Emerging Value Capital Management EVCM

1. Emerging Value Capital Management (EVCM)

2. Slide 2 New Stock Market Terms OGK-2 example Hi Everyone. My name is Ori Eyal. It is an honor to be here. We have already seen some fantastic presentations and I am sure these will continue. I want to thank Whitney and John for organizing this great conference. In the next half hour I am going to present a framework for Global Value Investing. We will talk about some of the opportunities, but also some of the misconceptions, risks, and pitfalls to avoid. Finally, I will present 2 actionable current investment ideas that I think you will find compelling. OGK-2 example Hi Everyone. My name is Ori Eyal. It is an honor to be here. We have already seen some fantastic presentations and I am sure these will continue. I want to thank Whitney and John for organizing this great conference. In the next half hour I am going to present a framework for Global Value Investing. We will talk about some of the opportunities, but also some of the misconceptions, risks, and pitfalls to avoid. Finally, I will present 2 actionable current investment ideas that I think you will find compelling.

3. Would you like to invest in Russian power generation assets? OGK-2 example Hi Everyone. My name is Ori Eyal. It is an honor to be here. We have already seen some fantastic presentations and I am sure these will continue. I want to thank Whitney and John for organizing this great conference. In the next half hour I am going to present a framework for Global Value Investing. We will talk about some of the opportunities, but also some of the misconceptions, risks, and pitfalls to avoid. Finally, I will present 2 actionable current investment ideas that I think you will find compelling. OGK-2 example Hi Everyone. My name is Ori Eyal. It is an honor to be here. We have already seen some fantastic presentations and I am sure these will continue. I want to thank Whitney and John for organizing this great conference. In the next half hour I am going to present a framework for Global Value Investing. We will talk about some of the opportunities, but also some of the misconceptions, risks, and pitfalls to avoid. Finally, I will present 2 actionable current investment ideas that I think you will find compelling.

4. Slide 4 Would you like to invest in Russian power generation assets? OGK-2 example Hi Everyone. My name is Ori Eyal. It is an honor to be here. We have already seen some fantastic presentations and I am sure these will continue. I want to thank Whitney and John for organizing this great conference. In the next half hour I am going to present a framework for Global Value Investing. We will talk about some of the opportunities, but also some of the misconceptions, risks, and pitfalls to avoid. Finally, I will present 2 actionable current investment ideas that I think you will find compelling. OGK-2 example Hi Everyone. My name is Ori Eyal. It is an honor to be here. We have already seen some fantastic presentations and I am sure these will continue. I want to thank Whitney and John for organizing this great conference. In the next half hour I am going to present a framework for Global Value Investing. We will talk about some of the opportunities, but also some of the misconceptions, risks, and pitfalls to avoid. Finally, I will present 2 actionable current investment ideas that I think you will find compelling.

5. Slide 5 Disclaimer THIS PRESENTATION IS FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY AND SHALL NOT BE CONSTRUED TO CONSTITUTE INVESTMENT ADVICE. NOTHING CONTAINED HEREIN SHALL CONSTITUTE A SOLICITATION, RECOMMENDATION OR ENDORSEMENT TO BUY OR SELL ANY SECURITY OR OTHER FINANCIAL INSTRUMENT OR TO BUY ANY INTERESTS IN THE INVESTMENT FUNDS OR OTHER ACCOUNTS MANAGED BY EMERGING VALUE CAPITAL MANAGEMENT, LLC (�EVCM�). WE HAVE NO OBLIGATION TO UPDATE THE INFORMATION CONTAINED HEREIN AND MAY MAKE INVESTMENT DECISIONS THAT ARE INCONSISTENT WITH THE VIEWS EXPRESSED IN THIS PRESENTATION. WE MAKE NO REPRESENTATION OR WARRANTIES AS TO THE ACCURACY, COMPLETENESS OR TIMELINESS OF THE INFORMATION, TEXT, GRAPHICS OR OTHER ITEMS CONTAINED IN THIS PRESENTATION. WE EXPRESSLY DISCLAIM ALL LIABILITY FOR ERRORS OR OMISSIONS IN, OR THE MISUSE OR MISINTERPRETATION OF, ANY INFORMATION CONTAINED IN THIS PRESENTATION. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS AND FUTURE RETURNS ARE NOT GUARANTEED. This is so that the lawyers can get paid. Let quickly move on.This is so that the lawyers can get paid. Let quickly move on.

