Advanced Automatic Investor

[Firebird400]

Hi Mark,
My A. I. is not logging in... Internal Errors #713 and #380, Thanks , Ken

[WinAudit]

tks, will do.

[Toofuzzy]

Winaudit

Check out the other Aim board. That is where most of us hang out.

Reguarding trading costs.

Cost of stock is + commission

Sale of stock is - commission

Dont make it more complicated than it needs to be.

The only rick with Aim is an individual stock going to ZERO ...... Use ETFs instead. They are much safer with Aim

Not Always
Toofuzzy

[WinAudit]

Read Lichellos' 4th edition book years ago and never implemented it. "Too busy earning a living to take control of my investments" is the excuse I tell myself.

I need to do better than buy and hold. Like it or not, I'm a portfolio manager of 401k, IRA, Roth and MM holdings...

I was surprised to find this dedicated group of AIM users. I've dusted off my book and made my excell sheet. No need to create a C++ program for this model, it's so simple. I will be sifting these posts for your improvements to Lichellos' method.

Questions for you:

1). All of the AIM charts/sheets I've seen leave out the transaction costs of market orders. Why? Wouldn't you want to include these trading costs? Except for retirement accounts, there are transaction costs that are detrimental to earnings.

2). Lichello said his system was superior because during periods where stocks were lackluster, paying low dividends or topping out, the cash portion always earned 5-6% interest to supplement the portfolio earnings. Clearly this is no longer true. Anyone find a safe place to hold their cash that earns more than 1% these days?

3). In your opinion, which tweak to AIM provides the best results?

TKS, WinAudit

[Firebird400]

Mark,
My A.I. 3.0 Service pack 8 will not work... Says it's not registered... I emailed you at support @ A.I... Thanks, Ken

[OldAIMGuy]

Hi Ken,

I'll leave the answer to Stock Splits to someone else as I don't have a clue! If you find out how, post an instruction note here.

Best regards, Tom

[kb_ranch]

Thanks so much for your Reply OldAIMGuy.....Do you know how Automatic Investor Software handles, or deals with Stock Splits? The ETF that I'm using maybe getting to the point of doing a split something like a 3:1 split. Do I just do an e!Update and the software will configure the Buy and Sell points automatically at the new lower price range, or am I going to have to figure it out manually? I hope it can figure it out automatically, as this will be a first time my EFT has split since using the Automatic Investor Software.

Thanks for any Help you can give me.
Ken Bradley

[OldAIMGuy]

Hi Ken,
To reduce the Hold Zone size (distance in price between a buy and a sell) you'll need to reduce both the Buy and the Sell SAFE values. After that you can reduce the value of the minimum trade size and reduce the minimum # of shares per trade.

All of these will help narrow the gap between the Buy and Sell recommended prices.

Setting SAFE to zero and min shares and dollars to 1 each would give you the smallest range. Those would be impractical settings, but you can check it to understand the limit.

Reducing the size of the Hold Zone should increase the number of "round trips" trades you get on many stocks, but you need to remember that it also reduces the LIFO gain per round trip. The sweet spot occurs when you get the most round trips at the largest LIFO gain.

[kb_ranch]

Does Anyone Know Anything About Tweaking Automatic Investor? What I'm trying to do is close the gap between the Buy and Sell Points. All the Tweaking that I've tried just moves the to points in unison, i.e. they both move in the same direction. I want them to move opposite of each other. Is this possible?...it doesn't seem like it is. If someone knows a trick to do this please post, or better yet could you e-mail me @: [e-mail], thank you for your help.
Ken Bradley

[kmsb]

Thank you so much for the reply...
will look in to this as per your instruction and get back...

KMSB

[Toofuzzy]

Anything I suggest other than standard settings would be with 20 20 hindsight with the advantage of data mining.

So try 50% cash, 10% buy and sell safe, and 5% min buy, which are the standard settings.

There are other reasons for Aim other than absolute returns.

Would you be willing to sell or hold asit went up?

Would you be willing to buy more at the bottom and not have sold out?

