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PNTV Market Size for PNTV, Thanks to Digital and New Media Platforms is Expected to Increase Over 500%, Reaching $500 million by 2015:
FREE RESEARCH REPORT http://www.stocksummary101.com/pntv.html
While PNTV is making strong strides in regards to growing its market share in the broadcasting, digital and new media sectors, the industry itself has a bright future, as technology advances increase and Internet saturation continues to blossom. Price Waterhouse’s latest forecast for the industry states:
“Entertainment and media (E&M) businesses are continuing to raise their game in operational agility and customer insight, as constant digital innovation becomes the industry’s new license to operate. Across the world, consumers’ access to E&M content and experiences is being democratized globally by expanding access to the Internet and explosive growth in smart devices. And while traditional, non-digital media will continue to dominate overall E&M spending globally throughout the coming five years, the growth will be in digital.”
In this regard, PNTV is poised to expand market share and to generate increased revenue. By planning ahead to capitalize on both existing and new digital media market share, PNTV has positioned itself to gain an ample piece of an over $1 trillion dollar a year market sector.
FREE RESEARCH REPORT http://www.stocksummary101.com/pntv.html
"Stock Trading Riches" Was Recommended on Two Different Investing Forums
I copied them to my blog:
http://simple-trading-system.blogspot.com/2013/12/stock-trading-riches-was-recommended-on.html
These new smart phone apps, that allow people to connect directly with taxi drivers, instead of going through a dispatcher, might be helping the value of medallions in the short term.
But, longer term, they may open up taxi markets because drivers without medallions might also start using them.
Also, there are new start-ups that let anyone rent out their cars. What's to stop someone from "renting" their car to someone, but do the driving themselves? So they act as a taxi, but they bypass the medallion?
It's absurd that taxis should be a state sanctioned monopoly. Ultimately, these medallions won't be worth much. But since New York just elected DeBlasio as Mayor, they will probably be valuable for next few years.
If we allowed free markets to operate in our large cities, taxis would be much more affordable, as they are, in many smaller cities.
The Twitter (TWTR) IPO price was $26, but it opened at $45.10, traded as high as $50.09, and closed at $44.90.
If it drops into the $30's, or if it stays in the $40's range for a few days, I may buy some.
My book "Stock Trading Riches" has a section on my successful IPO technique - buying IPOs that have similar market share as a previous IPO.
For example, I bought the Visa IPO because the mastercard IPO was successful. I bought the Chicago Board of Trade IPO because the Chicago Mercantile Exchange IPO was successful, and I bought the Hyatt IPO because Hilton was a successful stock.
Now that the Facebook IPO was successful, I think Twitter will be good also.
Hi Bob,
I bought 49 shares of FB @ $40.19 on 5/18/12.
I rebalance all my positions in December, not on their actual anniversaries, so I then bought 25 shares of FB @ $26.67 on 12/21/12.
So I spent $2636.06 for 74 shares. That comes to $35.62 per share.
As of today, FB is trading at $52.56, so my 74 shares are worth $3889.44.
I will now rebalance the position again in December, where I will sell the position back down to $2000.
Praveen
Praveen,
I just wanted to follow up on the FaceBook position. You've had it for over a year now and, I assume, you rebalanced sometime in May '13. Since the price, at that time, was lower than when you originally purchased FB, you then added to your position? Now that the price has finally "skyrocketed", do you take some "off the table", or wait until next May to re-examine? Do you only look at each stock on its "anniversary"?
Thanks,
Bob
>>>>>I read an interesting article in the Chicago Tribune that one of the best investments over the last year is not from Wall Street - but the New York city streets.
The value of a NYC Taxi medallion increased 49% to $1.3 million. <<<<
TAXI is a Business Development Company that lends money for taxi medallions.
Toofuzzy
I read an interesting article in the Chicago Tribune that one of the best investments over the last year is not from Wall Street - but the New York city streets.
The value of a NYC Taxi medallion increased 49% to $1.3 million.
Interestingly, they say that one of the reasons is technology - specifically cabs accepting credit cards and from apps that allow people to call cabs directly from their phones.
Also, the number of medallions is capped at 13,336 - and it is illegal to drive a cab without one.
Hi Praveen
Hi Clive,
Thanks for correcting me. I just remember that lots of asset classes were down in 2008.
