Aristides Capital LLC

General Partner to Aristides Fund LP and Aristides Fund QP, LP

25 S. Huron St. Suite 2A

Toledo, Ohio 43604
tel (419) 214-0412
fax (844) 533-0471

4 November 2016
Dear Partners,
For the month of October, Aristides Fund LP gained 0.51% while Aristides Fund QP, LP gained
0.49%. Year-to-date, Aristides Fund LP is up 11.34%, and Aristides Fund QP, LP is up 11.38%. Since
inception, August 15, 2008, Aristides Fund LP is up 292.67% or 18.03% annualized.1 As of 1 November,
assets under management are $87.5 million.
On a dollar-weighted basis across the two funds, we added approximately 87 basis points of alpha
last month, bringing our year-to-date alpha to positive 1,017 +/- 59 basis points.
I have received several questions recently regarding the U.S. Presidential election. My thoughts,
which will take the entirety of this months letter, are as follows:
According to Nate Silvers Polls plus model, Donald Trumps chance of winning the election has
recently risen from 12% to 34%. At the same time, the S&P 500 has slid for eight consecutive trading days.
It is definitely not a coincidence; when news negative for Clinton prints, such as word of the FBI exploring
Huma Abedins e-mails on her husbands computer, the market falls immediately.

These data are preliminary and unofficial, and are net of fees and expenses, including accrued pro forma incentive allocation. Official figures will be reflected in
statements from Perennial. Performance of partners accounts will vary depending the timing of investments. Alpha calculations reflect a beta of 0.2, which is
consistent with our historical observed beta.

Donald Trump is the first Republican candidate in recent memory roundly disliked by the
American business community. Zero of the Fortune 100 CEOs have donated to his campaign. Eighteen of
the 100 donated to other Republicans during the primary cycle, and 11 have donated to Hillary Clinton.
Trump also trails Clinton badly among college-educated white people, a group that usually strongly
prefers the Republican candidate. A September WSJ/NBC News poll showed Trump trailing Clinton by 15
points in this cohort, a stunning reversal to last cycles 14 point advantage for Romney over Obama.
Why do the most educated voters and those with the most to lose dislike Trump? His policy and
his person.
Trump has misrepresented the effects of free trade, has proposed a massive $7 trillion+ tax cut for
the wealthy, and has put forth little substantive detail. He has a long history of unethical business dealings,
failing to pay contractors on several projects and using legal bullying maneuvers to get his way. He is
involved in new litigation on average once every 3 days, currently embroiled in dozens of lawsuits, and
has promised that after the election he will sue each of the 11 women who have come forward accusing
him of unwanted touching and/or sexual assault.
Trumps foreign policy is confused and dangerous. His running mate confidently asserted in the
Vice Presidential debate that we should bomb the Assad regime in Syria, while Trump declared five days
later during the second Presidential debate that we should take decisive military action against Assads
enemies. He has described NATO, our nations most important military alliance, as obsolete. He has
repeatedly hinted at both using and allowing the proliferation of nuclear weapons, for example Let me
explain. Somebody hits us within ISISyou wouldnt fight back with a nuke?
On the environment, Trump has called global warming a hoax perpetrated by the Chinese to
destroy American business.
On public health, Trump said of American physicians and nurses, who helped to fight and contain
the Ebola epidemic, The U.S. cannot allow EBOLA infected people back. People that go to far away places
to help out are great-but must suffer the consequences! They knew the risk when they went to Africa.
They choose it freely." Imagine what our world and our country might look like now if the U.S. had failed
to lead a massive public health response to stop the 2014 Ebola outbreak in West Africa.
Trump was the most famous and respected proponent of the birther movement, declaring An
extremely credible source has called my office and told me that Barack Obamas birth certificate is a fraud.
He has energized White Nationalists and encouraged hate speech and violence. When Trump speaks of
taking our country back, it is a populist refrain straight out of the book of Adolf Hitlers collected
speeches, which Trump used to read and keep handy in his bedside cabinet.
As a former clinician, I am certain that Trump has Narcissistic Personality Disorder. The Mayo
Clinic explains, Narcissistic personality disorder is a mental disorder in which people have an inflated
sense of their own importance, a deep need for admiration and a lack of empathy for others If you have
narcissistic personality disorder, you may come across as conceited, boastful or pretentious. You often
monopolize conversations. You may belittle or look down on people you perceive as inferior. You may feel
a sense of entitlement, and when you don't receive special treatment, you may become impatient or angry.
You may insist on having "the best" of everything for instance, the best car, athletic club or medical
care At the same time, you have trouble handling anything that may be perceived as criticism. You may
have secret feelings of insecurity, shame, vulnerability and humiliation. To feel better, you may react with
rage or contempt and try to belittle the other person to make yourself appear superior. Or you may feel
depressed and moody because you fall short of perfection.
What about Trumps opponent? you may ask. Isnt Killery awful? Hasnt she done all sorts of
terrible things that disqualify her from being President?

