AF AR Annual-Report 2010 OH

Table of Contents
Management’s Note to Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Report on Fund’s Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Financial Statements
Aquamarine Master Fund, L. P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Aquamarine Fund, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Aquamarine Value Fund, L. P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Assets Under Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Investment Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Team Aquamarine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Dear Partner,
On the following pages, you will find Aquamarine Fund’s audited financial reports for 2010, my
most recent manager’s report as well as charts and a restatement of my Investment Principles.
However, I would first like to share with you how Aquamarine began, and how we have evolved over
the last fourteen years.
Looking back:
Back in 1995, I was two years out of Harvard Business School and working as an increasingly
disenchanted Investment Banker. In search of career inspiration, I picked up the Intelligent Investor
by Ben Graham at my local bookshop. I think I read the entire book in one sitting. I then moved on to
read Berkshire Hathaway's Annual reports and Roger Lowenstein’s "The Making of an American
Capitalist." From there, it was not long before I had set a new path in my life.
Since 1997, when I started Aquamarine, managing the Fund has been my only professional activity.
The result is that Aquamarine Fund represents the sum total of all my efforts in protecting the life
savings of a growing circle of investors that began with my father and continued with various
friends, relatives, and business partners.
The investment results contain within them one or two remarkable successes: Duff and Phelps and
Raffles Education Corporation were six baggers in the portfolio. Crisil, India's leading Credit Rating
Agency had even higher returns. There have also been numerous doubles and triples.
Moreover (and despite a strong and understandable desire to have it otherwise), the portfolio also
contains all of my mistakes, of which there have been a great many. These have been myriad:
mistakes of omission and commission in the portfolio, but also in the way I organized myself, and
some of the ways I sought to build this investment business. The results (presented on the first
page) are net of all expenses—custodial, brokerage, management and incentive fees.
When viewed through the lens of recent history, the last fourteen years have been eventful -
encompassing the Great Financial Crisis of 2008/2009, 9/11, the twin internet and housing bubbles
along with various other major and minor calamities. However, through all of these, the overall
results for Aquamarine Fund are healthy - both in absolute and relative terms. In other words, you
are better off because you invested in Aquamarine Fund. Almost all of the other alternatives,
including bonds, money market instruments, the various indexes as well as 99% of the various
collective investment vehicles, would have delivered an inferior performance.
Those investment vehicles that outperformed Aquamarine Fund over the same period, I believe, fall
into two categories: They have been either lucky, or smart. As far as the smart managers are
concerned, I work very hard to learn from, and reverse engineer what they are doing. This work
includes a lot of reading, visiting various conferences, and even bidding on charity lunches with
Warren Buffett (to my great fortune, the wisdom of Mohnish Pabrai came as a free extra). By the
same token, when it comes to those who were perhaps luckier than smart, I seek to make sure that I
do not get envious by being grateful for my own progress in investing our money, along with the
not-insubstantial rewards that have come with this.
2
It is clear to me that the most important reason for this success has been my continuing conviction
in a very specific and simple set of value investing principles. More generally, it comes from my
desire to learn and adhere to the worldly wisdom that has been taught to me by a remarkable group
of teachers that includes, but is not limited to, Ben Graham, Warren Buffett and Charlie Munger.
At the back of this report I have reproduced our results, as well as a personal summary of those
investment principles.
It remains for me to thank you, my partners and investors. For it is only with your hard earned
savings - entrusted to me, and managed with the insights granted to me by the above-mentioned
worldly wisdom that enables Aquamarine Fund to exist.
Thank you, and warm regards.
Guy Spier
Managing Partner
3
Annual Percentage Appreciation
Aquamarine S&P 500 with

Fund Dividends
Year Class A shares* Included* Relative Results
(1) (2) (1) - (2)
^2011 7.6% 6.0% 1.6%
2010 19.2% 14.8% 4.4%
2009 39.3% 25.9% 13.4%
2008 -46.7% -36.6% -10.1%
2007 17.0% 5.5% 11.5%
2006 37.1% 15.6% 21.5%
2005 7.2% 4.8% 2.4%
2004 11.2% 10.7% 0.5%
2003 29.5% 28.4% 1.1%
2002 -1.6% -22.0% 20.4%
2001 1.9% -11.9% 13.8%
2000 21.4% -9.0% 30.4%
1999 -6.7% 20.9% -27.6%
1998 26.1% 28.3% -2.2%
^1997 2.5% 6.0% -3.5%
*Notes:
^ 2011 is based on January –June 2011 performance and has not yet been audited.
^1997 is based on September –December performance.
We have selected the S&P Index because it is a widely known, well understood and commonly used benchmark
of performance. We could, just as easily have selected the Dow Jones Industrial Average, or the Morgan Stanley
World Index, which would have given a more favorable comparison. The vast majority of professional
investors underperform the S&P Index. Similarly, we have ensured that the presentation of index returns
includes the dividends, to ensure an apple -to apple comparison. By the same token, the returns in
Aquamarine Fund are calculated net of all fees.
4
Aquamarine Fund's Performance Relative to the S&P
Comparison of Changes in $100,000 invested in Aquamarine Fund Inc. vs S&P 500
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
S&P 500
$50,000
Aquamarine Fund Inc.
$0
96 97 98 -99 00 01 02 -03 04 05 06 07 08 09 10 11
n- n- n- n n- an- n- n n- an- n- n- n- n- n- an-
Ja Ja Ja Ja Ja J Ja Ja Ja J Ja Ja Ja Ja Ja J
Comparison of Changes in $100,000 invested in Aquamarine Value Fund vs S&P 500
$250,000
$200,000
$150,000
$100,000
S&P 500
$50,000
Aquamarine Value Fund L.P.
$0
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
*2011 results are unaudited and based on January -June performance.
5
AQUAMARINE MASTER FUND, L.P.
(A British Virgin Islands International Limited Partnership)
7
Manager’s Report
Dear Partners of Aquamarine Fund,
Subscriptions and Redemptions
During the course of 2010, we received redemptions of US$ 1.4 million from 7 investors. In the same
period, we received new subscriptions for US$ 3.7 million from 13 investors.
In addition to generating US$ 2.9 million net new funds available for investment of
US$2.9 million, this represented an increase in shareholder diversification, as well as an increase in the
average amount invested per investor.
Security Sales and Purchases
During 2010, we sold our position in Leucadia National Corporation which generated US$ 3.5 million in
investible funds.
My rationale for purchasing it during the 2008 crisis was as follows:
The company had a large, tangible and diversified book value, which was well in excess of the
value of the share price.
It was a useful way to gain exposure to various commodities -including Iron Ore and Copper, as
well as financial assets(e.g. Americredit & Jefferies) that were themselves depressed(and
reasonably inflation-proof), as well as assets that were being accorded no value, but had a high
option value (e.g. Sangart and the natural gas projects).
All of this was being run by Cummins and Steinberg, who had proven themselves over 30 years as
excellent capital allocators.
I sold the investment when it came to my attention that a dispute had started between Leucadia (LUK),
and Fortescue (FMG). LUK had previously lent money to FMG, and it emerged that the two companies had
very different views regarding the terms of the note. If Fortescue were to prevailin this dispute(they are
now litigating), Leucadia would be forced to leave a lot of money on the table.
This led me to re-evaluate the future upside of the shares. Although tangible assets make for great
downside protection, they can also create substantial "ballast,” which limits the potential upside. Further,
with Cummins and Steinberg reaching the end of an amazing career, I made the evaluation that Leucadia
would have a significant succession problem. At Leucadia, this will be less easily solved than at Berkshire,
and would occupy increasing amounts of management’s time.
Overall, we sold for an 18% profit over approximately 18 months, which was a modest contribution to our
returns.
Purchases
We invested a total of US$ 5 million into 5 new positions. One of these positions has more than doubled
already, and I am optimistic about the other positions.
Cash
Our cash currently stands at 9%, or $8.2 million. Furthermore, our large position in Berkshire would be a
potential source of cash in most environments.
8
A short detour to examine an unusual literary genre-the investment letter
Over time, I have become quite familiar with this genre because each month brings anywhere from 4-5,to
as many as 10-12 investment letters into my email inbox.
The senders come in various types. Most welcome are the investment letters that come from friends as
well as other investors whom I deeply respect and admire, and which I read carefully. At the other end of
the spectrum, some of the letters represent thinly veiled attempts to market an investment product.
The letters come with various writing styles and devices all of which I am familiar with because they all
represent answers to the following question -namely, "What should I report, and what else should I write to
my investors when I communicate with them?"
1. Running economic commentary

This approach can sometimes sound like the radio reports of a horse race. i.e. it sounds more like
a running commentary of what has recently happened. In bad cases this commentary does not
really give any real insight beyond what one could read in the newspapers, usually because the
writer does not have any.
It is often a rehash of news reports + brokerage research, and can also come with claims that the
manager foresaw certain macro events, or that, armed with their own analysis, claim foresight of
certain events was practically obvious.
Meta narrative of the writer: My insight into, and discussion of the macro economy is so erudite that it is
self evident that you should entrust me with your money.
2. Scare the living daylights out of you

In this approach, the writer points out reasons to be worried: For example, today they might
write about:
- potential inflation
- a potential sovereign default in Europe
- massive budget deficits in the US, Europe and Japan
- the Euro or the US$ or the Yen potentially falling apart
- the price of energy and commodities, revolutions in the Middle East and perhaps elsewhere
(the list is endless)
Meta narrative: I am the only one who knows how to protect you from these potential calamities -you
better invest your money with me.
3. Discuss positions
This approach can be very credible, depending on the quality of the manager's insight and
research. It serves to showcase the manager's thought processes and insights. In isolation, there
is nothing wrong with this approach; in fact it has a great narrative which is as follows:
Mr. Investor, as you can see, I am really smart. I have really good ideas and I manage them well. You really
ought to put some (more) money with me (this by the way, is in and of itself, a great reason to put money
with someone.)
My experience with this approach is that it can lead to a cascade of enquiries regarding investment
positions and leads to the need to explain those positions- which then leads either to approach (4) or (5) -
explained in the following sections.
9
4. Take credit for out-performance
When there is out-performance the manager uses his recent or long term out-performance as a
demonstration of his abilities. This may be embellished and expanded upon by speaking
selectively about specific positions and portfolio moves (which may help in selling out illiquid
positions.)
Meta narrative: As you can see, not only do you and I think that I am smart-the market agrees and is
validating this conclusion: Please send me more money.
5. Justify and/or apologize for under-performance

Under-performance generates the broadest variety of specific writing strategies and is the most
difficult for the manager to deal with.
Best of all is to enumerate his mistakes, and seek to demonstrate what he has learned. This is
probably the most respectable approach. However, the manager might restate his investment
theses; explain why the markets are getting it wrong, and why he will ultimately be proven right.
If the manager has already written or spoken about the position in the past, he may feel obliged to
talk about the position again (because now there are a bunch of people following his investment
moves.) This carries a great risk because it generates massive commitment and consistency bias.
In the most arrogant version, the manager explains why there was no way he could have known
that things could go against him. This may come with the accusation of fraud or
misrepresentation on the part of someone else which serves to shift the blame. (I'm brilliant, but
it was those lying liars who did me in...). Of course, in many cases, the manager has simply sold
the position so that he can avoid talking about it.
Meta narrative: Okay, it's not working very well right now, but give it time and "we" will be proven right.
("We" usually refers to some combination of the manager, his staff and investors.)
You should know that the only reason why I am so familiar with these strategies is that I have pretty much
engaged in all of them: Just look at my past letters, which are up on the website for all to see. However,
having recognized that these are unproductive, it is my firm intention to avoid the above mentioned
devices as much as possible.
At the recent VALUEx investment meeting, organized by my friend, John Mihaljevic, and myself, Peter
Wüthrich and Markus Henz (two managers of a family office) delivered a short talk on the topic of, "How
investment reporting can be hazardous to your wealth." My goal is to communicate with you in a way that
maximizes the probability of delivering sustained out-performance.
The best investment letters, as Warren Buffett has stated, communicate in an open and rational fashion
regarding what the manager would have liked the investors to know if their positions had been reversed.
This is my goal.
The joy of charging your customers less