6. Executive Summary PRINCIPAL

7. Investment Terms Domicile: US/ BVI Inception: October 15, 2008 Investment Minimum: $250,000 Management Fee: 1.0% with 2 year lockup 1.5% with 1 year lockup Incentive Fee: 20.0% of profits High Water Mark: Yes Lockup: 1 year or 2 years Prime Broker: Shoreline Trading Group, LLC Custodian: J.P. Morgan & Morgan Stanley Smith Barney Fund Administrator: Meridian Fund Services, LLC Legal Counsel: Drohan Lee & Kelley, LLP Accountants/ Auditors: Fulvio & Associates, LLP

8. Ori Eyal � Portfolio Manager My background. Worked in comp-science, but did value-investing every whenever boss was away Spent 10 years developing a global investing framework. EVCM launched during the financial crisis of 2008. Best of times, worst of times� EVCM is my life dream the only �job� I ever want to do. plan to manage it for 50 years then retire. Most of my net worth invested in EVCM fund. ** Joke about small fund � they are all small now.My background. Worked in comp-science, but did value-investing every whenever boss was away Spent 10 years developing a global investing framework. EVCM launched during the financial crisis of 2008. Best of times, worst of times� EVCM is my life dream the only �job� I ever want to do. plan to manage it for 50 years then retire. Most of my net worth invested in EVCM fund. ** Joke about small fund � they are all small now.

9. Slide 9 Emerging Value Fund - Performance I came out of Deutsche Bank Asset Management where I worked at an $8B global fund, and I also worked for Guy Spier from Aquamarine fund. In 2008, I left Deutsche bank and launched Emerging Value Capital Management. We launched right around the time Lehman Brothers was collapsing. Some people said I was crazy. It was the end of the world. Certainly the end of Hedge Funds. I would go to conferences and introduce myself. I said: �I manage a small fund�. And people would say: �they are all small fund now�. However, I actually felt it was a great time to launch a fund since I was seeing really great investment opportunities around the world, everywhere I looked. As you can see, we have been doing very well. Compounding capital capital at a high rate while bearing low risks. The blue line shows our performance net to investors. The red and green lines are our two benchmarks the S&P500 and the ACWI.I came out of Deutsche Bank Asset Management where I worked at an $8B global fund, and I also worked for Guy Spier from Aquamarine fund. In 2008, I left Deutsche bank and launched Emerging Value Capital Management. We launched right around the time Lehman Brothers was collapsing. Some people said I was crazy. It was the end of the world. Certainly the end of Hedge Funds. I would go to conferences and introduce myself. I said: �I manage a small fund�. And people would say: �they are all small fund now�. However, I actually felt it was a great time to launch a fund since I was seeing really great investment opportunities around the world, everywhere I looked. As you can see, we have been doing very well. Compounding capital capital at a high rate while bearing low risks. The blue line shows our performance net to investors. The red and green lines are our two benchmarks the S&P500 and the ACWI.

10. Slide 10 Some investments � past and present I think a great way to understand a fund and an investment framework is to look at some of the investments we have made. So here you see some interesting companies that we have invested in. This is just a selection, but it gives you an idea for how we outperform. There underlying themes that immediately jump out are global companies, emerging market consumers, and commodity producers.I think a great way to understand a fund and an investment framework is to look at some of the investments we have made. So here you see some interesting companies that we have invested in. This is just a selection, but it gives you an idea for how we outperform. There underlying themes that immediately jump out are global companies, emerging market consumers, and commodity producers.

11. Framework for Global Investing All else equal, invest in the USA. Carefully research and select both the counties you companies you invest in. Don�t chase GDP growth. Global investing <> diversification Gain exposure to emerging market currencies, but hold cash in USD. Cheap assets in less efficient markets. Sell to consumers in Emerging Markets. One of the main tenets of our strategy is Global Value investing. We search the world for the best investment opportunities that we can find. There are a lot of misconceptions and myths about global investing so it is important to carefully think through why we choose to invest globally, and to realistically determine what benefits we are likely to gain from global investing.Here is a list of the main reasons that people choose to invest globally. And by the way, when I am asked why we invest globally, I often give the same list of reasons. So lets quickly go through the list and for every reason I mention, in your mind, please think to yourself if you think this is a strong or a weak argument for global investing. We will get back to this list later and see if I can change your mind on at least some of these. One of the main tenets of our strategy is Global Value investing. We search the world for the best investment opportunities that we can find. There are a lot of misconceptions and myths about global investing so it is important to carefully think through why we choose to invest globally, and to realistically determine what benefits we are likely to gain from global investing.

