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    Edwin A. Levy graduated from Brown University, '58. After one year at Brooklyn Law School he withdrew to join Bear Stearns & Co. in September of 1959. He rose to General Partner in charge of sales in 1970 and was named Senior Options Principal in 1975. He resigned from Bear, Stearns in 1979 to co-found Levy, Harkins & Co., Inc., and investment advisory firm as Chairman of the Board. Mr. Levy is also presently a director of FutureFuel since 2005 and World Point Terminals since 1998, both of which are listed on the NYSE. In addition he serves on the Board of the Beth Israel Medical Center in New York and the Board of the Michael J. Fox Foundation for Parkinson's Research.

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    Michael J. Harkins is a graduate of Cornell University with a B.S. in Economics, and studied graduate Economics at Columbia University. He had been an analyst with Sloate, Weisman, Murray & Co., and an investment manager with AMR Associates before cofounding Levy, Harkins. Mr. Harkins is a member of the New York Society of Security Analysts. He is a frequent contributor to Grant's Interest Rate Observer, and comments on the financial scene periodically on the McNeil/Leher Newshour, Crossfire, the Charlie Rose Program, CNN and CNBC.

We started Levy, Harkins & Co. 34 years ago with one idea in mind. We would invest our client’s money alongside our own as if the funds with us were all the money they had in the world, and keeping it was every bit as important as growing it. Over the years that has led us to search for value all over the world, but we are always mindful of a few certain truths. Nobody knows much about the future except that it is uncertain, so making sweeping forecasts just isn’t for us. And the price you pay for any investment is all important for how you do. As simple as that sounds it is amazing how often this single precept is thrown away, as today’s bond markets illustrate all over the world.

We concentrate on great companies that sell at attractive prices with proven track records as cash generators. Recessions, near depressions, crashes and other calamities have taught us that if an investment is producing much more cash when it comes out the other side of calamity than it did going in, somehow things will take care of themselves for the best.

Balanced 1980 300 million 26.55% 5753%

Year Return % (Net of Fees) Value of $1,000 Investment Compounded Return
1980 26.11 $ 1,261.10 26%
1981 8.1 $ 1,363.25 36%
1982 34.98 $ 1,840.11 84%
1983 14.32 $ 2,103.62 110%
1984 15.13 $ 2,421.90 142%
1985 22.79 $ 2,973.85 197%
1986 13.08 $ 3,362.82 236%
1987 10.02 $ 3,699.78 270%
1988 2.02 $ 3,774.51 277%
1989 17.02 $ 4,416.94 342%
1990 8.75 $ 4,803.42 380%
1991 7.32 $ 5,155.03 416%
1992 2 $ 5,258.13 426%
1993 22.8 $ 6,456.98 546%
1994 -4.19 $ 6,186.44 519%
1995 27 $ 7,856.77 686%
1996 27.3 $ 10,001.67 900%
1997 5.6 $ 10,561.77 956%
1998 -3.77 $ 10,163.59 916%
1999 159.73 $ 26,397.89 2540%
2000 -12 $ 23,230.14 2223%
2001 -3.53 $ 22,410.12 2141%
2002 -6 $ 21,065.51 2007%
2003 35.23 $ 28,486.89 2749%
2004 17.1 $ 33,358.15 3236%
2005 4 $ 34,692.47 3369%
2006 14.02 $ 39,556.36 3856%
2007 -6.86 $ 36,842.79 3584%
2008 -34.99 $ 23,951.50 2295%
2009 40.54 $ 33,661.44 3266%
2010 27.2 $ 42,817.35 4182%
2011 -1.53 $ 42,162.24 4116%
2012 9.7 $ 46,251.98 4525%
2013 26.55 $ 58,531.88 5753%

Levy Harkins Fund Philosophy

Investing is emotionally taxing. This inescapable truth does more harm to investing success than any other impediment. It is perpetually alluring, for novices and old hands alike to abandon well thought-out but disappointing strategies moments before they work, in order to chase successful strategies just as they are about to run their course. How do we avoid this peril ourselves?

First, we remember that in good times the country grows at about three percent and inflation is somewhat less than that. Therefore, anyone hoping to achieve greater than six percent gains in the investment world is assuming he is much cleverer than the country as a whole. Hoping for an investment result three or four times the country’s average growth rate on an unleveraged basis is a self-evident path to a world of trouble. In the good times, we remind our clients about this.

But there are hard times in investing and there is no denying this, not for us and not for anyone else. And how one deals with down years is sure, over time, to tell the tale in total results; the compound interest tables will see to that, so punishing are they if big losses are realized even just once or twice. Two principles have stood us in good stead. We are always mindful of price, particularly in good times. Meaning when good times roll we are ready to hold large amounts of cash idle, and we have done it many times in our thirty-four years. Great enthusiasm blinds good judgment and is deadly for future returns. And second, if you only own cash generating businesses, they never have to go hat in hand to the markets when times are bad and suffer the tremendous dilution that prevents rapid comebacks in value. Quick snap backs are easy if all you need is a change in opinion, from dire to mediocre for example, so long as the business hasn’t been compromised. This was our experience in 2008-2009, 1999 to 2001 and many times before.

Our compounded rate of return net of all fees is 12.6% from January 1, 1980 to December 31, 2013. Put another way, $100,000 invested with us in the beginning of 1980 would be $5,700,000 now. And all of this was unleveraged. To be sure it does not take taxes into account, since we cannot know every individual tax circumstance. But our long term style has, in fact, been tax advantageous and we do not see that changing. Past success is nothing like a guarantee of future performance, but if you would like to know how we did this, and whether a style like this might be attractive for you, please contact us at your earliest convenience.

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