COMMENTARY & PORTFOLIO STRATEGY

JANUARY 2012

M. Cullen Thompson, CFA President & Chief Investment Officer cullen.thompson@bienvillecapital.com

I start with the platitude that one cannot judge a performance in any given field (war, politics, medicine, investments) by the results, but by the costs of the alternative (i.e. if history played out in a different way). Such substitute courses of events are called alternative histories.
Nassim Taleb, Fooled by Randomness

ALTERNATIVE HISTORIES
In 2001, Nassim Taleb, a former Wall Street derivatives trader turned philosopher, catapulted onto the financial and literary scene with the release of his intensely thought-provoking book, Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets, the predecessor to his other global best seller, The Black Swan. In his customary wit, sarcasm and occasional condescending style, Taleb exposes many of the deep-seated biases (acquired and genetic) that affect not only our interpretations of events, but also our decisionmaking. Admittedly, reading Taleb for the first time can be intellectually exhaustingat times you almost pause to wonder if up is down and down is up. So overwhelmed by the faultiness of our thinking, what remains is a lucid notion (now being confirmed by scientists) that we were purposefully designed by Mother Nature to fool ourselves. I first discovered Taleb a few years after the initial release of Fooled by Randomness. At the time I was part of a small portfolio construction group within a large private bank tasked with two challenges: first, to push the envelope in our portfolio construction process in order to deliver a more robust and holistic analysis to our clients, and secondly, to use the analysis to dissuade the companys private bankers from instinctively pushing the individual products that had recently done well (what they could sell). The idea that gripped my attention was Talebs notion of alternative historiesa concept that measures the quality of a decision not based solely on its outcome, but also by the potential costs of the alternative (that is, if history had somehow played out differently). To illustrate, consider Talebs simple, yet colorful hypothetical:
Imagine an eccentric tycoon offering you $10 million to play Russian roulette, i.e. to put a revolver containing one bullet in the six available chambers to your head and pull the trigger. Each realization would count as one history, for a total of six possible histories of equal probability. Five out of these six histories would lead to enrichment; one would lead to a statistic, that is, an obituary with an embarrassing cause of death.

Now, although there are six possible histories, only one will be observed in reality. Assume for a moment that you avoided the embarrassing statistic and compare the manner in which you obtained the $10 million versus earning it in a less lifethreatening way, such as through the diligent and artful practice of dentistry. Although the amount may be the samethey can buy the same goods and will look identical on a Form 1040they are not, however, equal. That is because ones dependence on randomness is far greater than the other. So although they may be quantitatively the same, they are qualitatively different. One method undertook extraordinary risk, while the other little. Although the need to consider alternative histories when evaluating decisions is fairly obvious, in everyday life, it seems its rarely practiced. As Taleb notes, For most people, probability is about what may happen in the future, not events observed in the past; an event that has already taken place has 100% probability, i.e. certainty. Therefore, to some people, the idea of analyzing both the observed and unobserved possible outcomes sounds like lunacy. And in reality, as psychologists have demonstrated, we are unduly influenced by randomness, often attributing skill based on a fortunate outcome, rather than the quality of the process that delivered it. In fact, in evaluating all history, we are biased to systematically underweight randomness, regularly identifying and assigning causality well after the fact (in a shallow attempt to suggest the events could have been foreseen). This past summer I had the opportunity to briefly meet Taleb, which inspired me to revisit his work. And with his material and style of thinking fresh in my mind, I couldnt help but notice its impact virtually everywhere. For instance, in the investment world (where, in Talebs words, the habit of mistaking luck for skill is more prevalentand most conspicuous), sophisticated investors have long recognized the futility of over-emphasizing past performance (without adequately reconciling the process and decisions that led to it). Yet, by and large, the investing public and financial

