Major Market Equity Value Review Feb. 2009


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Here is Keppler’s Recent Developments & Outlook

Global equities drifted lower last month. The Morgan Stanley Capital International (MSCI) World Total Return Index (with net dividends reinvested, December 1984=100) declined 7.1 % in local currencies, 8.8 % in US dollars
and 1 % in euros.

The euro declined 7.8 % to 1.28 (USD/EUR) in January from its 2008 year-end level of 1.39 (USD/EUR).

Four markets advanced and fourteen markets declined in January. Belgium (+7%), Denmark (+6.2 %) and Norway (+1.1 %) performed best.

Germany (-9.8 %), the United States (-8.2 %) and Spain (-7.9 %) declined most.

During the last thirteen months there has been no place to hide: all eighteen markets covered here declined.

Compared with end-of-2007 levels, the United Kingdom (-33.1 %), Canada (-34 %) and Switzerland (-37.4 %) fared best, i.e. lost least. Austria (-67.8 %), Belgium (-62.3 %) and Norway (-53.4 %) declined most.

Performance numbers are in local currencies unless mentioned otherwise.

There are no changes in our performance ratings this month. The Top Value Model Portfolio contains Austria, Belgium, France, Germany, Hong Kong, Italy, Norway, Singapore and the United Kingdom at equal
weights.

Our current ratings suggest that these markets offer the highest expectation of long-term risk-adjusted  performance.

The Top Value Model Portfolio now holds the nine “Buy”-rated markets Austria, Belgium, France, Germany, Hong Kong, Italy, Norway, Singapore and the United Kingdom at equal weights. According to our analyses, these markets offer the highest expectation of long-term risk-adjusted performance.

Keppler’s SELL CANDIDATES (Low Value) are: Canada, Denmark, Singapore, Switzerland , U.S.A.

Keppler’s NEUTRALLY RATED MARKETS are: Austria , Australia , Japan , Netherlands, Norway, Spain, Sweden .

Remember that the overall market value is just one of many filters we should use when we review value. The seven steps we use in our reviews include

1: Are the shares traded in a good value market?
#2: Does the share trade at fair Price to Earnings and Price to Cash Flow ratios?
#3: Does the share pay a good value dividend?
#4: Do the share have a good value relative to their previous price?
#5: Does the company have rising earnings?
#6: Has the share price been rising?
#7: Is the company’s management good and is their product or service line in a wave of the future

Michael Keppler also reminds investors not to misinterpret the investment analysis implicit in the Country Selection Strategy. A country is BUY-rated based on the valuation levels reflected in the MSCI benchmark index of country. A BUY rating therefore does NOT imply that any stock in that country would be considered an attractive investment.

For more details on Keppler’s analysis, contact Roderick Cameron at 1-212-245-4304 or email roderick.cameron@kamny.com

To invest according to the Country Selection Strategy it is necessary to
construct diversified, risk-controlled, representative country portfolios in
every BUY rated country, weighting each country approximately equally in the
overall portfolio. It is not appropriate to instruct a stockbroker to simply to select stocks in the BUY rated countries.

Gary

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