The Selection Process

We strive, through a highly disciplined approach, to identify those corporate entities that maintain a dominant franchise in the markets in which they participate. Companies are screened on the basis of traditional fundamental research and analysis with particular emphasis on the quality of earnings, condition of the balance sheet, and certain financial ratios. Information is gathered from a variety of sources, including annual reports, public filings with the Securities and Exchange Commission, prospectuses, various financial and industry publications, on-site company visits, press releases, internet sources, industry conferences, and a host of research materials and financial data prepared by leading domestic and international investment firms and corporate rating services.

The conclusions derived from the distillation of this information are geared toward long-term investment. Nevertheless, given the extraordinary volatility which the securities markets may experience from time to time, in certain of the more aggressive portfolios we may employ a variety of short-term oriented strategies in an effort to optimize returns. Trading positions involving securities sold within thirty days, hedging techniques which include covered and uncovered option writing, financial futures, margin transactions, and short selling are among some of the strategies employed where the client has directed us to engage in higher-risk transactions in keeping with their investment objectives.

Fixed-income investments are structured in an effort to minimize any potential for capital loss and to generate cash flow which can be withdrawn, reinvested, or reallocated toward common stock investments over time. Strong credit ratings, which result from the solid financial position of the underlying entity, are a critical component in the selection of fixed-income investments.