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Hi Toof, My retirement account is now fully invested and awaiting further distributions from the "income" side of the account. Then we can continue the downward averaging if the prices remain favorable for accumulation.
Everything I see indicates the market has more room on the upside than the downside right now. Maybe once we get all the "bad boy" syndrome over with maybe we can get back to business as usual.
Best regards, Tom
Purchase today
My dividends posted today in my IRA so I was able to buy 13% of the shares AIM wanted of CHI. Current dividend 16% yield. Wonder how long that will be.
Past buys were at $17 and $14 and this one at $10.29. Was tempted to wait a few more days to see if it would continue to drift lower but decided to not be greedy.
Not having money got me a nice discount to what AIM would have had me buy at ( $13.20)
Toofuzzy
Hi Tickettoride
You may want to check out FXA the Austalia fund. May not be the best time to invest as the exchange rate is going against them but the yield is very good. Might be good for AIMing.
I assume the swiss fund has a very low yield and you will be losing money to inflation unless the currency gets stronger against the dollar. Again if it swings enough ,,,,,, might be good for AIMing.
Toofuzzy
Hi Ticket, Re: Swiss ETF...............
I'm following one in a model portfolio; the one that Toof mentioned. FXF. It's a currency ETF, not an equity one. It positions the USD against the Swiss Franc and goes up and down with the changes in exchange rate.
"CurrencyShares" has eight different country specific currency ETFs right now.
Hope this helps,
Tom
thanks yes it is
i like the way the swiss think and in the end they may still be standing
Hi tickettoride
FXF may be what you are looking for...... or maybe not.
Toofuzzy
hello
if i may ask
Im looking for a swiss etf for the swiss money is there one ? do you know of it ?
Hi Tom
I didn't realize the connection between them and Lehman.
But it looks like all my fears for the fund were realized.
I added to my WRI holdings along the way and put in a GTC order to sell some the other day but it has since pulled back.
I am also taped out.... at least for the next few days.
Toofuzzy
Hi Toof, Yes, I did add to my NRO holding. However, I'm now tapped out in my IRA, so I think that's the end of buying until the next dividend checks clear!
Did you see the note they post at their web site now?
Neuberger Berman is operating as usual and is not subject to the bankruptcy proceedings of Lehman Brothers Holdings Inc. Our portfolio management, research, and trading operations are fully functional, and our portfolio managers continue to actively manage our clients' assets and will do so going forward. All mutual fund assets are segregated from Lehman Brothers and are held by the custodian, State Street Bank & Trust.
Best regards, Tom
Hi Tom
Did you manage to pick up more NRO in the latest swoon?
Toofuzzy
Hi TF, Re: NRO..............
The web site is pretty useless. However, if you dig deep enough you can at least find their reports.
1) It appears they do have realized cap gains, so I guess they did do some selling.
2) Cash as a % of assets currently is teensy.
3) It would appear their share price is not down significantly more than the average REIT or REIT Fund.
http://stockcharts.com/charts/performance/perf.html?IYR,WPC,NRO,JRS
But, it is down a bundle over the last 12 months.
4) Yes, it's a closed end fund.
5) It appears their payout was around $900MM last year while income was $2270MM. However, their Assets and Liabilities statement (Page 12) seems to create some more questions to be answered.
Best regards, Tom
Port Washington, WI 53074
Hi Tom Re NRO
Let me know what you find out.
OK they own real estate, all real estate is down, so I can live with that they are down also since they are supposed to own real estate.
1) Were they smart enough to lighten up on their holdings?
2) how much cash are they sitting on now as a % of their assets?
3) Are they down in stock price more or less than the average (REIT, REIT fund, or whatever you feel it is fair to compare them to)?
4) I don't think you told me whether they are a Closed End Fund or an open end? I went to their website and it had something about another fund being merged with it but nothing I could find about the fund itself.
Thanks
Toofuzzy
Hi Toof, Re: NRO...............
Funny we should be discussing NRO. Their semi-annual report just arrived in my email this AM.
https://www.nb.com/MYP/NB/PUB/16495/NFA/E/R/Q/V/doc/real_estate_income_fund_annual_report.pdf
Again on Page 12 there's some oddities I can't explain, but it looks far better than the previous report that I referenced this AM.
Best regards, Tom
Hi TF, Re: NRO NAV......................
