ACCREDITED INVESTORS ONLY Karnavas Partners, L.P. › files › Microsoft...From June 7, 2000, Inception, through December 31, 2014 Performance June 2000 – December 2014 Karnavas

Karnavas Partners, L.P.Karnavas Partners, L.P.

Value InvestingValue Investing

Margin of Safety, Rationality, Avoiding the CrowdMargin of Safety, Rationality, Avoiding the Crowd

ACCREDITED INVESTORS ONLY

MARK A. KARNVAS, CPA, MTMARK A. KARNVAS, CPA, MT

KARNAVAS VALUE MANAGEMENT, INC.KARNAVAS VALUE MANAGEMENT, INC.

January 2015January 2015

Karnavas Partners, LP8600 Seminole Street Philadelphia, PA 19118

Phone/Text (484) 470-8792 | E-Mail: [email protected]

KARNAVAS PARTNERS, L.P.Executive Summary

Investor Disclosure

This presentation has been prepared from original sources and data believed to be reliable; however, norepresentations are made as to the completeness thereof. This summary has been prepared solely as apreliminary document to provide investors with the opportunity to determine their preliminary interestregarding an investment in Karnavas Partners, L.P., (The “Fund”) described herein and may not be used orreproduced for any other purpose. An offer or solicitation for the Fund will be made only through the Fund’sPrivate Placement Memoranda (The “ Private Placement Memoranda ” ) and Partnership Agreement (the“Partnership Agreement”), and will be subject to the terms and conditions contained in such documents.

This summary does not constitute an offer to sell or buy any securities and may not be used or relied upon inconnection with an offer or sale of securities or other interests. Please see ‘Disclosure and Risk Notification’section on pages 25 and 26 for further investor disclosure information.

Karnavas Value Management, Inc. 2


KP S&P 500

CUMULATIVE RETURN 362% 92%

AVERAGE ANNUAL RETURN 24.96% 6.34%

COMPOUNDED ANNUAL RETURN 11.14% 4.62%

ALPHA (ANNUALIZED) 7.40% -

BETA 0.93 -

Karnavas Partners, L.P.Karnavas Partners, L.P.Gross Performance StatisticsGross Performance Statistics

From June 7, 2000, Inception, through December 31, 2014From June 7, 2000, Inception, through December 31, 2014

Performance June 2000 – December 2014

Karnavas Value Management, Inc.

BETA 0.93 -

STANDARD DEVIATION 20.17% 15.82%

CORRELATION 0.70 -

SHARPE RATIO 0.54 0.10

R-SQUARED 0.50 -

RISK FREE RATE 1.65% -

MAXIMUM DRAWDOWN -59% -53%

MONTHS TO RECOVERY 46 49

YEARS 14.5 14.5

3


% Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec TotalS&P 500

2000 - - - - - -0.77 0.28 2.83 2.49 -3.78 -0.61 2.94 3.24 -6.50

2001 10.07 -0.01 -3.11 -0.35 1.73 2.49 -0.81 -0.62 -4.76 -1.90 5.23 6.13 13.97 -11.89

2002 0.68 -0.12 4.12 3.97 4.59 3.63 -14.88 0.23 -6.00 5.04 4.12 -1.91 1.50 -22.10

2003 2.69 -2.87 -0.48 9.45 7.85 5.53 5.15 5.34 2.90 9.93 2.42 5.97 68.16 28.68

Karnavas Partners, L.P.Karnavas Partners, L.P.Monthly Gross Performance Since Inception through December 31, 2014Monthly Gross Performance Since Inception through December 31, 2014

Average Annual Return = 24.96%Average Annual Return = 24.96%

Performance June 2000 – December 2014

Karnavas Value Management, Inc.

2004 3.95 0.92 0.55 -2.47 -0.83 1.02 -2.45 -1.32 3.43 2.27 8.57 4.54 19.11 10.88

2005 -2.78 4.88 -5.05 -3.77 2.53 3.00 3.47 -0.02 3.03 -3.98 3.07 4.34 8.28 4.91

2006 5.53 -0.12 4.82 5.28 -4.96 1.10 1.92 0.79 0.19 8.14 0.89 2.25 28.33 15.79

2007 1.20 0.24 1.57 3.30 0.49 0.96 -1.46 -1.97 0.79 2.22 -7.57 -2.75 -3.44 5.49

2008 1.39 -6.91 -6.37 -5.15 3.41 5.41 -9.88 -4.32 -9.50 -16.10 -10.19 4.94 -43.65 -37.00

2009 -9.60 -14.49 8.89 18.91 11.11 -3.49 14.80 9.55 10.23 -8.69 1.29 8.02 48.59 26.46

2010 3.38 -1.05 15.17 6.61 -13.82 -9.36 6.72 -8.53 11.65 4.66 13.80 2.00 29.85 15.05

2011 1.66 3.72 0.14 -1.15 -5.56 -2.75 -2.69 -8.79 -7.99 11.01 -1.24 1.22 -13.16 2.12

2012 6.23 4.22 1.35 -2.16 -9.85 7.20 -1.39 3.45 2.50 1.97 4.46 10.15 30.11 16.00

2013 5.81 -0.88 7.46 -2.46 3.42 -3.08 7.48 -4.88 3.52 2.87 4.10 4.64 30.68 32.30

2014 -4.65 7.25 1.47 -2.47 0.11 3.26 -5.01 4.36 -10.73 -1.65 -0.51 -0.38 -9.50 13.69

43333


Fundamental Values Investment Perspective

Karnavas Partners, L.P. is dedicated to the tradition of value equity investing. The Fundseeks to preserve capital while achieving superior long term results. Its value investmentdiscipline strives to identify, invest in and capitalize on significant discrepancies betweenstock market prices and the real value of publicly traded companies. This emphasis onreal value provides a margin of safety, which reduces downside risk and providessuperior long-term performance. Its motto is:

“If we can buy $1.00’s worth of assets for 50 cents, something good may happen.”


for 50 cents, something good may happen.”

The Partnership seeks to invest in a wide range of companies over a 2 - 4 yearinvestment horizon with the intent of owning each company until its value is realized.This global, long-biased, multi-cap value equity investment strategy has a low correlationwith overall equity markets. Short opportunities may be employed in cases of extremeover-valuation or opportunistic arbitrage transactions. Specific long positions are nothedged. All investment activities are directed by Mark A. Karnavas.