12. Slide 12 All else equal, invest in the USA. -This presentation is about investing globally. Buy let me start from the other point of view. Why not to invest globally? You can live a perfectly happy and wealthy life never investing outside the US. -In many ways, the US was in the past (and still is today) the best place to invest for the long term. -Despite occasional setbacks, the US offers a capitalist market economy, strong investor protections, shareholder friendly management teams, good corporate governance, stable legal/ social/ governmental structures, economic freedom, good infrastructure, a productive work force, and a large and wealthy market place. -In fact, the US is the greatest wealth creation machine the world has ever seen. When other countries want to grow their economy, the prescription from economists is fairly straightforward. �become more like the US�. Obviously I am oversimplifying, but not too much. -This chart, which I borrowed from Guy Spier�s presentation � with permission � thank you guy � is just amazing to me. The purple line is Great Britain, and the grey line is the USA. In 1800, Great Britain had a larger population and a larger GDP per capital than the US. - The greatness of the US economic system is that it was able to dramatically grow both the population size and the GDP per capital. To use a simple analogy, so we have many more people and every single person gets a bigger piece of pie. That�s what you really have to do if a country wants to become fantastically wealthy like the US. Now the amazing economic success of the US does not automatically mean that it is the best place to invest, but it does help. - Compared to this favorable US investment environment, many other countries have crushed investors every few years via a series of currency crises, debt defaults, revolutions, hyperinflations, asset confiscations, etc. While the situation in many non US markets has certainly improved, I still feel the US remains one of the safest and best places to invest. It is no coincidence that in the 2008 economic crisis, capital �flight to safety� was directed towards US government bonds. When we invest outside the US, we look for investment opportunities that are so attractive that they more than compensate us for bearing additional geo-political and macroeconomic risks. - Some people say the US is in decline. It may or may not be in relative decline, but it is certainly not in absolute long term decline. It has faced many severe challenges in its history. The civil war, the great depression, pearl harbor, the cold war. The greatness of the US system is that in the long run, it overcomes and comes out stronger. -This presentation is about investing globally. Buy let me start from the other point of view. Why not to invest globally? You can live a perfectly happy and wealthy life never investing outside the US. -In many ways, the US was in the past (and still is today) the best place to invest for the long term. -Despite occasional setbacks, the US offers a capitalist market economy, strong investor protections, shareholder friendly management teams, good corporate governance, stable legal/ social/ governmental structures, economic freedom, good infrastructure, a productive work force, and a large and wealthy market place. -In fact, the US is the greatest wealth creation machine the world has ever seen. When other countries want to grow their economy, the prescription from economists is fairly straightforward. �become more like the US�. Obviously I am oversimplifying, but not too much. -This chart, which I borrowed from Guy Spier�s presentation � with permission � thank you guy � is just amazing to me. The purple line is Great Britain, and the grey line is the USA. In 1800, Great Britain had a larger population and a larger GDP per capital than the US. - The greatness of the US economic system is that it was able to dramatically grow both the population size and the GDP per capital. To use a simple analogy, so we have many more people and every single person gets a bigger piece of pie. That�s what you really have to do if a country wants to become fantastically wealthy like the US. Now the amazing economic success of the US does not automatically mean that it is the best place to invest, but it does help. - Compared to this favorable US investment environment, many other countries have crushed investors every few years via a series of currency crises, debt defaults, revolutions, hyperinflations, asset confiscations, etc. While the situation in many non US markets has certainly improved, I still feel the US remains one of the safest and best places to invest. It is no coincidence that in the 2008 economic crisis, capital �flight to safety� was directed towards US government bonds. When we invest outside the US, we look for investment opportunities that are so attractive that they more than compensate us for bearing additional geo-political and macroeconomic risks. - Some people say the US is in decline. It may or may not be in relative decline, but it is certainly not in absolute long term decline. It has faced many severe challenges in its history. The civil war, the great depression, pearl harbor, the cold war. The greatness of the US system is that in the long run, it overcomes and comes out stronger.

