1. FOURTH QUARTER 2014
RETROSPECTIVE AND PROSPECTIVE
Deja Vu
25 Adelaide Street East, Suite 500
Toronto ON M5C 3A1

2. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 2
Sprung Investment Management our focus is to create investment portfolios for our clients that
enable them to achieve their unique, long-term investment goals. In this endeavour, we strive to act
with the utmost integrity, utilising all of our analytical skills, knowledge and intuitions.
PRIVATE CLIENT FOCUS
Sprung Investment Management is an independent discretionary investment management firm that
serves the investment needs of high net worth private clients including business owners and
entrepreneurs, professionals, family trusts, estates, and private charitable foundations.
OUR PEOPLE
At Sprung Investment Management, the investment team collectively has over 120 years of diversified
investment experience. All of our principals hold the Chartered Financial Analyst designation and as
such adhere to the CFA Institute Code of Ethics. Each has made a commitment to continuing education.
RISK PERSPECTIVE
We understand that our clients have worked hard to get where they are and we appreciate that they don’t
want to lose it. As the chosen stewards of their investment assets, our risk management approach is to
preserve their capital by purchasing under-valued securities, with a margin of safety that we expect will
deliver income and capital appreciation over the long term.
PERFORMANCE
Sprung Investment Management has a track record of low volatility of returns since company inception
in June 2005. This has served our clients well over this relatively difficult investment period that
includes the bear market of 2007- 2008. Our performance numbers are available by request.
CLIENT SERVICE
At Sprung Investment Management, satisfying our client’s financial needs is our top priority. Each and
every client is special and receives individual attention and customized investment advice based on
his/her specific objectives and risk tolerance. Our principals are always available to speak directly to
clients.
INVESTMENT STYLE
In building equity portfolios, individual security selection is based on “bottom up” research that is value-
driven and often contrarian to current popular thinking. We assess quality and continuity of return on
equity, current price relative to intrinsic value, economic value added and quality of management.
Although our typical investment horizon is two to five years, we constantly evaluate our current
holdings against new opportunities that may offer better value. Our view is that a strong sell discipline is
a critical component to long-term investment success.
Our investment approach on the fixed income side is to conduct rigorous credit analysis in the context of
future economic and interest rate expectations.

3. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 3
FORTH QUARTER 2014
RETROSPECTIVE AND PROSPECTIVE
Deja Vu
“One Two Three Four/ If I had ever been here before/ I would probably know just what to do/
Don’t You?”- Déjà Vu, Crosby Stills and Nash
Geopolitical events continued to dominate headlines and investors’ concerns through the end of 2014
and into the New Year. In the Middle East, the rise of the Arab Spring continues to foster fears of
contagion. Worsening economic conditions in Egypt, Iran’s nuclear ambitions and Syria’s obstructionist
leadership all served to increase tensions. Despite sanctions, Russian leadership exhibits no intention to
leave the Ukraine and may even be considering some interference in the Baltic region. Chinese policy
appears to be more inwardly focused as attempts are made to bring more order to the banking system
while fighting corruption on a massive scale. In the face of all these events, US policy appears to be
weak and ineffective as they head towards another election year with an embattled political system in
which agreement or consensus is unlikely.
As the Fourth Quarter progressed, economic concerns grew on a global scale. European economies
continued to exhibit signs of stagnation and fears of deflation. Germany, the primary economic engine
of Europe, reported slowing rates of production. The slower rate of growth in the Chinese economy
continued to weigh on many commodity prices. Despite the apparent oversupply of oil, Saudi Arabia
decided not to curtail production in order to support prices. This event caused crude oil prices to fall
precipitously from near $100 per barrel to nearer $60 and had a major negative impact on markets with
larger oil exposure, such as Canada. The US economy and market stood out as a refuge in this turmoil.
Canadian Dollar US Dollar
Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD
Toronto Stock
Exchange 6.1% 6.4% -0.6% -1.5% 10.6%
S&P 500 5.9% -1.4% 6.1% 8.9% 24.3% 1.8% 5.2% 1.1% 4.9% 13.7%
MSCI EAFE* 4.0% -0.6% -1.8% -0.2% 1.3% 0.0% 2.9% -6.4% -3.9% -7.3%
91 Day T-Bill 0.2% 0.2% 0.2% 0.2% 0.9%
DEX** 2.8% 2.0% 1.1% 2.7% 8.8%
CDN/US dollar -3.9% 3.5% -4.7% -3.6% -8.6%
* Europe, Asia and Far East Index
** Canadian Bond Universe Index

