DONALD SMITH FUTURES FUND, L.P. utilizes a fundamental, discretionary, concentrated strategy focused on the long term. Our process begins with quantitative screening to identify financial, currency, and physical commodity futures trading at or close to the low or high end of their respective historical trading range. Within this universe we conduct intensive fundamental research to identify which ideas have the greatest potential for outperformance. This process involves identifying potential catalysts that could result in prices reverting to the mean. Fundamental analysis includes factors such as economic trends, level of interest rates, budgets, policies, politics, etc. for financial and currency markets. For physical commodity markets, factors such as supply/demand, marginal cost-of-production, cash costs, weather developments and forecasts, etc. may be utilized. Because we concentrate our research resources on a limited universe, we believe we can achieve an analytical edge over our less focused competitors. We invest with a long-term perspective and have low turnovers. We close out our positions if they appreciate/depreciate and valuations become unattractive, if better investment opportunities are available, or if fundamentals deteriorate. We do not have an explicit stop-loss policy. If a position goes against us in price without a material change in fundamentals, we regard it as a better value and are inclined to add to it.