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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 November 4th
_________________________
Short Term (18 Months)
Individual Stocks: 25% (Up 7 from previous week)
Diversified Mutual Funds
or Portfolio: 17% (Up 5 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 41% (Up 2 from previous week)
Diversified Mutual Funds
or Portfolio: 27% (Up 1 from previous week)
Oscillator: -1.91 (Up 1.55 from previous week)
*See posts #44585 and #44588 for Tom's explanation
For any of you who would like to read along over time as to a proprietary market risk indicator different from the v-Wave please check out:
https://www.signalpointinvest.com/market-risk-report-as-of-september-12-2022/
Unfortunately there was a gap of around a year and a half where this wasn't being posted. Those older reports from 2021 are being backfilled without editing and will soon be available for your reading pleasure.
Best wishes,
OAG Tom
Hi Steve, Re: 9.09 and 11.11..................................
For minimum trade size I like symmetry. I use either 5% of Portfolio Control or 10% depending upon the equity in question. That equates to roughly 6% and 12% more shares on the Buy side.
Best wishes,
OAG Tom
Hi Tom & Jon
I don't recall 'Husky' as a term used by Don, but you're probably correct as usual.
I do recall the 9.09/11.11 combination though. Have been using them for a very long time.
Getting old sucks.
Hi Steve, Re: Huskey.....
That was Don's own flavor of AIM. I can't remember what all he added but it might have been a "half way to the wall" cash utilization where you bought smaller and smaller amounts but never quite ran out of cash. I think this is before he started working on including moving averages and cross-overs.
We'd meet at the Brat Stop near the IL - WI border and have lunch and compare programs and laptops. Nice man.
Best wishes,
OAG Tom
Hi Jon.
Was that the 'Husky' Version?
??? Not sure what you mean so can't answer your question.
Steve..
Was that the 'Husky' Version?
Take care.
Jon
Hi Tom
0 Safe and Sell/Buy settings of 9.09 & 11.11
These are from Don Carlson's 'Magic Formula'!
I searched the board for the context of the conversation around these, but didn't find it. Maybe it was on the old board.
These 2 above effect a 10% Price Move either side.
Divide each by 2 for Split Safe/Minimum approaches.
I dug out my old spreadsheet for the actual formulas.
I think reciprocals are involved.
(The PM% defines Price Movement)
Buy Side
=(1/(1-PM%))-1
Sell Side
=1-(1/(1+PM%))
Hi Steve, Re: This program has 0 Safe and Sell/Buy settings of 9.09 & 11.11 respectively.
Interesting settings.
OAG Tom
Hi gang.
GIEW had its first Sell Friday on the new LD-AIM program for DRLL.
Nice 10% gain on shares purchased exactly 1 month ago.
This program has 0 Safe and Sell/Buy settings of 9.09 & 11.11 respectively.
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 28th
_________________________
Short Term (18 Months)
Individual Stocks: 18% (Up 5 from previous week)
Diversified Mutual Funds
or Portfolio: 12% (Up 4 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 39% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 26% (Unchanged from previous week)
Oscillator: -3.46 (Up .28 from previous week)
*See posts #44585 and #44588 for Tom's explanation
"Grampbo - The Movie"
Grampbo is loaded for BEAR
"No honey for YOU!!!"
LOL!
This calls for a Haiku!
If shirt was off, would
you really look like Rambo?
Definitely NOT!
Thanks Jon, Re: v-Wave history...................
While still not bullish, the 3-5 year v-Wave remains below the Median value. This appears contrary to what we see on the Ticker each day, but would appear that the Indexes are currently underpriced compared to what they might be looking out a few years.
The 18 Month v-Wave is nicely into the Proactive range.
Best wishes,
OAG Tom
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 21st
_________________________
Short Term (18 Months)
Individual Stocks: 13% (Down 5 from previous week)
Diversified Mutual Funds
or Portfolio: 8% (Down 4 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 39% (Unchanged from previous week)
Diversified Mutual Funds
or Portfolio: 26% (Unchanged from previous week)
Oscillator: -3.74 (Up .30 from previous week)
*See posts #44585 and #44588 for Tom's explanation
Hi Steve, Re: AMZN..................LD-AIM
It appears you're off to a good start. It's a nice price these days compared to the 53 Week High.
Have a great weekend,
OAG Tom
HI Tom.
It's nice to receive a raise once in a while.
It must be my good behavior!
Right! Take the credit when you can.
BTW:
I just executed my first AIM Trx on my new LD-AIM program with AMZN.
It was a Buy. Added 28% to my Actual shares, (11% to the Total w/ Virtual incl).
