55 south lake avenue suite 750 pasadena, ca 91101 phone (626) 568-2792 55 west monroe street suite...

55 South Lake Avenue Suite 750Pasadena, CA 91101Phone (626) 568-2792

55 West Monroe Street Suite 3125 Chicago, IL 60603 Phone (312) 269-1062

LOMBARDIA

PARTNERSC A P I T A L

LOMBARDIA


LLOMBARDIA OMBARDIA CCAPITAL APITAL PPARTNERS LLCARTNERS LLC

CONTRARIAN INVESTINGCONTRARIAN INVESTING

Al Polit, CFA Al Polit, CFA Managing DirectorManaging DirectorPortfolio Manager, International & Global Value EquitiesPortfolio Manager, International & Global Value Equities

http://www.dahab.com/index.html

LOMBARDIA


LOMBARDIA


DISCLOSURESDISCLOSURES

Lombardia Capital Partners LLC and employees shall have no obligation to update or amend any information or opinion contained herein, and the frequency of subsequent publications, if any, remain in the discretion of the author and the Firm.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This information discusses general market activity, industry or sector trends, or other broad-based economic, market, or political conditions and should not be construed as investment advice.

This publication does not constitute an offer or solicitation of any transaction in any securities referred to herein. Any recommendation contained herein may not be suitable for all investors. Although the information contained in the subject report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This publication and any recommendation contained herein speak only as of the date hereof and are subject to change without notice.

This report may not be reproduced, distributed, or published without the prior consent of Lombardia Capital Partners LLC.

LOMBARDIA


LOMBARDIA


“Even the intelligent investor is likely to need considerable willpower to keep from following the crowd.”

- Benjamin Graham

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LOMBARDIA


The Basics...

Intrinsic Value

Margin of Safety

The key to investment success is to look at stocks like small pieces of a

business that are up for sale like a rationale businessperson.

Offering...

Downside Protection

Capital Appreciation Potential

ABSOLUTE VALUE INVESTING - BASIC FOUNDATIONSABSOLUTE VALUE INVESTING - BASIC FOUNDATIONS

LOMBARDIA


LOMBARDIA


“...many shall be restored that now are fallen; and many shall fall that are now in honor...”

- Horace, Ars Poetica

LOMBARDIA


LOMBARDIA


““BURGERNOMICS”BURGERNOMICS”

Country

Big Mac Price

Implied PPP rate

+

Today'sExchange

Rate1 USD =

Over(+) / Under(-) Valuation against

the USD, % ++

in Local Currency

in US dollars

United States

$ 3.73 3.7300 --- 1.0000 ---

Argentina Peso 14 3.4101 3.75 4.1054 -8.6569Australia A$ 4.35 4.6134 1.17 0.9429 24.0853Brazil Real 8.71 5.5092 2.33 1.5810 47.3751Britain £ 2.29 3.6367 0.61 0.6297 -3.1285Canada C$ 4.17 4.2994 1.12 0.9699 15.4758Chile Peso 1750 3.7444 469 467.361 0.3507China Yuan 13.2 2.0402 3.54 6.4698 -45.2842Colombia Peso 8200 4.5965 2196 1783.96 23.0969

Costa RicaColones

20003.9588 536 505.200 6.0966

Czech Rep Koruna 67.6 3.8953 18.1 17.3543 4.2969Denmark DK 28.5 5.3409 7.63 5.3362 42.9856Eygpt Pound 13 2.1753 3.48 5.9761 -41.7680Estonia Kroon 32 2.7256 8.57 11.7405 -27.0048Euro area € 3.38 4.7246 0.91 0.7154 27.2016Hong Kong HK$ 14.8 1.8990 3.96 7.7936 -49.1891Hungary Forint 740 3.8509 198 192.164 3.0370

IndonesiaRupiah 22780

2.6584 6102 8568.98 -28.7897

Israel Shekel 14.9 4.3100 3.99 3.4571 15.4147Japan ¥ 320 4.0081 85.7 79.8390 7.3410Latvia Lats 1.55 3.0482 0.42 0.5085 -17.4041Lithuania Litas 7.3 2.9545 1.96 2.4708 -20.6735Malaysia Ringgit 7.05 2.3266 1.89 3.0302 -37.6279Mexico Peso 32 2.7105 8.57 11.8060 -27.4098New Zealand

