GA

Bill Browder and Bruce Greenwald Discussion

November 12, 2010

The Perils and Rewards of Emerging Markets

www.youtube.com/watch?v=WVgqp_0l-Ww

Q: First of all, I’d like to thank all of you for joining us this evening, and of course, our
speakers Bruce Greenwald and Bill Browder. I’m not going to take too much time away from our
speakers by way of introduction. But I want to explain why we had the idea of pairing Bill and
Bruce in this conversation. As most of you know, Bruce is a great authority on value investing,
and I’ve had the good fortune to read a lot about Bill Browder, had multiple opportunities to listen
to him speak, and I’ve also had the good fortune to talk to him about his business of investing in
emerging markets. And I think of it is a form of value investing, that is to say, his business model
is built around trying to figure out how much of companies have been stripped away, publicizing
this fact, and then lobbying both nationally and at the company level to have governance reforms
to, at a minimum, reduce the rate of stealing. And he’s been enormously successful in this in a
number of ways. I think a lot of people think of him as having contributed to capital market
reform. He’s made a lot of money for his investors. And his story has been told, among other
places, on the front page of The New York Times and other such publications.

From our perspective, sitting here, listening to Bill this evening, it’s probably equally important
that this is just an amazing story with a lot of crazy twists and turns, and equally important, Bill is
a very gifted storyteller. So at this point I’m going to turn it over to Bill Browder to tell his story.
And then Bruce and Bill are going to talk about, not just investing in Russia, but some broader
issues around investing, the future of investing in emerging markets. Thanks a lot. (Applause)

BB: Ray, thank you very much for inviting me here, and thank you all for coming on election
evening. I’m very flattered that I could disrupt the democratic process in America to tell my story.
My story is a fascinating story. and I’m not being immodest, and a pretty horrifying story as well.
I will fascinate you and then horrify you, and so be prepared for the horrifying part at the end.
I sat in these same seats, not in this business school, I was at Stanford Business School, almost 21
years ago. And I can remember sitting in these seats and one of the main concerns I had as an
MBA student was, what am I going to do with my life? And there was a lot of my colleagues,
other MBA students, that sort of knew what they wanted to do with their lives. They’re people
who came into business school, having come from a family of real estate developers, and knew
that they were going to become real estate developers. And there were other people in business
school who had worked on Wall Street before and everyone they knew worked on Wall Street and
they were going to go work on Wall Street.

But I didn’t have any of that. I had a really strange family background, and mine was different
than everybody else at business school by far. And I’m sure everyone thinks their family
background is different, but mine really was. I came from a family of Communists. My
grandfather was the head of the American Communist Party for 15 years in the 1930s, 1940s. In
fact, the way I got to business school was that during my teenage years when I was going through
my teenage rebellion, I thought the best way to piss off my parents was to become a businessman
and put on a suit.

1
So I was sitting in business school, searching my soul, having sort of not really felt like I had any
true calling in life, and it was 1989, which was the year that the Berlin Wall came down. And so
as I was searching my soul, and having come from a family of Communists, I thought, “What’s
the most logical thing I could do if the Berlin Wall is coming down?” and that was to become a
capitalist in Eastern Europe. And so I ended up, working, getting a job at the Boston Consulting
Group in London. And I went to work for them because they promised me that if there was any
work to do in Eastern Europe, I could be the first person doing the work in Eastern Europe, in fact,
I could be head of their Eastern European practice, since it didn’t exist.

And so I go to work at the Boston Consulting Group, and about six months into my employment
there, sure enough, an assignment came to work in Eastern Europe. There was a bus factory on
the Ukrainian border, six hours from Warsaw, which was failing, and the World Bank had offered
to pay Boston Consulting Group to bring in all of their experts to figure out why this bus factor
was failing and then help the state unravel the failing bus factor. So once BSG presented all of
these great proposals about how all of their bus and manufacturing experts were going to come,
they won the assignment, and after they won they sent me. I was 25 years old and didn’t know
anything about buses or business, or anything else for that matter. And it wasn’t a particularly
pleasant assignment, because the bus factory’s sales had declined by 80 percent and there was only
one option, which was to cut costs by 80 percent.

But while I was sitting in this little town in Poland, I noticed one day that the interpreter who was
shadowing me as I went around the factory, and was carrying a newspaper with a bunch of
financial statements in the middle of it. And I asked him what’s in that newspaper? What are all
those financial statements? Because it just seemed a little odd. And he said, “Oh, those are the
very first privatizations that are coming out of the government,” out of Poland, and I said, “That’s
interesting. Can you explain to me what all those numbers are?” and he said yeah, and he said,
“Well this is sales, and these are earnings and this is this, this is this, these are the number of
shares and this is the offering share price.” And so I said, “So this is the offering share price and
these are the number of shares,” and so I got a market capitalization. And I said, “And these are
the earnings? Are you sure about this?” And he said, “Yeah, these are the earnings.” I said, “So
this is profit?” and he said, “Yeah, this is profit.” And it turned out that the market capitalization
of the companies that they were privatizing in the very first privatizations were equal to one half
of the previous year’s earnings.

Now, you don’t have to be an MBA to know that that’s a good deal. And I started to think to my
self, hmm, I don’t know that much about investing. In fact, I’d never invested in my life, and I
didn’t have any money. I had $4,000 of total savings. But I thought, that’s got to be a good deal.
And so I took the entire $4,000 of savings I had and I took it and converted it into Polish zloty and
I submitted my zlotys for the shares I this privatization, a number of the privatizations. And I got
my full allocation and 12 months later my investment was worth ten times what I had invested.
And I don’t know how many of you have ever had a ten bagger, particularly it’s your first
investment. But that was the defining moment of my career. I said, “I want to do this again.”

And so I set out to find a way where I could do it again, and it certainly wasn’t going to be in
management consulting. And so then I find a job at Solomon Brothers in their Eastern European
Investment Banking Team. And this was now 1992 and Solomon Brothers, I’m sure many of you
have read the book Liar’s Poker, and if you haven’t you should, but Solomon Brothers was the
sort of quintessential Wall Street shark firm, and I was just speaking a minutes ago with a
2
Solomon Brothers alumni from those days. But basically, when I got hired at Solomon Brothers,
the training program was: here’s your desk; here are your business cards; and next year you have
to make five times what we’re paying you otherwise you’re fired; get to work. There was no
mentors, no ‘here’s how things are done.’ Get to work and make some money, and if you do, if
you make more than five times what we pay you, then we’ll pay you more next year.