Time and again, it has been an enduring lesson to me that business flows to the people who charge the
least and offer the most value for money -especially when it comes to undifferentiated products. There
are a number of unusual businesses that have had many years of profitable growth by adhering to this
strategy -including Walmart, Costco, IKEA, Vanguard and many businesses from within the Berkshire fold.
I was fascinated to read in Buffett's most recent letter that even Mid-American's electric power generation
business in Iowa, has followed this strategy so successfully that in some cases, houses located in the Mid-
American service area may well sell at a premium as a direct result of lower utility bills.
This is the reason why I am so enthusiastic about our zero management fee share class.
From a business school/Michael Porter perspective, it does not hurt to add that being the low cost
producer can become a competitive advantage in its own right over time. The reason for this is that it
takes various organizational adjustments to run your business this way which entails changes that are
10
difficult to implement and cannot be created overnight. As it is, I am one of a small handful of people who
are willing to manage someone else's money for a zero management fee. I am also glad to report that there
is a small handful of very high quality, thoughtful investors who seek us out for this reason.
Performance expectations
I believe that I can continue to out-perform the various indexes, although by how much I cannot say. My
historic rate of out-performance over the last 14years has been 6% better than the S&P, which is better
than 98% or so of all mutual funds and pooled investment vehicles out there, so I believe that you are
getting a good deal. For as long as the assets are at the current levels, I would be disappointed if I did not
continue to deliver this.
Our Value Proposition

I continue to believe that Aquamarine Fund offers an extraordinary value to its investors.
Low/No Management Fees

It is not unheard of in the fund management industry for investors to be charged 2% or even 3-
4% of their assets for the privilege of having their assets managed by some bank employee. At
Aquamarine Fund, the maximum fixed fee that you would pay is 1%, and many investors have
opted for the no management fee option.
Spier Family is the largest investor; ‘we eat our own cooking’
Your money gets pooled with Spier family assets -I and other members of the Spier family get
exactly the same results that you do.
No substantial performance fees until fund regains new high

I only get a performance fee if I exceed the last high plus a 6% hurdle. While I have earned some
performance fees on capital from new investors that came in at the lows, the last time I earned a
substantial performance fee was in 2007, and it might be as much as another year or two before I
earn a performance fee again. I am fine with that.
No leverage, No margin loans, No short positions, No complexity

I want to earn you a return by purchasing part ownership in businesses. In the past, banks have
tried to entice me to engage in complex transactions and I had no trouble resisting. Businesses
are the wealth creation engines of society, not derivatives.
2011 Annual Meetings

I plan to hold three annual Partnership Meetings. Dates and locations areas follows:
London: Tuesday, June 7th

New York: Monday, September12th
Zurich: Wednesday, October 5th
If you would like to rsvp, you are welcome to do so via email to rsvp@aqfd.ch.
Next opening:
Aquamarine Fund is open to new investments on the first of every month.
There are two classes of shares that are open with two different fee structures.
1) Management fee of 1% of assets performance fee of 20% of the profits above 4%
2) Management fee of 0% of assets Performance fee of 25% of the profits above 6%
For more on this topic feel free to ask us for a document entitled, "Considerations on investing in
Aquamarine Fund," which is also available to you on the website.
11
Thank you and referrals
Part of my learning over the past three years has been rediscovering that I have a phenomenal set of
investors-so thank you for investing with me.
In connection with this, most of you, my investors, were referred to me by existing investors who were
satisfied with my performance. So if you know of someone who you think would benefit from investing in
Aquamarine Fund, please don’t be shy.
Please feel free to call me about referrals, or anything else via phone on +41 44 210 1900
or +1 212 716 1352 (Yes, it rings in Zurich!) or via email at gspier@aquamarinefund.com.
With warm regards,
Guy Spier
Managing Partner
12
Deloitte & Touche
Wickhams Cay 1
P.O.Box 3083
Road Town,
Tortola, VG1110
British Virgin Islands
Tel: +1 284 494-2868

Fax: +1 284 494-7889
deloittebvi@deloitte.com
www.deloitte.com
INDEPENDENT AUDITORS’ REPORT
To the General Partner and Limited Partners of
Aquamarine Master Fund, L.P.
We have audited the accompanying statement of assets and liabilities of Aquamarine Master Fund, L.P. (the
“Master Fund”), including the condensed schedule of investments as of December 31, 2010, and the related
statement of operations, changes in partners’ capital and cash flows for the year then ended. These financial
statements are the responsibility of the Master Fund’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Master Fund’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by the management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Master Fund. as of December 31, 2010, and the results of its operations, changes in partners’
capital and cash flows for year then ended, in conformity with accounting principles generally accepted in
the United States of America.
DELOITTE & TOUCHE

May 9, 2011
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of
member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description
of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
Member of Deloitte Touche Tohmatsu Limited

Statement of Assets and Liabilities
at December 31, 2010
(Expressed in United States dollars)
ASSETS
Investments in securities, at fair value (cost: $82,246,288) $ 83,209,797
Due from brokers 7,551,651
Receivables and prepayments 668
Total assets 90,762,116
LIABILITIES
Capital withdrawals payable 149,990
Due to related parties 137,582
Accrued expenses and other payables 32,106
Total liabilities 319,678

PARTNERS' CAPITAL $ 90,442,438
See notes to the financial statements
14
Condensed Schedule of Investments
Principal Percentage of
amount of partners'
shares Description capital Fair value
INVESTMENTS IN SECURITIES, AT FAIR VALUE

COMMON STOCKS
United States of America

Financial 5.49 % $ 4,969,810
Coal 2.79 2,524,014
Commercial services 1.63 1,473,523
Diversified financial services

367,430 American Express Co 17.44 % $ 15,770,096
Other 0.75 685,610
Total Diversified Financial Services 18.19 % $ 16,455,706
Food 2.50 % $ 2,263,512
Insurance
140,600 Berkshire Hathaway Inc- CL B 12.45 % $ 11,263,466
30 Berkshire Hathaway Inc- CL A 4.00 3,613,500
Total Insurance 16.45 % $ 14,876,966
Leisure time 1.43 % $ 1,293,191

Pipelines 3.94 3,559,230
Total United States, at fair value (cost, $56,769,325) 52.42 % $ 47,415,952
Australia
Basic materials (cost, $1,127,378) 1.78 % $ 1,606,172
Brazil
Commercial Services 2.33 % $ 2,109,578
Schools 3.50 3,161,446
Total Brazil, at fair value (cost, $1,360,538) 5.83 % $ 5,271,024
Canada
Basic materials 2.65 % $ 2,399,865
Financial 3.35 3,028,307
Total Canada, at fair value (cost, $2,826,167) 6.00 % $ 5,428,172
15
amount of partners'
INVESTMENTS IN SECURITIES, AT FAIR VALUE (continued)

COMMON STOCKS (continued)
Egypt
Diversified Financial Services (cost, $651,994) 0.97 % $ 876,486
England
Mining (cost, $694,880) 2.69 % $ 2,434,786
Japan
Commercial Services (cost, $26,146) 0.03 % $ 29,386
Jordan
Mining (cost, $398,218) 0.53 % $ 478,383
Netherlands
Beverages (cost, $3,394,045) 3.69 % $ 3,337,919
Philippines
Food
16,905,000 Alaska Milk Corporation (cost, $1,955,625) 5.62 % $ 5,080,420
Singapore
Commercial services (cost, $7,305,934) 2.09 % $ 1,887,410
Switzerland
Food
110,000 Nestle SA-REG (cost, $4,282,277) 7.12 % $ 6,443,933
Zimbabwe
Building materials (cost, $2,342) 0.00 % $ 973
TOTAL COMMON STOCKS,

AT FAIR VALUE (cost, $80,794,869) 88.77 % $ 80,291,016
16
amount of partners'
INVESTMENTS IN SECURITIES, AT FAIR VALUE (continued)

AMERICAN DEPOSITORY RECEIPT (ADR)
Argentina
Agriculture (cost, $376,127) 1.46 % $ 1,321,919
Switzerland
Food
Nestle SA-SPONS ADR FOR REG (cost, $80,782) 0.14 % $ 122,052
TOTAL AMERICAN DEPOSITORY RECEIPT (ADR),

AT FAIR VALUE (cost, $456,909) 1.60 % $ 1,443,971
MUTUAL FUND
Australia
Electric (cost, $609,933) 1.07 % $ 967,023
WARRANTS
Argentina
Agriculture (cost, $40,837) 0.07 % $ 64,587
United States of America

Financial (cost, $343,740) 0.49 % $ 443,200
TOTAL WARRANTS,
AT FAIR VALUE (cost, $384,577) 0.56 % $ 507,787
TOTAL INVESTMENTS IN SECURITIES,

AT FAIR VALUE (cost, $82,246,288) 92.00 % $ 83,209,797
17
Statement of Operations
For the year Ended December 31, 2010
INVESTMENT INCOME
Dividends (net of withholding taxes of $240,367) $ 741,838
Interest 804
742,642
EXPENSES
Management fee 1,359,824
Administration fee 99,604
Professional fees 40,670
Brokerage and bank expenses 38,254
Other expenses 10,314
1,548,666
NET INVESTMENT LOSS (806,024)
REALIZED AND NET CHANGE IN UNREALIZED GAIN/(LOSS)

FROM INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain from:
Investments in securities 442,148
Derivative contracts 230,597
Foreign currency transactions 27,522
700,267
Net change in unrealized gain/(loss) on:

Investments in securities 14,151,226
Derivative contracts (115,208)
Foreign currency transactions (20,376)
14,015,642
NET REALIZED GAIN AND NET CHANGE IN UNREALIZED GAIN

FROM INVESTMENTS AND FOREIGN CURRENCIES 14,715,909
NET INCREASE IN PARTNERS' CAPITAL FROM OPERATIONS $ 13,909,885
18
Statement of Changes in Partners' Capital
Special
General Limited
Limited Total
Partner Partners
Partner
PARTNERS' CAPITAL, JANUARY 1, 2010 $ - $ 451,477 $ 74,246,365 $ 74,697,842

INCREASE IN PARTNERS' CAPITAL:
From operations
Net increase in partners' capital - 93,574 13,816,311 13,909,885
Incentive allocation 20,389 78,074 (98,463) -
From capital transactions

Capital contributions - - 2,977,650 2,977,650
Capital withdrawals (20,389) - (1,122,550) (1,142,939)
PARTNERS' CAPITAL, DECEMBER 31, 2010 $ - $ 623,125 $ 89,819,313 $ 90,442,438
19
Statement of Cash Flows
For the Year Ended December 31, 2010
CASH FLOW PROVIDED BY/(USED IN):

OPERATING ACTIVITIES
Net increase in partners' capital from operations $ 13,909,885
Adjustments to reconcile net increase in partners' capital
resulting from operations to net cash used in operating activities:
Net realized gain from investments (672,745)
Net change in unrealized gain on investments (14,036,018)
Payments for investments purchased (5,087,878)
Proceeds from investments sold 3,636,140
Payments for purchases to cover investments sold short (103,099)
Proceeds from investments sold short 22,400
Decrease in due from brokers 2,126,895
Decrease in receivables and prepayments 12,698
Increase in due to related party 27,441
Decrease in accrued expenses and other payables (4,620)
Net cash used in operating activities (168,901)
FINANCING ACTIVITIES
Capital contributions received 2,977,650
Capital withdrawals paid, net of capital withdrawals payable (2,808,749)
Net cash provided by financing activities 168,901
CHANGE IN CASH AND CASH EQUIVALENTS -

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR -
CASH AND CASH EQUIVALENTS, END OF YEAR $ -
20
Notes to the Financial Statements
1. ORGANIZATION AND BUSINESS ACTIVITY

