Do you work with investment advisors?
Absolutely. Send us an email or call us and we'd be happy to give you whatever information and support you need. There is more information that might be of interest to advisors at Information for Institutional Investors.

Your returns seem impossible.
Peter Lynch, the portfolio manager of the Magellan Fund at Fidelity achieved a 29% annual return after fees and expenses using a long-only strategy over a 17 year period. Many college endowment and private equity funds achieve similar returns. We are definitely not the first to achieve these kinds of returns.

For additional comfort, take a look at Oversight, Transparency & Investor Protection.

We hope you'll grow comfortable enough to perhaps place with us a trial investment and see for yourself.

Why is your Canadian backtest longer than your US backtest?
The US model uses data that weren't available before 1998 so that's as far back as our backtest can go. In general, we backtest each model as far back as it is possible to test it; we are limited only by availability of data.

You mentioned the advantages of diversification across several countries. Do you have plans to bring out other funds based in different markets?
Yes. We are planning on introducing a Sterling fund based on the London Stock Exchange in 2008.

How is your "black box" different from other peoples' "black boxes"?
Most so-called 'black box' models are designed to seek out small pricing opportunities in stocks as well as currencies, commodities, and derivatives. They trade rapidly and are often highly leveraged. Our model, on the other hand, seeks to buy listed stocks and sell them months later at a higher price. So the fundamental investment philosophy is very different.

'Black box' models use nonlinear models fitted to historical data using regression and other even more powerful techniques that come out of advanced math and physics. Our model comes from fundamental and technical analysis known to every sophisticated investor and CFA.

We will execute a handful of trades a week; their 'black box' models might make 1,000 trades a day. Their 'black box' models use leverage and invest in exotic instruments; we don't.

Our model has the same objectives and method as a conventional managed portfolio. We achieve higher returns by doing it relentlessly across the whole market every day – a task simply impossible without a computer model.

The only things we have in common with technical black box systems are (a) high returns, and (c) powerful computers. We have nothing else in common.

We notice you do not use leverage to increase your returns
You're right. There are many investors who don't feel comfortable increasing their investment risk with leveraged investments.

We plan, however, on introducing a leveraged variant of each of our funds in 2008 for those investors who would like even greater returns and who feel comfortable exposing themselves to the added risks of leverage.

Why did your US fund backtest so much better than the Canadian fund? Isn't the US market more efficient?
Our model doesn't seek out inefficiencies; it looks for stocks likely to appreciate faster than the market as a whole. The US market is bigger so there are more stocks to pick from. Also, until recently, the US market has generally more robust.

Does your model really pick the stocks to buy and sell? Is there no human oversight?
Yes, the model picks the stocks we buy and sell. But, yes, there is also human oversight.

The best analogy is when a pilot uses the autopilot to actually land the airplane. Yes, the autopilot is controlling everything including the engines right down to touchdown, but the pilot and copilot are sitting there watching its every move, ready to take over if they don’t like what is happening.

We intervene rarely, perhaps once every two or three months. We ignored a buy order for a US pharmaceutical company that was a one-drug wonder. We sold a Canadian position when we saw unexplained heavy selling. The next day the company announced significantly bad news. We have a computer program that looks at our portfolio constantly – every 15 seconds actually – and alerts us to just these sorts of situations. Yes, we intervene, but we do so rarely.

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