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The collapse in oil prices has been particularly painful to the Russian economy where nearly 65% of
their exports are related to oil and gas. The Energy Sector in the Toronto Stock Exchange fell 17% in
the quarter. As we enter 2015, it is interesting to note:
• There is a financial crisis in Russia
• We are in a period of weak oil prices
• Investors have fled into US securities and treasuries resulting in a strong US dollar…
• While currencies in emerging markets are very weak
• The Japanese and German economies are exhibiting signs of slowdown…
• While the US economy stands out as the economy expands and employment improves
• The strongest sector globally was Technology (Hardware) in 2014, and,
• The democratic President of the United States is under siege from the Republican House and
Senate
Have we not seen this before? This looks a lot like 1998!
If the analogy was perfect perhaps we would know just what to do, but some things are a lot different.
The emerging markets of the late 1990’s were the BRIC’s (Brazil, Russia, India and China) along with
the Asian Tigers (Hong Kong, Singapore, South Korea and Taiwan). Today, China is a much bigger and
more dominant player on the world stage. Also, many of the emerging economies of the late 1990’s had
fixed exchange rates but are now facing the dilemma of having floating rates at a time when they are
saddled with debt, much of it denominated in US dollars. Eventually, it was the collapse in the
Technology Sector that brought down the markets in the early 2000’s, including the US market.
Weak oil prices may yet have a damaging effect on the US economy. Oil and gas production has soared
over the last five years in the US as shale production has benefited from new techniques. The strength
in the US dollar will affect their ability to export into weaker economies with less purchasing power.
Many oil and gas companies have already announced cutbacks to dividends and capital expenditures in
the face of uneconomic prices. These cutbacks will reverberate throughout the economy as illustrated
early in 2015 as US Steel laid off 800 employees involved in the manufacture of pipe for the oil industry.
On the positive side, lower prices will put more money in consumers’ pockets. Lower prices should also
spur demand while supply shrinks as companies cut back on programs. In other words, the energy
markets remain cyclical. Where prices settle is anyone’s guess but we would surmise that ultimately
prices have to reflect the marginal costs of production. $100 per barrel may well be too high in today’s
world but $40 is likely too low. The strong, well-financed companies will survive and benefit from the
opportunity to take advantage of acquisitions at low prices as the weaker companies fail.
As we enter 2015, a number of events will be on investors’ watch lists. The United Nations Climate
Change Conference will be taking place in Paris where nations will be outlining their national goals for
moderating carbon emissions. Two very important trade negotiations are also underway: the Trans-
Atlantic Trade and Investor Partnership between the US and the European Union and the Trans-Pacific
Partnership with the involvement of the US and China. Freeing up trade will spur global economic
expansion to everyone’s benefit.

