The Path to a Soft Landing is a Narrow One, yet Stocks Hold Together Wealthlander Active Investment Specialist March 2023 The latest RBA statement highlights the problem of high inflation and that the path to a soft landing is a narrow one. It reiterates the RBA's commitment to pursuing a 2 - 3 % inflation target, a target which notably the current RBA leadership has never sustainably achieved. It flags further interest rate increases too, as has the Federal Reserve. Markets think a further two rate increases in Australia are needed bringing the cash rate to circa 4% and, more importantly, home loan rates beyond 6%. Home loan rates of over 6% will cause much pain to the average Australian mortgagee rolling off a fixed rate mortgage this year and make a meaningful impact on consumer discretionary spending. As such, we have already seen building approvals fall off in January and much anticipation that Australia will be heading in later 2023 for its first real housing-associated recession since the early 1990s. Much of the global economy is battling similar issues, and housing price falls. Somewhat perplexingly, equities have held up in 2023 despite belated recognition from bonds that the interest rate pressures aren't over and despite earnings margin deterioration and higher discount rates. Surely equities should have realised by now that we are heading for recession and that the cost of money has risen, so why are they so slow to get the memo? The answer to this question is critical to the path forward. So, let's consider it. There are a few potential reasons for high valuations and equity market intransigence, led by the US: (1) Corporations are still awash with cash because of the massive post-covid government stimulus and are still engaging in aggressive buybacks globally. These corporations feel the need to do something with their cash and prefer to spend it buying their stock regardless of price. (2) The price-independent "passive investor" or buyer has become dominant in markets. Passive managers don't value anything before they buy it and are price and outlook insensitive. This tends to boost market prices. (3) The amount of speculation in markets remains incredibly high. Options markets now trade over $1 trillion in notional value daily, which is greater than physical buying. Much of these are one-day or less options capable of easily moving market pricing in the short-term due to its sheer leverage and dominance! Equity markets have hence never been more casino-like and vulnerable to speculative flows. No wonder price movements defy belief in recent times and over short periods. Much of the market doesn't care whether we are in a recession in late 2023 because it's either price insensitive or only concerned with the current day's price movements. How we got to this ridiculous scenario is another story. So, it is indeed different in a meaningful way this time because of the character of market participants, but will it be different when we enter recession and earnings, and earnings margins take a more significant hit? This depends on the provision of one key factor, the actual amount of liquidity provided by central banks, commercial banks, and governments to the market. Commercial banks are and will likely be less willing to lend money to the less creditworthy when the outlook is poor, but what about governments and central banks? Governments, on the other hand, have become more fiscally irresponsible and dominant globally. They are likely to continue stimulating no matter what, given recent trends for greater government, the need for massive stimulus programs for infrastructure, climate change and increased military spending, and worsening dependency ratios and inequality. The swing factor is central banks. Suppose central banks are true to their words and are committed to getting inflation down sustainably. In that case interest rates will increase further and potentially stay higher for longer in the face of economic weakness. Quantitative tightening will suck liquidity out of the market. Given the above, the equity market is still likely to suffer and behave as it has in every other recession (assuming we get a recession, which leading indicators suggest is highly probable). The challenge for the outlook is that markets don't trust central banks to do what they say, and they have legitimate reason to be sceptical. Central banks could easily give up on tightening measures and reverse course in the face of weakening economies and rising unemployment. Equally, there is a solid case to be made given the sheer amount of debt in the global economy there isn't a realistic option for central banks to become fully responsible now. It is simply too late as the economy has been overly financialised, and without ongoing stimulus, a deflationary bust will ensue which politicised central banks can't tolerate. In other words, financial repression is needed whereby interest rates are kept artificially low to stimulate higher structural inflation to wear away high debt levels over time. This provides a potential path for equity markets to hold up and explains how it could be different this time. In our view, both the bears and bulls will be wrong and right. Central banks are first likely to cause a market accident or