Cumulative Return (Net of Fees Since Inception Sep, 1997)300%200%100% 0% Historical performance represents Aquamarine Fund, Inc. Returns are based on estimated results as of 12/31/07. Fund DJIU S&P 500 FT 100
Aquamarine Compound Annualized Net Returns (as of 12/31/07) Aquamarine Fund S&P 50030%20%10%0% 10-year 5-year 2-year Historical performance represents Aquamarine Fund, Inc. Returns are based on estimated results as of 12/31/07.
Aquamarine Fund Inc. Portfolio Concentration (% of net assets)120%100%80%60%40%20% 0% Top 5 Top 10 Total Invested Cash Positions Positions
Aquam arine Capital Assets Under Managem ent ($ in millions)$100 $80 $60 $40 $20 $0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 5
Aquamarine Capital Management, LLCRealized gains and losses since inception Realized Gains = $45.3 mm Realized Losses = $(1.8)
Common Characteristics Our Investment Candidates: – Are cash generative (not dependent on raising additional capital) – Have minimal or no leverage – Are run by honest management (must allocate capital well) – Publish financial reports in English – Have a very wide moat Low cost operator Pricing power/product differentiation Other sustainable competitive advantage – Have a margin of safety between market price and intrinsic value Uncommon characteristics, but can be found all over the world if one is willing to look 11
ConclusionsAlign Incentives With Investors 90% of my family’s net worth invested in the fund No significant other investments Family a substantial proportion of the fund Managers should be principals, not just agents 49
Meeting with Buffett – new share class 0% of the Assets 25% of the profits above 6% 1 year rolling lockup 50