H A W K S H A W Scuttlebutt Research - Investing with Conviction | Value Investing News shaw-capitalmanagementfactoring.com markshower

Kian Ghazi, CFA Managing Partner Hawkshaw Capital Management

THIS PRESENTATION IS FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY AND SHALL NOT BE CONSTRUED TO CONSTITUTE INVESTMENT ADVICE. NOTHING CONTAINED HEREIN SHALL CONSTITUTE A SOLICITATION, RECOMMENDATION OR ENDORSEMENT TO BUY OR SELL ANY SECURITY OR OTHER FINANCIAL INSTRUMENT OR TO BUY ANY INTERESTS IN THE INVESTMENT FUNDS OR OTHER ACCOUNTS MANAGED BY HAWKSHAW CAPITAL MANAGEMENT, LLC (“HAWKSHAW”).

HAWKSHAW OWNED STOCK IN LEARNING TREE AND LESCO AT THE TIME OF PUBLICATION (NOVEMBER 1, 2006). WE HAVE NO OBLIGATION TO UPDATE THE INFORMATION CONTAINED HEREIN AND MAY MAKE INVESTMENT DECISIONS THAT ARE INCONSISTENT WITH THE VIEWS EXPRESSED IN THIS PRESENTATION. WE MAKE NO REPRESENTATION OR WARRANTIES AS TO THE ACCURACY, COMPLETENESS OR TIMELINESS OF THE INFORMATION, TEXT, GRAPHICS OR OTHER ITEMS CONTAINED IN THIS PRESENTATION. WE EXPRESSLY DISCLAIM ALL LIABILITY FOR ERRORS OR OMISSIONS IN, OR THE MISUSE OR MISINTERPRETATION OF, ANY INFORMATION CONTAINED IN THIS PRESENTATION. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND FUTURE RETURNS ARE NOT GUARANTEED

Our Investment Strategy Just like most of you, we are value investors. We search among a targeted group of stocks for asymmetric risk/reward potential. Our mission is to establish concentrated investments in good businesses that are mis-priced as a result of what we believe are overly pessimistic expectations or underappreciated potential. We demand a high margin of safety – consisting of 3 components: Own quality businesses with high incremental returns on capital. invest only when the stock trades at a substantial discount to our conservative appraisal value. AND… Perform grass-roots, “scuttlebutt” research to help confirm (or refute) our thesis.

What is Scuttlebutt Research? Speaking with Proprietary, Non-Wall Street Contacts Customers Competitors Suppliers Other industry veterans Co-Sourcing our Company/Industry Analysis to Understand: Strengths and weaknesses Headwinds and tailwinds Level of competitiveness

„ Power of buyers and suppliers „ Barriers to entry „ Threat of substitutes Hawkshaw – a slang term from the 1800’s meaning detective. 5 I Know What Many of You Are Thinking… † “I don’t do scuttlebutt research, and my returns are just fine.” † “I’m a long term investor, not a channel checker or data point chaser.” † “It simply produces anecdotal information that creates a lot of noise.” † “It’s too time intensive relative to the usefulness of the information.” “What a man believes upon grossly insufficient evidence is an index into his desires – desires of which he himself is often unconscious.” - Bertrand Russell