is retired now but still kicking like a horse!
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Holy Smokes Is7550,
All these figures make my brain grind to a halt. It looks like more math sits behind it than for sending a rocket to Mars
It blew me away!
Hi Fuzzy, I wasn't fishing for a real answer . In my mind's eye I saw taxes being received by people that did want it being returned to the IRS by you
Since I am not investing and only working now and then, I have plenty of time on my hands, so I just fool around and pull legs when I can.
Whow!
How much tax did you return?
Most people want to get tax back!
Maybe one of the mentioned factors above and a crystal ball would do it?
One of these will do it! An honest crystal ball that tells you the future will be enough, but watch out. . .some of these balls are devious and will tell lies. . .you have to pick the honest one!
OK Alton,
Now I understand in principle what you are doing. . .a filter based on some specif price information in the past, the 50 D MA and a price recovery. On this I have seen all sorts of other schemes but I am not bothering to remember them(I am not investing in any meaningful way so I won't take the time to analyze it for comparing it to other methods). Maybe others could comment on its merit.
For me any system for buy-delaying and watching for a recovery sign is good enough for jumping in, provided the stock is worth buying. As long as one is earning money he is doing it right!
Success.
Alton:
This method is to make the first and sequential purchases 1 tick above the high of the previous 3 weeks. This method is not always indicative of a bottom but does seem to have some relevancy in making purchases closer to the bottom as opposed to a sequential purchase process based on percentages.
I try to follow what you mean here but fail to do so. You need to be a lot more specific. Why not give a detailed example of what you would do. Enclose a chart of the process steps you are thinking of, that would help.
I tend to think that if I do not understand it most others might not either.
Hi Karw, re April gains:
It is almost May, so you can go safely away!
Alton hit the nail the nail on its head.
It appears you're using PC as an indicator to trade stocks on a shorter term rather than longer term holding of an equity. In this regard, PC doesn't seem to provide much more of an advantage than other indicators used for trading. This, I believe, is the debate Conrad is making!
I am actually saying more than that:
1) An AIM PC that stops rising does not provide any more information than the a stock price that stops falling;
2) A PC that stops rising does not give any direct information as to how far the price has approached zero. By looking at that price as a primary indicator you see much more, especially in regards to the fact that the if stock has become worthless the PC does not show that . .the value of the risen PC does not tell you that. . . .obviously when the price keeps dropping you see directly that the stock may not longer be worth buying at some point, but the rising PC does not tell you that either. . .so, in order to judge if you want to buy the stock or not you need to look at the price(among other things) even before you plug it into the AIM machine and then you already know "what time" it is. Besides that the price can be fed into various other "machines that will tell you all sorts of things that the PC does not.
It is like when you are roughing it in the forest. . .the fact that its gets dark will tel you that the day is ready to turn into evening. .you do not need to feed the observation that it is getting dark into a "machine" to tell you that the evening is upon you.
That's how I consider "looking" at the AIM PC provides no information other than that it is rising as the price drops or that remains constant when the price no longer drops. Then after as the price reverses the PC tells you nothing but the rising price tells you you that it has recovered and that the stock may well become worth buying.
In regards to the Vortex AIM PC, for dropping prices the PC rises. For rising prices the PC drops(generally), and for constant prices the PC remains constant. So, the Vortex PC is more responsive to price changes than the AIM PC. Still, I would look only at the stock price to decide if I should buy or not.. . .The PC will determine how much to buy automatically
In fact you might as well completely hide the PC value from view. . .AIM will still pump out an Buy or Sell advice automatically, without you having to look at the PC.
In regards to Ocroft's idea to use the AIM PC as tracking device there seems to be(beyond me) some considerable positive sentiment about it. Obviously as the price of the equity drops the AIM PC rises as the buys are executed. One might well than produce a graph of the PC-curve as a function of price:
PC2 = PC1 + 1/2*(PC1-(s+1)*V2 . . . . Value2 = PR2*N1
PC3 = PC2 + 1/2*(PC2-(s+1)*PR3*N2
PC4 =PC3 + 1/2*(PC3-(s+1)*PR4*N3. . . etc.
Obviously when the "buying" stops at price recovery the PC comes a constant.
If forgot how to place a chart on the forum.
Maybe some of you might find it interesting to show this curve on a PC-PR grid for a deep Diver that is experiencing a price reversal?
I attempted to UnFuzzy things
Th point was that when you KNOW the price has reversed you also KNOW explicitly that the PC has stopped rising before you plug in the stabilized price into AIM. In LC's example the price dipped to $4 and the it went back to $5(or even if had stayed at $ 4 for a while AIM would give the same PC value=constant because no buys were executed at $ 4 or at $5.
So, as the price stabilizes at $ 4 one already knows that the PC will be constant, so there is no need to "look" at it. On can decide on the basis of perhaps other market signals that executing the buy at $4 is quite save and preferable than waiting till the price goes to $5. If however one is not sure on which way the price is going one can wait longer at $4. . . and if it stays there long enough(waiting for the MA to give the signal would be OK too), or one simply wait til the price is $5. .as long as the price is stabilized the PC does not change. . . no need to "look" at the PC. . it has not changed!
If one decides to buy at some point at the stabilized price or a bit higher then how much one buys is completely irrelevant(in regards to my rematks), as long as one buys exactly the amount one wants to buy . . .dictated by any method one cares to use. After all, if one is satisfied that a dip had been reached one might well decide to spend all his cash, or 20% of it, or borrow money from a Dutch Uncle so one could buy more than one could on his own.
It no longer Fuzzy . . .it crystal clear!
Cio,
The Nit Picker
Howdie Cowby!
Your explanation is exactly as I understand it as to what Ocroft is doing. Thank you! So now I know I am not going senile yet!