Mark Karnavas’ confidence and conviction in forming Karnavas Partners comes fromover thirty years of broad experience in the investment/finance profession, his family’smulti-generation investment experience and the writings of Warren Buffett, BenjaminGraham, Phillip Fisher, David Dreman, John Neff, Martin Whitman, among others.


Fund Overview Investment Perspective

v Inception of Fund: June 7, 2000

v Long Bias: Target 100% net long, 0% net short. Balance sheetorientation, value driven.

v Short positions primarily in extreme valuations and mergerarbitrage situations in order to bring sales forward.

v Performance: Cumulative return: 362% through 12/31/2014.


v Performance: Cumulative return: 362% through 12/31/2014.

• Long Positions. Wide range of positions generally focused onmostly U.S. Equities.

• Short Positions. Cases of extreme over-valuation or mergerarbitrage situations.

v Overall portfolio is comprised of up to 48 companies that arepriced at significant discounts to their estimated intrinsic value.


Fund and Strategy Overview Investment Perspective

Investment ObjectivesInvestment Objectives

v Capital preservation; minimize risk of significant capital loss.v Superior long-term capital appreciation.

StrategyStrategy andand ProcessProcess

v Identify companies that sell for substantially less than their intrinsic value.v Determine intrinsic value by reading financial statements and other public filings in

comparison to other companies.


comparison to other companies.v Utilize value metrics to benchmark progress by way of trends in book value,

earnings, cash flow, return on owners’ equity, etc.

PortfolioPortfolio CharacteristicsCharacteristics

v Go wherever the value trail leads, often in boring, dull, forgotten industries.v Up to 50 positions, with most positions less than 5% of fund.v Low turnover, low leverage, tax efficient.v Few short positions currently.


MANAGEMENT OF PARTNERSHIPMANAGEMENT OF PARTNERSHIPvv Mark A. Karnavas manages the partnership through Karnavas Value Management, Inc., a whollyMark A. Karnavas manages the partnership through Karnavas Value Management, Inc., a wholly--owned corporation.owned corporation.

BACKGROUNDBACKGROUNDvv Karnavas Value Management, Inc., Philadelphia, PennsylvaniaKarnavas Value Management, Inc., Philadelphia, Pennsylvaniavv 1999 1999 –– PresentPresentvv Organized and currently manages Karnavas Partners, LP Organized and currently manages Karnavas Partners, LP vv Security analysis and portfolio managementSecurity analysis and portfolio management

vv Mark A. Karnavas, P.C., Philadelphia, Pennsylvania.Mark A. Karnavas, P.C., Philadelphia, Pennsylvania.vv September, 1987 September, 1987 –– 19991999vv Organized and managed CPA firmOrganized and managed CPA firmvv Registered Investment AdvisorRegistered Investment Advisor

Firm Management Mark A. Karnavas


vv Registered Investment AdvisorRegistered Investment Advisor

vv Grant Thornton (an international accounting firm), Philadelphia, Pennsylvania.Grant Thornton (an international accounting firm), Philadelphia, Pennsylvania.vv January, 1984 January, 1984 -- August, 1987August, 1987vv Financial statement auditingFinancial statement auditingvv Financial consultingFinancial consultingvv Tax preparationTax preparation

EDUCATIONEDUCATIONvv VILLANOVA UNIVERSITYVILLANOVA UNIVERSITY, Villanova, Pennsylvania., Villanova, Pennsylvania.vv Masters Degree in Taxation May, 1994.Masters Degree in Taxation May, 1994.vv BOSTON UNIVERSITY (School of Management)BOSTON UNIVERSITY (School of Management), Boston, Massachusetts., Boston, Massachusetts.vv Bachelor of Science Degree in Business Administration, May, 1982. Cum Laude. Bachelor of Science Degree in Business Administration, May, 1982. Cum Laude. vvTHE HOTCHKISS SCHOOL, THE HOTCHKISS SCHOOL, Lakeville, ConnecticutLakeville, ConnecticutvvJune, 1978June, 1978


vv MarginMargin ofof SafetySafety

BenBen GrahamGraham introducedintroduced thethe conceptconcept ofof marginmargin ofof safetysafety toto thethe investmentinvestment worldworld.. ToTo Graham,Graham,thethe definingdefining characteristiccharacteristic ofof anan investmentinvestment waswas thatthat itit possessedpossessed aa marginmargin ofof safety,safety, thethedifferencedifference betweenbetween aa securitysecurity’’ss investmentinvestment worthworth andand itsits marketmarket priceprice.. TheThe marginmargin ofof safetysafetyprovidesprovides thethe potentialpotential futurefuture appreciationappreciation andand atat thethe samesame timetime itit cushionscushions thethe downsidedownside riskrisk..

vv RationalityRationality

WhenWhen investorsinvestors getget emotional,emotional, theythey makemake poorpoor investmentinvestment decisionsdecisions;; theythey purchasepurchase securitiessecurities

Investment Philosophy Portfolio Management

Margin of Safety = Fundamental Investment Value - Market Price


WhenWhen investorsinvestors getget emotional,emotional, theythey makemake poorpoor investmentinvestment decisionsdecisions;; theythey purchasepurchase securitiessecuritieswhenwhen thethe consensusconsensus isis encouragingencouraging andand thethe priceprice isis high,high, andand theythey sellsell whenwhen thethe outlookoutlook isischallengingchallenging andand thethe priceprice isis lowlow.. BuyBuy high,high, sellsell low,low, loselose moneymoney.. ByBy researchingresearching companiescompaniesandand settingsetting buy/sellbuy/sell targetstargets basedbased onon thatthat research,research, wewe avoidavoid thethe emotionsemotions thatthat areare sosodetrimentaldetrimental toto investinginvesting andand forceforce thethe investmentinvestment processprocess toto bebe rationalrational..

vv AvoidingAvoiding TheThe CrowdCrowd

InIn 18961896,, GustaveGustave LeLe BonBon wrotewrote thethe seminalseminal treatisetreatise onon groupgroup behaviorbehavior entitled,entitled, TheThe CrowdCrowd.. InInit,it, hehe describesdescribes whatwhat happenshappens toto aa groupgroup ofof individualsindividuals whenwhen theythey formform aa crowdcrowd.. HisHisconclusionconclusion isis thatthat anan individualindividual’’ss logiclogic getsgets subsumedsubsumed byby thethe emotionemotion ofof thethe crowdcrowd.. CrowdsCrowds dodonotnot thinkthink logically,logically, theythey thinkthink emotionallyemotionally.. TheThe marketmarket isis aa crowdcrowd.. InIn thethe shortshort--termterm itit movesmovesbasedbased onon emotionemotion.. ToTo followfollow thethe emotionemotion ofof thethe market,market, oneone willwill almostalmost alwaysalways loselose.. Often,Often,thethe bestbest investmentinvestment opportunitiesopportunities areare thosethose thatthat areare overlookedoverlooked oror ignoredignored..


