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v-WAVE 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 March 22nd
_________________________
Short Term (18 Months)
Individual Stocks: 72% (Up 2 from previous week)
Diversified Mutual Funds or Portfolio: 48% (Up 2 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 49% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
Oscillator: 1.90 (Down .15 from previous week)
*See posts #44585 and #44588
FYI:
Value Line late on posting data this week.
Will post v-Wave as soon as the information is available.
Jon
He stopped by for some sushi!!!
And here I thought 'Big Bird' was yellow! 😁
It's a white pine at the lakefront of our cottage.
Ice went out last week so Big Bird is back.
OAG
Great pic Tom!
Where was the pic taken?
Hi Tom…
I could always use a new decoder!
Thanks.
Take care.
Jon
RE: Only 3000 more until we hit 50,000!
That is true Tom. But at the current rate, it will take over 3 years to get there!
Keep 'em coming Indeed! 🙄
Hi Steve, Re Posts.....................
Only 3000 more until we hit 50,000!!!
Keep 'em comming!
Best wishes,
OAG
Congratulations JD,
Have you worn out your Decoder yet? If so, replacements are available again.
Nice job!,
OAG Tom
Thanks Jon!
Between the AIM Group's combined 65k posts on Silicon Investor & here on IHub...
I'm, STILL # 1 with 12 Grubs (2 on SI and 10 on IHub)
Codypup at #2 with 9,
You and AIMster are tied for 3rd with 5 apiece.
What's really amazing is we've crossed 65,000 posts!
Of course it's taken 27 years! 😊
Hey Steve!
There is no doubt that you are now back in the game!
What great records!
Take care.
Jon
SH*T !!! 🤬
Didn't notice we were close, and just now got back from walking the dogs.
However, given the distance between each of your 'Pre-Grub' posts, I probably wouldn't have gotten it anyway.
So......Congrats!
(I'll get you next time). 😁
RE: struggling with getting my Excel running again.
What kind of struggles Tom?
Thanks JD, Re: Ben Carlson Quote.......................
I've already sent this on to some others.
Thanks,
OAG
This is why AIM works:
“A systematic process is how you impose discipline on your lesser self, the one that makes all of the mistakes at the wrong times. Without a set of guidelines or principles to follow you'll be constantly second-guessing every move you make after the fact. No one is right all of the time, but without a consistent process, you’ll be judging yourself against an impossible benchmark-short term market fluctuations-a no-win situation.”
—Ben Carlson
v-WAVE 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 March 15th
_________________________
Short Term (18 Months)
Individual Stocks: 70% (Up 5 from previous week)
Diversified Mutual Funds or Portfolio: 46% (Up 3 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 49% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 33% (Unchanged from previous week)
Oscillator: 2.05 (Down .16 from previous week)
Hi Will,
Once more, congratulations on being 1st to guess Tomaso's Travels.
You'll find the Decoder will sync up nicely with Mr. Lichello’s AIM over time.
Best wishes,
OAG Tom
Hi Tom
Buy from the Scared, Sell to the Greedy
Thankyou. I'll find a special little place for my decpder.
Will
RE: Inflation at 4
Half your Purchasing Power
Gone in 18 years
Compound inflation 2006-2024 = 53.0%
https://www.usinflationcalculator.com/
Another more sobering example:
In 1976 I purchased my first new car; Chrysler Cordoba for $5,400
Cumulative rate of inflation since then: 442.0%
That same car today should cost: $29,269.80
Maybe I got a deal! 😉
I really am looking forward to finding out what it is
Security check, Customs, inspection by the King, CIA, MI6 and others could delay delivery until 2025 or '26!!!
OAG
All will be clear when your Secret Decoder arrives!
Tom: What is the transit time to the UK?
😊
Hi Will,
All will be clear when your Secret Decoder arrives!
Best wishes,
OAG Tom
An excellent explaination, thanks Tom
Hi Will, Re: Range around target Cash Reserve...........................
Yes, you are correct in your example. For me, if I was going to see a 4% rise in the cash reserve with a Sale, I'd want to let the cash reserve level to drop to maybe 27% with a 30% target cash. Then, the sale would satisfy cash requirements without over-shooting the actual cash by too much. It would rise to around 31%. Then if the cash target remained steady (risk assessment) that would be followed by yet another vealie down the road if the value continued to rise (shares times price/share).
