Our investment analysis involves an ongoing probabilistic risk/reward assessment that leverages our experience and deep understanding of the businesses in which we invest.

The amount of work that we do allows us to invest with confidence in that small subset of opportunities in which we have the most conviction. In other words, we take a limited number of concentrated positions in our best ideas both long and short, rather than investing in dozens of ideas in which we can have only limited conviction.

We seek out companies that engage in improper or overly aggressive business or accounting practices. Other short-selling targets include companies with poor or deteriorating fundamentals, dishonest or unreliable leadership, or excessive leverage. We use the skills and experience we have gained in our advisory business to identify and understand these issues ahead of the market.

We make our long investments for the long-term. We view our long portfolio as investments in the underlying businesses of the companies we own and we view ourselves as passive indirect owners of those businesses. We invest primarily in companies with:

• Management we trust and respect
• Strong business franchises
• Histories of sustained profitability and above-average returns on capital
• Significant long-term growth prospects supported by identified macroeconomic themes