vv AA companycompany hashas aa fundamentalfundamental intrinsicintrinsic valuevalue thatthat maymay oror maymay notnot bebe equalequal toto itsitscurrentcurrent stockstock priceprice..

vv TheThe surestsurest andand safestsafest wayway toto makemake moneymoney inin thethe marketmarket isis toto ownown thosethosecompaniescompanies thatthat sellsell forfor substantiallysubstantially lessless thanthan theirtheir fundamentalfundamental intrinsicintrinsic valuevalue..

vv MarketsMarkets areare oftenoften inefficientinefficient..

Core Beliefs Portfolio Management


vv TheThe futurefuture isis unpredictableunpredictable andand unknowableunknowable.. RelyRely onon whatwhat youyou knowknow currentlycurrently..

vv IndependenceIndependence ofof thought,thought, whichwhich oftenoften meansmeans goinggoing againstagainst thethe crowd,crowd, isis essentialessentialforfor successfulsuccessful investinginvesting..

vv TheThe greatergreater thethe universeuniverse ofof potentialpotential investmentsinvestments thethe greatergreater thethe chancechance ofofachievingachieving superiorsuperior investmentinvestment returnsreturns..


IdeaGeneration

1

Sell/No Action

6

Investment Process Portfolio Management


MonitorPortfolio

5

DetermineFundamental

Value

2

SetBuy/SellTarget

3

TradeExecution

4


Investment Process Portfolio Mangement

vv IdeaIdea GenerationGeneration:: IndustryIndustry publications,publications, financialfinancial publications,publications, outout--ofof--favorfavor sectors,sectors,quantitativequantitative screensscreens forfor specificspecific valuevalue metricsmetrics..

vv DetermineDetermine IntrinsicIntrinsic ValueValue:: AnalysisAnalysis ofof publicpublic filingsfilings andand comparisoncomparison ofof valuevalue metricsmetrics totootherother companiescompanies..

vv SetSet Buy/SellBuy/Sell TargetTarget:: KeepsKeeps investmentinvestment processprocess ““rationalrational””,, takestakes awayaway unhelpfulunhelpful emotionalemotionaltendenciestendencies.. AfterAfter reviewingreviewing aa companycompany’’ss publicpublic filings,filings, wewe determinedetermine intrinsicintrinsic valuevalue.. BasedBased onon thatthatdeterminationdetermination wewe selectselect anan appropriateappropriate discountdiscount toto thatthat valuevalue asas anan entryentry pointpoint.. TheThe sellsell targettarget isis


determinationdetermination wewe selectselect anan appropriateappropriate discountdiscount toto thatthat valuevalue asas anan entryentry pointpoint.. TheThe sellsell targettarget isisgenerallygenerally equalequal toto ourour estimateestimate ofof intrinsicintrinsic valuevalue..

vv ExecuteExecute TradeTrade:: WeWe areare inin controlcontrol ofof tradingtrading processprocess.. WeWe dodo notnot outsourceoutsource tradingtrading toto othersothers.. WeWegenerallygenerally useuse dayday--onlyonly limitlimit ordersorders.. WillWill useuse marketmarket orders,orders, ifif appropriateappropriate..

vv MonitorMonitor PortfolioPortfolio:: ReviewReview intrinsicintrinsic valuevalue estimateestimate quarterlyquarterly withwith issueissue ofof quarterlyquarterly reportsreportsfromfrom companies,companies, unlessunless warrantedwarranted soonersooner.. MonitorMonitor price/valueprice/value convergenceconvergence..

vv Sell/NoSell/No ActionAction:: SellSell basedbased onon convergenceconvergence ofof stockstock priceprice toto intrinsicintrinsic valuevalue oror deteriorationdeterioration ininintrinsicintrinsic value,value, otherwiseotherwise continuecontinue toto holdhold..


vv Current ThemesCurrent Themes

•• Companies targeted by activist investor (DD, AAPL, PEP).Companies targeted by activist investor (DD, AAPL, PEP).•• Insurance companies selling for less than book. (AIG, ANAT, NWLI)Insurance companies selling for less than book. (AIG, ANAT, NWLI)•• Companies that will benefit from the housing recovery (VMC)Companies that will benefit from the housing recovery (VMC)

vv Catalysts / Other Potential OpportunitiesCatalysts / Other Potential Opportunities

•• Low priceLow price•• SpinSpin--offs, carveoffs, carve--outs, splitouts, split--offsoffs

Idea Generation Portfolio Management

•• Low margins set to improve Low margins set to improve


•• SpinSpin--offs, carveoffs, carve--outs, splitouts, split--offsoffs•• Asset salesAsset sales•• LiquidationsLiquidations•• Merger activity in the industryMerger activity in the industry•• ClosedClosed--end fund discountsend fund discounts

•• Low margins set to improve Low margins set to improve •• CostCost--cuttingcutting•• Reducing capital expendituresReducing capital expenditures•• Share buybacksShare buybacks•• Motivated SellersMotivated Sellers•• Kicked out of Index, SpinKicked out of Index, Spin--off off •• Busted IPOBusted IPO’’ss


vv Daily RoutineDaily Routine

•• List of 52 week highs & lowsList of 52 week highs & lows•• Daily earnings summariesDaily earnings summaries•• Quantitative screens (see below)Quantitative screens (see below)•• Financial/Business/Industry trade publications Financial/Business/Industry trade publications

vv Screen for certain Quantitative Ratios such as Screen for certain Quantitative Ratios such as

Idea Generation Portfolio Management


•• Low price to net cash on balance sheetLow price to net cash on balance sheet•• Low price to net current assetsLow price to net current assets•• low price to book,low price to book,•• low price to earnings, low price to earnings, •• low price to free cash flow, low price to free cash flow, •• low enterprise value to cash flow.low enterprise value to cash flow.•• Combination of low p/b and low p/eCombination of low p/b and low p/e•• Combination of low p/e and high ROECombination of low p/e and high ROE•• Combination of low p/b and high ROE Combination of low p/b and high ROE •• (EPS growth + dividend yield) / p/e > 2x(EPS growth + dividend yield) / p/e > 2x


vv TheThe firmfirm performsperforms researchresearch inin--househouse.. TheThe sourcessources ofof informationinformation forfordeterminingdetermining fundamentalfundamental intrinsicintrinsic valuevalue areare

•• Public filings Public filings –– 10K, 10Q, annual report, quarterly report, proxy, regulatory 10K, 10Q, annual report, quarterly report, proxy, regulatory filings. filings.