Got them at a 10% discount to my initial buy.
Thanks Steve,
It's nice to receive a raise once in a while.
It must be my good behavior!
OAG
FYI. Just announced:
Amid record high inflation, Social Security beneficiaries will get an 8.7% increase to their benefits in 2023, the highest increase in 40 years.
Karw
I agree.
Good rules to follow.
Toofuzzy
My AIM rulebook :
Rule 1 : Stay as close as possible to Lichello's Original AIM.
Rule 2 : Normally don't Buy/Sell above Buy/Sell Advice
Stay Happy, K
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 14th
_________________________
Short Term (18 Months)
Individual Stocks: 18% (Up 15 from previous week)
Diversified Mutual Funds
or Portfolio: 12% (Up 10 from previous week)
__________________________
Long Term (3-5 Years)
Individual Stocks: 39% (Up 1 from previous week)
Diversified Mutual Funds
or Portfolio: 26% (Up 1 from previous week)
Oscillator: -4.04 (Up 1.72 from previous week)
*See posts #44585 and #44588 for Tom's explanation
Hi Toof, Re: demographics of the AIM Users......................
Over the years we've had several followers here that never post (both genders) who will private message me or others. Also, I have received lots of emails from both genders referencing our work here.
Currently there are 295 "Followers" of our board and just shy of 600 individuals have posted to this thread over the years. It's interesting to me that the 600 number is quite close to the number of Newport Programs that were sold by Bob Norman.
The most recent contact I had from a gal who occasionally posted here was K.Seekatz. She'd been an AIM user for quite a while but had drifted away. When her husband died she contacted me to reinstate her Newport program and get back up and running. That's been since 2018. She was a lurker here and followed the v-Wave development and JDerb's weekly posts. She and her new husband had just retired and were going to do some sightseeing around North America (she lived in Alaska at the time).
Best wishes,
OAG Tom
I wonder who the youngest person on this board is ?
Also seems to be all guys.
Toofuzzy
Thanks Ken. It's good to be back.
I retired at age 56, congrats on your retirement! I'm 65 now
OOF!
At 56, I had just started my last gig (2007).
Was there for the next 11+ years.
Big commute. 33 miles each way.
Retired a few months before my 68th birthday.
71 now.
Hi Jon.
Did not attend the dinner, just the presentation
That explains it!
Of course now we need to ID that 4th person from the right, standing!
The dinner was great (albeit somewhat on the spendy side).
But what the hell. You only live once.
Thanks
Hey Old John
You are more than welcome!
Hi Ken, Re: Don Carlson.................
No, I don't believe he's in this shot. He did attend one of the AIM meetings and I met him several times at "The Brat Stop" down near the IL border for lunch and discussions. Topics were always interesting and lively. We'd have our lunch (the only time we were quiet) and then we'd crack open our laptops and discuss things.
Nice man.
OAG
Steven!
Great to see you back! I'm a freebie so I can't answer your private messages. I retired at age 56, congrats on your retirement! I'm 65 now... Best regards, Ken
Hi Tom, Re: Don Carlson,
Is Don in this picture? Could you point him out. He and I never got together before his passing away. Don drove right past my exit on I-65 and we were goig to hook up on his next trip south to Florida. I believe he was from the Chicagoland area. Thanks Ken
Hi Steve..
No apology necessary! Did not attend the dinner, just the presentation. At the meeting I even suggested that someone might consider putting an AIM program on a Palm Pilot! Amazing what a little over 20 years has brought us. On occasion, I still wear my AIM baseball cap. ??
Take care.
Jon
Hi Steve, Re: JDerb in photo......
Not certain he's shown, but my guess is he's 4th from the Right Side, Standing....
OAG
Hi Jon.
I attended Steve. And it was informative, fun and some really interesting people.
Apologies Jon; my forgetful side must showing. Which person are you in the pic Tom posted last year?
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=161002103
Post 44997
Greetings Steve,
Thanks for taking the time to explain your use of GTC orders.
I have checked with my broker and they permit a standing order for 90 calendar days.
Using them for sell orders will work perfectly in my current situation.
Thanks also for LD-AIM worksheet that you created and released.
Wonderful contribution to the AIM community. Very much appreciated.
Best wishes,
Old John
Thank you Toofuzzy.
I am definitely leaning towards using this LD_AIM model.
I think that it provides a good balance between being overly
aggressive and staying on the sidelines.
Best wishes,
Old John
We should probably avoid Omaha during the Berkshire Hathaway meeting ( grin)
Toofuzzy
"The Money Show" used to meet in Orlando. I'll check the schedule.
https://www.moneyshow.com/
OAG
Did three buys today.
