Investment leadership results in performance Winner of 29 Lipper performance awards, certificates and top rankings since 2000 (Four out of 13 U.S. Global Investors Funds received Lipper performance awards from 2005 to 2008, six out of 13 received certificates from
Slide 4: Focus on Education
Focus on Education 28 MFEA STAR Awards for Excellence in Education www.usfunds.com June 2012 12-365 4
Slide 5: Fund Recognition: Three Funds Rank in Top 25 for 10 Years
Fund Recognition: Three Funds Rank in Top 25 for 10 Years The Global Resources Fund (PSPFX) ranked #12 World Precious Minerals Fund (UNWPX) ranked #13 Gold & Precious Metals Fund (USERX) ranked #24 Rankings were provided to The Wall Street Journal and Barron’s by Lipper and include all mutual funds
Slide 6: U.S. Global Investors is Mobile
U.S. Global Investors is Mobile Get Investor Alert and Frank Talk On the Go Visit www.usfunds.com/apps www.usfunds.com June 2012 12-365 6
Slide 7: Gas is CHEAP in the U.S. Compared to Other Countries
Gas is CHEAP in the U.S. Compared to Other Countries www.usfunds.com June 2012 12-365
Slide 8: The Great Disconnect
The Great Disconnect — Global Resources are the Building Blocks of Apple www.usfunds.com June 2012 12-365 8
Slide 9: Compare Market Capitalizations
Compare Market Capitalizations www.usfunds.com June 2012 12-365 9
Slide 10: Compare Dividend Yields to 10 Year Government Note
Compare Dividend Yields to 10 Year Government Note www.usfunds.com June 2012 12-365 10
Slide 11: Tech Stocks Lost More Than Lipper Gold Funds Combined
Tech Stocks Lost More Than Lipper Gold Funds Combined www.usfunds.com June 2012 12-365 11
Slide 12: Generating Alpha
Generating Alpha www.usfunds.com June 2012 12-365 12
Slide 13: S&P 500 – 10 Sectors, 500 Stocks
S&P 500 – 10 Sectors, 500 Stocks www.usfunds.com June 2012 12-365 13
Slide 14: Are You Underweight? Energy & Basic Materials
Are You Underweight? Energy & Basic Materials 15% of S&P 500 www.usfunds.com June 2012 12-365 14
Slide 15: Global Resources Fund Outperformed – 3 year
Global Resources Fund Outperformed – 3 year Past performance is no guarantee of future results. www.usfunds.com June 2012 12-365 15
Slide 16: Global Resources Fund Outperformed – 10 year
Global Resources Fund Outperformed – 10 year Past performance is no guarantee of future results. www.usfunds.com June 2012 12-365 16
Slide 17: Case Study in Good Government Policies: Resources Investing in Colombia
Case Study in Good Government Policies: Resources Investing in Colombia www.usfunds.com June 2012 12-365 17
Slide 18: Good Government Policy — Falling Kidnappings Protect Human Rights
Good Government Policy — Falling Kidnappings Protect Human Rights 2000 Pipeline attack in Colombia www.usfunds.com June 2012 12-365 18
Slide 19: Good Government Policy — Rising Justice Budgets Protect Rule of Law
Good Government Policy — Rising Justice Budgets Protect Rule of Law www.usfunds.com June 2012 12-365 19
Slide 20: Good Government Policy — Ease of Doing Business World Ranking
Good Government Policy — Ease of Doing Business World Ranking Compare Colombia to Venezuela Juan Manuel Santos Calderón Hugo Chávez President of the Republic of Colombia President of Venezuela www.usfunds.com June 2012 12-365 20
Slide 21: Pacific Rubiales — Case Study
Pacific Rubiales — Case Study www.usfunds.com June 2012 12-365 21
Slide 22: HRT — Case Study
HRT — Case Study www.usfunds.com June 2012 12-365 22
Slide 23: HRT — Case Study
HRT — Case Study www.usfunds.com June 2012 12-365 23
Slide 24: Opportunities for Junior Resource Stocks
Opportunities for Junior Resource Stocks BHP Exploration Offices and Explorationists www.usfunds.com June 2012 12-365 24
Slide 25: Predicting Attractive Tops and Bottoms — Easier in South Beach vs. Markets
Predicting Attractive Tops and Bottoms — Easier in South Beach vs. Markets Priority — Reading Money Magazine www.usfunds.com June 2012 12-365 25
Slide 26: The S-Curve – Big Question is Where Are We On The Curve?