•• Public filings of other companies in the same industry.Public filings of other companies in the same industry.•• Value LineValue Line•• S&P Industry SurveysS&P Industry Surveys•• CRB Commodity YearbookCRB Commodity Yearbook

Sources of Information Portfolio Management


•• CRB Commodity YearbookCRB Commodity Yearbook

vv Reasons for not using Wall Street researchReasons for not using Wall Street research

•• We employ independent, unbiased approach to financial analysis We employ independent, unbiased approach to financial analysis •• Brokerage firms have a potential conflict of interestBrokerage firms have a potential conflict of interest•• Sell side analysts are usually late to party (upgrade at peak, downgrade at Sell side analysts are usually late to party (upgrade at peak, downgrade at

trough)trough)•• Wall Street analysts reflect groupthinkWall Street analysts reflect groupthink•• Best results occur away from the crowdBest results occur away from the crowd


vv AssetAsset--based valuation methodologies based valuation methodologies (classic value, resource conversion(classic value, resource conversion))

•• Low price to cash/net current asset/liquidation valuesLow price to cash/net current asset/liquidation values•• Low price to book valueLow price to book value•• Low price to appraised valueLow price to appraised value•• Discount to sumDiscount to sum--ofof--thethe--partsparts

vv EarningsEarnings--based valuation methodologies (Graham, Dodd value)based valuation methodologies (Graham, Dodd value)

Areas of Concentration Portfolio Management


vv EarningsEarnings--based valuation methodologies (Graham, Dodd value)based valuation methodologies (Graham, Dodd value)

•• Low price to P/E ratioLow price to P/E ratio•• Low price to free cash flowLow price to free cash flow•• Low EV/EBITDA valuationLow EV/EBITDA valuation

vv EventEvent--drivendriven

•• Risk arbitrageRisk arbitrage•• Liquidation arbitrageLiquidation arbitrage•• Capital structure arbitrageCapital structure arbitrage


vv PrimaryPrimary objectiveobjective isis thethe preservationpreservation ofof capitalcapital whilewhile achievingachieving superiorsuperior longlongtermterm resultsresults byby maintainingmaintaining aa ““marginmargin ofof safetysafety”” viavia discountdiscount toto intrinsicintrinsic valuevalue..

vv TargetTarget longlong positionposition sizesize isis 1010%% ofof assets,assets, atat costcost.. MaxMax.. positionposition cancan bebe higherhigher..

vv NoNo useuse ofof equityequity oror equityequity--indexindex derivativesderivatives..

vv OnceOnce purchased,purchased, closelyclosely monitormonitor valuation,valuation, businessbusiness riskrisk andand longlong--termtermfundamentalsfundamentals toto ensureensure successfulsuccessful executionexecution ofof strategystrategy..

Disciplined Risk Controls Portfolio Management


vv SellSell DisciplineDiscipline::•• StockStock reachesreaches itsits sellsell targettarget..•• ErosionErosion ofof fundamentalsfundamentals (e(e..gg..,, deterioratingdeteriorating financialfinancial position,position, decliningdeclining

margins,margins, weakeningweakening revenues)revenues)..•• ChangeChange inin aa company'scompany's strategicstrategic directiondirection (e(e..gg..,, acquisition,acquisition, spinspin--off,off, etcetc..))..•• AA moremore compellingcompelling alternativealternative investmentinvestment..•• TaxTax considerationsconsiderations•• LiquidityLiquidity needsneeds

vv ModestModest useuse ofof leverageleverage andand shortingshorting.. OverallOverall portfolioportfolio longlong--biasedbiased..


v Asset-Based Valuations

• Pope Resources LP

• Washington Post

• Phillips 66

n Event-Driven (Merger Arbitrage)

• Philadelphia Consolidated Holdings Corporation

v One will notice in reviewing these examples that generating superior returns through the value approach is not verycomplicated or difficult to understand. As Warren Buffett writes,

Key Themes Value Investment Universe

Note: All portfolio positions presented herein are for informationalpurposes only and should not be construed as buy or sellrecommendations. All data/positions presented are subject to changeand no representations are made as to the completeness thereof.


“ To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or insideinformation…what’s needed is a sound intellectual framework for making decisions and the ability to keep emotions fromcorroding that framework.”

v Some may ask, “If the returns are so good, why doesn’t everyone pursue the value approach?” As Buffett writes,

“… I have seen no trend toward value investing in the 35 years that I’ve practiced it. There seems to be some perverse humancharacteristic that likes to make easy things difficult. Ships will sail around the world but the Flat Earth Society will flourish.There will continue to be wide discrepancies between price and value in the marketplace and those who pursue [value investing]will continue to prosper.”

n As for arbitrage, Buffett writes,

“Give a man a fish and you feed him for a day. Teach him how to arbitrage and you feed him forever.”

-Quotes are from The Intelligent Investor, 4th edition, Benjamin Graham


Key Themes Asset-Based Valuation

Pope Resources LP (POPE, formerly POPEZ) - Poulsbo WA

·Purchase Price (2004): $18 Sales Price (2006): $35 Market Capitalization: $81 Million

·Fair Market Value (FMV): $41 Price / FMV: 44% ($18/$41) Margin of Safety: 56% ($23/$41)

Karnavas Partners has a very large universe of equities to choose from relative to other funds. This provides us with greater opportunities thanother funds. The bigger the universe, the better the chance of finding bargains. Pope Resources, with a market cap of under $100 million, is anexample of an investment that we can make that few other funds can consider. POPE is a publicly-traded partnership that owns and manages115,000 acres of timberland. As an asset class timberland has out performed all others over the past 100 years while exhibiting less inherentrisk. Timberland is negatively correlated or uncorrelated with other asset classes. POPE sells timber to saw mills in the domestic and exportmarkets. One can get an idea of the value of POPE’s assets by researching timberland transactions. Our fair value calculation is:


Fair Market Value of Pope Resources

Asset Acres Fair Value per Acre Total Fair Value

Columbia Tree Farm 44,000 $1,200 $52,800,000

Hood Canal Tree Farm 71,000 $1,871 $132,841,000

Real estate held for development 1,200 $10,000 $26,000,000

Other assets (cash, receivables) $14,000,000

Less: All liabilities ($40,000,000)

Fair market value 185,641,000

Shares outstanding 4,520,000

Fair market value per share $41

When KP bought POPE shares, we were paying 44 cents for $1’s worth of assets ($18/$41). From our experience a large discount to fairmarket value does not last forever; someone will come along, a competitor, management, or a financial buyer that will take advantage of thisvaluation discrepancy and bid the stock price up. Often the low price itself can act as a catalyst for future appreciation in stock price. While wewait, we were protected by a 56% margin of safety. The market price of timberland would need to fall 56% before it effects our investment.The advantage to asset based valuations is that they tend to fluctuate less, from year to year, than valuations based on earnings. The one caveatis that operating losses or cash burn can reduce asset values so one must exclude those situations from consideration.


Key Themes Sum-of-the Parts Valuation

Washington Post (WPO)Washington Post (WPO)

Current Price Current Price $444$444 Target Sell PriceTarget Sell Price $780$780

We have been following the Washington Post (WPO), not for its flagship newspaper, but for its other assets: Kaplan, Cable, TVWe have been following the Washington Post (WPO), not for its flagship newspaper, but for its other assets: Kaplan, Cable, TV, a, and net cash. Here is how we value WPO, nd net cash. Here is how we value WPO, excluding Kaplan:excluding Kaplan:

Cable operations, valued at $3,000 per subscriberCable operations, valued at $3,000 per subscriber $2.0 billion$2.0 billion

TV operations, valued at 7.5 times cash flowTV operations, valued at 7.5 times cash flow 1.0 1.0

Net cash on the balance sheetNet cash on the balance sheet 0.650.65

Total value, excluding KaplanTotal value, excluding Kaplan $3.65 billion$3.65 billion

Shares outstandingShares outstanding 9.17 million9.17 million

Value of WPO stock, excluding KaplanValue of WPO stock, excluding Kaplan $398$398


Price of WPO stockPrice of WPO stock $348$348

The market is inferring a value of negative $50 per share ($450 million) for Kaplan, a provider of educational services. KaplThe market is inferring a value of negative $50 per share ($450 million) for Kaplan, a provider of educational services. Kaplan an is on track to earn $350 million in operating is on track to earn $350 million in operating income in 2010. Apply a multiple of ten to $350 million and you have a value of $3.5 billion ($382 per share) for Kaplan alonincome in 2010. Apply a multiple of ten to $350 million and you have a value of $3.5 billion ($382 per share) for Kaplan alone. e. Why the irrational pricing? Uncertainty.Why the irrational pricing? Uncertainty.

The majority of Kaplan students get loans from the government. The US Department of Education has indicated that if principalThe majority of Kaplan students get loans from the government. The US Department of Education has indicated that if principal rerepayment rates on those loans do not reach payment rates on those loans do not reach certain threshold levels, students will not be eligible for government loans. With Kaplan students currently below the threscertain threshold levels, students will not be eligible for government loans. With Kaplan students currently below the thresholhold investors are wondering how this will affect d investors are wondering how this will affect KaplanKaplan’’s operations. So they sold. While we cannot pinpoint Kaplans operations. So they sold. While we cannot pinpoint Kaplan’’s value currently we do feel comfortable estimating its worth somewhere between $0 and $3.5 billion, s value currently we do feel comfortable estimating its worth somewhere between $0 and $3.5 billion, not negative $450 million. As the uncertainty lifts over the coming quarters we will have a more precise idea of the value ofnot negative $450 million. As the uncertainty lifts over the coming quarters we will have a more precise idea of the value of KaKaplan. Until then this looks like a good entry plan. Until then this looks like a good entry point for WPO.point for WPO.

WPO has strong management and with Warren Buffett on the board we feel comfortable that they will make the necessary moves toWPO has strong management and with Warren Buffett on the board we feel comfortable that they will make the necessary moves to enenhance value. Our valuation does not hance value. Our valuation does not include anything for the newspaper or the overfunded pension plan.include anything for the newspaper or the overfunded pension plan.

WPO trades at a substantial discount to its sumWPO trades at a substantial discount to its sum--ofof--thethe--parts valuation.parts valuation.


Key Themes Sum-of-the Parts Valuation

Phillips 66 was spin out of ConocoPhillips in May 2012. It traded for $32 per share initially but is worth $55 on a sumPhillips 66 was spin out of ConocoPhillips in May 2012. It traded for $32 per share initially but is worth $55 on a sum--ofof--thethe--parts valuation (see below). parts valuation (see below).

PSX has three divisions; chemical, oil refining, and midstream. PSX has three divisions; chemical, oil refining, and midstream.

The chemical division makes ethylene and polyethylene from ethane (natural gas). With most of its production in the US the buThe chemical division makes ethylene and polyethylene from ethane (natural gas). With most of its production in the US the businsiness has an advantage as natural gas is in ess has an advantage as natural gas is in oversupply domestically. Natural gas prices in the US are at historic lows as a new drilling technology (hydraulic fracturinoversupply domestically. Natural gas prices in the US are at historic lows as a new drilling technology (hydraulic fracturing) g) has created an oversupply which benefits has created an oversupply which benefits domestic companies that use natural gas as a feedstock. As the chemical division sells its products into the world market itsdomestic companies that use natural gas as a feedstock. As the chemical division sells its products into the world market its ininternational competitors are using higher ternational competitors are using higher priced inputs. Profitability has been strong and should stay that way as long as domestic natural gas prices stay low. priced inputs. Profitability has been strong and should stay that way as long as domestic natural gas prices stay low.

Additionally, PSX owns 15 oil refineries. Its midAdditionally, PSX owns 15 oil refineries. Its mid--continent refineries use West Texas Intermediate (WTI) crude oil as a feedstoccontinent refineries use West Texas Intermediate (WTI) crude oil as a feedstock which trades at a big discount to other crudes k which trades at a big discount to other crudes since WTI is in over supply at the storage depot in Cushing OK. These midsince WTI is in over supply at the storage depot in Cushing OK. These mid--continent oil refineries have a cost advantage over recontinent oil refineries have a cost advantage over refineries in other parts of the country fineries in other parts of the country and they are recording large profits. and they are recording large profits.