Perhaps the most intriguing poll of this election season is the one by Suffolk University that
recently asked respondents which TV news source they trusted the most, followed by other more typical
political questions. There were 1,000 people in the survey, and 270 said that Fox was their most-trusted TV
news source. Of those 270, only 14% believed our country was on the right track.
When a media outlet presents a disproportionate weighting of stories which, again and again,
paint immigrants as dangerous, crime as sky high, and civilization is fraying, after a while people are going
to believe it. I personally had to stop reading ZeroHedge a couple of years ago, because I finally realized
that it was biased towards doom to the point of being generally untrue. Economic data were reported by
giving only the negative subscales and avoiding mention of the positive ones. If facts or events didnt fit
into a narrative of decay and destruction and demise, they were not reported. I constantly expected the
next recession to be right around the corner, and ZeroHedge fed my expectation.
My own mom is the granddaughter of immigrants from the Middle East. Shes intelligent, and her
dad was a Lebanese-American who served in World War II before becoming a Democratic politician in
Ohio. She is also a watcher of Fox News, and a Trump supporter. She told me recently that a friend of hers
was going to visit London, and how insane she was for taking that sort of a risk. What do you mean,
Mom? She explained to me that there are all sorts of terrorist attacks over there. Telling my mom that the
homicide rate in Louisville, where she lives, is 30 times higher than that of London, didnt make a
difference. Facts that didnt conform to the narrative she had seen again and againthe world is unsafe
now thanks to Obamawerent going to break through.
Its not just Fox News that feeds the right-wing narrative. Drudge, WorldNetDaily, NewsMax,
Breitbart, The Washington Times, Jihad Watch, and so on carry the television narrative to tens of millions
of readers online. A recent analysis showed that three-eighths (!!!) of the stories in the right-wing media
contain serious factual errors. The net result is among those who trust Fox News more than other TV
networks, 11% support Hillary Clinton, and 83% support Donald Trump. Among those who favor any
other television news (730 of the 1,000 respondents), 62% support Hillary Clinton, versus only 22% for
Donald Trump.
Alex Jones, who reaches six million people a month, recently had this to say on his show:
I'm never a lesser of two evils person, but with Hillary, there's not even the same universe.
She is an abject, psychopathic, demon from Hell that as soon as she gets into power is going to try
to destroy the planet. I'm sure of that, and people around her say she's so dark now, and so evil, and
so possessed that they are having nightmares, they're freaking out. Folks let me just tell you
something, and if media wants to go with this, that's fine. There are dozens of videos and photos of
Obama having flies land on him, indoors, at all times of year, and he'll be next to a hundred people
and no one has flies on them. Hillary, reportedly, I mean, I was told by people around her that they
think she's demon-possessed, okay?
They said that they're scared. That's why when I see her when kids are by her, I actually get
scared myself, with a child -- with that big rubber face and that -- I mean this woman is dangerous,
ladies and gentleman. I'm telling you, she is a demon. This is Biblical. She's going to launch a
nuclear war. The Russians are scared of her.
[...]
Imagine how bad she smells, man? I'm told her and Obama, just stink, stink, stink, stink.
You can't wash that evil off, man. Told there's a rotten smell around Hillary. I'm not kidding, people
say, they say -- folks, I've been told this by high up folks. They say listen, Obama and Hillary both
smell like sulfur. I never said this because the media will go crazy with it, but I've talked to people
that are in protective details, they're scared of her. And they say listen, she's a frickin' demon and
she stinks and so does Obama. I go, like what? Sulfur. They smell like Hell.
Wow. Is Hillary Clinton really that evil? What, objectively, are the worst things that she has done
in thirty years of public life?
Lets start with the commodity trading scandal. In the late 1970s, Hillary once made $99,500
allowing a close friend, who was also a very large commodity futures trader and an attorney for Tyson

