Sisyphus is not myth 2

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The reality is now one of every 9.5 dollars we create through our employment is consigned to pension fund coffers, a 7.9% increase in 2 years. Every dollar lost in ineffective market myths requires we make another 9.5 more to replace it. Sispyhus is no myth, we live it every year. We keep-on having to roll that burden of losses from conventional market myths and their methods. All society must pick-up their slack from those losses. We must bend our knee as a society and push the rock, again and again. The financial industry managers, and politicians at their prompting, just keep telling us to push harder, "Sisyphus, shoulder your rock."

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Sisyphus is not myth 2

  1. 1. “Page 1 of 4 February 2013 © 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! Sisyphus Is No Myth, #2?The progressive increase in pension contributions has happened over decades and will continuequietly increasing on our pay stubs, just as employers will complain of their increasing burden tomatch half. The reality is now one of every 9.5 dollars we create through our employment isconsigned to pension fund coffers, a 7.9% increase in 2 years. Every dollar lost in ineffective marketmyths requires we make another 9.5 more to replace it. Sisyphus, shoulder your rock.That is the reality these untestable hypotheses are not something just esoteric. They resign us tosignificant reworking in consequence of their damage to our assets entrusted to fund managers’care, by law to ensure our pension funding. Portfolio Management Theory is not working it is myth.We have been sending our newsletters to public pension fundmanagers. Our lessons have not been accepted by them, at your loss,literally. As their results reveal in the summary 13F reports filed withthe Securities and Exchange Commission (SEC) every quarter. Notintending to pick but to illustrate, and, though doing overall betterthan most, one national fund summary reads as a severe casualty listof dollars lost instead of gained by the decisions made Second tothird Quarter. They did this by defying the reports we released. Lost688.97 million, total gained 21.40, losses outnumbered 32 to 1 gains.That fund held $5.2 billion in equities, meaning they lost heavily,12.87% of the value held in equities. That was just on their decisionsmade to hold through fourth quarter as markets suffered. The storyending is our society having to “re-earn” $7.343 billion in 8 days toreplace that loss of fund assets, as 9.5% was our contribution fromeach dollar we earned. Contributions have now increased to 10.25%.Sispyhus is no myth, we live it every year. We keep-on having to roll that burden of losses fromconventional market myths and their methods. All society must pick-up their slack from thoselosses. We must bend our knee as a society and push the rock, again and again. The financialindustry managers, and politicians at their prompting, just keep telling us to push harder, as theyThe failure of pension fund investing on untestable myths, gospel and shibboleths tumbles oursocial institution back down the hill. The raid on our wallets is persistent but not avoidable. Thewell intentioned try hard to maintain and hopefully increase the pension fund value but sadly, donot. Their untestable hypotheses do not a valid theory make. They are left with their faith inconventions that amount to an arsenal of divining rods and martingales, or tumblers and dice.Our Risk Price is tested and proven in logic and mathematics. Our Risk Price is a concisestatement of “what is” the relationship of the balance sheet to the stock price. The funds have notbeen using our Risk Price. Their theory is not testable. They do not know where the equities theybuy in your name with your nest egg dollars actually stand in the markets. This is why their resultsare just barely better than fair dice in fair times. Every dollar they distress requires we futurepensioners must work harder now to regain 10.53 dollars to replace that one dollar lost on theirmyths of markets while the liability gap continues to enlarge due to flawed myths used.Symbol $ MillionsQ2 Q4G.TO -2.8037SU.TO -7.1623POT -1.7871IVN -275.8501CNQ -12.8267GIB -3.8118TLM -25.5068NXY -11.3712RIMM -255.5975TRI -54.8768ECA -21.4298STB -1.8296FCX -14.1209-688.9743