I looked it up and treasury bonds were up 29% and gold up 5.5%. Corporate bonds and many commodities like oil were down - that is why I probably remember many assets being down:
http://3.bp.blogspot.com/_6zFiwogUkPk/SV8f9Iit_BI/AAAAAAAABHY/ttVBtMW_0PU/s1600-h/2008+asset+returns-4.jpg
Your idea about investing 25% in each of the 4 asset classes and rebalancing back shows a lot of promise - it seems very effective and simple.
Praveen
Year LTILG LTG BRK Gold Best Rest
1987 6.90 15.70 -5.76 -2.14 15.70 -0.33
1988 13.70 9.30 51.45 -11.88 51.45 3.71
1989 14.50 6.30 93.11 9.46 93.11 10.09
1990 4.40 6.10 -30.92 -19.56 6.10 -15.36
1991 5.20 17.80 36.14 -5.53 36.14 5.82
1992 17.10 17.40 29.83 16.30 29.83 16.93
1993 21.10 25.70 56.94 20.36 56.94 22.39
1994 -7.90 -9.50 23.00 -7.46 23.00 -8.29
1995 12.00 17.90 54.19 1.88 54.19 10.59
1996 6.50 8.20 7.51 -12.84 8.20 0.39
1997 13.40 18.10 30.02 -19.62 30.02 3.96
1998 20.30 23.00 50.97 -0.74 50.97 14.19
1999 5.00 -3.10 -17.39 3.57 5.00 -5.64
2000 3.10 8.70 33.14 1.79 33.14 4.53
2001 -0.90 1.20 12.04 4.34 12.04 1.55
2002 8.20 9.20 -7.77 13.46 13.46 3.21
2003 6.80 1.50 7.27 8.19 8.19 5.19
2004 8.60 7.00 -6.05 -3.08 8.60 -0.71
2005 9.10 8.00 1.37 31.06 31.06 6.16
2006 2.30 0.10 23.02 8.95 23.02 3.78
2007 5.50 5.10 20.74 29.24 29.24 10.45
2008 -1.20 11.70 -23.67 42.35 42.35 -4.39
2009 5.60 -0.80 20.53 14.77 20.53 6.52
2010 10.30 9.40 22.71 32.82 32.82 14.14
2011 19.90 21.40 -7.85 12.28 21.40 8.11
>>> I think non-correlated assets will reduce volatility. Though, in 2008, everything dropped.<<<
The only thing that was not correlated to everything else in 2003 and 2008 was CASH and LONG BONDS ( TLT for instance )
With AIM I see 50% cash as a starting point and I am willing to hold more with the expectation that the next crash will use up most of my cash and take me down to 10% or 20%. I don't want to run out of cash again.
Toofuzzy
Hi Bill,
1. Yes, the 40% drawdown was because, at that time, I didn't have a lot of cash in the account to cushion it. For my account, I set the maximum amount of cash to be 30% (after that, I use the excess cash to buy more positions). I think I had 10% cash at that time.
Actually, the drop let me test the "doomsday scenario" - I had to add cash from other sources and I didn't have enough to rebalance all the positions, so I had to use the "triage" rule and sell some stocks at a loss to build cash to rebalance other positions.
It paid off with the +44% return the next year - though I made a mistake there. I was nervous with the gains and so I rebalanced in the middle of the year. If I had stuck to my system and rebalanced at the end of the year, I probably would have made more than 44%.
2. Now, I'm keeping more cash in the account to dampen the swings. I'm keeping the cash in a no-load short term bond called AALPX. I also added a couple of REIT stocks.
3. I think non-correlated assets will reduce volatility. Though, in 2008, everything dropped. As far as total returns, I'm not sure if you will still outperform the market, but you should at least match it with less drawdown.
Hi Clive
The amount of annalisis you do never ceases to amaze me.
Since the begining of the year my acount except for materials has done very well. Recently (last week) Gold, Silver, and Copper seem to have drawn a lot of interest. I don't know why, and it was totally unexpected by me. Having a diversified portfolio in whatever form is a good thing especially if the components move up and down at different times.
Toofuzzy
Tom runs his portfolio like an equity warehouse.
A different but somewhat similar approach might be to consider your investments as stacking the shelves of an isolated towns general store that you own. Ideally you want to have a range of goods to cover all eventualities. Umbrella's for rainy periods (or intense heat), sun cream and shorts, lip-salve and heavy coats ... etc.
10% gold will be called upon during times of extreme economic bad times. When 10% gold might double and double again and double yet again in value - maybe more.
10% long dated TIPS for periods of high inflation, low nominal yields.
10% long dated conventional treasury bonds.
