Equity Investment Philosophy

I.  Find long term investments in Great Growth Companies through bottom-up stock picking. II.  Great Growth Companies exhibit the following:  Outstanding Management and Corporate Culture  Industry or Niche Dominance  High or Rapidly Growing RAM Margins*  Disciplined use/reinvestment of Cash III.  We believe our stocks could outperform the stock market over the long run because: § § Cash generation creates wealth for the company Prudent reinvestment of that cash increases company wealth even more! Eventually, an increase in company wealth may translate into proportionately higher stock prices * a proprietary calculation

Equity Investment Process

Equity Sell Discipline Fundamental Disciplines (Resulting in complete sale) Loss of confidence in management Fundamental deterioration - i.e. no longer meets the RAM Margin or Fundamental Growth of the screen Price Related Disciplines Overvaluation - reduce or eliminate position Monitor holdings for absolute and relative performance