hard landing particularly given the nature of market participants and speculation in today's equity market, yet ultimately will be forced into a path of financial repression. It's a matter of timing. So, while cash looks attractive today, its attractiveness is likely to be somewhat fleeting. Equally equities are unattractive today but will likely provide a great buying opportunity at some point later this year. History has convincingly demonstrated that in every market sell-off investors don't buy at the bottom and become afraid to become invested. Investors hence need to be invested, but just prudently at this point in time to avoid the risks of a hard landing in the short-term while still capture the likely benefits of financial repression over time. This means being invested with truly active and dynamic management that will buy into economic and equity market weakness when it arises but is investing cautiously with low equity market exposure for now, patiently waiting for the opportunity to strike. This management style will look to take advantage of an opportunity that we know investors are not structured to achieve and will otherwise miss. You need to be in it to win it, but equally you need to ensure the journey is tolerable too. Funds operated by this manager: WealthLander Diversified Alternative Fund DISCLAIMER: WealthLander Pty Ltd is a corporate authorised representative (CAR) of Boutique Capital Pty Ltd (BCPL) AFSL 508011, CAR Number 001285158. CAR is the investment manager of the WealthLander Diversified Alternative Fund (Fund). To the extent to which this document contains advice it is general advice only and has been prepared by the CAR for individuals identified as wholesale investors for the purposes of providing a financial product or financial service under Section 761G or Section 761GA of the Corporations Act 2001 (Cth). The information herein is presented in summary form and is therefore subject to qualification and further explanation. The information in this document is not intended to be relied upon as advice to investors or potential investors. It has been prepared without considering personal investment objectives, financial circumstances or particular needs. Recipients of this document are advised to consult their own professional advisers about legal, tax, financial or other matters relevant to the suitability of this information. The investment summarised in this document is subject to known and unknown risks, some of which are beyond the control of CAR and its directors, employees, advisers or agents. CAR does not guarantee any particular rate of return or the performance of the Fund, nor do CAR and its directors personally guarantee the repayment of capital or any particular tax treatment. Past performance is not indicative of future performance. The materials herein represent a general summary of CAR's current portfolio construction approach. CAR is not constrained with respect to any investment decision-making methodologies and may vary from them materially at its sole discretion and without prior notice to investors. Depending on market conditions and trends, CAR may pursue other objectives or strategies considered appropriate and in the best interest of portfolio performance. There are risks involved in investing in the CAR's strategy. All investments carry some level of risk, and there is typically a direct relationship between risk and return. We describe what steps we take to mitigate risk (where possible) in the Fund's Information Memorandum. It is important to note that despite taking such steps, the CAR cannot mitigate risk completely. This document was prepared as a private communication to clients and is not intended for public circulation or publication or for the use of any third party without the approval of CAR. While this report is based on information from sources that CAR considers reliable, its accuracy and completeness cannot be guaranteed. Data is not necessarily audited or independently verified. Any opinions reflect CAR's judgment at this date and are subject to change. CAR has no obligation to provide revised assessments in the event of changed circumstances. To the extent permitted by law, BCPL, CAR and its directors and employees do not accept any liability for the results of any actions taken or not taken on the basis of information in this report or for any negligent misstatements, errors or omissions. This Document is for informational purposes only and is not a solicitation for units in the Fund. Application for units in the Fund can only be made via the Fund's Information Memorandum and Application Form.

