Dear NORDSTERN CAPITAL Partners and Friends:

The third quarter was disappointing for our partnership on the surface. The underperformance has three main reasons:

1. significant drop of Embracer Group’s (OTC:THQQF) share price;
2. significant decline of Swedish krona vs. US Dollar;
3. commodity price weakness due to recession fears.

I am convinced that these same three themes that were strong headwinds last quarter are the foundation of strong performance over the next quarters and years.

Every investor should understand that temporary stock price underperformance is incidental. The current state of world affairs is laden with extreme risks. I am convinced that our holdings are well suited to not only withstand whatever may come, but to thrive in most scenarios that may unfold.

Future

I believe the next quarters will demonstrate the following:

1. Embracer Group will generate strong cash flows, up-list to the main stock market, and will attract a new slate of more sophisticated buyers;
2. the drop of the Swedish krona will boost the earnings of our Swedish companies, in contrast to many US-listed companies which might experience FX-related earnings downgrades^[1];
3. the world suffers from commodity shortages.

Physical markets remain tight. Our commodity businesses are cash cows and can use the recession fears and depressed prices as an opportunity to buy back large amounts of their own stock.

Risks

“It is not about risks, it is about recognizing that you have to make good…