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media still obsess over recent performance, with fund rankings and feature articles almost singularly based on it. By contrast, a more thoughtful analyst would be wondering how the portfolio would have performed if Y occurred rather than X, a process of shocking the past results against alternative histories. The importance of this cannot be understated. Thats because in any field occupied by tens of thousands of (professional) participants where randomness is knowingly prevalent, at any given moment, many will appear brilliant, and therefore the temptation to attribute skill intense.1 But even when fully appreciating the degree of randomness in outcomes, or in a given field, our biological impulses are hard to resist. For instance, in the Bienville office, part of our regular ritual is to debate potential outcomes for a given topic (e.g. Fed policy, European bailouts, Chinas growth model, etc). Often we start with the base case view and then work in multiple directions with the intent to explore potential alternative histories. Nonetheless, during some of these game theory exercises, we have occasionally caught one another making (over-confident) statements, such as that could never happen, demonstrating the difficulties we all have in imagining something abstract (something that hasnt occurred in our respective available histories). Of course the irony here is that thinking abstract is the very purpose of the exercise. These biases also cropped up in other unexpected areas, including my personal life. As an example, for nearly two years my wife, Emily, and I have argued over her habit of letting the dogs out through the front door (where the street is) versus the back (where theres less roaming area, but certainly greater safety). To my frustration, she routinely chose the front (its also easier for her), which I insisted would result in one of our two dogs being hit by a car. To her, the very fact that they hadnt in the pastthe outcomewas sufficient enough evidence that I was wrong.2 But the notion of alternative histories is crystallized when you consider the following: nearly every major historical event of consequence was largely unpredictable. The events that have explained the world were rare. Before they occurred, they were abstract (because theyd never happened before). And they were far outside of the so-called Guassian, or normal, distribution. One could argue about whether they were gray or black swans (possibly predictable or completely
Referred to as the cross-sectional problem where at any moment in time its likely someones skills will fit the existing environment 2 One of the dangers of statistics: the more information you have, the more confident about the outcome. Emily was relying on what statisticians would call a narrowly defined time series, and extrapolating it to the future (or nave empiricism to Taleb).
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unpredictable), but regardless, they were certainly alternative to the manner in which the world was supposed to unfold. Take June 1914 for example. Few would have suggested that the assassination of an Austro-Hungarian Archduke (Franz Ferdinand), who had taken an unfortunate wrong turn in Sarajevo, would alter the course of world history. Yet, despite decades of peace in Europe, that singular event managed to serve as the transformational trigger for a chain of events that ultimately culminated in one of the greatest calamities in world history: the First World War. Also consider that in the early 1980s, according to Mark Buchanan, author of Ubiquity, there was a palpable and pervasive fear among democratic nations that the USSR would become a permanent fixture on the world stage. Nonetheless, within a few months, the Berlin Wall fell and democracy began to flourish. It was also around that time that books such as Japan As No. 1 populated bookshelves, predicting the continuing rise of Japans industrial might, yet the history that played outthe bursting of their equity and real estate bubbles, followed by two decades of economic stagnationwas incomprehensible at the time. So why were these major historical events and relative shifts in economic power so incalculable and unpredictable? As Buchanan asks, Why dont ecosystems, organisms, and economies reveal the same simplicity as Newtons laws and other laws of physics? The answer lies in the nature of social, economic and financial systems.

COMPLEXITY = FRAGILITY
I can calculate the motion of heavenly bodies, but not the madness of people. - Isaac Newton