So I set about trying to figure out how to make five times what I was being paid. I wasn’t being
paid that much, but five times, still was money that I didn’t know how to make. And there was a
group of people who were involved in privatizing the Hungarian airlines inside Solomon Brothers.
They had the mandate for that privatization. So I thought I would try to muscle in on their
meeting to see if I could somehow get involved because that seemed like a good place to start.

And so I find out when the meeting is taking place and where it’s taking place, and is how up, and
I walk in, and I walk in as if I, there was some, that I had like some kind of like horns sticking out
of my head. And the people in the meeting looked at me like I was completely unwelcome there,
and they said, “Bill, thanks for showing up, but we really don’t need your help. Just, please
leave.” Then I figured out that they didn’t want to share the five times with me, ‘cause they had
their own five times problem.

Then I heard that there was a meeting of a bunch of bankers working on the Polish Telecom
privatization, and so I thought, maybe give that a try, maybe it’s these Hungarian, the guys doing
the Hungarian stuff aren’t so friendly, but the Polish people will be a little nicer. And I show up at
the Polish Telecom privatization and they didn’t even, they were far ruder than the Hungarian
ones. They said, “Don’t even think about flying over Poland. You’re not welcome here. We
don’t need you.”

And I realized that I wasn’t going to be able to get involved in anything that anyone had any
economic interest in because they didn’t want to share their five times with me. And so I looked
around and I realized that nobody was doing anything in Russia. And so one day I declared
myself the investment banker in charge of Russia to see if there was any reaction. Nobody said a
word, not a word. So I was the investment banker in charge of Russia. The only problem was
there was no investment banking work to do in Russia.

So at this point I started looking around for investment banking work. And I was scrounging,
really scrounging, and one day there was a lead. There was a fishing fleet that had hired Clearly
Gottlieb as their lawyer because they were suing somebody over some stolen fish, and somehow
Clearly Gottlieb had suggested them to hire an investment bank to advise them on their
privatization program which was happening back then. And so they sort of ignorantly agreed and
put out a request for proposal. And I got the request for proposal, and I went up to the library at
Solomon Brothers and I realized that like 25 years earlier they had done a bunch of fishing deals.
And so I wrote down all these important fishing deals that had been done 25 years earlier in our
credentials package. And they called me a few days alter and said, “You’re hired.” And I
thought, wow, that’s great. So I said, “Well, how much are you going to pay?” They said, “We’re
going to pay $50,000 for two months worth of advisory work.”

Now, for those of you who haven’t ever been involved in Wall Street, remember, there’s a famous
expression from this model, Linda Evangelista, who said that she wouldn’t get out of bed for less
than $10,000. Well, with an investment banker, the number is probably like 20 times that, but
3
here … but the $50,000 for two months worth of work was $50,000 greater than zero, which was
what I had earned in total for the firm up until that point. And so I took the assignment, and I
turned out to be the most profitable thing I ever did in my life.

I take the assignment and I go to Murmansk, which is this horrific place, really bad, you can’t
imagine. And this is … I haven’t been there recently, but I can’t imagine it’s gotten a lot better.
And I sit down with the head of the fishing fleet and I go through the dilemma. They have 100
ships, this fishing fleet, the Murmansk trawler fleet. And these are big ships, these are factory
fishing vessels. And each ship costs $20 million to buy. And so they had $2 billion worth of
ships. And it wasn’t a great looking fleet. I went on some of the ships, they were a bit rusty and
not so nice smelling, maybe half depreciated, so they had a billion dollars worth of ships at the
market value. And the management had hired me to figure out whether they should exercise their
legitimate right under the privatization program to buy 51 percent of this fleet for $2.5 million. It
wasn’t a very complicated question. And I thought to myself, “My God, if this is what’s going on
here, I wonder if this is an anomaly or whether I should be investing in this stuff?”

And so instead of flying back to London, I get a flight to Moscow, and I didn’t speak a word of
Russian, and I get out a English-language Yellow Page director and I started circling the names of
people who might be able to explain to me what’s going with the privatization program. And I go
and have about 35 meetings during the week, and I discover that the fishing fleet was just the tip
of the ice berg, that the entire country was basically being given away for free. To go from
communism to capitalism they decided that the best thing to do was just create a bunch of
capitalists, and the best way to do that is just give everyone free property. And the best way to do
that is through a number of different schemes, and one of them was called the Voucher of
Privatization Program, where they gave a voucher, physical certificate, to every person over the
age of 18. And the vouchers were freely tradable, exchangeable certificates. And those vouchers
were exchangeable for 30 percent of all the share capital of all Russian companies.

So if you do the math, the vouchers cost, on average, about $20 each, and you multiply that by 150
million people, which was the number of people in the country, that gets you to $3 billion worth of
property, and that was exchangeable for 30 percent of the share capital of all Russian companies,
which meant the market capitalization of Russia in 1992, in 1993, was $10 billion.

Russia is the second largest oil producer in the world after Saudi Arabia; they have a third of the
world’s natural gas; they have timber, aluminum. And it was trading at something like one fifth
the valuation of Yahoo at the time. So I was obviously very intrigued and excited and enthused by
this idea.

And so I go back to Solomon Brothers to share my enthusiasm and I say, “What are we doing
wasting our time with investment banking advisory work? We should be investing as principals in
these privatizations.” And when I started talking about as investing as principals in Russia, people
said, “What are you, out of your mind? That’s Russia.” And I said, “No, but look how cheap it
is.” They just couldn’t get beyond the word Russia.

And I didn’t have any great organizational, political skills. I didn’t realize that you have to be
subtle in your ways of lobbying organizations. So I figured if one person said no, I would just go
onto the next person to see if they said yes. And so I worked my way through the entire
organization, completely discrediting myself. And by the time I was done, everybody said, “Who
4
is this …that’s the weird Russian guy.” And the guys my age stopped inviting me around for
lunch because they didn’t want to ruin their careers by being associated with me. And the
management were getting pissed off because I had not been earning this five times that I was
supposed to be earning. And I was on the verge of being fired when I got a call from a very senior
guy in the New York office of Solomon Brothers whose job it was to invest the firm’s own capital
in strange emerging market situations.