Now the puzzling thing is this. When the price has bottomed out and reversed a bit even from 4 to 5 then the FIRST thing that is obvious is the FACT that this has happens. . .one knows this because one is looking at the prices and this fact is obvious BEFORE the price is fed into the AIM Machine and from that the investor can see plainly that a price reversal has taken place of 25% from $4 to $5. That signal is strong enough to decide to buy the amount of shares that has been calculated already for the price of $4. There is no need to look at the PC because at the price of $5 (25% rise) there is no Buy Signal. .and with a holding zone of 10% one would probably get a Sell signal as the AIM system has assumed that the Buy at $4 was executed.
The fact that Ocroft then jumps in at $5 is not relevant. He could as well decide to wait for the price to go to $ 6 to make sure the $5 price is not an incidental jitter, with the price dropping to $3 thereafter.
My point is that he does not have to look at what the PC will do at $5 on order to decide to start buying. The fact that the price is at $5 is the primary indicator and if the stock stays at 5 for a while then it is en even better indicator that bottoming out has taken place.
Why look at the PC then????
Maybe Ocroft could help out here???
Isn't that the general idea here?
But WHAT is new about bailing out when prices are high and getting back in when prices are low? That technique is as old as investing itself and you can do that without using the AIM PC as guideline. It is a known alternative to AIM type investing.
Am I the one that doesn't "get it". . . (using the AIM PC as an indicator). . . or don't some of you "get it" that one can look at the stock price itself to decide to delay buys till a price reversal at the bottom occurs and to bail out if a price reversal at the top occurs?
Th primary purpose of AIM is supposedly to follow up the Buy and Sell signals it gives. Other than that it makes sense to use other Market indicators to delay buys and/or trigger bailouts.
So, the part I do not understand is the idea that if the the PC of AIM BTB no longer rises then this is a direct result of the fact that the price dropping has stopped and the Buy Signal is zero(not considering residuals). My point is that you can see this directly form the price behavior. . .why look at the PC to make that observation? If the price stops dropping you already know that this FACT for the price it self.
It like walking outside and it stops snowing. Then you go insode and watch the news on TV, which states that it is no longer snowing in the place that you were when it stopped snowing. Then you say: "Good Lord" it is no longer snowing! Good thing I watched the news on TV or else I would not have known it".
That's the way this PC method as an indicator appears to me. It does not give any more information that the price behavior itself does.
I don't get it!
The thing that i am trying to convey to my fellow AIM users is
that a buy entry should only be made when the PC has stopped rising.
But this happens when the stock price stops dropping and levels off and that is also obvious from looking that price itself! If you have faith that the stock is worth buying then that is a relatively safe point to start buying. I do not see why you need to use the PC for that! On this theme various mechanisms already exist
At some point when the AIM figures indicate to me a downward reversal in this stock, I will completely liquidate my position in this stock.
You can figure that out from looking at the stock price figures as well. . . .the AIM figures are fullu dependent on thaat. Why do you need AIM for that? Many investors get out 100 at such a point(say at a 10% drop in price).
I fail to see anything special here. You are just getting out at a high point and getting back in at a low point. . .that you wait for larger changes than AIM itself advices is applying a price-based filter. Correct me if I am wrong on this.
One more thing about the Residual Buy Signal in Standard AIM and this compared to the Buy Advice in Vortex AIM for which there is no Residual Buy Signal(after one executes a trade the Trade signal is 0 if there is no price change):
I have before "now" objected to having such a "feature" in AIM and then ignoring it (as is the usual advice that AIMers give and that I call a Flaw). I had not analyzed in detail the exact effect of this Residual on standard AIM until today, and as I am curious on this issue I have now made a comparison as to what happens when one ignores the residual buying and when one does execute ALL the Residuals, according to the standard AIM Rule.
Basics
PC=V=10000 to start
SAFE s=0.1
Trade trigger =0.1
so the first buy occurs at 9000.
Buy=PC-(1+s)*V
PC2=PC1 + 1/2*Buy
This gives for the fist two principal buys:
1) Without executing Residuals
Cash Invested =1240
End Value V= 9258.33 -------> after 2x a 10% drop in price.
PC(new)= 10620
2) With executing all Residuals. . . approaching Last Buy=---->0
Cash Invested =1175
End Value V= 9258.33 -------> after 2x a 10% drop in price! The SAME as for Case 1
PC(new)= 10083.33 ------LESS than for Case 1
The first amazing thing is that(provided I have not made a mistake) that by executing ALL the residuals for Case 2 in one shot, one spends $ 65 less cash in order to come to the same End Value $ 9258.33, after two price drops of 10%!
So, in contrast to what one might expect the execution of the Residual Buys is a "Cash Efficient" and therefore a "Cash Conserving" mechanism.
This I did not expect for Standard AIM, and it would be an additional argument to buy everything that standard AIM advices! If you compare this with two standard buys at 10% drop without executing the residuals it would appear that not executing the residuals is wasteful for the cash burning. All the more reason to Call the Residual Buy Signal a Flaw IF one does not execute it. . meaning actually that ignoring the Buy Signals is a Flawed procedure if cash conservation is the prime objective, as Standard AIMers claim is the purpose for not executing the Residuals.
In this I recognize that with the greater amount of cash spend at the second 10% drop(not executing the Residuals) one acquires more cheap shares. . .this principle we already know applies for any investment system and remains valid. In this sense one could argue that not executing the Residuals is only Cash Preserving for the first time that the price drops nut not thereafter, for which case the cash is burned fast.
My question is: "Is the fact that with executing the Residuals and then ending up with the same End Value with less cash spend, a known Feature for Standard AIM?
