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Hi Steve
I am 69 so not a good choice.
But I would like there to be a meeting before we are all gone.
I thought of near where I live in New he Hudson Valley as there is a lot to do if people want to hang around and site see. Hiking, historic sites, etc
Stewart international Airport is nearby with nearby hotels and shopping. Also in the process of building a casino.
Toofuzzy
Hey Gang!
I'm officially all caught up!
Feels good.
Now I gotta go and help the missus do a little work in the gardens.
Hi Tom,
Who's going to take over when we Chairpeople retire?
Right!
We need a Succession Plan!
Hey Toof! What's your 2 cents?
Hi Tom
AIM also signaled a buy for me in WPC but I didn't get around to placing a trade ( also missed BIB, WPM, and HASI )
Today I added shares to my LD AIM account on EFA AT $59.28. A few days ago would have been better. Added 41% more shares.
I use 5% safe and 10% min order size but increase buy SAFE by 5% with each BUY and resent to 5% if I have a sell.
Toofuzzy
Aim Gathering...
When we took a poll on where people wanted to have the meeting they chose Las Vegas!!!
2 Years in a row!
Hi old_john.
Re: Using GTC orders.
I have every one of my next Sells in as a GTC (plus extended hours when available), good for 4 or 5 months.
I rarely use GTC's on the Buy side.
But I set Alerts for for both prices and as soon as it gets there, I get a text.
If it's at my Buy price, I take a look and decide.
If I go for it, It might be a GTC at or a little lower if that seems to be the trend, or if it's 'waffeling' around my price, I'll execute as market. Typically not more than a few pennies difference.
Been doing this for years at TD-Ameritrade.
Works well for me.
Hi Steve, Re: Equity Warehouses...................
Who's going to take over when we Chairpeople retire?????
OAG
Thanks Steve,
I filter most TV news through the business channels. That gets rid of a lot of noise. Even the business channels I only tune in a dozen times a year. It's similar to what started as a habit back in college. I didn't like the TV news even then. Daily papers had too much about which I had no interest, too. So, I switched to reading Weekly magazines for such info. My thought was if it makes it to the weekly, then maybe it was something about which I might have an interest. It was a great filter back when U.S. News and World Report was still a magazine. Over time, the weekly publications failed to offer content of interest and later, because of technology shift, many of them failed all together. Now I'm just a functioning illiterate!!!
Re: .....2592 mile tour of the deep South.....
The official Hot Rod Power Tour was about 1000 miles and started in Memphis on day One. We traveled to Nashville, Birmingham, Pensacola and then to Atlanta Motor Speedway on subsequent days. So, the extra 1600 miles were just getting there and back to Wisconsin! It was fun, even if the weather wasn't ideal for driving an un-air conditioned car! I met some nice people. I think there were about 3000 cars traveling from city to city.
I think my closest approach to Texas was a few miles into Arkansas! Total states were:
Wisconsin, Illinois, Tennessee, Arkansas, Mississippi, Alabama, Florida and Georgia.
Maybe next trip they'll swing through Texas!
OAG
Hi Steve, Re: AIM 2000.............
I'll have to check my photo archives for a photo................
OAG
Hi Tom.
OAG Tom
Chairman - OAGEW (Old AIM Guy Equity Warehouse)
How the hell do you even pronounce that?!
I liked 'VIEW' better.
Best Regards,
Steve (The Grabber)
Chairman - GIEW (Grabber's International Equity Warehouse).
Hi Tom.
This is from a post you made near the June bottom as all y'all were noting all the recents Buys.
I tried to listen to CNBC this AM for a while and have to say that I got nothing of value out of it.
Try Fox Business if it's available to you.
It is one of our channels we stream on Hulu Live. It is also available to listen to on Sirius/XM.
Maria Bartiromo at 5 AM and Stuart Varney at 8. Mon-Fri
Both CNBC alums if I'm not mistaken.
The rest of the lineup is also very good IMHO.
Also...
I returned from a 2592 mile tour of the deep South last Saturday.
You didn't happen to swing through the DFW area did you?
Yep, you did.
several people were suitably impressed, too!!!!
One can't argue with a good entrance!
And I didn't even mention your cape!
