The Transparent Value investment philosophy is disciplined and unemotional. We use it throughout our asset-management business to make all stock selection and portfolio management decisions.

We have thoroughly tested and systematized our RBP methodology to ensure that it produces information quickly; information that translates into meaningful investment decisions that deliver long-term investment returns. We follow these eight guiding principles.

• We don't guess at the true value of a company.
  
  
• We believe it is best to invest more heavily in management teams that are most likely to meet market expectations.
  
  
• We ask a basic due diligence question: "Can management deliver the required business performance (RBP) to support the price of the stock?"
  
  
• If the answer is yes, we invest in the stock.
  
  
• We don't get emotional. Emotions are often priced into the stock; the higher it goes the more difficult it is for management to deliver the required business performance. (See Apple investment example)
  
  
• We look at companies relative to one another: Are there other companies within the industry that have a higher likelihood of delivering the performance?
  
  
• We invest in companies where there is a clear link between what management does on a day-to-day basis and the price of the stock.
  
  
• We don't invest to increase returns; we first and foremost manage the risks. We believe the returns will look after themselves.