Again, the reason that the (Investment — Foreign Savings) term adds little variation to
profits over the business cycle is that variations in gross domestic investment as a share of GDP are tightly and inversely correlated with variations in the current account deficit (a chart is presented in Taking Distortion at Face Value).
They are looking for companies that they believe are «reasonably priced, and have strong fundamental
business characteristics, sustainable earnings growth and the ability to outperform peers
over a full market
cycle and sustain the value of their securities in a market downturn, while [trying to] avoid investments in companies that it believes have low
profit margins or unwarranted leverage, and companies that it believes are particularly cyclical, unpredictable or susceptible to rapid earnings declines.»