Toofuzzy

[kmsb]

Can AIM beat this stocks B&H results?
if yes kindly share the AIM settings for the same!!

real stock prices

77.600
80.8
89.2
92.3
113.9
126.6
134.85
150.8
143.15
140.7
151.55
167.55
179.9
189.65
184.95
206.8
217.4
230.9
249.05
252.7
247.1
168.75
170.3
155.65
114.25
127.25
134.15
120.65
67.9
61.3
75.15
61.2
51.3
49.9
77.25
125.6
148.4
159.65
167.25
204.95
236.55
252.85
267.05
249.2
236.6
254.85
285.5
287.85
269.15
294.95
311.1
351.5
359.3
306.05
312.7
262.95
256.45
309.9
305.1
300.35
311.9
310.65
280
272.5
314.5
272.45
238.6
329.95
345.7
367.3
350.35
330.1
339.15
364.25
329.85
382.2
411.45
442.4
464.2
522.05
472.5
428.55
501.4
487.45
461
323.8
243.25
287.5
368.8
368.7
370.1
307.95
304.75
413.5
440.7
569.45
541.9
541.05
571.65
558.5
684.15
710.4
741.65


Thanks
KMSB

[kmsb]

Hi advanced AIM traders...

here is the real stock data for which can some help me to configure AIM settings to beat B&H method????

77.600
80.8
89.2
92.3
113.9
126.6
134.85
150.8
143.15
140.7
151.55
167.55
179.9
189.65
184.95
206.8
217.4
230.9
249.05
252.7
247.1
168.75
170.3
155.65
114.25
127.25
134.15
120.65
67.9
61.3
75.15
61.2
51.3
49.9
77.25
125.6
148.4
159.65
167.25
204.95
236.55
252.85
267.05
249.2
236.6
254.85
285.5
287.85
269.15
294.95
311.1
351.5
359.3
306.05
312.7
262.95
256.45
309.9
305.1
300.35
311.9
310.65
280
272.5
314.5
272.45
238.6
329.95
345.7
367.3
350.35
330.1
339.15
364.25
329.85
382.2
411.45
442.4
464.2
522.05
472.5
428.55
501.4
487.45
461
323.8
243.25
287.5
368.8
368.7
370.1
307.95
304.75
413.5
440.7
569.45
541.9
541.05
571.65
558.5
684.15
710.4
741.65


Thanks
KMSB

[SFSecurity]

RE: Opportunistic Rebalancing...

Hi Toofuzzy. I came across the following article about this and it seems to explain it quite well.

http://www.tdainstitutional.com/pdf/Opportunistic_Rebalancing_JFP2007_Daryanani.pdf

Warmest Regards,

Allen

[OldAIMGuy]

Hi Mark, Re: AIM web pages......................

I appreciate the extra effort you're putting into the resource. THanks. I look forward to seeing the results.

Best regards,

[aptus]

Hello Byculla,

No, backtesting will not be in the new version of Value Stock Selector. Unfortunately the amount of data required to backtest VSS makes it difficult to include this function and still maintain a low price (other analysis programs that include backtesting charge $2,000 to $5,000 per YEAR for this functionality).

However the new version allows you to save your previous analysis results and then scroll through them using the next/previous buttons.

It also allows you to filter on dividend yield (which was requested by users of version 4.0) and includes the company name and industry in the results (another request from v4.0 users).

I've also added a maximum filter to the rating, moat strength and estimated return (apparently some v4.0 users wanted to use VSS to only find bad stocks).

Finally, it includes a watch function that allows you to enter symbols along with minimum and maximum ratings and moat strengths and will alert you if that stock moves outside your selected ranges.

The interface has also been redesigned to use colours so it is easier to interpret results.

Regards,
Mark.

[aptus]

Hi Tom,

I successfully transferred the domain name many weeks ago and started the website refresh then (I thought I'd give it a more updated look although the information would be the same).

Unfortunately I got tied up doing a few other things. So I think it will be a few more weeks before I get the site is up with the new look.

Regards,
Mark.

[byculla]

Will back testing ability be included in the new improved version ?

[OldAIMGuy]

Pinging Mark Hing...................

Any word on when the AIM-Users.com domain and web site might be up and running again?

Thanks,

[aptus]

Value Stock Selector v5.0 needs Beta testers.

If you'd like to beta test the latest version of VSS, please send me an email.

I'm looking for 3 to 5 people who will put it through its paces and test it thoroughly. As usual, Beta testers will receive a free copy when it's released.

There are quite a few enhancements that make v5.0 more powerful than v4.0.

Here are a couple of screen shots.



The main Fundamentals Analysis screen.





The configuration screen.



Let me know if you're interested.

Thanks,
Mark.

[e-mail]

[aptus]

Hi Tom,

I hadn't actually thought of that.

Off the top of my head, I think if you held one stock (or a group of highly correlated stocks that you think of as one) and cash, then AIM and Opportunistic Rebalancing (OR) are somewhat related.

However AIM doesn't have a neat way to rebalance between multiple stocks (just between equity and cash).