Three Ways to Profit in 2023 Wealthlander Active Investment Specialist November 2022 A year ago, we communicated that inflation and geopolitical risks would dominate 2022. Early in 2022, we predicted the recession would strike within 18 to 24 months. We now expect that the outlook for 2023 will be dominated by the following economic drivers: US and global recession, volatile inflation outcomes, and continuing geopolitical risks. This provides tremendous challenges to traditional equity and property-centric portfolios and great opportunities for unconstrained active management. Let us explore three ways we expect to benefit from this outlook to position and profit in 2023. (1) Precious Metals and Other Commodities Inflation has peaked for now. Demand is in decline, and recession is looming, with cooling inflation due to weakening economic growth and the delayed effects of a rapid monetary policy tightening cycle. Inflation is not a spent force, however, and increasing inflation will likely return post-recession due to policy and geopolitical settings. At the same time, given the large structural challenges, including huge debts and fiscal deficits, central banks are unlikely to continue with sufficient tightening for long enough to prevent inflation's eventual return. Mismanagement of energy and commodity policy, low workforce participation and China's reopening will likely see higher inflation, energy and commodity prices than has been the case in many prior recessions. Geopolitical risks remain extreme, and war is a highly profitable business for some instrumental people and entities, with the Pentagon again being unable to pass an audit. The war in Ukraine is at risk of escalation and is no closer to being resolved. The Middle East remains a risk, and China and Taiwan remain unresolved. Politically the world appears to be fracturing both regionally and ideologically, and many important countries are now openly flouting US hegemony and working on deepening and developing their own trading and financial relationships. Precious metals was our favoured asset class for 2022 (and one of its top performers) and remains a must to own given the political and economic environment. Gold could easily reach new highs in 2023, offering diversification and some reasonable prospect of substantial gains. As part of a diversified portfolio, we also perceive opportunities in oil, uranium, speciality metals and food. (2) Active Management, Hedging and Shorting At the asset class and stock level we perceive numerous opportunities to preserve and add value in 2023. Equity markets are likely to be weak into an earnings recession in the first half of 2023 as decreasing earnings are not priced in and may hence provide opportunities for increased weightings as realism returns. Dynamic asset allocation enables meaningful asset class movements, such as taking advantage of the current rally to sell or hedge equities, hence owning low equity weightings today while being ready to buy equities or high-yield credit when they offer a sufficient risk premium and a better outlook. Even bonds may provide opportunities. Convertible bonds currently appear attractive as equity substitutes and offer better downside protection. Government bonds with duration have two-sided risks albeit they may still suffer under structural inflation, capital withdrawals or central banks unexpectedly holding their nerve and keeping policy tight for longer. Nonetheless, they will likely provide tactical opportunities to own small weightings. Liquid alternatives and trading strategies appear attractive for their low market sensitivity and their ability to protect capital. These include long/short approaches, relative value opportunities, contrarian trading, carbon trading and event-driven strategies. These strategies don't rely upon favourable equity markets to do well and provide a cash alternative, offering better capital preservation in weak markets. It is not necessary to lock up money for 7-10 years in illiquid alternatives to get the benefits of diversification, as liquid strategies provide attractive opportunities while so many stocks remain overvalued.. Investors in large commercial property managers like Blackstone are finding out that favourable published returns are not available to them when they want to redeem. Investors in some large Australian super funds could also potentially suffer similar issues, particularly if economic and financial market conditions further deteriorate. Stock picking will likely offer good opportunities into 2023, both long and short and even among some very large market leaders. Tesla looks to be the gift that keeps on giving on the short side, with the reality of strong competition, insider sales and lower growth in a recession bringing the company's valuation back down to earth. (We have successfully shorted Tesla more than once in 2022 and will likely do so again). Numerous still highly priced growth stocks are likely to disappoint further and will provide good hedging opportunities during market weakness in the early part of 2023. Companies like Zoom still fall into this category. Numerous "high promise" but currently unprofitable companies have had a disastrous 2022 whilst diluting shareholder equity by issuing large share and option incentives to management. Many large quality companies and household names where investors are hiding also appear overvalued; companies like McDonalds and Coca-Cola are trading at greater than 30 times earnings with modest growth and consumer sensitivity. Blackrock provides an opportunity to short passive management. Many commercial property stocks will likely be strong shorting opportunities, given the sector's disastrous outlook. Later in 2023, there may be significant opportunities on the long side in small caps and selective growth companies to play a recovery. On the long side, selective resource stocks still offer good longer-term