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For decades physicists have differentiated between simple systems, where a force applied leads to a predictable and proportional result (i.e. every action has an equal and opposite reaction), and complex systems, where nonlinearity and interconnectivity is present. To illustrate, consider the Russian roulette exercise above. In playing the game, the odds are known, and although the outcome cant be predicted, the probability of the two possibilities (e.g. death or fortune) can be precisely measured. But in the real world, where complexity is present, the game is far more vicious. For one, the bullet is delivered rather infrequently, creating an atmosphere of complacency, leading one to forget about its very existence. But more importantly, as is often the case, we are unwitting participants, playing a
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game with a low risk-sounding name (i.e. banking, diversified portfolio), yet incurring extraordinary and unknown risks. As Taleb notes, outside of textbooks and casinos, one has to guess the problem more than the solution. Rarely is the bullet even visible, making a prediction about its outcome impossible. So whereas the physical world can be described by a set of Newtonian equations, complex systems suffer from a few differentiating features, including nonlinearity and interconnectivity, rendering calculations meaningless. Take nonlinearity to start. When nonlinear dynamics are present, outcomes can be disproportionate to their inputs. Consider traffic, an optimized complex system. With a 10% increase in traffic theres hardly a noticeable effect and travel time is therefore virtually unchanged. However, increase the number of cars by another 10%that is, a relatively small changeand the result can be gridlock, increasing travel time anywhere from 50 to 100% (an outcome highly disproportionate to the input).3 When nonlinearity is present, small and seemingly insignificant acts can have profound effects. Buchanan refers to this phenomenon, where systems seem to be poised on the edge of instability, as the critical state. Because social and economic systems do not operate in equilibrium, they are a special kind of organization characterized by a tendency toward sudden and tumultuous changes. In December 2010, Mohamed Bouazizi, a Tunisian street vendor who had been humiliated by police officers, marched to the front of the governors house in Sidi Bouzid, doused his body in gasoline and promptly set himself on fire. This bizarre, yet seemingly isolated event managed to catalyze a wave of demonstrations across the region (the Arab Spring). And despite years of regional tensions, it was one small (but fatal) act that led to the eventual toppling of the governments in Egypt, Libya and Yemen. As Buchanan says, it is because even small acts may ultimately have great consequences, those consequences are almost entirely unforeseeable. Whats also intriguing about nonlinearity is that, similar to randomness, our brains arent properly wired for it. We seem to be stuck in the every additional input leads to a predictable output framework, and as a result, when trying to explain events, we invariably search for causal links (i.e. A causes B, despite the importance of variables D, E and F that we never see). And because causality provides us the illusion of understanding, it comes with the added benefit of feeling in control. Daniel Kahneman, a pioneer of behavioral economics, once remarked that hikers would prefer a map of
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the Alps when traversing the Himalayans, versus having no map at all. Humans, it seems, are imbued with an intense innate desire to explainto feel in control. Interconnectedness is also a major generator of alternative histories. As the term implies, interconnectivity suggests the presence of a web of intricately-linked relationships, many of which are obscure and therefore outside the purview of casual observers. Edward Lorenz captured this concept beautifully as it pertains to the worlds ecosystem with his concept of the butterfly effect, which describes how a butterfly waving its wings in Rio causes a tornado in Texas. Once again a seemingly insignificant event (i.e. wing flapping) represents a small change in the initial conditions of the system, which triggers a chain of cascading events leading to large scale phenomena, altering the trajectory of the entire system. Scientists have a name for this: chaos. Of course the global financial system is also intricately linked, and its not always the result of the more obvious trade-related relationships. Increasingly important over the past several decades has been the flow of capital. Imagine a game of hot potato, yet substitute individual countries for the participants and money in lieu of the potato. While individual countries are openmeaning capital can flow amongst them, accumulating deficits and surplusesthe system as a whole is closed (that is, money cannot leave the circle). Therefore, from a macroeconomic perspective, individual economies cannot be analyzed purely in isolation as they are affected by the actions of others.4 For a current example, consider the European banking system. European banks are not only massive in size, but their geographic reach is also far and wide. Aside from dubiously financing governments in the southern half of the continent, European banks have been a vital source of private sector credit creation in emerging markets, particularly, and most surprisingly, in China. As theyve now been forced to pull back on lending, growth in these economies has noticeably slowed. Another critical feature of social systems is that they are populated by thinking participants. Thinking participants adapt, often changing their beliefs, which, in turn, affects the opinions of others. George Soros has been a proponent of this view for years, referring to it as reflexivity. To quote Soros: financial markets cannot possibly discount the future correctly because they do not merely discount the future, they
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Its also important to recognize that this structure is generally only as strong as its weakest link, a warning for over-optimized systems

Traffic systems are not just fragile to the number of cars but also to the variability of them

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help to shape it. In certain circumstances, financial markets can affect the so-called fundamentals which they are supposed to reflect. Think about that last sentence for a minute: financial markets can affect the so-called fundamentals they are supposed to reflect. This is what irked Newton: no matter how precise and sophisticated his math, the madness of people could never be calculated. To again quote Buchanan, whether you analyze the history of politics, earthquakes, fires or financial market crashes, there is an intriguing similarity. In each case, it seems the organization of the systemthe web of international relations, the fabric of the forests or the Earths crust, or the network of linked expectations and trading perspectives of investorsmade it possible for a small shock to trigger a response out of proportion to itself. The central point of course is that complex systems, which have nonlinear dynamics, are highly interconnected and often over-optimized, and in some cases, populated by thinking participants, have the propensity to be engulfed into reenforcing feedback loops. And this susceptibility to so-called outlier events is what makes them so dangerously fragile. Since the onset of the financial crisis, feedback loops have become better understood (rising prices and easier access to credit created in a positive feedback loop in housing, whereas the subsequent deleveraging of the financial system resulted in a negative feedback loop) even if their viciousness remains underappreciated. Consider the European crisis (arguably the most fragile situation confronting the global financial system today). In order to reduce their over-levered balance sheets, European banks sell European sovereign bonds, causing the price of the bonds to fall (and their associated yields to rise). As prices fall, banks balance sheets deteriorate further, causing them to sell even more bonds. Thus, deleveraging becomes a moving target. Meanwhile, depositors and counterparties become nervous over the viability of the banks and cease doing business with them. As deposits fall, the need to de-lever increases. In an almost laughable act of circularity, governments attempt to backstop the banks who are instructed to buy (or hold) the sovereigns bonds. Ultimately, investors see through the ridiculous optics and the vicious cycle leads to cascading failures.5 So if complex systems, such as economic and financial systems, are inherently fragile, making predictions about their specific outcomes futile, and if alternative histories are far
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more impactful to the course of history than base case scenarios, how do we invest? By not being too levered to base case scenarios and therefore hopefully more robust to the alternative ones