13. Slide 13 Carefully research and select both the counties you companies you invest in. Ok. So all else is not equal, and we still want to invest outside the US for some of the reasons that I listed before. Which markets should we invest in and which markets should we avoid? There is no absolute answer, and it often depends on the specific investment opportunity. But here is what I have been doing at EVCM, and you should feel free to pick and choose on your own which countries you are willing to invest in. We carefully weigh many qualitative and quantitative factors when choosing in which countries we wish to invest. It is of critical importance is that we invest in stable countries with regimes that respect foreign investors and the rule of law. We also prefer to invest in countries that have embraced capitalism and have relatively free markets. We think Australia, Canada, Mexico, Israel, Korea, Europe (West and East), Taiwan, Singapore, and Hong-Kong are fairly attractive investment destinations. Japan faces structural and cultural obstacles that make us reluctant to invest there unless we see astonishing bargains. We view the lumping of the BRIC (Brazil, Russia, India, and China) countries into a single group as misleading. We like China and Brazil. While not perfect, they are making progress towards a more capitalist economy and offer reasonable investor protections. On the other hand, we think Russia needs to improve its respect for the rule of law, and therefore are not likely to invest there. We have not invested in India even though it is a potentially attractive investment destination. This is mostly because India has erected regulatory barriers that make direct investment difficult and (unlike China) few Indian companies are traded on US exchanges. Regarding China, we used to invest there, but have pretty much stopped. In the US listed Chinese company space, the level of fraud is just through the roof. There may be some good apples there, but we think very few, and we don�t want to invest against the current. Finally, a brief comment on currencies: I am not an expert on currencies. But I think it is clear that the USD, the Japanese Yen, the Euro, and the British Pound all face severe problems. I don�t know which of them is the worst � they all seem in bad shape to me. So I think it�s a reasonably safe bet that emerging market currencies and commodity country currencies will outperform developed market currencies over the long run. However � watch out for this �flight to safety� periods that hit every so often.Ok. So all else is not equal, and we still want to invest outside the US for some of the reasons that I listed before. Which markets should we invest in and which markets should we avoid? There is no absolute answer, and it often depends on the specific investment opportunity. But here is what I have been doing at EVCM, and you should feel free to pick and choose on your own which countries you are willing to invest in. We carefully weigh many qualitative and quantitative factors when choosing in which countries we wish to invest. It is of critical importance is that we invest in stable countries with regimes that respect foreign investors and the rule of law. We also prefer to invest in countries that have embraced capitalism and have relatively free markets. We think Australia, Canada, Mexico, Israel, Korea, Europe (West and East), Taiwan, Singapore, and Hong-Kong are fairly attractive investment destinations. Japan faces structural and cultural obstacles that make us reluctant to invest there unless we see astonishing bargains. We view the lumping of the BRIC (Brazil, Russia, India, and China) countries into a single group as misleading. We like China and Brazil. While not perfect, they are making progress towards a more capitalist economy and offer reasonable investor protections. On the other hand, we think Russia needs to improve its respect for the rule of law, and therefore are not likely to invest there. We have not invested in India even though it is a potentially attractive investment destination. This is mostly because India has erected regulatory barriers that make direct investment difficult and (unlike China) few Indian companies are traded on US exchanges. Regarding China, we used to invest there, but have pretty much stopped. In the US listed Chinese company space, the level of fraud is just through the roof. There may be some good apples there, but we think very few, and we don�t want to invest against the current. Finally, a brief comment on currencies: I am not an expert on currencies. But I think it is clear that the USD, the Japanese Yen, the Euro, and the British Pound all face severe problems. I don�t know which of them is the worst � they all seem in bad shape to me. So I think it�s a reasonably safe bet that emerging market currencies and commodity country currencies will outperform developed market currencies over the long run. However � watch out for this �flight to safety� periods that hit every so often.