NZ$ 5 4.0997 1.34 1.2196 9.8721

Norway Kroner 45 8.0826 12.1 5.5675 117.3327Pakistan Rupee 210 2.4226 56.30 86.6826 -35.0504Peru New Sol 10 3.6043 2.68 2.7745 -3.4060Philippines Peso 102 2.3627 27.3 43.1702 -36.7619Poland Zloty 8.3 2.8829 2.22 2.8790 -22.8899Russia Rouble 71 2.5068 19.0 28.3227 -32.9160

Country

Big Mac Price

Implied PPP

rate +

Today'sExchange

Rate1 USD =

Over(+) / Under(-) Valuation against

the USD, % ++

in Local Currency

in US dollars

Saudi Arabia

Riyal 10 2.6662 2.68 3.7506 -28.5448

Singapore S$ 4.23 3.4463 1.13 1.2274 -7.9355South Africa

Rand 18.5 2.6879 4.94 6.8827 -28.2258

South Korea Won 3400 3.1919 911 1065.19 -14.4754Sri Lanka Rupee 210 1.9145 56.3 109.690 -48.6735Sweden SKr 48.4 7.3401 13.0 6.5939 97.1519Switzerland SFr 6.5 7.7854 1.74 0.8349 108.4082Taiwan NT$ 75 2.5987 20.1 28.8609 -30.3556Thailand Baht 70 2.3014 18.8 30.4158 -38.1900Turkey Lire 5.95 3.6028 1.59 1.6515 -3.7239UAE Dirhams 11 2.9945 2.95 3.6734 -19.6929

UkraineHryvnia

14.51.7872 3.88 8.1131 -52.1761

Uruguay Peso 79 4.1586 21.1 18.9970 11.0702

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LOMBARDIA


Euro integration or disintegration

High public debt levels & anemic economic growth

Default insurance costs soaring

Liquidity issue or insolvent

Sovereign buyers strike

Sovereign default or restructuring

Italian & Spanish contagion

Bank capital and funding options

Upcoming bank stress tests

A second “euro”

EUROPE - MARKET CONCERNSEUROPE - MARKET CONCERNS

Italian VS. German 10-yr Bond Spreads

General Government Debt to GDP Ratio

LOMBARDIA


LOMBARDIA


EUROPE - OPPORTUNITIESEUROPE - OPPORTUNITIES

Increased transparency

Market discipline

Increasing privatization of state assets

ATTRACTIVE EQUITY VALUATIONS

LOMBARDIA


LOMBARDIA


High public debt levels (most domestically-funded)

Nuclear shutdown

Political circus

Public financial institutions

Deflation

Inefficient utilization of corporate balance sheets

Lifetime employment

“Amakudari”

Poor corporate governance

JAPAN - CONCERNSJAPAN - CONCERNS

LOMBARDIA


LOMBARDIA


Public financial institutions reform

Adoption of shareholder-friendly practices

Some unwinding of cross-shareholdings

Increased loan demand

ATTRACTIVE EQUITY VALUATIONS

JAPAN - OPPORTUNITIESJAPAN - OPPORTUNITIES

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LOMBARDIA


The unknown

Use of shell companies

Inflationary pressures

Negative real rates

Labor constraints

Chinese “white elephant” projects

Unbalanced economies

Undisciplined spending

Poor corporate governance

EMERGING MARKETS - CONCERNSEMERGING MARKETS - CONCERNS

LOMBARDIA


LOMBARDIA


In general, expensive valuations

Growth, but what is the cost and return

Conflicts of interest

Poor disclosure

Limited shareowner rights

EMERGING MARKETS – OPPORTUNITIES?EMERGING MARKETS – OPPORTUNITIES?

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LOMBARDIA


THE NEXT EMERGING MARKET?THE NEXT EMERGING MARKET?

LOMBARDIA


LOMBARDIA


Value has underperformed Growthlast 7 years

Value has outperformed Growthover long periods

Note: Results greater than one year have been annualized and data is net of withholding taxes ending 6/30/11.

MSCI EAFE VALUE VS. GROWTHMSCI EAFE VALUE VS. GROWTH

LOMBARDIA


LOMBARDIA


“Conventional wisdom is the surest path to underperformance.”

LOMBARDIA


LOMBARDIA


55 south lake avenue suite 750 pasadena, ca 91101 phone (626) 568-2792 55 west monroe street suite...

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