Basic Principles

When our target is met, we sell.

A tremendous body of literature has argued for years that investors ought to buy and hold stocks. We disagree with the certainty that often accompanies this thesis. We set a target price that we believe the market should reach, consistent with our estimate of the company's intrinsic value. When that target is met, we sell.

That said, we willingly hold positions for several years when we are convinced that the intrinsic value of a company is steadily rising and that a quantifiable discount persists. We also try to be tax-efficient, looking to reach the 12-month holding period required in order to establish a less costly gain. We will experience periods, however, of realizing short-term gains.

People Matter

Roumell Asset Management strives to align itself with quality people in all of its activities. In selecting investments, we ask ourselves: Do we want to partner with this management team? Are they prepared to outwork the competition? Are they honest? Are they smart operators? We are not looking for perfection, but we are seeking to go into business with people we believe we can trust. Sizing up management is a critical, and often difficult, component of our investment process. A greater discount to our intrinsic value is required in situations where management is seen as less than stellar. Similarly, superior operators may require us to pay up (so to speak). Among other things, we value:

• High percentage of inside ownership
• Reasonable compensation structure
• Conservative accounting policies
• Longevity of leadership

Similar to the standards we demand of our management teams, we know that our clients expect no less from us. We invest alongside our clients because it makes perfect sense to do so (and would seem inappropriate to do otherwise). Trading procedures are in place to insure that clients' interests come first. The firm's Code of Ethics is available upon request.

We strive to be exceptional operators ourselves - practicing our deep value investment philosophy in an ethical and consistent manner. We communicate regularly with our clients through a quarterly report and conference call.

As we look to build wealth, we seek clients who value the steady, though often unpredictable, creation of wealth as a result of a disciplined approach practiced over time.

“We believe strongly that management integrity matters - a lot - so we try to invest only in companies possessing competent and honest management teams...We are interested in real, honest-to-goodness businesses managed by hard-working people.”