RAISING THE BAR

MarketGrader’s ratings are not arbitrarily based on buy, hold and sell quotas or fit into a predetermined statistical distribution. Each company’s rating is independently issued based solely on the merits of the company’s fundamentals. Therefore we cannot know ahead of time how many buys, holds and sells MarketGrader will issue at any given point in time.

However, negative ratings have historically outnumbered positive ratings almost by a three-to-one ratio, not intentionally but as a result of our strict grading methodology. Neutral ratings have historically represented no more than 15% of MarketGrader’s coverage universe since our system is designed to develop a clear opinion about a stock’s outlook. We understand that in a world where real performance matters, neutrality conveys irrelevance and indecision.

MarketGrader’s research allows our clients to view the stock market from a very different prism than they have in the past. Our methodology rewards companies with consistent long term plans, financial stability, reliable profitability and superior management. It discourages near-sighted focus on quarterly results, overreaction to short term market fluctuations and disproportionate valuations, regardless of the company’s business model.

In doing this, our system brings the investment process back into perspective, eliminating market noise and rewarding disciplined investors who are able to sentimentally detach themselves from the stocks in their portfolio and focus on results. Since MarketGrader performs millions of calculations daily on a broad section of the U.S. equity market, our system is able to shed new light on the overall quality of our markets and help investors see the big picture.

The following chart illustrates the distribution of MarketGrader’s ratings on 01/06/2009: