Sprung Investment Management is an independent investment management firm serving high net worth individuals. It has over 120 years of combined investment experience among its principals. In the third quarter of 2013, markets were volatile due to political uncertainty in the US and slowing growth in emerging markets. Sprung believes this environment creates opportunities for value investors.

1. THIRD QUARTER 2013
RETROSPECTIVE AND PROSPECTIVE
LAND OF CONFUSION
(Song by Genesis)
25 Adelaide Street East, Suite 1914
Toronto ON M5C 3A1

2. 25 Adelaide St. E., Suite 1914, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 2
At 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, utilizing 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 the company’s
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. 25 Adelaide St. E., Suite 1914, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 3
THIRD QUARTER 2013
RETROSPECTIVE AND PROSPECTIVE
LAND OF CONFUSION
(Song by Genesis)
“If you’re not confused, you’re not paying attention.” - Anonymous
“What is right is not always popular and what is popular is not always right.” – Albert Einstein
Here we go again!
As we enter the last quarter of 2013, US politicians are once again playing a game of brinkmanship;
unfortunately one that could have dire consequences for the world’s economy. Politicians continue to
entrench opposing positions rather than engage in positive action. It is highly unlikely that the entire US
government will shut down as essential services will remain active, but nevertheless, investors dislike
uncertainty and markets have been under pressure as the Third Quarter closed.
Investor behaviour during the quarter appeared less than consistent with past experience. Despite this
contradictory behaviour, results generally finished in positive territory.
Canadian Dollar US Dollar
Q1 Q2 Q3 YTD Q1 Q2 Q3 YTD
Toronto Stock
Exchange 3.3% -4.1% 6.2% 5.3%
S&P 500 13.2% 6.5% 3.1% 24.4% 10.6% 2.9% 5.2% 19.8%
MSCI EAFE* 6.8% 1.3% 8.7% 17.7% 4.4% -2.1% 10.9% 13.4%
91 Day T-Bill 0.2% 0.2% 0.3% 0.7%
DEX** 0.7% -2.4% 0.1% -1.6%
CDN/US dollar -2.2% -3.2% 2.2% -3.8%
* Europe, Asia and Far East Index
** Canadian Bond Universe Index

4. 25 Adelaide St. E., Suite 1914, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 4
As noted last quarter, it appeared to be a bit of a conundrum as the Federal Reserve discussed reducing
the degree of market intervention undertaken thus far, presumably due to indications of a stronger
performing economy, yet investors reacted negatively as fears that the lesser levels of intervention
would be insufficient to maintain current yields. In other words, there is a discontinuity between the
reality of improving economic conditions and the perception of the investment market participants as to
the durability of that growth.
Statistics continue to indicate that inflationary expectations are low. Typically, this would be a good
environment for bonds yet the pressure on yields has been to the upside pushing bond prices down. The
appetite for equities has been improving suggesting a willingness to engage in riskier assets. The
American economy has been showing signs of improvement while the Euro-zone has been somewhat
more stable yet emerging markets have been weaker as growth there has slowed. As a result, this
appetite for risk has not translated to the emerging economies but has in fact been shunning them.
Expectations for global economic growth has dampened as a result since the emerging economies have a
much larger impact now than a few years back. Yet, as previously noted, the trend has generally been
into equities despite lower expectations in global growth.
Could inflationary expectations transform into deflationary fears as the emerging markets slow and their
currencies lose value relative to the developed countries? Commodity prices were generally better in the
Third Quarter however they remain largely down for the year to date. Lower commodity prices
generally translate into an improved environment for consumers while low inflation is typically good for
bond prices. Mounting debts in the public sector will eventually put pressure on interest rates to
increase but the day of reckoning will be postponed as long as the politicians can push it forward. In the
interim, emerging markets have demonstrated great resistance to currency adjustments.
As the above text indicates, investors today appear confused. Their focus would appear to be on
immediate reactions to geo-political events. This was evident in August when developments in Syria
negatively impacted equities. Although this uncertain environment would normally be perceived to be
positive for gold, the price has declined in the latter part of the quarter.
This concentration on exogenous events has taken the focus off fundamentals. Shocks will continue to
impact short-term market directions as investors over-react to economic news releases. This
environment will provide opportunities for value investors over the coming months.

5. 25 Adelaide St. E., Suite 1914, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 5
THIRD QUARTER 2013 FIXED INCOME COMMENTARY
“Nothing is so unbelievable that oratory cannot make it acceptable.”- Cicero
After a negative second quarter, fixed income markets continued their slow grind towards higher rates
until the Federal Reserve postponed its tapering program causing what is expected to be a temporary
reversal. As a result, bonds were essentially flat in the quarter.
The initial reaction to the continuation of the “quantitative easing” program may have been positive but
on further reflection, the implications are less rosy. The delay on tapering the stimulus may imply that
the Federal Reserve considers the economy weaker than the market participants. In any case, their lack
of action after the buildup in anticipation, eroded that most precious commodity of central bankers –
credibility. In our view, a modest reduction in the level of bond buying would have satisfied both the
expectations of market participants, while having no meaningful negative impact on the economy.
The European situation seems to have settled down with modest economic improvements becoming
evident. Still, high unemployment and crushing levels of debt remain and will have to be dealth with. In
the meantime, another round of bailout for Greece will have to be decided on in November.
Germany’s leadership in this stabilization process was once again confirmed with Mrs. Merkel's recent
electoral success. Nevertheless, she is faced with crafting a coalition that may be less ameanable to her
goals of extending continued support for Germany’s less stable Euro partners.
At quarter-end the spectacle of the US legislative process’s inability to come to terms with crafting a
budget was faced by the market. It is likely that after further posturing some form of agreement will
eventually be reached. Nevertheless, it is extremely unlikely that both parties will agree to deal with the
ongoing deficits that continue to accumulate, in a meaningful manner.
It would appear that only some massive external shock will focus the attention of legislators on dealing
with debt and deficits. Whether the reduction this summer in Japanese and Chinese purchases of US
Treasury securities is an early warning sign or just a blip in international investment flows, remains to be
seen.
The total return performance of the bond market as measured by the DEX Universe Index for the third
quarter was a minimal gain of 0.1%. The benchmark ten-year Government of Canada bond yield
increased by 0.1%, to 2.5%.

6. 25 Adelaide St. E., Suite 1914, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 6
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 several years with Successful Investor 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.
• Robert is a Chartered Investment Manager (CIM) candidate.
Stay connected with Sprung Investment Management:
Twitter https://twitter.com/SprungInvest Twitter handle: @SprungInvest
Facebook https://www.facebook.com/SprungInvestment
Linkedin https://www.linkedin.com/company/sprung-investment-management-inc-
Google+ http://bit.ly/SttIHz
See Michael on BNN http://www.sprunginvestment.com/videos