14. Slide 14 Don�t chase GDP growth. Global Investing Myth 2: Follow the GDP growth. Go to any book store and you will find shelves of books advocating investing in emerging markets with alluring titles about China, India, and other developing countries. The main argument presented in these books is that emerging markets are going to experience rapid GDP growth and are therefore the best place to invest. The problem with this thesis is that numerous studies have shown that there is actually little correlation between GDP growth and stock market returns. Below are some charts which demonstrate this lack of correlation. If you would like further convincing then please Google: �GDP Growth and Stock Market Returns�. Why doesn�t faster GDP growth always translate into higher stock market returns? The value created by GDP growth may accrue to new firms, existing firms may dilute shareholders with equity raises, value may get stolen or lost along the way due to poor corporate governance, asset purchase prices may be high, etc. By the way, this data also highlights the folly of trying to time the stock market based on short term macro-economic predictions. Even if you get the macro predictions correct, your predictions still give you little insight as to what the stock market will do. Global Investing Myth 2: Follow the GDP growth. Go to any book store and you will find shelves of books advocating investing in emerging markets with alluring titles about China, India, and other developing countries. The main argument presented in these books is that emerging markets are going to experience rapid GDP growth and are therefore the best place to invest. The problem with this thesis is that numerous studies have shown that there is actually little correlation between GDP growth and stock market returns. Below are some charts which demonstrate this lack of correlation. If you would like further convincing then please Google: �GDP Growth and Stock Market Returns�. Why doesn�t faster GDP growth always translate into higher stock market returns? The value created by GDP growth may accrue to new firms, existing firms may dilute shareholders with equity raises, value may get stolen or lost along the way due to poor corporate governance, asset purchase prices may be high, etc. By the way, this data also highlights the folly of trying to time the stock market based on short term macro-economic predictions. Even if you get the macro predictions correct, your predictions still give you little insight as to what the stock market will do.

15. Slide 15 No correlation between GDP growth and stock market returns Global Investing Myth 2: Follow the GDP growth. Go to any book store and you will find shelves of books advocating investing in emerging markets with alluring titles about China, India, and other developing countries. The main argument presented in these books is that emerging markets are going to experience rapid GDP growth and are therefore the best place to invest. The problem with this thesis is that numerous studies have shown that there is actually little correlation between GDP growth and stock market returns. Below are some charts which demonstrate this lack of correlation. If you would like further convincing then please Google: �GDP Growth and Stock Market Returns�. Why doesn�t faster GDP growth always translate into higher stock market returns? The value created by GDP growth may accrue to new firms, existing firms may dilute shareholders with equity raises, value may get stolen or lost along the way due to poor corporate governance, asset purchase prices may be high, etc. By the way, this data also highlights the folly of trying to time the stock market based on short term macro-economic predictions. Even if you get the macro predictions correct, your predictions still give you little insight as to what the stock market will do. Global Investing Myth 2: Follow the GDP growth. Go to any book store and you will find shelves of books advocating investing in emerging markets with alluring titles about China, India, and other developing countries. The main argument presented in these books is that emerging markets are going to experience rapid GDP growth and are therefore the best place to invest. The problem with this thesis is that numerous studies have shown that there is actually little correlation between GDP growth and stock market returns. Below are some charts which demonstrate this lack of correlation. If you would like further convincing then please Google: �GDP Growth and Stock Market Returns�. Why doesn�t faster GDP growth always translate into higher stock market returns? The value created by GDP growth may accrue to new firms, existing firms may dilute shareholders with equity raises, value may get stolen or lost along the way due to poor corporate governance, asset purchase prices may be high, etc. By the way, this data also highlights the folly of trying to time the stock market based on short term macro-economic predictions. Even if you get the macro predictions correct, your predictions still give you little insight as to what the stock market will do.