The reason for the braking-effect on the cash burning is clear If one looks at the progressive Difference=(PC-V) as the Residual buying takes place then this value gets smaller as one executes the Residuals, and after the buy at the second price drop this smaller difference remains as you go! The very reason for this is that you are increasing the value of V faster than increasing the value of PC.
In effect then executing the Residual Buys is an automatic means of applying the brakes in standard AIM. . .as opposed to what usually is said that Not executing the Residuals is a means for applying the brakes.. .quite a contrast to what is normally said for "explaining" the Residual Buys!
I am quite surprised at this, but it explains fundamentally also as to why Vortex AIM, which is based on execution of the residuals in one shot, reserves cash better than Standard AIM does, for deep divers.
I also looked at the case for Standard AIM to execute the Residual in One Shot without changing anything else. The analysis shows that the Total Buy including the residuals would be 166,666...instead of 100 and keeping the factor of 0,5 for the PC update constant one can simply change the SAFE value from 0,1 to approximately 0,092592903. I calculated this by iteration but one can set the buy at 166.6666 and calculate the new SAFE s:
(166+2/3) = 1000 -(1+s)*9258+1/3)
By this small decrease in the safe the Single Buy would be a 66,67% bigger but later on the brakes are applied.
Now also interesting(buy obvious) is that by doing this one will find that when the price has NOT yet changed the Residual Buy is automatically zero!!!
Buy(price constant)= (PC-(1+s)*V = 0 -------> like magic!!!!
So, by setting the safe lower by just a very minimal amount so that the Buy = 166.67 instead of 100 Standard AIM gives Buy =0. . .just like it does for Vortex AIM!
The only difference then is that for Standard AIM
PC1=PC1 + 1/2*Buy
just as before.
This means that Vortex AIM and Standard AIM are quite alike than more so than I till now assumed. . .IF one executes the Residuals in Standard AIM.
The difference between the two for the Selling remains, as in Vortex the PC is updated in an identical way as for the buying, but with setting the Sell Parameter conservative the selling can be "damped" as much as one requires:
Buy Vortex AIM = 1/(1-fb)*(PC-V)
Sell Vortex AIM = 1/(1-fs)*(PC-V)
By setting the Aggression Factors fb and fs just right one can control the general behavior of the buying and selling exactly as one wishes to achieve the right mix of selling and buying aggressiveness:
Aggressive Buying or conservative Buying
or
Aggressive Selling or conservative Selling
or combinations thereof
Aggressive Buying and aggressive Selling----->This is good for a horizontal Trading Range
or
Conservative Buying and conservative Selling-----> This tends towards the Buy & Hold Method
or
Conservative Buying and aggressive Selling-------> This tends towards a Pension Income Mode. . .it regularly pays out cash to provide extra pension income.
One more thing about the Residual Buy Signal in AIM:
I have before "now" objected to having such a "feature" and then ignoring it (as is the usual advice that AIMers give and that I called a Flaw). I had not analyzed in detail the exact effect of this Residual on standard AIM until today and as I am curious on this issue I have now made a comparison as to what happens when one ignores the residual buying and when one does execute ALL the Residuals, according to the standard AIM Rule.
Basics
PC=V=10000 to start
SAFE s=0.1
Trade trigger =0.1
so the first buy occurs at 9000. This gives for the fist two buys:
1) Without executing Residuals
Cash Invested =1240
End Value V= 9258.33 -------> after 2x a 10% drop in price.
PC(new)= 10620
2) With executing all Residuals. . . approaching Last Buy=---->0
Cash Invested =1175
End Value V= 9258.33 -------> after 2x a 10% drop in price! The SAME as for Case 1
PC(new)= 10083.33 ------LESS than for Case 1
The first amazing thing is that(provided I have not made a mistake) that by executing All the residuals for Case 2 in one shot one spends $ 65 less cash in order to come to the same End Value $ 9258.33, after two price drops of 10%!
So, in contrast to what one might expect the execution of the Residual Buys is a "Cash Efficient" + a "Cash Conserving" mechanism.
This I did not expect, and it would be an additional argument to buy everything that standard AIM advices! If you compare this with two standard buys at 10% drop without executing the residuals it would appear that not executing the residuals is wasteful for the cash burning. All the More Reason to Call the Residual Buy Signal a Flaw IF one does not execute it. . meaning actually that ignoring the Buy Signals is a Flawed procedure.
In this I recognize that with the greater amount of cash spend at the second 10% drop(not executing the Residuals) one acquires more cheap shares. . .this principle we already know applies for any investment system and remains valid.
My question is: "Is the fact that with executing the Residuals and then ending up with the same End Value with less cash spend, a known Feature for Standard AIM?
The reason for the braking-effect on the cash burning is clear If one looks at the progressive Difference=(PC-V) as the Residual buying takes place then this value gets smaller as one executes the Residuals, and after the buy at the second price drop this smaller difference remains as you go! The very reason for this is that you are increasing the value of V faster than increasing the value of PC.
In effect then executing the Residual Buys is an automatic means of applying the brakes in standard AIM. . .as opposed to what usually is said that Not executing the Residuals is a means for applying the brakes.. .quite a contrast to what is normally sdaid for "explaining" the Residual Buys!
I am quite surprised at this, but it explains fundamentally also as to why Vortex AIM, which is based on execution of the residuals in one shot, reserves cash better than Standard AIM does, for deep divers.
I also looked at the case for Standard AIM to execute the Residual in One Shot without changing anything else. The analysis shows that the Total Buy including the residuals would be 166,666...instead of 100 and keeping the factor of 0,5 for the PC update constant one can simply change the SAFE value from 0,1 to approximately 0,092592903. I calculated this by iteration but one can set the buy at 166.6666 and calculate the new SAFE s:
(166+2/3) = 1000 -(1+s)*9258+1/3)
By this small decrease in the safe the Single Buy would be a 66,67% bigger but later on the brakes are applied.