And he called me up and he said, “Bill, I understand that you’re having a few career difficulties,
but you might have something interesting to say about Russia. Why don’t you come to New York
and tell me what you know about Russia?” And so I spent two days preparing two days preparing
what I considered to be sort of the presentation that was going to save my career. And I put
together a really, very compelling PowerPoint presentation. And I get on a plane to New York
and I go and meet this man, and I start making my presentation. And I get about half way through
the presentation, and without any feedback, positive or negative, he steps up and leaves the room.
And I thought to myself, “God, what did I do wrong here? This was my career-saving
presentation and I think I’ve not saved my career.” And I’m sitting there thinking about what I’m
going to do to salvage this meeting, and I’m thinking over and over in my mind, and he’s gone for
about half an hour, and when comes back, before I have a chance to sort of launch into my
meeting turnaround story, he says to me, “Bill, that’s the most amazing thing I’ve ever seen in my
investment career.” He said, “I want you to stop wasting your time doing anything else that
you’re already doing. And I just went to see the Risk Committee of Solomon Brothers and I got
you $25 million to invest in this stuff. Let’s get to work.” And that was the beginning of my
career investing in Russia.

We put the money to work in December of 1993 and by July of 1994 The Economist magazine
picked up on the same math that I just took you through and wrote a story called Sale of the
Century. And after that, a bunch of people were alerted to the fact that this stuff was cheap. A
few people started to invest in Russian stocks, and the value of our portfolio went up five times.
My portfolio went from $25 million to $125 million. And this was back in the time when $100
million was real money. And all of a sudden, the guys who had stopped coming around my desk
for lunch were hanging around my desk early in the morning waiting for their tips on how to get
rich in Russia.

And something very important happened to me then, which was the senior sales people who
covered the most important clients on Wall Street for Solomon Brothers, started coming around
and asking me if I would meet their clients to explain to them what I was doing in Russia. The
Soros coverage team and the Sir John Templeton coverage team and the Edmond Safra coverage
team; their clients didn’t want to see them, and so they were always looking for ways of getting in
front of them and they had this interesting guy from Russia that made five times his money.

And so I went around on this world tour of famous investors on Wall Street, and they were all
much smarter than Solomon Brothers was. The moment that I showed them the stuff, they said,
“That’s amazing. We want to invest.” And they said, “Can we give you some money to
manage?” And I said, “Maybe. I don’t know. We don’t manage other people’s money, but let me
go back and ask the bosses.”

So I get back to Solomon and I go to the bosses and I say, “I went and I met Soros and he wants to
give money, and others do too. And I think we have a possibility of building a business here.”
5
And one of the big bosses said, “That’s an excellent idea. Let’s form a task force to study it.”

So I show up on my first task force meeting, and there was like 40 people present, 30 of them I
had never seen before in my life, I didn’t know their names. And apparently, they were like senior
managing directors and managing directors and junior managing directors and senior directors and
directors, and me. And I was way below that on the totem pole. And we got into this meeting and
they started discussing this important business that was going to be launched, and halfway through
the meeting, a big argument broke out about who is going to get the economic credit for the
business. All these big heavyweights, very impressive people with very deep voices and
important positions started throwing their weight around. And I thought to myself, “I don’t know
who’s going to get the economic credit in this business, but I know for sure one person who’s
not.” And that was me.

So I sucked up my gut and I quit and I set up Hermitage Capital Management and I went back to
all these famous investors, and the one who impressed me the most was Edmond Safra. He was
the owner of Republic National Bank of New York. He has since passed away. But he put up my
first $25 million and I took his money and we became partners and I moved to Moscow. And
when I was living in Moscow … I moved to Moscow, it was April of 1996, and I was the only
Wall Street-educated principal sitting on the ground in Moscow. There was a lot of Wall Street-
educated brokers sitting there, and there was a lot of Wall Street-educated principals sitting on the
ground in Wall Street.

And so the principals on Wall Street had to entirely rely on the brokers in Moscow for their
research. And so the brokers could pretty much define which stocks were valuable and which
ones weren’t by writing a research report, because you couldn’t, a guy on Wall Street couldn’t buy
a stock if there was no research report written. And so the stocks with research reports traded at
ten times the value of stocks without research reports.

But I thought to myself, “I don’t have to rely on their research. I’m sitting on the ground. If one
oil company trades at one tent the value of that other oil company, and I can go visit that oil
company and see that their management is just as surly as the other one and their oil derricks are
rusting in the same way and they have the same cost structure and the same nastiness and
everything, why not buy the one at one tenth the valuation?” And so I did that. I bought, I filled
my portfolio with companies that were exactly comparable to the ones with research, but trading at
one tenth the value.

But then I did something to help the process along a little bit, which was I wrote some of the stuff
down that I learned in my meetings, and I shared it with all those famous guys in Wall Street that I
met. And so they were thinking, “Why should we buy this stuff from the brokers if this stuff is so
much cheaper?” And so they started buying it and pretty soon, the first month, my fund was up 40
percent, next month is up 35 percent. By the end of the first year I was up to $150 million of
assets under management, up 175 percent. Second year, 1997, I was up 228 percent. I was the
best performing fund in the world in 1997. I had more than a billion dollars under management.
The New York Times featured me on their front page, Businessweek, Financial Times. I was very,
very clever. My clients were inviting me to their yachts and celebrating their acquaintance with
me.

Now, any of these things, in the singular, would have been okay, an invitation to a yacht would
6
have been okay, good performance in a fund would have been okay, maybe a billion dollars too
much, but you put all this stuff together, and if you have any experience on Wall Street, which I
didn’t, but if you put any of this stuff together and you had any experience on Wall Street, you’d
understand that all these things together were the biggest sell signal you could ever have in
anything. A guy was up 800 percent in two years, with a billion dollars, who’s 33 years old.
That’s a sell signal. I didn’t see that. I didn’t sell. And, unfortunately, I didn’t because the
Russian economy, or I should say the Asian markets started to have trouble, Asian debt had
trouble, Asian currency started to devalue, and that spread to Russia, and in 1998 Russia defaulted,
devalued and my portfolio went down 90 percent. I lost 900 million bucks, nine hundred million
dollars. I can’t tell you how horrifying that was.

And it wasn’t just the financial loss. For me it was actually much more than the financial loss.
For me it was the absolute public humiliation of being the guy, the Russia guy, and having
attracted all these people to come invest with me, and have them lose all this money, it was just
horrifying. And so I decided that I was going to climb out of this, I was going to get these people
out of this hole no matter what. I was determined, no matter what, I was going to climb out of this
hole, take these people with me, and repair the situation.

