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Statement of Intent

Whereas: An investment is a commitment of cash today in the reasonable expectation of receiving a greater purchasing power of cash return on the investment in the future;

Whereas: Investment valuation is an art, not a science, yet it is solidly grounded in established valid scientific principles;

Whereas: The economic value of an investment opportunity can be determined from its expected internally-generated future cash returns and from its appraised value, independently of any external market for securities, and this is the meaning of the term "intrinsic value" when applied to such valuation;

Whereas: A company can be valued both as a going concern using forward-looking discounted cash flows and as a resource converter using worth as a private company or takeover target;

and Whereas: A minority ownership interest in the publicly-traded shares of a company offers an investment opportunity for passive (non-control) individual investors to own a pro rata interest in the company.

Thus: The estimation of the absolute long-term intrinsic value of a minority ownership interest in an operating company both as a continuing going concern based on expected cash returns and as a resource conversion vehicle based on appraised value is accordingly of primary interest;

Thus: The estimation of comparative or relative value is accordingly not of primary interest;

Thus: The estimation of short-term value is accordingly not of primary interest;

Thus: The estimation of next calendar quarter or next annual earnings is accordingly not of primary interest;

Thus: The estimation of the liquidation value of a company is accordingly not of primary interest;

Thus: The estimation of the replacement cost of a company is accordingly not of primary interest;

Thus: The estimation of the value to a strategic buyer as opposed to a financial buyer is not of primary interest.

Thus: The estimation of the value of an activist controlling interest in a company with the ability to precipitate control-type events is accordingly not of primary interest;

Thus: The estimation of the value of a closely-held corporation with all of its common stock privately held and not publicly traded in organized markets is accordingly not of primary interest.

Thus: The valuation of common stock or other paper claims per se is accordingly not of primary interest;

Thus: The valuation of a group of securities, such as a portfolio of common stocks, is accordingly of not of primary interest;

Thus: The valuation of a group of companies, such as an industry or sector, is accordingly of not of primary interest;

Thus: The p-r-i-c-i-n-g of common stocks by a public market or other price-setting mechanism is accordingly not of primary interest;

Thus: The currently best style or fashion of investment or other attempt at market timing is accordingly not of primary interest;

Thus: The mechanical screening, sorting, ordering, and ranking of a group of stocks is accordingly not of primary interest;

Thus: Filtering rules, whether opaque or transparent, and ratings of the stocks in a market or other grouping are accordingly not of primary interest;

Thus: The statistical or mathematical analysis of a database containing historical market price or company information about all the stocks traded on one or more markets is accordingly not of primary interest;

Thus: The graphical analysis of a database containing historical market-generated data about one stock at a time is accordingly not of primary interest.

Thus: Superficial investment selection criteria are accordingly not of primary interest;

Thus: Merely preliminary* investment analysis is accordingly not of primary interest;

Thus: Quick profit is accordingly not of primary interest;

Thus: The avoidable risk attributable to insufficient knowledge, misinformation, and inadequate tools is unacceptable;

and Thus: We intend to add value by minimizing this risk.

* Preliminary analysis refers to research done before performing an in-depth study which necessarily entails close, detailed scrutiny with informed judgment of the financial statements of the company for several recent years.

 


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