Hi Steve, Re: Trying to remember if you had the Wizard's Hat on during your intro...
Yep, and several people were suitably impressed, too!!!!!
OAG
Hi OJ, Re: Income investments and Cash Ceiling..........................
Yes, for income type investments I usually put a max cash cap on the investment. It's there for Income, so selling too much of it can be counterproductive. I look at history and what a typical draw down might require of cash to buy effectively and use that value as the ceiling. Income investments aren't necessarily responsive to equity market risk, so I give them a slightly different treatment than stocks or ETFs.
In some cases I let the cash build to 30% but most I cap around 20 or 25%. In most cases I also trade 10% of shares on the Sell side unless I'm close to a cash ceiling and then I'll just sell 5%. (it keeps it closer to the ceiling target) On the buy side I usually buy 12% more shares (about the equivalent of 10% of Portfolio Control).
This round of FED and Treasury Rate interest rate hikes has tested this strategy with large discounts in share price on income components. It's been a nice opportunity to "average up" in yield and "average down" in share price. It's the first time in a while my income portfolio (around 10 individual AIM engines) has come near being 100% invested. I'll post histograms of the various portfolios through Sept. later.
Clip coupons, harvest dividends and trade when AIM suggests. The above suggestions help to keep more of the AIM engine at work.
Best wishes,
OAG Tom
Re: This group has always had Class and deserves to be congratulated for a job well done during Covid.
This group has always had "Cool Hand Lichello" guiding us!
OAG Tom
Hi Tom.
Trying to remember if you had the Wizard's Hat on during your intro...
AIM 2000 Meeting..........
May, 2000
Intro - Expectations and Reality
-You expected someone 6'5”, 210#; The reality is 5'8”,190#
-You expected someone with six-pack abs; The reality is more like a twelve-pack!
-You expected “Ask Jeeves”; The reality is “See if Tom knows.”
-You expected a SuperHero; The reality is you got a family man from Wisconsin.
-You expected James Bond; What you got was Austin Powers!
-This is much like the world of investing. Expectations and reality need to be understood together.
Is AIM a Successful Plan for Investing? YES!
Is Robert Lichello's Model based in reality? YES!
Are there other ways to be successful as investors? YES!
Is there a Safer, more Responsible way to be successful as an investor than AIM? NO!
Hi byculla.
I realize this is months ago, but...
Do you mean stop loss orders?
If so, then I can't help you.
But TD Ameritrade allows GTC Ext orders, Buy and Sell for almost any stock except OTC stocks, but they do allow GTC regular hours for it.
Good morning Tom. Thanks for presenting this fine example of what AIM can do. I have a bond maturing in December and will probably transition into a similar type of holding at that time.
You mentioned your cash ceiling target is 20%. Does this mean that you over ride what V-Wave is indicating? To clarify my question, if you were to have started this position in Sept. 2019, would you have used V-Wave or the 20% number?
Hope that you are having a nice weekend.
Take care,
John
Hi Tom
You were discussing this group's measured approach during the Covid 19 peak...
Give it a few minutes and re-read the posts from that period and congratulate yourselves on a job well done..
As you know, I've been catching up out here this last week, and of course I've read every post starting in 2019 until this one.
Allen (SF Security) made the first mention of what became Covid-19 on 1/24/20!
...the longest bull market in American history has me wary about all the problems, Presidential impeachment, fire in Australia, new virus that seems to be spreading from China and that almost a billion hogs put to death to prevent the further spreading of an African virus that started only about 18 months ago.
My concern is that another big issue happening might trigger a very big down turn in the economy and the stock market.
Post 44103
This was well before the first reported fatality in Seattle, and even before the earlier attributable deaths in Santa Clara County, CA that occurred in early February but were not reported until this article in April.
https://www.cidrap.umn.edu/news-perspective/2020/04/coroner-first-us-covid-19-death-occurred-early-february
It was fascinating to retroactively read all of them.
This group has always had Class and deserves to be congratulated for a job well done during Covid.
Hi Jon. Is that short term (18 months) value for individual stocks correct?
3% cash seems awfully aggressive!!! The 38% level for a 3-5 year time horizon is more my speed.
