1.  Trading Vs. Investments By: Vishal R. Nanwani © Copyright 2012 MUTIS. All rights reserved 2012.

2.  Your Subject © Copyright 2012 MUTIS. All rights reserved 2012. Content 1.Note the difference 2.Explanation by Jim Cramer 3.Exercise – Thoughts of a Trader vs. Thoughts of an Investor

3.  Your Subject 1.Trading Trades have a shelf-life And are only in relation to a specific catalyst Think poker – You have a Jack and a 2 The table opens with and Ace, King, Queen DO you raise? Yes Next card is a 5. (your probability just reduced) – Perhaps you match? Next card is a 7. (anyone with a single pair will beat you – you either check or fold) Same thing with trading, you make sure you have your catalyst in mind. © Copyright 2012 MUTIS. All rights reserved 2012. The Difference

4.  © Copyright 2012 MUTIS. All rights reserved 2012. Know when your probability drops and triangulate out (the last card could very well have been a 10) Cut your losses the moment the catalyst is dead. It does not matter if you made or loss money! All that matters is the trade is no longer alive. Question - Is trading more like gambling? It is more like gambling than Investing but it is not exactly gambling. Here probability maters just like playing cards But probabilities are based on fundamental factors not chance and hence can be predicted to a certain extent. Therefore, you are not trading on chance like when you gamble but rather on expected occurrence.

5.  © Copyright 2012 MUTIS. All rights reserved 2012. The Difference 2.Investing Investments have no Shelf Life Based purely on fundamental value of the firm/product. If price falls but fundamentals have not changed, you do not close you trade, you buy more. Think China : Prices have fallen and might perhaps fall more. But it is a very bold statement to say there will no longer be growth in China.

6.  Your Subject © Copyright 2012 MUTIS. All rights reserved 2012. The Difference During periods of weaker prices, you should be looking to buy in companies you trust and see value. You should not be clearing up your position, unless your fundamental view of the product/firm changes. Note : This does not mean you should not triangulate your holdings downwards to reduce risk, it just means, if you did that ( which is the smart thing to do), you would need to triangulate your position upwards as the market recovers. That way, whatever percentage of holdings lost through the sale as the market slips, will be gained back with a larger percentage on the way up. Read up on triangulation Story for another day

7.  Your Subject http://video.cnbc.com/gallery/?video=3000112756 © Copyright 2012 MUTIS. All rights reserved 2012. Cramer’s Explanation

8.  Your Subject © Copyright 2012 MUTIS. All rights reserved 2012. Exercise Rule – 1.We will discuss the fundamental information available. 2.We will discuss possible trades and possible Investments. Euro Dollar: 1.Price Chart (Next Slide) 2.Sovereign Debt Crisis – Still no fix for fiscal differentiation Near term support for weaker nation’s Bonds and hence, government expenditure by ECB and European stability Fund. O% on ECB deposit.

9.  Your Subject © Copyright 2012 MUTIS. All rights reserved 2012. Exercise

10.  Your Subject © Copyright 2012 MUTIS. All rights reserved 2012. Exercise BHP Billiton: 1.Price Chart (Next Slide) 2.Miners of Metals– Net Income fell in the previous term by 35% Price at $68 from a high of $100+ in 2011 Weakness in demand from China and EM slowdown Long-term weakness on US and EU Global Markets +ve outlook on US housing market (QE) Long term EM Growth still sustained Shortage of mines. Controls 30% + of the markets Always outperformed the industry

11.  Your Subject © Copyright 2012 MUTIS. All rights reserved 2012. Exercise

12.  Your Subject Thank You © Copyright 2012 MUTIS. All rights reserved 2012.

13.  The information and material provided at MUTIS is for educational purposes only and does not constitute financial product advice. The views of the speakers are their own and not those of MUTIS. MUTIS does not represent or warrant that the information or material is complete or accurate. You should consider obtaining independent advice before making any financial decisions. If you are seeking advice (including a recommendation or opinion) about a financial product you should consult a certified financial advisor. To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of the information or material is accepted by MUTIS © Copyright 2012 MUTIS. All rights reserved 2012. Disclaimer