- John. D. Rockefeller

	Undervalued assets
	Low price to earnings ratio
	Low price in relation to market dominance
	Ability to control prices
	Low price to cash flow
	High percentage return on equity
	Good management
	Protection from competition

The Fund’s investment objective is to achieve long term growth of capital and income. This goal may be changed only by the vote of a majority of the shares of the Fund. The Fund’s investment advisor endeavors to meet the Fund’s objectives but there can be no assurance that the Fund’s investments will achieve the advisor’s expectations.

The shares of Philadelphia Fund, Inc. provide a convenient way for investors to own, at a reasonable cost, an interest in a carefully selected and supervised portfolio of investments. The shares represent ownership of a program designed and managed for long-term growth of capital and income.

The Fund will invest primarily in common stocks with a market value greater than $150 million traded on the major U.S. security exchanges.

The Advisor uses fundamental analysis to select stocks which are believed to be undervalued. The Advisor considers the following criteria to evaluate whether a stock may be undervalued.

	Price to earnings ratio less than growth rate of sales and/or earnings.
	Return on equity greater than 15% x
	Price to sales ratio less than 1
	Price to book ratio less than 1
	Price to cashflow less than 6

Each of these criteria may indicate that a stock is undervalued. The advisor considers stocks with as many of these criteria but does not require that all or any exist prior to investment. Other factors considered before investing include low price in relation to market dominance, ability to control prices, market capitalization size, corporate business strategy, industry position, trading liquidity, trading activity of officers, directors and large stockholders, good management, protection from competition, and dividend yield. Investments are held until the stock meets the advisor’s projection, the original criteria used to select the investment no longer exists, or an investment opportunity believed to be superior presents itself.

The Fund’s portfolio usually consists of 20-30 different stocks which is less than the amount of stocks held by the typical mutual fund. This strategy stems from the belief that there are a limited number of investment ideas available and allows the advisor to focus on companies with the greatest potential for investment return balanced with minimal risk.

The Fund generates income by investing in stocks that pay dividends, commercial paper, and long term fixed income securities rated at least A by Moody’s Investors Service, Inc. (‘‘Moody’s’’) or by Standard & Poor’s Corporation (‘‘Standard & Poor’s’’). Fixed income securities are selected by comparing the investment’s yield in relation to market rates with similar duration to maturity and risk factors. When the advisor believes a decline in interest rates are imminent, fixed income investments may also be purchased for the purpose of capital appreciation as prices tend to rise as interest rates fall.

The Fund’s investment advisor takes into consideration the tax implications on shareholders by trying to balance capital gains and losses resulting from portfolio transactions. Unexpected declines in securities prices sometimes cause the Advisor to take capital losses. Unexpected increases in securities prices sometimes cause the Advisor to take capital gains. Both of these actions are taken with full consideration given to the Fund’s current realized and unrealized gain (loss) position and its tax implications to the shareholder.