On the flip side, the OR threshold and tolerance bands are static whereas AIM has a dynamic Portfolio Control. So AIM "rebalances" back to a moving policy benchmark while OR rebalances to a static policy benchmark (with some wiggle room).

I actually think they can complement each other nicely. AIM rebalances individual cash/stock portfolios (the micro level) and OR rebalances multiple AIM-managed portfolios (the macro level).

So AIM takes advantage of an individual stock's volatility and reduces risk at that level while OR takes advantage of uncorrelated AIM-managed portfolios (the holistic view).

And since individual AIM portfolios will usually hold cash, it can make rebalancing easier since it may not be necessary to actually sell individual stocks to rebalance at the Macro level.

On the other hand, Macro rebalancing will require us to interfere with AIM when OR tells us we should rebalance. I don't view this with too much concern because I personally don't have an issue with making non-AIM-directed sales/purchases and manually adjusting the Portfolio Control appropriately if there's a good reason to do so, however I'm sure some AIM purists would not like the idea.

Thanks for bringing this up. I think there could be a few different ways in which AIM and OR could interact. At the end of the day they both seek to control risk and buy low and sell high -- just at different levels.

Mark.

[OldAIMGuy]

Hi Mark,

While a bit more complicated, isn't AIM a form of Opportunistic Rebalancing?

Best regards, Tom

[Toofuzzy]

>>>>I didn't say anything about doubling returns. Perhaps you read the following sentence and thought it was referring to returns...

"The Daryanani study showed that an Opportunistic Rebalancing strategy more than doubled the calendar rebalancing benefits over a wide range of market conditions." <<<<

Yeah I guess that is what I saw. Like I said it doesn't seem to make much difference to me and by his reference calendar year rebalance doesn't help much either (if .25 is a doubling of improvement then calendar year rebalancing is .25 better than not rebalancing ?) I personally think the improvement of rebalancing is much greater than that compared to dollar cost averaging or buy and hold. My thoughts are just subjective though.

I think the important thing is to rebalance and mainly between stocks (funds) and fixed income either by using AIM, calendar rebalancing, or Opportunistic Rebalancing. I don't know how to make sense of his analysis though. What am I missing?

Toofuzzy

[aptus]

Hi Toof,

I didn't say anything about doubling returns. Perhaps you read the following sentence and thought it was referring to returns...

"The Daryanani study showed that an Opportunistic Rebalancing strategy more than doubled the calendar rebalancing benefits over a wide range of market conditions."

Daryanani stated this in the Executive Summary of his paper.

Regarding tax sheltered accounts, I agree these types of accounts would be best. However not all investors are U.S.-based and there are countries that don't have the long-term/short-term tax rates like the U.S. has.

In addition, Opportunistic Rebalancing can make sense even for U.S.-based investors using taxable accounts.

First, if you've been buying shares over time, some of these shares could have been purchased more than a year back. These are the ones you can sell when you rebalance.

Secondly, Daryanani talks about tax costs under the section, "Costs of Rebalancing" in his paper. So in some situations it makes complete sense to rebalance this way in a taxable account.

The main reason I like this method is because it's based on price rather than dates. And since price is really what creates a portfolio's imbalance, it's logical to use it as the prime determiner on when to trigger a rebalancing event.

Regards,
Mark.

[Toofuzzy]

Hi Mark

I read the original source article and he claims only a .25 to .3 basis point advantage. How do you go from that to doubling returns?

While in a tax sheltered account I can see it as another valid way to rebalance, I do NOT see it making sense in a taxable account where you would want to wait a year and a day to take the gains when you rebalance to make the gains long term.

Toofuzzy

[aptus]

In case you haven't visited the Value Stock Selector site recently (or don't know about it), I've posted an article that explains the Opportunistic Rebalancing strategy.

You can find it here --> http://valuestockselector.com/investment-articles/opportunistic-rebalancing-ultimate-rebalancing-strategy

I also maintain an investment blog at the site here --> http://valuestockselector.com/blog

Regards,
Mark.

[1step]

Hi Mark

thank you

1step

[aptus]

Hi Neko,

My apologies for the delayed reply. I haven't been on iHub for a few months now.

I'm still working on the new Pragmatic Investor 3.0 software (which is cloud-based software that runs in any browser and on any device with a modern browser -- such as smartphones and tablets).

However this is not yet available.

The previous version (2.0) is not for sale any longer.

I'll post here once PI 3.0 is released.

Regards,
Mark.

[aptus]

Hi 1step,

VSS will run on any intel-based Mac with an appropriate emulator (e.g. Parallels, VMWare or Oracle). You can also install Windows using Bootcamp and VSS will run.

