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TWST: I'd like to ask you about your valuation methodology. I understand that your analysis has revealed some interesting findings which I hope you will tell us about.

Ms. Pak: I use all kinds of valuation methodologies. I use p/e's and EBITDAs and multiples of sales, and I look at the multiples versus the growth rates. I look at everything I can possibly get my hands on, so I don't have one major way. But one thing I do that is a little different is I look at the number of stores a company has to open to achieve a particular multiple. In other words, what does the 30 multiple the Gap (NYSE:GPS) is currently trading at imply about how many stores that company will open. And it is an interesting way to look at valuation, because we take the store model that is given to us by the company and look at how many stores the market is saying the company has to open to reach such and such price. And what it really does is require us to think about strategy rather than simply the multiple.

TWST: Let's talk about AnnTaylor (NYSE:ANN). AnnTaylor appeared to have a number of problems a couple of years ago. Has it overcome those problems? Is it on an upward trend?

Ms. Pak: I think Ann and Talbots (NYSE:TLB) are very similar stocks, very similar companies. They both have very good brands, very good niches. Ann is targeted to the 30ish-year-old professional woman who wants to buy suits for 300-400, and Talbots is for customers interested in a more classic look. Both of them mess up their merchandise sometimes, and that gives investors opportunities. I view both of them as trading stocks, which you buy low and sell when they get toward historical peaks. So when I look at Ann, I say yes, it looks pretty good to me right now. Is it the best I've ever seen? No, it's not the best I've ever seen. But I think their merchandise looks pretty good. I think their customer is very loyal. It's easy to shop at their stores. As we said before, when you walk by an AnnTaylor store in New York, you can see what's in the window, you can get in and get out. So they do have a customer, and it's much harder for a department store to compete for that customer. So at these levels I do think AnnTaylor is an attractive stock.