I read the "riot act" to my purchasing dept. this past week and they responded with several buys. No days off for them right now. The distribution center on the other hand looks to be quiet for the next while. No layoffs yet. Probably move some of the staff into the buying office to help out with the mountain of paperwork.
Have a wonderful weekend.
Old John
VWave 3.0*
Suggested Starting Cash Value For New AIM Accounts/Positions
Individual Stocks
High Risk: At or above 51%
Neutral: Between 37 and 50%
Low Risk: At or below 36%
Diversified Funds
High Risk: At or above 34%
Neutral: Between 25 and 33%
Low Risk: At or below 24%
_________________________
Week of October 7th
_________________________
Short Term (18 Months)
Individual Stocks: 3% (Down 22 from previous week)
Diversified Mutual Funds
or Portfolio: 2% (Down 16 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 38% (Down 4 from previous week)
Diversified Mutual Funds
or Portfolio: 25% (Down 3 from previous week)
Oscillator: -5.76 (Down 3.73 from previous week)
*See posts #44585 and #44588 for Tom's explanation
No thanks.
Sounds like a Hacker's Playground.
Also, one router will only handle so many devices.
The mesh part improves the signal strength away from the router.
Did he demonstrate how COLD his well water was?
With apologies for taking almost a year to reply.
Toof replied to jaiml....
With LD AIM
5% SAFE
10% MIN ORDER SIZE
Increase BUY SAFE by 5% with each buy. Reset to 5% at next SELL.
Saves cash.
jaiml's response...
[i[Thanks @Toofuzzy. Good point. It also depends on what one does with the cash saved over classic AIM, no? If however one is using LD-AIM to leverage their program, then it becomes a question of how many 'buys' they wish to make before stopping.
My 2 cents...
Correct jaiml.
If you use the LD-AIM spreadsheet to set up your program, you decide how many consecutive Sells and Buys. Ranging from 1 to 10. They do not have to be the same.
You can control the % of Cash on a new program this way. Should comport nicely with whatever vWave pick you make.
The $ Saved vs Classic AIM are the additional $ you did not have to spend. In other words it represents the initial value of your Virtual shares if you use the 'Diversify' outputs, These $ are not a part of your LD-AIM program and can be used for whatever else you want. Otherwise, use the 'Leverage' outputs will which amplify your LD-AIM program up to your Total $ available which is the first input you provide.
Bottom line to all this is that the LD-AIM spreadsheet is basically a What-If exercise.
A fellowship missed
Your return brightened my day
Welcome back, Old Friend
Re: The Haiku Board...
Thanks Tom
I'm as far as July last year on my catch up effort.
So I thought it was appropriate for me to post this there.
I've been away
For a really long long time
I have returned
Not a Stock Recommendation, only a History with AIM.....
W.P. Carey (WPC) has been in my "Sandbox Stocks" portfolio for several years now. It's a contributor to cash flow via a dividend of around 6%/yr. It was also chosen, being a REIT, as a place to have some anti-inflation hedge and some slow growth. In other words, Total Return. Here's how the history looks so far:
It's not a hyper trader, but as you see, it's opportunistically been traded with AIM. Generally AIM is trading the appropriate was on the appropriate side of the 26 Week Moving Average. AIM has done an excellent job of managing Cash Reserves through time while picking off trades at nice inflection points. Yesterday was the first time it's added shares since Fall of 2020. Two subsequent sales kept the Cash Reserve near my ceiling target of 20% of AIM Engine value. Note that the dividends are NOT included in the displayed cash level. Those levels are just from the AIM trades.
As of this latest trade, there are more shares in this holding than were purchased at the Start (+16% more shares). Cash Reserve (exclusive of dividends) is 50% higher than the start. Thank you Mr. Lichello for creating a system that works well for those of us with Total Return Investing in mind.
Total Return = Price Appreciation over time + Dividend Capture over time + Profitable Volatility Capture over time.
OAG Tom
Greetings Old John,
The virtual machine is set up with the same values as Lichello uses, see page 56 in the fourth edition. Safe is 10%, no minimum buy or sell. The size of the virtual machine is your choice. The virtual machine develops from ZERO-AIM to LD-AIM to Classic-Full-AIM.