10% cash (5 year treasury ladder perhaps, so some bonds maturing each and every year).
With that as the '40% bond' allocation, for 60% stocks you might opt for perhaps BRK, Small Cap Value and XOM/Energy providers/partners.
Since 1972 such a portfolio would have trashed the Coffee House (more general 60-40 stock/bond portfolio). Something like a 14% annualised compared to 10.4% for the Coffee-House portfolio.
Yearly real % gains (after inflation of (for 1972 to 2012 respectively)
9.46
-4.50
-19.47
13.67
37.24
8.71
4.66
28.86
12.96
-3.10
17.05
25.12
4.20
31.25
18.22
0.96
18.50
20.57
-10.85
19.69
11.05
16.48
1.38
25.62
7.18
17.60
13.92
-3.29
10.72
2.91
-1.09
15.78
9.70
3.09
16.32
10.61
-12.33
3.68
14.26
4.30
7.89
i.e. a reasonably productive/rewarding general store - that had goods on the shelves support both the greedy and the scared in the time of their need. Whilst there were the odd modestly bad year (or two), generally adjacent years either preceding or subsequent to those bad years compensated for those bad years.
Long dated TIPS might still be a viable buy even at current price levels.
Unlike conventional bonds whose price rise as yields decline, price declines as yields rise, with inflation bonds (TIPS) the price rises as REAL yields decline, price declines as REAL yields rise (where real yields = nominal yield minus inflation).
My guess is that low/negative real yields are likely to persist for a whilst yet, perhaps three years or more i.e. prices could remain relatively high for a while yet.
If real yields turn more positive again likely the economy will be doing relatively well, so whilst TIPS might lose, stocks might gain to counter-balance that and more.
If some nasty mess occurs and inflation spikes sharply whilst nominal yields are kept low, then real yields would move sharply negative and TIPS could soar in price. The Fed/Treasury would welcome such a sharp spike in inflation as that in effect erodes debt at the cost to savers/investors.
IIRC back in 1917, nominal yields were being kept down at sub 4% levels whilst inflation hit nearly 20% levels i.e. a -16% negative real yield. Under such conditions long dated TIPS might rise quite significantly.
The UK TIPS equivalent (index linked gilt) for 2055 currently has a modified duration (volatility) that is very high (35) which somewhat indicates that for every 1% change in real yields the TIPS price moves 35%. A modestly small holding of that, perhaps 10% to 20% could rise sufficiently to counter-balance the rest of the portfolio under such a high inflation, low yields environment. If in contrast high positive real yields occur and the 10% or 20% loses heavily, the 80% or 90% of other investments might be gaining sufficiently enough to counter those TIPS losses.
As a guide a 30 year TIPS bought when real yields for 30 years were +1% and when inflation was perhaps 2%, that then saw inflation spike to perhaps 10% might see the longer dated end yields decline to perhaps -5%. A 29 year TIPS priced to a -5% yield would generally have gained +400% compared to a year earlier (when it was a 30 year priced to a +1% real yield) i.e. $100 price rises to $500 price.
In the meantime, there's also sufficient volatility for the likes of AIM to potentially trade the (volatile) longer dated TIPS holding(s).
[FT250 = mid cap stock index, PHGP = gold, IL Treasury = Index Linked Gilt (TIPS)]
A benefit for US TIPS is that the repay at least par value, such that if during the lifetime there's overall deflation, then you get repaid par value - which is a real gain (purchase power has risen due to negative inflation over the period). If bought when priced to a positive real yield, then holding to maturity at least maintains purchase power. Or trading the holding potentially might lock in a real gain if during the holding period circumstances depict a sharply higher price. In the UK we don't have that repay at par option (if there's overall deflation the TIPS repay less than the par value, but that matches purchase power). Our benefit comes from taxation - as inflationary uplift element is non taxable, whilst in the US (depending upon which account they're held in) the inflationary uplift element is (I believe) taxable.
Clive.
Hi wje3
>>>>2. Do you think the drawdown could have been lessened if you had non correlated assets in your portfolio? <<<
In 2003 and 2008 the only thing that was non correlated with everything else was LONG TERM TREASUARY BONDS (think TLT etc)
I owned CHI thinking that would be bond like and it wasn't.
Rates are too low to buy TLT now but after rates go up and there is a first Fed rate cut or interest rates invert I would reccomend putting a % = to your age in to long bonds. You can then trade them, buying more if they go down and selling a little as they go up, just like the other securities you hold.