5. 25 Adelaide St. E., Suite 500, Toronto, ON M5C 3A1 | Phone: 416.607.6642 | www. SprungInvestment. com | P a g e | 5
FOURTH QUARTER 2014 FIXED INCOME COMMENTARY
“Investing should be more like watching paint dry or watching grass grow. If you want excitement,
take $800 and go to Las Vegas.” ~ Paul Samuelson
The events of the fourth quarter brought to mind the purported ancient Chinese curse, “may you live in
interesting times”: Not so much as to what actually happened, but more as to what they seem to presage.
The Federal Reserve’s (Fed) asset purchase program (quantitative easing) came to an end in October as
planned. Announcements from the Fed’s Open Market Committee (FOMC), following their meetings
during the latter part of the quarter, continued to reinforce the notion that interest rates will remain at a
low rate for an “extended period”. Nevertheless, it was clear that this may well be influenced by future
economic developments.
By quarter end, Russia appeared to be near a financial collapse. While the impact of this situation
appears to be limited to their domestic sphere at present, low oil prices, western sanctions, and outflows
of capital are all increasing the pressure on the government.
Greece will be going to the polls in a snap election called for January 25th
in order to establish whether
a consensus exists to continue with austerity measures. Post-election, it is certain that there will be
increased pressure by Greece to reopen the issue of debt relief. As much as Germany may not feel
inclined to entertain this notion, a potential Greek exit from the Euro zone will likely focus politicians’
minds towards reaching “creative” solutions.
In previous comments we sounded a note of caution regarding the mispricing of risk. In order to garner
higher yields, when compared to the paltry returns available in government securities, bond investors
have increased their exposure to high yield (formerly “junk”) bonds. In general, as demand increases for
such instruments, yields decline and investors in turn look to higher risk instruments offering yields
previously offered by less risky investments. This cycle continues until … it stops. Sometimes
catastrophically!
Twice during the quarter, there was a “wobble” in the junk bond market. In October, a short period
occurred where clients began to withdraw assets from high yield funds. In line with this reduced appetite
for risk, prices declined temporarily. The second event occurred as oil prices plummeted. In turn, the
risk profile of oil companies increased. Once again, investors moved to lower risk and reduced their
exposure to oil related, high yield instruments. These events tend to suggest that investors are becoming
more jittery about riskier assets, especially in the context of increased geopolitical uncertainty.
The total return performance of the bond market as measured by the FTSE TMX Canada Universe Bond
Index (formerly DEX Universe Bond Index) for the fourth quarter was an increase of 2.7%. The
benchmark ten-year Government of Canada bond yield declined by 0.4% to end the quarter at 1.8%.
Over the course of the quarter the Canadian dollar declined by 3.1 cents from 89.3 cents US to 86.2
cents US.

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Our Team
Michael Sprung, CFA: Chief Investment Officer
msprung@sprunginvestment.com
• Chief Investment Officer
• More than 30 years experience in Canadian Investment industry, overseeing portfolios up to $2.5B
• Senior level positions with YMG Capital Management, Goodman & Company, Ontario Teachers’ Pension Fund,
Ontario Hydro and Cassels Blaikie & Co.
• Frequent contributor to BNN-TV, Globe & Mail, National Post and Money Sense
Fred Palik, CFA: Vice President, Fixed Income
fpalik@sprunginvestment.com
• Extensive experience in fixed income management in a variety of senior positions, primarily in the insurance
and hospital sectors.
• Member of the Toronto CFA Society and the CFA Institute.
Lois O’Sullivan, CFA: Vice President
loiso@sprunginvestment.com
More that 25 years experience in investment management.
• Co-founder of Sprucegrove Investment Management, specializing in international markets.
• Senior level roles at Confed Investment Counselling and Confederation Life Insurance Company.
• Fellow of the Life Office Management Institute (FLMI), the Toronto CFA Society and the CFA Institute.
Joie P. Watts, CFA, FSCI: Vice President & Portfolio Manager
jpwatts@sprunginvestment.com
• Over 30 years of progressive experience in the securities and investment industry.
• Senior level roles at Burns Fry Limited, Merrill Lynch Canada and Nesbitt Thomson.
• Managing Director of Instinet Canada Limited for over 10 years
• CEO of Shorcan ATS Limited, a specialized marketplace for equity dealers trading as principal.
Robert D. Champion, MSEd: Vice President, Client Services
rchampion@sprunginvestment.com
• Joined Sprung Investments Management in 2012 after several years with Successful Investor Wealth
Management.
• Prior to that, he had a fifteen-year career in OEM industrial sales.
• Manager with investment-publishing division of MPL Communications in the 1980s and early 1990s. MPL
publish Investor’s Digest and Investment Reporter.
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