process: "identify, assess, apraise--to always buy $1.00 worth of assets for $.50 to $.75"

At ValueWorks, we have a clearly defined process that guides each of our investment decisions. Our investment strategy enables us to target securities that we believe demonstrate attractive value, using a well-planned series of steps.

Identification: We often find investment opportunities where quality securities have fallen out of favor with the market. Whether or not we identify a security through this contrarian approach, we will always determine if a security is a promising prospect by submitting it to an abbreviated version of our process. If the security passes this initial test, we will then take an in-depth look at the company, as described below.

Assessment: When we value a company, we determine its ‘underlying value' by accurately identifying , analyzing and pricing its assets. We also determine whether the asset base is of high caliber. We will decide to invest in a company only if its assets are currently undervalued and high-quality.

Appraisal: We compare a company's underlying value to its market price. If its security trades at a discount, we identify the key factors that could serve as a catalyst to eliminate this valuation gap and increase the security's price. We then identify any claims against the company's assets. We can then evaluate the price required to control a particular instrument—and make either a positive or negative investment decision.

Re-evaluation: We monitor our portfolios to ensure that companies continue to exhibit the traits that originally made them good investments. We are also watchful so that changes in market conditions do not unexpectedly alter the merits of particular investments.

Exit: We sell securities when they have realized our estimate of their assets' value, or when new developments lead us to believe that part of our original conclusion to buy them is no longer valid.