The midstream division owns natural gas pipelines and processing facilities. Additionally PSX owns gas stations in Europe andThe midstream division owns natural gas pipelines and processing facilities. Additionally PSX owns gas stations in Europe and anan oil pipeline in the US.oil pipeline in the US.

SumSum--ofof--thethe--parts valuationparts valuation

DivisionDivision EPS EPS MultipleMultiple ValueValue


DivisionDivision EPS EPS MultipleMultiple ValueValue

ChemicalChemical $1.30$1.30 10x10x $13$13

MidstreamMidstream $1.00$1.00 21x21x $21$21

Gas stations and transportGas stations and transport $1.44$1.44 14x14x $20$20

RefiningRefining $2.40$2.40 4x4x $10$10

Less: DebtLess: Debt ($9)($9)

Valuation of PSXValuation of PSX $55$55

Management seems proManagement seems pro--shareholder, emphasizing dividends and share buybacks. With the earnings they retain management plans on grshareholder, emphasizing dividends and share buybacks. With the earnings they retain management plans on growing the chemical and midstream owing the chemical and midstream operations since they garner higher returns on invested capital.operations since they garner higher returns on invested capital.

In the sumIn the sum--ofof--thethe--parts valuation above, the valuation multiple applied to the refining earnings is only 4x, which compares withparts valuation above, the valuation multiple applied to the refining earnings is only 4x, which compares with a market multiple of 14x. This low valuation is a market multiple of 14x. This low valuation is typical of refining operations which tend to be cyclical and capital intensive. In order to obtain a higher multiple one comptypical of refining operations which tend to be cyclical and capital intensive. In order to obtain a higher multiple one companyany in the industry recently transferred its in the industry recently transferred its refining assets to a master limited partnership (MLP), a taxrefining assets to a master limited partnership (MLP), a tax--efficient investment vehicle that has been popular for some time. Tefficient investment vehicle that has been popular for some time. The multiple accorded assets in a MLP he multiple accorded assets in a MLP tends to be higher than assets in a traditional company since the earnings are not taxed at the partnership level and the divtends to be higher than assets in a traditional company since the earnings are not taxed at the partnership level and the divideidends are prized by investors in this low nds are prized by investors in this low interest rate environment. If PSX were to transfer its refining assets to a MLP the multiple conferred on its earnings might interest rate environment. If PSX were to transfer its refining assets to a MLP the multiple conferred on its earnings might be be higher than 4x and accordingly the sumhigher than 4x and accordingly the sum--ofof--thethe--parts valuation could be higher than $55. Management has not indicated its intent, as transferring refining assets into Mparts valuation could be higher than $55. Management has not indicated its intent, as transferring refining assets into MLPs is a new concept, but it is an LPs is a new concept, but it is an interesting option for PSX.interesting option for PSX.

When PSX was under the ConocoPhillips umbrella its operations were not well known, nor appreciated. Now that the assets have When PSX was under the ConocoPhillips umbrella its operations were not well known, nor appreciated. Now that the assets have beebeen exposed through the spinn exposed through the spin--off there is off there is the real possibility that they will garner a higher valuation through increased visibility. the real possibility that they will garner a higher valuation through increased visibility.

PSX has the traits of a successful spin off; a current strategic advantage, strong earnings, underPSX has the traits of a successful spin off; a current strategic advantage, strong earnings, under--appreciated assets, and a lowappreciated assets, and a low valuation.valuation.


Key Themes Event Driven

Philadelphia Consolidated Holdings Corporation (PHLY) - Event Driven (Merger Arbitrage)

·Current Price: $56.00 Buy-out Price: $61.50 (all cash) Expected Value: $61.19 (see calc. below)

·Return: 9.3% Completion date: 12/1/08 (Est.) Current date: 11/1/08

·Duration: 30 days Annualized return: 112%

The arbitrage strategy involves identifying companies in the process of transition (e.g. mergers, acquisitions, reorganizations, liquidations,and spin-offs). These are securities with a timetable. The profit on each investment is small. However the predictability of the investmentreturn combined with the short holding period produces quite decent annual rates of return. The investment process starts when atransaction, such as an acquisition, is publicly announced. It is not based on rumor or inside information, nor will Karnavas Partners guesswhich company will be the next acquisition candidate. Once a transaction is announced, KP assembles as much information as possibleincluding: annual, quarterly, and SEC reports. KP focuses on three keys to each prospective investment: return, risk, and the probability


including: annual, quarterly, and SEC reports. KP focuses on three keys to each prospective investment: return, risk, and the probabilityof the transaction being completed. The risk in the arbitrage strategy applies, not to general market behavior, but to something preventingthe transaction from being completed, such as governmental action (antitrust), shareholder rejection, or problems financing the transaction.KP reduces these risks by researching each transaction and selecting for investment only those transactions that have the greatest chanceof completion.

In July 2008 Tokyo Marine agreed to purchase PHLY for $61.50 per share in cash. The shareholder vote was completed in October andthe buy-out accepted. Financing is not an issue as Tokyo Marine is a much larger company than PHLY and has the cash to finance thedeal. Finally, the major regulatory approvals have been obtained. For an investment of only 30 days we earn a 9.3% return (112%annualized) with a high probability of success. That is how we stack the odds in our favor.

Calculation of the expected value of the deal:

Deal price times probability of deal being completed: $61.50 X 99% = $60.89

Stock price if deal breaks times probability: $30.00 X 1% = $ 0.30

Expected Value $61.19


Fund Structure Terms

vv VehicleVehicle:: OnshoreOnshore PennsylvaniaPennsylvania LimitedLimited PartnershipPartnership

vv Strategy:Strategy: Global, Long Biased, MultiGlobal, Long Biased, Multi--Cap Value Equity FundCap Value Equity Fund

vv Minimum Investment:Minimum Investment: $250,000$250,000

vv ManagementManagement FeeFee:: 22..00%% annuallyannually ((00..5050%% payablepayable quarterlyquarterly inin arrears)arrears);;ManagementManagement feefee discount(s)discount(s) andand separateseparate accountaccountavailabilityavailability subjectsubject toto solesole discretiondiscretion ofof GPGP (higher(higherminimumminimum capitalcapital contributionscontributions required)required)


minimumminimum capitalcapital contributionscontributions required)required)

vv Incentive Fee:Incentive Fee: 20% of gains, subject to high20% of gains, subject to high--water markwater mark

vv Subscriptions:Subscriptions: QuarterlyQuarterly

vv RedemptionsRedemptions:: QuarterlyQuarterly withwith 3030 daysdays priorprior writtenwritten noticenotice

vv ReportingReporting:: MonthlyMonthly performanceperformance fromfrom ManagerManager

QuarterlyQuarterly letter/researchletter/research summarysummary fromfrom managermanager

YearYear--endend accountingaccounting


vv IntroducingIntroducing BrokerBroker:: VanguardVanguard BrokerageBrokerage ServicesServices (VBS),(VBS), aa divisiondivision ofofVanguardVanguard MarketingMarketing CorporationCorporation (VMC),(VMC), MemberMember

SIPCSIPC..

vv ClearingClearing Brokers/CustodyBrokers/Custody:: PershingPershing LLC,LLC, aa BNYBNY SecuritiesSecurities GroupGroup membermember andandaa subsidiarysubsidiary ofof TheThe BankBank ofof NewNew YorkYork MellonMellon CorpCorp..