Now also interesting(buy obvious) is that by doing this one will find that when the price has NOT yet changed the Residual Buy is automatically zero!!!
Buy(price constant)= (PC-(1+s)*V = 0 -------> like magic!!!!
So, by setting the safe lower by just a very minimal amount so that the Buy = 166.67 instead of 100 Standard AIM gives Buy =0. . .just like it does for Vortex AIM!
The only difference then is that for Standard AIM
PC1=PC1 + 1/2*Buy
just as before.
This means that Vortex AIM and Standard AIM are even more alike than I till now assumed. . .IF one executes the Residuals.
The difference between the two for the Selling remains, as in Vortex the PC is updated in an identical way as for the buying, but with setting the Sell Parameter conservative the selling can be "damped" as much as one requires.
This was an interesting exercise indeed!
LC. . . .
No not really. . .I simply missed out on the meaning of "Constant Ratio Plan" . .I thought the PLAN had something to do with the Trading Ratio such as Trade = c*Valaue, with c being the "constant ratio".
The time I did not have my hand on the steering wheel was last week when I set the Sell Order on the Disaster Fund Dico at 20 cents while it was meant to be 2 cents.
I was powdering my nose while I was setting the price. It appears "riding free hand" costs me € 3000 to 4000.
Hi Fuzzy
I was hoping to hear how your latest trade went.
It is now almost 2 PM. I just checked the internet status of my Dico "Disaster Account" and the Sell @ 0,03 has NOT been executed. The price now stand at 0,02. My mistake is going to cost me a bundle! If I had set the sell a week ago at 0,02 instead of 0,20 I might have earned 4000 profit on the 1000 mistake!
The temporary revival of the Dico price might be over and if so the price will drop back to 0,01 and probably after Dico's bankruptcy is finalized it will disappear. I doubt very much e second revival will happen. This cookie is crumbling.
1995-2000 was a good time! I AIMed strongly and rode the ups/downs + a big UP on HSS(Cairn) Warrants. Made a bundle but then lost it as I got knifed by my investment partner. . .Lost € 50000 in the battle(had to sell our house). My mistake was not a mistake in investing but one of not covering my ass.
Nowadays I do not go into any deals as I do not "trust" anyone any more. . easy to do as I have very little money to invest anyway .
Still a gamble a bit here and there as I did with Dico.
My account has been recovering nicely since last year but is not up to its all time high as I have pulled some money out a little at a time over the years.
I suppose you can do the same with AIM as I can with Vortex AIM: to have it automatically become a sort of Pension Income Source.
In Vortex AIM one sets the Sell Parameters more aggressive than the Buy Parameters for this operating mode. What happens then is that as the price cycles it automatically coughs up periodic Sells on the price cycle and only gives Buy Signals if the price has dropped below the trading range. This rejuvenates the Portfolio Value on the price recovery. Of course one should still use caution on the Buying: Is the stock worth buying?
I do not think it is a mistake on buying individual stocks. They have a higher volatility than funds and CAN be excellent investment vehicles. The mistake could have been that you bought the wrong stock. There is a difference.
In 2000 I suffered very little loss as I had pulled my money in 1999 to invest in my engineering venture (and to pay off some personal debts). THEN I got nailed by the crooked partner, which cost us € 50000(I and my ex-wife) and I ended up on welfare.
Now fresh water flows under the bridge!
I sold my first Vortex Method book for 2010 for € 15 and the profit is € 13,74. . .it takes me almost an hour to process and record the sale in the administration, but what the heck, it gives me something to do .
The prognosis is that I will sell 4 books this year!
Good News!
I just closed a Sell on my Qanda Forex Game EUR/USD account and I made a profit of over € 20.000 !
Whoopy!
My loss has decreased now to just over € 1 million!
Things are a turning around!
The Proficient Investor. . .sounds like a title for a Best Seller. I wish I could write a book like that
OK, I would call a proficient investor at least one that earns his principle income, and a good one at that, from year in year out investing, and next to that one that on the average consistently makes a better profit from hobby investing than the stock market indexes. Of course there is no sharp distinction between "proficient" and "good enough". It is a subjective concept but I would rule winning at "flipping coins" out.
I rule also out that one can be "wise to be lucky" as it would be fundamentally in conflict with the process by which luck comes about. One can be skillful to understand certain processes and profit from it, that is the way I see it. The quote you state therefore a "tongue-in-cheek" way of saying that one knows something valuable about a certain process, such as when one says: "I buy from the scared and sell to the greedy".
As to "everyone being a genius in a rising market" that too get the "thumbs" down from me. Dumb people remain dumb as the share rices start rising.
Of course, I would agree with you that smart people remain smart as the share prices keep dropping across the board for a few years on end.
So in regards to you AIMing, are you skillful, lucky or both?
Today was bad day for me. The Disaster Fund Dico International which had been standing at € 0,01 for about 6 month or so started moving up to 2 cents last Monday and I figured that was good for me. I have 130000 shares bought at € 0,01 . . .(100000 bought by mistake as I had meant to buy only 10000 , so I figured I was going to double my stupid investment as I thought I had just a week ago issued a Running Sell Order for € 0,02.
On Tuesday the price went up to 3 cents and then to 4 cents and I thought I was going to make a killing as on Monday the Sell at 0,02 was not executed. On Wednesday the price went to 5 cents and I was jubilant: "No doubt today my Sell will go through and I will quintuple my investment. T"his morning I checked the price and it stood at 3 cents and still my order had not been executed. . .and I wondered why, so I checked the figures on the Sell Order. I discovered . . no kidding. . .that my Sell stood still waiting. . . at 20 cents! . . .I had entered the Sell Order that way myself on the Internet Order Form!