However since VSS is purely Windows based, it won't run on OS X.

There is a scaled down version of the VSS single stock analyzer here --> http://valuestockselector.com/online/

Regards,
Mark.

[aptus]

Hi 1step,

I recommend waiting. It's not very often in this type of market that excellent stocks with strong moats (i.e. 5 or 6) appear at the price required for the default Margin of Safety.

One change in the latest Service Pack (SP3) of VSS I made was to add an extra filter. So if you are running SP3, you can change the Minimum Rating to 70 (however I recommend you leave the Minimum Moat Strength at 5, the Margin of Safety at 50% and the Worst Case Return at 12%).

I use the 70 minimum rating and I check the "Show when current price greater than Buy Price" box on the Configuration window. This lets me see if the current price is near the maximum buy price.

Regards,
Mark.

[Toofuzzy]

How does delaying AIM trades by using a 13 and 30 day moving average crossover compare?

If you just used a MA crossover to trade you would get wiped sawed but you can use the crossover to delay the AIM trades to the recoveries or the start of a pull back.

Toofuzzy

[ls7550]

Active investors cost themselves 1.2% by buying and selling at the wrong times. Financial advisor's tend to spend their time trying to convince investors not to follow their emotions - but to be more Spock like. AIM has a tendency to lead you towards being more Vulcan than human.

[ls7550]

Around four years ago I ran some extensive tests of AIM over a range of periods and assets and came to the conclusion that if you weighted to the same average stock/cash weightings as what AIM averaged over the investment period and periodically rebalanced (yearly or at bands such as +/- 40% i.e. start with 25% weight and rebalance back to 25% target weighting if the weighting declined to 15% or less or rose to 35% or more) then you came out with similar overall results. In that context AIM might lose out in practice as it tends to trade more often (higher trading costs). The plus side however is that AIM automatically navigated to reasonable weightings - whereas that average weighting couldn't have been known in advance for the fixed weighting approach.

If for instance it was more appropriate to initially weight to say 40% stocks/60% cash fixed weightings over the investment period than it was to weight to 50-50, then AIM would tend to have averaged closer to 40-60 weightings over the investment period.

MPT efficient frontier is a conceptual thing. The efficient frontier is dynamic and can't be predicted in advance, only measured with hindsight. AIM has the tendency to navigate close to the efficient frontier. Whilst (generally) there will be more (and less) rewarding alternatives, being close to the efficient frontier provides the better risk adjusted reward.

Clive.

[1step]

Hi Mark


advanced autopmatic investing also works on the mac. Mac users can now use your program.

1step

[1step]

Hi Mark

Though few stocks show up on the screen your program is very usefull.. It gives me entry prices.
etc. when i use the single stock option.

I read my past posts and din't mean to imply your program isnt productive. It is that everything is out of whack. IN other times the average yielsd of sp was 4 % not like now about 2%. To me it means everything is over bought. Your program is just reflecting and warning the buyer to be aware. I also like the asset allocation function.

I just wish times were more normal.




1step.

[1step]

vss on a mac

Hi Mark

I was able to run vss on a mac. I down loaded oracle's virtual box. Installed xp on it . down loaded vss and ran a scan .Even on a mac only two shares turned up suitable for your system. Any way people can run your program outside of a pc.

1step

[1step]

HI Mark

With VSS i still get 2 or 3 recommendations. Should I set different paramaters or just wait till there is more selection?. If different parameters then what values?

What do you do?

1step

[OldAIMGuy]

Hi B, Re: Besting the SPX......

My long term test of using AIM with SPY showed significant improvement over Buy/Hold in total return and especially on a risk adjusted basis. My test was for most of the first decade of the New Millennium. I don't have the numbers handy, but at the time I ended that test, SPY was down about 15% for Buy/Hold and AIM's management of SPY was showing a positive 15%. Don't remember any specifics but that was the general story.

Even with its lower volatility compared to business sector ETFs, SPY offered enough movement during 2000 through 2010 to have AIM improve total return.

So much depends upon the start and end date that much of the idea of besting an index with a "system" is negated. In general, if a stock or fund drops about 50% and recovers to full value, AIM will improve return on that investment about 25% to 30% over Buy/Hold. Each cycle adds to that improvement. In smaller cycles AIM will add less, obviously.

Volatility capture is just one aspect of investing. There are many ways to work on it with AIM being a very structured and consistent one.

Best regards,

[byculla]

So it would appear that AIM provides almost the same perfomance as B & H but at a lower risk. No 20% p.a. advantage.
Is there a management system that beats the S&P as that is the oft stated standard?