Value Investing for

Mere Mortals
Guy Spier
Aquamarine Fund Value Investing Congress October 12 &13, 2010

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

$400,000.00 $350,000.00

S&P 500
$300,000.00

Aquamarine Fund Inc

$250,000.00

$200,000.00

$150,000.00

$100,000.00

$50,000.00

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

10

13

 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 a distance from the madding crowd

Sequence information appropriately

Maximise positive feedback loops Invoke useful circuit breakers

The Obesity Epidemic

Your Friends Friends Can Make You Fat Nicholas Christakis Harvard

Its better to hang out with people better than you, Pick out associates whose behavior is better than yours and youll drift in that direction.
- Warren Buffett

Thoughts on partnerships in investing

Dont interfere in each others work Accepting of failure and error Talk about ideas not about buy / sell decisions

Respect each others confidentiality

Dont tell each other what to do Have found a financial deal that works and dont need to

revisit / reopen

Act like a great partner to find great partners

Company Name Shingakukai Clip Corporation

Market Capitalizati Enterprise on Value (US$mm) 60 $38 186 57 125 74 73 (22) (4) (32) (1.5) (28) (12) 5

Dividend Yield 4% 4% 4% 5% 3% 2% 2%

Net Cash US$ m 82 42 218 58.5 153 88 68

LTM Ebit

Industry Coaching Schools and Sports Clubs Coaching Schools Construction and Engineering Air conditioning systems Construction and Real Estate Bus Routes Gas Distribution

7.5 10.5 76 17 52 13 23

Nippon Road
Nihon Dengi Daiichi Kensetsu Corp Hokkaido Bus Company Otaki Gas Heian Ceremony Service Co.

67

4%

59

15.5

Wedding and Funeral Services

Q&A
(Merci vielmals Auf wiederluege En guete!)