Aquamarine Master Fund, L.P. (the “Master Fund”) was formed as an International Limited Partnership in
the British Virgin Islands (“BVI”) on February 7, 2007 in accordance with the Partnership Act, 1996, and
commenced trading on April 1, 2007. The Master Fund is also registered under the Securities and
Investment Business Act 2010, as a “professional” mutual fund.
The Master Fund operates under a “master/feeder” structure where its investors invest substantially all of
their investable assets in the Master Fund. The Master Fund’s feeders are Aquamarine Fund, Inc., a BVI
Business Company (the “Offshore Feeder”), and Aquamarine Value Fund, L.P., a Delaware Limited
Partnership (the “Onshore Feeder”), (collectively the “Feeder Funds”).
The investment objective of the Master Fund is to compound wealth for investors over the long term.
Entirely consistent with this goal is a strict focus on the potential downside for any investment.
Conceptually, the objective is to “double” investors’ wealth several times over the course of a lifetime.
Practically, this translates into the goal of outperforming most equity indices by 5-15% annually..
Aquamarine Capital Management, LLC, a New York limited liability company serves as the investment
manager (the “Investment Manager”) to the Master Fund and is responsible for certain administrative and
investment advisory services for the Master Fund. The principal decision maker of the Investment Manager
is Guy Spier. The general partner of the Master Fund is Aquamarine GP Ltd., (the “Master Fund GP”) an
affiliate of the Investment Manager.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in conformity with accounting principles generally accepted
in the United States of America (“US GAAP”) and are stated in United States (“US”) dollars. The following is a
summary of the significant accounting and reporting policies used in preparing the financial statements.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make
estimates and assumptions that affect the reported amounts in the financial statements and accompanying
notes. Actual results could differ from those estimates and the differences could be material.
Investments valuation
The Master Fund values its investments in accordance with Financial Accounting Standards Board ( the
“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures
(“ASC 820”) which defines fair value, establishes a framework for measuring value, and requires certain
disclosures about fair value measurements. Fair value is the amount that would be received to sell an asset,
or paid to transfer a liability, in an orderly transaction between market participants at the measurement
date. See note 4, Fair Value Measurements for further discussion relating to the Master Fund’s investments.
Securities listed on national securities exchanges are valued at their last sales price on the day of valuation. If
no sales occurred on that day, such securities shall be valued at the last closing bid prices for investments if
held long and their last closing asked prices for securities sold short. If no bid or asked prices are quoted on
such date, the security shall be fair valued by certain methods as the Investment Manager shall determine in
good faith to reflect its fair market value. Because of the uncertainty of valuation, the estimated fair values
determined by the Investment Manager may differ from the value that would have been used had a ready
market for the securities existed, and the differences could be material. The change in unrealized gain and
loss on investments in securities is reflected in the statement of operations.
21
2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Standards Update
In January 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-06 which provides
amendments to ASC Subtopic 820-10, Fair Value Measurements and Disclosures. This guidance requires
new disclosures, and also clarifies existing disclosures. The new disclosures relate to the transfers in and out
of Level 1 and Level 2 investments, and disclosures about purchases, sales, issuances, and settlements in the
rollforward of activity in Level 3 fair value measurements. The guidance also clarifies existing disclosures
regarding the level of disaggregation, and disclosures about inputs and valuation techniques. The new
disclosures and clarifications of existing disclosures are effective for annual periods beginning after
December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the
rollforward of activity in Level 3 fair value measurements, which are effective for fiscal years beginning after
December 15, 2010. As the guidance is limited to enhanced disclosures, the adoption did not have a material
impact on the financial statements of the Master Fund.
Geographical and industry classifications
The geographical and industry classifications included in the condensed schedule of investments represent
the Investment Manager’s belief as to the most meaningful presentation of the classification of the Master
Fund’s investments.
Derivative financial instruments
The Master Fund enters into derivative financial instruments such as options. Derivative financial
instruments are initially recorded at contract prices and are measured to fair value at subsequent reporting
dates. Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting
are recognized in the statement of operations as they arise. See Note 5 for quantitative and qualitative
disclosures on the Master Fund’s derivative financial instruments.
Securities sold short
The Master Fund engages in short sales as part of its investment strategy. A short sale is a transaction in
which the Master Fund sells a security it does not own. The proceeds received for a short sale are recorded as
a liability and the Master Fund records an unrealized gain or loss to the extent of the difference between the
proceeds received and the fair value at the reporting dates of the open short position. The Master Fund
records a realized gain or loss when the short position is closed out. By entering into short sales, the Master
Fund bears the market risk of an unfavorable change in the price of the security sold short in excess of the
proceeds received. While the transaction is open, the Master Fund will also incur an expense for any
dividends and/or interest which will be paid to the lender of the securities.
Fair value of financial instruments
The fair value of the partnership’s assets and liabilities which qualify as financial instruments under ASC
825, Financial Instruments: Disclosure about Fair Value of Financial Instruments, approximates the carrying
amounts presented in the statement of assets and liabilities.
Cash and cash equivalents
The Master Fund considers cash at bank, short-term deposits and other short-term highly liquid
investments with original maturities of three months or less to be cash and cash equivalents.
22
Due from brokers
Due from brokers include cash, foreign cash and margin balances with the Master Fund’s clearing
brokers. The Master Fund receives interest on cash balances and pays interest on margin debit balances
as determined by the brokers based on market rates. The cash at brokers is partially related to securities
sold short and its use is therefore restricted until securities are purchased to cover the outstanding short
position. In addition, some of the Master Fund’s investments in long securities are held by the brokers as
collateral for securities sold short, and margin debt balances.
Capital withdrawals payable
The Master Fund recognizes capital withdrawals payable in accordance with ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”). Capital withdrawals are recognized as liabilities when the amount
requested in the capital withdrawals notice becomes fixed. Prior to December 31, 2010, the Master Fund
received redemption notices to be paid after year end but based on December 31, 2010 partners’ capital
balances. Within the context of ASC 480, such capital withdrawal notices represent an unconditional
obligation of the Master Fund at December 31, 2010. The liability to such partners is presented in the
statement of assets and liabilities as “capital withdrawals payable”.
Revenue and expense recognition
The Master Fund records its transactions in securities, including short sale of securities, on a trade date
basis. Realized gains and losses on investment transactions are determined based on the first in, first out
cost basis. Interest income is recorded on the accrual basis. Dividend income is recognized on the ex-
dividend date and is recorded net of withholding taxes, where applicable. Interest expense and other
operating expenses are recorded on the accrual basis. Dividends on securities sold short are accrued on the
ex-dividend date and paid to the broker on the payable date.
Foreign currency
Investment in securities, other assets and liabilities denominated in foreign currencies are translated into
US dollar amounts at the date of valuation. Purchases and sales of investment securities, income and
expense items denominated in foreign currencies are translated into US dollar amounts on the respective
dates of such transactions.
The Master Fund does not isolate that portion of the results of operations resulting from changes in foreign
exchange rates on investments from the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized gain or loss from investments in
the statement of operations.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest and foreign withholding taxes recorded on the Master Fund’s
books and the US dollar equivalent of the amounts actually received or paid.
Net unrealized foreign exchange gain and loss arise from changes in the fair values of assets and liabilities,
other than investments in securities at fiscal year end, resulting from changes in exchange rates.
Income taxes
Under the current laws of the BVI, the Master Fund is not subject to income taxes. The Master Fund intends
to conduct its affairs such that it will not be subject to taxation in any jurisdiction, other than withholding
taxes on investment income and capital gains, where applicable. Withholding taxes, if any are shown as a
separate item in the statement of operations.
23
Income taxes (continued)
The Master Fund reviews and evaluates tax positions in its major jurisdictions and determines whether or
not there are uncertain tax positions that require financial statement recognition. In determining the major
tax jurisdictions, the Master Fund considers where it is organized and where it makes investments. The
Master Fund’s US Federal tax returns for 2007 to 2010 remain open for examination by tax authorities and
tax positions associated with foreign tax jurisdictions remain subject to examination based on varying
statutes of limitations.
Based on its review, the Master Fund has determined that the adoption of ASC 740, Income Taxes (“ASC 740”)
has not impacted the Master Fund’s financial statements for the year ended December 31, 2010 and
therefore no provision for income taxes was recorded. The Master Fund is additionally not aware of any tax
positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change
materially in the next twelve months. The determination of income taxes is based on complex analyses of
many factors, including matters that are subject to interpretation.
Individual partners of the Onshore Feeder, General Partner and Special Limited Partner of the Master Fund
are taxed on their proportionate share of the Master Fund’s income.
3. DUE FROM BROKERS
The “Due from brokers” balance in the statement of assets and liabilities includes the net cash and cash
equivalents held by brokers at December 31, 2010. This amount includes cash denominated in foreign
currencies with a fair value of approximately $1,773,716 (cost approximately $1,689,129) at December 31,
2010.
4. FAIR VALUE MEASUREMENTS

The Master Fund selects an appropriate valuation technique for the market conditions and for which
sufficient, reliable data inputs are available. The Master Fund distinguishes between inputs that are based
on market data obtained from independent sources and inputs that reflect assumptions from one market
participant as to actions of other market participants and emphasizes those valuation methodologies inputs
based on market data. A determination of what constitutes “observable market data” requires significant
judgment.
Market price observability is affected by a number of factors, including the type of investment and the
characteristics specific to the investment. Investments with readily available active quoted prices or for
which fair value can be measured from actively quoted prices, generally will have a higher degree of market
price observability and a lesser degree of judgment used in measuring fair value.
Inputs to valuation techniques used by the Master Fund to determine the fair value of an asset or a liability
are prioritized based upon a hierarchy, which gives priority to observable inputs in the marketplace that are
more objective, rather than inputs that are more subjective because they have been derived through
extrapolation or interpolation from market data. In certain cases, the inputs used to measure fair value may
fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value
hierarchy is based on the lowest level of input that is significant to the fair value measurement. The following
describes the three levels of the fair value hierarchy, provides general characteristics and examples of
measurement inputs associated with each hierarchical level as well as valuation techniques used by the
Master Fund for components of its financial instrument inventory. Investments measured and reported at
fair value are classified and disclosed in one of the following categories:
Level 1 Inputs are unadjusted quoted prices in active markets that are accessible at the measurement date
for identical and unrestricted assets or liabilities. The types of investments included in Level 1 are exchange-
traded equities and derivatives. Level 1 investments are primarily securities that are listed or traded on a
national or global exchange.
24
4. FAIR VALUE MEASUREMENTS (continued)

Level 2 Inputs are inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs
and may include:
Ÿ Quoted prices in markets that are not considered to be active for identical or similar assets or liabilities,
quoted prices in active markets for similar assets or liabilities, and inputs other than quoted prices that are
observable or can be corroborated by observable market data, or price quotations vary substantially either
over time or among market makers (e.g., some brokered markets), or in which little information is released
publicly (e.g., a principal-to-principal market)
Ÿ Inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield
curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit
risks, and default rates)
Ÿ Inputs that are derived principally from or corroborated by observable market data through correlation
or by other means (market-corroborated inputs)
Level 3 Inputs that are both significant to the fair value measurement and unobservable, including inputs
that are not derived from market data or cannot be corroborated by market data. The inputs into the
determination of fair value require significant management judgment or estimation. Level 3 inputs reflect
the Master Fund’s assumptions that it believes market participants would use in pricing the asset or
liability. Level 3 inputs are based on the best information available in the circumstances, which may include
indirect correlation to a market value, combinations of market values or proprietary data.
At December 31, 2010, all of the Master Fund’s investments were valued using Level 1 inputs.
5. DERIVATIVE FINANCIAL INSTRUMENTS
The Master Fund may trade in derivative financial instruments with off-balance sheet risk in the normal
course of its investing activities. These derivative financial instruments may involve, to a varying degree,
elements of risk in excess of the amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment the Master Fund has in particular
classes of financial instruments and does not necessarily represent the amounts potentially subject to risk.
The measurement of the risks associated with these instruments is meaningful only when all related and
offsetting transactions are considered. During the year the Master Fund traded in derivative financial
instruments, however there were no open contracts at December 31, 2010.
ASC 815, Derivatives and Hedging (“ASC 815”) is intended to improve financial reporting about derivative
instruments by requiring enhanced disclosures to enable investors to better understand how and why the
Master Fund uses derivative instruments, how these derivative instruments are accounted for and their
effects on the Master Fund’s financial position, results of operations and cash flows.
Options - The Master Fund is subject to equity price risk in the normal course of pursuing its investment
objectives. The Master Fund may enter into options to speculate on the price movements of the financial
instrument underlying the option, or for use as an economic hedge against certain equity positions held in
the Master Fund’s portfolio of investments.
Purchased options – In purchasing listed options, the Master Fund obtains the right, but not the obligation,
to buy or sell within a limited time, a financial instrument, commodity or currency at a contracted price that
may also be settled in cash, based on differentials between specified indices or prices.
25
5. DERIVATIVE FINANCIAL INSTRUMENTS (continued)