I try to have all stock-machines of roughly similar size. If you anticipate a drawdown of 50%, then you need cash for that drawdown similar to the average machine size. Let Lichello invest the cash and when you do the final conversion to Classic-Full-AIM you can spend all cash that was still left.
An important criterium for me is that I should feel happy with this process, happiness tuned by Lichello's philosophy. Whenever I used termvest or synchrovest and did a buy on a somewhat higher level, I did not feel happy, and needed a few days to shed that feeling. If you are doing what is right(buy low), you feel happy immediately.
Your series of planned purchases is another possibility to do the buying. Always also look at the virtual machine buy advice, make sure that your real purchases are not above Lichello's buy advice. To spread your real buys, look at transaction costs to determine your optimal buying sequence.
I don't think you are overly cautious, I think you are prudent especially in the current climate. Just a few minutes ago I saw that september inflation is over 17% here.
Hope I have answered your question a bit.
Best, K
Greetings karw. Thanks for taking the time to tell us how you manage your cash with AIM. I'm interested in your approach using AIM-zero with individual stocks. May I ask how you set up your virtual machine? Size, safe settings, min. buy/sell etc.
I have set up a couple of (virtual) engines using actual AIM price targets. But I have substituted the following cash amounts for the first 5 real purchases: 1500, 1750, 2000, 2250, 2500. Total planned purchases = 10,000 (50% of 20,000).
After (hopefully) 5 buys, I plan to switch to standard AIM and use V-wave as a guide from then on. Some might say that I am being overly cautious. At the end of day, we all have to be able to sleep at night with our decisions.
As Mr. Lichello put it so eloquently, so many years ago: "May you have all that you need, And all that you desire, And the wisdom to know the difference."
Old John
Re: Don't know if you ever visited his spread near Jonesboro, but if I had it, I'd have a hard time leaving.
Agreed. Yes, Jane and I visited there and enjoyed their hospitality.
I'll let you know when I hear back from him.
OAG
Hi Clive. It's been awhile.
Still catching up and ran across one of your posts from last year...
With recent good stock gains, now might also be a appropriate time to consider taking some off the table. Buffett for instance who typically AIM's with 10% cash reserves, is more recently aligned to more like 30% reserves..
Buffett uses AIM?
That's good company to keep!
I believe there are some cities where everyone uses mesh routers and daisy chain to each other.
I wonder who actually has a o pay for the internet service.
Toofuzzy
28,800, 36,600, or 48,000 baud???
POSH!
I just ran a speedtest from my phone, standing near the router,.and got 488.7Mbps Down & 200.6 Mbps Up, latency 6 ms.
I think that's equivalent to 689.3 million baud rate.
We've got Frontier Fiber Gigabit service.
All of our TV's are streaming, having cut the cord over 4 years ago.
Our main TV is directly under the router so no issues with that.
One in the bedroom also no issues.
My HP Desktop PC running Windows 10+ is in my office, (connected wirelessly). So through 2 walls, service drops to 71.3 Mbps Down & 50.9 Mbps Up, latency 4 ms. Still fast enough for just about anything I throw at it.
Baud Rate is such 90's term!
My 1st modem was a 56 baud rate Hayes if memory serves.
Of course if either of the kids picked up a phone it would disconnect.
I've looked at range extenders but the future seems to be mesh routers and they're still a little 'Spendy' for me.
When are we going to have another meeting ? Before we can't !
Toofuzzy
Panama? Go figure. Keith is such a 'Good ol Arkansas Boy', I wouldn't have expected him to be spending time internationally.
Don't know if you ever visited his spread near Jonesboro, but if I had it, I'd have a hard time leaving.
Cash management,
Cash management for AIM machines is for me not the same for each machine.
Existing ETF machines have their own cash level. Shares are bought and sold and the cash level goes up and down. Cash is allocated to each machine.
In my UBA I can't buy new shares, so I receive the dividends and export the cash from the UBA machines and the cash typically goes into 'free cash'. I made a few changes to the spreadsheet for this. Once a week I look at the 'free cash' level.
In the 'individual share' machines I had cash allocated to each machine. However I liked the UBA cash management and started using that: import cash when a machine flashes a buy and export cash when a machine flashes a sell or received a dividend. This simplifies things, the cash level is always zero. Of course you need to have enough cash in the 'central cash facility'.
