Diamond Age Russia Fund: Monthly Letter to Investors – July 2011

Calm before the Storm

“In my opinion, around these levels US Government Bonds are the short of the century,” – Dr. Marc Faber, Gloom, Boom and Doom Report

“Markets can remain irrational for a lot longer than you and I can remain solvent” – John Maynard Keynes

Diamond Age produced a very positive result for the July period with a +6.17% return vs. +2.91% for the benchmark index MSCI Emerging Market Europe, +1.98% for global MSCI emerging markets, and +4.36% for the Russian Stock Market (MICEX), chart next page. Randy Newman is not the house favourite! In July the portfolio’s single best performing line item was a large short position in Frontline (FRO NO) Norway which declined ‐19.1% for the month and was subsequently closed out as the Fund squared the position at a near ‐60% decline (i.e. +60% gain for investors); and the often discussed and much publicised Mail.ru (MAIL LI) short also continued to produce stellar returns on the short side until covered at $28.35 early in the new reporting period.

Eng_DA_July_11

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