But I had a problem, which was that the guys who owned the companies that I was investing in,
they had a different idea. The oligarchs of Russia, the only reason they had behaved themselves
up until this moment was the idea that Wall Street would give them some money for free
somehow. The bankers from Goldman and Morgan were running around telling them all the
lucrative things they could do on Wall Street as long as they behaved themselves.

But after 1998, all those guys were fired from Morgan Stanley and Goldman Sachs, and there was
nobody investing anything in Russia, and there was absolutely … Wall Street was closed for
business, and so there was no longer an incentive to behave. And there was no disincentive to
misbehave.

And so, as a result, they said, “Well, it’s economically rational to steal money from everybody.”
And they embarked on the biggest orgy of stealing that’s ever happened in the history of the
world, asset stripping, transfer pricing, dilutions, embezzlement, you name it, they did it. And
there I was, sitting on my last ten cents on the dollar, with a huge chip on my shoulder, trying to
climb out of this hole when they were trying to smack me down into the hole further. And so I
decided to do something which will forever change my life, very negatively, which was I decided
to go to war with these guys for stealing from me, just to try to stop them from doing it.

My most famous war, and the one that’s been written about in business school case studies and the
one which defined my career, was the war with Gazprom. Gazprom, as most of you know, is the
largest, I think they said the largest company in the world, certainly largest in terms of assets. And
at the time, in 1999, Gazprom was trading at 99.7 percent discount to Exxon, per barrel of
hydrocarbon reserves. Why was it so cheap? Because everybody thought that there was a lot of
stealing going on there, and the market basically concluded that everything was stolen from the
company.

And so we said to ourselves, “We don’t think everything is being stolen from the company, but
how do you know?” And so we got together, I got my research team together and I said, “Let’s do
a stealing analysis of Gazprom.” How do you do a stealing analysis of a company? I don’t know.
7
They didn’t teach that to me at Stanford Business School. I don’t know if they teach that at
Columbia. Ray, do you teach that now?

Q: I do.

BB: Well, I’ll tell you how … (Overlap)

Q: We teach about Gazprom.

BB: You teach my case? Well, the way you do a stealing analysis … well, I should say the
management consulting was kind of a silly profession for me, but I did learn one thing when I was
working at the Boston Consulting Group, which was that if you have a question that you can’t
answer by looking up in a book, then you could set up interviews with people who know the
answer to the question, and then you write it down and then you put it into a report and that’s how
consultants make their money.

And so I thought, why not give that a try in my stealing analysis? And so we made appointments
with people to have breakfast, lunch, dinner, tea, coffee, dessert, anything, any type of food we
could invite them to, to see whether they would tell us how much stealing was going on at
Gazprom, the competitors, customers, suppliers, et cetera.

And a lot of people accepted our invitations. And we went to these meetings and people started
spilling their guts to us. It turns out that everyone was so angry for not being included in the theft,
they sure didn’t want these other guys to get money. And we started filling up notebooks full of
this stuff. And then we said to ourselves, “How much of it is true?” And we discovered
something truly remarkable about Russia. Because Russia is the most bureaucratic country in the
world, every bit of information about everything is kept in some ministry. I mean information is
just … people say it’s an opaque country. It’s not. It’s the most transparent country in the world.
There is just so much information there. And it’s just a question of knowing where to go and get
it. And so I had a guy working for me who became a specialist in going to get the information.
And we went through cobwebs and dusty ministries where no one ever had visited them, and got
databases that no one ever had asked for before, and took those databases and combined those
with the notes that we took on these meetings, and we concluded that nine members of
management of Gazprom, between 1996 and 1999, had stolen an oil company the size of Exxon
out of Gazprom. This has to be the largest fraud in the history of the world. Exxon is as big as
Kuwait in terms of oil reserves; nine guys had stolen it over three years from Gazprom.

But we came up with the second most important conclusion, I guess this was another career-
defining conclusion, that an oil company the size of Exxon only represented 9.65 percent of
Gazprom’s total reserves. More than 90 percent was still there when the market was pricing it as
if 99.7 wasn’t.

Now, again, you don’t have to be a Columbia MBA to figure out that’s a good deal, and so made
Gazprom my single largest investment in my career. It became 30 percent of my investment
fund. We had to go back to the investors to get special dispensation to make it such a concentrated
position.

But then we took the dossier that we created and we broke it into seven chapters, and we gave the
8
first chapter to The Financial Times, the second chapter to The New York Times, the third chapter
to the Wall Street Journal, et cetera. And they were a little scared, and we said, if you don’t write
about it within a week we’re going to give this chapter to your competitor. And so each of them
wrote the story, and this lit up the Moscow sky. For the same reason that all these people were
spilling their guts out to us, it became … no one had any idea how much money had been truly
stolen and people were pissed off, not for moral reason but because, how could those guys get so
rich and nobody else did?

As a result, nearly 500 articles were written over the next 12 months about what we had disclosed.
The parliament began debates, board of directors began debates, minority shareholders began
debates, everybody was debating with everybody. And roughly a year after we started this
exercise, Putin stepped in and he fired the CEO of Gazprom who had been doing all the stealing
and replaced it with one of his colleagues and friends whose job it was to stop assets from leaving
the balance sheet, and to recover what had left the balance sheet. The share price doubled, and
then doubled again, and then doubled again. Gazprom went up 100 times from that day. This is
not 100 percent, 100 times. This was 30 percent of my fund.

So, as you can imagine, I became very enthused with this way of investing. And so we did at the
electricity company, we did it at the national savings bank, we did it at three different oil
companies. And every time it was working, and why was it working? Because Putin had the
same enemies that we did. The oligarchs were stealing power from him, and stealing money from
us. And so every time we would publicize one of these scandals, I would get a call from the Chief
of Staff to the President, or from the Deputy Finance Ministry, from the Energy Minister, asking
for a briefing. And I would go to the Kremlin or the White House with my PowerPoint
presentation and my analyst team, and we would take them through it, and they would generally
do something to fix the problem. And so I was extremely happy and my $100 million at the
bottom of the market grew into $4.5 billion by 2005. It was a remarkable thing. I had become the
largest foreign portfolio investor in the country, and I thought quite a big friend to Russia. I
thought I was doing them a big service. They should have given me an award for cleaning up
Russia. But they didn’t.

And November 13th, 2005, as I was flying back to Moscow, after living there for ten years, they
stopped me at Sheremetyevo Airport, they took me from the VIP lounge to the detention center of
the airport, they locked me up, they kept me there for 24 hours, and then they put me on a flight
back to London and declared me a threat to national security, never to come back to Russia again.