Also the environment of individual shares is more dynamic, you sell a stock completely or buy a new stock. It is now maybe a good time to start an AIM-zero machine (a virtual machine with no stock, and the buys are real buys). Having cash at zero level in the machine makes management a bit easier for me. So that is why I calculate cost (what did I pay for the shares) and market(what can I get for the shares).
Best , K
Bull Market - When Good News is good new and Bad News is good news...
Bear Market - When Bad News is bad news and Good News is bad news...
Hi Steve, Re: AIM Users Photo...................
We're a good looking group!!!
That's Jack Jagernauth sitting next to Steve K. I just heard from him again on LinkedIn after several years. He's well and still acting as a structural engineer consultant in Canada. He says his AIM is a little less formal but still uses the principles of the concept - sell into strength, buy into weakness and carry a healthy cash reserve.
I have kept in touch with Keith F (Lemonhead) on occasion. He was spending a lot of time in Panama. I'll have to ping him and see what's up.
I'm glad you liked that Photo!
OAG Tom
Ha!
I'm back too (albeit 18 months later than you).
The Game's Afoot!
Only 861 to go.
Oh my! 22 years ago!
That pic brings back so many memories.
'socal' was the life of the party.
Yes
Standard AIM is standard AIM no matter how much you start with. 50% stock and 50% cash.
You can adjust the starting point a bit but then you are market timing. Maybe 40% stock a year ago compared to 60% stock if you were starting at what you felt was the bottom of the market.
Toofuzzy
Thank you Toofuzzy for offering up these great suggestions.
$20,000 to start an AIM engine makes a lot of sense. In your view, will a $50,000 or even a $100,000 engine operate in a similar manner to a $20,000 one?
I have looked at LD_AIM in the past and I am now inspired to have a sober, second look.
I think the mistake that I was making was concentrating too much on the shorter term.
I was adjusting too many settings to get the perfect exit. Spaghetti AIM.
Together with Tom's advice on the merits of long-term investing, your ideas are indeed valuable and very much appreciated.
Continued success,
Old John
Hi OJ, Re: ............position that is closed after a 100% profit......
A 100% profit as a goal is a bit thin compared to some long term stock price histories. A favorite book of mine is "100 to 1 in the Stock Market" by Thomas Phelps.
(1971, ISBN 0-0704-9772-9)
It might be hard to find but was an interesting book that challenged my own thinking. He said, "The reason people don't make more money with stocks is because they set their investment goals too LOW."
Best wishes,
Tom
Personally I find $20,000 with standard AIM is the minimum I want to start with. $10,000 in stock which gives min trade of $500 and profit of $75 on first sale.
With LD AIM 5% SAFE, 10% MIN ORDER SIZE you might start with $3,000 in stock and $10,000 in cash ( or a bit less at bottom of market ). Your first trade will be $1,000 with a $100 profit if a sale.
Or don't use AIM and just buy or sell on a 20% move.
Or just buy a few things and rebalance once / year till the account grows.
No sense trading just to trade.
Toofuzzy
Hi John..
I’ve been there too! When that occurs now, I will check to see how much cash I have in reserve and consider sending the purchasing department on a 30 day sabbatical unless the price drops a percentage (i.e. 15%-20%) below the last purchase price. If low on cash reserves, I will use half for a purchase and go on another 30 day freeze.
Nice to have you on board, John.
Take care.
Jon
Hi Jon
Your point is well taken. I just completed a buy transaction at a price below my target. Congratulations to me!!! Except the price has kept falling!!! Outsmarted myself again. Grin and bear it and wait for the next signal :)))
Thanks for providing the weekly cash % levels. They are very much appreciated.
Really, really Old John
Hi Tom, thanks for this great explanation.
I dug out my old, tattered copy of the book and discovered the root of my confusion. Mr. L mentioned that it is a "synchrovest" position that is closed after a 100% profit. I suppose that this in theory, could also be applied to an "aim" program. But I do question the benefit of doing so.
Really Old John
Hey Jake.
Thanks. LD-AIM is valuable in my mind.
Come December, it will be 20 years since I finalized the concept and built the LD-AIM setup spreadsheet.