BE ROBUSTAND WHERE POSSIBLE, ANTI-FRAGILE6

To illustrate the concept of robustness (and anti-fragility, a new concept of Talebs), consider the mythical vignette below: Imagine two friendly golfers with two distinctly different temperaments, styles and philosophies that transcend all activities (work, golf and investment methodology). The first player, Phil, is unapologetically competitive. He likes to win. In Phils mind, doing anything conservatively is an act of cowardice. He believes his aggressive style is an outward expression of his inner confidence. Phil loves to feel hes in control. Hes undeterred by the reality that his professionfilm productionis subject to extreme randomness. Nor is he bothered by the fact that he plays a game on imperfect grass or that he has no ability to command the direction of the stock market.7 Before reaching the first tee, Phil regularly finds himself analyzing the scorecard, searching for the courses Par-5s. Spotting one less than 550 yards provides an immediate serotonin boosthe knows he can get home in two. Once on the course, Phil is equally as likely to fire at a closely-tucked pin with a 3-iron as he is a pitching wedge. And should a playing partner lag a birdie putt, hes known to harass them for the remainder of the round. Like Phil, and despite his smaller stature, Ben can also hit it deep, yet he only does so when the time calls for it. Ben, given his patient and measured demeanor, prides himself on being precise and calculating. Hes known to rotate his driver with a 3-wood, often electing to play position golf. Ben generally aims for the middle of the greens, unless hes offered an easily assessable pin that can be reached with a short club. He often eschews low probability shots, and at the end of the round, Ben is more prone to reflect on his course management than the driver he ripped off of No. 12. And although Ben loves birdies, he abhors double and triple-bogeys. They create too big a hole to dig out of his playing partners frequently hear him say, especially on more challenging courses where hazards are prevalent. On such a course, Ben will happily accept a bogey to prevent a bigger number. In the middle of a round on a recent sunny day, Phil and Ben found themselves discussing their investment portfolios, as
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This is occurring in Greece today. We suspect capital controls are soon forthcoming, and if history is any guide, they will also fail as a stop-gap remedy

Anti-fragile suggests being long gamma, or volatility Phils favorite movie is Tin Cup starring Kevin Costner

