CAPITALIZING ON A CHANGING WORLDCAPITALIZING ON A CHANGING WORLDEmerging Market Opportunities

ROBERT T. LUTTSPRESIDENT, CHIEF INVESTMENT OFFICER

Salem State College Enterprise CenterApril 1, 2010

A CHANGING WORLDA CHANGING WORLD

“It is not the strongest of the species that survives, nor is it the most intelligent,

it is the one that is the most adaptable to change.”

– Charles Darwin

THREE THREE CRITICAL GLOBAL CHANGESCRITICAL GLOBAL CHANGES

1. Three Billion New Capitalists. Power and wealth is moving from West to East. Expect this trend to continue. We believe emerging middle class of China, India, Brazil offer great growth opportunities.

2. Competition for Energy – A new energy mandate.

3. New Wealth Developing – Profit building opportunities have never been better in these economies.

EMERGING MIDDLE CLASS EMERGING MIDDLE CLASS OF EMERGING MARKETSOF EMERGING MARKETS

Positive Trends – could last decades

Favorite Growth Sectors

Automobiles

Financial Services / Insurance

Medical Use

Internet Use

Alternative Energy

HOW FAST IS CHINA GROWING?HOW FAST IS CHINA GROWING?

China Internet Growth – In 2002, China had 50 million internet users. In 2005, it passed 100 million users and now, only five years later, China has over 420 million internet users. China adds about 50 million internet users per year!

Penetration Rate: 70% in USA (220 million of 300 million) versus only 32% (420 million of 1.3 Billion) in China.

Mobile Cell phone users are signing up at a rate of 6 million new users a month. Today China has over 600 million mobile cell customers; up from only 10 million in 1997. China has the largest cell phone market in the world.

EXCEPTIONAL OPPORTUNITY EXCEPTIONAL OPPORTUNITY IN EMERGING ECONOMIES IN EMERGING ECONOMIES

% of World Market Cap as a % of World GDP% of World Market Cap as a % of World GDP

United Kingdom 2.59%

United States 2.08%

Japan 1.69%

Emerging Economies 0.25%Source: MacroMavens, June 2009

Cabot Money Management, Inc. | 216 Essex Street | Salem, MA 01970 | 978.745.9233 | www.eCabot.com

THE CHINA OPPORTUNITYTHE CHINA OPPORTUNITY

19951995 20072007

Shanghai, ChinaShanghai, China

Cabot Money Management, Inc. | 216 Essex Street | Salem, MA 01970 | 978.745.9233 | www.eCabot.com

By 2020, Asia is expected to have more than 1.2 billion population with a GDP per capita greater than $5,000 USD. This is five times the size of the US middle class!

CHINA:CHINA:TOP SECTORS FOR GROWTHTOP SECTORS FOR GROWTH

Financial Services

Property Development and Management

Internet Applications

Education

Infrastructure Growth

Consumer Spending, Travel, Advertising

CHINA: OPPORTUNITY AND RISK CHINA: OPPORTUNITY AND RISK

Where the USA was in 1940’s.

We expect Outperformance in China for many years.

2003 -2010 GDP Per Capita $1,000 to $3,000. We Expect 2010-2017 GDP per Capita will double again to $6,000.

Volatility – Will Continue to Be High. Skepticism among investors will be high as well.

BrazilBrazil

Expected growth rates: 5-7% annually for coming decade

Inflation now under control : Approximately 4% range. (inflation of the 1990s was terrible – 15 years ago Brazil had inflation of 760 percent for five years)

Drivers of Brazil growth – Exports of energy, steel and mining resources, beef and poultry. China and other emerging and developed economies drive demand.

100 million middle class – Incomes in this segment have grown 9 percent per year. This is expected to continue.

Brazil: ChallengesBrazil: Challenges

Infrastructure problems – inferior in many areas. Transportation, airports, highways all need significant improvements.

Corporate governances: improving, but still problematic. Electricity Co. in Rio – 42% loss rate (unbelievable!).

Taxation – problematic. Consumption taxes in some areas too high.

Top sectors: Homebuilding, banks, electric utility, energy.

SummarySummary

Emerging Economies – Opportunities are significant!

Risks are higher too: legal, business practices, corruption and bad faith dealing.

To protect yourself: Seek professional advice, legal and business partners with solid record of success.

Wealth and Power will continue to shift from the west to the east in the coming decades.

For copies of this presentation or information on Wealth Management Services contact:

Robert T. Lutts, President and Chief Investment Officer

Cabot Money Management, Inc. 216 Essex Street, Salem Massachusetts

225 Franklin Street, Boston, Massachusetts

www.ecabot.com

1-800-888-6468

QUESTIONSQUESTIONS

Thank you for joining us today.