Welcome!2010 Partners Meeting

October 7th 2010

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$0.00

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

$300,000.00

$350,000.00

$400,000.00

S&P 500

Aquamarine Fund Inc

Comparison of changes in $100,000 invested in Aquamarine Fund Inc. vs S&P 500

3

0%

50%

100%

150%

200%

Fund DJIU S&P 500 FT 100

Aquamarine FundCumulative Return (Net of Fees Since Inception Sep, 1997)

Year Fund S&P  500

2010 4.3% -­‐5.9%

2009 39.3% 23.5%

2008 -­‐46.7% -­‐38.5%

2007 17.0% 3.5%

2006 37.1% 13.6%

2005 7.2% 3.0%

2004 11.2% 9.0%

2003 29.5% 26.4%

2002 -­‐1.6% -­‐23.4%

2001 1.9% -­‐13.0%

2000 21.4% -­‐10.1%

1999 -­‐6.7% 19.5%

1998 26.1% 33.6%

1997 2.5%^ 5.5%^

Investment  Performance  (As  of  May  19,  2009  net  of  fees  since  inception   Sep  1997

Historical  performance  represents  Aquamarine  Fund,  Inc.  

Fund DJIU S&P  500 FT  100

Cumulative  Return 181% 29.7% 14.1% 6.6%

Annualized  Return 8.3% 2.0% 1.0% 0.5%

Trailing  12-­‐Months  Return 12.4% 5.5% 2.8% 6.4%

Performance  Expectations

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)

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.

quite confident we‟ll beat the indices over the long haul. Not sure by how much

Aquamarine  Fund  Value  Proposition

Low  /  No  management  fees

Spier  family  is  the  largest  investor   we  eat  our  own  cooking

No  performance  fees  until  fund  regains  new  highs

No  leverage,  No  margin  loans,  No  short  positions,  no  complexity

going  to  die,  so  I  will  never  go  there.

-­‐ Charlie  Munger(  Commencement  Address  to  USC  law  

school)

Before Investing, run a checklist

Take buy and sell decisions when the market is closed

Buy to hold for at least two years

Reduce toxic relationships, increase productive ones

Create Useful Partnerships

Sequence information appropriately

Maximise positive feedback loops

Invoke useful circuit breakers

Instead of a 7X, Moodys

12

Go long what China is short

- John Burbank, Passport Capital

Iron Ore Cost Curve

Source Citibank

Steel China Iron Ore Fines cfrmain China port $/tonne

London Mining

18

Allocation of Ideas Value US$ mm Total

Best of Breed 41.55 50%

Global Commodities 9.54 11%

Global For Profit Universities 6.14 7%

Other 19.04 23%Cash 7.23 9%

Total 83.5 100%

Approx. 25 positions. New positions enter the portfolio at 2-5% of capital

Q&A

25

Danke vielmals

Auf  widerluege

En  guete!