In the meantime the only other non correlated security you can trust to stay that way is CASH.
Toofuzzy
Hi Praveen:
Thank you for making your book available. I am very intrigued by the simplicity of the system, but have three questions regarding portfolio construction and drawdown.
1.Your account was down ~40% in 2008. Is it safe to assume that your portfolio consisted of essentially all equities?
2. Do you think the drawdown could have been lessened if you had non correlated assets in your portfolio?
3. Do you think that using your system with a portfolio of non correlated assets would lessen the overall performance?
Thank you again for your book.
Bill
Hi Praveen
Hi P²,
Thanks for the report and comments on precious metals. Keep up the great work.
Best regards,
On Wednesday, the Chicago Tribune had an article about how gold and silver prices have declined this year.
The article included a graph showing that, despite the recent declines, the SPDR Gold Trust ETF has returned +94.73% from Jan 1, 2007 through this past Tuesday. During this same period, the iShares Silver Trust ETF returned +48.47%, and the S&P 500 index +13.80%.
My account, which does not have any precious metals ETFs (only stocks, REITS, a short term bond fund, and cash) and has been managed with my STR system, has returned +49.09% during this time period - so I have done well compared to the S&P 500.
This shows the value of good stock picking and rebalancing (buying low, selling high).
The Kindle version of "Stock Trading Riches" is free on Amazon all this week (Monday 5/20 - Friday 5/24)
Here is the link:
http://www.amazon.com/Stock-Trading-Riches-Transforms-ebook/dp/B0065CE3VO
Remember that, to enjoy Kindle books, you don't need to own a kindle. Amazon has free kindle readers for macs, PCs, iPads, etc.
I changed the intro to link to "A Zen Trading System" instead of the old book "Stock Market Riches". The material is the same, but people seem to prefer the new title, and it did go to #1 on the kindle best seller list for business and investing.
"A Zen Trading System" Reaches Number 3 on Amazon's Kindle Best Seller List For Business and Investing.
For the next 3 days (today through Monday), the Kindle version of my book "A Zen Trading System" is free through Amazon's KDP Select Promotion.
Already (as of Saturday afternoon), it reached #3 on Amazon's Kindle Best Seller List For Business and Investing.
This book is a re-issue of "Stock Trading Riches", with a new title and cover.
If you were ever interested in reading about my "Stock Trading Riches" trading system, now is a chance for you to pick up the book for free.
If you do grab a free copy, I'd appreciate it if you could write an honest review on Amazon, or at least let others know of the promotion so that they could download the book.
Thanks!
I recently received 2 new email testimonials from readers of my book "Stock Trading Riches":
"A Wonderful Book... I probably would choose your system as it is simple, easy to use, and not bad performance based on my random testing at present."
Kevin W.
"I read your book in about 2 hours. I like it a lot. I like books that are written in simplistic ways and yours did that. More importantly, it was clear that you had a lot of insights to present to your readers and for which I learned a bit. "
Narin A.
2012 Return On My Portfolio
For the past 8 years (2005-2012), I have been using my Stock Trading Riches system to manage my portfolio.
While I tied the market in 2012, I have beaten the S&P 500 over those 8 years:
Year, Me, S&P 500
2005, +13%, +4.91%
2006, +14%, +15.79%
2007, +22%, +5.49%
2008, -40%, -38.49%
2009, +44%, +23.5%
2010, +22%, +13%
2011, -5%, 2.11%
2012, +13.3%, 13.4%
My portfolio has had a cumulative eight-year return of +78.31% vs. +27.37% for the S&P500.
Hi 1step,
Thanks, I'm glad you're a big fan.
You don't have to buy the new books - they are just abridged versions of "Stock Trading Riches". I was experimenting with different titles and lower price points to attract new readers. I'm not advertising them - they are aimed for people browsing Amazon for lower priced titles.
I'll have to be more careful so people who bought "Stock Trading Riches" don't buy what is essentially a subset of the material. I'm going to add a note to the descriptions that they are abridged versions.
Praveen
Hi Praveen
I'm a big fan. Can you explain about your new books . How do they differ from your original work.
This way ill know which ones to purchase.
1step
Hi P², Re: Amazon review......
Nice review.
TV
Today, a reader posted a nice, detailed 5-star review of "Stock Trading Riches" on Amazon.com:
http://www.amazon.com/Stock-Trading-Riches-Powerful-Transforms/dp/1434809870
"I am a short term trader by heart but needed a system to manage my retirement accounts and this one certainly works very well.