The S-Curve – Big Question is Where Are We On The Curve? The S-Curve is a type of curve that shows a rapid, exponential increase in growth for a period of time, followed by a tapering or leveling off. www.usfunds.com June 2012 12-365 26
Slide 27: 7 Billion People — Tipping Point
7 Billion People — Tipping Point Centuries to Decades to a Decade www.usfunds.com June 2012 12-365 27
Slide 28: China/India Share of World GDP Increased Substantially
China/India Share of World GDP Increased Substantially www.usfunds.com June 2012 12-365 28
Slide 29: Super Shift – Energy
Super Shift – Energy Oil Consumption and Industrialization, 1900 to present Oil Consumption Oil per capita rises rapidly during early industrialization, then levels to rapid real income growth. Rising world trade actually stimulates the industrialization phase. per capita: Lower U.S. labor costs ver
Slide 30: Super Shift – Electricity
Super Shift – Electricity Intensity of electricity consumption Source: BHPB Power consumption has been growing faster than the rate of GDP growth. www.usfunds.com June 2012 12-365 30
Slide 31: Huge Pent-Up Demand for Automotive Transportation in the Developing World
Huge Pent-Up Demand for Automotive Transportation in the Developing World www.usfunds.com June 2012 12-365 31
Slide 32: Metaphor: Tipping Points, Melting Points
Metaphor: Tipping Points, Melting Points H2O is Like Money Ice Turns to Water at 32º, but Still H2O www.usfunds.com June 2012 12-365 32
Slide 33: Low Real Interest Rates Historically Fuel Gold, Silver and Oil
Low Real Interest Rates Historically Fuel Gold, Silver and Oil 2% Tipping Point for Gold Gold & silver perform well in low or negative real interest rate environments www.usfunds.com June 2012 12-365 33
Slide 34: Demographics is the Key – Super Shift Rural to Urban
Demographics is the Key – Super Shift Rural to Urban Half of the global population (>3 billion) is estimated to live in urban areas Deng Xiaoping Projected urban population is larger than the entire world population in 1965 www.usfunds.com June 2012 12-365 34
Slide 35: Chindia – Rising Middle Class
Chindia – Rising Middle Class Source: padanisaa.blogspot.com www.usfunds.com June 2012 12-365 35
Slide 36: Bubble — Negative Press on China
Bubble — Negative Press on China www.usfunds.com June 2012 12-365 36
Slide 37: Possible Contagion
Possible Contagion www.usfunds.com June 2012 12-365 37
Slide 38: Hong Kong Chinese H Shares Correlate with Natural Resources
Hong Kong Chinese “H” Shares Correlate with Natural Resources www.usfunds.com June 2012 12-365 38
Slide 39: Hong Kong Chinese H Shares More Attractive on Relative Valuations
Hong Kong Chinese “H” Shares More Attractive on Relative Valuations www.usfunds.com June 2012 12-365 39
Slide 40: China's GDP Growth Tends to Stabilize in Fifth Year of Leadership Transition Cycle
China’s GDP Growth Tends to Stabilize in Fifth Year of Leadership Transition Cycle www.usfunds.com June 2012 12-365 40
Slide 41: Trend is Your Friend — China PMI (Manufacturing)
Trend is Your Friend — China PMI (Manufacturing) www.usfunds.com June 2012 12-365 41
Slide 42: China Rail Freight Volume
China Rail Freight Volume www.usfunds.com June 2012 12-365 42
Slide 43: China New Bank Loans
China New Bank Loans www.usfunds.com June 2012 12-365 43
Slide 44: China Power Production
China Power Production www.usfunds.com June 2012 12-365 44
Slide 45: Stay Tuned to the Big S-Curve
Stay Tuned to the Big S-Curve 2009 1966 www.usfunds.com June 2012 12-365 45
Slide 46: Trend is Your Friend — Global PMI 15 Year
