Investment Philosophy PRESERVING YOUR MONEY’S PURCHASING POWER It is often difficult to earn and save money. We recognize this and believe sound investment programs should place a high priority on the preservation of capital. The value of capital is defined by its ability to purchase goods and services. Thus, individual investors should focus on the preservation of purchasing power.To preserve purchasing power, investors need investment programs that resist the effects of inflation and taxes over time. Among asset classes, equities have historically been particularly effective in providing investors with real return. For that reason, we believe that, for the long-term investor, equities are essential to preserving and enhancing wealth. Equities offer you the opportunity to defer capital gains, recognize relatively low rates of taxable income, and qualify long-term realized capital gains for taxation at a lower rate. Generating a satisfactory return on the ownership of assets is a primary tenet in our capitalist system. Historically, the appreciation of equities has enabled investors to more than offset the corrosive influence of inflation on wealth. FOCUSING ON AFTER-TAX RETURN In our view, separately managed accounts offer investors several advantages in terms of portfolio control, investment transparency, and tax efficiency. We capitalize on the separately managed account structure to manage taxable portfolios for after-tax total return. We favor highly diversified portfolios that are well suited for the harvesting of opportunities to match realized gains with realized losses. Weary of transaction costs, we prefer to minimize investment turnover. We believe this approach works best to maximize a taxable investor’s wealth. SEARCHING FOR VALUE Blue Fin Capital builds broadly diversified portfolios on behalf of our clients—portfolios that in our judgment will offer attractive returns and minimize the risk of permanent capital loss. We assess an investment’s return potential and risk exposure by determining the difference between an investment’s intrinsic value and its market value. In the long run, we believe the movement in a given investment’s price will reflect the path of the investment’s intrinsic or central value. Given a sufficient time horizon, we expect the discrepancy between an investment’s intrinsic and market value to narrow significantly.We examine common stock from a business perspective. Businesses are not all equal. Some firms are structurally superior and consistently generate high levels of discretionary cash flow. We believe a diversified portfolio of such businesses, operated by shareholder-oriented management teams, is positioned to provide equity investors with an attractive rate of return over the long term. IDENTIFYING AND CONTROLLING RISK Successful investment management requires the ability to identify, quantify, avoid, or minimize risk. Although Blue Fin Capital manages some specialized portfolios, we generally employ an investment discipline that is designed to control risk exposure to any given security or industry. We advocate portfolio diversification, prefer firms that use low levels of financial leverage, and seek to invest in firms that align management’s goals with those of shareholders. Our long-term success stems from our ability to carefully define our circle of competence.