From: Michael Fowler cla To: Lesley Groff <MINII > Subject: ATorus - Daily Portfolio Report - 2/3 & 2/4 Date: Wed, 05 Feb 2014 18:26:38 +0000 Attachments: Atorus_BacktestNAV_020314.pdf; Atorus_BacktestNAV_020414.pdf Lesley, I've attached Daily Portfolio Report for 2/3/14 and 2/4/14. Also, below is a short daily commentary. Daily Commentary: "Always Catching the Big Move" Inherent to the foundation of the strategy, is the ability to get generate positive absolute returns in significant market declines (where many years of gains can be eliminated in short order). We consistently say "we are not worried about catching the big move in either direction." A case in point is the current short position in OGXP3 BZ Equity. In this case, we received a short signal on April 2012 at 4.45. The price has subsequently fallen to 0.11. During this period we added to the position, as to leverage the winners. To the extent broad markets were to experience a move similar to the decline in OGXP3 BZ, the fund would generate returns similar to those experienced in that position. "Impact of Correlation, Vol, & Leverage on NAV' We have what we believe is a unique dynamic approach in managing correlation and volatility (position sizing & global universe opportunity set), wherein we do not over manage and thereby severely reduce absolute returns. Yet varying correlations and realized volatility are states of the system/market and are out of our control in terms of effecting them. We can only mange them prudently. "You want a valve that doesn't leak and you try everything to develop one, but the real world provides you with a leaky valve. You have to determine how much leaking you can tolerate" - Arthur Rudolph, scientist who developed first Saturn 5 rocket for Apollo mission Specifically, in periods of significant consistent directionality (in other words a lot of correlation) our daily volatility will increase, but with right way risk. Since we leverage winners when e