A: At any point in time, we typically have 50 securities, and we do not overweight any position, as we do not like to take a bet on any one stock. We believe this approach will result in a more consistent performance out of the Fund. Our aim is for our Fund to reflect a broadly diversified portfolio of the “best of breed” in each sector. So typically, with 50 securities we are going to have an equal allocation of 2% in each position. We also re-balance the Fund twice a year.

Q:  Do you have a formal rebalancing process and why do you re-balance only twice a year instead of every quarter?

A: There is a formal process in place for our first screening where we download the data into an in house computer program, enter all the fundamental information and go from there until we have what we think are the best investment choices. As for the frequency of rebalancing, one main reason why most funds do not outperform the market is because of the management fees and expenses involved in trading is something that is borne completely by the shareholder. We also feel that the more that we adjust the portfolio; the more it is going to hurt our performance. Incidentally, we have one of the lowest expense ratios – our 1% is far below the average for our peers.

Q:  What drives your buy and sell decisions? How would you judge a good stock like Countrywide, badly hit due to macro events in the industry? Do you look at macro events or just focus on the company level?

A: We are very wary of the technology sector because of the earnings and stock price volatility, generally we have less exposure to the sector; there is no consistency there. Moreover, these companies do not typically pay dividends, which makes them an even less attractive buy for us.

Regarding our buy and sell discipline, typically these are limited to when we rebalance the Fund notwithstanding any macro or position specific items that may come up. So if we had owned Countrywide Financial two months ago, we would have been watching that pretty close and we might have just decided to sell it, it’s hard to know for sure since we were fortunate not to own Countrywide. We were lucky and did not have any direct exposure to the credit issues the market has been facing this year. However, typically, such events are rare. We did have a couple of events last year where Aetna and United Health had some company specific issues, by the time those issues became public; we were already looking at losses. When that happens so suddenly, as was the case, the last thing we want to do is sell if we still believe in the company long-term. We might look at this as an opportunity to acquire additional shares.

Fifty stocks is still a large number to monitor. Therefore, we frequently run a fundamental analysis and look to see what these stocks have done.

Q:  What kind of risks do you face and how do you control them?

A: All of our companies are profitable and we will not buy them unless we think they are going to stay profitable. We feel our analysis helps us to better avoid big mistakes by identifying those companies that might have gotten ahead of their fundamentals. If we can avoid these mistakes and instead invest in companies that have shown a more consistent performance and earnings growth, we think we are going to perform much more consistently over the long run.

However, probably the most important risk control measure is the diversification that we have. If we are placing no more than 2% in any individual security, any individual position that underperforms will be minimized.

We are currently a small Fund; our net assets are about $11 million because we haven’t been actively marketing the Fund. There is lot of room for growth here because our strategy can easily handle large amounts of money. Performance for the Fund has been good; our annualized returns have outpaced the S&P 500 Index by 1% over the 3-year period and 3% over the 5-year period ending July 31, 2007.