Foods, to trade a commodities account for her. At first, she said she made buy-and-sell decisions herself,
but it later became clear that the friend was doing the trading for her. There are several issues surrounding
these trades. The firm, REFCO, failed to supervise position limits (it is possible that her large trader friend
was buying and selling more contracts than he was allowed to), failed to enforce margin requirements, and
enabled trades to a bulk account to be allocated to individual clients after the trading day. It is entirely
possible, although not proven, that the $99,500 she made at the time was some sort of a bribe from Tyson
rather than money made honestly, trading alongside a friend who indeed happened to be a very wellknown and successful trader.
Next, there is Whitewater. This one is hard to summarize in a paragraph, but Ill try. Hillary
Clinton and her husband were minority partners in a real estate development venture led by campaign
contributor Jim McDougal. The venture, called Whitewater, ultimately failed, after receiving a loan from a
Savings and Loan company, owned in part by McDougal, which itself also failed, amidst fraud. McDougal
had another real estate project, Castle Grande, which his S&L was illegally funneling loans to. Hillary
Clinton, as an attorney at the Rose Law Firm, had done work for Castle Grande. During the investigation
by independent Special Counsel Kenneth Starr, Hillarys billing records from the Rose Law Firm
disappeared for a time, only to magically reappear one day in the White House. McDougals wife Susan
refused to answer questions about the Clintons involvement and was imprisoned for contempt of court
charges. After a massive investigation, Starr did not find prosecutable evidence of wrongdoing against
either of the Clintons. President Bill Clinton eventually pardoned Susan McDougal.
During Bills presidency, Hillary was alleged by some Republicans to have conducted criminal
wrongdoing in the White House FBI files scandal (Filegate), in which Craig Livingstone, director of the
White Houses Office of Personnel Security, improperly retrieved FBI background reports on hundreds of
past White House employees. She was also alleged by Republicans to have broken the law in conjunction
with the firing of seven people in the White House Travel Office (Travelgate). The Clinton
administration said the firings were due to financial improprieties identified in the office during the
previous administration. Critics alleged the Clintons were trying to do political favors for their own people.
Starr investigated both Filegate and Travelgate and found no evidence of criminal wrongdoing by either of
the Clintons.
Moving to recent years, my right-wing friends declare the word Benghazi! as if they have
suddenly developed Tourettes syndrome. In 2012, while Clinton was Secretary of State, members of an
Islamic militant group launched an attack against a U.S. embassy and a CIA compound in Benghazi, Libya,
killing four Americans and injuring 10 others. A common refrain is Hillary Ignored Pleas for Help and Let
Americans Die. There are thousands of right-wing Internet articles to the effect that Clinton could have
imminently saved the lives of these Americans, but somehow chose not to. There are thousands of other
articles alleging that it was obvious before the attacks that the security situation was poor and catastrophe
was imminent. The reality is that this has been one of the most investigated episodes in American history,
and Hillary did nothing wrong. The security situation was known to be challenging in the year leading up
to the attacks, and decisions regarding security were handled in the normal way by the security staff at the
State Department, in conjunction with other resources.
Blaming Clinton for Benghazi is akin to the Donald Trump TV ad that says Hillary Clinton has
been [in Washington for] 30 years. Taxes went up, terrorism spread, jobs vanished In reality, Federal
taxes as a % of GDP were basically stable, the unemployment rate remained stable, the number of working
Americans increased by tens of millions, and yes, terrorism spread, but mostly due to George Bushs
bloodshed in the Middle East. But what does any of that have to do with Hillary Clinton? Largely nothing,
except perhaps for her husbands excellent economic record as President. This commercial is laughable if
part of you doesnt already believe that Clinton is a nearly omnipotent demonic force.
In response to the sexual assault allegations against Donald Trump, in which more than 10 women
have accused him of unwanted groping, unwanted kissing, or attempted rape, the Trump campaign has
developed a counter-narrative, recited in Trumps speeches and by his surrogates, that Hillary has herself
attacked women. Most of these allegations are false. There are, for example, widespread stories that Hillary

