Aquamarine 14th Annual Partners Meeting New york,London Zurich

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Aquamarine Capital Annual Partnership Meetings held in New York, London and Zurich. www. AquamarineFund.com

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  • Only 3 years underperformed…
  • Amazes me how many people misunderstand the value proposition here. Good news is that there is a small proportion of people who do – and they seek me out… Only about 5 people in the world who run money this way. All of them are phenomenal people. Can introduce you some time.
  • Seen the book. Checklists: Washing hands – reduces infection rates.Aeroplanes. Works in investing too. Seek to find mistakes - & salient facts that existed at the time of the mistake. Seek to avoid
  • Why great partnerships work. Seek to find great partnerships. Put yourself in the company of the right people. Structure the conversation in the right way.
  • Aquamarine 14th Annual Partners Meeting New york,London Zurich

    1. 1. Welcome!<br />Aquamarine 14th Annual Partners Meeting<br />New York, London, Zurich<br />Guy Spier<br />Managing Partner<br />
    2. 2. Agenda<br /><ul><li>Performance review & expectations
    3. 3. Post mortem on past holdings
    4. 4. Thoughts on the economy..
    5. 5. Q&A</li></li></ul><li>
    6. 6.
    7. 7. Investment Performance (As of September 2010 net of fees since inception – Sep 1997<br />Historical performance represents Aquamarine Fund, Inc. <br />
    8. 8.
    9. 9.
    10. 10. Performance Expectations<br /><ul><li>85% of mutual funds lag the S&P 500 Index after all fees and expenses. Just 0.5% of Mutual Funds beat the Indices by over 3%. (Source: Bogle)
    11. 11. My goal is to beat the three indices over the long haul. Beating all three indices is likely to put us in the top 10% of all US mutual funds and hedge funds.
    12. 12. I’m quite confident we willbeat the indices over the long haul. Not sure by how much</li></li></ul><li>Aquamarine Fund Value Proposition<br />Low / No management fees vs. 2/20 @ some funds<br />Spier family is the largest investor – we eat our own cooking<br />No performance fees until fund regains new highs<br />No leverage, No margin loans, No short positions, no complexity<br />
    13. 13. I only make money if you make money…<br />
    14. 14. Process Adjustments<br />
    15. 15. The model I like to sort of simplify the notion of what goes on in a market for common stocks is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market. Everybody goes there and bets and the odds change based on what's bet. That's what happens in the stock market.<br /> - Charlie Munger<br />( Commencement Address to USC law school)<br />
    16. 16.
    17. 17.
    18. 18.
    19. 19. Moody’s<br />
    20. 20.
    21. 21.
    22. 22.
    23. 23.
    24. 24. Cresud: Investment considerations at purchase<br /><ul><li>Argentina: Kirschner government introduces heavy levies on agricultural exports.
    25. 25. Agricultural and other commodities have plunged.
    26. 26. Eduardo Elztain: Controversial figure both in Argentina and in the US. - Aggressive with the company shareholders.
    27. 27. Financial crisis: Developed markets hit badly. Developing markets even worse.
    28. 28. Share price has plunged: $22 to below $5 in 8 months</li></li></ul><li>Cresud: Investment considerations at purchase<br />Market Cap <br />US$ 250 million<br />$ 50 million in s/t debt. No LT. Debt: <br />EV $300 million<br />IRSA stake.<br />$250 million. <br />(Intrinsic value much higher)<br />Arable Land<br />675 mm hectares arable farm land <br /> - 280 mm hectares producing land<br />Value in Argentina: U$$500 - 5,000 per hectare. Value in the USA – as high as $30,000 per hectare.<br /> $680 million @ $1,000 per hectare<br />
    29. 29. Go long what China is short<br /> - John Burbank, Passport Capital<br />
    30. 30.
    31. 31.
    32. 32. CresudS.p.a.<br />
    33. 33. Investment Considerations at Purchase<br /><ul><li>Fairfax Financial (PremWatsa) & Wilbur Ross - 20%
    34. 34. Approx annual sales: 17-19 mm tonnes (2.6mm met coal)
    35. 35. Cash margin per ton $10
    36. 36. Moderate production costs cost producer
    37. 37. Valuation: 6.5X Cash Margin (US$ 1 billion)
    38. 38. Substantial Reserves (1.1 billion tons. 320mm met coal.)</li></li></ul><li>?<br />
    39. 39.
    40. 40.
    41. 41. International Coal<br />Projected Met Sales for 2011 = 3.1-3.5 mmt<br />
    42. 42.
    43. 43. London Mining<br />
    44. 44. Fortescue Metals Group<br />
    45. 45.
    46. 46. USA: Rail Car Loadings<br />
    47. 47. USA: Unemployment<br />
    48. 48. USA: Housing Affordability Index<br />
    49. 49.
    50. 50.
    51. 51.
    52. 52.
    53. 53. Daiwa Industries 6459 JP<br />大和冷機工業<br />
    54. 54. Daiwa Industries 6459 JP<br />大和冷機工業<br />
    55. 55. Daiwa Industries 6459 JP<br />大和冷機工業<br />
    56. 56. Japan Nikkei<br />NKY: 1981 - 2011<br />
    57. 57.
    58. 58.
    59. 59.
    60. 60. Dankevielmals<br />Auf widerluege<br />Thank you<br />

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