Slides for a talk at Universitas Gunadarma regarding current economic conditions (mostly US and commodities) as well as Indonesia's capital market followed by stock recommendations.

1. 2017: Get Ready For An
Explosive Year!
By NICO Omer Jonckheere, SE, MM

2. ”Predictions are very difficult, especially about the
future.”
--Yogi Berra

3. The Trump Honeymoon period will turn into the Trump
Presidential Reality Show, and that will shake things up
substantially.

5. President-elect Trump may have grand ideas for the U.S.
economy. However his hands will be tied by the massive
official US national debt, which is approximately $20
trillion as of Dec 2016 and has approximately doubled
every 8 years at a 9% compounded rate for over a century:
Year Official Debt
2016 $20 trillion
2024 $40 trillion
2032 $80 trillion
2040 $160 trillion
(What could go wrong?)

6. “Looking further ahead, the
most worrying signs relate to
the risk of greater
protectionism. There would
be no winners, only losers.
Lower global growth, and
possibly higher inflation,
would benefit no one.”
--BIS’ Claudio Borio

7. Trump’s campaign rhetoric signals the likelihood of
protectionism, tariffs and trade wars. None of this is
particularly encouraging for growth projections:

8. This will not help the overall US economy. In fact, it will
worsen it. As Ron Paul has stated in layman’s terms, the
expense of a tariff is simply passed along to the
consumer:

10. Trump has made it clear he does not like the EU. He
prefers bilateral negotiations.

11. There is now a clear
shift in attitude within
the electorate of the
developed economies
towards anti-
globalization. Existing
free trade agreements,
tariffs and
protectionism are all
on the table now.

12. The question no is: Which countries will be hurt the most by
another protectionist era and sharp contraction of global trade?

13. In an interview with The Wall Street Journal, Trump said the US dollar,
which touched a more than 14-year high about six weeks ago, has
gotten “too strong” against the Chinese yuan. He told the WSJ, “Our
companies can’t compete with them now because our currency is too
strong. And it’s killing us.”

15. ”A new global financial panic will be one legacy of the
Trump administration. It won’t be Trump’s fault, merely
his misfortune.” --Jim Rickards

17. “I think 2017 is going to see abattle between deflationary
forces (as paper assets like stocks and bonds begin to
rollover to the downside) and inflationary forces (as
deteriorating currency values and natural resource challenges
steadily push commodity prices higher).”
--Eric Hadik of www.insiidetrack.com

18. 2017: What to Buy & What to Sell?

19. If borrowing costs keep rising, companies with a lot of
debt could struggle to pay their bills. We could even see a
huge spike in corporate defaults.

20. The trend in ‘actual’ earnings has been dismal … but the
trend in ‘hope’ has been exceptional!

21. This indicator peaked at 11.35 as an Internet-
driven bull market of the 1990s was ending!!
Today it’s at 11.27…

22. The median
price/revenue ratio
of individual S&P
500 component
stocks now stands
just over 2.45,
easily the highest
level in history!

24. The optimism of
professional
money managers
has reached an
extreme!

26. The DJIA has soared 73% in five years to 20,000 even as
aggregate revenues have been mired down in a sea of
stagnation.

27. After the S&P
500 hit its low of
666 points in
2009, overall
trading volume
continued to
decline.

28. IHSG or JCI

30. IDR

31. SEKTOR & SAHAM PILIHAN

32. PUSATKAN PERHATIAN PADA
PERUSAHAAN DENGAN:
“Buying good companies at bargain prices makes sense.”
- Joel Greenblatt
1) pertumbuhan penjualan dan laba bersih;
2) cash flow yang positif;
3) sedikit hutang;
4) ROE yang tinggi, dan
5) ekspansi dalam OPM.

33. INVESTMENT STRATEGY
 The key is to look for cash flow, a reasonable dividend
payout, if you can find it, and growing fundamentals.
Companies that exhibit those characteristics represent
value. There are not many, but for those investors willing to
do the homework, they exist.
 I remain positive towards those kinds of investment that will
retain inflationary protection like hard assets such as
commodities.

34.  As Greg Fisher of Adepa Asset Management wrote, amid a
world of worries, “keeping the discipline of holding lowly
valued, under-owned and unleveraged companies is likely to
continue to protect our capital and earn us both income and
capital appreciation over the longer term.”
 Or to put it more plainly, and in the words of Warren Buffett,
“price is what you pay; value is what you get.”

35.  Also stick to small-caps, which come with big advantages
because of their size. Few analysts cover the smaller
stocks on the market, and few mutual funds are even
allowed to invest in them. That lack of professional
awareness of small caps means that you are far more
likely to run across a major mispricing or hidden
opportunity in a small cap than you are in a larger name.

36. MY FAVORITE FIVE

38. A true mania for gold stocks could develop over the coming
years. This could make anyone who buys gold stocks at their
current depressed levels very rich!

40. Gold stocks have
been in the
second-deepest
bear market since
1975. In other
words, this is an
incredible
opportunity!

41. The ratio in the chart above compares gold stocks with the
price of gold. The lower the ratio, the cheaper gold stocks
are compared to gold. According to this ratio, gold stocks
haven’t been this cheap since the early ‘80s!

45. VALBURY’S STOCK PICKS

74. VALUE STOCKS

84. CONCLUSION
“If you were smart at the start of
the 19th century, you made your
way to London. If you were smart at
the start of the 20th century, you
moved to New York. And if you are
smart at the start of the 21st
century, you will find your way to
Asia.”
--Jim Rogers

85. Thank You
@researchvaf
/valburyasia
/valburyresearch
www.valburysecurities.co.id