16. Slide 16 Global Investing Global Investing Myth 1: Diversify by investing globally. In bad times correlations get close to one. Joke: not completely correlated (only 95%) so we did actually get some diversification. Problem: outside US declined more. Investment diversification is often cited as a good reason to invest globally. Unfortunately, in bad times, the correlations between asset prices in different countries shoot up (everything declines together). Looking back at the meltdown of 2008, it is easy to see that diversifying by investing globally is not likely to protect us in difficult times. In other words, just when you need it the most (during market meltdowns) global diversification helps the least. In fact, �flight to safety� during times if crisis actually hurts foerigh investments further so that you are better off not being diversified. Global Investing Myth 1: Diversify by investing globally. In bad times correlations get close to one. Joke: not completely correlated (only 95%) so we did actually get some diversification. Problem: outside US declined more. Investment diversification is often cited as a good reason to invest globally. Unfortunately, in bad times, the correlations between asset prices in different countries shoot up (everything declines together). Looking back at the meltdown of 2008, it is easy to see that diversifying by investing globally is not likely to protect us in difficult times. In other words, just when you need it the most (during market meltdowns) global diversification helps the least. In fact, �flight to safety� during times if crisis actually hurts foerigh investments further so that you are better off not being diversified.

17. Slide 17 Why most of my cash is USD Ok. So all else is not equal, and we still want to invest outside the US for some of the reasons that I listed before. Which markets should we invest in and which markets should we avoid? There is no absolute answer, and it often depends on the specific investment opportunity. But here is what I have been doing at EVCM, and you should feel free to pick and choose on your own which countries you are willing to invest in. We carefully weigh many qualitative and quantitative factors when choosing in which countries we wish to invest. It is of critical importance is that we invest in stable countries with regimes that respect foreign investors and the rule of law. We also prefer to invest in countries that have embraced capitalism and have relatively free markets. We think Australia, Canada, Mexico, Israel, Korea, Europe (West and East), Taiwan, Singapore, and Hong-Kong are fairly attractive investment destinations. Japan faces structural and cultural obstacles that make us reluctant to invest there unless we see astonishing bargains. We view the lumping of the BRIC (Brazil, Russia, India, and China) countries into a single group as misleading. We like China and Brazil. While not perfect, they are making progress towards a more capitalist economy and offer reasonable investor protections. On the other hand, we think Russia needs to improve its respect for the rule of law, and therefore are not likely to invest there. We have not invested in India even though it is a potentially attractive investment destination. This is mostly because India has erected regulatory barriers that make direct investment difficult and (unlike China) few Indian companies are traded on US exchanges. Regarding China, we used to invest there, but have pretty much stopped. In the US listed Chinese company space, the level of fraud is just through the roof. There may be some good apples there, but we think very few, and we don�t want to invest against the current. Finally, a brief comment on currencies: I am not an expert on currencies. But I think it is clear that the USD, the Japanese Yen, the Euro, and the British Pound all face severe problems. I don�t know which of them is the worst � they all seem in bad shape to me. So I think it�s a reasonably safe bet that emerging market currencies and commodity country currencies will outperform developed market currencies over the long run. However � watch out for this �flight to safety� periods that hit every so often.Ok. So all else is not equal, and we still want to invest outside the US for some of the reasons that I listed before. Which markets should we invest in and which markets should we avoid? There is no absolute answer, and it often depends on the specific investment opportunity. But here is what I have been doing at EVCM, and you should feel free to pick and choose on your own which countries you are willing to invest in. We carefully weigh many qualitative and quantitative factors when choosing in which countries we wish to invest. It is of critical importance is that we invest in stable countries with regimes that respect foreign investors and the rule of law. We also prefer to invest in countries that have embraced capitalism and have relatively free markets. We think Australia, Canada, Mexico, Israel, Korea, Europe (West and East), Taiwan, Singapore, and Hong-Kong are fairly attractive investment destinations. Japan faces structural and cultural obstacles that make us reluctant to invest there unless we see astonishing bargains. We view the lumping of the BRIC (Brazil, Russia, India, and China) countries into a single group as misleading. We like China and Brazil. While not perfect, they are making progress towards a more capitalist economy and offer reasonable investor protections. On the other hand, we think Russia needs to improve its respect for the rule of law, and therefore are not likely to invest there. We have not invested in India even though it is a potentially attractive investment destination. This is mostly because India has erected regulatory barriers that make direct investment difficult and (unlike China) few Indian companies are traded on US exchanges. Regarding China, we used to invest there, but have pretty much stopped. In the US listed Chinese company space, the level of fraud is just through the roof. There may be some good apples there, but we think very few, and we don�t want to invest against the current. Finally, a brief comment on currencies: I am not an expert on currencies. But I think it is clear that the USD, the Japanese Yen, the Euro, and the British Pound all face severe problems. I don�t know which of them is the worst � they all seem in bad shape to me. So I think it�s a reasonably safe bet that emerging market currencies and commodity country currencies will outperform developed market currencies over the long run. However � watch out for this �flight to safety� periods that hit every so often.

