The Bannon & Company Investment Management Philosophy

The Bannon & Company investment management process was formed with a simple goal: to provide consistent and superior investment returns relatively independent of the overall market. The firm has pursued this goal through a combination of innovation, diligence, focused investment selection, and disciplined risk management. While on occasion we will show our portfolio's performance compared against a market index, we do not use benchmarks to guide our investment decisions. We use client goals. There is in fact not one index that can resemble any of our portfolios at all times.

We are active, go-anywhere, total-return managers of portfolios that focus on both dynamic and tactical asset allocation. We believe that actively managed, go-anywhere portfolios can minimize risk based upon not only what we choose to own but also upon what we choose not to own. We flex our freedom by allowing ourselves to hold cash, short-term bonds, or whatever we think appropriate. Managing assets in an unconstrained manner is intended to preserve capital and improve portfolio performance. Our emphasis is placed on adding value through multiple strategies.

We have a longer-term view that select investments should produce superior returns now and into the future. With this, we advocate a disciplined, unemotional approach to investing that embraces the features of:

• A conservative long-term investment philosophy that avoids extreme risks
• Maintaining a flat, independent organizational structure that leverages our intelligence and experience

With regard to risk management: we believe that not losing money is as important to investment success as making money. Losing trades are inevitable in investment management. The key to success, however, is minimizing the impact of those losing trades on portfolios. Bannon & Company examines the risk of individual positions, as well as sector and overall market exposure, and we use a number of risk mitigation techniques in our investment programs.