Clinton laughed at a 12-year-old rape victim whose alleged attacker she defended in court. In reality,
Clinton, who defended the man as his defense attorney, as part of the legal aid program at University of
Arkansas, did not laugh at the victim at all. She laughed in a subsequent interview about the fallibility of
polygraphs, and about how the prosecution in the case tried to hide key evidence from the defense team. In
another case, Juanita Broddrick has been trotted out by Trump as a women who was raped by Bill
Clinton at a political fundraiser. Broaddrick now claims that Hillary Clinton grabbed her hand in a way
that was intended to be a threat, to tell her to keep quiet. Broaddrick, however, was subpoenaed in 1997
and wrote a sworn affidavit that Clinton in fact made no sexual advances towards her, and the rumors
surrounding their encounter were untrue. In a 1999 NBC interview, when Broaddrick was asked "Did Bill
Clinton or anyone near him ever threaten you, try to intimidate you, do anything to keep you silent? She
answered no.
The only documented truth supporting Hillarys attacks against women appears to be comments
she made in her staunch defense of her husband when he was accused of having repeated extramarital
affairs. She said of Gennifer Flowers, who alleged a 12-year-long consensual affair with Bill Clinton, that
she was a failed cabaret singer who doesn't have much of a resume to fall back on," implying that Flowers
was making the allegations only for a large financial payout. Its also clear that Bill Clintons campaign staff
hired a professional investigator in order to try to discredit the women who were accusing him of affairs or
sexual harassment, although its unknown if Hillary played any role.
One particularly nasty attack is that Hillary stayed married to Bill even though he was once a
frequent party guest of billionaire pedophile Jeffrey Epstein, and Bill may have done things with trafficked,
underage girls. We know that Bill Clinton hung out with Jeffrey Epstein and partied with him, but we
dont know exactly what transpired. We also know, however, that Donald Trump was a frequent party
guest of billionaire pedophile Jeffrey Epstein. So Ill call that a wash.
Very recently, Hillary has recently been investigated by the FBI for using a personal e-mail server
for government business while serving as Secretary of State. Ill be brief here, as the e-mail scandal is
widely known and basically a Rorschach test. If you dislike Hillary, then she put our national secrets at risk
in a wholly disqualifying and unforgivable fashion. If you favor Hillary, you note that she used the
appropriate government e-mail systems for messages marked Secret or Top Secret, and accidentally
received or sent a grand total of three (3) emails on the personal e-mail server containing the marking of (C)
for classified.
As youve probably gathered by now, I dont think Hillary is responsible for the mysterious death
of over 100 Americans as ClintonBodyCount would have you believe. I also dont believe shes actually a
demon.
I dont think theres illegal pay to play going on between foreign leaders and the Clintons, using
the Clinton Foundation as a handy cover. The right-wing media looks at the e-mail leaks from the hacked
emails of John Podesta, Hillary Clintons campaign manager, and sees vast evidence of wrongdoing. I look
at the juiciest bits of those emails and am reassured. This is all that was going on? The hack has basically
revealed that Hillary Clinton was campaigning for President. A few folks at the DNC favored Clinton over
a democratic socialist? Of course they did. A journalist leaked a couple of town hall meeting questions to
Clinton? Of course she did. Thats not illegality; thats life.
At its essence, this election is between an unpredictable narcissist with no relevant domestic or
foreign policy experience, a working knowledge of Hitler speeches, a recent history of saying anything to
foment populist fervor, and a long history of completely disregarding others in order to make himself one
more dollar or grab one more handful of breast; or, the other choice, a Machiavellian with considerable
relevant domestic and foreign policy experience, and a history of bipartisan accomplishment, who has
likely consistently used her political career to grossly enrich herself financially.
Thats not a great choice, but it is an easy one.

