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	DYNAMIC VALUE PROCESS

Our investment process combines the dynamic opportunities of growth stock investing with the strong valuation disciplines of "value" investing. To us, this combination is a natural result of thinking thoroughly about what we believe our clients desire most -- an optimal balance between return and risk.

We believe that growth stock investing with little or no concern about absolute valuations is foolish at best and irresponsible at worst. Conversely, even though value investing has outperformed growth investing while also having lower risk, we believe the lower growth rates of "value" stocks limit one's potential returns. Combining the advantageous qualities of each approach in an overall process, also having rigorous structure and discipline, offers clients a more thoughtful approach using higher growth equities.
In addition to using the positive aspects of each approach, we believe our investment process has more similarities with a finely tuned business management process than with a typical investment approach. Our process is divided into two distinct activities -- 1) Research, and 2) Portfolio Management -- and each activity has the same structure, control, and discipline that one would expect from a well-managed business.
Each separate activity is further divided into discreet steps for more structure. The individual steps are:
Research

Economic/sector/industry analysis
Initial screening
Opportunity assessment
Financial Assessment
Functional Assessment
Comprehensive risk assessment
Continuing review

Portfolio Management

Valuation

Portfolio characteristics

Buy discipline

Portfolio monitoring

Sell discipline/optimization

Although such structure, control, and discipline are no guarantee of success, we believe our process results in both high levels of knowledge about each company before it can be considered for a portfolio and high return prospects for the companies which then satisfy our buy discipline. At each step, the primary focus is on risk management -- not stock selection. We believe risk is managed best by knowing more about our portfolio companies than might be typical and having less expensive companies in our portfolios than also might be typical.
Results of the Process

Although we must warn potential investors that past performance is no indicator of future results and that there are no guarantees in equity investing, we believe that our projected return based buy discipline provides a more structured approach for modeling potential future results. We also attempt to minimize the risks assumed with the projected returns for each individual security by only using conservative assumptions both in our internal financial modeling and in our company valuation process.
So in a business filled with many different sales pitches about investment themes, concepts, and styles, our approach is simple:
Every day we will resolutely follow an investment process that is so well defined that it is as clear to our clients as it is to ourselves how their portfolios are constructed.
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