Hi jaiml, Welcome to the newbies, like me, with lots of questions.
Your observations are good stuff. So far I've only found one stock that was better with a by the book AIM compared to orcroft's approach. (I got so involved in double checking the results I forgot to write down the name. Dumb)
As to your question about the initial buy of a position, I don't think attempting to use ocroft's approach can be made to work. My understanding is that it is for an existing AIM position.
So what do you do for the initial buy? Follow the advice that others have said, "...buy the worst performer(s)." What period? It looks to me like the last 6 months to a year. More than a year seems like too long because of market noise, and other economic factors that have their ups and downs.
Finding the worst is a bit of a guessing game, but looking at typical business cycles and where a given position fits into them is a good start. Beyond that it is much like the annual contest that the NY Times (?) and other papers used to run where they selected a portfolio by throwing darts at a list of stocks and compared this to various advisers, etc. Mostly the dart method did as well as the advisers, as I recall. So not to worry too much.
BTW, what is the program you are using to get those charts and the rest of the data you showed?
Warmest Regards,
Allen