So, it was not bad luck as the reason that I did not make a killing on my first mistake (buying 100000 shares) on my Disaster Portfolio Dico but plainly my stupidity was the reason! The fact that the prices were rising sharply did not make me a genius! I remains stupid on the issue and made a second mistake!
I immediately altered the Sell to 3 cents and hopefully now the Sell will go through at 3 cents. At the end of the day I will know what happened. Its a Comedy of Errors
I will let you know if the result is Funny or not!
As it Stand this affair id quite Too Fuzzy at the moment to make sense of it!
Hi there Toouzzy,
If professional investors are so much better than why on average do they underperform index funds.
For a minute I thought that maybe I had put my foot into my mouth and started get ready for licking my wounds and hide in a corner someplace but it didn't feel the right thing to do. . .a little voice told me not to give up yet
After having read my assertion in what you quoted 3 times I noticed that I had used the word "professionals" only in relation to investors that were not professionals. Then I referred to
Those who become very proficient in investing really no longer need their simple AIM Machine, opt(=or) they for using their AIM machine as basic tool and keep "turning the dials". . .
Clearly, you must agree, that my reference to proficient investors includes also AIMers that do well. . .those that are proficient . . .possibly even you are in this group!
So, in retrospect, the question as to why professional investors under-perform index funds, IF that is what they normally do. . . I say that they could not be called proficient investors, and as to why they are not proficient. . .I presume they do something that does not provide good results.
As to your reference that the Titanic was built by professionals, so were the WTC Towers but also the the San Fransisco Golden Gate Bridge, the Verrazano Suspension Bridge, the Saturn Rockets, Space Shuttle, the Concord, and the LHC in Cern. . .to name just a few. . . .not to forget a few nuclear bombs that worked quite well.
As to the Ark, well, it would appear that as yet we only have a story about it, it possibly never existed, so no more real than the Tin Man in the Wizzard of Oz, but even if the ARK was actually boat once, the story goes that it was made of wood, and anyone can make a piece of wood float.
I do not think that your reference to the Titanic and the Ark have any real value in the context of the question of the functionality of an AIM-like investment machine and that some investors are proficient(with or without a machine) and others are not(with or without a machine).
Well, the fat has been chewed. We should have had some beer to go with it.
When you visit Holland some day I invite you so we can chew more fat. . I will buy the beer!
Regards,
Conrad
LC. . .Comprendo Constant Ratio Plan
I note that this relates to having a constant ratio for different equities in the portfolio.
Quite a different beast than what I called a constant ratio plan for my trading units as a ratio of the size of a singe fund.
This was Babylonian Mix-Up!
Thanks LC for the link on the Constant Ratio Plan. I am curious about that because for example radioactive decay is a Constant Ratio Plan.
Newton's Cooling Law as well, as such change processes depend on how much "substance" is present.
Rate of change = dBase/dt = k*Base k + or - constant
In my booklet on capital appreciation I have modeled the grow-function of AIM in this way, more or less as the rate at which capital grows like interest, as you add interest very frequently.
AIM works like that as well as you trade frequently within a trading range.
In this case the model is
dN/dt = k N
N being the number of shares and dN the increase in shares per short Price Cycle.
This then approaches the in exponential growth function
N = No*EXP(kT)
In reality is the capital accumulation curve of course more chaotic and spiky but on the average one can show that the AIM value increase over time is more or less exponential.
I will check out your link later on. . .I am off to drink coffee and chew the fat on all topics under the sun.
Ahhh. . .If there ever was a Fuzzy issue it is the trigger that caused the recession. I heard as many reasons for it as I have for other recessions! In 1980-81 or so it was the same: The blame game started the day the Bubble burst: All the blue collar people that had bought extra houses at up to 21% interest rates(in Canada that was)did so because they were greedy, but of course this greed was fired up by the money lenders. . . .the same as this time around. . .may be a bit different in the details.
In 2008 approximately July August the scrap metal prices react to the clouds. .copper was at something like € 6/kg and scrap iron 25 ct/kg. Like before many people rode the wave to even better prices. 6 months later the scrap iron price dropped to 0 for a while and copper was something like € 1,50
I would argue that Berni Madoff's crooked ways was not single cause but only a syndrome of the general greed of people in general. . .The ERON Affair did not cause the economy to cave in but no doubt that event was part of the underlying problem that acumulated to the bursting point.
Part of the problem was of course too that people were talked (pressured???) into loans they could ill afford. . .In this case one can see this also in the bankruptcy of the small Dutch DSB Bank: people have been viciously pushed into high-commission products piggy-backed so apparently cheap mortgage rates. Later they discovered that were taken to the cleaners, the bank President. . .Dirk Scheringa. . .more or less sole owner. . .dived in to the bank funds to buy a soccer club, bought millions of $$$ of art, build a gigantic museum for it, bought a yacht that rivaled the one Ari Onassis had build in cost and paid himself a salary that was criminal. Originally everyone liked this guy a lot. . .like good old Bernie Madoff. . .Problem was that these people are not alone. . plenty of like him around.
Then the general public. . the had workers with stuffed savings account. .they were so greedy that they surfed the internet for high return savings accounts an dumped their money in Iceland and that too disappeared out of sight and popped up in the pockets of the criminals that ran away with it. Today the governments of in any case the UK and The Netherlands are trying to get the dough back but of course it is not going to work. .either the people of Iceland pay the piper of the greedy foreign savers that wanted to get 6% interest instead of 4 @5 at home.
Everybody is guilty of this Recession except for 2 people
1) Mother Theresa
2) Donald Duck
Mea Culpa.
