INVESTMENT DISCIPLINE

VALUE ORIENTED

Milwaukee Private Wealth Management believes in an investment approach where we buy low and sell high. Our goal is to make investments in shares of a business trading at a fraction of our appraised value of the business. We believe markets have periods of inefficiencies when share prices become disconnected from business values, thus creating opportunities to buy at bargain prices or sell at inflated prices. We continually seek to take advantage of these inefficiencies.

We view common stocks as a fractional ownership interest in businesses - an investing approach from a fundamental, bargain hunting perspective. We invest in companies that we believe are currently priced at financially attractive levels. We buy or sell ownership interests as market conditions permit. Our investment outlook is 5 years or longer. We invest in companies, not stocks.

We believe the best way to achieve our investment goal is to focus our intellectual efforts on a relatively small list of securities.  We typically hold 18-22 securities of significant size. This allows us to obtain thorough and reliable research information.  When attractively priced securities are not readily available we will hold cash or short-term bonds, exercising patience and discipline.

EVALUATION PROCESS

When investing in equities, we own businesses that we understand and which provide clearly explained and timely filed financial statements. Ideally we have direct contact with the company's top management, either the CEO or CFO, with whom we will address all questions and concerns. We must be able to develop a level of comfort with managerial objectives and goals. Central to all investments we make is a sufficient Margin of Safety which we define as follows:

The principal of reducing investment risk by investing in company shares when they can be purchased at a discount from appraised value. Companies able to provide predictable streams of earnings, cash-flow or increases in shareholder equity have higher margins of safety.

We purchase shares priced at levels that have a substantial "Margin of Safety," giving us potential price appreciation of 100% over a 3-5 year horizon.  They trade at attractive valuation metrics at the time of purchase such as:

Low Price to Book Value

Low Price to Earnings

Low Price to Revenue

High Profitability Margins - Gross, Operating, Net

Continuous Growth in Shareholder Equity

High Dividend Yield

Lastly, we look for a visible catalyst that we believe will cause the marketplace to recognize our appraised value through price appreciation.

PORTFOLIO CRITERIA

We invest in companies of all sizes as measured by market capitalization, owning companies  across all industries from around the world. We prefer companies that pay dividends. Client portfolios typically hold 18-22 equity securities. We constantly research companies we own as well as potential new issues to add to portfolios. We continually review and monitor all portfolio companies and attempt to meet with top management when possible, as well as visit the company facility if appropriate. Occasionally we will assume an activist shareholder role if we deem it necessary in order to bring out unrealized company value. As a result, we are long term holders of companies and consequently have low annual portfolio turnover. We believe a thoughtful purchase price will limit capital risk.

Our selling discipline is quite simple: we sell when we believe the current quoted price has approached our appraised value. Or, if our ongoing evaluation leads us to believe that the company fundamentals have deteriorated.

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