The NAV has been tracking with the Price/Share pretty closely for a long time. The discount is there, but it's not a big one. It's as though the assets are declining in value at about the same pace as the share price. In theory "efficient" markets should reduce the discrepancy to zero, but we know that rarely happens with closed end funds.
Usually there's a premium or discount because of psychological aspects of the market participants. Right now they're not willing to pay as much for the assets as the NAV suggests. With price leading the decline, it indicates poor investor sentiment. This is similar to when the NAV leads the Price upward. That also indicates investors are less than enthusiastic about the rise in asset value.
When NAV leads the Price downward it indicates investors are optimistic about the outcome. This is similar to when the Price leads the NAV upward.
What may be a telling indicator is when the NAV starts to stabilize. Other market forces will determine that. Then, how investors react to that will determine the future Premium/Discount.
Best regards, Tom
Hi TF, Re: NRO.................
Those are all the right questions, but the answers are very hard to find. I think a large portion of the decline is "guilt by association" with Lehman Bros. these days.
(see
http://stockcharts.com/charts/performance/perf.html?NRO,LEH
and stretch the X axis to full length)
When one looks over their holdings, it looks pretty good. When one attempts to find their annual income per share vs their payout, it gets more difficult.
I'm continuing to investigate. On page 12 of their semi-annual report it shows significant realized capital gains. It also shows they are distributing more than the value they are receiving in income. At the time of the report, the excess distribution appears to be about balanced with "unrealized" capital gain. Much of that may have disappeared in more recent times as real estate assets have declined in value.
Then under Assets, it shows significantly higher dividends and interest receivable than it shows as payable under the Liabilities column.
So there seems to be a contradiction here. I'm going to call and see if I can get it explained.
Looking at it in an entirely different light:
It's been under "distribution" since last Summer and the beginning of the "credit crunch." It's also showing a very generous trade range in the last year. So, the confusion continues.
Best regards, Tom
Port Washington, WI 53074
Hi Tom Another thought
I think the main issue for me with NRO is that I would be happier if they weren't paying out such a large dividend. I could see buying it because of the price drop and their holdings are now at bargain prices. It would be nice if the discount to MAV was higher though.
Toofuzzy
Hi Tom Re NRO
Are they a Closed End Fund?
Have they sold off a bunch of assets on which they have gains they have to pay out?
If that is the case they are returning a LOT of capital in that dividend. Are you just going to end up buying a return of capital?
The NAV has declined 36.5 % roughly in the past year (see above) and the stock has declined significantly also. Is the price likely to keep declining in line with their dividend pay out (return of capital)?
They may have picked a good time to lighten up their stock holdings. Are their cash holdings extremely high now? If they return all that capital will they have the cash to invest back in the market in the future and grow the share price?
I had picket ICF to AIM and had switched that to LD -AIM and eventually sold out. When the price dropped enough for me to get in a few months ago I wasn't happy with the yield (3 to 4%) so I started looking at individual REITS.I don't think the other REIT ETFs yield much more. At the present time there are a bunch of REITS that have 6 to 9 % yields.
Right now I own WRI and have been following FUN but The dividend to earnings ratio has me nervous. If WRI goes to $29.44 I get another buy.
Toofuzzy
Neuberger Berman Real Estate Securities - NRO - declares distributions for July, August and September of $0.15308 per share per month.
http://biz.yahoo.com/bw/080627/20080627005546.html?.v=1
That works out to be just under 20% per year at today's share price. It's very difficult to tell if this is going to blow up or just continue on while the market "hates" it.
Best regards, Tom
Hi Enrico
Welcome. I am sure you will find a lot of usefull info on AIM here, on the other site, and Tom's website.
People have tries but I believe AIM will not work with FOREX.
The one risk of AIMing is that something you buy goes to zero. Therefore any kind of fund works very well with AIM because it avoids that risk (ETFs CEF closed end funds, and no load mutual funds)
There are a few currency ETFs which can be AIMed
fxa, fxb, fxc, fxe, fxf, fxm, fxs
You would buy them and put 50 to 70% of what you want to invest in them and the rest in cash in case it goes down.
