Corona Associates Capital Management, LLC Investment

Letter - November 2017

Dear Fellow Partners,

These last two months have marked a continuation of the
waiting and frustration we have endured for much of this year in
an on again off again fashion, this most recent period with a
decline in the Funds NAV. During our last investor call we had
stressed patience in that there were catalysts in place to
dramatically change investor perception along the lines that
would favor our portfolio including the U.S. debt ceiling
shenanigans that ended up being kicked into December from
September. All of those catalysts and more are in force today
with the market at even loftier levels. Most significantly, for the
very first time in 8 plus years, the Fed has begun reducing their
gargantuan balance sheet that has so buoyed asset prices to
bubble levels. All of our financial systems risks and fragility, our
economic weakness, and the bubble prices for nearly all risk
assets have been papered over by this 8 years of unabated
manufactured liquidity. It is this enormous liquidity spigot that is
in the process of being turned off and the results of this
cessation of liquidity will not be benign or hard to miss.
Our biggest and most underperforming asset continues to
be the gold mining sector. By some measures this sector is
currently priced at near 50 year lows while key members of this
group have recently begun to report robust earnings momentum.
We believe this sector can appreciate by 100s of percent from

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these levels before getting to a point of overvaluation which is
why we have made it a large holding and also why we continue
to endure the frustrating waiting game. We also believe that this
outcome is both likely and imminent as the market environment
for other now popular risk assets from stocks to Bitcoins have
reached unsustainable and unstable mania levels that will
ultimately undermine these assets, and in the process act to
shift capital toward sectors like gold that will benefit our
current portfolio selection.
The circumstances presently before us does not present a
garden variety of risks or opportunities. In fact the frustration of
enduring this level of portfolio volatility and underperformance
is rooted in the belief that we have before us an unprecedented
investment set up that will lead to a near certain revaluation of
gold and gold mining equities higher from current levels.
Similarly the decline that we will see from the whole spectrum
of bubble assets is not one where they will only just decline,
they will very likely crash, and in so doing create another set of
opportunities to profit both from shorting this likely crash, and
also from purchasing sound assets at bargain prices in the
aftermath of this outcome.
As the Chief Investment Officer of our Fund, I believe this
opportunity is both immediate and unprecedented and
accordingly I am taking steps to myself deploy a significant new
equity investment in our Fund during the next two weeks.
The last two months have seen a time-out of economic
reality but longer term there can be no time-out for the laws
of economic gravity. This 8 year toll of rising debt and
debasement of our currency through endless money printing

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along with a policy of official market intervention to prop up
asset prices has created a market that has embraced risk at the
most unattractive of prices just as the props that have enabled
these circumstances are being removed. The consequences of
this withdrawal will be swift, deep, and brutal. We are patiently
positioned for this outcome, and having endured this level of
frustration and pain we await our moment of gain that we are
convinced is at hand. The drama continues but we are about to
see a very different scene of risk and volatility as the 8 year
liquidity tsunami recedes.That timing horizon is here and now
and we expect to see the remaining weeks to year-end and this
early part of the New Year usher very different results for our
Fund.
As always, thank you for your continued support and confidence.

Sincerely,

John Scurci
Chief Investment Officer

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Corona Associates Capital Management, LLC1

1 Legal Disclaimer - Attention: The information contained herein is confidential and is intended
solely for the use of the intended recipient. Access, copying, distribution or re-use of this letter
by any other person is not authorized. If you are not the intended recipient please advise the
sender immediately and destroy all copies of this letter. Nothing presented herein should be
deemed to constitute a recommendation or an offer to sell any investment product. This letter
contains forward looking statements, as defined by SEC Regulation D, and the Investment Act
of 1940, which are the original ideas and best judgments of the authors. The conclusions
expressed herein are not guaranteed, and past performance is not predictive of future results.
Circular 230 Notice: Any written advice provided herein (and in any attachments) is not intended
or written to be used, and cannot be used, to avoid any penalty under the Internal Revenue
Code or to promote, market, or recommend to anyone, a transaction or matter addressed
herein. Past performance is not necessarily indicative of future results. All investments involve
risk, including the loss of principal. The views expressed herein are those of Corona Associates
Capital Management,(CACM), as of the date indicated and may change without notice. CACM
may buy or sell any security at any time and is under no obligation to provide updates to the
information contained herein. This is not a recommendation to buy or sell any security.

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