Cornerstone takes the view that a firm’s investment process should be an outgrowth of its investment philosophy. In the Value 50 strategy, we favor stocks with proven operating histories that are sustainable but are trading at levels below what is justified by that record. Over the more than 30 year history of the Fair Value Model, these stocks have exhibited the most attractive returns per unit of risk, as measured by standard deviation. In addition, we seek to identify companies with low financial and operating leverage as we find that this can significantly reduce the risk profile of the portfolio. Other attributes of an ideal candidate include industry leadership, sensible capital allocation, and a long-term track record of success. Once stocks are identified as exhibiting the above characteristics, they are subjected to fundamental review, the goal of which is to determine the repeatability of a company’s past track record.