Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Thanks for the help, Tom.
I believe that is what I was looking for.
AIM Excel Spreadsheet
I have not been following the AIM method for several years. However I've decided to try it again on a particular ticker with lots of ups and downs. I once had a XL spreadsheet that I'm certain was sourced through here. Can someone provide a link or info on where I might find it again?
Good to read that many of the same people are still active. AIM must be working fine for you guys.
Thank you Tom for the link. I'm not sure why I could not find that again. I'll need to thrash around with that and some other ideas I've had on the AIM type strategy.
Grabber,
I once had a version of the LDAim spreadsheet but can no longer locate it. I thought I saw a link to it on the website here but cannot again find that either.
Would you please be kind enough to again post a message with a link.
Regards
A bit more on the Taleb business of the Black Swan
http://thecriticalthinker.wordpress.com/2009/01/14/mandelbrot-and-taleb/
NY Times article on Black Swans and Taleb.
Risk Management
http://www.nytimes.com/2009/01/04/magazine/04risk-t.html?pagewanted=1
That is about the way I see it too.
Problems have simply compounded to be too large to ignore and put off for another year. GM will have to take the cure of bankruptcy. There is no way to renegotiate all of their relationships in 90 days.
The disaster that is not getting much attention at all are the US public pension funds. Almost all are in terrible shape. New Jersey and Illinois are about the worst ones. So we have a decline in asset values, increasing benefit payments and promises, that they will try to fund with higher taxes, on people who are not employed. How it works out will be a dry run for Social Security workover. All of the calls for safe muni bond investments could look pretty silly in just 12 or 24 months. If the defaults start there will be no Safe munis.
We currently have a pretty strong rally going on. Watch the $VIX. It is currently declining from darned high levels. As long as it is declining it is making options cheaper and is also reflecting less fear as the market is going up. When that 10 da avg turns up again, buy some 10% OTM leap puts with about 5% of your port. If problems are solved you should not suffer too big a loss when you sell them. If things GTH, you will maybe make 5 X your money and recover some of your losses.
Just my recommendation for a way to avoid one Black Swan.
Change does not have to be deadly. But it is the deadly change that you want to most avoid.
IBM once made great typewriters.
NCR once produced Cash Registers in Dayton, Ohio.
Douglas Aircraft made those great DC-3s.
Citi bank once was considered a very strong financial institution. The Fed just had to buy $300+ Billion in assets from them to stave off a run on the bank. In addition to the $25 Billion capital injections of the preferred stock.
Today's report on the US manufacturing downturn was pretty bad. Worldwide economies are showing the same symptom. There is no internatinal trade credit if there was a desire to trade. What bank would you accept a multi-million letter of credit from? Or, what company would you issue it for? Dow Chemical?
The challenge is to come up with something for an investment which gives a reliable positive return and without correlation to the stock market or US economy. Then find several of those which are not correlated with each other.
I would not really think that Taleb would call a stockmarket decline as a Black Swan. The cause of it, imploding major banks, might qqualify.
Further, I don't believe a buy on the decline method will not offer much protection from the Taleb style Black Swan. His recommendation is to buy very cheap mispriced insurance against the Black Swan events in order to directly profit from them. That will be generally unprofitable on a daily basis and probably for many years running.
Consider how you would have responded to a suggestion, made two years ago, that economic conditions would change so that GE would not be able to roll over its debt without a govt. guarantee. Or look at how AIM would have done with GE as the security being used as it declined from $40 plus to $15. I'm not trying to pick on GE, BTW. But, not being wiped out yet does not mean that it won't be in another year. There are any number of possible country defaults that are now possible, on the order of investments in Iceland.
When you have finished the book I expect that your thoughts on possible Black Swans will be changed.
There are a large number of closed end funds now selling at a deep discount. Use caution to only choose those that invest in listed securities so that the NAVs are computed from real markets, not model markets. In some investment situations the CEFs are percieved to have an addvantage in being able to invest in more offbeat investments. With today's environment the less liquid investments are getting hammered and the valuations may not be accurate. No one really knows what they should be as they are so thinly traded.
Generally the CEF universe will sell at a discount as they will usually have higher management fees. The large ETFs such as SPY and QQQQ have miniscule fees. Some of CEFs can be over 1.5% for the management fee. Personally, I would rather buy the liquid vehicle with the lower management fee.
Clive,
The compressed time scale on the chart does not really show how painful the decline was. The intermediate rallies were the ones that caught so many and wiped them out even worse.
That up move from 200 to 300 at the end of '29 gave investors hope enough to leverage up and put more into the market to "make it all back" and get even. Following decline wiped them out even worse.
