by Dr. Richard Smith, Chairman of the Board and CEO
A LETTER FROM OUR NEW CHAIRMAN DR. RICHARD SMITH
Dear Friends of the Foundation for the Study of Cycles
I am writing to you today as the new Chairman of the Board of the Foundation for the Study of Cycles (FSC).
This is an important letter. It is not a solicitation for funds or donations. It is an update on what has happened in the past couple of months and it is an invitation for your ideas and collaboration. I hope that everyone who has an affection for the FSC will take the time to read this letter carefully and then share your thoughts and hopes about the future of the FSC.
Today I am excited and deeply gratified to be able to report that the FSC is back!
We have a new Board of Directors, including leading cycles researchers Jake Bernstein, Larry Williams and Andrew Pancholi and pioneering technical analyst Tom Demark. We have the support of other pillars of the cycles community as well, including Sherman McClellan, Bill Sarubbi and others.
Your new Board is bringing new leadership and benefits to the FSC membership, including a series of absolutely FREE online webinars from some of the biggest names in the cycles and technical analysis community. Keep an eye out for upcoming announcements!
We are rebuilding the FSC from the ground up. It will be a slow and steady process but the process is solidly underway and I hope that you will be inspired to join us in our efforts.
For too long now, and in spite of all the good intentions, the FSC has been effectively run as a sole proprietorship. That is not what the FSC was meant to be. It was meant to be a community of cycles enthusiasts who are working together to discover the truth about cycles, apply our research and contribute to the healing of our fractured and out-of-balance world.
A lot has happened in the past couple of months following the passing of the former Chairman David Perales. I would like to take some time now to bring everyone up to speed on what has happened and where we are now headed.
Upon learning of David’s death, I immediately began to take steps to see what could be done to protect and preserve the assets and heritage of the FSC. I did so because I care about both the heritage and the future of the FSC and I want to see the FSC restored to what we all know it could and should be. I also did so because I cared about David and wanted to see him respectfully laid to rest.
I had a lot of help from other concerned members of our community including Nathaniel Hansen, Radu Lupea, the staff in Romania, and Board members James Walker, Tim Donlea and Dan Wichhart. We all owe a debt of gratitude to them and I hope you will join me in extending our appreciation.
You can view an online photo album of some of the significant events and milestones in our recent efforts here.
We laid David to rest in his adopted home of Bucharest. We gathered the accounts, archives and digital assets of the FSC. We resolved urgent debts. We paid the Romanian staff back wages. We engaged legal counsel to advise us on resolving all past liabilities and to position the new FSC on solid ground going forward.
With all that work behind us we are ready to turn over a new leaf, and start a new cycle, in the ongoing evolution of the FSC.
Since the passing of Dewey in 1978, the FSC has unfortunately had a number of problems. For the past couple of decades in particular, the FSC has been dominated by individual personalities who, while full of good intentions, primarily used the FSC to further their own personal agendas.
That will not be the case under our new leadership.
This letter along with the dedicated work of our new Board, and hopefully your support, mark the beginning of a new growth cycle for FSC!
As your new Chairman and as the spokesperson for the new Board of Directors, I assure you that the new FSC will be committed to the original vision of its founders – Edward Dewey and W. Clement Stone in particular.
We are working diligently to re-establish the FSC as a true foundation – dedicated to the interdisciplinary advancement of the study of cycles for the broad benefit of humanity. The new FSC will once again be a not-for-profit and non-stock corporation that is focused on research and education.
Of course, the FSC will always be of interest to those of us who are focused on the forecasting power of cycles in business, trading, investing and economics. That is what piqued my own interest in the study of cycles. Edward Dewey himself started out in business with Chapin Hoskins, the managing editor of Forbes.
There is a wonderful practicality to the worlds of business and speculation that makes people in these endeavors more receptive to areas of research like time-cycles. We are OK with knowing how cycles can be useful without necessarily needing to know why they occur.
The FSC will continue to publish groundbreaking research and conduct workshops on how cycles can be used to predict economic events. All of the current board members are deeply engaged in this endeavor already. We expect to continue to deliver even greater value to members in this important area of our research.
But it is clear that Dewey did not intend for the FSC to be primarily a for-profit business selling signals to financial speculators. His vision was considerably larger, both pragmatically and academically.But it is clear that Dewey did not intend for the FSC to be primarily a for-profit business selling signals to financial speculators. His vision was considerably larger, both pragmatically and academically.
Early on in his most well-known book “Cycles: The Mysterious Forces That Trigger Events” Dewey describes his vision for the Foundation as he saw it in 1941. I’ve excerpted the highlights here.
The Foundation for the Study of Cycles believes it is building a cathedral – several of them in fact.
Cathedral Number One – The Advancement of Human Knowledge
We are doing our part toward learning how the universe functions, for we are discovering evidence of hitherto unsuspected forces.
Cathedral Number Two – The Elimination of War
There is little hope of eliminating war for yourself, your children, or your grandchildren. But, hopefully, you will have great-grandchildren. It is for them we are building.
