- The document discusses problems within the hedge fund and financial industries, including high fees and losses for investors. Many top hedge funds lost over 18% of their assets in the last half of 2011. - It introduces the Modal Geometry theory which provides a new way to analyze firms and markets based on their trading connections and relationships. This theory claims to be able to identify "likeable" firms that are more likely to gain in price over time. - The authors have applied this theory through their own investments, claiming annual returns of 29% on average, and argue the financial industry should consider this new framework rather than existing economic theories.

1. “
Page 1 of 5 January 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
Man Bites Man! Judged By The Company They Keep.
Of the 99’662 CFA charter holders worldwide, 65% are located in North America, with some
7% executives in financial funds or companies, so, 4,535 charter holder executives. Some 450
are in Canada presumably leaving 4085 in the
US. At least one CFA distinguished executive
is involved in each of these 2500 investigations,
so that implies some 62% CFA designated
executives (as are required for running a fund)
are implicated and under investigation by the
FBI. The top ten employers of CFAs are all
banks. These are not foolish or ill-educated
persons, as prerequisite to becoming a CFA
candidate one must be a Bachelor of Arts or
equivalent degree holder.
One hedge fund certification study guide
service provider devotes one paragraph (in his
enticing free 130+ page guide) to cover ethics,
a subject presumably covered otherwise by at
least a liberal arts degree. “Bottom Line: If you
are smart enough and hard working enough to
be successful then you don't need to ever cut
corners and blatantly break securities laws.” On
mediocre days is the subtext reading then that the judge or jury can decide on the degree of
“smart ... hard working enough ... and blatant” with the obscuring opinions of legal counsel you
hire to lead their decisions your way? As Mueller in his yearend report to the Senate Judiciary
Committee goes on to relate 51 individuals in one insider trading case have had charges laid
concluding in 49 convictions with the remaining two still pending.
Memory may just be lacking but one commentator recently indentified 8 of the worst 10 Wall
Street scandals have occurred within the past quarter century. With chagrin he relates the
perfidious lawyers, accountants, politicians and financial advisors involved have endured
The FBI and its law enforcement partners continue to uncover major frauds, insider trading
activity, and Ponzi schemes. At the end of fiscal year (FY) 2011, the FBI had more than 2,500
active corporate and securities fraud investigations, representing a 47 percent increase since FY
2008. Over the past three years, the FBI has obtained approximately $23.5 billion in recoveries,
fines, and restitutions in such programs, and during FY 2011, the FBI obtained 611 convictions,
an historic high. The FBI is pursuing those who commit fraud at every level and is working to
ensure that those who played a role in the recent financial crisis are brought to justice.
- Robert S. Mueller, III, Director, Federal Bureau of Investigation, December 14, 2011

