THE CHINA SYNDROME The Stanley-Laman Group manages portfolios that invest in equities listed on foreign exchanges trading in local currencies across the globe. Thus, when events such as the Chinese Stock Market crash are reported, we directly experience the impact of these events and are active in both assessing and managing their impact on behalf of our investors. As we observed the news regarding China’s stock market volatility and knowing full well that the financial press thrives on sensationalism, we felt that the following observations would be useful for investors. The most significant of the pullbacks occurred in the China A-Share Market, generally

accessible only to Chinese Citizens and select institutions Prior to correcting 30%, the market was up +130% over the past year The Chinese market plunge followed moves by regulators to limit ownership of stock with

margin financing and speculation The markets have rebounded quickly While the sell-off has had a bit of a spillover effect to other Emerging Markets, it has not

been at the level of the impact on the A Share Market China reported second quarter growth of 7%, as better retail sales and factory output in

June suggest efforts to bolster the economy are gaining traction While Chinese officials are concerned about the plunge in the market, the impact on the

real economy should be limited as less than 10% of Chinese households own stocks, compared to over one third of households in developed markets

China is adding approximately 30 million new individuals to their middle class annually;

consequently, a large portion of their investing citizenry are newcomers to capital markets and are perhaps more prone to making investment decisions based on emotion, speculation and rumor (although the U.S. seems to have no shortage of this as well)

China overtook the U.S. as the World’s largest economy in real terms in 2014 ($17.6 Trillion versus $17.4 Trillion)

86% of the World’s 6.07 Billion People reside in emerging markets with China being the largest

And while growth may be slowing, we remain reasonably confident that the Chinese will continue to eat, travel, work, entertain themselves, educate their children, require clothing, etc.

The preceding represents the opinions of The Stanley-Laman Group, Ltd., a Registered Investment Advisor, and is not intended to be investment recommendations. Strategies outlined and the views expressed offer risk of loss of principal and are not suitable for all investors. Investors are advised to consult with qualified investment professionals relative to their individual circumstance and objectives. The portfolios mentioned are a private placement available to accredited investors and is sold by prospectus only.