I was very upset, as you can imagine. I was the largest investor in the country. This was my
business. This was my whole career. This was my whole life. But I had no idea how that was
nothing compared to what was going to happen next.

After that my clients all said, “We want our money back. This was a great ride. Thank you very
much, 40 times our is very good.” And we liquidated everything we had in Russia and took every
security we had, we liquated it. Even the people who didn’t want their money back, we bought
ADRs in London. I then moved my whole team out ‘cause I thought when this stuff starts getting
bad it gets a lot worse.

And a good thing I did that because on June 4th, 2007, the next phase of their attack began.
Twenty-five officers from the Moscow Interior Ministry raided my office in Moscow, and 25
9
more officers raided the offices of my law firm, Firestone Duncan, an American law firm. And
they specifically raided the offices to get hold of the certificate stamp, seals, and articles of
association of our investment holding companies. And we didn’t understand why they wanted
those until three months later, we learned that we no longer owned our investment holding
companies. The documents had been used by the police to transfer our companies into the name
of a man named Victor Markelov, who had been convicted of murder in 2001, and released from
jail early.

We then said, “This is very disturbing.” And we went out and hired seven lawyers from four
different law firms to help us unwind this ugly thing we had just discovered, including a young
lawyer named Sergei Magnitsky. He was a 36-year-old lawyer who worked for this American
firm, Firestone Duncan. And Sergei came back to us after several weeks of investigation. He
said, “This is far worse than just what you’ve discovered so far.” Sergei said it wasn’t just the
companies had been reregistered, but the documents that had been seized had been used to
fraudulently create a billion dollars of fake contracts that your companies owed to three newly
formed shell companies. And then those contracts were taken to court, the shell companies sued
our companies based on unpaid billion dollars of liabilities. They sent lawyers that they hired, the
bad guys, without our knowledge, to defend our companies, but they didn’t defend our companies,
they pled guilty. And in five-minute hearings, the court awarded a billion dollars of judgments
against our three Russian holding companies.

At that point the police then started to go around all of our banks searching four our assets, to
seize them. And it was just very, very, very fortunate that all my clients redeemed and we took
our money out of the country, because otherwise they would have taken it on the basis of these
fake court judgments.

But that wasn’t the end of it. Sergei kept on investigating and he said, “If you think this is bad,
wait ‘til you hear what I’ve got for you next.” He said, “After not getting any money from the
banks, they guys who stole your companies went to the tax authorities and they took the liabilities
that they created in court, and they said the billion dollars that these companies had earned, and
the $230 million of taxes paid in 2006, it was all a big mistake.” I said, “These companies
shouldn’t have paid any tax because, look, here’s a billion dollars of liabilities that they waved
around the fake court judgments.”

And so they applied for a $230 million tax refund on the 23rd of December, 2007. This was the
largest tax refund in Russian history, and it was granted in one day, on the 24th of December,
Christmas Eve. One day, the largest tax refund in Russian history.

Well, at this point this was quite a grave situation. And they didn’t steal any money from us.
They stole money from themselves. It’s just remarkable. And so Sergei helped us prepare
criminal complaints and we filed these complains with every law enforcement agency in Russia.
And one would have expected, after filing complaints about the theft of nearly a quarter of a
billion dollars by Russian officials from the Russian state, that there would be SWAT teams and
helicopters and major law enforcement action immediately. Well, there was SWAT teams, but
they weren’t dedicated towards the people who had stolen the money. The police opened up
criminal cases against every single one of the lawyers from four different law firms, all seven of
our lawyers from four different law firms, who helped us investigate and uncover and expose the
fraud.
10
And so I called up every one of our lawyers and I said, “This is really ugly and I’m sure it’s going
to get uglier. It’s time to pack your bags and get out of the country.” I said, “Come to London,
we’ll take care of you.” And these were people in their 40s and 50s that were specialists in like
arcane types of Russian law, some of them didn’t even speak any English, and I was telling them
they had 15 minutes to pack their bags. It wasn’t an easy conversation.

But six of the seven said yes. The one person who said no was Sergei Magnitsky. Sergei, he
came from a different generation. He came from a … he was 36 years old. He came from this
young generation of hope and optimism that came from Russia, democratizing and ending
communism. And he didn’t want to leave. He said, “I’ve not done anything wrong. I know the
law backwards and forwards. I’m not going to leave.” And he stayed. And, moreover, he said,
“I’m a patriot, and these people have stolen $230 million from my country, and I’m going to
testify against them.” And he did. He testified on October 8, 2008, against the police officers
who raided the office. And on November 24th, 2008, the same, not the same officers but three
officers who reported to one of the people he testified against, came to his house at eight in the
morning and arrested him and put him in pretrial detention. And they started to torture him to get
him to withdraw his testimony. They put him in a cell with eight inmates and four beds and kept
the lights on continuously, in order to sleep deprive him and them.

After they loosened him up, then they came to him and said, “Okay, why don’t you withdraw your
testimony and sign the following confession saying that you committed a number of tax crimes,
that Bill Browder committed these tax crimes, and that you guys were both responsible for the
$230 million stolen from the budget.” And Sergei said, “You’re out of your mind. I’m not going
to do that.” And he said no. So they then put him under more pressure. They put him in a cell
with no windowpanes in the Moscow winter, in December, and so there was no heating in the cell
and they all were just with nothing to keep them warm. And all the inmates got upper respiratory
infections. They then moved him to a cell with no toilet, just a hole in the floor. And every time
they moved him from cell to cell, and they must have moved him something like 25 times, they
would lose his belongings, and the most precious belonging he had was a device to boil water,
because you can’t drink the water out of the faucets in Moscow prisons. So he was exposed to no
sleep, cold, hot, cold, all this unsanitary stuff, and unable to drink drinkable water, and after six
months of this he lost 40 pounds, and he was diagnosed as having pancreatitis and gall stones, and
he was prescribed with an operation on August 2nd, 2009. One week before his operation they
came to him and said, “Okay, you ready to sign this false confession?” He still said no, even with
all this terrible health problems. And a week before his operation was due to take place, they
abruptly moved him to another prison called Butyrka, which is one of the toughest prisons in
Russia, really nasty place. And the nastiest part of it was that there was no medical facilities there
at all. And at that point he was desperate for medical attention. He needed an operation.