18. Slide 18 Invest in companies that cater to a billion new capitalists. The growth in the number and in the wealth of emerging market consumers is one of the most powerful secular investment themes of which we are aware. As the emerging markets population urbanizes, it rapidly embraces capitalism, creates wealth for itself, and increases its purchasing power. To profit from this trend we seek to invest in businesses that sell to emerging market consumers. The growth in the number and in the wealth of emerging market consumers is one of the most powerful secular investment themes of which we are aware. As the emerging markets population urbanizes, it rapidly embraces capitalism, creates wealth for itself, and increases its purchasing power. To profit from this trend we seek to invest in businesses that sell to emerging market consumers.

19. Framework for Global Investing All else equal, invest in the USA. Carefully research and select both the counties you companies you invest in. Don�t chase GDP growth. Global investing <> diversification Gain exposure to emerging market currencies, but hold cash in USD. Cheap assets in less efficient markets. Sell to consumers in Emerging Markets. One of the main tenets of our strategy is Global Value investing. We search the world for the best investment opportunities that we can find. There are a lot of misconceptions and myths about global investing so it is important to carefully think through why we choose to invest globally, and to realistically determine what benefits we are likely to gain from global investing.Here is a list of the main reasons that people choose to invest globally. And by the way, when I am asked why we invest globally, I often give the same list of reasons. So lets quickly go through the list and for every reason I mention, in your mind, please think to yourself if you think this is a strong or a weak argument for global investing. We will get back to this list later and see if I can change your mind on at least some of these. One of the main tenets of our strategy is Global Value investing. We search the world for the best investment opportunities that we can find. There are a lot of misconceptions and myths about global investing so it is important to carefully think through why we choose to invest globally, and to realistically determine what benefits we are likely to gain from global investing.

20. Slide 20 Investment Idea � Prisa Group I am recommending Short PRIS, long PRIS/B There is not much borrow on PRIS. I was able to short some shares at a 6.25% negative rebate after asking a few brokers. If you can borrow, great. If not, at least make sure you exchange any PRIS you own for PRIS/B. I will keep the writeup short since it is both simple and timely. There is no reason to get into details about Prisa, since I am suggesting a pair trade which negates the economic exposure to the company. PRIS is an ADR representing 4 shares of PRS SM (promotora de informa). A leading, but highly leveraged Spanish media conglomerate. PRIS/B is a convertible security that converts mandatorily into at least 4 shares of PRS SM in about 3.5 years. If PRS SM trades for under 2 Euro when PRIS/B converts, you could get up to 5.33 share of PRS SM. In addition, PRIS/B holders are entitled to receive �0.70 of minimum dividends per annum, which are cumulative until mandatory conversion subject to the existence of distributable profits. So holders of PRIS/B benefit from both dividends and strong downside protection. Despite the obvious superiority of BRIS/B over PRIS, the spread in the prices is now under 5%. 5% spread is not remotely enough. 5% does not even account for the extra dividend that PRIS/B pays and PRIS does not. Your maximum loss in the trade is therefore 5% + the negative rebate on the short. I expect that the next time Europe has macro problems or Prisa reports a weak quarter, the spread will widen dramatically. -----------------�Some more info on the PRIS/B shares: Minimum Dividend of �0.175 [note - each PRIS/B ADR owns 4 NVCS, so minimum dividend on PRIS/B is 0.70 Euro] per share to be paid annually in cash. If the�Company has sufficient distributable profits during any fiscal year, the Company�will be obligated to pay the Minimum Annual Dividend. If the Company does not�have sufficient distributable profits to pay the Minimum Dividend, the NVCS have�the right to receive the unpaid part of the Minimum Annual Dividend from the�Premium Reserve created upon issuance. We estimate this Premium Reserve to�total approximately �660 million or �1.63 per NVCS at closing. Any losses post�closing would reduce the Premium Reserve. Dividends are cumulative if not paid.�If Prisa declares a dividend on the Class A, the NVCS are to receive the same�dividend (on a 1:1 basis) in addition to the stated annual dividend of � 0.175 per share. Convertible at the option of the holder at any time into Class A Ordinary Shares on a 1:1 basis. Mandatorily convertible 3.5 years after issuance into on a 1:1 basis if Ordinary Share price at the time is at or above �2.00, on a 1:1 to 1:1.333 basis if Prisa Ordinary Shares are trading between �1.50 and �2.00, and on a 1:1.333 if Ordinary Shares are trading below �1.50�----------------------- I am recommending Short PRIS, long PRIS/B