I don't know you but the place to start is with a diversified portfolio of stock related funds. large, small, foreign, REITS, bond
Toofuzzy
Good Day, My name is Enrico I am brand new. I read Lichello's book several times. Could someone tell me explicitly, or point me to how I should proceed trading currency ETF's the AIM way. I have traded spot FOREX, but don't know at all how to proceed using AIM in that market. Any help will be gladly appreciated. I wanted to start a small acct. with $1000 to get an overall feel for the system. Thanks in advance
Tom, Do you know of an ETF or fund that invests solely in Euro Bonds?
CHI
Anybody have any thoughts on the below article other than it will create a buying opportunity? Any long term effect on the fund.
Toofuzzy
Calamos Releases Comment on Auction Rate Securities Market
Tuesday March 4, 5:00 pm ET
NAPERVILLE, Ill., March 4 /PRNewswire-FirstCall/ -- The failure of the closed-end fund auction process has permeated the entire closed-end fund market as liquidity providers have stepped away. Initially, failed auctions were limited to lower rated securities, but as liquidity disappeared, closed-end funds began to be impacted. Should the auctions continue to fail, common shareholders may eventually be impacted through lower distribution rates.
"The recent turmoil in the U.S. credit markets has spilled over into the auction-rate securities market and in turn, into the closed-end fund market. It's important to remember, however, that this is a liquidity issue, not a credit issue," said John P. Calamos, Sr., the chairman, chief executive officer and co-chief investment officer of Calamos Investments.
Each of the five funds that Calamos has outstanding has experienced failed auctions. Pursuant to the standard governing documentation on the preferred securities, a failed auction triggers a "maximum rate" as described in each prospectus. The fund shareholders will continue to receive dividends during this time. The maximum rate is a calculation, and an example of a rate for each of our funds is included in the following table:
Fund Ticker Maximum Rate Maximum Rate (as of
Calculation February 29, 2008)
Calamos
Convertible
Opportunities and AA Financial CP 4.473 %
Income Fund CHI multiplied by 150%
Calamos
Convertible and AA Financial CP 4.473 %
High Income Fund CHY multiplied by 150%
Calamos Strategic 7- Day LIBOR 4.706 %
Total Return Fund CSQ multiplied by 150%
Calamos Global 7- Day LIBOR 4.712 %*
Total Return Fund CGO multiplied by 150%
Calamos Global
Dynamic Income 7- Day LIBOR 4.706 %
Fund CHW multiplied by 150%
(*) Fund only auctions on Tuesdays, auction occurred on February 26,
2008.
"The failed auctions have created liquidity challenges for many closed-end funds, including the Calamos closed-end funds. While it is impossible to predict when the heightened uncertainty surrounding the auction rate securities market will abate, we remain confident in the fundamental positioning of the Calamos closed-end portfolios. As in all market environments, we continue to manage the funds according to a time-tested discipline guided by long-term perspective and proprietary research," said Mr. Calamos.
My retirement account's holdings are starting to make some progress even in this stinky market.
First up is the most recent one to trade - a world govt. bond fund:
Next is a precious metals commodity fund:
Last is the main "growth" item for the portfolio, the "timely stocks in timely industries" fund from PowerShares:
The international stock funds haven't done as well nor have the U.S. small and mid cap value funds. All but the CHY and PHY shares are new to the account as of November, so will take some time to get some history built.
Best regards, Tom
Hope it helps! I've been adding significant amounts of these high yielders since August.
Best regards, Tom
Thanks for the reply Tom.
Hi eM, Re: Stability and High Yield..............
It's a mixed bag at best. If one's 100% invested in the high yield funds near the top, then it becomes a very painful experience when the NAV and share price start downward. However, if one can continue to average down in share price, NAV and average up in yield, then it's not so earth shattering. Assuming the dividends stay steady, the lower the price, the higher the effective yield.
In my case, in my taxable account I pull the yield for living expenses. In my IRA its there to generate cash since I've not been pulling a salary for 22 years and haven't been able to contribute to an IRA. So, since the funds won't be sold unless there's a yield crisis, I don't mind being able to average down.
The JGG is government oriented in income and subject to yields world wide on sovereign debt; CHY is corporate debt and therefore subject to the winds of the economy. NRI is based in real estate and REITS so has both the FED and the economy as its influences. Still for the three, the overall yield is good.
