From the Desk of Irwin Michael – May 1, 2015 The past few weeks have been turbulent for stocks, which were mainly driven by the myriad of corporate earnings reports and to some extent, more dovish comments by the U.S. Fed. It seems that with lower than targeted inflation, there is no rush to raise interest rates. Additionally, oil prices have been creeping higher well above their lows, which is aprime factor driving the Canadian dollar higher versus the $US. Consequently, we have been opportunistic in hedging most of the ABC Funds’ U.S. dollar exposure through forward contracts. This action gives us considerable comfort with our U.S. stock holdings. A number of our American holdings include: SVB Financial Group, a regional California bank specializing in loans to technology, biotech, private equity and venture capital, while offering a full suite of daily banking and financial service needs.We like that SVB has a diversified loan portfolio with high credit quality and strong loan growth. SVB is held in two ABC Funds: ABC American-Value and the ABC North American Deep-Value Fund. Pepsico Inc., is a well-known global food and beverage company that markets manybrands under its Frito Lay and Pepsi segments. Frito Lay includes many familiar household names from Lays potato chips and Doritos to Quaker oatmeal.The Pepsi segment known for its line of Pepsi and Diet Pepsi offers many variations of its soda-based drinks as well as juices, sports drinks and bottled water. Pepsi free cash flows and has regularly increased its dividend and continues to buy back stock. More importantly, Pepsi has demonstrated consistent earnings power while holding a dominant market position in many of its key brands. We believe Pepsi should continue to perform well. Pepsi is held in the ABC American-Value Fund. East West Bank Corp., Inc., a Pasadena, California-based bank offers a wide selection of banking products and services to retail and commercial clients. We particularly like that EWBC specializes in the U.S as well as the Asian market. Aside from its 130 branches in the U.S., the company has 5 full-service branches in Hong Kong, Shanghai, Shantou, and Shenzhen; and 5 representative offices in Beijing, Chongqing, Guangzhou, Xiamen, and Taipei. East West Bank is held in the ABC Dirt-Cheap Stock Fund. Google Inc., is the clear leader in Internet searches deriving its revenue from ad placements online. Google has proven itself year after year by reporting top and bottom line growth while significantly building cash on its pristine balance sheet. The company is also focused on R&D in an effort to remain innovative and has developed its own pipeline of new and improved products. Google also has a dominant market share in mobile operating systems, which has become a huge growth area for attracting increased advertising. Other areas under the Google banner include YouTube and its popular Google Map intelligence. Google has been producing a considerable stream of free cash flow each year which we expect will either be returned to shareholders via dividends or reinvested in the business. Google is held in the ABC Fundamental Value Fund and the ABC American-Value Fund. Microsoft Corporation, is known for its world class operating system, Windows. The company develops, licenses, markets, and supports software, services, and devices worldwide. Its Computing and Gaming Hardware segment provides Xbox gaming and entertainment consoles and accessories and is a leader among the growing gaming market. We like the company’s earnings and free cash flow power and its strong hold on the operating system for the personal and commercial use market. Additionally, we see Microsoft as a key player in the cloud computing market, which is poised to grow for years to come. Microsoft is held in the ABC Fully-Managed Fund and the ABC American-Value Fund. While it has been a very busy month for corporate earnings and we have been witnessing more volatility than usual, we remain very focused on our search for free cash flowing, fundamentally sound businesses for our ABC funds. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.