opportunities, but many managers need to be avoided in the space due to demonstrably poor risk management and track records. If 2022 has proven anything at all about many money managers, it is that too many are like passive funds and rely upon rising markets, offering little risk management or capital preservation on the downside. Poor downside risk management can reveal who to avoid and switch away from! (3) Genuine Diversification and Differentiation Uncorrelated assets and strategies combined provide superior risk-adjusted returns to any one of the underlying components. Investing in multiple assets across various strategies provides greater downside protection. A diversified portfolio provides the owner with the knowledge that their risk is substantially lowered in a precarious and uncertain world compared to betting on any one outcome such as in equity or property risk alone. No matter how experienced you are, you never know anything for sure in this crazy world full of bad actors, and hence it is prudent to be protected from concentrated risks. We expect that markets will remain challenged in early 2023 as economic mismanagement, increased corruption and malfeasance, geopolitical, valuation, and volatile inflation and interest rate pressures continue haunting broad market outlooks. This will again prove highly challenging for passive management, which must wear all these factors to its detriment. Genuine active management, fundamental research, risk management and conservatism appear essential in this environment. We still see the end of a previously favourable period of globalisation and peaceful prosperity. Wages pressure, demographic issues and greater protectionism, regionalism, autocracy and greater socialism, along with less workforce participation, mean the labour and capital balance is shifting. Higher structural inflation and volatile inflation outcomes in coming years, along with various tail risks, must be carefully considered when building a portfolio and mean that the portfolio of the 2020s should be fundamentally different from years past. It is essential to be more conservative and have better diversification in this environment rather than simply gambling on strong financial asset returns, as the latter approach is best suited to a period that has now gone. 2022 has shown that many bottom-up investors who ignored these crucial top-down factors have been severely punished, for example, by holding large allocations to growth stocks or investing in what were traditionally defensive investments such as government bonds. Funds operated by this manager: WealthLander Diversified Alternative Fund DISCLAIMER: This Article is for informational purposes only. It does not constitute investment or financial advice nor an offer to acquire a financial product. Before acting on any information contained in this Article, each person should obtain independent taxation, financial and legal advice relating to this information and consider it carefully before making any decision or recommendation. To the extent this Article does contain advice, in preparing any such advice in this Article, we have not taken into account any particular person's objectives, financial situation or needs. Furthermore, you may not rely on this message as advice unless subsequently confirmed by letter signed by an authorised representative of WealthLander Pty Ltd (WealthLander). You should, before acting on this information, consider the appropriateness of this information having regard to your personal objectives, financial situation or needs. We recommend you obtain financial advice specific to your situation before making any financial investment or insurance decision.  WealthLander makes no representation or warranty as to whether the information is accurate, complete or up-to-date. To the extent permitted by law, we accept no responsibility for any misstatements or omissions, negligent or otherwise, and do not guarantee the integrity of the Article (or any attachments). All opinions and views expressed constitute judgment as of the date of writing and may change at any time without notice and without obligation. WealthLander Pty Ltd is a Corporate Authorised Representative (CAR Number 001285158) of Boutique Capital Pty Ltd ACN 621 697 621 AFSL No.508011.

This latest market rally provides investors with another wonderful opportunity… Wealthlander Active Investment Specialist November 2022   The latest US CPI and PPI have come below consensus expectations, precipitating an equity market recovery. Is this the opportunity of a lifetime and the start of a new bull market after months of bear market pain? Over a year ago, nearly everyone thought interest rates would have to be low for a very long time and according to central banks, inflation was transient. Hence, the shock of seeing inflation rise further and be anything but transient, combined with escalating geopolitical pressures, has turned 2022 into a harrowing year to remember. Rising inflation and escalating geopolitical risk were foreseeable. Despite this, the extent of the world's economic and political challenges has been a shock to all and sundry. However, there is genuine cause for optimism that the worst of inflation and interest rate rises are now behind us. Bulls are excited