Many clients asked about our investment philosophy and approach as we transitioned from Chinook Capital to Empirical. Over the next several letters we will share with you in detail our approach to protecting and growing your investments. In this letter we will begin this process with a broad overview of the core principles that guide our investment process. We will leave detailed discussion and support of these principles for future letters. It is worth noting that we believe wholeheartedly that an investment strategy worth executing should be able to be explained, rationalized and backed up by empirical evidence. In the following detail of our investment approach we make several assertions about the principles that guide market behavior. These principles are not based on our opinions; they are based on research done by leading scholars in the field of finance.