Mr. Deysher: The Pinnacle Value Fund is an SEC registered mutual fund that launched April 1, 2003 with a mandate to invest in the securities of small and micro-cap companies that we feel are undervalued relative to their earnings power or asset values. Many of these stocks are overlooked in the marketplace and trade well below the radar screens of large institutions. Our purchases are ones of deep discount value and we seek the most compelling opportunities with the best risk reward characteristics. Because we seek deep value, the stocks must be absolutely cheap not just relatively cheap. We are risk averse and try to maintain an adequate margin of safety. Finally, as bottom-up stock pickers, we look at a lot of lumps of coal in order to find one diamond.
TWST: March of this year must have been the best time for for your investing approach. How has the volatility in the market impacted your investing?
Mr. Deysher: You are right. Early in 2009, we were fairly consistent buyers and going into March we were buying virtually every day. Stocks were being priced at very compelling valuations and we took advantage of that. Sure enough, that window closed fairly soon as the world became convinced that the economy was no longer falling off a cliff and appeared to be bottoming. Investors started looking to the future and an economic recovery. This was aided by the prospect of significant government monetary and fiscal stimulus that sent stocks rising almost as quickly as they declined. Back in March, there were lots of new lows and very few new highs, these days there are lots of new highs and very few new lows. It's slim pickings today. We view volatility is our friend, allowing us to buy stocks when prices are low and sell when prices are dear.
Tickers included in this excerpt: FAC, FLXS, HDNG, NAV, NOBH
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