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The "Stock Trading Riches" Investment System

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Last Post: 1/20/2016 6:37:27 PM - Followers: 18 - Board type: Free - Posts Today: 0

I'm Praveen Puri, the author of  "Stock Trading Riches".

It describes my Stock Trading Riches (STR) trading system which, like Robert Lichello's AIM system, is based on constant value rebalancing. (My book is available in paperback and Kindle formats).

My stock trading book led me to be interviewed about "Wall Street 2" on NBC and interviewed about reality shows / business on "Fox Business".

I have been involved with investing for over 25 years. I have been a full-time trader, financial software developer, consultant at the Chicago Board of Trade, and a vice-president at a major bank.  I'm currently an independent business consultant who helps his clients innovate and grow.  I'm passionate about simplicity, and so I always gravitated towards designing simple systems. I was originally a big advocate of trend-following, but years of experience and testing convinced me that counter-trend rebalancing systems (such as STR or AIM) are better for achieving a repeatable and dependable economic-based edge in the market.

I read Robert Lichello's book on the AIM system in the early 1990's, but I ended up developing my own system because I felt that AIM had several drawbacks:

1. Lichello originally intended for AIM to be applied at the portfolio level. Thus, there would be one portfolio control and one cash. The problem with this is that individual stock movements cancel each other out, thus dampening volatility.

2. While AIM can be applied individually to each stock, I felt, as an evangelist for simplicity and elegance, that this was a bit too clunky and complex - having to track separate controls, safes, cash, etc.

3. I also didn't agree (when trading individual positions) of portfolio control increasing during down cycles, and not increasing during prolonged bull moves.

Note that these views don't mean that I think AIM doesn't work. AIM and the STR systems are cousins and any re-balancing system is a good approach to the market.

The basic Stock Trading Riches system is to build a portfolio of many positions. Each individual position is assigned a constant value (which never changes) and is rebalanced once a year.  Growth happens at the portfolio level. The portfolio consists of the individual positions and a cash balance. At this level, the system uses constant ratio balancing to have a maximum cap on the cash level. For example, the default value is 30% cash.
If cash builds up over 30%, then the cash is used to add new positions.  Besides the basic system, my book also discusses optional rules, trading psychology, and (in the 2009 updated section) ideas for stock picking, IPOs, portfolio design, etc.  Readers of my book also get a link to download an Excel spreadsheet of the basic rebalancing system.

#269   Thanks Chris, PraveenP 01/20/16 06:37:26 PM
#268   Hi everyone, Brand X 01/19/16 12:39:09 AM
#267   11 Year Return on my portfolio vs. Total PraveenP 01/15/16 10:43:44 AM
#266   Excellent article regarding Trump. I realize it was Stetson2011 12/31/15 10:46:18 PM
#265   Hi Praveen neko 10/28/15 11:13:06 AM
#264   I had to modify the script again, so PraveenP 10/28/15 02:16:18 AM
#263   Hi Neko, PraveenP 10/28/15 01:47:56 AM
#262   Hi Toofuzzy neko 10/25/15 03:34:40 PM
#261   Just pretend you yave more shares Toofuzzy 10/24/15 09:45:04 PM
#260   Hi praveen neko 10/23/15 01:09:37 PM
#259   Donald Trump would have been twice as rich PraveenP 07/19/15 11:02:42 AM
#258   Hi L, Re: your history example................ OldAIMGuy 06/26/15 11:49:49 AM
#257   Hi Praveen !! Levobel 06/25/15 01:47:14 PM
#256   Hi Bob, PraveenP 05/24/15 01:06:38 AM
#255   Praveen, Another follow-up on my original inquiry about your BowlerBob 05/22/15 08:31:54 PM
#254   The WSJ had an article about human stock PraveenP 05/21/15 11:57:38 AM
#253   Thank you for your response.... crumbcatcher 04/30/15 06:14:32 PM
#252   Hi, One of the earliest books that mention it is: PraveenP 04/28/15 09:18:37 PM
#251   Sir, In your book you mentioned that your trading crumbcatcher 04/26/15 11:55:56 PM
#250   Water and hydrogen should be transported with trucks. Water Truck1 02/15/15 05:38:35 PM
#249   10 Year Return on my portfolio vs. Total PraveenP 02/13/15 01:19:14 AM
#248   Hi Allen, PraveenP 08/08/14 06:50:39 PM
#247   Hi PraveenP, SFSecurity 08/06/14 04:06:33 PM
#246   a 79 yo man who has 450k that ls7550 07/31/14 11:02:33 AM
#245   Hi glog Toofuzzy 07/24/14 10:14:59 AM
#244   Hi Greg, PraveenP 07/23/14 03:59:25 AM
#243   Hi Praveen, glog 07/16/14 04:07:11 PM
#242   Hi Greg, PraveenP 04/26/14 01:26:56 PM
#241   Hi Praveen, glog 04/25/14 09:10:30 AM
#240   Hi Greg, PraveenP 04/22/14 02:41:18 AM
#239   Hi Praveen, I was wondering where your Stock glog 04/09/14 10:44:31 AM
#238   PNTV Market Size for PNTV, Thanks to Digital DWaite214 03/03/14 08:12:32 PM
#237   "Stock Trading Riches" Was Recommended on Two Different PraveenP 12/06/13 04:46:52 PM
#236   These new smart phone apps, that allow people PraveenP 11/11/13 09:41:18 AM
#235   It's absurd that taxis should be a state aim hier 11/11/13 03:07:51 AM
#234   The Twitter (TWTR) IPO price was $26, but PraveenP 11/07/13 04:55:09 PM
#233   Hi Bob, PraveenP 10/25/13 11:18:43 AM
#232   Praveen, I just wanted to follow up on the BowlerBob 10/19/13 09:13:52 PM
#231   >>>>>I read an interesting article in the Chicago Toofuzzy 08/20/13 02:48:49 PM
#230   I read an interesting article in the Chicago PraveenP 08/20/13 01:59:11 PM
#229   Hi Praveen ls7550 08/17/13 05:03:20 AM
#228   Hi Clive, PraveenP 08/16/13 06:15:57 PM
#227   I think non-correlated assets will reduce volatility. Though, ls7550 08/16/13 06:50:14 AM
#226   >>> I think non-correlated assets will reduce volatility. Toofuzzy 08/14/13 10:00:37 PM
#225   Hi Bill, PraveenP 08/14/13 06:56:00 PM
#224   Recently (last week) Gold, Silver, and Copper seem ls7550 08/11/13 05:55:58 PM
#223   Hi Clive Toofuzzy 08/11/13 09:38:46 AM
#222   Tom runs his portfolio like an equity warehouse. ls7550 08/11/13 07:21:56 AM
#221   Long dated TIPS might still be a viable ls7550 08/11/13 06:46:06 AM
#220   Hi wje3 Toofuzzy 08/10/13 09:30:48 AM