Htgc, Hasi, and for WPM I bought deep in the money call leaps instead of the stock.
Toofuzzy
Hi Adam
Have you heard what happened to Florida this past week ?
Besides it's boring.
Toofuzzy
I attended Steve. And it was informative, fun and some really interesting people.
What about some place in Florida? New York State doesn't sound so inviting from here in S Cal. Las Vegas was not a bad choice.
I am 69 so not a good choice.
But I would like there to be a meeting before we are all gone.
Well you're the Youngling so....
As for a gathering, the 2 we had in 2000 & 2001 were in Vegas because we gathered during the same days as The Money Show ran. So there were other sessions folks could also attend.
Our meet was at the hotel where many of us stayed, but did go most of the day.
It was also a great social gathering as was obvious in Tom's pic.
Hudson Valley sounds good, but we might consider somewhere more centrally located (Like Dallas!) .
Regardless, it could be a lot of fun, and it would be great to meet all y'all.
I think Tom and I are the only attendees still active in this specific group.
Hi Toofuzzy,
Zero cash in the machine, the cash is in a central cash reserve. If you have a buy, import the cash into the machine and do the buy. The central cash reserve is shared by all machines. It makes the spreadsheet a bit easier for me and cash is not linked to a particular machine. I know when a machine has used a lot of cash, the buys get exponential in that case, time for a Bear Buy or a super Bear buy as Jeff Weber is doing. There are other ways to limit the use of cash.
Zero real shares, there are virtual shares ( you can also start with some real shares).
If you have a sale then sell the virtual shares or exercise a Vealie. I would like to have zero real shares with a machine that is going down or starting to go down.
When I am not sure about a stock I like to start with zero (or not too many) real shares
Best,K
Hi Toof, Re: SAFE and Order Size plus SAFE Buy Increases........
Good plan!
OAG
AIMing through tough times...............................
Here's a look at my various portfolios through the end of September:
U.S. Sector ETFs
Cash reserves have been drawn down while AIM issued buy orders for essentially all business sectors of the S&P 500. In this portfolio I'm using Invesco's "Equal Weight" Sector ETFs as individual AIM engines. The histogram represents the sum of those individual sectors through time.
International Style ETFs
There's been no immunity to Putinitis in 2022. Again, reserves of cash have been drawn down while averaging down in each sleeve of this portfolio. There are 9 ETFs in total here from various suppliers in three categories of capitalization, growth and value and includes exUS REITs and Emerging Markets for a pretty complete international exposure.
Tom's Simple Contributory IRA
The "growth fund" (Vanguard's VUG has suffered through 2022 as much of other growth funds have. Monthly contributions are divided up using Mr. Lichello's "Twinvest" method which is Dollar Cost Averaging with a Brain. Each month some goes to the Growth side and the residual to the Cash side. The ratio varies by the share price change in the Growth side. During market swoons, it increases its purchase size of the Growth side using monthly residual cash plus stored cash from the Reserve side.
Tom's 10 Company Stock "Sandbox" Portfolio
In this portfolio each company stock is its own AIM engine. Again, what you see in the graph is the summary of those ten positions. Because the Sandbox contains individual company stocks and not mutual funds, I let the cash reserve level run higher in general than for the ETF portfolios. Individual Company Risk is the reason. This portfolio has actually held up better than the others so far in 2022. Currently it's 74% invested/26% cash. It's down about 13% for the YTD which isn't bad compared to the major indexes.
Best wishes,
OAG Tom
PS: Cash Reserves here include interest and dividends in each cash.
Old John
In your reply to KARL yo wrote
" 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. "
V wave was set up to give a starting point for cash based on market conditions when you first set up an AIM account.
Once you set up an AIM account you let the AIM signals tell you how much cash to hold. I was as high as 80% cash in 2000 but had zero cash in 2002.
With LD AIM I reduce the actual shares when starting but keep the cash the same. So I might start with $3,000 to $5,000 in actual stock ( virtual is still $10,000 ) and $10,000 in cash.
I also use 5% safe but increase BUY SAFE by 5% with each consecutive BUY and reset back to 5% if I have a SELL.
I set minimum order size to 10%
I do the above to allow for reasonable fund management.
Instead of using LD AIM you can also use call leap options on low or no dividends securities. I just pretend I own the shares.
Toofuzzy
Karw
" 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)."
If you have zero cash how do you buy anything ? If you start with zero shares how do you handle sales ?
Toofuzzy
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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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