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| The Risk and Reward of an Investment Shifts as the Valuation Changes |
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A prudent investment manager capitalizes on opportunities when the Risk/Reward is favorable. An example was evident with the precious metal stocks in early 2001. Conversly, an unfavorable Risk/Reward situation presented itself with the NASDAQ in early 2000, just before its collapse. Wistar recognized both of these situations and acted accordingly. As a value manager, our approach centers around the theory that the best investment opportunities exist when fundamental valuations are low. Our investment disiplines help us to identify situations which meet either of the following criteria: Top-down (macro-economic) analysis - we begin with an overview of the economy and identify undervalued investments in sectors which will directly benefit from identified economic conditions or changes. Bottom-up (company specific) analysis - we seek stocks with a low price earnings ratio, low price to book value, a high dividend yield, or a combination of all three.
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