Pancreatitis and gall stones is an imminently treatable disease, and all it takes is like one click on
WebMD to know that if you don’t treat it, it’s fatal. And they refused him treatment. Things
started getting worse and worse and he went into excruciating, unbearable pain, and they refused
to give him anything, anything for his pain, refused him any medical attention. He applied for
medical attention on 20 different occasions, officially, through his lawyer, to all the different
parties who had the capacity to do it, to give him medical attention. Not a single one of them
accepted his requests, and often they would write written rejections of his requests for medical
attention.
11
Things got worse and worse and worse, and on the night of November 16th, he went into critical
condition, and it was only then that they decided to move him to a prison with a hospital. They
moved him to a prison called Matryoshka Tishina Prison. But as they’re treating him at
Matryoshka Tishina, they put him in a straight jacket, put him in an isolation cell, and waited
outside the door for one hour and 18 minutes until he died. He was 37 years old and he was my
lawyer.

After he died we released … and the reason we know all this stuff is because he wrote it all down.
Everyone has their own way of dealing with adversity in life and his was to write it all down in the
form of complaints about how they were misusing their powers. He wrote it all down and every
time he filed a complaint they ignored it, but we got a copy of it, and there are 450 complaints in
his 358 days of detention, and this forms the basis of, essentially, a modern day gulag archipelago.

And we released one of the complaints that he wrote, which is a 40-page document to the General
Prosecutor of Russia. We released it along with a press release announcing is death. And the
main opposition newspaper, Novaya Gazeta, saw this and they couldn’t believe what they were
reading. Most people thought this was the 1930s when they read it. And so they took this
document and they published it in its entirety and they called it Sergei’s Prison Diaries. And
when the Russian population saw this, they couldn’t believe it. And even though it was not
politically correct to speak out against the government, everybody started to, ‘cause this was
something outrageous. And more outrageous for everybody was the fact that Sergei wasn’t an
oligarch, he wasn’t a human rights activist, he wasn’t even … he was just a tax lawyer working for
the wrong client, who did the right thing when he was faced with corruption.

And this violated the social contract. The social contract in Russia was to, if you kept your head
out of those controversial things, like politics or whatever, that you could enjoy the fruits of the
authoritarian regime. And as a result many, many people said many, many things, and the
newspapers and the radio and all over the place. And the President of the country was forced to
call an investigation into Sergei’s death. And by doing so, it actually created even more news
about it, because the state television then started reporting on it.

At this point, Sergei has become an icon for everything that’s wrong with Russia. Twenty-nine
percent of all Russians have heard the name Sergei Magnitsky now because of all the controversy
around his death. But what’s most remarkable, is even the President calling for an investigation
… we’re now one year after … the anniversary of Sergei’s death is the 16th of November, and not
a single person has been charged with any crime in relation to this, not in relation to his torture,
not in relation to his death, not in relation to lack of medical care, and not in relation to the fraud,
where there’s huge amount of documentary evidence.

And what says to me is that Russia is a truly corrupted system, right up through the ranks, all the
way to the top. The fact that the President of the country cannot crack down on this thing is a
truly damning statement about what’s going on in Russia.

I’ve gone way over time and we were supposed to have a conversation here, so I’m going to stop
right now and I’d be happy to converse or do whatever you want to do from here.

BG: Why don’t you have a seat? I think I’d like to organize this in two parts. I’d like to give
12
you people a chance, first to ask Bill about this particular incident. Then I’d like to move onto
something more cheerful, which is investing in emerging markets more generally, and what
lessons Bill might have learned from this, and how many might have adapted. So if there are
questions about the narrative you just heard, we’ll take those first and then hopefully we’ll … yes,
go ahead?

Q: (Inaudible)

BG: The question was, were there any warnings from any of the official diplomatic community
of what was going to happen?

BB: There’s an interesting thing going on in Russia which was everybody said … when they
saw me going to war with these oligarchs, they said, “This guy’s not doing … it’s impossible, it’s
unfeasible, that some guy from Chicago is doing this on his own volition.” In Russia, everything
is a conspiracy. And so they said, “If he’s not doing it on his own volition, who’s standing behind
him?” They said, “Well, he does this, Putin steps in and fires that guy. Huh. This is just a clever
strategy of Putin to go after is enemies by using this weird guy from Chicago.” And so, for four
years nobody touched me because they thought that the Hermitage Fund was the Putin Fund. I
never got a single threat or nothing, absolutely nothing. Nobody touched me, nobody threatened
me. Everybody thought that I was completely untouchable.

And it was only after they arrested the richest guy in Russia, Mikhail Khodorkovsky, and then al
the oligarchs realized that they had better go and come to terms with Putin, that the war between
Putin and the oligarchs ended. And at that point I wasn’t untouchable. But there was never any
warning. It was a complete, utter surprise when the whole thing started going down the tubes.

BG: Yes, go ahead.

Q: I lived in Russia from 2003 to earlier this year, and I remember back in like 2003 up until
2005, (Inaudible) you had this reputation of being something of a cheerleader. You generally
(Inaudible) … if I actually remember correctly, you (Inaudible) the prosecution (Inaudible). I’m
wondering now (Inaudible) … (Laughing)

BB: No, I still love him. No, of course I was the cheerleader. He was cracking down on every
bad guy who I was fighting with. How could I not have been a cheerleader? I think that his .. I
think the people who were really honest with themselves would have all said that during his first
term in power he was actually doing stuff that looked like it was reform. And in fact, for what it’s
worth, Khodorkovsky was one of the biggest oligarchs who I was fighting with in 1999. So that’s
why I was in favor of that. I’m now, having seen the true colors of this regime, I’m very much in
favor of Khodorkovsky coming out of jail and I very much regret ever saying a nice word about
this man who clearly doesn’t have my best interests at heart, and we can all make mistakes in
judgment and we can all support people that we then, who turn on us and I certainly don’t have
many kind things to say about the way in which he has treated me.

BG: Okay, last question on this … well, okay, let me take one from over there. Go ahead.

Q: Mr. Browder, coming from the former Soviet Union, Winston Churchill once famously
described Russia as a, a change of power in Russia is (Inaudible) bulldogs under the rug. You
13
never know anything until the bodies are carried out. In light of Mr. Putin’s and Mr. Medvedev’s
plans for the future, what do you see happening in Russia in the next decade or so? Is there going
to be some kind of a semblance of a return to civil society? Or is it going to continue to be
chaotic?