Actual Cash Reserve percentage, then, can "drift" + or - maybe 3% from the target cash level. Vealies happen if cash is close to, at or above the target level and sales happen if the cash is roughly 3 points below the target. Even if the price/share should double, then at the end you would still be roughly 30% of that ending AIM value. This assumes the target cash (and risk assessment) remain constant.
Best wishes,
OAG Tom
Hi Will. I think Tom will concur.
Assuming the "Vealie" level is at 30%, cash at 29%.
The target price of £15.00 would take the cash to 33%, instead of a sale you'd Vealie? All based on the expected trade return?
You describe it well.
So I will pre-calc a 'Potential Vealie in the tracking worksheet.
So
Assuming the "Vealie" level is at 30%, cash at 29%.
The target price of £15.00 would take the cash to 33%, instead of a sale you'd Vealie? All based on the expected trade return?
That's my understanding, just checking with you.
Will
Thanks a lot Tom!
1) When a stock or fund is fully funded with cash reserve per my thinking, I don't hold any GTC Limit Sell orders open on it. I wait until the price/share hits my target (or better) and then execute the 'vealie' and update my watchlist target prices on the buy and sell sides.
This makes sense to me. Of course I've never had 'Too Much Cash'! 🙄 But if I did, I'd likely use the same approach.
2) I've been using i-Hub's "Monitor" menu item in a separate window. There I've added a "Memo" column and in there I put the next buy and sell target prices. That's my watchlist. It keeps me up-to-date at a quick glance. I've had other software in the past for such monitoring, but those have all gone "Bye Bye" now, so this is how I handle them today.
I set 'Alerts' in TD Ameritrade for both my next Buy and Sell points. I get a text notification when they trigger
3) Yes, if I'm lucky enough to have the price/share race past my next Sell target while I'm napping ( 😎 ) I ask AIM how much the current price would want me to sell and then use that value divided by 2 to add to the Portf Control. Then all's well until the next price move or check-up.
This has happened to me from time to time.
Also, if market risk moves upward so that my current cash percentage isn't satisfactory, I'll execute a sale at the next target price to bring cash up toward the new market risk cash suggestion. Going the other way on risk, if risk drops and my cash looks too fat, I'll just have a chance to do more 'vealies' until either risk rises again, or cash gets diluted by stock position growth, or a buy cycle comes along and naturally lowers cash again.
Makes sense
I'll look through my Newport histories and see if I have a good 3 year period of trades and vealies as an example.
That would be great!
Hi Steve, Re: Questions...............
1) When a stock or fund is fully funded with cash reserve per my thinking, I don't hold any GTC Limit Sell orders open on it. I wait until the price/share hits my target (or better) and then execute the 'vealie' and update my watchlist target prices on the buy and sell sides.
2) I've been using i-Hub's "Monitor" menu item in a separate window. There I've added a "Memo" column and in there I put the next buy and sell target prices. That's my watchlist. It keeps me up-to-date at a quick glance. I've had other software in the past for such monitoring, but those have all gone "Bye Bye" now, so this is how I handle them today.
3) Yes, if I'm lucky enough to have the price/share race past my next Sell target while I'm napping ( 😎 ) I ask AIM how much the current price would want me to sell and then use that value divided by 2 to add to the Portf Control. Then all's well until the next price move or check-up.
Also, if market risk moves upward so that my current cash percentage isn't satisfactory, I'll execute a sale at the next target price to bring cash up toward the new market risk cash suggestion. Going the other way on risk, if risk drops and my cash looks too fat, I'll just have a chance to do more 'vealies' until either risk rises again, or cash gets diluted by stock position growth, or a buy cycle comes along and naturally lowers cash again.
I'll look through my Newport histories and see if I have a good 3 year period of trades and vealies as an example.
Best regards,
OAG Tom
Thanks Tom!
So that approach assumes you don't have a GTC Sell order sitting out there?
But maybe just an alert if it gets to your next target price?
But if it does blow past that target price, you do the Classic Lichello calc to determine the amount to add to PC to execute the Vealie?
Hi Adam, Re: Double Vealies..............
I've done that, too. And I've also done "Full vealies" or take the entire selling amount and adding it to PC. That usually scrubs out any residual sell suggestion.
OAG Tom
If the vealie does not erase the sell completely, rather than doing another vealie, I just increase the amount I increment the PC until it erases the sell. The effect is the same as doing two vealies but it's easier.
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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.
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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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