2. “
Page 2 of 5 January 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
Man Bites Man! Judged By The Company They Keep.
minimal consequences. Among this ‘company’ can even be found those then elevated to
ambassadorships and other public office services. Judgement of such company seems poor for us
to collectively consign our treasure to their applications. Asked and answered we do as believed.
The five year results of the top fourteen hedge funds found in one recent Canadian national news
report does not do the math. These best-of-the-bunch returned 2.6% pa, which is less than the
rate of inflation. The five year average result of the “top-performing” pension funds is 2.5%, not
including their growing liability gap now expanding at over -9%, nearing -16%. The mutual and
pension funds are the meeker of the financial industry tribe.
The highly touted wise-guys portfolio management “gun-slingers” that come to aid the
wealthiest grow their portion have had a few very turbulent years of results. The market bounce
after March 2009 has covered many faults in the performance yield. The Four Horses they ride
around town are surely lame, for reasons well known and long suspected.
Top 10 Hedge Funds oversee nearly $190 billion in assets
September 5th, 2011
The Top 10 Hedge Funds saw their US Equity assets drop by over $3.36 billion, or -1.7%, during the
second quarter of 2011.
Top 10 Hedge Funds lose $31.8 Billion, John Paulson’s Fund Leads the Losers
December 12th, 2011
The Top 10 Hedge Funds saw their US Equity assets drop by an astounding $31.8 Billion, or -16.8%,
during the third quarter of 2011.
Defined benefit pension health fell more than 16 per cent in 2011:Towers Watson
January 04, 2012
The health of defined benefit pensions took a turn for the worse in Canada in 2011, a trend that is expected
to continue this year
Hedge funds get an 'F' Don’t pass muster against stocks, bonds
January 6, 2012
Overall, hedge funds lost roughly 4 percent in 2011, marking the $1.7 trillion industry’s second-worst year
on record
That combined $35.16 billion loss from $190 billion client wealth amounts to 18.5% decline in
performance through the last half of 2011, by the top ten. There is a severe disconnect when the
largest and presumed meriting smartest ten firms in the sector with all their wise-men cannot
hold Humpty from falling so badly. To be sure these clients qualify as “knowledgeable
investors” as they have at least $20 million personal wealth and can afford to play with the hedge
funds. They believe, as spouts from so many mouths, the high risk hedge will yield the larger
returns needed to offset inflation’s erosion than the underperforming lower risk bond sector.
At all four points of their compass sits a poor hypothesis that is not teased out of factual
economic realities. It is and has always been engaging, but possibly fiction, if not just pretence.
The Four Horses of portfolio “apocollapse” as at least that which we have shown over these
years, adding our voice to many. Throwing aside those four we can add a fifth below, but then
our results speak very loudly, 48.27% IRR ending 2010 and 33.39% IRR finishing 2011.

3. “
Page 3 of 5 January 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
Man Bites Man! Judged By The Company They Keep.
High volatility is the now chanted cause of this defeat of their reasonable “encompassing”
approach to investing and managing portfolios of substantial wealth. Is that so? Is such a fifth
horse necessary when the founder of economic game theory John von Neumann is acknowledged
to have expressed clearly, “Volatility is not risk, it is volatility.” That horse is a non-starter, too.
There is too much supposition from exotic things that have been engaged to make the high-
strung theory in economics string into a tale. Much sound and fury signifying, nothing much, but
a shadow of reality. Many have suggested the failings to which we give reason.
We infer there is a problem with what is being used. The economic theory is not sufficient or
robust enough for the reliance given by all levels of the financial industry. That is what the
industry has had to work with. Shunning the obvious doubts many had with no better answers
but not looking for any. At least there has been no better empirical economic context, until now.
The Modal Geometry1
is entirely new theory built-up from the work left behind by Dr Atrill and
neglected by the industry. Ernst worked with Dr. Atrill brief years before his passing, and later
became further enlightened by following the allusions of Tobin, Coase, Nash, and Rubinstein.
Empirical basis of proof lays in our real-time results. These results we obtain are not conjectures,
they are auditable. We give reasons for the logical case supported by mathematical proof. Reality
continues to prove the profundity of the point as uncovered by the Modal Geometry at work in
our “likeables” demonstrating their tendency to make price gains 2 to 1.
Though he is famous for saying, and writing in Latin, “Hypotheses non fingo ... I feign no
hypothesis” Sir Isaac Newton did see the apple fall but could not see the penny roll. That is to
say he relied on observable empirical things from which he then adduced the mechanic laws of
the universal motions. He supposed not other than as the world showed. He knew this world was
ruled by what we can now reasonably call the weak force of gravity. Newton, a towering
imagination, he could comprehend it but not explain why that was the case, only that it is.
The penny-like orb rolling on the diaphragm of space-time required no elastic string to hold an
elliptical orbit such as Kepler had documented and Galileo confirmed. However gas clouds and
coinage were not Newton’s forte either. These are more artful things than Newton’s privilege for
divinity could grasp in his time, or by his peers. Made a sinecure as Master of the Mint he could
not adduce the process that is money and concerned himself with debasement of the coin.
As The Modal Geometry affirms we all can act as willing participants in the health and wealth
creation of firms and “inspire” money into existence by our efforts as its trading connections
before that created worth can be accounted for in terms of fiat money in the balance sheet. The
Modal Geometry describes that creation by a firm’s trading connections on the diaphragm of
entry and exits of their engagement with credit and debit float that are what later appears as
ciphers in the balance sheet. This is not a simple planar geometry that can be expressed as