Hi LC,
Good to see this comparison you made with different plans. Very interesting. I think it confirms my previous statement(partly in jest) that tings usually balance out in some way. . .(come down to No Free Lunch Principle)'.
Here is the stock prices I used, $10, $7.5, $5.0, $$7.5, and $10.
Each plan starts with $10,000.
The constant ratio plan started with $10,000 and ended up with $10,633. A gain of 6.34%
The constant value plan started at $10,000 and ended at $11,250 a gain of 12.5%
AIM BTB started at $10,000 and ended at $12,183. A gain of 21.83%.
If this was a -89% bear only the constant ratio plan would have had working cash left.
I am not 100% clear what you mean by "Constant Ratio"(CR) in the case you compared it to the others(maybe you could explain it a bit more?).
CR could mean
Buy = c(V1-V2). . .with c. . you guessed it . . .a free to choose constant, so that the buys remains of equal value for a certain price drop(High Cash Burn Rate).
or
Buy = cV. . . In this case the Cash Burn Rate drops off exponentially and one never runs out of cash. . .Very strong braking effect.
or
Buy = c(PC-V) as Vortex AIM does it. In that case
c=1/(1-f) . . .with f = constant and the PC is updated much like the AIM BTB but just a little different:
PC2=PC1 + f*Buy. . . .= PC1+ f/(10f)*(PC-V)
The interesting thing here is. . .[Refresher Course ]. . . if one executes the Buy as advised then the next advice =0 at the same price.
As previously noted this is more or less an AIM structure with a subtle modification to achieve the remove the Residual Buy Signal. With the choice of f one can make the Buy as large or as small as one wants it to be
Still, Vortex AIM has just like AIM BTB a progressive Value difference because The PC is increased as prices drop. So in comparison with your Test Vortex AIM would behave initially approximately like AIM BTB if both systems would start approximately the same way. I have tried to compare Vortex AIM with AIM BTB before but I think I never got any conclusive results, as I remember it now. Results tend to be greatly dependent on how the stock behaves.
It would be interesting if you could run the same test with Vortex AIM and see where it ends up.
The starting point would be identical in that the Firsts Buy for the same price drop could be the same or simply the PC could be the same:
AIMBTB: BuyAIM = {PC-V*(1+s)}. . .s = SAFE as you would take it, I presume s=0,1 here:
BuyAIM ={PC-1.1*V)
This would be the same as for Vortex AIM:
BuyVAIM
VAIM= c(PC-V)= PC -1.1V . . .PC and V are the same after a price drop
and this gives a value c= (PC-1.1V)/(PC-V)
Taking a 10% price drop gives PC=10000 and V =9000 this gives c=0,1
and the value of f= (0.1-1)/0.1= -9
Buy AIM= 10000-9900 = 100
PC2AIM = 10000+50 = 10050
V2=9100
Residual Buy AIM=(10050-9000+100) = 50 . . .execute or not as one likes it.
Buy VAIM = 0.1*(10000-9000) = 100
PC2VAIM =10000 -9*100 = 9100
V2=9100--------> PC2 = V2 every time after a trade!
Residual Buy VAIM= 0.1(9100 -9000+100) = 0 ß------!
For another 10% price drop:
V3= 8190
Buy AIM = 10050-1.1*8190 = 1041
Buy VAIM = 0.1*(9100-8190)= 910
Here the differences between AIM BTB and Vortex AIM for an identical first buy are seen to be:
1) The Vortex AIM PC2 is lower than the AIM BTB PC2. This causes the buying for the AIM BTB to be more severe than for VAIM and the cash of AIM will be exhausted earlier than the cash of VAIM. This is more or less in line with your conclusion that AIM BTB buys more shares on the way down than a VAIM will do, for an identical start situation;
2) VAIM will therefore be able to buy more shares at a lower price, if the price drops beyond the Cash=0 for AIM. VAIM is therefore a cash preserving method relative to AIM. This is also is in agreement with your prognosis for the ratio system you used in your test.
3) Note here that the VAIM is more conservative because of the low value of the constant c. So just like in AIM one can set his own brakes: AIM can do that by setting the SAFE=s larger and VAIM can do that by making c smaller. In that sense for both systems one can make his automatic investment more aggressive for buying or more conservative for cash preservation, to the extend that one is comfortable with.
3) As Is7750 & others have also pointed out, the end-yield for two different systems is strongly dependent on a) the parameter setting one will choose, b) the behavior of the stock prices, and the extend to which one is willing to use one or more additional criteria to buy more or less shares after a drop in prices, as well as the price drop at which the Buy Signal is executed.
It is generally agreed that an AIM-like system derives its growth potential from deep buying at low prices. . .BUT that is the same for any investment system. The key for achieving a good yield is not so much the type of system one uses but how well he can tune his buying and selling to the market behavior.
And this brings me to a moot point: The more one becomes experienced to make the correct investment decisions the less one needs a "machine" to execute the trades one wants to make.
AIM and Vortex AIM etc. are made for people that usually are not investment professionals and want to spend little time to manage their investments. . . usually these systems are marketed with the suggestion that one can easily become rich with while sleeping. Ironically this also means that many AIMers, and more so of course the beginners, are less capable of making good investment decisions if they rely only on their AIM-system. I dare say: “in spite of their system”. . .Those who become very proficient in investing really no longer need their simple AIM Machine, opt they use their AIM as basic tool and keep “turning the dials” in response to what they know of the market trend (applying filters, adding various indices for making decisions, modifying their machines, . . . you name it).
This forms my dilemma: on the one hand I find it fascinating to try to make the AIM Machine better all the time and add dials but I actually have little interest in doing a lot of work to sell my AIM Machine. . .