Cathedral Number Three – the Elimination of Depressions
Only by understanding the forces that caused depressions can we ever learn to control them. There is a growing mass of evidence that depressions recur at rhythmic time intervals.
Cathedral Number Four – the Elimination of Disease
As yet only a small amount of cycle research has been done in this area, so the importance of cycle knowledge in the elimination of disease has not been determined.
Cathedral Number Five – Accurate Weather Forecasting a Year or More in Advance
How wonderful it would be if farmers could know in advance when to expect droughts, late frosts, or rainy harvests.
From our present vantage point nearly 50 years after Dewey outlined the above mission for the FSC, his aspirations may seem a bit quaint – like something from a bygone era.
And yet, Dewey’s mission is not easily dismissed. These are the words of Dewey himself after all, and frankly, our cynical and mechanism-fascinated age could use a little unadulterated idealism.
We believe that these are worthwhile and timeless pursuits and we seek to rededicate the Foundation of the Study of Cycles to an updated and contemporary version Dewey’s original vision which we will work to refine and communicate in the coming months.
As the sciences of human behavior, economics, biology and artificial intelligence continue their geometric growth it becomes more evident that cycles in their various forms can be found in every area of human endeavor.
Computers and new technology are now able to achieve results that early manual operations could not produce or foresee. The case for cycles has been made!
Restoring the FSC to Dewey’s original vision is not going to be an easy task. It will take hard work, money, and dedication. We hope to still be advancing Dewey’s vision when the FSC celebrates its 100th anniversary in 2041.
We will have more to say in the near future about next steps for the new FSC but in the meantime, I would like to give a report on the current state of affairs of the FSC and the steps the board has taken to secure its future.
It grieves me to report that the condition of the FSC upon the death of David was very dire and I suspect that many recent members of the FSC who worked with David may find the next section of this letter disconcerting.
While David was very passionate and dedicated and made many contributions to the FSC, his organizational skills were lacking. David was running the FSC as a sole-proprietorship out of his own personal PayPal account. There were few records at David’s death and no money.
As of David’s death, the FSC was essentially bankrupt.
There was literally no money in the bank to continue operations, so all operations and services were suspended. Sadly, all services that were being fulfilled by the FSC under David are no longer able to be fulfilled.
David had also taken several questionable legal steps such as attempting to transfer the Intellectual Property of the Foundation into his name personally in exchange for shares in a new Illinois L3C company. Shares in the Illinois L3C were never issued to the FSC and the attempted transfer of the IP of the FSC was invalid at best and fraudulent at worst.
David sold shares in the Illinois L3C via a crowdfunding initiative. That L3C is no longer in existence for failure to file and it did not own any assets. It is also bankrupt.
That’s the bad news, and I recognize that it may be a hard pill to swallow for those who believed that the FSC was in a better position and possibly poised for transformative success. That simply was not the case.
Because of the difficulty of knowing what liabilities David may have incurred under the banner of the FSC, the board has taken the significant step of dissolving the original Connecticut non-stock corporation and establishing a new Delaware non-stock corporation. The assets of the Connecticut entity have been transferred to the new Delaware entity.
The Board has been closely and well advised in these efforts by the new legal counsel of the new FSC.
Taking these steps will allow us to move forward as expeditiously as possible, to limit liability and to immediately start the process of restoring the tax deductible 501(c)(3) status of the Foundation.
In fact, I can tell you that as of today, donations made to the FSC are once again tax-deductible in the United States!
That’s all the bad news and the legal necessities. Now I’m excited to share with you some of the positive highlights of our work over these past couple of months.
One of the things that I am personally most excited about is that we have secured all of the physical assets of the FSC that David had in storage in Palm Springs. Here is a picture of what we found in the Palm Springs storage unit when we first arrived.
It wasn’t exactly the ideal conditions that we had hoped to find for the FSC’s valuable archives.
After nearly two weeks of tireless work by Nathaniel Hansen, I am very pleased to report that these archives are in much better conditions today. Take a look:
In addition, I am thrilled to report that we have begun to expand the Board of Directors of the FSC by bringing on several luminaries in the world of cycles – Jake Bernstein, Larry Williams and Andrew Pancholi – and leading technical analyst Tom DeMark.
You can learn more about the new leadership of the FSC here.
Jake, Larry, Andy and Tom are exactly the kind of important members of the cycles community who had become estranged from the FSC. We are excited and proud to welcome them back and we look forward to announcing more new noteworthy Board members soon.
We want to continue to expand the Board as well. We welcome all recommendations – both financial and non-financial.
For those in the cycles community that may not know me well, I’d like to share a little bit about myself and a few thoughts on why it is I find myself in this unexpected position of shepherding the FSC into its next cycle.
My undergraduate training is as a mathematician at U.C. Berkeley. I then went on to get my PhD in the interdisciplinary field of systems science under the late professor George Klir. My dissertation was on new mathematical methods for helping scientists and researchers be more honest about and aware of the uncertainties in their own models and forecasts.
For the past 15 years I’ve been building software tools and developing algorithms to help investors build more profitable and lower risk portfolios. Today I serve over 30,000 individual investors that track over 20 billion dollars of assets on my platform TradeStops.