The Master Fund may purchase call and put options for which premiums are paid. Such premiums are
recorded as assets and are subsequently adjusted to the current value of the options purchased. Premiums
paid from purchasing options that expire are treated as realized losses. Premiums paid for purchased
option contracts that are sold prior to expiration are offset against the proceeds of the related sale
transaction, net of brokerage commissions, to determine the realized gain or loss. If an option is exercised,
the premium is included in the cost of the securities purchased (call) or deducted from the proceeds of the
securities sold (put) by the Master Fund.
Written options – The Master Fund generally intends to write covered call options on individual stocks
above the current value of the stock to generate premium income. In writing call options on individual
stocks, the Master Fund in effect, sells potential appreciation in the value of the applicable stock above the
exercise price in exchange for the option premium received. The Master Fund retains the risk of loss, minus
the premium received, should the price of the underlying stock decline.
In writing call and put options, premiums are received. Such premiums are recorded as liabilities, and are
subsequently adjusted to the current value of the written options. Premiums received from writing options
that expire are treated as realized gains/losses. Premiums received from written option contracts that are
closed prior to expiration date are offset against the cost of the related purchase transaction, net of
brokerage commissions, to determine the realized gain or loss.
If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in
determining the realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the
securities purchased by the Master Fund. The Master Fund, as writer of an option, has no control over
whether the underlying securities are subsequently sold (call) or purchased (put) and, as a result, bears the
market risk of an unfavorable change in the price of the security underlying the written option.
The effect of derivative financial instruments (not accounted for as hedging instruments under ASC 815-
10) on the statement of operations for the year ended December 31, 2010 was as follows:
Change in unrealized
loss recognized in the
Realized gain
statement of
recognized in the
operations
statement of
Equity price - written options $ 230,597 $ (115,208)
Realized gains and losses on derivative financial instruments are included in the statement of operations
within the account “net realized gain from derivative contracts” while the change in unrealized gain or loss
on these instruments is included within the account “net change in unrealized depreciation on derivative
contracts”
The Master Fund’s activity in derivative financial instruments for the year ended December 31, 2010 was
as follows:
Options
Number of Premiums
contracts received
Opening balance (422) $ (311,296)

Contracts expired 240 208,197
Contracts covered 182 103,099
Total - $ -
26
6. PARTNERS’ CAPITAL
Capital contributions
The Master Fund GP may admit new limited partners and permit them to make additional capital
contributions on the first business day of each calendar month or at any other time at the Master Fund Gp’s
sole discretion. The minimum initial and additional contribution to the Master Fund by each investor shall
be such minimum as determined by the Master Fund GP from time to time.
Capital withdrawals
A limited partner has the right upon five days prior written notice to the Master Fund GP to make a partial or
total withdrawal from its capital account as of the last business day of each calendar quarter or such other
date as determined by the Master Fund GP.
Allocation of net profits and net losses
At the end of each month, the opening capital account of each Feeder shall be adjusted by crediting any
increase or decrease in the Master Fund’s partners’ capital in proportion to their respective Master Fund
investments.
Purchase of “New Issues”
The Master Fund may to the extent permitted by the Rules of Financial Industry Regulatory Authority time
(the “FINRA Rules”), purchase equity securities that are part of an initial public offering (sometimes
referred as “IPO’s” or “new issues”). For the year ended December 31, 2010, the Master Fund did not
purchase any securities that are part of IPO’s.
Special Limited Partner
The Master Fund’s Special LP (“Special LP”) is an affiliate of the Investment Manager and is entitled to
receive a portion of the incentive allocation with respect to the Offshore Feeder’s capital account in the
Master Fund. At December 31, 2010, the Special LP’s proportionate interest in the partners’ capital of the
Master Fund is 1%.
7. RELATED PARTY TRANSACTIONS AND BALANCES

Management fee
Under the terms of an investment management agreement dated April 1, 2007 the Investment Manager has
agreed to render investment management services to the Master Fund. The Investment Manager receives a
monthly management fee in arrears of an amount equal to approximately 0.0833% (1% per annum) for
applicable non-related party investors and approximately 0.1667% (2% per annum) for related parties, as
of the last business day of each calendar month.
Management fee is payable by Class A limited partners of the Onshore Feeder, and Class A/B shareholders of
the Offshore Feeder. No management fee is paid by the Special LP, Class B limited partners of the Onshore
Feeder and Class C shareholders of the Offshore Feeder. Related parties are subject to pay management fee
regardless of the class in which investments are held.
For the year ended December 31, 2010, the Investment Manager earned $35,452 from the Onshore Feeder
and $1,324,372 from the Offshore Feeder, of which $125,865 is payable.
27
7. RELATED PARTY TRANSACTIONS AND BALANCES (continued)

Incentive allocation
Offshore Feeder
Incentive allocation is calculated on the Offshore Feeder in accordance with the confidential information
memorandum dated October 1, 2008 as amended July 2010.
Subject to the “loss recovery account provisions” discussed below, the following amounts will be reallocated
(in the aggregate) from the Offshore Feeder’s capital account in the Master Fund collectively to the Master
Fund GP’s and Special LP’s capital accounts in the Master Fund:
(i) at the end of each calendar quarter of the Master Fund, 20% of the Class A/B aggregate net
increase, in excess of the Class A/B hurdle return;
(ii) at the end of each calendar year of the Master Fund, 25% of the Class C aggregate net increase, in
excess of the Class C hurdle return.
The incentive allocation shall be allocated as follows: 15% will be allocated to the capital account of the
Master Fund GP, and 85% will be allocated to the capital account of the Special LP.
Class A/B hurdle return means an amount equal to one percent (1%) of the portion of the Offshore Feeder
capital account balance in the Master Fund which is attributable to Class A/B shareholders, calculated as of
the beginning of each calendar quarter. The Class A/B hurdle return will be adjusted throughout the
applicable period to reflect additional contributions and withdrawals by the Class A/B shareholders of the
Offshore Feeder in the Master Fund. The Class A/B hurdle return is cumulative with respect to each quarter
during a calendar year but not from year to year.
Class C hurdle return means an amount equal to six percent (6%) of the portion of the Offshore Feeder
capital account balance in the Master Fund which is attributable to Class C shareholders, calculated as of the
beginning of each calendar year. The Class C hurdle return will be adjusted throughout the applicable period
to reflect additional contributions and withdrawals by the Class C shareholders of the Offshore Feeder in the
Master Fund. The Class C hurdle return is non-cumulative with respect to each calendar year.
Under a loss carry forward recovery account, no incentive allocation is made from the sub-capital account of
a particular shareholder of the Offshore feeder until any net loss previously allocated to the sub-capital
account of such shareholder has been offset by subsequent net profits. Any such loss carry forward will be
subject to reduction for redemptions on a pro rata basis.
Incentive allocation shall be credited as of the end of the performance period to the capital account of the
Master Fund GP and Special LP. The Master Fund GP and Special LP may, at their sole discretion, waive or
reduce the incentive allocation with respect to any shareholder.
For the year ended December 31, 2010, $78,074 and $13,778 were allocated from the Offshore Fund to the
Special LP and the Master Fund GP respectively.
Onshore Feeder
Incentive allocation is calculated on the Onshore Feeder in accordance with the amended and restated
confidential private placement memorandum dated January 1, 2008.
Subject to the “loss recovery account provisions” discussed below, the following amounts will be reallocated
(in the aggregate) from the Onshore Feeder’s capital account in the Master Fund to the Master Fund Gp’s
capital account in the Master Fund:
28

Incentive allocation (continued)
Onshore Feeder (continued)
(i) at the end of each calendar quarter, 20% of the Class A aggregate net increase, in excess of the
Class A hurdle return;
(ii) at the end of each calendar year of the Master Fund, 25% of the Class B aggregate net increase, in
excess of the Class B hurdle return.
Class A hurdle return means an amount equal to one percent (1%) of the portion of the Onshore Feeder’s
capital account balance in the Master Fund which is attributable to Class A limited partners, as of the
beginning of each calendar quarter. The Class A hurdle return will be adjusted throughout the applicable
period to reflect additional capital contributions and withdrawals by the Class A limited partners in the
Master Fund. The Class A hurdle return is cumulative with respect to each quarter during a calendar year but
not from year to year.
Class B hurdle return means an amount equal to six percent (6%) of the portion of the Onshore Feeder’s
capital account balance in the Master Fund which is attributable to Class B limited partners, calculated as
of the beginning of each calendar year. The Class B hurdle return will be adjusted throughout the
applicable period to reflect additional capital contributions and withdrawals by the Class B limited
partners in the Master Fund. The Class B hurdle return is non-cumulative with respect to each calendar
year.
Under a loss carry forward recovery account, no incentive allocation is made from the sub-capital
account of a limited partner of the Onshore Feeder until any net loss previously allocated to the sub-
capital account of such limited partner has been offset by subsequent net profits. Any such loss carry
forward will be subject to reduction for withdrawals on a pro rata basis.
Incentive allocation shall be credited as of the end of the performance period to the capital account of the
Master Fund GP. The Master Fund GP may, at its sole discretion, waive or reduce the incentive allocation
with respect to any partners.
For the year ended December 31, 2010, an incentive allocation of $6,611 was made to the Master Fund
GP from the Onshore Feeder.
Related party balances
A summary of the related party balances at the reporting date is as follows:
Due to Investment Manager $ 119,835

Due to General Partner 17,747
$ 137,582
8. ADMINISTRATION AGREEMENT
The Master Fund and the Feeder Funds entered into an administration agreement with Prime Management
Limited (the “Administrator”) as of April 1, 2007 for the provision of certain accounting, administrative and
investor services. The Master Fund pays the Administrator an annual fee calculated and payable on a
monthly basis. The fee is calculated based on certain percentages of the partners’ capital of the Master Fund
at the beginning of each month and is subject to a monthly minimum of $5,000.
For the year ended December 31, 2010, total administration fees of $99,604 were incurred of which $12,806
was payable at the reporting date.
29
9. RISK FACTORS
Investment in the Master Fund involves significant risk factors and is suitable only for persons who can bear
the economic risk of the loss of their investment, who have limited need for liquidity in their investment and
who meet the conditions set forth in the private placement memorandum. There can be no assurances that
the Master Fund will achieve its investment objective. Investment in the Master Fund carries with it the
inherent risks associated with investments in securities, as well as additional risks including, but not limited
to, the following:
Short sales
The Master Fund may invest in short positions. Short selling involves selling securities which may or may not
be owned and borrowing the same securities for delivery to the purchaser, with an obligation to replace the
borrowed securities at a later date. Short selling allows the investor to profit from a decline in the price of a
particular security. A short sale creates the risk of a theoretically unlimited loss, in that the price of the
underlying security could theoretically increase without limit, thus increasing the cost to the Master Fund of
buying those securities necessary to cover the short position. There can be no assurance that the security
necessary to cover a short position will be available for purchase. Purchasing securities to close out the short
position can itself cause the price of securities to rise further, thereby exacerbating the loss. As a result, short
sales create the risk that the Master Fund’s ultimate obligation to satisfy the delivery requirements may
exceed the amount of the proceeds initially received or the liability recorded in the statement of assets and
liabilities.
Borrowings and leverage
The Master Fund may utilize leverage in its investment program by entering into short sales, options and
other similar techniques.
The concept of leverage is based on the premise that the Master Fund’s cost of borrowing will be at rates that
normally will be lower than the rate of return earned on the longer term investments it holds. While the use of
leverage may increase the returns on capital invested in the Master Fund, the use of leverage also increases
the risk of loss of such capital, because the claims of lenders on assets and income of the Master Fund will be
senior to the claims of the investors.
Financial instruments and associated risks
The Master Fund maintains active trading positions in a variety of derivative and non-derivative instruments
as directed by its investment management strategy. The investing activities of the Master Fund expose it to
various types of risk, which are associated with the financial instruments and markets in which it invests.
Such risks include, but are not limited to, market risk, credit risk and liquidity risk.
Market risk
Market risk is the risk that future changes in equity and commodity prices, interest rates and foreign
exchange rates may make an instrument less valuable or more onerous. Market risk includes price risk,
interest rate risk and currency risk. All investments held are subject to market risk, are recognized at fair
value, and all changes in market condition directly affect net increase/decrease in partners’ capital resulting
from operations.
The Master Fund manages its exposure to market risk in accordance with risk management principles set by
the Investment Manager for buying or selling instruments.
Price risk – The Master Fund is exposed to market risk on financial instruments that are valued at market
prices. Specifically, a risk exists that the ultimate selling price of such financial instruments may differ from
their estimated fair values at December 31, 2010.
30
9. RISK FACTORS (continued)