TD Ameritrade, Interactive BrokersTD Ameritrade, Interactive Brokers

Service Providers


vv Legal:Legal: DechertDechert, LLP, Philadelphia, PA., LLP, Philadelphia, PA.

vv Accounting:Accounting: BachelerBacheler & Company, PC, Cherry Hill, NJ& Company, PC, Cherry Hill, NJ


Disclosure and Risk Notification

THIS PRESENTATION HAS BEEN PREPARED SOLELY AS A PRELIMINARY DOCUMENT TO DETERMINEINVESTOR INTEREST IN THE FUND. THIS PRESENTATION IS SUBJECT TO AND QUALIFIED FULLY BY THEFUND’S PRIVATE PLACEMENT MEMORANDUM AND RELATED DOCUMENTATION (COLLECTIVELY REFERREDHEREIN AS THE “PPM”). ALTHOUGH THIS PRESENTATION HAS BEEN PREPARED FROM PUBLIC AND PRIVATESOURCES AND DATA WE BELIEVE TO BE RELIABLE, WE MAKE NO REPRESENTATIONS AS TO ITS ACCURACYOR COMPLETENESS. THIS SUMMARY IS NEITHER AN OFFER TO SELL, NOR A SOLICITATION OF AN OFFERTO PURCHASE ANY OF THE SECURITIES DESCRIBED HEREIN. SUCH AN OFFER OR SOLICITATION WILLONLY BE MADE THROUGH MEANS OF THE PPM, AND RELATED SUBSCRIPTION MATERIALS TO INVESTORSWHO MEET THE SUITABILITY STANDARDS DESCRIBED THEREIN. FOR MORE INFORMATION, PLEASE REFERTO THE PPM AND READ IT CAREFULLY BEFORE YOU INVEST.

HEDGE FUNDS ARE CONSIDERED HIGHLY SPECULATIVE INVESTMENTS. NO ASSURANCES CAN BE MADE ASTO THE RETURNS EXPERIENCED BY THE FUND. THERE CAN BE NO GUARANTEE THAT THE INVESTMENTSMADE BY THE FUND MATCH THE TARGET OR HISTORICAL RETURNS. AN INVESTMENT IN A HEDGE FUND


MADE BY THE FUND MATCH THE TARGET OR HISTORICAL RETURNS. AN INVESTMENT IN A HEDGE FUNDINVOLVES A SIGNIFICANT DEGREE OF RISK, WHICH EACH PROSPECTIVE INVESTOR MUST CAREFULLYCONSIDER BEFORE SUBSCRIBING TO PURCHASE AN INTEREST IN SUCH A FUND. RETURNS GENERATEDFROM AN INVESTMENT IN A HEDGE FUND MAY NOT ADEQUATELY COMPENSATE INVESTORS FOR THEBUSINESS AND FINANCIAL RISKS ASSUMED. WHILE HEDGE FUNDS ARE SUBJECT TO THOSE MARKET RISKSCOMMON TO OTHER TYPES OF INVESTMENTS, INCLUDING MARKET VOLATILITY, HEDGE FUNDS EMPLOYCERTAIN TRADING TECHNIQUES, SUCH AS, THE USE OF LEVERAGE AND OTHER SPECULATIVE INVESTMENTPRACTICES THAT MAY INCREASE THE RISK OF INVESTMENT LOSS. OTHER RISKS ASSOCIATED WITHHEDGE FUND INVESTMENTS INCLUDE, BUT ARE NOT LIMITED TO, HIGH ILLIQUIDITY ASSOCIATED WITHTHE LACK OF A SECONDARY MARKET FOR FUND INTERESTS, RESTRICTIONS ON TRANSFERRING INTERESTSIN FUNDS, HIGH FEES THAT MAY OFFSET A FUND’S TRADING PROFITS, LACK OF DIVERSIFICATION IN FUNDINVESTMENTS MADE BY A SINGLE ADVISER, COMPLEX TAX STRUCTURES THAT MAY DELAY THEDISTRIBUTION OF IMPORTANT TAX INFORMATION, NO REQUIREMENT THAT PERIODIC PRICING ORVALUATION REPORTS BE PROVIDED TO INVESTORS AND LACK OF REGULATORY REQUIREMENTS SIMILAR TOMUTUAL FUNDS. INVESTORS SHOULD INVEST IN A HEDGE FUND ONLY IF THEY ARE ABLE AND PREPAREDTO BEAR THE RISK OF INVESTMENT LOSSES, INCLUDING THE POTENTIAL LOSS OF THEIR ENTIREINVESTMENT. PROSPECTIVE INVESTORS ARE URGED TO DISCUSS THESE MATTERS WITH THEIR LEGALCOUNSEL OR OTHER PROFESSIONAL ADVISERS BEFORE INVESTING IN HEDGE FUNDS.


