Investment Objective
The Nicholas Fund, Inc. seeks long-term capital appreciation by investing in a diversified portfolio that includes primarily medium- and large-sized companies. Small companies also may be considered. Our goal is to find great companies and hold them for the long-term.

Investment Policies & Considerations
The Nicholas Fund’s management team believes that company selection is the key to providing superior returns over time. Our goal is to find growth companies that are reasonably priced by identifying stocks that have low price-to-earnings ratios relative to their earnings growth or those that are attractively priced relative to book value. Above average earnings growth and strong future growth potential are important characteristics in the companies we consider. When selecting portfolio holdings, from among the stocks that meet our criteria, we often take a contrary view and choose lesser known or out-of-favor companies as they generally offer the best values. Some of the factors we consider in assessing companies include:

• Growth rate of 10% or better
• Consistent earnings
• Return on equity (ROE) of 15% or an improving ROE
• Debt to total capitalization of less than 50%
• A price to earnings ratio lower than two times the growth rate
• An enduring franchise or brand
• Honest, capable management
• Significant management ownership of stock
• Long-term and short-term business momentum

It is our strong conviction that superior long-term results are achieved by minimizing capital losses in adverse markets. We do not attempt to forecast short-term market swings, but work to preserve gains and minimize losses using long-term, fundamental valuation techniques. Our portfolio turnover is moderate as our goal is to find, and hold, great companies. However, if a company’s stock is not meeting our expectations, or has become over valued, we will sell it.

At Nicholas, our watchword is patience. We believe it is the key to superior long-term results. 

The Fund may invest in smaller companies, which involve additional risks such as limited liquidity and greater volatility.

Mutual fund investing involves risk: loss of principal is possible.

Price to earnings ratio is common tool for comparing the prices of different common stocks and is calculated by dividing the current market price of a stock by the earnings per share.

Return on Equity is net income divided by common equity..