21. Investment Idea � Willi Food I am recommending Short PRIS, long PRIS/B There is not much borrow on PRIS. I was able to short some shares at a 6.25% negative rebate after asking a few brokers. If you can borrow, great. If not, at least make sure you exchange any PRIS you own for PRIS/B. I will keep the writeup short since it is both simple and timely. There is no reason to get into details about Prisa, since I am suggesting a pair trade which negates the economic exposure to the company. PRIS is an ADR representing 4 shares of PRS SM (promotora de informa). A leading, but highly leveraged Spanish media conglomerate. PRIS/B is a convertible security that converts mandatorily into at least 4 shares of PRS SM in about 3.5 years. If PRS SM trades for under 2 Euro when PRIS/B converts, you could get up to 5.33 share of PRS SM. In addition, PRIS/B holders are entitled to receive �0.70 of minimum dividends per annum, which are cumulative until mandatory conversion subject to the existence of distributable profits. So holders of PRIS/B benefit from both dividends and strong downside protection. Despite the obvious superiority of BRIS/B over PRIS, the spread in the prices is now under 5%. 5% spread is not remotely enough. 5% does not even account for the extra dividend that PRIS/B pays and PRIS does not. Your maximum loss in the trade is therefore 5% + the negative rebate on the short. I expect that the next time Europe has macro problems or Prisa reports a weak quarter, the spread will widen dramatically. -----------------�Some more info on the PRIS/B shares: Minimum Dividend of �0.175 [note - each PRIS/B ADR owns 4 NVCS, so minimum dividend on PRIS/B is 0.70 Euro] per share to be paid annually in cash. If the�Company has sufficient distributable profits during any fiscal year, the Company�will be obligated to pay the Minimum Annual Dividend. If the Company does not�have sufficient distributable profits to pay the Minimum Dividend, the NVCS have�the right to receive the unpaid part of the Minimum Annual Dividend from the�Premium Reserve created upon issuance. We estimate this Premium Reserve to�total approximately �660 million or �1.63 per NVCS at closing. Any losses post�closing would reduce the Premium Reserve. Dividends are cumulative if not paid.�If Prisa declares a dividend on the Class A, the NVCS are to receive the same�dividend (on a 1:1 basis) in addition to the stated annual dividend of � 0.175 per share. Convertible at the option of the holder at any time into Class A Ordinary Shares on a 1:1 basis. Mandatorily convertible 3.5 years after issuance into on a 1:1 basis if Ordinary Share price at the time is at or above �2.00, on a 1:1 to 1:1.333 basis if Prisa Ordinary Shares are trading between �1.50 and �2.00, and on a 1:1.333 if Ordinary Shares are trading below �1.50�----------------------- I am recommending Short PRIS, long PRIS/B

22. Yukon Nevada Gold Corp

23. Yukon Nevada Gold Corp

24. Yukon Nevada Gold Corp

25. Yukon Nevada Gold Corp Also own: Ketza River Located in Yukon, British Columbia $10M Flow-through financing completed May 2010 to fund expanded exploration program. Targeted production from Ketza River, Yukon estimated to be 60,000 oz/year FD share count about 900M. At $0.25 / share, M-Cap = $225M. At $0.75 / share, M-Cap = $675M.Also own: Ketza River Located in Yukon, British Columbia $10M Flow-through financing completed May 2010 to fund expanded exploration program. Targeted production from Ketza River, Yukon estimated to be 60,000 oz/year FD share count about 900M. At $0.25 / share, M-Cap = $225M. At $0.75 / share, M-Cap = $675M.

26. Yukon Nevada Gold Corp