No one really needs it anyway!
Hi Cowboy
Ummmm The Federal Reserve. >grin<
That's a good one!
Never thought of that!
But, in this case here is scientific principle at work that applies to fluid dynamics as well as to financing:
Fluids: Conservation of Mass
Financing: Conservation of Value
This last one is the principle from which AIM got its start:
Constant Value Value Investing !
So you see, everything in the Universe is connected, normally. . .what disappears in one place appears in another place. That is also the principle the Vortex Investing:
The Vortex pulls the money from its surroundings into the core of the whirl and into the bank account of the Vortex AIMer.
There is only one mysterious thing left we do not understand yet.
Where did the money go that Bernie Madoff pulled out of "our" pockets??????
We are all Fuzzy
AIM has you buy more with each drop till you run out of cash ...... then you don't buy more at all. You can't conserve any more cash than not buying at all!You appear to see AIM as Iron Fisted Master that is not to be crossed . One can slow down the buying any which way he sees fit. . . and one should if there is information that indicates another choice than following the standard AIM Buying signals.
For LD -AIM I wanted to slow the buying down a bit so I increased SAFE by 5% with each CONSECUTIVE buy. It would reset to the original SAFE if I then had a sell. But I only use that for LD AIM where I have limited cash.
All investors have limited Cash. Have you ever heard of one that has unlimited cash? Hahahaha.
Anyway, it looks like that your LD-AIM then uses a structure more or less as I suggested.
The AIM with the progressive braking as I suggested with the (1-s)^(n-1) Buy Deceleration factor could be called CC-AIM. . .or Cash Conservation AIM. One can be as creative as need be to limit the buying if that is what is wanted.
LC, Interesting Issue you raised.
Constant Value, also known as the constant dollar plan. If you start out with half in stock and half in bonds, you should be able to have cash for investing up to a -70% drop. With AIM you run out of cash around 50%.
This issue, earlier referred to as a high cash burning rate for AIM, is only a feature if an AIM is set and then left without any overriding management techniques. This acceleration of cash burning, I conclude, is a direct result of the Residual Buy Signal as prices keep dropping and which results from the fact that at every buy the PC is raised after a Buy so that the difference (PC-V) increases rapidly as prices drop. This means that the Buy Signal increases more rapidly that the price difference it self. This is, of course, already known and a recognized drawback of AIM. It would require the investor to look for other rational means to ignore the strong Buy Signals is a lower cash burning is desired. For example using filters or “gut feeling” buy-delays so that the investment of the cash is only carried to the point that the AIMer is comfortable with. One could do this for example with ever increasing values of SAFE
In this sense I would be even more inclined to call the Residual Buy Signal a FLAW rather than a feature: it requires more and more the investor to ignore the Buy Advice as prices drop. For the inexperienced AIMer this could become a disaster. . rather than the general advice that he should follow the “instructions” if his AIM System(to take away the emotions of the investing) he should us his "higher" management system to ignore the buying. That does not appear very logical(or automatic) as he must ignore the AIM Advice all the time if prices drop sharply and he is to conserve the Reserve. . .this because the Buy Advice has a FLAW. . .of course this is still only my opinion.
One way to avoid this with AIM is to decrease the buying systematically when prices drop. With SAFE=s and prices keep dropping one could do this
Buy 1=(PC1-V1*(1-s))*1
Buy =0
Buy 2=(PC2-V2*(1-s))*(1-s)
Buy=0
Buy 3=(PC3-V3*(1-s))*(1-s)*(1-s)
Buy=0
Buy n=(PCn-Vn*(1-s))*(1-s)^(n-1)
Buy= 0
To make it logical I have introduced the optional Buy=0 for the case that the price does not change, so eliminating the Residual Buy Signal. In this it is obvious the the source of the Residual Buy Signal remains in the algorithm and is the very reason that the buy signals increase so rapidly with dropping prices.
As you can see that as the number of buys increase the Buy Signal gets weaker as you go. . applying the brakes. Furthermore, as you buy less the value of the PC rises less sharply but because of the dropping prices itself the value of V drops more rapidly as well. . . somewhat counteracting the Brake with the factor (1-s)^(n-1). If in the opinion of the investor the brake needs to be applied more then one can in increase s by a bit till the brake works as desired. That way one can decide exactly how great or how small the Cash Burn Rate should be, or one can calculate at what point the Reserve should be used up, for a certain value of s:
SUM B = B1 + B2 B3 . . .+ Bn = Reserve.
This way one can maintain the basis AIM characters and have an automatic Buying Brake added to it.
In contrast when I contemplate a pure ratio Advice System.
Buy= M*(PC-V)
the Buy Rate does not increase as prices drop (for a fixed price difference as trade trigger). So, relative to AIM the Ratio Buy System has a more severe braking system than AIM. Also here one can simply decrease the value of M if it is desirable to stretch out the Reserve by adjusting a single parameter.
One can set either system to behave exactly as one wants it to behave.
Yes, Obama is an adult....Saul Alinsky was an adult as well.
???
I am an adult too!
Does this have anything to do with AIM???
Isn't it time we had an adult in the White House?
Yes that time is now!
That's why HE is there!
Well, I am sure for $71,91 I bet it is not made of Kevlar, so it won't protect me from vicious attacks with knives. May be it works against old ladies attacking me with a tea spoon
New Method???
As far as I know it Synchrovest investing is at least 25 years old!
But then there are some things I don't know for sure
Make that 35 years!@
I noticed that a SynchroVest only costs $ 71,91
http://www.surfinsel.eu/product_info.php?products_id=738&XTCsid=2c3a2df108f274b8d741d6d59f1e2ae6
I think I will get one.
