Table 2.1 Top Paid CEOs in 2007 CEO Firm ‘Total Compensation John Thain Merril Lynch $83.1 milion Leslie Moonves BS Corp $67.6 milion Richard Adkerson Freeport-McMoran $653 milion Bob Simpson. XTO Energy Inc. $56.6 milion Loyd Blankfein Goldman Sachs $53.9 milion Kenneth Chenault ‘American Express $51.7 milion Eugene Isenberg Nabors Industries $44.6 milion John Mack Morgan Stanley $41.7 milion Glenn Murphy Gap Inc $39.1 milion Ray Irani Occidental Petroleum $34.2 milion ‘Source: The Associated Press, “List of Highest-Paid CEOs in 2007 Table 7.1 Mutual Fund Market Cap Versus Sales. Firm Market Cap (Mil) Sales (Mil) Ratio Franklin Resources $28,258 $6,206 46 BlackRock $25,641 $4419 58 T. Rowe Price $16,635, $2,120 78 Invesco $13,148 $2,936 45 Legg Mason $9,827 $4,653 2a Janus Capital $5,746 $1,138 50 Eaton Vance $5,889 $1,018 58 Waddell & Reed $3.16 $787 40 Cohen & Steers $1,195 $273, 44 ‘Source: Morningstar.com as of December 24, 2007.Table 7.2 Brokerage Firm Market Cap Versus Sales Firm Market Cap (Mil) Sales (Mil) Ratio Goldman Sachs Group $85,230 $44,653 19 Morgan Stanley $58,336 $40,344 14 Merril Lynch $46,000 $28,835 16 Lehman Brothers $34,797 $19,400, 18 Charles Schwab $29,246 $4,745 62 TD Ameritrade $11,848 $2,177 54 Bear Stearns $10,253 $8,738 12 Raymond James $4,084 $2610 16 Lezard $2,159 $1,805 12 E*Trade $1,538 $2,250 07 Source: Morningstar.com as of December 24, 2007.7 Table 7.3 Insurance Market Cap Versus Sales Firm Market Cap (Mil) Sales (Mil) Ratio AXA, $82,439 $139,351 0.6 Metropolitan Life $46,991 $62,171 rr) Prudential Corporation $35015 $65,901 os ‘Sun Life Financial $32,138 $21,385 15 ac $30,498 $15,063 20 Principal Financial Group $18,500 $10,901 17 Lincoln National $16,135 $10,750 15 Genworth Financial $11,427 $11,751 10 Nationwide $6,544 $4,472 15 ‘Source: Morningstar.com as of December 24, 2007.Wealthiest Fee-Based OPMers Name Famous for Net worth, Edward Johnson I Fidelity $10bbillion George Soros Slew of hedge funds and tanking the $8.8 billion British Pound Charles Johnson Franklin Resources $6 billion Charles Schwab Eponymous firm $6.5 billion James Simons, Hedge funds $5.5 billion Rupert Johnson Franklin Resources $5.2 billion Edward Lampert ESL hedge fund and being $4.5 billion kidnapped Leon Black Apollo Management $4 billion Ray Dalio Money management $4 billion ‘and hedge funds Stanley Druckenmiller Tanked the Briish pound with Soros $3.5 billion Bruce Kovner Hedge funds and a harpsichord $3.8 billion Paul Tudor Jones ll Hedge funds $3.3 billion Kenneth Grifin Hedge funds: $3 billion Charles Brandes Brandes money management $2.5 billion David Shaw Hedge funds $2.5 billion Source: Matthew Miller, “The Forbes 400,” Forbes (October 8, 2007).EN TES cS For further guidance on where to baron, look at net domestic migration of productive people over 10 years. Go to the inflow states, Table 9.1 Best Land Baron States States with Highest Net Population Inflow, 1997-2006 ‘State Net inflow Florida +1,643,073 ‘Arizona +769,679 Texas +667,810 Georgia +650941 North Carolina 4+570,716 Nevada +491,325 Tennessee +258,838 South Carolina +258,109 Colorado +231,891 Washington 4+218,304 States with Highest Net Population Outflow, 1997-2006 State Net outflow New York 1,955,023 California 1,318,266 inois -727,150 New Jersey 409,409 Louisiana = 402,745 Ohio =362,601 Massachusetts ~330,657 Michigan 317,389 Pennsyivania =182,078 Connecticut 109,930 ‘Arthur B. Laffer and Stephen Moore, “Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index,” American Legislative Exchange Council (2007), Washington, DC. Page 15.Table 10.1 Average Returns Aren't Normal ‘S&P 500 Annual Occurrences Frequency Return Range Since 1926 > 4 oS : on Big Retums 30% to 40% B 159% } a7a%of the tm 20% to 30% 13 15.9% Ae 10% to 20% 16 19.5% ‘Average Returns 34.1% 0% 1 10% 2 146% J otthetime 10% t 0% 2 146% 20% to -10% 6 73% | Negative Returns 30% to -20% 3 Sr Se 40% to -20% 1 12% | thetime < 40% 1 12% Total Occurrences 2 ‘Simple Average 12.2% ‘Annualized Average 10.3% ‘Source: Global Financial Data,Years Past Current Age % Equity Benchmark Exposure ssegegags SRRASSTRRSRRESBRES ‘Current Age (years) 105 110 115 Figure 10.1 Life Expectancy ‘Source: IRS Revenue Ruling 2002 ~ 62 Mortalty Table 120%. 100%. 20% 60% 40% 20% 1 5 10 15 2 5 30 ‘Time Horizon (years) Figure 10.2 Benchmark and Time Horizon200% 700%. a ser sco . Gusci eare Som 200% ne , 400% 200% se 200% 100%] 770% ne sa a aa 9705 19808 19008 "2000-2007 Figure 10.3 Domestic and Foreign Performance Are Cyclical ‘Source: Global Financial Data, Thomson Datastream, MSCI, Inc.® as of 1261/2007 = ee ace ion am ee “Wee Se eB See ew See eS 8853888855 8838 8g Figure 10.4 Real After-Tax US 10-Year Treasury Yields 1926-2007 Source: Global Financial Data 20%: 10%. 0%: 10%: : 3 20%. 3 19264 1931 1986] 1961 1906] 1976] 1906] 1991 1996] 1981 3 Figure 10.5 Real After-Tax S&P 500 Returns 1926-2007 ‘Source; Global Financial Data 1951 sor 1981 2001 2006