CABOT’S 22ND ANNUAL INVESTMENT CONFERENCE & LUNCHEON

Friday, September 23, 2011

CABOT’S YEAR IN REVIEWPresented by: Dennis Wassung, CFA, Portfolio Manager

2011 BY ASSET CLASS

2011 thru 9/22/11

GOLD

BONDS

REITS

NASDAQ

COM

MODIT

IES

S&P 5

00

MID

CAPS

FOREI

GN DEV

ELOPED

SMALL

CAPS

EMER

GING M

ARKETS

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

2011 BY COUNTRY: TOP & BOTTOM 5

2011 thru 9/22/11

THAILAND

SOUTH AFRICA

UNITED STATES

TURKEY

SOUTH KOREA

ARGENTINA

CZECH REPUBLIC

FRANCE

HUNGARY

EGYPT

-40% -35% -30% -25% -20% -15% -10% -5% 0%

2011 BY SECTOR

2011 thru 9/22/11

UTILI

TIES

CONSUM

ER S

TAPLE

S

HEALT

H CARE

INFO

RMATI

ON T

ECH

CONSUM

ER D

ISCR

TELE

COM

SVC.

ENER

GY

INDUSTR

IALS

MATE

RIALS

FINANCIA

LS-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

12/3

1/20

10

1/11

/201

1

1/22

/201

1

2/2/

2011

2/13

/201

1

2/24

/201

1

3/7/

2011

3/18

/201

1

3/29

/201

1

4/9/

2011

4/20

/201

1

5/1/

2011

5/12

/201

1

5/23

/201

1

6/3/

2011

6/14

/201

1

6/25

/201

1

7/6/

2011

7/17

/201

1

7/28

/201

1

8/8/

2011

8/19

/201

1

8/30

/201

1

9/10

/201

1

9/21

/201

1-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

S&P 500

2011 Market EventsDebt

Ceiling Debacle

S&P Downgrad

es U.S.

Weak Economic Data

2011 thru 9/22/11

12/3

1/20

10

1/11

/201

1

1/22

/201

1

2/2/

2011

2/13

/201

1

2/24

/201

1

3/7/

2011

3/18

/201

1

3/29

/201

1

4/9/

2011

4/20

/201

1

5/1/

2011

5/12

/201

1

5/23

/201

1

6/3/

2011

6/14

/201

1

6/25

/201

1

7/6/

2011

7/17

/201

1

7/28

/201

1

8/8/

2011

8/19

/201

1

8/30

/201

1

9/10

/201

1

9/21

/201

1-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

S&P 500

2011 Market EventsDebt

Ceiling Debacle

S&P Downgrad

es U.S.

Weak Economic Data

2011 thru 9/22/11

?What’s Next?

10-YEAR TREASURY YIELD

12/3

1/20

07

3/31

/200

8

7/1/

2008

10/1

/200

8

1/1/

2009

4/1/

2009

7/1/

2009

10/1

/200

9

1/1/

2010

4/1/

2010

7/1/

2010

10/1

/201

0

1/1/

2011

4/1/

2011

7/1/

2011

0%

0.5%

1%

1.5%

2%

2.5%

3%

3.5%

4%

4.5%

Yield on 10-year U.S. Treasury

The 10-Year Treasury yield is now near 60-year

lows!

12/31/07 thru 9/16/11

A YEAR AGO…STOCKS VS. BONDS

2010 thru 9/16/10

12/3

1/20

09

1/11

/201

0

1/22

/201

0

2/2/

2010

2/13

/201

0

2/24

/201

0

3/7/

2010

3/18

/201

0

3/29

/201

0

4/9/

2010

4/20

/201

0

5/1/

2010

5/12

/201

0

5/23

/201

0

6/3/

2010

6/14

/201

0

6/25

/201

0

7/6/

2010

7/17

/201

0

7/28

/201

0

8/8/

2010

8/19

/201

0

8/30

/201

0

9/10

/201

0-10%

-5%

0%

5%

10%

15%

Stocks Bonds

FULL YEAR 2010STOCKS VS. BONDS

2010

12/3

1/20

09

1/14

/201

0

1/28

/201

0

2/11

/201

0

2/25

/201

0

3/11

/201

0

3/25

/201

0

4/8/

2010

4/22

/201

0

5/6/

2010

5/20

/201

0

6/3/

2010

6/17

/201

0

7/1/

2010

7/15

/201

0

7/29

/201

0

8/12

/201

0

8/26

/201

0

9/9/

2010

9/23

/201

0

10/7

/201

0

10/2

1/20

10

11/4

/201

0

11/1

8/20

10

12/2

/201

0

12/1

6/20

10

12/3

0/20

10-10%

-5%

0%

5%

10%

15%

20%

Stocks Bonds

EXTENDED TO TODAY…STOCKS VS. BONDS

12/31/09 thru 9/17/11

12/3

1/20

09

3/3/

2010

5/3/

2010

7/3/

2010

9/3/

2010

11/3

/201

0

1/3/

2011

3/3/

2011

5/3/

2011

7/3/

2011

9/3/

2011

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Stocks Bonds

EQUITY MARKETS HAVE LONG-TERM VALUE:Dividend Yield Is Higher Than 10-Year Treasury

Yield

1998-Current

7/3/

1998

1/3/

1999

7/3/

1999

1/3/

2000

7/3/

2000

1/3/

2001

7/3/

2001

1/3/

2002

7/3/

2002

1/3/

2003

7/3/

2003

1/3/

2004

7/3/

2004

1/3/

2005

7/3/

2005

1/3/

2006

7/3/

2006

1/3/

2007

7/3/

2007

1/3/

2008

7/3/

2008

1/3/

2009

7/3/

2009

1/3/

2010

7/3/

2010

1/3/

2011

7/3/

2011

0%

1%

2%

3%

4%

5%

6%

7%

8%

S&P 500 Dividend Yield 10-Year Treasury Yield

EQUITY MARKETS HAVE LONG-TERM VALUE:Stocks Are “Cheap”

1976-Current

EQUITY MARKETS HAVE LONG-TERM VALUE:10-Year Rolling Returns Favor Stocks

Dec-

10

Dec-

15

Dec-

20

Dec-

25

Dec-

30

Dec-

35

Dec-

40

Dec-

45

Dec-

50

Dec-

55

Dec-

60

Dec-

65

Dec-

70

Dec-

75

Dec-

80

Dec-

85

Dec-

90

Dec-

95

Dec-

00

Dec-

05

Dec-

10

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Rolling 10-Year Annualized Total Return of the Dow Jones Industrial Average (1910 - Present)

ONE OF THE CLASSIC“STOCK MARKET RULES”

“The time to buy is when there is blood in the streets…

…even if the blood is your own.”

–Baron Rothschild, 18th Century