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they customarily do. Over the past few months, Phil had seemed particularly proud. As it turns out, his retirement funds, which he refers to as his Optimized Portfolio, had been going gangbusters. As Ben learned, Phils portfolio was geared to provide an equity-like return, for which he would also tolerate equity-like volatility.8 The portfolio carries little fixed income (given todays unattractive yields as Phil is fond of saying) and virtually no cash, which he construes as an opportunity cost. As you can imagine, Ben is intrigued, but otherwise unimpressed. Similar to a devilishly-long and hazard-prone Par-4, Ben currently sees a great deal of fragility in the financial system. And being more calculating, Ben believes there are likely to be better times to take more risk, which he doesnt view as a constant as suggested by the pie chart strategies (i.e. 60/40) he often sees promoted. Rather, Ben believes the degree of risk taken should vary depending on the opportunity set in front of him. In contrast to Phil, Bens Robust Portfolio is an intelligentlydiversified collection of assets. When structuring his portfolio, Ben doesnt rely on Modern Portfolio Theory, which he describes as a ridiculous concept propagated on unsuspecting investors because it largely assumes markets are normally-distributed and that participants always rational (both of which he knows not to be true). As a result, he also puts little faith in historic correlations, recognizing they can undergo regime shifts depending on economic growth, inflation and interest rates. And because he requires a margin of safety, Ben avoids overvalued asset classes and securities. Momentum investing is a fools game, he claims. Also, rather than being naively optimized, Ben often utilizes cash, which he believes provides the redundancy necessary to offset some of the inherent leverage in the financial system. And somewhat uniquely, Ben also occasionally seeks out insurance-like hedges (with defined downside, yet substantial upside) that have served to mitigate the periodic draw-downs of his portfolio. As a result, both his near-term expected return and volatility is lower to account for the inevitable performance drag from cash and hedges.9 When Ben gets home after the round, he decides to crunch some numbers using a Monte Carlo simulation. With his Monte Carlo generator, Ben can run thousands of iterations accounting for different levels of volatility and changing correlationsand derive a range of possible outcomes, which he believes results in a superior way to run scenario analyses. Using the base case outcome, or the 50th percentile, Ben sees that hes likely to underperform Phil, which is to be expected given Phils higher return profile. Nonetheless, hes unperturbed by this. You see, Ben knows that financial markets and the economies they are supposed to discount are complex systems and therefore subject to occasional crashes (in statistical jargon, skew). Ben also believes that adding high levels of debt (i.e. leverage) to an over-optimized system, as policymakers have done, increases fragility and that deleveraging scenarios, which he believes the developed world is currently experiencing, tend to be especially penalizing to equity investors. For example, during the Great Depression, he knows stocks in the US peaked in 1929 before falling 89% (and didnt recover previous highs until 1954, fully 25 years later). And in Japan, the Nikkei is currently 80% below its peak in 1989. Incidentally, in both cases, between the start of the bear market and its eventual conclusion, stock prices produced magnificent swings, often rising substantially before relapsing when it became clear economic growth was dependent on stimulus.10 Importantly, in investing, Ben knows that maximizing the frequency (probability) of winning when skew is present does not increase the overall expectation (i.e. wealth). This is of course because losses hurt asymmetrically. With that in mind, Ben decides to add a twist to his simulation: he incorporates a drawdown in Year 5. With economic growth so low when fragility is so evidently prevalent, Ben believes the traditional business cycle is likely to be shorter. And with a renewed contraction in economic growth, corporate revenues, margins and PE multiples are likely to simultaneously tumble, taking equity prices along with them. But considering that stock prices are still 20% below their 2007 pre-crisis levels, he assumes stocks fall 40%, a deviation far from standard. And whereas Phils portfolio will likely replicate the market, Ben believes that his will capture only around 15% of the decline, thanks to his high cash levels and tactical hedges. The results of the simulation are shown below.

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Optimized Portfolio: Expected Return: 8%, Volatility: 18% Robust Portfolio: Expected Return: 6%; Volatility: 6%

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US stocks fell 50% between 2000 and 2002 and then 56% from October 2007 to March 2009

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Although Ben is pleased with the outcome, he realizes its important to not stop the mental exercise in Year 5. Thats because whereas Bens portfolio has experienced an undesirable loss, his overall cumulative return for the period remains positive (+6.3%). And seeing better opportunities, hell be ready to increase risk in his typical calm and calculating manner. Finally, he will have a margin of safety. By contrast, as evidenced by the sharply concaved line, Phil has now lost nearly a quarter of his net worth, and in spite of the stellar results in Years 1-4, where he outperformed Ben, the drawdown has resulted in annualized return of -5.0% for the period. Phil is panicked. His thinking is clouded and irrational. His Paleolithic instinct is to flee. Unable to tolerate further losses, Phil decides to liquidate his portfolio just as a generational opportunity seems to be presenting itself. Ironically, Phil, once proud and confident, has discovered that he has the yips. After reflecting on the simulation, Ben decided to pick up a copy of Boombustology, suggested to him by Christopher Pavese, the Chief Investment Officer of the Broyhill Affinity Fund.11 To Bens satisfaction, he immediately locks in on the opening passage in the foreword written by David Swensen, the CIO of the Yale Endowment, one of the worlds top performers: "Financial crises bedevil market modelers because crises reside in the notoriously difficult-to-assess fat tails of distributions of security returns. Not only are the fat tails hard to parse, but their impact is disproportionate to their size. Extreme events, good and bad, do more to determine long run results for investors than do the run-of-the-mill events that fall in the center of distributions. Sensible investors pay close attention to low probability extreme negative events, like financial crises, that have the potential to wreak havoc with their portfolios." Ben couldnt agree more. As a keen observer of markets, he recognizes that today we are not operating not in the middle of the distribution, but rather in the tails. And by layering in intelligent hedges with a focus on predictable surprises, Ben managed to alter his overall return profile. His so-called antifragile positions, which tend to benefit the more the system is shaken, have made Bens overall portfolio less fragile.

