We fundamentally believe that in the long-run, earnings growth is the engine that drives stock prices. There are times when a company performs well and the stock doesn’t. Knowing the company and having confidence in management allows us to be patient during these periods of time.

A good example is Medtronic. The company has grown revenues and earnings nicely over the past five years and the stock has essentially done nothing. During the September 2006 quarter, they reported earnings and the stock rose almost 13% overnight. Our biggest advantage is that we don’t look for the next quarter, but we look at the next 2 to 5-year time frame.

Q: Can you give some examples of cases when you saved money following your investment principles?

A: About ten years ago, I had purchased a new car and it had Xenon Headlights. As I was driving, I was amazed by how bright the lights were and thought that this product was incredible. I did some research and found out that the lights were being manufactured by a company in Ohio called Advanced Lighting Technologies.

After further research we, liked what we saw and scheduled a visit to the company. While visiting the company, the CEO was telling us about the company jet and he was wearing a fancy suit that we figured cost $3000-4,000. It made us a bit nervous, but we bought some stock anyway. The next two quarters had over 50% growth, but the stock didn’t go higher. We decided to exit the position, because something just wasn’t right. About a year later, news came out about accounting irregularities and the company ended up filing for bankruptcy. Had we not visited the company and been nervous about an over-spending CEO at a start-up company, we could have lost a lot of money. By exercising our philosophy, we were able to avoid that.

Statistical data referenced in this interview was information extracted from SDS Financial Technologies (www. sdsft.com).