I think the yields on these can only drift a certain distance from prevailing govt bonds of shorter duration. After that people, even when somewhat fearful of capital loss become attracted by the higher yield. The spread is pretty large right now and the generaly stock market nor the real estate market don't appeal to the average investor right now. So, support should start to build for the high yield funds.
All three funds are currently selling at discounts to their NAV. As stability returns, we should see the Price/Share start to switch back to even or slightly above the NAV.
Best regards, Tom
Tom, I noticed that your CHY and JGG your biggest holdings both seemed to have rolled over in about May of last year. I have found the same thing with several that I have looked at. I think that the market will be terrible for stocks for quite some time and I am at 100% cash since June of last year except for a few quick trades. I am tempted to go for the high yields, but does it really make sense to have a fund that pays 10% and the NAV drops 20%? I'm thinking that there must be some funds that invest in foreign fixed income where most are paying way more than in the US where maybe the NAV has stayed stable. Have you spotted anything like that?
I've updated the web page on my retirement account to show the various components since I reallocated the assets in November of 2007. While it has turned out not to be the ultimate in timing moves, it looks like it's going to work out okay, given time.
http://www.aim-users.com/etfunds.htm
I've added one graphic to show the overall allocations:
Best regards, Tom
Hi Toof, Re: High Income components...............
I had for years only owned govt bond funds. They did what I wanted - paid the bills - but had very little in any other potential.
I decided to diversify into corporate bonds and then real estate trusts as far back as 1998-1999. In a very glacial manner I started this process. Instead of selling off the bond fund I owned, I just added the other components as they became reasonable and I had cash. In late 1999 I'd added significantly to the real estate side but hadn't found a proper vehicle for the corporate side. I was still buying individual bonds of companies at that time.
As the early part of this decade started off as a rough patch for regular common stocks, the price of bond funds was bid up from their cyclical lows of 1999 and so I had very little chance to add to my positions. As time went on these investments continued to do well way past the time when I thought they'd cycle again.
As companies started to come out of the early recession of this decade, I switched from govt bonds to corporates to ride their tide of good fortune. That continued to this year.
I now have a mix of all three: corporate bond funds, govt bond funds and real estate funds (mostly REITs involved). While not quite 1/3 each, I'm working my way in that direction for the long run.
Best regards, Tom
Writing Options
I previously bought some shares of CREE @ $24.50 and at the same time wrote
June $22.50 PUTS (giving someone the right to sell me more @ $22.50) for $5.00 / sh
I had wanted to write CALL options but was greedy and the stock went down making that unlikely at the price I wanted but I had the GTC order in.
CREE shot up more than 8% today and I got my price
June $25.00 CALLS (giving someone the right to buy my shares @ $25.00) for $3.50 / sh
That is a 15% premium for six months for just the CALL
$8.50 for both together or a 34% return in six months for both as long as the stock isn't PUT to me. If it is Called I lose the stock but that is OK.
If the stock is PUT to me I will effectively be buying the shares @ $14 / sh which is below the 52 week low.
More typically CALL and PUT options near the money pay about 10% premium.
The danger with using them as part of an AIM strategy is that you will get wipsawed.
Toofuzzy
Hi Tom
A short while ago you mentioned that you diversified your bond funds to include corporate, government, and a few other bond sectors.
I was wondering what you sectors you split it in to and what funds for each sector.
So far I own CHI
I have also looked at CHY, EAD, MSD, and most interesting to me at the moment HYB
Toofuzzy
Hi Toof, Re: Style vs Industry...................
I don't favor Style over Industry, but I can only divide the pie so many ways and wanted to get nonUS exposure along with Value components and the only way to do so was to give up on my IYE, IYG, IYW and IBB and use the proceeds to buy into those other areas.
Some time in the future I'll probably have a big enough pie to divide it further and rejoin the ranks of Industry ETFs.
Best regards, Tom
Hi Tom
I remember discussing with you when i set up my account whether to go with STYLE or INDUSTRY divesification. At the time you steered me towards industry for greater volitility
So if you haven't addressed it in your link my question is why do you now feel style is better.
While I have come around to thinking style is better for smaller accounts / asset levels because you need less individual (so larger) funds, recently I took a look at a series of three I-shares funds and found and was dismayed that the same top 10 stocks in roughly the same percentage were in all three funds! One was the growth, one the value, and one the underlying total index.
Toofuzzy
Re: Retirement Account Diversification.....................
