Our most important pillar is our fundamental research and value investment philosophy. We analyze a company’s operations, finances and valuation to assess its risk and reward potential. A value strategy offers two advantages. First, a stock purchased below our estimate of intrinsic or fair market value offers the potential for outperformance as the stock ascends to fair value. Second, we believe that stocks trading below their fair value offer a “margin of safety”; that is, downside risk is mitigated because these stocks are detached from their fair value.

Our proprietary security trading model, TRAC^TM, is used to gauge changing sentiment for individual stocks, sectors or overall markets. TRAC^TM helps to optimize the timing of our stock purchases and sales. We aim to buy stocks when they fall to TRAC^TM floors and to sell them when they hit ceilings or fall through floors.

Our two macro pillars are designed to manage risk. We monitor global economies and markets to alert us to potential economic downturns or severe market declines. Our Economic Composite evaluates economic activity by combining various economic variables into one composite to capture business cycle peaks. The Relative Indicator of Momentum model (TRIM^TM) is an algorithm that combines momentum and volatility to determine the primary trend of the market. When the economy hits a business cycle peak according to our Economic Composite or stock markets fall below their TRIM^TM line, we may raise cash, alter portfolio holdings, and hedge our portfolios by short selling markets/sectors.