Blue Point Investment Management

Way Points
Performance Summary
Total Return on $100,000
225000 212500 200000 187500 175000 162500 150000 137500 125000 112500 100000 87500 75000 62500 50000

Third Quarter 2013 Page 1

News In Brief
Portfolio Statistics as of 9/30/13:
32 Equity positions 9% International equities Core portfolio average holding period 2-3 years

Blue Point seeks equity-oriented growth at a reasonable price with a global perspective. During the third quarter, Blue Point, which is based on a model portfolio applied to separately managed accounts, returned an impressive 12.31% after advisory fee. Anatomy of a Home Run Nokia on the next page discusses a primary source of the quarterly outperformance. The total return of the S&P 500 during the third quarter was quarter was 5.24%. Blue Point offered clients more than twice the return offered by the total return of the S&P 500 during the third quarter. Year-to-date Blue Point has returned 24.37% while the total return of the S&P 500 was 19.79%. This means that Blue Point outperformed the benchmark by 4.58% after advisory fee.

Top 5 Equity Holdings:

8.8% Gilead Sciences 5.0% Microsoft 4.7% BorgWarner 4.5% Precision Castparts 4.4% Amazon 27.4% Net Assets

Blue Point $213,865

S&P 500 TR $137,243

Blue Points Cumulative Return

Since inception on 12/31/06, Blue Points cumulative return after advisory fee was an impressive 113.87%. During the same period the total return of the S&P 500 was 37.24%. On a $100,000 investment, the dollar value of Blue Point's cumulative return after advisory fee was $213,865.

2006 1Q07 2Q07 3Q07 2007 1Q08 2Q08 3Q08 2008 Q109 Q209 Q309 2009 Q110 Q210 Q310 2010 Q111 Q211 Q311 2011 Q112 Q212 Q312 2012 Q113 Q213 Q313

S&P 500 Index TR*

Blue Point

*Total Return (TR) calculations above include the reinvestment of dividends

Disclosures: Performance of the separate accounts can differ substantially from the actual performance of Blue Point, the model portfolio, due to timing of entry, whether account is taxable or non-taxable, and the timing of withdrawals. Past performance does not guarantee future results. The management fee schedule is as follows: 1.2% on first $1 million, 1.0% on the next $3 million, 0.85% on next $5 million. Accounts under $0.5 million are 1.5% annually. Depending on circumstance, institutional fee schedules may be negotiated. Blue Point Investment Management, LLC, is a Maryland registered investment advisor, founded in 2006. To receive a copy of the firm's Form ADV Part II, contact us at 443-600-8050.

Time Weighted Return as of 12/31/12:

1 Year Blue Point 21.69% 1 Year S&P 500 TR 16.00% 5 Year Blue Point 39.75% 5 Year S&P 500 TR 8.59%

Market Outlook
Not Everything Goes Up The upward march of equity valuations is challenged by slower earnings. Quantitative easing on its own does not create confidence. The equity markets are overdue for a correction. Shift in U.S. Energy Needs The discovery of shale gas and oil is creating a reversal of fortune. The U.S. is becoming increasingly energy independent, but more importantly a huge wave of energy infrastructure and industrial investment is occurring. Low Growth Creates a Cost Focus - In the absence of revenue and wage growth, companies and consumers are very cost sensitive. This creates demand for low price leaders, software and automation which, in turn, enhances U.S. competitiveness. Not So Rosy for the BRICs Brazil, India, Russia and China have been enormous beneficiaries of capital inflows. The magic is not lost but the wind is no longer at their backs. A lack of government reform, higher wages, and inflation are creating challenges. Equities Favored Asset Class Equities offer a claim on the earnings of real assets. Unlike money real assets cannot be printed. Fixed income is negatively impacted by more printed money.

Portfolio Manager Niall H. OMalley (443) 600-8050 niall.omalley@bluepointim.us Web site www.bluepointim.us

Copyright 2013 Blue Point Investment Management, LLC

Blue Point Investment Management

Way Points
technology on mobile devices. Nokia offers a distribution platform that is selling mobile phones to the next billion users. While there were many challenges associated with the speed of Nokias turnaround there was a material cushion from Nokia Siemens Network. The operations of Nokia Siemens Networks, while generally not profitable from an income statement perspective, created a cash cushion for Nokias turnaround. Interestingly, value investors were quite upset that Microsoft was investing in lower margin growth with the announced Nokia transaction and, as a result, Microsoft stock sold off 10%. Value investors forget that Microsofts financial

Third Quarter 2013 Page 2

The Anatomy of a Home Run Nokia

It is not every day that the second largest holding in the Blue Point portfolio goes up 40% in the premarket. What changed? Why did Microsoft announce the $7.2 billion acquisition? Microsoft is largely absent from the mobile operating systems. In 2011, the former head of Microsofts Business Division, Stephen Elop, now the CEO of Nokia, announced the all-out adoption of Microsofts mobile operating system for Nokia phones. In 2011, Microsoft committed to Nokia $250 million in platform support payments a financial life line. Technically Nokia was an independent company, but functionally it was a mission-critical joint venture. Microsofts desktop software dominance is being displaced by the convergence of and marketing resources can increase the market share of the well-received Lumia smart phones. Having a mobile operating system is critical to selling Microsofts business-oriented software and cloud computing now and in the future. Microsoft also invested in its future by reacquiring a top manager, Stephen Elop. Blue Point shares the belief that beyond the next 90 days Microsoft made a solid investment that will allow it to be a standard setter in the integration of mobile and cloud commerce. Client Profile
Individuals/Institutional (100%)

Individuals Institutional Total

Count % 94% 6% 100%

Dollar % 87% 13% 100%

THE MANAGERS CORNER

PORTFOLIO MANAGER: Niall H. OMalley (pictured) is the founder and Managing Director of Blue Point Investment Management, LLC, which manages accounts on a separate account basis. He has an MBA from George Washington University in Finance and Investments with minors in Business Law and Taxation. Prior to starting Blue Point Mr. OMalley worked for buy-side firms, consulted and worked for a top ten U.S. commercial bank. He was a Vice President of Credit & Risk Management at SunTrust Bank. Mr. O'Malley passed Level II of the Chartered Financial Analyst examination in 2005 and holds the Series 65 License from FINRA. Mr. OMalley serves on the Board and Program Committee for the Baltimore CFA Society which has over 600 members. He has served as President of the Baltimore CFA Society and continues to serve as Co-Editor of the Baltimore Business Review. Mr. OMalley has taught Investments and Equity Security Analysis as adjunct faculty at Towson University, College of Business and Economics. RESEARCH INTERNS Jeff Stein, Towson University, Candidate Bachelor of Science in Economics and Business Administration with a concentration in Finance and a minor in Political Science. Matthew Lesko, Towson University, Candidate Bachelor of Science in Business Administration with a concentration in Finance. Nolan High, Towson University, Candidate Bachelor of Science in Business Administration with a concentration in Finance and a minor in Economics. Blue Point Investment Management seeks equityoriented growth while seeking to minimize downside risk. A copy of the firms ADV Part II is available upon request. Additional Information is available at www.bluepointim.us Niall H. OMalley Blue Point Investment Management 722 Dulaney Valley Road #330 Towson, MD 21204 (443) 600-8050 niall.omalley@bluepointim.us www.bluepointim.us

Copyright 2013 Blue Point Investment Management, LLC