After 5 years working with my original plan with ETFs in my retirement account I've done a significant restructuring.
http://www.aim-users.com/etfunds.htm
This will give the complete story.
Since the account's size only allowed a certain level of diversification back in 2002, I went as far as I could. Now, with growth of the portfolio of about 60% overall and an increase in the level of reserve funds available it was now time to do more work.
While the overall account remains committed about 60% to equities and 40% to income, I've divided the equity side into more pieces. Instead of business sector funds this time I've chosen "style" funds for this work. Larger and smaller cap value and growth, U.S. and International are all now represented.
In the future we may further subdivide some of these areas as there's more value to be spread around. But for now, this is about as diversified as I can make it and still have viable AIM accounts.
Best regards, Tom
Hi AH, Re: Non U.S. ETFs..........................
I feel this is more a currency value performance than anything to do with the core investments' performance from business.
That's part of the beauty of these ETFs. They offer some pretty good currency hedging. In this case, as we sell shares of the non U.S. ETF and shift the value to the weaker U.S. currency, we're both selling "high" and buying "low." I'm certain that there will be another era where that US currency will be put back to work buying back shares of depressed non US ETFs.
Best regards, Tom
Hi AH, Re: Homebuilders ETF...................
About 3 weeks ago 11 of the 41 "Worst Performers" for the last 13 weeks were related to home building, furnishing, etc. Historically when we get that type of concentration in the Worst list it's a pretty healthy signal that the sector is "over sold." Just for fun I took a look at that ETF in "Point and Figure" view and it seems to concur nicely.
Now, that doesn't mean it can't remain "over sold" for longer, or that it might become even more over sold. However, AIM's pretty good at handling the last few gasps of these big moves. My PIC List is an example of that sort of Out Of Favor buying. As you suggest, the home building sector won't necessarily disappear, but it could be pretty tough for a while. Sector P/E doesn't look bad for now, but they're looking back at history not at the next quarter's probable lousy earnings.
Sector Book value, on the other hand, is such that this sector is now selling at 1x BV. That's one of the lowest Price/Book ratios in the market today.
I made my move last week. I replaced my Financials sector with this one. Financials is also out of favor, but probably doesn't have the recovery potential either. The ETF for Home builders represents a rather small universe of companies. Only about 30, I believe. The financials sector fund I was using was far more broadly diversified. I'm tracking both in separate accounts, so it will make an interesting foot race.
Best regards, Tom
Were they more exhuberant, or does lower U.S. interest rates depress the value of the dollar? A decline in the value of the dollar versus other currencies, makes the value of all non-U.S. assets more valuable, including stocks.
I think it may look even more washed out in coming months. Some builders will survive and even thrive as demand returns. Some wil probably disappear, either in bankruptcy or liquidation. For me, I would let the market tell me when conditions have improved. For AIMers, this ETF is probably better than individual stocks, unless you have a good feel for the future. Those that have landholdings, in growth areas of the U.S. are the best bets. Some areas are going to languish for a long time. If AIMing, I'd allow for a very generous cash reserve, you might need it.
A look at the nonUS ETFs certainly makes me smile. Not that the US market isn't happy about the FED move, but the folks outside the US seem "exuberant."
Anyway, I updated my web page devoted to such things:
http://www.aim-users.com/exusetf.htm
Here's the summary:
Best regards, Tom
Hi TF, Re: Homebuilder start point...............
I took a look at ITB on a Point and Figure chart and it looks pretty well washed out.
http://stockcharts.com/def/servlet/SC.pnf?c=ITB,P&listNum=
Maybe this would be a nice time to get an AIM account started.
Best regards, Tom
ITB and KRE entry point
I am thinking eventually home builder stocks have to stop bleeding and that will probably happen before the actual business improves.
Wondering how to pick an entry point for ITB the homebuilder index.
In a similar vein regional banks look interesting and KRE was recommended by Cramer.
Once the rate cuts start happening financial stocks should improve.
Should I wait for a rate cut or some technical signal to get in?
Then of course course I can take the advise of the commercial and,,,,,,,,
"Just do It ! " and let AIM worry about it.
Toofuzzy
Interesting article on ETFs and Asset Allocation
http://biz.yahoo.com/seekingalpha/070625/39239_id.html?.v=1
Toofuzzy
Hi Jack, The email address is here, just click on my name and it's there.