Personally, I've been using it ever since and am happy with how it has been turning out.
It is a little frustrating at times to to see it incorrectly described or really misunderstood.
But that's for another day.
With regards to the Younglings:
Not sure how small their available capital is.
But with zero commissions AIM can be profitable at pretty much any level.
As for fractional shares, that shouldn't be an issue at all.
At it's core, as designed by Lichello, AIM provides all of it's direction in $. So stock price really just ends up being a divisor when you place your Buy or Sell order.
The LD-AIM worksheet will allow for this if you just enter $1.00 as your price per share.
Even $500 works! But we're talking very small $. But 30% Gain if the 1st 5 transactions are Sells.
Let me know if this helps!
Steve (The Grabber) - I hope you'll do this.
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Assistants The Grabber Toofuzzy |
Here's a handy "Quick AIM Calculator" for finding the next AIM directed Buy and Sell prices for your portfolio holdings:
A.I.M. Users Bulletin Board (AIMUSERS): Thanks LC, Now they can use the "calculator" again! (advfn.com)
While the AIM book is no longer being reprinted, it is available from Amazon for their Kindle for $5.99.
http://www.amazon.com/How-Make-Stock-Market-Automatically-ebook/dp/B002VKJ1EI/ref=sr_1_1?s=books&ie=UTF8&qid=1395757939&sr=1-1&keywords=lichello
Mr. Lichello wrote the book on AIM in 1977. In the mid-'80s he put an infomercial on AIM on late night TV and attempted to sell his workbook and audio tapes.
(1) How To Make $1Million In The Stockmarket Infomercial - 1985 - YouTube
It's a reasonable review of the AIM method for those who are unfamiliar.
Run A Successful Equity Warehouse
Welcome to the AIM Users Bulletin Board. This is the thread to post your thoughts, questions and comments on the use of Robert Lichello's Automatic Investment Management for handling the risk of being involved in the Equities markets.
The AIM strategy gives the user LIFO gains of 20% minimum if the method is followed "by the book." It is ideally suited to those seeking long term investment growth while managing the risk of being invested.
Thoughts on being a successful Individual Investor
I wrote this book review a long time ago. It's a trader's interpretation of
Sun Tzu's "Art Of War." I related it to AIM as best I could.
------------------------------------------------------------------------
Mr. Lundell says, "Today's financial markets are the last bastion of unabashed conflict.....
To participate, you must be your own general, devising a strategy, gathering information, executing your plan, and adapting to the situation."
How can we use AIM and the v-Wave for strategic and tactical planning to carry out Mr. Lundell’s requirements to participate in the Equity Markets?
"Be your own general"
You are in charge. You are responsible. When you win, you benefit. When you lose, only you are to blame.
a) Broad trends persist. Discover them. They will survive boom and bust.
b) Don't contemplate engaging in war while beholden to another. They could become your ruler!
To me this means "Stay away from Margin Buying unless you are certain of victory."
c) Establish and maintain a "Baseline of Survival" for your command.
This is the "income" side of my overall portfolio.
d) Know that reality is governed by Darwinism; Long Term Survival belongs to the fittest.
"Devise a Strategy"
Our strategy is to sell inventory into market strength and to buy into market weakness. Robert Lichello's AIM algorithm provides us with a systematic approach to follow that employs this strategy.
a) Sell quality merchandise to all those willing to pay.
b) Buy quality merchandise when the price offers reasonable hope to resell at a profit.
c) Let the allocation of resources and inventory be governed by the course of the market and AIM's guidance.
"Gather Information"
Today there is no excuse for not being informed.
a) Differentiate between information VOLUME and QUALITY.
b) Differentiate between FACTS and OPINION.
c) Find good sources of judgement where you cannot act as judge.
d) Information is trusted only when provided by those proved trustworthy.