PORTFOLIO STRATEGY
Life is understood backwards, but must be lived forwards. Soren Kierkegaard

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As the New Year begins, we maintain a portfolio of highquality assets, combined with higher-than-average levels of cash, and where possible, tactical hedges focused on a handful of what we believe to be predictable surprises. As many clients have heard us mention over the past several months, never in observed history have governments been so collectively indebted (and dependent on capital markets to fund themselves). We suspect these funding gaps, in addition to concerns about overall growth, will continue to dominate the movements of asset prices. The global imbalances that have focused our attention and reduced our appetite for risk not only remain unresolved, but, in our opinion, are also still largely misunderstood. And like a cancer, the longer they go untreated, the further and deeper they will spread. Their eventual unwinding is what Bridgewaters Ray Dalio has referred to as the forthcoming seismic shift. Importantly, these imbalances could not have arisen if not for the current global monetary regime (a toxic combination of floating and quasi-fixed, fiat currencies). Over the years, we believe this regime will become increasingly discredited to the benefit of sound currencies, including gold. Therefore, we maintain exposure to these assets, largely unconcerned with the day-to-day whipsaws in their prices. As we all know, history has a habit of making a mockery of those attempting to precisely predict its course. Rather than do so, we focus our research on understanding the possibilities of numerous histories, including the potential alternative ones. We then hope to build a portfolio that is not only more robust to them, but one that also hopefully delivers a reasonable return on capital without jeopardizing the eventual return of capital. Like the mythical Ben, we patiently await better days (or more accurately, lower prices) before dialing up our risk.

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A few weeks ago I received a call from Emily. I could immediately sense something was wrong. Traveler, our oldest dog, had been hit by a SUV. Thankfully, he survived (with his over-sized ego taking the brunt of the bruising). Both Traveler and Lily are now let out the back.

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In the interest of full disclosure, both Ben and the authors have capital invested in the Broyhill Affinity Fund

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ABOUT BIENVILLE
Bienville Capital Management, LLC is a research-focused, SEC-registered investment advisory firm offering sophisticated and customized investment solutions to highnet-worth individuals, family offices and institutional investors. The members of the Bienville team have broad and complimentary expertise in the investment business, including over 100 years of collective experience in private wealth management, institutional investment management, trading, investment banking and private equity. Bienville has established a performance-driven culture focused on delivering exceptional advice and service. We communicate candidly and frequently with our clients in order to articulate our views. Bienville Capital Management, LLC has offices in New York, NY and Mobile, AL. DISCLAIMERS Bienville Capital Management, LLC. (Bienville) is an SEC registered investment adviser with its principal place of business in the State of New York. Bienville and its representatives are in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which Bienville maintains clients. Bienville may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. This document is limited to the dissemination of general information pertaining to its investment advisory services. Any subsequent, direct communication by Bienville with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Bienville, please contact Bienville or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). This document is confidential, intended only for the person to whom it has been provided, and under no circumstance may be shown, transmitted or otherwise provided to any person other than the authorized recipient. While all information in this document is believed to be accurate, the General Partner makes no express warranty as to its completeness or accuracy and is not responsible for errors in the document. This document contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. The views expressed here are the current opinions of the author and not necessarily those of Bienville Capital Management. The authors opinions are subject to change without notice. There is no guarantee that the views and opinions expressed in this document will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Past performance may not be indicative of future results and the performance of a specific individual client account may vary substantially from the foregoing general performance results. Therefore, no current or prospective client should assume that future performance will be profitable or equal the foregoing results. Furthermore, different types of investments and management styles involve varying degrees of risk and there can be no assurance that any investment or investment style will be profitable. This document is not intended to be, nor should it be construed or used as, an offer to sell or a solicitation of any offer to buy securities of Bienville Capital Partners, LP. No offer or solicitation may be made prior to the delivery of the Confidential Private Offering Memorandum of the Fund. Securities of the Fund shall not be offered or sold in any jurisdiction in which such offer; solicitation or sale would be unlawful until the requirements of the laws of such jurisdiction have been satisfied. For additional information about Bienville,

including fees and services, please see our disclosure statement as set forth on Form ADV.

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