Trend is Your Friend — Global PMI 15 Year www.usfunds.com June 2012 12-365 46
Slide 47: Government Policy Model — Precursor for Change
Government Policy Model — Precursor for Change Ben Bernanke, Chairman President Barack Obama of the Federal Reserve www.usfunds.com June 2012 12-365 47
Slide 48: E7 and G7 Population vs GDP
E7 and G7 Population vs GDP www.usfunds.com June 2012 12-365 48
Slide 49: Compare E7 vs G7 Money Supply Growth
Compare E7 vs G7 Money Supply Growth www.usfunds.com June 2012 12-365 49
Slide 50: Majority of G7 and E7 Countries Have Negative Real Interest Rates
Majority of G7 and E7 Countries Have Negative Real Interest Rates www.usfunds.com June 2012 12-365 50
Slide 51: High Correlation of Oil and Money Supply
High Correlation of Oil and Money Supply Government will likely continue to print money, like the bailout of Fannie Mae and Freddie Mac, to support the economy R-squared is a measure of correlation. See Disclosures page for more information. www.usfunds.com June 2012 12-365 51
Slide 52: Gold Fear Trade for Gold Investors
Gold “Fear Trade” for Gold Investors Developed Countries Must Rollover a Massive $8 Trillion in 2012 (Below Inflation Rate) www.usfunds.com June 2012 12-365 52
Slide 53: Gold Demand Drivers
Gold Demand Drivers www.usfunds.com June 2012 12-365 53
Slide 54: Warren Buffett vs. Gold
Warren Buffett vs. Gold Warren Buffett www.usfunds.com June 2012 12-365 54
Slide 55: It's Not the Political Party, It's the Political Policies
It’s Not the Political Party, It’s the Political Policies www.usfunds.com June 2012 12-365 55
Slide 56: Fiscal 2010 U.S. Government Revenues & Expenses at a Glance
Fiscal 2010 U.S. Government Revenues & Expenses at a Glance 58% www.usfunds.com June 2012 12-365 56
Slide 57: Great Super Cycle Debt Bust — Contagion
Great Super Cycle Debt Bust — Contagion www.usfunds.com June 2012 12-365 57
Slide 58: History Repeats Itself with Currency Debasement
History Repeats Itself with Currency Debasement Russell Crowe, Gladiator www.usfunds.com June 2012 12-365 58
Slide 59: Declining Value of the U.S. Dollar
Declining Value of the U.S. Dollar Alan Greenspan Ben Bernanke www.usfunds.com June 2012 12-365 59
Slide 60: Gold Reserves Held as Financial Assets
Gold Reserves Held as Financial Assets www.usfunds.com June 2012 12-365 60
Slide 61: Driver: The Love Trade
Driver: The Love Trade www.usfunds.com June 2012 12-365 61
Slide 62: Holidays Drive Gold Demand
Holidays Drive Gold Demand www.usfunds.com June 2012 12-365 62
Slide 63: China's Increasing Jewelry Demand
China’s Increasing Jewelry Demand www.usfunds.com June 2012 12-365 63
Slide 64: Gold Love Trade
Gold “Love Trade” Strong Correlation Between Rising Incomes and Gold Price www.usfunds.com June 2012 12-365 64
Slide 65: American Dream Trade
“American Dream Trade” Massive Urbanization Trend in India and China www.usfunds.com June 2012 12-365 65
Slide 66: Rising Incomes in Emerging Markets Sustain Demand – Love Trade
Rising Incomes in Emerging Markets Sustain Demand – “Love Trade” www.usfunds.com June 2012 12-365 66
Slide 67: +$4 Trillion Infrastructure Spending Globally
+$4 Trillion Infrastructure Spending Globally www.usfunds.com June 2012 12-365 67
Slide 68: Next Wave of Infrastructure Spending Globally
Next Wave of Infrastructure Spending Globally www.usfunds.com June 2012 12-365 68
Slide 69: Tipping Point
Tipping Point Impact is About to Be Felt Quite Soon High Speed Train, China www.usfunds.com June 2012 12-365 69
Slide 70: Emerging High-Speed Rail Hub Cities