There were several 50% or greater rallies on the way to final bottom of about 35, IIRC. Even after that note that the first big rally up to about 75 or so was a 100% rally. That one then had another 30% decline to 50. It was that one that did the absolute final wipeout damage. Those who had missed the earlier wipeouts on the rallies were whacked the worst in the '32 - '33 decline.
IIRC, the unemployment rate was still obut 15% in 1939 after all of the FDR programs had been effect for about 8 years. The chart really does not show the pain (from the dashed hopes in rallies) that was associated with generating those bars on the chart. The other consideration is that this is showing averages of companies that continued to exist.
Interesting WSJ article on Bill Miller. His recent disasters havae wiped out a great 15 year record. Primary cause has been doubleing down. Then doing it again.
Be careful what you choose for the AIM vehicle. FNM and AIG did not work so well for Miller.
http://online.wsj.com/article/SB122886123425292617.html
<<<<<<<<<
have given up on our dream. After years of intense study,<br>there is no systematic investment program that protects one in case of drawdowns. ;-(
The only things that can mitigate such are time and diversification. What is new becomes old then becomes new again. In the meantime keep the faith and you'll benefit for it in the long run.<br><br>
<<<<<<<<<<<,
There is ONE Program that will not have a Drawdown. Put the money into an insured savings account.
Problem is that the returns will not be very exciting. However, there is that guarantee of the increase (however small) every month, if that is what you find necessary to make your investing worthwhile.
Another real possiblility would be to use the insured deposit for 95% of your money - guaranteed monthly increase and no drawdown - combined with IWM for the other 5%. The suggestion is really off topic for this board, however it does provide a method of guaranteeing that you will almost never have a drawdown lasting for more than a month or two.
I very much like the Bullish Percent calculations that StockCharts makes available. I would like to suggest that you add that calculation for the Russell 2000. That index has become a much more active trade in the last year or so. The Bullish Percent calculation works pretty well as a general trend indicator for the Compq and SPX. But the Russell does not track with them as well. Depending upon the horsepower required to generate the information, it could be a great addition to the information StockCharts makes available.
Yep, Sure Taxmantoo,
Your Bill of Rights has been destroyed.
Probably have Homeland Security out trying to find you right now.
Saddam appreciates your support while he is up there with the Virgins.
Of course Saddam was immoral.
That is why there has been a war to remove him.
Are you one of those who would have him back?
Should have spoken sooner, I suppose.
Yeah, crushaugiebooshead, you are so right.
Too bad you were not able to go over to Baghdad and be one of those "human shields for Saddam", so that he could have been protected until you got your revenge on the traders in the City. That would have been real justice for all, wouldn't it. Protect Saddam until you were able to work out a swap for London Traders. Good person you are.
Mainehiker,
You hiking around in a fog? Maybe created by what you are smoking? Or are you a prayer rug speculator with big inventories to move?
Anyway, take the politics to the New Years Eve party. Just not here.
I found the articles on wealth lab. still interesting.
I liked it when I read it. But did not follow up on it as I was not ready to learn all about Wealth Lab. Anyway, if you go to the Knowledgebase and enter "Direction of the Market" into the search, you will get the four articles by dtsokakis. It took me a while to find them again.
http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/kb
Direction of the Market - Part One
http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/kbase?id=31
Direction of the Market - Part Two
http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/kbase?id=32
Direction of the Market - Part Three
http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/kbase?id=33
Direction of the Market - Part Four
http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/kbase?id=34
If you do look it over, please let me know what your opinion is. I thought it was very interesting. But I have not updated his work. As I recall, he seemed to go to a different software program shortly after posting these. I read several of his discussion posts on Wealth Lab and the other systems message board. He was certainly competent and serious about his work. I cannot say whether this method was proved successful though.
If you are able to run these, I'd sure be interested in your findings.
This is a link to one of the charts I use on Stockcharts and following the $BPCOMPQ with the ONEQ (naz composite tracker etf) price in the bottom.
http://stockcharts.com/h-sc/ui?s=$BPCOMPQ&p=W&b=3&g=0&id=p34140981521
I also like the $BPSPX and $BPCOMPQ as indicators for market trend. I'm not too pleased that I don't know how these numbers are derived. Sure, it is based upon a bullish PNF chart. But exactly how is that interpreted, etc?
Someone posted a pretty good article - several of them actually - at the Wealth Labs website. They did much the same as the $BPCOMPQ except that they used the MACD indicator rather than PNF. Seemed to have darned good results and would be reproduceable and backtestable. And maybe could be fine tuned a bit through the adjustment of the MACD values. I'm not enough of a code writer/programmer to make it work. If you follow up and get it working, send me acoupon for a free milkshake at Dairy Queen, OK?
"I'm not sure where you heard about the gun laws in Australia being terrible but I don't think it was correct.
There are very few gun related deaths over here.
