There are two sets of internal controls that distinguish the system's in-market trading operations from the more or less industry-typical practices: (1) the rigorous controls over the traders' decisions and actions, and (2) the proprietary design of the trading room "Environment".
There is a built-in Surety Reserve Mechanism that is designed to protect the predicted quarterly and annual Net Gains, and it is designed to function during the occasional material departure from Time-Value's established Principles of: (a) 7 Of Every 10 Trades Result In Profit and (b) Gains Average Larger Than Losses, when averaged weekly. If and when trading losses occur in amounts exceeding the designed limits of the technologies and applications, the Surety Reserve comes into operation.
The Time-Value proprietary system operations without relying on Clients' money to cover our basic costs of remaining in business each year! ... The Time-Value took this radical approach because it makes the clearest possible statement about our beliefs in the financial instruments trading technologies and applications. Quite frankly, if the system performance is as consistently reliable as represented, it should be an embarrassment to have to ask for anything more than a simple Participation Fee that is derived solely from the Clients' Net Realized Trading Gains. It seems Self-Evident that it would be an act of fundamental immorality to exact some kind of professional fees when the professional technologies and applications deliver unsatisfactory results.
First of all, there is nothing new or inexperienced about Time-Value's founders. Secondly, and perhaps more importantly, is the widely acknowledged fact that we are all looking at a new and diversified financial instruments trading marketplace! The new dominance exhibited by the Quantitative analysis-based Traders (those exclusively using mathematical/technical means) are almost certainly causing the markets to become more and more Quantitative and Technically decipherable. Doesn't it seem logical that the decisions and actions of mathematicians, engineers or scientists ought to be far more predictable than those of the rapidly obsolescent practitioners of the Dismal Sciences (economists and users of economic fundamental data & information to predict price movements and trend changes)?
Please know that the industry watchdogs strenuously object if funds managers fail to include the language that says "Past Results Are No Indication of Future Performance" in promotional documents. This appears to suggest that the SEC, for example, must have concluded that long-established firms are as potentially unreliable as the newer types of funds manager companies. Understanding that concept, under the Time-Value system we have gone to great lengths to make it nearly effortless for each client to monitor the Net Asset Value ("NAV") of their individual portfolio(s), and to do so within 45-minutes after the market closing. By the way, the Time-Value system will eventually be able to offer electronically "audited" NAV in near real-time. We intend to have alarm systems that will deliver an electronic notification if and when a preset downside limit is exceeded.
Given the foregoing, we would suggest that the notion that length of time in business is an indicator of investment safety or reliability is now obsolete.
Proven Winners Became Proven Losers: During the past thirty months or so, the great majority of funds managers, whether technically oriented or economic fundamentals-oriented, have lost money for their clients. Time-Value was not offering the Cash Portfolio Management product then. If we had licensed it, we might have been a party to the loss of funds too. However, it is doubtful this would have occurred because of two things: one factual, and the other anecdotal, to wit: Our original Track Record Fund was designed, operated and run with a whole extra layer of non-typical risk because it was being simultaneously run as an R&D testing platform. This "prototype" Track Record Fund was fully exposed to highly volatile markets from November of 2001 to June of 2002. The anecdote is that several of the Track Record Fund's investors have reported that in the utilization of the Time-Value system they had the highest Gains vs. Losses record of any regularly-reporting USA hedge fund during the period January 1 to June 30 of 2002.
A Newly Open-Minded Marketplace: Early Adopter-types of decision-makers that we are now regularly encountering are, by and large, fascinated with the Time-Value technologies and applications. In spite of that kind of intellectually rewarding reception, mainstream corporate finance executives are, and perhaps justifiably so, much more cautious about "Taking Chances" with either old-styled or even newly proven money management systems and techniques. Time-Value's decision to carefully tailor all of our product offerings to the more conservative elements of the Corporate-Finance-Executive spectrum does, in fact, appeal to the more attentive executives. Given the pattern of this marketplace feedback, Time-Value can rest assured that its basic value proposition will have a lasting appeal.
The "Rising Tide Lifts All Boats" Principle: Time-Value believes the foreseeable future of traditional approaches to analyze market behavior and make buy/sell decisions will remain largely discredited. Time-Value is also convinced that the majority of money managers that become well known do so only during long up-trends in one or two coincidentally selected markets while the broader markets are also rising. We, at Time-Value, define all such across-the-board up-trend developments as the Positively-Self-Reinforcing Effects of In-Market trading successes.
We are convinced that many of these seemingly-individual-success-stories, in turn, give birth to mostly accidental performance winners of what we call "Trend Experts." During the years 1999-2001, Trend Experts proliferated and almost effortlessly accumulated gigantic amounts of discretionary funds. Time-Value believes they were able to do so not only because they were being perceived incorrectly, but also because the all-encompassing Up-Trend made barely-competent traders look like great ones. Once the broader market had structurally turned down, virtually all of the "famous" Trend Experts found themselves without any intellectual basis for making decisions, and thereupon began manufacturing long sequences of losses in their clients' portfolios.
The Space Shuttle's Scientists vs. The Gifted-Trader Ersatz Scientists: Perhaps it is time to turn to an analogy for help by reminding ourselves, for a moment, of some of the things we know about how and why the Space Shuttle was able to run up that perfectly awesome track record of safety before the recent crash: The Shuttle has approximately 1-Million parts, seventy or eighty major systems, thousands of subsystems and dozens of human and digital "Brains." Guess what else? ...it can be fully and completely flown, operated and returned to a safe landing without any pilot or crew member on board at all! The Shuttle's scientists are never, ever, going to become the equivalent of Trend Experts!
Fees & Charges ...What You See Is What You Get: The simple answer is no. To more directly respond to the apparent concern here, it seems important to note that the Time-Value system will operates from a baseline position of openness and candor in all parts of the business activities, especially when it concerns the handling of moneys that have originated with a rightfully interested Client of our licensee.