because higher interest rates and persistent inflation have been the main cause behind the market's falls. With inflation pressures easing, for now at least, there is less need for further aggressive interest rate rises hurting stock valuations and economic values. This has precipitated a fierce equity market rally and challenged a bearish consensus in October. Bear market rallies can be aggressive and substantial in scope, and seasonally the market may be stronger post-mid-term elections and into Christmas. Why then, isn't this the start of a new bull market for equities? The bulls are likely confusing a temporary market rally and opportunity with a permanent one. The lower inflation figures are not just due to a recovering supply chain but primarily due to economies slowing fast as the lagged effect of previous rate increases take their toll. Most importantly, an earnings recession is highly likely in 2023 as historically high margins continue to erode, and recession hits. Importantly, The US equity market isn't priced for recession. While risk assets may rally for a month or two, eventually they'll work out that inflation receding isn't occurring in a vacuum and that a recession is right in front of us in many countries around the world. If history is any guide, this may not only see us retest the equity market lows but possibly even break below this. To put numbers on this, S&P earnings in 2023 of 180 on a multiple of 16.5 could see the US S&P500 at 3000 in 2023, more than 25% below today's level of over 4000. While these figures and falls may appear dramatic, they are by no means unrealistic. Hence a market rallying above 4000 likely provides another incredible opportunity - potentially the last one in this cycle (I have written about this before) - for investors to sell out of traditional risk-heavy portfolios in favour of less overvalued and better-suited investment approaches and assets for today's world. The second reason the bulls may be wrong is that they continue to assume the Federal Reserve will pivot. But the FED is very unlikely to pivot today (cut interest rates) with inflation still too high, a rising stock market and loosening financial conditions unless a significant financial or economic event force them to. The latter means the market likely has to fall before a FED pivot occurs. The bulls may have their timing about a FED pivot wrong and may be entirely wrong if the FED raises further and then holds interest rates higher for longer - as they say they will. Jerome Powell has been clear that he wants to avoid making the mistake of his predecessors and ensure inflation is under control before changing track. He is emphasising the current data and not forward-looking data, having previously been heavily scarred by the FED's inaccurate economic forecasts; this is something the market doesn't seem to realise and means that the FED will likely still raise interest rates well beyond the point when they need to, again causing further damage to the economy and company earnings in 2023. The third reason why the bulls may be wrong is that they may be utterly wrong about inflation. Services inflation may be more persistent even if goods inflation recedes somewhat. The latest CPI print benefits from a one-off improvement in health insurance inflation. While inflation may recede, it is unlikely to get to target and stay there in a favourable way. If geopolitical risks escalate further in the short term, energy and supply side issues may resume, and inflation may remain sticky and come back in another wave. The boomers may continue to spend and redeem their risky assets as inflationary expectations set in and they consider their lifetimes finite. Waves of higher inflation - or alternating inflation and deflation (i.e. unstable inflation outcomes) - would likely be extremely challenging for policymakers and markets alike, given current valuation levels. It is also crucial to remember the big picture and see the forest for the trees. The world and many countries appear to be run in no small part by many bad actors, including sociopaths, autocrats, criminals and frauds with scant regard for anything but their lust and greed. Is it any surprise then that bad things are happening to us? Is this a world which can effectively address some of the most significant governance challenges of all time - some of which require global coordination, including growing diplomatic, governance, corruption and environmental challenges? Some of these bad actors want war for various reasons including the opportunity for graft and funding of their war machines - as well as to further their power ambitions and vision of how the world should look. This could quickly turn the 2020s into one of the most dangerous decades the world has ever seen as our "leaders" take huge risks. They ultimately don't provide favourable asset price policy settings! War tends to be inflationary or stagflationary and extremely wealth destructive if you're on the losing side or are occupied by enemies. Growing corruption turns previously wealthy societies into submerging markets and lowers asset valuations. Real growth is likely to be low for various reasons, including years of mal-investment, higher debt loads, ageing demographics and greater involvement