As I mentioned by using “no follow” you are actually raising a flag that the link is either not important or has not been approved by me, so there is no question of transferring my link juice to the link with rel=”no follow”
So that means you are actually preventing outflow of link juice from your site.
That’s something which you need to be very smart about. Simply by using rel=”no follow” for external site you will not be able to increase your page rank.
Page rank is something which is based on sophisticated algorithm, which no one other than Google Engineers could explain with 100% accuracy. Yes, all serious SEOs know what it means and what are some possible factors that can help to improve page rank?
One suggestion regarding this is to combine your link building efforts with applying with rel=”nofollow” attribute to all the lesser important pages on your site.
For example the page rank for your home page is 4 and you have 1000 pages
on your site with some 30-40 links going out from your home page. Do you think all 30-40 pages are equally important for you or do you want them to be indexed by Google at all.
Why the hell will I want my privacy policy, my sign in form page, my disclaimer policy, my RSS feed link, etc. to be indexed by Google. Isn’t it better I support the effort of my webmaster who is working all day hard to bring in fresh stream of link juices from social bookmarking sites, article marketing or through press releases by applying rel=”no follow” attribute to all such pages.
Give it a try, you will not loose anything but definitely will gain. It is like applying strong adhesives to all the leakage area which was letting your link juice drip out of the container.
Once you add “no follow” attribute, search engine robots will understand that site owner is actually not giving any prominence or weightage to the link in reference and hence will not transfer the page score 
<a href=”http://www.example.com/”>Visit My Page</a>
This is how the link would look after the nofollow attribute has been added, with the attribute portion shown in bold
<a rel=“nofollow” href=” http://www.example.com/”>Visit My Page</a>
This would also be acceptable, as order of elements within the anchor tag makes no difference:
<a rel=“nofollow” href=” http://www.example.com/”>Visit My Page</a>
You can apply rel=”no follow” attributes to
• Blog comments
• Reference sites
• Trackbacks
• Lesser important pages on your site such as privacy policy, disclaimer, etc.
• Any other link, which you feel is of not much use even if indexed by search engine
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