Accredited Investors

v The information in these materials is intended solely for: (i) "Accredited Investors" within the meaning ofRule 501 of Regulation D under the U.S. Securities Act of 1933, as amended; and (ii) "Qualified EligiblePersons" within the meaning of the Commodity Futures Trading Commission Regulation 4.7.

v Definition of Accredited Investor. “Accredited investor” shall mean any person who comes within any of thefollowing categories, or whom the issuer reasonably believes comes within any of the following categories, atthe time of the sale of the securities to that person:

• Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or otherinstitution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciarycapacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of1934; any insurance company as defined in section 2(13) of the Act; any investment companyregistered under the Investment Company Act of 1940 or a business development company as definedin section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. SmallBusiness Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;any plan established and maintained by a state, its political subdivisions, or any agency or


any plan established and maintained by a state, its political subdivisions, or any agency orinstrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan hastotal assets in excess of $5,000,000; any employee benefit plan within the meaning of the EmployeeRetirement Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined insection 3(21) of such Act, which is either a bank, savings and loan association, insurance company, orregistered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000or, if a self-directed plan, with investment decisions made solely by persons that are accreditedinvestors;

• Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation,Massachusetts or similar business trust, or partnership, not formed for the specific purposes ofacquiring securities offered, with total assets in excess of $5,000,000;

• Any natural person who individual net worth, or joint net worth with that person’s spouse, at the timeof his purchase exceeds $1,000,000;

• Any natural person who had an individual income in excess of $200,000 in each of the two most recentyears or joint income with that person’s spouse in excess of $300,000 in each of those years and hasa reasonable expectation of reaching the same level in the current year;

• Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiringthe securities offered, whose purchase is directed by a sophisticated person as described in§230.506(b)(2)(ii) and

• Any entity in which all of the equity owners are accredited investors.

Why Invest in Equities?Why Invest in Equities?““TodayToday peoplepeople whowho holdhold cashcash equivalentsequivalents feelfeel comfortablecomfortable.. TheyThey shouldnshouldn’’tt.. TheyThey havehave optedopted forfor aaterribleterrible longlong--termterm asset,asset, oneone thatthat payspays virtuallyvirtually nothingnothing andand isis certaincertain toto depreciatedepreciate inin valuevalue.. Indeed,Indeed,thethe policiespolicies thatthat governmentgovernment willwill followfollow inin itsits effortsefforts toto alleviatealleviate thethe currentcurrent financialfinancial crisiscrisis willwillprobablyprobably proveprove inflationaryinflationary andand thereforetherefore accelerateaccelerate declinesdeclines inin thethe realreal valuevalue ofof cashcash accountsaccounts..EquitiesEquities willwill almostalmost certainlycertainly outperformoutperform cashcash overover thethe nextnext decade,decade, probablyprobably byby aa substantialsubstantial degreedegree..ThoseThose investorsinvestors whowho clingcling nownow toto cashcash areare bettingbetting theythey cancan efficientlyefficiently timetime theirtheir movemove awayaway fromfrom ititlaterlater.. InIn waitingwaiting forfor thethe comfortcomfort ofof goodgood news,news, theythey areare ignoringignoring WayneWayne GretzkyGretzky’’ss adviceadvice:: ““II skateskate totowherewhere thethe puckpuck isis goinggoing toto be,be, notnot toto wherewhere itit hashas beenbeen..”” SoSo ...... II’’veve beenbeen buyingbuying AmericanAmericanstocksstocks........Why?Why? AA simplesimple rulerule dictatesdictates mymy buyingbuying:: BeBe fearfulfearful whenwhen othersothers areare greedy,greedy, andand bebe greedygreedywhenwhen othersothers areare fearfulfearful.. AndAnd mostmost certainly,certainly, fearfear isis nownow widespread,widespread, grippinggripping eveneven seasonedseasonedinvestorsinvestors.. ......LetLet meme bebe clearclear onon oneone pointpoint:: II cancan’’tt predictpredict thethe shortshort--termterm movementsmovements ofof thethe stockstockmarketmarket.. II havenhaven’’tt thethe faintestfaintest ideaidea asas toto whetherwhether stocksstocks willwill bebe higherhigher oror lowerlower aa monthmonth —— oror aa yearyear—— fromfrom nownow.. WhatWhat isis likely,likely, however,however, isis thatthat thethe marketmarket willwill movemove higher,higher, perhapsperhaps substantiallysubstantially so,so,wellwell beforebefore eithereither sentimentsentiment oror thethe economyeconomy turnsturns upup.. SoSo ifif youyou waitwait forfor thethe robins,robins, springspring willwill bebeoverover..””

-- Warren E. Buffett, NY Times, 2008 OpWarren E. Buffett, NY Times, 2008 Op--Ed Contributor, Buy American. I Am. Ed Contributor, Buy American. I Am.

Why Invest in a Value Equity Strategy?Why Invest in a Value Equity Strategy?

““BecauseBecause itit hashas workedworked sincesince anyoneanyone beganbegan trackingtracking returnsreturns.. AA mountainmountain ofof evidenceevidence confirmsconfirms thatthatthethe principlesprinciples ofof valuevalue investinginvesting havehave providedprovided marketmarket--beatingbeating returnsreturns overover longlong periodsperiods.. YetYet inin thethefaceface ofof compellingcompelling evidence,evidence, fewfew investorsinvestors andand fewfew professionalprofessional moneymoney managersmanagers ascribeascribe toto thetheprinciplesprinciples ofof valuevalue investinginvesting..”” -- ChristopherChristopher HH.. BrowneBrowne

Why Invest with Karnavas Value Management Now?Why Invest with Karnavas Value Management Now?““ TheThe currentcurrent investmentinvestment environmentenvironment isis constructiveconstructive;; lowlow inflation,inflation, lowlow interestinterest rates,rates, ananaccommodativeaccommodative FederalFederal Reserve,Reserve, improvingimproving employmentemployment andand GDP,GDP, aa strongstrong automobileautomobile sectorsector andand aarecoveringrecovering realreal estateestate sector,sector, allall pointpoint towardtoward earningsearnings growthgrowth andand stockstock appreciationappreciation..

-- MarkMark AA.. Karnavas,Karnavas, DecemberDecember 20132013

Karnavas Partners, L.P.Karnavas Partners, L.P.

Margin of Safety, Rationality, Avoiding the CrowdMargin of Safety, Rationality, Avoiding the Crowd

Mark A. Karnavas CPA, MTMark A. Karnavas CPA, MT

Karnavas Value Management, Inc.Karnavas Value Management, Inc.Karnavas Value Management, Inc.Karnavas Value Management, Inc.

8600 Seminole Street8600 Seminole Street

Philadelphia, PA 19118Philadelphia, PA 19118

484 470484 470--87928792

[email protected]@yahoo.com

ACCREDITED INVESTORS ONLY Karnavas Partners, L.P. › files › Microsoft...From June 7, 2000, Inception, through December 31, 2014 Performance June 2000 – December 2014 Karnavas

Documents

ACCREDITED INVESTORS ONLY Karnavas Partners, L.P. › files › Microsoft...From June 7, 2000, Inception, through December 31, 2014 Performance June 2000 – December 2014 Karnavas