Strategy Invention and Development

The Strategy and its variations were invented using the two-step scientific method. The first step (initially developed circa 1969) was to develop the hypothesis for our proprietary Microeconomic Theory of the Firm to identify well-managed, healthy, companies that have a high probability of sustainable earnings and are likely to outperform in the short-term to medium-term. The second step (2008) was to test that hypothesis out-of-sample against a U.S. Large-Cap fundamentals database. A respected global firm of mathematicians was engaged to incorporate the rules, which defined the hypothesis, into software algorithms and to independently perform the stock selection tests that validated the Theory.