BB: The one thing about Russia is, and if you come from that part of the world you’ll know this
more profoundly than anybody, is that it’s totally unpredictable, that nobody knows what’s going
to happen. We really don’t know what’s going to happen. Whatever the status quo is, and
whatever everybody thinks is going to happen, isn’t going to happen. So the status quo is that
Putin becomes president for the next 12 years because it goes from four years to six years, or is it
14 years … six or seven years, terms. That’s the prediction and the status quo. I would argue that
it’s an untenable regime for one simple reason, because you can’t have the kind of criminality that
you have in Russia where, essentially, 100,000 people are living the dreamiest life you can
possibly live, and 141 million people are living in abject, unpleasant, horrible poverty. You just
can’t have that without an ideology.

In 1937 there was an ideology which was all these people were fighting, all these bad people that
they were taking away to the camps were against this great experiment of socialism, and so
somehow people could somehow justify that in their mind. As Russia does all this nasty stuff now
internally with this criminality, there is no ideology, and that’s not going to … that’s not tenable.

And so I hate to say it, but I think the most likely outcome is not civil society, but it’s some type
of really hard core nationalism, which comes into replace this criminality, where there is some
ideology. And that’s not necessarily a good ideology when it’s a hardcore, nationalist ideology.

BG: All right, go ahead, and then we’ll move onto emerging markets?

Q: I’m really grateful to you for what you’ve done in this (Inaudible) … any other countries.
But I think the most … best thing that you can do, and I think that’s probably what I would do in
your place is try to find, try not just to (Inaudible) … it’s pretty well known that these people
they’re keeping assets in (Inaudible) and here in the US. That’s probably what is most …

BG: Let me cut you off there. So the question is, what are you doing about it? And there is a
suggestion that you do something to go after the assets of the people who did this.

BB: Don’t you worry.

BG: You might want to tell them what you are doing.

BB: So, basically, I was a simple hedge fund manager before Sergei Magnitsky died. I had a
very uni-dimensional life where I was worrying about what stocks were going to go up, what
stocks were going to go down and what investors were going to invest with me. That was my life.
It’s a very simple calculation. It was a very satisfying and interesting life. And then they killed
my lawyer, and they killed him as my proxy, and they killed him for defending me. And that
changed my life. And I still run my fund, and I still worry about what stocks are going to go down
and up and all that kind of stuff. But I also spend a lot of my day thinking about how I’m going to
make sure that Sergei Magnitsky didn’t die in vain, that the people who did this to him, every
single one of them, regrets having done it for the rest of their lives, and that we make sure that
14
we’re going to get justice for Sergei Magnitsky, and I’ve done a lot of things in that regard. I just
came from Washington yesterday where we put in place a law which has been proposed by
Senator Benjamin Cardin of Maryland, on the Democratic side, and Senator John McCain from
Arizona, on the Republican side, to ban any official who played any role in the fraud, false arrest,
torture and death of Sergei Magnitsky, for life, coming into America, along with all of their family
members, and to freeze their assets if they come into the country.

I was just testifying, by video link, in front of the Canadian Parliament today, asking for the same
law to be put in place there. I’m doing the same thing at the European Parliament, at the German
Parliament, at the British Parliament. And that’s just the tip of the iceberg of what we’re going to
do to these guys. And it’s my lifetime project to make sure that every single one of them regrets
forever having done what they did. And that’s the beauty of being a hedge fund manager who’s
been successful, as I’ve got the facilities and resources to do that, and that’s what we’re doing.

BG: Well, you’re also suing them, right?

BB: We have three parts to our campaign. The first is political, the second is legal, and the
third is media. If you have the opportunity you can, we have a website called www Russian dash
Untouchables dot com. And you go there and you can see some of the movies we’ve made about
these guys, and you can learn all about the property that they’ve acquired after they killed Sergei
Magnitsky. We got lists, we got names, we got pictures, we got assets, we got all sorts of
interesting stuff. What’s that?

Q: Can you say that again?

BB: Russian dash Untouchables dot com. Anyways …

BG: All right. So moving on, how has this experience changed your approach to investing in
emerging markets?

BB: Well, I think there’s one very profound message from this whole thing, which is that if a
country doesn’t have … a lot of people think that democracy, well, that’s kind of interesting and
cool, but who cares if the economic growth is good and the businesses are growing. But if you
don’t have democracy, and you don’t have a free press, then stuff like this can happen and there’s
no self-regulating mechanism. And I guess one of the things that I’ve learned from this
experience, is that there’s a huge economic value to all this fuzzy stuff that one doesn’t think about
that much as an investor. People talk about investing in China as if it’s all great, but the fact that
there’s not a free press and the fact that there’s no democracy there makes … either the situations
have to be that much more attractive than a comparable situation in another country, or it should
be at a discount to justify that type of thing.

And I would say that that’s probably the single biggest lesson that I’ve learned is that all the things
that we … we undervalue the things that make America and a number of other democratic
countries great, and we shouldn’t, because that plays a real role in valuation and what something’s
worth.

BG: What about the prior strategy that you had of doing one country at a time? Have you
rethought that?
15
BB: Yeah. After dealing with one country and all the terrible things that happen in a country,
and even before all the terrible stuff happened in Russia, every time there was like a major
political hiccough, my whole life was on hold and everyone was calling up and my economic, my
entire net worth was at risk, and that’s kind of tiring. And so I’m now in like 25 different
countries, and thank you very much, I’ll take the diversification, even as harder work figuring it all
out.

BG: And are there costs to doing that?

BB: Oh, surely. So, the benefit of investing in one country is you can know everything about
that country, that you could become an expert. And I was truly the leading expert on Russia, and I
knew more than a lot of the Russians, in their own country, about their country. But the cost is
that no matter what happens in the country, you have to love that country, ‘cause that’s your
country. And so the cost of investing in one country is that you’re committed to one country. The
cost of not being invested in one country and being invested in 25, is that there’s a million
different things going on and different permutations of each country. And the only way that I can
get around that, and this comes back to my original sort of investment strategy, is I’m a deep value
investor. And I figure there’s sort of an 80-20 rule to this whole thing, that you can put 20 … if
something’s cheap enough, you can put in 20 percent of the effort to get 80 percent of the value if
it’s cheap enough. And so we just try to go through things where the downside is limited by how
cheap something is on an asset basis, on an earnings basis.

BG: And do you have difficulty measuring that in different countries or is the accounting more
or less comparable across …

BB: The accounting is not comparable across any countries. Although the one thing that being
in Russia for ten years has taught me is I’ve got these big antennas at the end of my head for fraud.
I can sniff out a fraud anywhere I go. I really can. I know exactly what … I know every different
technique that fraudsters use.