Looking forward to hearing from you.
Best regards, Tom
Don't have your email. Seems to have changed. Been a while. Mine is what I use here at gmail. I've been looking at some new ideas around AIM but want to has them out in the background before going public.
Cheers, Jack
Hey Jack, It's been quite a while, good to hear from you again. Do you have my email address?
Best regards, Tom
Hi Tom,
Oddly enough, iHub doesn't remember me. Can't send private messages. Would like to talk about ETFs and more using my name and gmail if possible.
Cheers
Jack
Another sale in the Mexico ETF:
The substantial cash position now gives us the luxury of letting this one grow without any further sales for about the next 10% of share price growth.
Best regards, Tom
Which is more valuable Bricks and Mortar or Intellectual Property? Interesting new ETF will represent the IP end of things:
http://www.claymore.com/etf/public/fund/Overview.aspx?ID=4467b372-9ef3-4d5f-a4b8-b32d09994414
Best regards, Tom
--------------------------------------------------------------
Ocean Tomo Catches the Wave in Valuing Intellectual Property
By Alan Sipress
Washington Post Staff Writer
Sunday, May 6, 2007; Page F03
Some of the manufacturing jobs that built American industrial might have left for foreign shores. Services, too, are taking wing. American capital now crosses the border with the ease of a mouse click.
What remain at the core of today's U.S. economy are innovative ideas -- intellectual capital.
But even as economists and corporate executives acknowledge this new reality, they've found it difficult to accurately measure the worth of ideas to companies and the economy.
That's where Keith Cardoza came in. An asset manager at Ocean Tomo, a Chicago financial services firm specializing in intellectual property, Cardoza concluded the marketplace was failing to keep pace with the economy's seismic shift over the last generation. His research showed that knowledge had displaced traditional assets as the lifeblood of the U.S. economy.
Cardoza set out last year to create a stock index that, in his view, reflects the role invention plays in fueling economic growth. The result was the Ocean Tomo 300 patent index, which uses a novel technique for valuing patents held by companies to assemble what he says is a roster of many of the country's most innovative enterprises.
By contrast, leading stock indexes such as the Standard & Poor's 500-stock index and Dow Jones industrial average try to capture activity in the broader economy by listing a cross-section of large companies. The Ocean Tomo 300 has only been live for seven months, too short a time to judge its long-term prospects; for now, it is outperforming the S&P 500 by slightly less than half a percent.
Cardoza's index is not an investment, but after it was established, a separate exchange-traded fund based on the index and called the Claymore/Ocean Tomo Patent ETF debuted on the American Stock Exchange. That fund, issued by Claymore Securities, now has $16.2 million in assets and closed Friday at $27.17.
"I realized that we are in a time in our economy when we have outsourced manufacturing to China and outsourced services to India. What we have left in this country is knowledge," Cardoza said.
Some analysts are intrigued by the approach for pricing patents, which give companies a valuable, limited monopoly on new inventions, but have questions about whether patents should serve as the basis of a stock index. Skeptics say patent value may prove too narrow a measure of corporate prospects.
"It's not clear that intellectual property equates to superior performance over the long term," said Jeff Tjornehoj, a senior research analyst at Lipper. He noted that many of the most successful stocks of the last decade, including Berkshire Hathaway and Countrywide Financial, are missing from the Ocean Tomo index.
Cardoza said his patent index is as well suited to the current era as the Dow was to the industrial age, taking into account factors that the Dow and other indexes don't.
Cardoza said his research showed that tangible assets, like plants, equipment and inventory, represented four-fifths of the market value of U.S. companies 30 years ago. The other fifth came from intangible assets like brand name, reputation and other factors. Now, he said, the ratio has flipped, and intangibles, which he valued by subtracting tangible assets from a company's total market value, make up four-fifths of the pie, with the largest slice made up of patents, copyrighted material and other forms of intellectual property.
Ocean Tomo is not the only company that's tried to measure the value of patents. The Patent Board, a Chicago research firm, publishes a scorecard ranking companies based on the number and quality of their patents across 17 different industries.
The notion that patents are tied to growth is not entirely new. A study published last year by the Federal Reserve Bank of Cleveland found that the single best predictor of how a state's income will grow is the number of patents in the state per capita. Education ranked second.