Market risk (continued)
Interest rate risk – Certain of the Master Fund’s financial assets and liabilities are interest bearing and as a
result the Master Fund is subject to risk due to fluctuations in the prevailing levels of market interest rates.
Currency risk – The functional currency of the Master Fund is the US dollar. The Master Fund invests in
financial instruments denominated in currencies other than its functional currency. Consequently, the
Master Fund is exposed to risks that the exchange rate of its currency relative to other currencies may
change in a manner that has an adverse effect on the value of the portion of the Master Fund’s assets or
liabilities denominated in currencies other than the US dollars.
Credit risk
Credit risk is the risk that the counterparty to a financial instrument will fail to discharge an obligation or
commitment that it has entered into with the Master Fund. Credit risk is generally higher when a
nonexchange traded financial instrument is involved because the counterparty for non-exchange traded
financial instruments is not backed by an exchange clearing house.
Substantially all financial instruments are cleared through and held in custody primarily by two major
international institutions. The Master Fund is subject to credit risk to the extent that these institutions may
be unable to fulfill their obligations either to return the Master Fund’s securities or repay amounts owed.
The risk that counterparties to both derivative and other instruments might default on their obligations is
monitored on an ongoing basis. To manage the level of credit risk, the Master Fund deals with counterparties
of good credit standing.
Liquidity risk
Liquidity risk is the risk that the Master Fund may have difficulty in liquidating its positions due to existing
or unforeseen market constraints. The Master Fund’s financial instruments may include investments that
are traded over-the-counter, which are not traded in an organized public market and may generally be
illiquid. As a result, the Master Fund may not be able to quickly liquidate investments or to respond to
specific events such as deterioration in the credit worthiness of any particular issuer.
At December 31, 2010, the Master Fund’s listed securities are considered to be readily realizable as they are
listed on major United States and international stock exchanges.
These risks are monitored on an ongoing basis and the composition of the portfolio is amended accordingly
while adhering to the investment guidelines set forth in the Master Fund's confidential information
memorandum.
10. FINANCIAL HIGHLIGHTS

The following financial highlights are calculated for the limited partners taken as a whole and exclude
data for the Master Fund GP and Special LP.
Individual limited partner’s returns will vary due to the timing of capital contributions and withdrawals,
different management fees and incentive allocation arrangements.
Total return
Total return before incentive allocation 18.51 %
Incentive allocation (0.11)
Total return after incentive allocation 18.40 %
31
10. FINANCIAL HIGHLIGHTS (continued)
Ratio to average limited partners' capital*

Operating expenses 1.93 %
Incentive allocation 0.12
Total net expenses 2.05 %
Net investment loss before incentive allocation (1.01) %

Net investment loss after incentive allocation (1.13)%
*Ratios of net investment gain, operating expenses and incentive allocation are computed based on the
monthly average of the limited partners’ capital for the year.
11. SUBSEQUENT EVENTS
Subsequent to year end, the Master Fund had contributions and withdrawals totaling approximately
$1,043,400 and $235,400 respectively. There were no other material events requiring disclosure.
Management has evaluated subsequent events occurring through May 9, 2011, the date that these financial
statements were available for issue.
32
AQUAMARINE FUND, INC.
(A British Virgin Islands Business Company)
33
Deloitte & Touche
Wickhams Cay 1
P.O.Box 3083
Road Town,
Tortola, VG1110
Tel: +1 284 494-2868

Fax: +1 284 494-7889
www.deloitte.com
To the Board of Directors and Shareholders of
Aquamarine Fund, Inc.

We have audited the accompanying statements of assets and liabilities of Aquamarine Fund, Inc. (the
“Offshore Feeder”) as of December 31, 2010, and the related statement of operations, changes in net assets
and cash flows for the year then ended. These financial statements are the responsibility of the Offshore
Feeder's management. Our responsibility is to express an opinion on these financial statements based on
our audit.
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Offshore Feeder’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by the management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Offshore Feeder as of December 31, 2010 and the results of its operations, changes in net
assets and cash flows for the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
DELOITTE & TOUCHE

May 9, 2011

At December 31, 2010
ASSETS
Investment in Aquamarine Master Fund, L.P., at fair value $ 84,602,882
Cash and cash equivalents 653,660
Receivable from Master Fund 41,890
Other assets 20,697
LIABILITIES
Subscriptions received in advance 513,000
Redemptions payable 429,557
Due to related party 4,500

NET ASSETS $ 84,356,722
35
NET INVESTMENT LOSS ALLOCATED FROM AQUAMARINE MASTER FUND, L.P.

Income $ 687,573
Expenses (1,592,593)
(905,020)
INCOME
Other income 20,561
EXPENSES
Director's fee 10,000
Office expenses 8,969
66,279
REALIZED GAIN AND NET CHANGE IN UNREALIZED GAIN ON INVESTMENTS AND

FOREIGN CURRENCIES ALLOCATED FROM AQUAMARINE MASTER FUND, L.P.
Net realized gain on investments and foreign currencies 654,181
Net change in unrealized gain on investments and foreign currencies 13,097,611
NET REALIZED GAIN AND NET CHANGE IN UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCIES ALLOCATED FROM AQUAMARINE MASTER FUND, L.P. 13,751,792
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 12,801,054
36
Statement of Changes in Net Assets
NET ASSETS, JANUARY 1, 2010 $ 69,774,113

INCREASE/(DECREASE) IN NET ASSETS
From operations
Net investment loss (950,738)
Net realized gain on investments and foreign currencies 654,181
Net change in unrealized gain on investments and foreign currencies 13,097,611
Net increase in net assets resulting from operations 12,801,054

Issuance of shares
Class B Series 14 187,498
Class B Series 18 1,500,000
Class C Series 2 950,000
3,040,148
Redemption of shares
Class A initial series (385,924)
Class B Series 2 (73,622)
Class B Series 6 (799,047)
(1,258,593)
Increase in net assets from capital transactions 1,781,555
NET ASSETS, DECEMBER 31, 2010 $ 84,356,722
37

Net increase in net assets from operations $ 12,801,054
Adjustments to reconcile net increase in net assets resulting
from operations to net cash provided by operating activities:
Net realized gain from investments and foreign currencies (654,181)
Net change in unrealized gain on investments and foreign currencies (13,097,611)
Net investment loss allocated from Aquamarine Master Fund, L.P. 905,020
Payments for purchases of Aquamarine Master Fund, L.P. (2,877,650)
Proceeds from sales of Aquamarine Master Fund, L.P. 899,750
Decrease in receivable from Master Fund 1,699,610
Increase in other assets (20,697)
Increase in payable to related party 4,500
Decrease in accrued expenses and other payables (7,250)
Net cash used in operating activities (347,455)
Proceeds from issuance of shares 3,553,148
Payments on redemption of shares, net of redemptions payable (2,566,667)
Net cash provided by financing activities 986,481
INCREASE IN CASH AND CASH EQUIVALENTS 639,026

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 14,634
CASH AND CASH EQUIVALENTS, END OF YEAR $ 653,660
38
1. ORGANIZATION AND BUSINESS ACTIVITY

Aquamarine Fund, Inc. (the “Offshore Feeder”) is an investment company incorporated in the British Virgin
Islands (“BVI”) on June 26, 1997 under the International Business Companies Act. The Offshore Feeder is
registered under the Securities and Investment Business Act 2010, as a “professional” mutual fund.
The Offshore Feeder operates under a “master/feeder” structure, where Aquamarine Master Fund, L.P. (the
“Master Fund”), a BVI International Limited Partnership is the master fund. The Offshore Feeder invests
substantially all of its investable assets in the Master Fund, together with Aquamarine Value Fund, L.P (the
“Onshore Feeder”), a Delaware Limited Partnership (collectively, the “Feeder Funds”). As at December 31,
2010, the Offshore Feeder’s proportionate interest in the partners’ capital of the Master Fund is 93%.
The investment objective of the Offshore Feeder is to compound wealth for shareholders over the long term.
The Offshore Feeder intends to achieve its investment objectives through its investment in the Master Fund,
which has the same investment objectives as the Offshore Feeder.
Aquamarine Capital Management, LLC, a New York limited liability company, serves as the Investment
Manager (the “Investment Manager”) of the Offshore Feeder and the Master Fund. The Investment Manager
is responsible for certain administrative and investment advisory services for the Offshore Feeder and the
Master Fund. The principal decision maker of the Investment Manager is Guy Spier.
The performance of the Offshore Feeder is directly affected by the performance of the Master Fund. The
Master Fund utilizes the services of the Investment Manager to invest the assets of the Offshore Feeder,
together with the assets of the Onshore Feeder.
The financial statements of the Master Fund, including the condensed schedule of investments, are included
at the end of this report and should be read in conjunction with the Offshore Feeder’s financial statements.

The financial statements have been prepared in conformity with accounting principles generally accepted in
the United States of America (“US GAAP”) and are stated in United States (“US”) dollars. The following is a
Use of estimates
Valuation of investment in the Master Fund
The Offshore Feeder records its investment in the Master Fund at fair value based on its respective
percentage of the Master Fund’s partners’ capital. Valuation of securities held by the Master Fund is
disclosed in Note 2 of the Master Fund’s notes to the financial statements (the “Master Fund’s Notes”) which
are attached to this report.
ASC 820, Fair Value Measurement and Disclosures (“ASC 820”) defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value. Additional disclosures due to the impact of
ASC 820 on the Offshore Feeder’s underlying investments held within the Master fund are included in Note 4
of the Master Fund’s Notes.
The Offshore Feeder classifies cash at bank and short-term deposits with original maturities of three months
or less as cash and cash equivalents.
39

The Offshore Feeder records its proportionate share of the Master Fund’s income, expenses, and realized
and change in unrealized gains and losses. The Master Fund’s income and expenses recognition policies and
allocation are discussed in Note 2 of the Master Fund’s Notes.
Income and expenses that are directly attributable to the Offshore Feeder are recorded on the accrual basis
as incurred.
Redemptions payable
The Offshore Feeder recognizes redemptions payable in accordance with ASC 480, Distinguishing Liabilities
from Equity (“ASC 480”). Redemptions are recognized as liabilities when the amount requested in the
redemption notice becomes fixed. Prior to December 31, 2010, the Offshore Feeder received redemption
notices to be paid after year end but based on December 31, 2010 net asset value. Within the context of ASC
480, such redemption notices represent an unconditional obligation of the Offshore Feeder at December 31,
2010. The liability to such shareholders is presented in the statement of assets and liabilities as
“redemptions payable”.
Foreign currency
The books and records of the Offshore Feeder and the Master Fund are maintained in US dollars. The foreign
currency translation policy is discussed in Note 2 of the Master Fund’s Notes.
Income taxes
Under the current laws of the BVI, the Offshore Feeder is not subject to income taxes. The Offshore Feeder
intends to conduct its affairs such that it will not be subject to taxation in any jurisdiction, other than
withholding taxes on investment income and capital gains, where applicable.
The Offshore Feeder reviews and evaluates tax positions in its major jurisdictions and determines whether
or not there are uncertain tax positions that require financial statement recognition. In determining the
major tax jurisdictions, the Offshore Feeder considers where it is organized and where it makes
investments. The Offshore Feeder’s US Federal tax returns for 2008 and 2009 remain open for examination
by tax authorities and tax positions associated with foreign tax jurisdictions remain subject to examination
based on varying statutes of limitations.
Based on its review, the Offshore Feeder has determined that the adoption of ASC 740, Income Taxes (“ASC
740”) has not impacted the Master Fund’s financial statements for the year ended December 31, 2010 and
therefore no provision for income taxes was recorded. The Offshore Feeder is additionally not aware of any
tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will
change materially in the next twelve months. The determination of income taxes is based on complex
analyses of many factors, including matters that are subject to interpretation.
3. SHARE CAPITAL
Authorized share capital of the Offshore Feeder
As of April 1, 2007, the Offshore Feeder no longer offers Class A shares. Instead, the Offshore Feeder offers
the Class B shares, which have the same rights, privileges and terms as the Class A shares, except for the
terms of redemption as noted below. As of January 1, 2008, the Offshore Feeder offers Class C shares.
The authorized capital of the Offshore Feeder is $100,000 and consists of 1,000 voting non-participating,
non-redeemable shares of par value $0.01 each (the “Ordinary shares”) and 9,999,000 non-voting,
participating redeemable shares of par value $0.01 each (the “Participating shares”). The authorized capital
of the Offshore Feeder may be divided into different classes with varying rights attached to each class. The
Participating shares are divided into Class A, Class B and Class C Participating shares (respectively, the “Class
A shares”, the “Class B shares”, the “Class C shares”, each a “Class” collectively, the “Shares”).
40
3. SHARE CAPITAL (continued)

