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Three money managers examine portfolio management strategies in the latest Issue of The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info581.htm

TWST: Could you give us a brief overview of Retirement System Investors Inc. and your responsibilities there?

Mr. Gorodinsky: Retirement System Investors is the wholly owned investment advisory subsidiary of Retirement System Group, a New York City-based full service provider of retirement plans. Investors and its corporate predecessors have been managing equity assets for over 20 years. We currently manage equity portfolios in small cap growth, large cap blend, large cap value and equity income. Our major clients are the RSI Retirement Trust fund family and the Enterprise Funds. I manage a 30 million small cap growth portfolio that is part of the RSI Retirement Trust Emerging Growth Equity Fund.

TWST: Are you strictly a bottom-up investor or do you do any top-down analysis?

Mr. Gorodinsky: I would say I’m more bottom-up, but top-down is a factor. I do look at the GDP growth outlook, which may be brought down in the second half, but that’s speculation. I also look at the direction of interest rates and demographic trends. Industry analysis is another area I would look at top-down; I’m looking for new industries, new competitors. Maybe 20%-30% of my thinking would be top-down, and the rest is really bottom-up fundamental analysis.

TWST: How many stocks do you typically have in your portfolio?

Mr. Gorodinsky: Generally between 60 and 80 stocks. I think it’s important to be diversified across different industries and sectors, especially in the small cap arena.

TWST: What is your definition of small cap?

Mr. Gorodinsky: I would say under 2 billion and above 100 million is kind of my playing field.

TWST: This may be the place to learn about a couple of stocks that are not well known by readers or investors. Can you mention a couple that are unfamiliar to most people?

Mr. Gorodinsky: The ones that I mentioned are in that category. These are strong companies with limited coverage, strong financials and improving outlooks going forward. Another one that I like, and I just met with management two days ago, is Resources Connection (Nasdaq:RECN), a company that was spun out of Deloitte & Touche. It’s in the professional services space and provides accounting and finance services to large and mid-sized corporations on a project-by-project basis. I believe they will be a beneficiary of all these accounting issues in the marketplace today. I think there is a growing need for more internal controls within companies and they are likely to hire someone like RECN for audit assistance. Also, since they’re independent of large accounting firms, they should benefit as more services go to them. So this is another company to watch.

TWST: How do you determine an appropriate price to pay for a stock? Can you tell us your valuation metrics?

Mr. Gorodinsky: It really depends on the industry and on the company’s growth characteristics. P/e is the usual approach, but I may also use price to sales and price to EBITDA or cash flow in certain situations. Typically, small cap growth stocks are just coming out of a loss and entering a growth phase or earnings acceleration, so they may not have earnings, and I may have to look at alternative valuation metrics, such as price to sales and price to EBITDA.

TWST: Is one of the criteria that you look for in a company high insider ownership?

Mr. Gorodinsky: No, it’s not. I do like to see it, but it’s not a major factor. It’s nice to see company management owning large stakes.

This special report includes:

1) Investing in Small Cap Value Stocks - Mark F. Degenhart, Senior Vice President for Oppenheimer Capital, examines portfolio management strategies in this timely and deeply informative 4,000-word interview from The Wall Street Transcript.

2) Mark Gorodinsky, a Portfolio Manager of the RSI Retirement Trust Emerging Growth Equity Fund with Retirement System Investors Inc., examines portfolio management strategies in this timely and deeply informative 2,400-word interview from The Wall Street Transcript.

3) H. Edward Shill II, Chief Investment Officer of QCI Asset Management, examines portfolio management strategies in this timely and deeply informative 2,800-word interview from The Wall Street Transcript.