Mr. Sparrow: My name is Gerry Sparrow; I am the President and CIO of Sparrow Capital Management. We use an earnings-based approach to invest in. We look for companies that have consistent earning power, and we also look for companies that have accelerated earning power. Then we use some balance sheet, income statement, cash flow documents to determine if it's a good price or not for the security. And once we run it through our different screens, and give it a check up and scrub it down, we'll buy the security for the portfolio. Then we also diversify the portfolio having between 20 and 30 stockholdings, and then we rate the portfolio either over- or underweight relative to the sector ratings for the S&P 500 Index and the All Cap World Index.
TWST: When we talked to you a year ago, you were just coming out of a dark period. Perhaps you can take us through this year, and tell us how you performed and how you coped with the volatility?
Mr. Sparrow: We are now into the fourth quarter. The first quarter, like so many other managers, was a down quarter. But since the market made a bottom in March, we have been coming up at the market level or higher. We had a two back to back quarters, 13% and a 17% quarter in the second and third quarter. Specifically, in the second quarter we did 13.8% and the third quarter, 17.67%. And this quarter is not over yet, but I am optimistic.
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