Authorized share capital of the Offshore Feeder (continued)
The Ordinary shares of the Offshore Feeder are held by the Master Fund Special LP (the “Special LP”), a
related party to the Investment Manager. The Articles of Association of the Offshore Feeder empowers the
Board of Directors (the “Board”) to create different classes of shares.
The Shares are issued in series with a new series being issued on each date that the Offshore Feeder permits
subscription for shares. The series are issued consecutively per class (i.e. commencing with A1, B1, C1 etc.).
Each of the outstanding series of shares participates ratably with all other outstanding series of the same
class in the Offshore Feeder’s fees, expenses, assets and earnings with respect to such series.
The Shares are issued in various series to reflect equitably the differing incentive allocation attributable to
each series. At the end of each quarter or year as applicable, all series that do not have a loss carryforward
available to them will be converted into the initial series of the applicable class of Participating shares unless
the initial series has a loss carryforward, then the next available series that do not have a loss carryforward
shall be used in its place.
Issued share capital
Ordinary shares
1,000 shares at $0.01 par value issued and fully paid.
Participating shares
20,098.75 Class A shares at a $0.01 par value issued and fully paid.
18,855.14 Class B shares at a $0.01 par value issued and fully paid.
2,071.57 Class C shares at a $0.01 par value issued and fully paid.
Dividends and distribution
It is anticipated that the Offshore Feeder will not declare any dividends or make any distributions to its
shareholders.
Subscriptions
Shares may generally be subscribed to on the first business day of each month by giving two days written
notice, or such other days approved by the Board in its sole discretion. The initial purchase price per share
for each series of shares is $1,000. The minimum initial subscription for shareholders in the Offshore Feeder
is $500,000 for Class A/B shares and $1,000,000 for Class C shares. These amounts are subject to reduction
at the discretion of the Board.
Redemptions
Shares will be redeemed at the redemption price equal to such shares’ net asset value (the “NAV”) as of the
close of business on the redemption date.
Class A shareholders have the right upon 20 days prior written notice to request a partial or total
redemption of its Class A shares as of the last business day of each calendar month or such other day as
determined by the Board.
Class B shareholders have the right upon 60 days prior written notice to request a partial or total redemption
of its Class B shares as of the last business day of each calendar quarter or such other date as determined by
the Board.
Class A and B shareholders are subject to a redemption fee of five percent (5%) of the redemption proceeds
for redemptions made by a shareholder within the first six month after each subscription. A redemption fee
of two percent (2%) will be charged for redemptions by a Class A and B shareholder, occurring any time
following the first six month and preceding the twelve month anniversary of each subscription. The Board
may, in its sole discretion, waive or reduce the redemption fees.
41

Redemptions (continued)
Class C shareholders have the right upon 60 days prior written notice to request a partial or total redemption
of its Class C shares as of the last business day of the calendar month in which the Class C lock-up period
(defined below) expires, and thereafter, on the last business day of the calendar month in which each 12
month anniversary of the expiration of the Class C lock-up period, or such other date as determined by the
Board. A shareholder may not redeem any series of its Class C shares until the expiration of the 12 month
period following the purchase of such series of Class C shares, (the Class C lock-up period), without the prior
written
consent of the Board.
Allocation of net profits and losses
As the Offshore Feeder is made up of more than one class and series of shares, the NAV per share of each class
and series is calculated by determining that part of the NAV of the Offshore Feeder attributable to each class
and series and dividing this value by the number of shares of that class and series in issue and rounding the
result to two decimal places. Any increase or decrease in the NAV of the Offshore Feeder will be allocated
between the classes and series based on their pro rata NAVs at the previous valuation date adjusted for any
subscriptions and redemptions in the relevant period.
Net asset value per share
At the end of the year Class B Series 14, 15, 16, 17, 18 and 19 were collapsed into Class B Series 13 and Class C
Series 2 was collapsed into Class C Series 1. The following table summarizes the shares outstanding, the NAV
per share and the net asset value for each class of shares and series at the reporting date.
Net asset value Number of shares NAV per share
Ordinary shares $ 1,000 1,000.00 $ 1.00
Participating shares
Class A
Class A initial series $ 7,880,557 2,450.40 $ 3,216.03
Class A series 1 55,632,363 17,648.35 3,152.27
63,512,920 20,098.75
Class B
Series 1 $ 3,584,181 3,660.12 $ 979.25
Series 2 579,218 649.98 891.14
Series 3 275,092 325.00 846.44
Series 4 341,936 400.00 854.84
Series 5 309,790 350.00 885.11
Series 6 311,214 337.73 921.49
Series 8 170,417 180.00 946.76
Series 9 9,062,804 9,766.02 927.99
Series 10 420,007 461.00 911.08
Series 11 81,594 89.97 906.93
Series 12 380,330 369.98 1,027.97
Series 13 2,800,454 2,265.34 1,236.22
$ 18,317,037 18,855.14
Class C
Series 1 $ 2,525,765 2,071.57 $ 1,219.25
42

Share transaction summary
Shares Shares
Shares Shares Shares
issued/ redeemed/
outstanding converted outstanding
transferred transferred
January 1, during the December 31,
during the during the
2010 year 2010
year year
Class A initial series 2,570.40 - - (120.00) 2,450.40

Class A series 1 17,648.35 - - - 17,648.35
Class B series 1 3,660.12 - - - 3,660.12
Class B series 2 749.96 - - (99.98) 649.98
Class B series 3 325.00 - - - 325.00
Class B series 4 400.00 - - - 400.00
Class B series 5 350.00 - - - 350.00
Class B series 6 1,287.73 - - (950.00) 337.73
Class B series 8 180.00 - - - 180.00
Class B series 9 9,766.02 - - - 9,766.02
Class B series 10 461.00 - - - 461.00
Class B series 11 89.97 - - - 89.97
Class B series 12 369.98 - - - 369.98
Class B series 13 485.98 1,779.36 - - 2,265.34
Class B series 14 - (187.50) 187.50 - -
Class B series 15 - (50.00) 50.00 - -
Class B series 16 - (152.65) 152.65 - -
Class B series 17 - (50.00) 50.00 - -
Class B series 18 - (1,500.00) 1,500.00 - -
Class B series 19 - (150.00) 150.00 - -
Class C series 1 1,240.81 830.76 - - 2,071.57
Class C series 2 - (950.00) 950.00 - -
39,585.32 (430.03) 3,040.15 (1,169.98) 41,025.46
4. RELATED PARTY TRANSACTIONS AND BALANCES

Management fee
The Offshore Feeder as a limited partner in the Master Fund pays a monthly management fees to the
Investment Manager who provides the Offshore Feeder with continuous supervision of the Master Fund’s
assets, including the composition of its portfolio and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sales allocated derivatives.
Management fee due to the Investment Manager is recorded in the financial statements of the Master Fund.
The amounts have been charged to each of the Feeder Funds’ capital accounts in the Master Fund.
Management fee is discussed in Note 7 of the Master Fund’s Notes.
For the year ended December 31, 2010, total management fee of $1,324,372 was incurred and $122,638 is
payable at year end by the Master Fund for the Offshore Feeder. The fee is included in the caption “Expenses
allocated from Master Fund” in the statement of operations.
43

Incentive allocation to the Master Fund GP and the Special LP are recorded in the financial statements of the
Master Fund. The amounts are allocated to each of the Feeder Funds’ capital accounts in the Master Fund.
Incentive allocation is discussed in Note 7 of the Master Fund’s Notes.
For the year ended December 31, 2010, the incentive allocation to the Master Fund GP and the Special LP for
the Offshore Feeder was $13,778 and $78,074 respectively. The fee is included in the caption “Expenses
allocated from Master Fund” in the statement of operations.
Share capital
The Offshore Feeder has related party shareholders inclusive of the Special Limited Partner of the Master
Fund. These shareholdings of $65,414,551 represent approximately 78% of net assets at the reporting date.
Director’s fee
For the year ended December 31, 2010, director fees of $10,000 was incurred and fully paid.
The Master Fund and the Feeder Funds entered into an administration agreement with Prime Management
Limited (the “Administrator”) as of April 1, 2007 for the provision of certain accounting, administrative and
investor services.
Pursuant to the administration agreement with the Administrator, the Offshore Feeder pays to the
administrator a monthly fixed fee as of the last business day of each month.
For the year ended December 31, 2010, total administration fees of $19,000 were incurred and $5,250 was
payable at year end.
6. RISKS FACTORS
Due to the nature of the “master/feeder” structure, the Offshore Feeder may be materially affected by the risk
factors affecting the Master Fund as discussed in Note 9 of the Master Fund’s Notes.
The per share operating performance, total return, ratios to average net assets are calculated for the initial
series of each share class. An individual investor’s per share operating performance, total return and ratios
to average net assets may vary from these amounts and ratios based on different management fee and
incentive allocation arrangements and the timing and amount of capital transactions.
44
7. FINANCIAL HIGHLIGHTS (continued)

The following represents the per share information, total return and ratios to average net assets and other
supplemental information for the year ended December 31, 2010:
Per share operating performance Class A Class B Class C

Intitial Series Series 1 Series 1
Net asset value, beginning of year $ 2,697.29 $ 821.30 $ 1,043.67
Income from investment operations

Net investment loss (11.11) (3.38) (30.66)
Net realized and unrealized gains 529.85 161.33 206.24
Total from investment operations 518.74 157.95 175.58

Net asset value, end of period $ 3,216.03 $ 979.25 $ 1,219.25
Total return
Total return before incentive fee 19.23 % 19.23 % 20.43 %
Incentive fee 0.00 0.00 (3.61)
Total return after incentive fee 19.23 % 19.23 % 16.82 %
Ratios/supplemental data *
Ratio of expenses to average net assets 1.46 % 1.46 % 4.02 %

Ratio of net investment loss to average net assets (0.42)% (0.42)% (2.98)%
*The ratios are computed based upon the weighted average net assets of shares as a whole throughout the
year.
Subsequent to year end, the Offshore Feeder had subscriptions and redemptions totaling approximately
$775,000 and $89,000 respectively. There were no other material events requiring disclosure.
45
AQUAMARINE VALUE FUND, L.P.
(A Delaware Limited Partnership)
47
Deloitte & Touche
Wickhams Cay 1
P.O.Box 3083
Road Town,
Tortola, VG1110
Tel: +1 284 494-2868

Fax: +1 284 494-7889
www.deloitte.com
To the General Partner and Limited Partners of
Aquamarine Value Fund, L.P.
We have audited the accompanying statement of assets and liabilities of Aquamarine Value Fund, L.P.
(the “Onshore Feeder”) as of December 31, 2010, and the related statement of operations, changes in
partners’ capital and cash flows for the year then ended. These financial statements are the responsibility
of the Onshore Feeder’s management. Our responsibility is to express an opinion on these financial
statements based on our audit.
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Onshore
Feeder’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Onshore Feeder as of December 31, 2010, and the results of its operations,
changes in partners' capital and cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE

May 9, 2011

At December 31, 2010
ASSETS
Investment in Aquamarine Master Fund, L.P., at fair value $ 5,216,431
Receivable from Master Fund 108,100
Due from related party 77,286
Cash and cash equivalents 10,413
LIABILITIES
Capital withdrawals payable 112,347
PARTNERS' CAPITAL $ 5,270,532
49
NET INVESTMENT LOSS ALLOCATED FROM AQUAMARINE MASTER FUND, L.P.

Income $ 50,529
Expenses (53,376)
(2,847)
EXPENSES
Office expenses 4,776
59,631
Reimbursed expenses (6,542)
53,089
REALIZED GAIN AND NET CHANGE IN UNREALIZED GAIN ON INVESTMENTS AND

FOREIGN CURRENCIES ALLOCATED FROM AQUAMARINE MASTER FUND, L.P.
Net realized gain on investment and foreign currencies 41,785
Net change in unrealized gain on investment and foreign currencies 832,138
NET REALIZED GAIN AND NET CHANGE IN UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCIES ALLOCATED FROM AQUAMARINE MASTER FUND, L.P. 873,923
NET INCREASE IN PARTNERS' CAPITAL FROM OPERATIONS $ 817,987
50
Statement of Changes in Partners' Capital
General Limited
Total
Partner Partner
PARTNERS' CAPITAL, JANUARY 1, 2010 $ 266,439 $ 4,240,218 $ 4,506,657
INCREASE IN PARTNERS' CAPITAL

From operations
Net increase in partners' capital 44,584 773,403 817,987

Capital contributions - 117,000 117,000
Capital withdrawals - (171,112) (171,112)
PARTNERS' CAPITAL, DECEMBER 31, 2010 $ 311,023 $ 4,959,509 $ 5,270,532
51

Net increase in partners' capital from operations $ 817,987
Adjustments to reconcile net increase in partners' capital
resulting from operations to net cash provided by operating activities:
Net realized gain from investments (41,785)
Net change in unrealized gain on investments (832,138)
Net investment loss allocated from Aquamarine Master Fund, LP. 2,847
Payments for purchases of Aquamarine Master Fund, L.P. (100,000)
Proceeds from sales of Aquamarine Master Fund, L.P. 222,800
Increase in receivable from Master Fund (33,800)
Increase in receivable from related party (16,667)
Increase in accrued expenses and other payables 3,751
Net cash provided by operating activities 22,995
Capital contributions received 117,000
Capital withdrawals paid, net of capital withdrawals payable (133,026)
Net cash used in financing activities (16,026)
INCREASE IN CASH AND CASH EQUIVALENTS 6,969

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,444
CASH AND CASH EQUIVALENTS, END OF YEAR $ 10,413
52
1. ORGANIZATIONAND BUSINESS ACTIVITY

Aquamarine Value Fund, L.P. (the “Onshore Feeder”) was organized as a Delaware Limited Partnership on
March 15, 2001 and commenced operations on April 26, 2001.
The Onshore Feeder operates under a “master/feeder” structure, where Aquamarine Master Fund, L.P. (the
“Master Fund”), a British Virgin Islands (“BVI”) International Limited Partnership, is the master fund. The
Onshore Feeder invests substantially all of its investable assets in the Master Fund, together with
Aquamarine Fund Inc. (the “Offshore Feeder”) a BVI Business Company (collectively, the “Feeder Funds”). At
December 31, 2010, the Onshore Feeder’s proportionate interest in the partners’ capital of the Master Fund
is 6%.
The investment objective of the Onshore Feeder is to compound wealth for limited partners over the long
term. The Onshore Feeder intends to achieve its investment objectives through its investment in the Master
Fund, which has the same investment objectives as the Onshore Feeder.
Aquamarine Capital Management, LLC, a New York limited liability company, is the general partner (the
“General Partner”) of the Onshore Feeder and is also the Investment Manager of the Master Fund. The
General Partner is responsible for certain administrative and investment advisory services for the Onshore
Feeder and the Master Fund. The principal decision maker of the General Partner is Guy Spier.
The performance of the Onshore Feeder is directly affected by the performance of the Master Fund. The
Master Fund utilizes the services of the General Partner to invest the assets of the Onshore Feeder, together
with the assets of the Offshore Feeder.
The financial statements of the Master Fund, including the condensed schedule of investments, are included
at the end of this report and should be read in conjunction with the Onshore Feeder’s financial statements.

The financial statements have been prepared in conformity with accounting principles generally accepted in
the United States of America (“US GAAP”) and are stated in United States (“US”) dollars. The following is a
Use of estimates
Valuation of investment in the Master Fund
The Onshore Feeder records its investment in the Master Fund at fair value based on its respective
percentage of the Master Fund’s partners’ capital. Valuation of securities held by the Master Fund is
disclosed in Note 2 of the Master Fund’s notes to the financial statements (the “Master Fund’s Notes”) which
are attached to this report.
ASC 820, Fair Value Measurement and Disclosures (“ASC 820”) defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value. Additional disclosures due to the impact of
ASC 820 on the Onshore Feeder’s underlying investments held within the Master fund are included in Note 4
of the Master Fund’s Notes.
The Onshore Feeder classifies cash at bank and short-term deposits with original maturities of three months
or less as cash and cash equivalents.
53

The Onshore Feeder records its proportionate share of the Master Fund’s income, expenses, and realized
and change in unrealized gains and losses. The Master Fund’s income and expenses recognition policies and
allocation are discussed in Note 2 of the Master Fund’s Notes.
Income and expenses that are directly attributable to the Onshore Feeder are recorded on the accrual basis
as incurred.
Capital withdrawals payable
The Onshore Feeder recognizes capital withdrawals payable in accordance with ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”). Capital withdrawals are recognized as liabilities when the amount
requested in the capital withdrawals notice becomes fixed. Prior to December 31, 2010, the Onshore Feeder
received capital withdrawal notices to be paid after year end but based on December 31, 2010 partners’
capital balances. Within the context of ASC 480, such capital withdrawal notices represent an unconditional
obligation of the Onshore Feeder at December 31, 2010. The liability to such partners is presented in the
statement of assets and liabilities as “capital withdrawals payable”.
Foreign currency
The books and records of the Onshore Feeder and the Master Fund are maintained in US dollars. The foreign
currency translation policy is discussed in Note 2 of the Master Fund’s Notes.
Income taxes
The Onshore Feeder reviews and evaluates tax positions in its major jurisdictions and determines whether
or not there are uncertain tax positions that require financial statement recognition. In determining the
major tax jurisdictions, the Onshore Feeder considers where it is organized and where it makes
investments. The Onshore Feeder’s US Federal tax returns for 2007 to 2010 remain open for examination by
tax authorities and tax positions associated with foreign tax jurisdictions remain subject to examination
based on varying statutes of limitations.
Based on its review, the Onshore Feeder has determined that the adoption of ASC 740, Income Taxes (“ASC
740”) has not impacted the Master Fund’s financial statements for the year ended December 31, 2010 and
therefore no provision for income taxes was recorded. The Onshore Feeder is additionally not aware of any
tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will
change materially in the next twelve months. The determination of income taxes is based on complex
analyses of many factors, including matters that are subject to interpretation.
Individual partners are taxed on their proportionate share of the Onshore Feeder’s income.
3. PARTNERS’ CAPITAL ACCOUNT

The Onshore Feeder is currently offering limited partnership interests (“Interests”), which are defined as
partners’ share of the partners’ capital as reflected in each limited partner’s capital account. The Interests
are divided into two classes, A and B. The limited partners holding Class A Interests are sometimes referred
to herein as “Class A limited partners” and the limited partners holding Class B Interests are sometimes
referred to herein as “Class B limited partners”.
As of December 31, 2010, there are Class A and Class B Interests for an amount of $2,409,344 and $2,861,188
respectively.
54
3. PARTNERS’ CAPITAL ACCOUNT (continued)

Capital contributions
The minimum investment in the Onshore Feeder is $500,000 by each Class A limited partner and $1,000,000
for each Class B limited partner. The General Partner may in its discretion waive the minimum initial
contribution amount with respect to any partner. Following initial investment, a limited partner may make
additional investments in amounts of not less than $50,000, subject to adjustment at the discretion of the
General Partner. The General Partner may admit new limited partners and permit limited partners to make
additional contributions as of the first business day of each calendar month, or at any other time in the
General Partner’s sole discretion.
Capital withdrawals
Class A limited partners may make a complete or partial withdrawal from its capital account as of the last
day of each calendar quarter, with 60 days’ prior written notice to Prime Management Limited (the
“Administrator”).
A withdrawal fee of five percent (5%) of the withdrawal amount will be charged for withdrawals made by a
Class A limited partner within the first six months after each capital contribution, and two percent (2%) for
withdrawals occurring any time following the six (6) months and preceding the twelve (12) month
anniversary of each capital contribution.
Additionally, the General Partner, in its sole discretion may permit any Class A limited partner to withdraw
all or any portion of its capital account on a day other than the last day of a calendar quarter and/or on less
than 60 days prior written notice subject to a withdrawal fee of two percent (2%) of the withdrawal
proceeds, together with the initial Class A withdrawal fee.
Class B limited partners may make a complete or partial withdrawal from its capital account as of the last
business day of the calendar month in which the Class B lock-up period (defined below) expires upon 60
days prior written notice to the Administrator. Thereafter, on the last business day of the calendar month in
which each 12 month anniversary of the expiration of the Class B lock-up period, or such other date as
determined by the General Partner.
The General Partner in its sole discretion may waive or reduce the Class B lock-up period and/or the notice
period required for withdrawals by Class B limited partners. Class B limited partners are not subject to
withdrawal fees.
Class B limited partners may not withdraw any capital contribution (and any appreciation thereon) until the
expiration of the 12 month period following the contribution of such capital, (the Class B lock-up period),
without the prior written consent of the General Partner.
Each withdrawing limited partner will receive, at the General Partner’s sole discretion, at least 90% of its
estimated withdrawal amount with the balance payable 30 days after the Onshore Feeder’s annual audit.
The General Partner may in certain circumstances suspend withdrawals from capital account of the
Onshore Feeder.
Allocation of gains/losses and management fees
At the end of each month, the aggregate amount of management fees payable by the Onshore Feeder during
such month which are attributable to each Class A limited partner shall be charged to such Class A limited
partner’s capital account, and any net capital appreciation or depreciation will be allocated to all partners
(including the General Partner) in proportion to their respective ownership percentages for such month.
55
4. RELATED PARTY TRANSACTIONS
Management fee
The Onshore Feeder, as a limited partner in the Master Fund, pays a monthly management fee to the General
Partner (as the Investment Manager of the Master Fund), which is attributable to the Class A limited
partners for such month with respect to the Master Fund as of the last business day of each calendar month.
The Investment Manager provides the Onshore Feeder with continuous supervision of the Master Fund’s
assets, including the composition of its portfolio and furnishes advice and recommendations with respect to
investments, investment policies and the purchase and sales allocated derivatives.
Management fee due to the General Partner is recorded in the financial statements of the Master Fund. The
amount has been charged to each of the Feeder Funds’ capital account in the Master Fund. Management fee
is discussed in Note 7 of the Master Fund’s Notes.
For the year ended December 31, 2010, a total management fee of $35,452 was incurred of which $3,227
was payable at year end by the Master Fund for the Onshore Feeder. The fee is included in the caption
“Expenses allocated from Master Fund” in the statement of operations.
Incentive allocation to the General Partner is recorded in the financial statements of the Master Fund. The
amount is allocated to each of the Feeder Funds’ capital accounts in the Master Fund. Incentive allocation is
discussed in Note 7 of the Master Fund’s Notes.
For the year ended December 31, 2010, the incentive allocation to the Master Fund GP for the Onshore
Feeder was $6,611. The fee is included in the caption “Expenses allocated from Master Fund” in the
statement of operations.
Partners’ capital
The Onshore Feeder has related party partners inclusive of the General Partner. These partners’ capital
represent 16% of partner’s capital at the reporting date of which $348,530 are Class A Interests and
$499,931 Class B Interests.
Reimbursed expenses
The General Partner has decided to cap the expenses which are incurred at the Onshore Feeder level in such
manner that will cause the net returns between the Feeder Funds to be identical on a monthly basis. The
expenses incurred above such cap will be incurred by the General Partner.
Effective February 1, 2010, the General Partner removed the cap on expenses applied to the Onshore Feeder.
For the month of January 2010, the expenses incurred above such cap were $6,542. An outstanding balance
of $67,161 was receivable from the General Partner as of December 31, 2010.
Additionally, the General Partner assumed certain expenses incurred on the Onshore Feeder. The assumed
expenses of $12,500 were paid directly by the Onshore Feeder and are recoverable at December 31, 2010.
The General Partner directly paid certain expenses on behalf of the Onshore Feeder of $2,375 resulting in a
net receivable of $10,125 as of December 31, 2010.
56
The Master Fund and the Feeder Funds entered into an administration agreement with the Administrator as
of April 1, 2007 for the provision of certain accounting, administrative and investor services.
The Onshore Feeder pays to the Administrator a monthly fixed fee as of the last business day of each month.
For the year ended December 31, 2010, total administration fees of $29,000 were incurred and $15,250
were payable at year end.
6. RISK FACTORS
Due to the nature of the “master/feeder” structure, the Onshore Feeder may be materially affected by the
risk factors affecting the Master Fund as discussed in Note 9 of the Master Fund’s Notes.
The following financial highlights are calculated for the limited partners taken as a whole and exclude data
for the General Partner.
Individual limited partner’s returns will vary due to the timing of contributions and withdrawals, different
management fees and incentive allocation arrangements.
Total return
Total return before incentive allocation 18.33 %