Emerging High-Speed Rail Hub Cities Frank Holmes High Speed Train, China www.usfunds.com June 2012 12-365 70
Slide 71: High-Speed Rail is a Growth Opportunity for U.S. Companies
High-Speed Rail is a Growth Opportunity for U.S. Companies www.usfunds.com June 2012 12-365 71
Slide 72: Global Oil Demand – Compare G7
Global Oil Demand – Compare G7 www.usfunds.com June 2012 12-365 72
Slide 73: China and India Increasing Share of Global Oil Demand
China and India Increasing Share of Global Oil Demand “Chindia” is 40% of the World’s Population www.usfunds.com June 2012 12-365 73
Slide 74: Top 20 Crude Producers
Top 20 Crude Producers www.usfunds.com June 2012 12-365 74
Slide 75: Bad Government Policy — Russian Production Growth Slowing
Bad Government Policy — Russian Production Growth Slowing Year-over-Year Growth www.usfunds.com June 2012 12-365 75
Slide 76: Historically Over 40 Percent of Global Oil Supply Under Autocratic Rule
Historically Over 40 Percent of Global Oil Supply Under Autocratic Rule Moammar Gaddafi www.usfunds.com June 2012 12-365 76
Slide 77: Disruptions Often Have Long-Lived Impact
Disruptions Often Have Long-Lived Impact Hugo Chávez President of Venezuela Mahmoud Ahmadinejad President of Iran www.usfunds.com June 2012 12-365 77
Slide 78: Bad Government Energy Policy in Mexico — Declining Cantarell Production
Bad Government Energy Policy in Mexico — Declining Cantarell Oil Field Production Source: Secretaría de Energía de Mexico www.usfunds.com June 2012 12-365 78
Slide 79: Oil and Gold Undervalued Compared to Rise in Other Areas of U.S. Economy
Oil and Gold Undervalued Compared to Rise in Other Areas of U.S. Economy www.usfunds.com June 2012 12-365 79
Slide 80: Inflation-Adjusted Gold Prices in 2009 Dollars
Inflation-Adjusted Gold Prices in 2009 Dollars www.usfunds.com June 2012 12-365 80
Slide 81: Gold Would Need to Be Much Higher to Cover U.S. Money Supply
Gold Would Need to Be Much Higher to Cover U.S. Money Supply www.usfunds.com June 2012 12-365 81
Slide 82: Fear Trade: Aligning Gold Price to Bretton Woods II — $46,000/oz?
Fear Trade: Aligning Gold Price to Bretton Woods II — $46,000/oz? www.usfunds.com June 2012 12-365 82
Slide 83: Managing Expectations — The Math
Managing Expectations — The Math Standard Deviation (as of 3/31/12) based on 10-Year Data Rolling 1 Year NYSE Arca Gold 38.1% BUGS Index (HUI) WTI Crude Oil 35.0% MSCI Emerging Markets 30.7% S&P 500 Index 19.1% Gold Bullion 13.2% 12-month rolling volatility of price action over 10-year period View t
Slide 84: Managing Expectations — Oil Seasonality
Managing Expectations — Oil Seasonality Past performance is no guarantee of future results. www.usfunds.com June 2012 12-365 84
Slide 85: U.S. Presidential Election Year is Traditionally a Non-Event for Energy Stocks
U.S. Presidential Election Year is Traditionally a Non-Event for Energy Stocks VS. Barack Obama Mitt Romney www.usfunds.com June 2012 12-365 85
Slide 86: Managing Expectations — Oil vs. Dollar
Managing Expectations — Oil vs. Dollar www.usfunds.com June 2012 12-365 86
Slide 87: Managing Expectations — Gold Seasonality
Managing Expectations — Gold Seasonality Past performance is no guarantee of future results. www.usfunds.com June 2012 12-365 87
Slide 88: Managing Expectations — 60 Day Rolling Oscillator
Managing Expectations — 60 Day Rolling Oscillator Gold Oversold Based on Historical Math www.usfunds.com June 2012 12-365 88
Slide 89: Seasonality Fluctuations Appear Poised to Rebound – XAU Gold Stock Index
