15 | 2023 Investment Outlook | December 12, 2022 COUNTERPOINT GLOBAL This Too Shall Pass Manas Gautam Head of Global KEY POINTS Endurance While macro factors may be driving performance over the short-term, we continue 1 to be focused on the fundamentals of our portfolio companies and their long-term compounding potential. In our view, equities will likely outperform over the long term because they provide 2 ownership in the creativity, ingenuity and productivity of hundreds of thousands of talented workers. We believe a higher cost of capital will lead to fewer market entrants and less 3 competition, which should benefit companies that have already established valuable businesses and brands. As a team, we have never maintained a market outlook and believe that basing investment decisions on macro forecasts can be a futile exercise. However, we do consider how micro and macroeconomics can impact the fundamentals and cost structures of our businesses. What We Are Seeing ƒ Rising interest rates, inflation and geopolitical tensions have led to uncertainty and character- 1 testing volatility, impacting business sentiment and driving down share prices around the world. ƒ Guidance-obsessed market participants have become increasingly fixated on short-term forecasts, losing sight of the underlying fundamentals and long-term growth potential for companies. ƒ As the Federal Reserve increases interest rates to tame inflation, we have seen the dollar strengthen year-to-date, impacting earnings power for companies that export products and services and have non-dollar-denominated sales. ƒ While these non-fundamental factors may be driving performance over the short-term, we continue to believe these headwinds are unlikely to materially impact the long-term cash generation and intrinsic value of the types of businesses we own. What We Are Doing ƒ We maintain our belief that equities will likely be the best-performing asset class over the long term as they provide ownership in the creativity, ingenuity and productivity of hundreds of thousands of talented workers. While money can be inflated, talent cannot. ƒ We do not spend a lot of time worrying about the ups and downs of the market or the forecasts of economists and pundits. Instead, we focus on the compounding potential and fundamentals of our portfolio companies. ƒ We continue to reassess the competitive advantages and qualitative characteristics of the businesses we own. Strength of customer value proposition, growth profile and earning power; track record of management team, direction and size of their moat; and short- and long-term capital needs remain primary concerns when evaluating companies.