BG: So start with that.

BB: Well, we know about conflicts of interest, so if you’re investing in a company, you want to
look at who owns the company, and you want to see what else they do. You want to see how
much they own and how much they own of other things they do, and if you’re investing in like an
agricultural company, and the owner also owns a fertilizer company, that’s not a good thing; if
you’re investing in a company where they switch auditors, that’s not a good thing; if you’re
investing in a company where the majority shareholder is a politician, that’s not a good thing. I
mean there’s a million different ways of doing it. There’s a whole life worth of work in
understanding fraud.

BG: No, but I mean, I assume that fraud is a big part of investing in emerging markets.

BB: Well, it is. You can’t avoid it. And so I always had this saying that you want to look for
companies that are cheap on a profit-after-stealing basis.

BG: And how do you calculate that?

16
BB: Generally, I’ll tell you one thing which is interesting is that it’s only in America where
they over report earnings, because of stock options. They don’t have stock options in most other
places. And so what they do in most other places is they just steal the money. And whatever you
see, the accounting is generally not trying to overstate anything, the accounting is what it,
generally, what’s there. And so if there’s something and you smell fraud, that can also be an
opportunity if you can somehow stamp out the fraud, and that’s what we did in Russia. I haven’t
gotten, I haven’t started like getting my, taking out my toolkit on other countries ‘cause I’m still,
I’m using my activism to fight for Sergei Magnitsky right now. But once we get around to it, after
we’ve accomplished some tangible goals in the Magnitsky case then we’ll probably show a few
guys how to stop stealing.

BG: All right. Now, next, when you invest in these countries, do you take a macro view at all
other than the political view you just described?

BB: Yeah, of course. I think you have to take a macro view before you even invest in a
country. There’s a lot of countries where the macro situation is just dire, particularly in Eastern
Europe right now, and also there’s a lot of countries in the western world where the macro
situation is dire. And so you kind of have to start with the macro and then you work your way
down to the micro.

But what I don’t do, which makes me different than most other managers, is I don’t say, “I love
Brazil ‘cause the macro is good, therefore, I’m going to get some Brazilian exposure.” I might say
I love Brazil, and then I’ll send a team of my guys down to Brazil for a couple of weeks, and if
they can find something that’s especially interesting and cheap on an absolute basis, and cheap on
a relative basis, then we’ll buy it. But we start out with a macro view and then we work our way
down to find things that are compelling on a mirco basis. And if any of you have careers or are
considering careers in the investment world, I strongly advise against getting exposure to things.
Getting exposure is a sure way to not make money. One needs to be an investor, and the way you
invest in things is by looking for things that are mispriced, and generally the way to find things
that are mispriced is look at quantitative measures of their mispricing, which generally comes
down to valuation. And if you look out, back into history, and you look at what techniques make
money, value investing trumps everything.

BG: It does. All right. So the last question I’m going to ask and then we’ll take a couple more
from the audience ‘cause we got to be out of here at seven. In terms of the current outlook, is
there anyplace that you really see opportunities in emerging markets, at the moment?

BB: Well, I think the entire space of emerging markets is a bubble that’s about to be inflated
because of all the money that’s being printed in the developed world. I don’t think that emerging
markets are attractive on a valuation basis today, on average. There are attractive situations in
emerging markets, but I think that the completely absurd economic policy of printing money, all
that printed money is not going to go toward saving the American economy, it’s going to go
towards inflating Thai real estate prices. And so I think that if you can feel comfortable being on
the ride, understanding that it’s going to end in tears at some point, there’s a lot of money to be
made in the meantime, between now and the tears, and it’s just a question of when it’s going to
end in tears and how it ends.

17
BG: Okay. I just want to do one caution, which is the safe sex version of this. Everybody who
tries to do what Bill just describes, gets the tears not the money. I know of nobody who’s gotten
out ahead of time, including our friend when he was investing in Russia the first time. All right,
are there any other questions about emerging market investing generally? Go ahead.

Q: First of all, thank you very much for the very interesting presentation. I worked with
Firestone (Inaudible) … two questions. How did you communicate your strategy outside Russia
to your investors? How did you transition (Inaudible)? Going back to Professor Greenwald’s
question, what markets do you like, or are you simply focusing on pricing?

BG: He’s sort of asking what markets are cheap. Go ahead.

BB: The way that I transitioned was that I went to London … I got kicked out and I brought my
team to London, and everyone redeemed from my Russian fund, and so I went back and I said,
“Well, listen, we’ve done some brainstorming and we’ve decided we’re going to try out our
Russian strategy in the rest of the world.” And some people made 40 times their money with me,
and so they said, “Okay, we’ll give that a try.”

What markets do I like? I don’t like any markets. I think that actually … I like companies in
certain markets. I like the macroeconomics of certain markets, but I wouldn’t say that there’s any
… it’s not like when I found Russia and it was trading in such a deep discount I could say
anything in Russia really made sense. Half our money is in Asia because those places are growing
and if you can find cheap things in markets that are growing with good economics, and currencies
that are bound to appreciate, that makes sense. But I feel very uncomfortable just as a general
rule, and I think that there’s too much money chasing too few goods and things are priced, many
things are priced for perfection and so it’s a harder task to find things that really make sense out
there. There’s no generalizations.

Q: So your investor base (Inaudible) …

BB: My investor base or my …

Q: Investors in (Inaudible) …

BB: No, people are happy to just be in emerging markets, with me anyways.

BG: All right, last question. Go ahead.

Q: What practical (Inaudible) … to working in this kind of environment where you don’t have
structures and (Inaudible) …?

BB: Good knife handling skills. I think that the way you really need to operate in these places
is to just be very skeptical. If you go in trusting, as a trusting person, your trust will be abused,
and so you have to be skeptical. It doesn’t mean you have to be cynical, you can just be skeptical
and look for objective, fact-based analysis which helps you determine whether people are lying or
telling the truth.

BG: Can I leave them with one thought that you should never forget about investing? Every
18
time you buy something, thinking it’s a good idea to buy ‘cause it’s going to perform really well,
somebody else is selling you that same thing thinking it’s going to do badly. And one of you is
always wrong. And who do you think is wrong if you’re flying in and they’re local? Keep that in
mind with emerging markets and keep it in mind with Russia. Bill, thank you very much.

19