Total return after incentive allocation 18.17 %
Ratios to average limited partners' capital *

Operating expenses before reimbursements 2.40 %
Reimbursed expenses (0.14)
Operating expenses after reimbursements 2.26 %
Net investment loss after reimbursed expenses 0.94 %
* Ratios of operating expenses and net investment loss are computed based on the monthly average of the
limited partners’ capital for the year.
Subsequent to year end, the Onshore Feeder had contributions and withdrawals totaling approximately
$500,000 and $125,000 respectively. There were no other material events requiring disclosure.
57
Aquamarine Capital Assets Under Management
($ in millions)
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
c- c- c- c- c- c- c- c- c- c- c- c- c- c- n-
De De De De De De De De De De De De De De Ju
58
Investing Principles
In June 1996 Berkshire Hathaway issued a booklet entitled, “An Owner’s Manual,” to Berkshire’s
shareholders. This was a sound psychological move on Berkshire’s part since a number of studies have
shown that by writing something down we increase the probability of it happening.
I wanted to set down a similar set of principles and share them with partners and friends of Aquamarine
Fund. The goal here is to be neither complete, nor comprehensive: Rather, it is to emphasize those parts of
that body of worldly wisdom that I see as particularly relevant to me as well as to Aquamarine Fund's
investors at this point.
For those readers unfamiliar with the term, “Worldly Wisdom,” is a phrase coined by Charlie Munger. How to
best acquire it, use effectively for a life well lived is the subject of a book entitled "Poor Charlie's Almanack,"
which is a compilation of Munger’s teachings, as put together by his friend, Peter Kaufman.
In his search for worldly wisdom, Charlie Munger has drawn from many sources, including Ben Graham,
Warren Buffett, Benjamin Franklin, Roberto Cialdini and various others: These principles, too have been
drawn from many sources, which include various friends and mentors, as well as role models drawn from
both the current era as well as from the past: These all start as ideas, and over time, and through constant
repetition, I believe they have become gradually integrated into my business and investment philosophy.
THE MIRACLE OF COMPOUND INTEREST (ACHIEVING DOUBLES)
DON’T LOSE MONEY
AVOID LEVERAGE
CREATE GOOD INCENTIVES
PLAY CENTER COURT
BETTER BUSINESSES ATBARGAIN PRICES
FIND AND WORK WITH GREAT PARTNERS
59
The Miracle of Compound Interest (Achieving Doubles)
When it comes to investment results, many investors have a tendency to focus on what happened over the
past month, quarter, or year. They might compare quarterly or annual results to an index or to the results of
other funds. Financially sophisticated investors may even talk about the search for alpha (a fancy way of
referring to above average returns) or for superior risk-adjusted returns.
I pay as little attention as possible to these metrics because they distract from the true task at hand. The only
metric I find useful is thinking of long-term increases in net worth, or getting the miracle of compound
interest to work in our favor. The following table illustrates the point that seemingly modest differences in
the annual rate of return can generate profound differences in the ultimate gain over long periods of time.
Investment Result -As a multiple of Original Investment
Years of Operation Rate of Return

7% 12% 18%
20 4 10 27
40 15 93 750
60 58 898 20,555
My goal is to compound wealth at the highest possible rate, while minimizing the risk of permanent capital
loss. In order to keep my sights on the horizon, I frame the investing challenge as follows. I seek to double the
price per share as many times as possible over the course of my investing lifetime.
Don’t Lose Money

Another way to frame the investment challenge is to ask the following question: How do I compound our
investors’ wealth at the highest possible rate, but in a manner that minimizes the probability of a loss?
Gain Required
Initial Loss to Be Whole
10% 11%
25% 33%
40% 50%
50% 100%
As the above chart illustrates, the more you lose, the harder (or longer) it will be before you even get back to
where you started. Big losses are a real killer, or, as Warren Buffett has said:
Rule number one: Do not lose money.
Rule number two: Do not forget rule number one.
Avoid Leverage
The fastest and most effective way to violate the previous rule is to put capital that we do not already own at
risk. Thus, I do not lever the portfolio, and I avoid overly levered investments. There is nothing wrong with
getting rich slowly - especially if trying to do it fast could, and often does end badly.
60
Create Good Incentives
Charlie Munger has said that while he has certainly understood the paramount importance of incentives in
human behavior, even he has grossly underestimated their importance in human affairs.
Many investment partnerships are run by managers who do not have a substantial personal investment
and who work primarily with other people’s money. This creates an incentive to maximize short term
performance, and ultimately leads to increased risk.
An important component of our set-up at Aquamarine is to make sure that our incentives are appropriately
aligned. For my part, the majority of my family’s wealth is invested in Aquamarine Fund which creates a
powerful incentive to minimize the risk of loss.
An even more important component is that, with the introduction of its zero management share class, more
and more of my partners are not paying a management fee, which means I only make money if you make
money.
While I believe that I have been able to spot the most egregious ways in which misaligned or misunderstood
incentives can be damaging, spotting the more subtle ways has been a lot harder: It is easy enough to take the
barber's statement that I need a haircut with a pinch of salt. Similarly, it is just as easy to steer clear of the
sell-side broker who wants to churn my account. But here is something much harder to spot: Consider an
advisor who is genuinely honest, hard working, and truly desires the very best for Aquamarine Fund and its
partners. While the course of action that he counsels is generally sound and well thought out, it contains
within it unnecessary complications that, in most states of the world should be fine, but in extreme states of
the world could lead to problems. In such circumstances the advisor will tend to discount the downside (hey,
it's not his downside, and, indeed it might even lead to more work down the road). My job is not to discount
that downside: Because the advisor would certainly survive the hidden, but fatal flaw, I might not.
Most importantly, I realized that someone with the very best intentions and knowledge is still capable of
giving imperfect advice. And while I might catch the egregiously imperfect advice, I need to be on guard for
subtly imperfect advice.
In addition to becoming more attuned to these factors, I have learned that a very valuable source of input on
important business decisions is to see the input of my peers, and I have become active in a number of
organizations that have helped me to do this.
Another important way to guard against this is to Play Center Court - which is the subject of another
paragraph.
Play Center Court

Donald Keough has a great discussion of this in his book, “The Ten Commandments for Business Failure”. The
problem with playing the game close to the foul line is that, first of all, the foul line moves around. AIG and the
Greenberg family discovered that in the realm of finite insurance. When the foul line was moved by Eliott
Spitzer, they were on the wrong side of it.
Due to the uncertainty of where the foul line actually is, playing close to it is a specific example of opening
yourself to the possibility of low-probability, but highly negative outcomes. Also, another important point to
factor in is that playing centre court usually does not require huge amounts of legal, accounting, and other
types of advice. The result is that accountants and lawyers do not like it when their client plays centre court –
they would much rather have their clients push the boundaries.
61
Better businesses at bargain prices
One of the hardest things for me to learn and truly internalize has been to see the market as a pari-mutuel
system: Like betting on horse races. At the horse races, it is not that hard to identify the fastest horse that will
most probably win the race on any given day. However, that horse is unlikely the best bet considering the
probability of its winning is already factored in the odds given by the bookmakers.
The real skill is to find the mispriced bet: The horse whose chances of winning are much greater than the
odds suggest. This is much harder, and the opportunities to place such bets are much rarer than most people
think.
While time is the friend of a great business, if it was purchased when it was priced to perfection it has as
much potential to impair returns as a much less decent business. Thus, the focus of my investment research
is now more oriented towards finding businesses that are mispriced, rather than identifying great
businesses and trying to justify paying a high price for them.
Find and work with great partners

This is the subject of a book by Michael Eisner and I have seen the same principles play out in my own life.
The book carries the message that when it comes to working with other people, one plus one often equals
three.
During the recent financial crisis, I learned volumes about identifying the right sort of partner. I have now
implemented many of those lessons.
Similarly, when it comes to investment research, I also work hard at developing great relationships with a
broad group of people who can help me evaluate investment ideas.
Perhaps my greatest lesson of partnership is that, the way I see it, all business is personal. The vast majority
of the time, whenever I have gone beyond the call of duty regarding someone's wellbeing, it has resulted in
all sorts of remarkable, unexpected and fortuitous results for me. To paraphrase Hillel, perhaps the best way
to find a great partner is to be a great partner. That has been true for me in all areas of my life.
62
From Left to Right: Orly Hindi, Martin Forster, Guy Spier, Keith Smith, and Simon Spier
63
Team Aquamarine
GUY SPIER
Managing Partner
Office Team
Orly Hindi, Director of Operations, New York

Keith Smith, Consultant, London
Oliver Süess, Associate, Zurich
Sarah Stephenson, Associate, Zurich
Aquamarine Fund Board of Directors
Simon Spier, London, United Kingdom

Martin Forster, Bratschi Wiederkehr Buob, Zurich, Switzerland
Auditor
Deloitte and Touche,Tortola, British Virgin Islands
Brokers and Custodians
Morgan Stanley Smith Barney LLC, The Desai Group, Illinois

Credit Suisse, Zug
General Counsel
Tannenbaum Helpern, Syracuse & Hirschtritt LLP, New York

Bratschi Wiederkehr Buob, Zurich
Ogier, British Virgin Islands
Tax, Accounting and Administration
Prime Management Limited, Bermuda

(Aquamarine Master Fund, L.P., Aquamarine Fund, Inc.,
and Aquamarine Value Fund, L.P.)
Michael J. Liccar & Co., LLC, Illinois

(K1’s, US Tax accounting)
64

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Table of Contents

Management’s Note to Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Report on Fund’s Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Assets Under Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Thank you, and warm regards.

Aquamarine S&P 500 with

^2011 7.6% 6.0% 1.6%

2010 19.2% 14.8% 4.4%

2009 39.3% 25.9% 13.4%

2008 -46.7% -36.6% -10.1%

2007 17.0% 5.5% 11.5%

2006 37.1% 15.6% 21.5%

2005 7.2% 4.8% 2.4%

2004 11.2% 10.7% 0.5%

2003 29.5% 28.4% 1.1%

2002 -1.6% -22.0% 20.4%

2001 1.9% -11.9% 13.8%

2000 21.4% -9.0% 30.4%

1999 -6.7% 20.9% -27.6%

1998 26.1% 28.3% -2.2%

^1997 2.5% 6.0% -3.5%

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

Comparison of Changes in $100,000 invested in Aquamarine Value Fund vs S&P 500

*2011 results are unaudited and based on January -June performance.

Dear Partners of Aquamarine Fund,

Subscriptions and Redemptions

Security Sales and Purchases

My rationale for purchasing it during the 2008 crisis was as follows:

1. Running economic commentary

2. Scare the living daylights out of you

5. Justify and/or apologize for under-performance

The joy of charging your customers less

Our Value Proposition

Low/No Management Fees

No substantial performance fees until fund regains new high

No leverage, No margin loans, No short positions, No complexity

2011 Annual Meetings

London: Tuesday, June 7th

With warm regards,

Tel: +1 284 494-2868

INDEPENDENT AUDITORS’ REPORT

To the General Partner and Limited Partners of

Aquamarine Master Fund, L.P.

DELOITTE & TOUCHE

Member of Deloitte Touche Tohmatsu Limited

Total assets 90,762,116

Total liabilities 319,678

See notes to the financial statements

INVESTMENTS IN SECURITIES, AT FAIR VALUE

United States of America

Diversified financial services

Total Diversified Financial Services 18.19 % $ 16,455,706

Food 2.50 % $ 2,263,512

Total Insurance 16.45 % $ 14,876,966

Leisure time 1.43 % $ 1,293,191

Total United States, at fair value (cost, $56,769,325) 52.42 % $ 47,415,952

Total Brazil, at fair value (cost, $1,360,538) 5.83 % $ 5,271,024

Total Canada, at fair value (cost, $2,826,167) 6.00 % $ 5,428,172

See notes to the financial statements

INVESTMENTS IN SECURITIES, AT FAIR VALUE (continued)

TOTAL COMMON STOCKS,

See notes to the financial statements

INVESTMENTS IN SECURITIES, AT FAIR VALUE (continued)