Ocean Tomo's valuation system for rating patents was developed by California patent lawyer Jonathan Barney, who now works for the firm. Barney's key insight was that companies, which are required to pay the U.S. Patent Office every four years to maintain their patents, would only do so if the patented technology was proving to be valuable. Barney identified 53 factors in a patent document that indicated whether a patent was likely to be renewed -- that is, whether it was valuable.
For its index, Ocean Tomo evaluated the patents issued by the patent office according to these factors and then assigned each one a value relative to the others. Finally, using this rating system, Ocean Tomo selected 300 publicly traded companies that own what were found to be the most valuable patents relative to the company's book value.
"Now, knowledge is transformed into intangible forces of power," Cardoza said.
Another new 52 Week High generated by EWW today at $58.42.
Every little bit helps!
Best regards, Tom
EPP tripped a sale yesterday after almost a year. 51 weeks ago we sold enough to push the Cash Reserve above the 33% threshold that we maintain as our maximum level. So, in December of '06 and again in February of this year we passed on the AIM advice to sell and instead increased Portfolio Control by half the AIM directed amount.
This sale came with the reserve level at 32.7%, just under our threshold. Post sale the cash level is up to 40%, so it will be a while before we see another sale.
Best regards, Tom
The advent of Exchange Traded Funds (ETFs) has brought a new way to use AIM on various Market Sectors. They offer an easy way to own and trade entire sector indexes without the expense and inconvenience of the typical open end mutual fund. Closed End ETFs (CEFs) offer yet another interesting alternative and some extra BETA because of their Premium/Discount range.
With AIM, we like to make our trades when the price/per share meets our requirements. With traditional mutual funds we never know exactly what the end of the day will bring - but that's what the basis of our our trade price will be. Using ETFs we can use "Good 'til Cancelled" Limit Orders to trade when our price is met, or trade any time during the day at the current bid/ask prices.
Diversified mutual funds usually don't have the ingredients that AIM likes - Frequency and Amplitude of price change. This is because their money is spread over many different business sectors of the economy all moving in their own directions. Individual sector funds look as though they will give us many more opportunities to capture volatility than do traditional diversified mutual funds. As this graphic shows, individual sectors perform well at different times in the economic and market cycles.
ETFs can be selected from a wide variety of industrial sectors, individual country funds and also from "value" or "growth" by size of capitalization. This offers us the chance to build a portfolio of our own that is easily as diversified as any mutual fund. If we use ETFs we preserve much of the frequency and amplitude of each sector that AIM uses for creating trading profits. Each sector seeks its own level while AIM adjusts properly for the changes. Overall the portfolio benefits from extensive diversification while also improving AIM trade related returns.
An interesting article on building the "ultimate buy-and-hold" portfolio can be read at:
http://www.fundadvice.com/articles/buy-hold/the-ultimate-buy-and-hold-strategy.html
Constructing an ETF portfolio using the component ideas mentioned in the article would give an individual a very well diversified portfolio. Here is my account compared to similar indexes over a year's time:
[chart]www.aim-users.com/UBH_vs_Index.gif[/chart]
GENERAL INFORMATION ON ETFs
http://quotes.nasdaq.com/asp/ETFsHome.asp
LOOK UP SPECIFIC INDUSTRIAL SECTORS AS ETFs
http://quotes.nasdaq.com/asp/ETFsSector.asp
POWERSHARES ETF SITE
http://www.powershares.com/
INFORMATION ON ETFs
http://www.etfguide.com/etftickerguide.php
MOST POPULARLY TRADED
http://money.cnn.com/funds/etf/mostpop/
HEATMAP OF ETFs
http://screening.nasdaq.com/Heatmaps/Heatmap_ETF.asp
SPECIFIC INFORMATION ON CLOSED END ETFs (CEFs)
http://www.etfconnect.com/
TOM'S RETIREMENT ACCOUNT BUILT WITH ETFs
http://www.aim-users.com/etfunds.htm
EXAMPLE OF NON-U.S. ETF PORTFOLIO
http://www.aim-users.com/exusetf.htm
MORE ON A.I.M. (Automatic Investment Management)
IHub - http://www.investorshub.com/boards/board.asp?board_id=949
Web Site - http://www.aim-users.com/
Best regards, Tom
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