  2. 2. “Page 2 of 4 February 2013 © 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! Sisyphus Is No Myth, #2?make the rock bigger due their failure. One in 20 funds is failing to meet their liabilities. In pressannouncements they ebulliently extol their virtuous gains of 3 or 4% year over year. But they donot relate that contributions required by law gained 1-2% of the portfolio value. Their managementof your assets has eroded value from inflation. The reality is that 1.1% is the 5 year average. That1.1% is the same for the average of hedge funds in the past five years, according to HFRI.One of the largest labour-oriented pension funds publicly claims to have had positive results for thepast eight years, while they also extol you will get an extra 30% of tax savings for contributions youmake. So, after you get the extra tax reduction what happens? It tookthem three years to recover from their 2008-9 loss of 13.7%. How is thatpositive? They are now ahead of their 2003 decline.The reality is that for the past ten years these portfolio managers havereturned an average rate of 1.60% inclusive of member contributionincreases to assets under their management. In the past five years theirrate of return has been 1.03% inclusive of contribution increases.Over the past 8 years as the base they prefer to talk from, the return hasbeen 2.87% exclusive of member contributions gain ((-) 1-2%), while theTSX has gained at rate of 5.05% per annum. They have chronicallyunderperformed the market by more than half at best, near a third ifmember contributions are accounted. So, in all cases exclusive of annual member contributionsgained these fund managers have successfully eroded the assets workers have entrusted to their care.At least we can say capitalism is working fairly, even handedly. Whether you have a million ormore to invest with a hedge fund manager, or rely on labour-movement fund managers, you aregetting reasonably similar results from their portfolio management skills. Even the national pensionfunds get corresponding results, poor, slowly eroding your wealth. Their theory is not working.They are all using the same fundamental tools as they are officially certified, differing entirely onarbitrary measures. Ethics is another factor as we keep hearing daily of the depths many haveresorted. The true exceptional performing fund managers such as Soros, Dalio and Robertson donot use conventional portfolio management tools, relying on what most see as heuristics, good luck.Economists trained just gape in awe of the results these have obtained. These towering examplesfor long run success have not relied on the conventional methods analysts and their managers arecertified to use after extensive study. The claims made for conventional portfolio management arelarge but do not bear out as we have seen through the past decade. Neither of the publishedaccounts of Dalio’s or Soros’ methods is considered as economics by main-stream economists.Theirs are very detailed anecdotal corroborations, as Sam Clemens related, “History does not repeatitself, but it sure rhymes.” Certainly their methods have been canonically more effective than thoseof “economics” conventions, certifications and seminars.Good luck should not to be dismissed as it is really all conventional portfolio theory has. As wehave shown, the market average for conventional portfolio management is just 1.1 to 1 identifying
  3. 3. “Page 3 of 4 February 2013 © 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! Sisyphus Is No Myth, #2?gainers. That is a very small differential “free-board” keeping your boat afloat. That 10% potentialsuccess rate is quickly overwhelmed by market declines or volatility which is what so many havetargeted for blame in their results. Risk is not volatility. It is risk, as “there is risk in what you donot or cannot know." Thomas Tooke, 1844, asserted.Their funds theory is not gaining value, not working. It will take years to overcome impact of thatfailure on top of many such since 2002, as endowment and pensions liability gaps opened and havenot diminished. Conventional portfolio theory is based on projecting what will be, divining whatthe future will be, by projecting expectations of earnings, or discounting some expectations offuture cash flow. Both are problematic schemes of projection that rely on legally disclaiming theconsequences while hoping for the better outcome, which bless their “foresight.” Conventionrequires such extrapolations of what will be, and, a large helping of your hoping for the best.StockTakers Risk Price on the other hand is appreciated as a statement of “what is” that can beroutinely found in the balance sheet and its relationship to what is the stock price. Our correlationshave shown that relationship to be that when the stock price of an equity is already above our RiskPrice determination the markets will tend to increase the stock price two of three times. Marketbehaviour correlates consistently. The