I had expected Clinton to pull away from Trump after he looked a bit unhinged during the second
Presidential debate. As there is a strong correlation between presidential margin of victory and the
performance of the S&P 500 in the 30 days before an election, we spent some options premium (about 30
basis points) last month unsuccessfully betting on the large Clinton rally that never came.
By last Friday morning, it seemed that the election was starting to tighten, and knowing that there
is a possibility that some Trump voters are unwilling to tell pollsters that they plan to vote for Trump, and
knowing that a Trump win would likely cause a large pullback in the U.S. equity market, I spent 15 basis
points of options premium as Trump insurance, to hedge our fund against a possible Trump victory. We
bought weekly S&P 500 puts, and some volatility index calls. The trade has helped us somewhat since we
put it on, keeping us roughly flat month-to-date for November in spite of the market selloff.
I expect Clinton will win the election, but I believe she is only a slight favorite, something like
60/40, to do so. If she wins, in the very near-term, the S&P 500 will rally. If she loses, in the very near-term,
it will fall. A drawn-out, highly contested election decided by the courts, like Bush v Gore, wouldnt be
great for equities, but it would probably be less bad than a clear-cut Trump victory. The key voices in the
equity market arent Democrats; far from it. But the most important thing that has enabled stability in the
financial system in recent years is faith in government support for financial stability. If there are doubts as
to governments willingness to allow the Fed to be independent, to honor our debts, to intervene in the
case of a financial crisis, or to project American military power wisely, risk premia must rise.
There are, of course, certain stocks that would be helped by a Trump presidency. Hopefully I dont
get the chance to trade those. Honestly, though the thought of President-elect Donald Trump is, as a
human, utterly alarming, in the narrow role of trader the thought of trading the volatility he will cause is
exciting. Plus, hes going to yugely cut my taxes. Id rather just have reasonable domestic and foreign
policy though.
I had second thoughts about actually sending this letter. Maybe I was being biased or unfair, etc.
But any doubts were resolved this morning when my Twitter feed was full of a story, in the Washington
Times and the other usual right-wing media outlets, about Hillarys campaign manager John Podesta being
invited to a dinner where the courses would be made from blood, semen, and breast milk and for which
there had been code for child sex trafficking. This sort of ridiculous lie is just not okay. Its not
acceptable. Decent people need to stand up and say, No. This new culture of hurting anyone we disagree
with in any way possible is the thing we need to Take America Back from. As the Kentucky state flag
wisely declares, United We Stand, Divided We Fall.
Thank you for you partnership!

Christopher M. Brown
Managing Member, Aristides Capital LLC
Aristides Funds October Performance Attribution
Strategy/Category
Gain or Loss (gross basis points)
Earnings Strategy
+21
Fundamental Community Bank
+22
Fundamental Other
-127
Hedges & Broad Index
-25
Arbitrage
+23
Single Name Shorts
+105
Fixed Income

+46

# of Positions
15
21
57
10
9
33
2

Top October Aristides Funds Winners & Losers (% represents gross % gain/loss as entirety of Funds)
Winners
+0.46% long SAExploration common stock, Term Loan, and 2L
notes, net of crude oil hedges
+0.44% short Energous Corp. common stock and bearish
options
+0.16% distressed E&P company capital structure arbitrage
+0.15% long Hingham Institution for Savings common stock
+0.12% bearish Lannett Company, Inc. options

Losers
-0.51% long Great Elm Capital Group, Inc. common stock
-0.21% long Bank of Utica common stock
-0.17% Russell 2000 and S&P 500 index ETFs, futures, and
options, various volatility index options
-0.17% long Tower International, Inc. common stock
-0.16% long Electromed Inc. common stock

This document is confidential and intended solely for the addressee. This document may not be published or distributed without the written consent
of Aristides Capital LLC and does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product. Any
such offer of solicitation may only be made by means of delivery of an approved confidential offering memorandum.
Any investor who subscribes, or proposes to subscribe, for an investment in Aristides Fund LP (the Fund) must be able to bear the risks involved
and must meet the Funds suitability requirements. No assurance can be given that the Funds investment objectives will be achieved. Investments
in the Fund are speculative and involve a substantial degree of risk. The Fund may engage speculative investment practices that may increase the
risk of investment loss. Past results of the Fund are not necessarily indicative of future performance, and the Funds performance may be volatile.
An investment in the Fund should be deemed highly illiquid. There is no secondary market for an investors interest in the Fund and none should be
expected to develop. There are significant restrictions on transferring interests in the Fund. Neither the Fund nor Aristides Capital LLC are
required to provide periodic pricing or valuation information to investors with respect to its individual investments. Additionally, the Fund is not
subject to the same regulatory requirements as a mutual fund, including the SECs registration and disclosure requirements. The Fund is subject to
various other risk factors and conflicts of interest that are fully disclosed in the Funds offering memoranda and subscription documents.
Market indexes are included in this report only as reference reflecting general market results during the period. The Fund may trade in securities
that are not represented by such market indexes and may have long or short concentrations in a number of securities and in asset classes not
included in such indexes. Accordingly, no representation is made that the performance or volatility of the Fund will track or otherwise reflect any
particular index. The index information has been obtained from sources believed to be reliable, but we do not represent that it is accurate or
complete, and it should not be relied upon as such. The Fund and Aristides Capital LLC expressly disclaim any liability, including incidental or
consequential damages arising from errors or omissions in connection with the inclusion of any index in this publication. Performance results are
net of all fees and expenses, and are unaudited after December 31, 2015.