Roffman Miller Associates, Inc.

“We help people take charge of theirfinancial future”

Conference Agenda

• What are our thoughts on the Market?• Peter Miller, President

• Will it ever get better?• Bob Hofmann, Vice President

• What should I do?• Mark Frombach, Investment Manager

Recessions & Bear Markets

• Headlines are Bad• Banks & Financial Stocks have collapsed from the credit

crisis• Real estate values are plunging• Gas prices have gone through the roof• Consumers’ confidence lies near a 40 year low• We are in one of the worst Bear Markets in history

1969-1970 Recession

• The conglomerates were the leading stocks of the Dow whose growth was based on aggressive leveraging.

• By mid 1970 most conglomerates were out of business• Who remembers: Leasco Data, City Investing, University

Computing, Gulf & Western or Solitron Devices.• Once bottomed it took 1 ½ years to recoup most of the losses.

1973-1974 Recession

• Collapse of the “Nifty Fifty”• Bubble where the best companies reached

unrealistic levels• Once bottomed it took about 1 year and 5 months

to recoup most of the losses

1987 Bear Market

• No recession, but the market was extremely overvalued

• Black Monday-down 25%• Once bottomed it took about 1 ½ years to recoup

most of the losses.

1990-1991 Recession

• Recession with no Bear Market• 1,500 Savings & Loans (S&L) and Banks were forced to

merge or went bankrupt• Era of Greed-Michael Milken—junk bond king• Congress-Resolution Trust Company to bail out S&L’s• Once bottomed it took about 4 months to get back to its high.

2001 Recession

• Tech Bubble• September 11, 2001• 5 Years afterwards the NASDAQ was still down 60%• Once bottomed the S&P 500 took 7 years and 7 months to

recoup its losses.

2007-2008

• Real Estate Collapse• Credit Crisis• Global Recession

Bear Market -46%

Bear Market History

• Tend to come before recessions• Tend to be over well before the recession ended

Bear Market Start Bear Market End Percentage Decline

After --22% drop, percent drop to

end Bear Market

Duration of Bear Market

6/15/1948 6/13/1949 -20.57% 100% 1 yr8/2/1956 10/22/1957 -21.63% 100% 1yr 3m

12/12/1961 6/26/1962 -27.97% 79% 6.5m2/9/1966 10/4/1966 -22.18% 99% 8m

11/29/1968 5/26/1970 -36.06% 61% 1yr 6m1/11/1973 10/3/1974 -48.20% 46% 1yr9m

11/28/1980 8/12/1982 -27.11% 81% 1yr 9m8/25/1987 12/4/1987 -33.51% 66% 3m3/24/2000 9/21/2001 -36.77% 60% 1yr 6m1/4/2002 7/23/2002 -31.97% 69% 7m

10/9/2007 7/15/2008 to ? -46% to date ? ?

Summary Average 30.4% Average 75.0% 1yr 1mNon Bubble Average 27.0% Average 84.4% 1yr 1m

Post Bear Market Bounce

• Bear market is over—stock markets explode

Bear Market EndNext 12 months

(S&P 500)6/13/1949 42.07%10/22/1957 31.02%6/26/1962 32.66%10/7/1966 33.06%5/26/1970 43.73%10/3/1974 37.96%8/12/1982 59.40%12/4/1987 22.40%9/21/2001 -12.50%7/23/2002 17.94%

5 Year Periods/ Low P/E Discipline

Recession Period

Investment Time Frame

Annualized Return for 5-Year Periods

1969-1970 1968-1972 9.66%

1973-1974 1972-1976 17.81%

1981-1983 1980-1984 26.46%

1991 1990-1994 10.10%

2001 2000-2004 16.01%

Summary

• At the end of the day listen to Warren Buffet:

“I will tell you how to become rich. Be fearful when others are greedy. Be greedy when others are fearful.”