"Adapt to the Situation at Hand"
The v-Wave measures general U.S. Market Risk (and may be sensitive to world market risk) from low to average to high. This helps you gauge the situation by:
a) Gauging your initial cash reserve requirements on new investments
b) Gauging your on-going cash reserve requirements on established investments
c) Judging whether to establish a bias for accumulation or distribution
d) Possibly starting no new AIM accounts when the v-Wave is showing High Risk
e) Possibly ignoring all AIM Buy Signals during v-Wave High Risk events.
f) Following all AIM buy and sell signals during v-Wave Average Risk events
g) Possibly ignoring all AIM Sell signals during v-Wave Low Risk events
h) Re-assessing your "Baseline For Survival" at times when AIM has your account heavily in Cash
i) Always attempting to beat measured inflation by 5 basis points minimum after all taxes and living expenses are paid. If you do this consistently, in good and bad markets, you will be winning long term
j) Possibly using "vealies" when your positions are cash rich relative to the v-Wave. Limiting supply helps to keep Momentum player’s Demand high.
"Execute your Plan"
Set the plan in motion; know that it takes time for realization. Follow the plan without hesitation allowing the goals to be realized. The strategy is sound so execution is all that is required.
a) Buy when the plan says
b) Sell when the plan says
c) Be very patient when no buy or sell signals are being generated
Reading Mr. Lundell's interpretation of Sun Tzu's work will help you focus on your own plan. It will arm you with knowledge of what others not using AIM are doing in the market. Understanding Short Term Trader's strategy and tactics is like having a spy in the enemy's camp. AIM users can profit by knowing just how these people think and act. AIM acts as almost a mirror image of what goes on in a trader's mind.
-------------------------------------------------------------------------------------------------------------
The v-Wave........
Mr. Lichello used fixed cash starting levels; first it was 50/50 then 67/33 and in the last edition of his book 80/20 for the Equity/Cash ratio. This "one size fits all" approach is like a broken watch that shows the correct time twice a day but is wrong the rest of the time!
Minstrlman, a regular contributor here, helped gather data from Value Line and formed a highly capable risk-cash indicator for our use. Since then, J Derb continued his work each week. As an adjunct to the AIM methodology we now have a Cash Indicator which helps guide our starting and ongoing Cash Reserve level of AIM relative to measured market risk. It can be used as a general market barometer or specifically with the AIM method. The v-Wave (or VW) is derived from the Value Line "Appreciation Potential - Next 3-5 Years" (VLAP) indicator shown weekly in their Summary and Index Section for their 1700 stock edition. Looking back through V/L's history we find the peak Appreciation Potential occurred 12/23/1974 at +234%. Our continuous database starts January of 1982 and we scaled our "zero cash" to the market risk low point of early that year. We take the VLAP and manipulate it to get an indication of how much cash should be reserved for diversified mutual fund AIM accounts. It should be multiplied by your stock or portfolio's BETA to get the cash reserve level of less diversified or more aggressive holdings.
v-Wave Weekly Cash Reserve Indicator For AIM Users
Current years of the v-Wave:
For diversified portfolios the Median value for the v-Wave is 29.5%. High Risk is 34% cash or higher for individual company stocks. Low Risk is 24% cash or lower.
To get a more proper cash level for individual company stocks multiply the current "Diversified" value by 1.5. This gives us 51% as the high risk threshold and 36% for the low risk boundary.
Looking at the cumulative risk of the v-Wave gives another perspective:
Cumulative v-Wave is calculated by taking each week's v-Wave Stock value, subtracting the median value from it and adding it to the previous total.
Significant historical events are shown nicely here and the v-Wave's response at those times.
v-Wave Calculations can be found at #30219. The data are a work-in-progress for now.
TooFuzzy provided us with a handy "Quick AIM Calculator" Here's a link to that page:
A.I.M. Users Bulletin Board (AIMUSERS): Thanks LC, Now they can use the "calculator" again! (advfn.com)
(follow the link on the above page)
AIM has a predictable pattern of "cash burn" in a declining market. Depending upon the SAFE settings AIM will generate new buy orders sequentially as share prices decline. It can be helpful to know in advance about how deeply AIM is going to draw down one's cash reserves. This link is to the "Cash Burn" AIM page. It shows various end points based upon the starting cash reserve level. Here's a link to that page:
"" rel="nofollow noopener noreferrer ugc" target="_blank">http://www.aim-users.com/cashburn.htm"; rel="nofollow noopener noreferrer ugc">A.I.M. Cash Burn Rate (archive.org)
Best wishes,
Old AIM Guy
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