Seasonality Fluctuations Appear Poised to Rebound – XAU Gold Stock Index Philadelphia Stock Exchange Gold and Silver Index (XAU) Source: CIBC www.usfunds.com June 2012 12-365 89
Slide 90: U.S. Presidential Election Year is Traditionally a Weak Year – XAU
U.S. Presidential Election Year is Traditionally a Weak Year – XAU Gold Stock Index Philadelphia Stock Exchange Gold and Silver Index (XAU) VS. Federal Election Years Barack Obama Mitt Romney www.usfunds.com June 2012 12-365 90
Slide 91: But 2013 Should Post Better Comebacks – XAU Gold Stock Index
But 2013 Should Post Better Comebacks – XAU Gold Stock Index Philadelphia Stock Exchange Gold and Silver Index (XAU) Post Federal Election Years www.usfunds.com June 2012 12-365 91
Slide 92: Three Price Levels When Valuing Companies
Three Price Levels When Valuing Companies 1. Wholesale Price 2. Retail Price 3. Fairytale Price www.usfunds.com June 2012 12-365 92
Slide 93: Life Cycle of a Resource Share
Life Cycle of a Resource Share www.usfunds.com June 2012 12-365 93
Slide 94: Value Drivers for Superior Performance
Value Drivers for Superior Performance www.usfunds.com June 2012 12-365 94
Slide 95: Multiple Compression: How Long Before Revival?
Multiple Compression: How Long Before Revival? Baywatch www.usfunds.com June 2012 12-365 95
Slide 96: Oil Stocks Underperform Oil
Oil Stocks Underperform Oil www.usfunds.com June 2012 12-365 96
Slide 97: Gold Stocks Underperform Bullion
Gold Stocks Underperform Bullion www.usfunds.com June 2012 12-365 97
Slide 98: History Repeats Itself — Cash Flow Multiple Collapse and Bottom in Late 1970s
History Repeats Itself — Cash Flow Multiple Collapse and Bottom in Late 1970s www.usfunds.com June 2012 12-365 98
Slide 99: Managing Expectations: Promises Versus Delivery
Managing Expectations: Promises Versus Delivery Tom Cruise, Jerry Maguire www.usfunds.com June 2012 12-365 99
Slide 100: The Replacement Cost for an Ounce of Gold is $1500
The Replacement Cost for an Ounce Of Gold is $1500 with $1700 as a Sustainable Number (2012) www.usfunds.com 10 June 2012 12-365 0
Slide 101: Oil Supply Cost Curve
Oil Supply Cost Curve www.usfunds.com June 2012 12-365 101
Slide 102: Apple is a Want, Global Resources Are Needs
Apple is a Want, Global Resources Are Needs: Energy, Food, Water, etc. www.usfunds.com June 2012 12-365 102
Slide 103: Trying to Stop a Bull Market Has Risks
Trying to Stop a Bull Market Has Risks www.usfunds.com June 2012 12-365 103
Slide 104: Fund Performance
Fund Performance www.usfunds.com 10 June 2012 12-365 4
Slide 105: Come Visit Us at…
Come Visit Us at… Facebook: www.facebook.com/usfunds Twitter: www.twitter.com/usfunds Frank Talk: www.usfunds.com/franktalk Investor Alert: www.usfunds.com/alert www.usfunds.com June 2012 12-365 105
Slide 106: Disclosures
Disclosures Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US- FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Gl
Slide 107: Disclosures
Disclosures The Shanghai Composite Index (SSE) is an index of all stocks that trade on the Shanghai Stock Exchange. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The S&P 500 Energy Index is a capitalization-weighted index t
Slide 108: Disclosures
Disclosures Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha. M1 Money Su
Slide 109: Disclosures
Disclosures Investment Objective: The Global Resources Fund is an actively managed fund that takes a diversified approach to the natural resources sector by investing in energy and basic materials. The fund invests in companies involved in the exploration, production and processing of petroleum, nat