Our Valuation Philosophy

We always prefer to buy a stock that is priced below or near its intrinsic value.  We do not buy a stock that is trading at a price that we believe is above its value.  We understand the 'momentum trading approach' and know that when the stock market is bullish and a stock's trend is up, the trend can carry an 'overvalued' stock even higher.  This occurs especially with a hot, growth industry like the Internet and with a stock that has a relatively small amount of shares available for trading.

We strongly believe that there is value to careful stock selection and also believe that an investor should own a diversified portfolio of common stocks. Within that portfolio the investor should value each stock individually using the DCF valuation technique. When the stock is 'overvalued' and it exceeds its intrinsic value by more than X% (the investor should pick that percentage, e.g. 15%), he should sell that stock and replace it with another stock that is 'undervalued' by more than X% (e.g. 15%).