I have never even seen a real gun, not either any of my work collegues.
If someone does get shot over here it makes national headlines.
A story you may like to read is on the link below showing the reduction by 65% of gun related deaths since the ban.
http://www.theaustralian.news.com.au/common/story_page/0,5744,11202534%255E1702,00.html"
+++++++++++++++
So, the laws are not bad?
They simply BAN the possession of Firearms.
Sure the gun deaths are down.
No one can shoot the crooks now.
Look at the overall crime statistics.
Guess the Aussies can carry around one of those great big Dundee Corc Skinner knives. Until they ban those too.
and you use that vehicle for that business (and I'm sure most people could find something to do from home that would qualify as such),
No. Most people cannot find a way to deduct their vehicle as a busines expense. Otherwise, you would have them doing it.
Some legitimately can. And do take the deduction. As they should.
And based on some articles I read a couple of years back, the new tax laws that Bush passed made it much easier for anyone to qualify as working from home self employed and have that up to $100K deduction.
Some of the tax changes passed by Congress encouraged the formation of new businesses. Increasing the amount eligible for immediate expensing ws one of those. Why it does not apply to ALL busineses, for all equipment purchases, I don't know. There would be nothing incorrect with taking the write off when the money is spent on the equipment. Recognize the expense when the money is spent. Who knows when of if there will be a profitable future use for it - even though the investment was made with that hope?
Up to a $100,000 tax deduction of a 6000+ lbs SUV. It used to be $24,000 but Bush raised it in 2002 to $100,000 tax deduction. So I guess that means that if you are in the 35% tax bracket, it could mean that up to $35,000 of a $100,000 behemoth gas guzzler are subsidized by other tax payer dollars. An incentive to waste more oil and gas.
+++++
For there to be a tax deduction, the vehicle must be used for business purposes. Vehicles used for business purposes have ALWAYS been eligible for writeoff. Just the same as any other business use equipment.
The only advantage is that there is allowed a larger first year writeoff for the first $100,000 of business equipment spending - and the large SUV falls into that category. Essentially, it amounts to only an earlier writeoff of something that would be written off anyway. The only possible subsidy would be the interest on the deferred taxes. Not as much tax this year because of a (possibly) larger writeoff this year but more taxes next year since the depreciation is used up. If the business was buying more than $100,000 in equipment - the SUV does not generate anything in advantage as the immediate expensing of the $100,000 would have been used anyway.
Getting the Yukon this week.
MSRP Minus about $6,000 to get it down to "dealer invoice"
Then deduct:
$3,000 or take the Zero rate
$1,000 for something called Truck Fest
$2,000 for GM Card rebates
$1,000 Bonus rebate on GM card
final price about $13,000 below MSRP
If it is a Suburban - Take off another $1,000
They sure want to move trucks.
Gold sure should be due for a UP bounce.
The smaller miners just hove so much hype built into the prices. But I think I will do a little adding to BGO and WHT here.
Yes,
The new link worked to open a web page showing a directory of the files.
Thanks
Charley
This page is not available.
We're sorry, but this page is currently unavailable for viewing.
If this site belongs to you, please read this help page for more information and assistance.
For general questions see our main help area, or search for other member pages.
http://www.geocities.com/lostcowboy5/Spreadsheets/Synchrovestnew.xls
Toofuzzy,
One thing that AIM does is to allow for significant movement before there is a buy or sell initaited.
With that thinking in mind, consider your rebalancing method. I do not have a spreadsheet for support or to test with. however, in thinking about the rebalancing, I "believe" that it is necessary to allow for a reasonable divergance from the desired holding before taking action.
I'm not sure how to apply this to a dozen holdings. But the simplified version of two funds is a good starting point for trying to think about it. The charting feature at MSN will allow you to compare two investments, with dividends included. Choose a couple of those that you are using and create a fairly long term chart including both - and with dividends included. I "believe" that this will give you some ideas on how far the divergence should go before rebalancing.
Something on the order of 20% looked good for several funds I was trying to compare. The problem with the annual method is that thee is no reason to expect that the divergences will be at a favorable relationship at that date - whenevver that is.
Regards
Charley
Firebird wrote:
If I trade 1000 shares per dollar and own 50,000 shares at $1 and 25k shares at $25,, and hold only 1000 shares at $50, the game spins off tons of cash,, it is nearly impossible to beat this type of system. Firebird
++++++++
Firebird,
Holding all shares bought at $1 until the price reaches $50 will beat your result. Unless the price declines, of course.
Buying back on the decline will put you in the original position eventually - if I understand your post and method.
Charley
Get used to smaller lattes, coming soon to a Starbucks near you.
-wg
++++++++
Oh.
A Starbucks Man.
Lattes in jeopardy.
That IS most upsetting.