I used the excel sheet provided in the book to test dozens of random stocks over the past 6 years and about 80% beat Buy and Hold over the same time period.
The results were good but I needed more proof since the market conditions of the last 6 years did not capture every possible market scenerio.
With the excel sheet , I simply created every possible market movement I could think of and still my results were very good.
This is the kind of system someone with very little investment or trading experience can pick-up and implement right away,that's how simple it is. I found that it will work for retirement accounts and trading accounts.
Many times ,especially those of us who are traders, dismiss the simple for being ineffective but the truth is the more complex the trading system the more likely it is to fail over time.
And oh yeah-what I love most about this book-he gets right to the point and shows you how the system works. No beating around the bush for a 100 pages."
Hi Praveen,
Thanks. Yes I understand. My situation is a bit different. I am not adding to the total on an ongoing basis, but managing a lump sum. I suppose you might say well, when the cash pot exceeds 30% sufficiently, you can buy into another stock or fund. The added complication is that my funds are distributed between numerous relatively small, annual, tax-free accounts (I'm UK-based). I can take money out of them, but not put any back in, so I have to operate them independently and separately. Hence my thought about increasing the constant value figure for each in line with general inflation. (I also look at various constant and variable ratio approaches for them and in fact I'm operating some of them as AIM accounts.)
Daisy.
Hi Praveen,
Thanks. Yes, I understand that, I just thought even with stocks perhaps it is simpler to think in $ terms and only convert that into number of shares (rounding up or down) when you come to implement the actual trade.
It's not a major point!
Daisy.
Hi Daisy,
Under the basic Stock Trading Riches system, we are rebalancing each individual stock or fund back to a constant value (i.e. $2,000). We don't increase this constant value because we handle growth at the portfolio level.
At the portfolio level, we cap cash at a maximum percentage (i.e. 30%), and then add a new stock or fund with the excess.
So, the idea is that we account for inflation and growth by adding new positions over time.
That being said, increasing the constant value by a percentage each year is an option that could be tested.
Hi Daisy42,
We are rebalancing each stock or fund back to $2,000.
If it is a regular mutual fund, you can buy and sell in dollar amounts. For ETFs or individual stocks, we have to buy or sell by the number of shares (unless using a service like Sharebuilder).
Would the Stock Trading Riches system be improved by using Constant REAL Value rather than Constant (Nominal) Value? It would seem appropriate to increase the target value in line with inflation and rebalance to that.
Daisy
Hi Daisy
You can also just decide on your asset allocation and rebalance back to that once / year. Backtesting any one method against the other becomes data mining.
Toofuzzy
Is it necessary to consider stock prices at all? Can't you just use the value of current value of the stock account and its deviation from the starting value, of say $2,000? I.e. if at the end of year 1 the value of the account has dropped to $1,800, i.e. by 10% you buy (approximately) $200 worth more shares, and if at the end of the following year the value has risen to $2,200 you sell $200 worth of shares.
Daisy.
Because of my book, some popular bloggers asked me to join an interview/panel discussion on money and finance. (I came on a few minutes late).
Here is the interview on you tube:
Hi Bob,
I considered buying Facebook at the IPO a contrarian move because the stock behaved differently than the conventional wisdom at the time. From what I had read and from talking to other people in high technology, everyone expected Facebook to soar at the opening.
I know someone, a senior executive at a high-tech company, who placed a limit order at the open to not buy over 55. So, I wasn't planning to buy Facebook at the IPO, but when I saw that it didn't soar like everyone predicted, I decided to buy it.
Because my system diversifies, and each individual position is re-balanced, I feel safe sometimes taking a risk on a stock. I will rebalance my Facebook position at the end of the year. Even with Facebook's performance, I'm currently up 10% in my portfolio.
I don't use any stop losses with my system - other than replace a position if I feel that there is something fundamentally wrong with the company. In my book, I list an optional stop loss rule in the section about customizing my system. It calls for replacing a stock if it declines 50% (or X% - it can be customized) from the initial buy. I state in the section that I don't use this rule myself, and it would have prevented the performance in the AMZN stock example in my book.
Praveen
Praveen,
I was somewhat puzzled when you first posted this message and said that you were buying as a "contarian" move because of all the "gloomy" news stories. I was puzzled because I would have thought that the contrarian move would be to wait and buy FB after it had fallen and most traders didn't want anything to do with it.