of inefficient governments in capital allocation. Furthermore, we are coming off one of the biggest bubbles of all time. Much wealth destruction is still required to realign asset values (still high) with the size of the actual underlying global economy and deteriorating real wealth and purchasing power. This will likely need to occur through both higher inflation and lower asset values, as it is unlikely to occur through productive economic growth. This also probably won't happen smoothly and will be a shock to many who remain confused about why markets don't always go up, having seen nothing else during their (historically short) careers, or who take their investment advice from promotional material, young and ignorant influencers or the mainstream media. FTX is an example of what happens when you do that and a warning sign to us all. Note: To put numbers on this, S&P earnings in 2023 of 180 on a multiple of 16.5 could see the US S&P500 at 3000 in 2023, more than 25% below today's level of over 4000.  While these figures and falls may appear dramatic, they are by no means unrealistic (although are purely for demonstration purposes and do not represent forecasts). In this environment, it is naïve and foolish to bet all on believing that good things will persistently happen to traditional risk-heavy portfolios, which depend on real growth happening, higher valuation levels and markets going up persistently. While equity markets still provide selective good long opportunities, these are the exception rather than the rule meaning the index and index-like approaches (so favoured for their "cheapness") are well past their use-by date. While we can all hope for a benign and highly favourable but less likely outcome, that is no way to invest safely. Markets are far more likely to range trade, meaning long-only managers will continue to provide among the poorest risk-adjusted returns and miss out on good opportunities to short overvalued loss-making enterprises. Historically, the 2020s are more likely to look more like the 1970s or the 1940s than the 2010s. In this environment, better risk-adjusted returns will be achieved by genuine value-adding approaches and more active dynamic and long-short approaches that are better suited to today's macroeconomic conditions and which don't simply rely purely on markets going up to make money. While still capable of making returns, these strategies should be much less likely to lose substantial sums than buy-and-hold approaches - risk management and capital preservation is equally if not more important in this environment than seeking high returns Buffett famously says that when the tide goes out, you see who has been swimming naked. If your superannuation fund, broker or fund manager is charging you to provide you with significant double-digit losses so far in 2022 (as we warned may would), perhaps take the hint while you still can and look around for a better option which has adapted to today's more challenging investment environment. 2022 is a year in which many are flying blind and as for years before that - well any fool can make money in a bull market and many fools did. Seek genuine diversification and preference good risk managers over speculation because the future is uncertain and risky. There will always be great opportunities to make money over time as the world changes, but this is most likely for those who (like it or not) assess and admit to what is going on with the world today. Avoiding and reducing the risk of significant losses is an excellent place to start. Funds operated by this manager: WealthLander Diversified Alternative Fund DISCLAIMER: This Article is for informational purposes only. It does not constitute investment or financial advice nor an offer to acquire a financial product. Before acting on any information contained in this Article, each person should obtain independent taxation, financial and legal advice relating to this information and consider it carefully before making any decision or recommendation. To the extent this Article does contain advice, in preparing any such advice in this Article, we have not taken into account any particular person's objectives, financial situation or needs. Furthermore, you may not rely on this message as advice unless subsequently confirmed by letter signed by an authorised representative of WealthLander Pty Ltd (WealthLander). You should, before acting on this information, consider the appropriateness of this information having regard to your personal objectives, financial situation or needs. We recommend you obtain financial advice specific to your situation before making any financial investment or insurance decision.  WealthLander makes no representation or warranty as to whether the information is accurate, complete or up-to-date. To the extent permitted by law, we accept no responsibility for any misstatements or omissions, negligent or otherwise, and do not guarantee the integrity of the Article (or any attachments). All opinions and views expressed constitute judgment as of the date of writing and may change at any time without notice and without obligation. WealthLander Pty Ltd is a Corporate Authorised Representative (CAR Number 001285158) of Boutique Capital Pty Ltd ACN 621 697 621 AFSL No.508011.