4. “
Page 4 of 5 January 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
Man Bites Man! Judged By The Company They Keep.
descending demand and rising supply curves. The planar explanations of most economics in
general do no justice to complexity of the relations among the trading connections in business.
This is geometry found on a surface that is more evolved than that of even Bernhard Riemann’s2
spherical3
or hyperbolic surfaces. It has even more parameters than space-time. The Modal
Geometry comes from the n-dimensional geometries of David Hilbert’s space and typological
musings of Felix Klein can express such as, a famous bottle from which a single folded and
convoluted surface can be found as nearest representation we can still grasp, or a black hole
warping in space delivering a parallel or serial multi-verse. The expressions of those parameters
are rendered as ciphers of a geometry we are able to justify in balance sheet data. This is the
intellectually rigorous terrain of a “country and company” The Modal Geometry relates from the
entry and exits of any firm’s trading connections reciprocal engagement with participating,
evolving and wishing into existence the very worth and ultimately the wealth created in the
balance sheet by the healthy firm’s working with trading connections as engaged in its process
business. It is the float they create that is the engine of the real economy and root of money
creation.
The Modal Geometry relates the process by which this exercise of trading connections develops
the firm, and “floats4
” worth into balance sheet existence. It is solely from these measurements
made in The Modal Geometry of firms we derive the partitioning of markets into the “likeables”
firms with the empirically shown tendency for price gain two to one, and the rest of the market
who show only a tendency of one to one5
. We have shown this to occur in all markets6
.
This is the country and company we keep. We are pleased to be judged by this and real-time
auditable results we are able to demonstrate with what we know. Our reasons for having any
equity in our portfolios are clear, concise and consistent new fundamentals from theory we have
put into policy obtaining 29% IRR average. Know What You Have. Have What You Know
Our view is risk averse. Of course we require a fee for doing that. Mail us for our help.
Ernst and Hans Goetze,
Architypes Inc and StockTakers Limited
Head Office
76 Midridge Close SE
Calgary, AB
T2X 1G1
7 Balsam Avenue
Toronto, ON
M4E 3B3
351 Chemin Boulanger
Sutton, PQ
J0E 2K0
450 538-1270
1
“The Modal Geometry of the Firm and the Balance Sheet Worth of the Trading Connections”, 2006, unpublished but available.
2
It is an amusing irony of history that Bernhard Riemann and the Goetze brothers are born little more than two kilometres and a
century apart connected in DeSelby fashion by a “Jammering Woods: Jameln Wald and even possibly a “Dalkey” postman may
be found in some way responsible for this.

5. “
Page 5 of 5 January 2012 © Copyright StockTakers Limited, All Rights Reserved. Copying Prohibited.
The author does not provide investment advice. In order to use reproduce or convey the material herein,
in any way, written agreement must be obtained from the author or its agent Architypes Inc.
StockTakers Limited is an Alberta corporation providing information on “likeables” equities.
StockTakers Limited encourages your seeking tax law advisor for capital gains tax dispositions.
Man Bites Man! Judged By The Company They Keep.
3
My good friend and former gold explorer’s champion, Alez Herz, advises that we walk actually on the inner side of Earth’s
surface, as is seen empirically told by the evidence of the rounded-over wear on the toes and heals of our shoes.
4
Banks are fully aware of the existence and use of float in this sense though they do not and never have understood the why and
hows of its existence on which they rely for their business, fundamentally.
5
http://www.slideshare.net/HansGoetze/the-grail-and-the-goat-portfolios
6
http://www.slideshare.net/HansGoetze/running-markets-without-walras-and-schumpeter