Everybody thinks when things get cheaper that you can buy more.
The answer is that you will buy less, you will have less, and what you do have you'll worry about losing.
-wg
+++++++
It won't take you long to confirm that, yes, more barrels of oil were used when the price was cheaper.
What the heck, do you only shop at Tiffany. Good for you.
And do you have a driver for the Mercedes? To help the unemployed? What nonsense.
WalMart is the Standard Oil of our generation. It just hasn't fully played out yet.
++++++++
Standard Oil reduced the cost of fuel oil by 2/3's. At the time, there were no automobiles - the fuel was used for lighting and lubrication.
If Walmart can reduce the costs of goods by 2/3's - I'm all for it.
Try these links for Small Times
http://www.smalltimes.com/subscription
And for the daily briefing - you can get it by email:
http://www.smalltimes.com/document_brief.cfm
There is a Nano Industry trade mag called Small Times.
It is available on the web.
I signed up and they send it to me for free. Must be one of those Advertiser supported deals. Anyway, it does have some fairly decent coverage of what is going on. A whole lot of Gee Whiz stuff in the pipeline. No one making any money yet. Everyone scrambleing for grants and such.
Darned neat stuff comming.
Lets see what happens if you start at $20, and the stock gets up to $45, and then drops to $30. At $45 the chart shows you have 105 shares, total invested is $2,980, $1,500 is you own money,$1,480 borrowed. The price drops to $30, and you sell all the stock for $3150. After paying back the margin, you have $1670. Your return on the $1500 is 11%.
The only Attack I was doing is that Glett was not showing the negatives, of his system. We also did not account for interest on the shares borrowed. I think most of the time the broker house will make more money than you will, which is how they stay in business.
Then posted was this:
Hi LC, it is always good to check for the worst case scenario. And of course not all stocks in a basket would suffer from a worst case scenario.
The problem is that this is not the Worst Case Scenario. The example demonstrated a gross profit (not cagr) of only 11% after having the stock price increase by 125% while it was held and after selling out at a price that was 50% greater than the initial entry. If selling stocks after a 50% gain is the Worst Case, pick my stocks to buy, Please.
Charley
RVS is intended for stocks that might become 10 baggers over the nex few years; much more speculative. A big basket of such stocks gives you a greater chance that one of your stocks might make it to that exalted status. In a basket of speculative stocks, one big winner will make the bulk of your profits.
Regards,
Qarel (as there is another Karel on this board)
++++++++++
How big does your basket have to be to insure that you have a stock that will be a 10 bagger? Have you had any?
In a basket of lottery tickets, one big winner will make all of your profits. How big does that basket have to be.
I'm reasonably convinced that AIM will be profitable. I'm not convinced that it will be optimally profitable or that it will necessarily beat the averages. I'm certain that, without exceptional luck in selecting individual stocks, this Reverse Scale business will not work.
But, heck, someone cashes some lottery tickets every day.
I don't buy them.
Good Returns
Charley Meng
If all get stopped out, yes they are losers, but what if the stocks are happily bouncing around between $20.01 and $44.99? The return could be anything between -17% and +88%. With a stock bouncing around between $13.34 and $29.99, the return could be anything between -33% and +50%.
Regards,
Karel
++++++++
Those that bounce around between 13.34 and 20.99 do not cause a trade. They may or may not equal out in profit or loss. They are the same as buy and hold.
Those that go to 30 and back to 20 cause a loss.
The purported large gains only come from the very large winners. They are unnlikely to be a very large percentage of the original selection of stocks. The only way a stock is removed from the original group selection is if it is sold - most probably at a loss or very small gain.
While I still am not convinced that Lichello's version of AIM is the ultimate answer for investing, I'm darned certain that this Reverse Scale proposal is not workable.
Good Returns
Charley Meng
Karel,
The numbers you presented are exactly correct.
If you select 10 stocks to use this strategy with, those that do not gain over 125% ($20 to $45) will be losers. Those that go down immediately will also be losers.
The numbers are correct, so far as they go. They do not incorporate a probability of selecting a particular stock that will do the 10 Bagger for you. If you can consistently select the 10 Baggers, then more power to you.
The general AIM idea is to consistently make money from the lucky doubles and triples that continue to bounce around while going up. Those stocks are not difficult to envision an individual selecting. Particularly when adding a fairly long time horizon to achieve the double or triple.
The Reverse Scale method just does not seem to be something that is achieveable in real life.
Charley
Gas prices rise on any excuse to gouge the consumer. Here in Georgia (the state with the lowest gas taxes) the price ran up to 1.75 a gallon and is all ready back to 1.36 a gallon.
Pete
+++++++++
Gee, those oil companies that have that absolute price control must sure be stupid to have let it come down. Funny how that works.
Charley