About 10 years ago, David asked me to look into the software published by the FSC and to look into the original papers published by Dewey, Shirk, Vaux and others which described the cycle detection algorithms being used by the FSC.
My team and I spent nearly two years on this project, pro bono, which resulted in new and improved algorithms and new editions of the software published by the FSC.
Upon David’s death, I was asked by the Board to assume the role of interim Chairman and CEO. In that capacity I spent my own personal funds (over $100,000 to date) to lay David to rest, gather assets from Bucharest and Palm Springs, clean up the legal status of the FSC and establish basic operations sufficient to give the FSC the opportunity to come back to life.
As I stated earlier, I am not interested in becoming a new dominant personality for the FSC. I want the FSC to shine with its own light. But I do believe that there are some important reasons that I will make a good Chairman for the FSC at this time in its history.
- I care deeply about the history of the FSC and long to see it restored to respectability and recognition and I believe that it is an important time in history for a revitalized FSC to clarify and broadcast its message.
- I will not run the FSC as a sole-proprietorship. I will work to build a robust Board of Directors that can collectively support the future of the FSC.
- I use time-cycles actively in my own work and have continued to evolve my own computer programs and algorithms in the field.
- My experience in the interdisciplinary field of systems science makes me uniquely positioned to help develop a truly interdisciplinary FSC.
- My background in enterprise grade financial software for retail investors will serve the FSC’s own aspirations for developing and publishing its own data, algorithms and software.
In closing, I am proud of the work we have done to give the FSC this opportunity to once again be recognized as the transformational institution that it truly is. The Board and I have brought it this far, but we need your help to continue marching forward.
I recognize that many of us have given repeatedly to the FSC over the years and not always received the value that we expected in return. This is, in fact, the very reason that the old FSC was bankrupt.
That will not be the case with the new FSC. Your new Board is committed to delivering value to the cycles community and doing so with clarity, transparency and civility.
Here are some of the steps that your new Board is already taking to make good on that promise:
- Securing and protecting FSC digital and physical assets.
- Taking legal steps to limit liabilities and preserve assets.
- Applying for 501(c)(3) status for the new FSC so that donations will be tax deductible.
- Developing a business plan for the new FSC.
- Recruiting new Directors to the Board from multiple disciplines.
- Removing marketing heavy materials (and extraneous websites) from the FSC web presence.
- Organizing and digitizing FSC archives and making them available online to members.
- Arranging free webinars for members from new Board members and cycles luminaries Jake Bernstein and Larry Williams.
- Preparing a big online webinar in 1Q 2019 to bring together the work of many leading cycles theorists.
We are doing all this currently without any operating funds or employees. Of course, we want to move as fast as possible, but we believe that building a Foundation the right way is more important than doing it quickly.
In addition to these recent improvements we are currently working hard on several fronts including:
As the new FSC finds its footing and its new supports, here are some of the projects we would like to see initiated.
- Re-publishing of a quarterly online version of Cycles magazine.
- Re-building the Foundation's membership by working with list owners who want to promote the Foundation to their own lists
- Funding of a full-time operations officer to manage the day to day affairs of the FSC and the needs of members.
- Building an online data warehouse and cloud-based version of the core cycles-detection algorithms.
- Creating a physical location for scholars of cycles and cycles enthusiasts to browse FSC archives and publications
- Fomenting the growth of Cycles chapters globally, wherein cycles enthusiasts and scholars may interact
- Affiliating the FSC with an academic institution that wants to support cycles related research; and, of course
- Raising a new endowment and operating funds.
We welcome all the help we can get in these important areas!
One last point … It is important to note that the new FSC is exclusively focused at this time on our not-for-profit scientific research and educational mission. We envision a time in the future where the FSC will create a wholly-owned for-profit subsidiary to commercialize FSC technology – much like universities do – but we are not yet there today.
For now, we will not be selling software or conducting paid workshops.
Of course, supporting and funding the FSC has always been a challenge. The challenge goes all the way back to the very first days of the FSC back in 1941. It is no different today.
Great opportunities lie in front of us and our ambitions for the FSC are as expansive as ever, but we can’t do it without you. If you are inspired by this new opportunity to rebuild the FSC, your Board sincerely hopes that you will contact the FSC and see how you can help.
The easiest way to let us know that you want to help is to simply reply to this email. You are also welcome to directly contact any of the current Directors or Officers. A list of all current Directors and Officers and contact email addresses is below.
Please let us hear from you!
Thank you again for taking the time to read this letter. After such a tumultuous transition and a long period of silence, I felt that it was proper and necessary to explain in detail the recent events and the new direction.
With high hopes for a bright future for the FSC,
On behalf of the Board of Directors,
Richard M. Smith, PhD
Chairman and CEO, Foundation for the Study of Cycles
P.S. The new FSC will not be concerned with any past disagreements between members of the cycles community. We welcome all members of the community tрat wish to constructively contribute to the benefit of the FSC going forward.
P.P.S. Keep an eye out for exciting announcements about FREE online cycles workshops from Jake Bernstein, Larry Williams and others.
Richard M. Smith, PhD, Chairman