Our goal in investing is first to not suffer permanent loss of capital and second to achieve well above average absolute returns. We achieve this by purchasing the shares of growing businesses with fundamental tailwinds when they trade far below a conservatively calculated appraisal value. While it is our overwhelming preference to hold these investments until such value is realized in the market, if we are clearly wrong or if we find something even better, we will not hesitate to act.

While we pay close attention to standard measures of classic value, we are not beholden to value as defined strictly by financial ratios. Growth potential, capital intensity and high normalized return on capital also impact our appraisal values. Shares whose underlying businesses lack those characteristics and that trade at substantial premiums to appraisal value constitute our universe of short sale candidates. We also believe a keen assessment of the general market direction is critical to risk management.

In summary, we are value-oriented in our philosophy but focused on business growth and quality in our fundamental analysis and respectful of market direction and macro factors. To control risk, we focus on purchase or sale price relative to fair value.