Outlook and Review - April 2017

The Set Up

What a difference 100 days make. The 100 days I refer to is the approximate current age
of the reign of Trump and it also marks the transformation of Trump-Hopia' to Trump-Aggeddon
as he even left us pondering whether this years Easter Bunny weekend would also be ushering in
a mushroom-capped thermonuclear war.

In the investment business you have the luxury of not being political,(objectivity Trumps
all ideology), but you must always be aware of how public policy, politicians, and investor
expectations impact the economy, and asset valuations.

Its been just under six long months since Trump was elected and the silly season for the
U.S. stock market went into high gear. Three thousand points later we now find ourselves
perched on the edge of a precipice as virtually every Trump-o-Mania promise lies broken. Pick
your promise: Obamacare Repeal; Massive Tax Cuts-A-Coming; Yuuge' Infrastructure Spending; or
the end to all Foreign Military Adventurism. To each of these campaign promises the present day
reality shouts out the eloquent phrase: Fawgetaboutit! Here is the promise that will definitely
be kept: Mr Trump will be sinking his presidential teeth into the biggest Sh*t Sandwich that
Mother Destiny ever cooked up, served along with such sides as a: Looming Debt Ceiling Crisis; a
near certain cornucopia of Foreign Policy Disaster(s); and an emerging economic Recession tilting
towards Depression.all of which leads further to the dessert platter which has on the menu a
potential stock market meltdown; and a heaping spoonful of an old fashioned currency collapse.
None of this has gone unnoticed by the risk-off asset to end all risk-off assets: Gold. As I write
this gold sits at its highest dollar price levels since the night Trump was elected on November 6.

Our portfolio has noticed this development too and Im happy to report that as the
portfolio presently sits we have recouped half of the still stinging setback we incurred during the
last two months of Q4 2016. Closing the remaining deficit is still job one, and I am ever
optimistic that this too is close at hand as our biggest leverage driver: the gold mining equities
have seriously lagged the price rally of gold itself. But this sector has just in the past two weeks

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begun to flex some serious muscle and like the green shoots of Spring, these shoots should
eventually overshoot to the upside and place our returns solidly back where they belong.

This Time is Now

The Trump distraction aside, what makes this time different is that the market for
financial assets have walked into the perfect trap from which there will be no escape unless your
portfolio is filled with exposure to real assets and assets negatively correlated to the status quo.
Stock prices are at their zenith just as the U.S. Fed has embarked upon a rather badly timed rate
hiking campaign and just as the general economy has rolled decidedly over and global political
uncertainties have reached almost unprecedented levels. The investing public now finds itself
holding the proverbial bag that contains all the wrong assets. We are fully locked and loaded
with our gold exposure, and are building short select U.S. equities exposure,(predominantly in
revenue challenged tech, credit impaired financials, and interest rate sensitive sectors levered
to the struggling consumer), and we are poised for some significant near term and long term
gains.

I am confident that the negative performance I had termed our perfect storm will be
properly relegated to the rear view mirror and that we have entered a period of sustained
outperformance that will in the near future be buttressed by the most vigilant gain-hedging and
downside risk management we have ever utilized. That strategy will be the ever present
corollary to our job one, namely keeping our again outsized returns in the black and in the bank.

The New Normal

The structural catalysts I addressed in earlier letters are here to stay and will
define our new normal. We will eventually get used to the fact that the rest of the
world has moved on and given up on the U.S. Dollar as the central point of reserve
assets. The new asset destined to reclaim that central point as the pre-imminent
reserve asset is that same one that that held that same role for millennia. In fact that
reserve asset never went away. It was obfuscated and hidden away, but as the years
have ticked by and as promises have been broken and as the problems of a debt-based

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trust me financial system inevitably give way, the role of gold begins to bleed
through the faade and once again becomes front and center for all to see.

The rest of the world is preparing and prepared: witness the worlds new non-
dollar, non-SWIFT money wiring system; or the new Yuan-based International
Development Bank; or the multi-lateral and bi-lateral trade agreements that utilize
currencies for trade outside the U.S. Dollar. And lastly, witness the worlds first
physical-only, Yuan denominated gold exchange: the Shanghai International Gold
Exchange that opened in mid October 2016, and promises to make the Chinese Yuan a
de-facto gold-backed currency. These are all separate nails in the U.S. Dollar coffin
and they will be the game changers that will funnel the greatest transfer of wealth
the world has ever witnessed away from financial assets and particularly away from
America. We are well positioned in the Fund to be on the receiving end of this great
wealth transfer.

We intend to execute our role in capturing this wealth transfer that is already
taking place. As always, we appreciate your continued faith, patience, and confidence
in our vision and stewardship and abilities to manage our Fund and to steer our
investment returns forward.

Best wishes,

John Scurci

Chief Investment Officer & Portfolio Manager

Corona Associates Capital Management, LLC1

1 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

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