We believe that the future is uncertain and therefore so are profit forecasts. An investment must be justified primarily upon a demonstrated history of profitability and secondly upon the potential for future growth. We don't want to overpay for growth that may not materialize or that is already reflected in the market value of a company.

While the future is uncertain, we believe that there are specific fundamental characteristics that often result in above average growth. We therefore favor investing in companies with:

• high rates of return on equity and capital
• strong free cash flow
• a sustainable franchise
• dominant market share
• above average profit margins