correlation of market Stock Price behaviour to our RiskPrice shows this very likeable tendency, rewarding portfolios partitioned on our Risk Price basiswith average of 26.53% IRR per year on the DJI over 12 years, through recessions and recoveries.Our Newbies issued 31Dec2012are close, 103.61% after sixweeks, to TSX full portfolio of 86stocks Q4-2012 for 43.07%IRR.Our Newbies issued 31Dec2012are close, 104.10% after sixweeks, to NYSE portfolio of 210stocks Q4-2012 for 22.36%IRR.That is very consistent result from knowing the “what is” of our Risk Price. That result of knowingthe “what is” of an equity in our Risk Price should not be so readily ignored or dismissed as fundmanager have seemingly been prepared to do. They have done so by risk management and portfoliostress models they use. We show these do not work and must be deconstructed, as well as, theefficacy of the pricing and discounting value models that took them there. Lessons should belearned, as they intend true social good were it not for losing your pension assets.Your ‘blameless’ fund managers by following the standards of conventional methods as in theabove cases make our point decidedly. By knowing our Risk Price and holding only stocks whosestock price is greater, yields powerful and consistent results. The mid-section of 2011 was difficultfor many. Using only our information such as we released to those fund managers and de-constructing that fund portfolio of according purchases and pitch-outs of equities the result isprofound in 33 weeks, obtaining 29.75% IRR instead of 19.66% loss, of your assets in their care.
  4. 4. “Page 4 of 4 February 2013 © 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! Sisyphus Is No Myth, #2?So, these ‘blameless’ fund managers lost 688 million on that 3.5 billion portion, a 19.66% loss ofyour assets, as they passively managed held in equities contrary to our Risk Price information andmethods. They acted to protect their 7-figure job descriptions written to execute conventionalportfolio methods from untestable theories. Those assets redirected into the "what is" relationshipof our Risk Price “likeables” obtained gain of 650 million, 18.58% added to portfolio assets inthose 33 weeks, obtaining 29.75% IRR. To be fair we sent them what not to hold, then, appliedthose assets uniformly over our “likeables” portfolio. Add that back to the rest of the equititesportfolio not suspect to our remedy there would be little impact in raising the rate of return.The bigger issue is that they have put a high proportion of your pension assets into low-yield bondsconsequent to their "risk-fright" or "flight" from markets “volatility.” As much as they talk about"risk management" in their public pronouncements that becomes a negative portfolio growth modelas inflation has exceeded most rates of bonds they have committed for years. The return earnedmostly covers their management costs. They are just snapping their bubble-gum with less than 4%of their assets in the markets of their supposed expertise in conventional methods.The Grail portfolio and the Goats are not myth, but very real, as we have proven. By holding Goatequities with a stock price less than our Risk Price be anxious in declining markets as those willonly tend to gain less than one to one. The Goats are slightly better behaved than one to one inmore favourable market swings. That relationship is corollary. The Goat portfolio behaviour illcompares to our proven Grail portfolio of just “likeables” that arises in any and all markets.It has taken an extensive amount of hypothesis-test-analysis-synthesis to displace the diving rod ornose of a dog for finding water to drink. It can be readily seen most economics relies on myths andsuppositions more than “let reality speak for itself.” There is no real testable basis in what haspassed as expertise instead of faith. The rash of insider trading indictments for “expert networks”indicates where ethics has been turned in these circumstances, from senate to exchange seat.Our reasons for having any equity in our portfolios are clear, concise and consistent. The equitieswe hold are “likeables” tending to gain 67% of the time. We do not make stock prices but canreasonably respond to stock market price tendencies, by our knowing the price of risk, thedownside, and buying and holding accordingly. That is new fundamentals from theory we have putinto policy obtaining 26.53% 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 LimitedHead Office76 Midridge Close SECalgary, ABT2X 1G172 Cornwall StreetToronto, ONM5A 4K5351 Chemin BoulangerSutton, PQJ0E 2K0450 538-1270

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