If I remember your system correctly, you take a relatively small, but consistantly sized, position in many stocks (say $2,000 each and 30, 50 or 100 stocks over time) and hold for a year, then re-balance or get rid of a stock at that time. Do you use any other type of stop loss method? I think, if I were using your system, I would trust the method entirely and not use any Stop Loss. A total loss (unlikely) on one stock would not be a very large percentage of the portfolio. But I may very well want to not allow too large a loss on a stock like FB, which it seems you took on largely as a "gamble".
I do like the idea behind your system.
Bob
Thanks Praveen.
The link works. Just bought one.
Here is the new Paypal purchase link for the "Stock Trading Riches" ebook:
https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=B8P3WSC9J4S2L
Hi Bilmer,
I'm sorry about the link being down. I will fix it by tonight (Sunday night) and send out a reply when it is up.
Thanks,
Praveen
Hi Preveen,
The link for purchasing your ebook won't work.
It says:
"PayPal cannot process this transaction because of a problem with the seller's website. Please contact the seller directly to resolve this problem."
Could you fix it or give us alternative link.
regards
bilmer
I just bought Facebook (FB) to be contrarian because of the way the IPO "fizzled".
I first started to think about buying Facebook because, for the last several weeks, I saw lots of news stories warning against buying Facebook when it went public.
Everywhere I looked, reports and columnists warned how the stock is over-hyped, the insiders want to cash out, people are foaming at the mouth to buy it, etc. The stock would run away at the open and, if you were foolish enough to try and buy it during the first day, you would end up getting burned.
I've learned to be skeptical of all these financial stories.
Then, this afternoon, I saw that Facebook did go public this morning at $38. The stock only opened at $42 (so much for the "frenzied pop"), touched $45, and now is around $40.
Also, the last couple of weeks have been bad for stocks, and it looks like Facebook failed to rally the over all market.
At this point, I don't feel like Facebook is overpriced. I think that, over the next several months, it has a good chance to go up because, as the uncertainty with Greece works itself out, and the markets put it behind and start to recover, individual investors and funds will start to revisit Facebook.
On the other hand, I don't see a lot of room on the downside for Facebook. Google Plus doesn't appear likely to do to Facebook what Facebook did to My Space - at least not yet.
As always, I bought Facebook as a long term investment, and plan to manage the position and harvest it for cash by trading around a core position according to my Stock Trading Riches system.
I'm Praveen Puri, the author of "Stock Trading Riches". It describes my Stock Trading Riches (STR) trading system which, like Robert Lichello's AIM system, is based on constant value rebalancing. (My book is available in paperback and Kindle formats).
I have been involved with investing for over 30 years. I have been a full-time trader, financial software developer, consultant at the Chicago Board of Trade, and a vice-president at a major bank. I'm currently an independent business consultant who use Strategic Simplicity to help clients achieve faster change and innovation.
I'm passionate about simplicity, and so I always gravitated towards designing simple systems. I was originally a big advocate of trend-following, but years of experience and testing convinced me that counter-trend rebalancing systems (such as STR or AIM) are better for achieving a repeatable and dependable economic-based edge in the market.
I read Robert Lichello's book on the AIM system in the early 1990's, but I ended up developing my own system because I felt that AIM had several drawbacks:
1. Lichello originally intended for AIM to be applied at the portfolio level. Thus, there would be one portfolio control and one cash. The problem with this is that individual stock movements cancel each other out, thus dampening volatility.
2. While AIM can be applied individually to each stock, I felt, as an evangelist for simplicity and elegance, that this was a bit too clunky and complex - having to track separate controls, safes, cash, etc.
3. I also didn't agree (when trading individual positions) of portfolio control increasing during down cycles, and not increasing during prolonged bull moves.
Note that these views don't mean that I think AIM doesn't work. AIM and the STR systems are cousins and any re-balancing system is a good approach to the market.
The basic Stock Trading Riches system is to build a portfolio of many positions. Each individual position is assigned a constant value (which never changes) and is rebalanced once a year. Growth happens at the portfolio level. The portfolio consists of the individual positions and a cash balance. At this level, the system uses constant ratio balancing to have a maximum cap on the cash level. For example, the default value is 30% cash.
If cash builds up over 30%, then the cash is used to add new positions. Besides the basic system, my book also discusses optional rules, trading psychology, and (in the 2009 updated section) ideas for stock picking, IPOs, portfolio design, etc. Readers of my book also get a link to download an Excel spreadsheet of the basic rebalancing system.
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