Conrad
Hoi Karel,
It's been a long time since we discussed things one-to-one. I see from the forum that you contribute often on your actual investment activities and usually I have no idea what is it about as it deals with specific funds. . .I am not active in the market place, except for a short venture in penny stocks(Disaster Funds), which turned out to be a little disaster: I have 130,000 shares that are worth 1 €-penny and the stock is almost frozen solid(Dico International).
Otherwise I am also like Warren Buffet: sometimes I execute a trade signal that should be ignored. . .and sometimes I violate my own fundamental investment: Only buy stock that is worth buying. This in spite of having a AIM-variant system that does exactly what I want it to do.
On your claim that AIMers always know how much to invest:
I believe AIMers had the same experience as Mr Buffett, with the difference that they always know 'how much'!
I do . .no surprise I bet. . .disagree. The reason we get questions now and then on the Residual Buy in AIM demonstrates that the Trade Signal for repetitive buying without a price change creates uncertainty. . . the questions that pop up on this are on record. The fact that experienced AIMers have established their own way on how to deal with it is a personal issue and is not part of the dubious AIM-Buy signal. So the fact is that AIMers not always know how to interpret the Residual Buy and therefor not always know "how much" to buy. . .If they did then the questions on it would not be asked.
Interesting to note that this issue, every time it is raised, is grist for the mill and this "mill" goes in over-time-running for a while until the grist is milled.
Good to hear from you!
2040forsight,
What do you really mean by "Doing Both"
I can imagine having a fund in which you invest $100 and if the price rises you invest say 80 for that week, and if the price drops you would invest 120.
Then if for that fund you also want to run an AIM it and for the same point in time you get for the rising price an AIM advice to Sell 300 then you simply add up these order and for that week you Sell 300-80 = 220
And if the price dropped and you get an AIM Buy advice for say 500 you ad these up to buy 500+120= 620
That is what I would interpret to mean "doing both"
You could even do that by executing weekly the Synchrovest Buy and once a month the executing the AIM Advice . . .simply adding up the two Advice signals and execute it as a single Trade. You manage you plan for a Buy = 80 and the Aim account for a Sell=300.
However, if you ad every week says 100 or 120 or 80 then you should update the AIM account PC with the full value of the added investment. . you are adding shares to the AIM account. Your two accounts are running apart from each other. And the values are not the same
If however you have one Portfolio then things change. If you execute an AIM Buy or Sell then you Synchrovest algorithm should also account for the addition or withdrawals and here I see a dilemma: If you have updated Synch. On the basis of the AIM trade you Synch represents a value for which you have not made an investment.
For the moment I do not see how you would run one portfolio with two different algorithms.
Maybe you could give an example of what you think of?
Buy now? Yes or no. Simple and to the point. So any method that corrects this renders the system to act as it should, giving the exact advice with no further interpretation required.
Aimster, at least we agree on that. That is my point.
How much one would want to buy at that action-point is a different matter!
Thanks Clive for you insight on this.
It all boils down to buying more as prices decline, reducing as prices rise. How you scale that buy/sell rate overall doesn't matter providing trading costs aren't excessively high. One scaling however will better another, but that's all subject to how the share price actually moves and cannot be predicted in advance.
If I could agree more than 100% on this, I would! It's the very essence of the "Dollar Cost Averaging" and the Constant Value" principles that preceded the Lichello Method, which is simply a way to go a step further on these basics which work automatically with regular Lay-Away Plans when prices cycle. The extra buying or selling only increases the effects of the Lay-Away Plans for funds that cycle in value. You have specifically underwritten my point that selecting a scaling factor is more a personal preference issue than anything else and the level of knowledge of the market or of a particular fund is only added oil in the AIM Investment Fire. In this AIM differs only in a small way from Vortex AIM and especially in that particularly the Sell Functions have a little different structure, but that both are simply driven by the price difference. . .both Sell Function can be adapted to create a scaling factor that suits the investor.
What I particularly like about the Permanent Portfolio buy-low/sell-high style is that you never exhaust 'cash' on the downside excepting if the stock goes broke (which can be avoided by holding only funds).
On this point one could easily disagree. If a fund steadily decreases in value without cycling one can easily run out of cash IF one blindly follow the Buy Signals. . .In a Lay-Away Plan this would not happen if only regular periodic payments are made, but if one uses the scaling function to buy extra on low prices as Lone Cowboy's Lay-Away Plans do, and the Vortex PremiVest Plan does, then you could also exhaust a predefined Cash Reserve. However this is no problem: one needs to decide, in any situation, whether or nor to invest extra cash beyond the Reserve, or not to dig into the Reserve at all. The system one uses with satisfaction is only a rough guideline for situation that occur within a certain trading range and as soon prices escape the trading range the investor needs to stand on his toes and decide personally how to respond. No system can take over that primary management function(Never blame the system if things go wrong. . always take personal credit if thing go right).
Consider four pots, each of $10,000. One declines to $3000 and the others remain level. Rebalancing back to equal weightings has the pots each at $8250. That sort of action can continue indefinitely.
But technically only up to a point that there is cash to do that if one does not sell any stock of the funds that remains unchanged. Here again personal intervention is needed in order to make sensible decisions with external information. One could safely sell the part of the fund that remain unchaged and dump the cash into the "deep diver" IF this "diver" is worth buying.
Better still if the one that is down is countered by one or more of the others gaining enough to counter that loss i.e. one is at $3000 but the other three pots amount to $37,000, then the rebalance had you back at $10,000 in each pot (you just hold more shares in the one that is significantly down and fewer in the others that gained). Exactly, that is essentially my point above! Here the feature of the Skewed Ratio for cheap share acquisition is the Strong Arm of the AIM like systems. I would think that all of us ÄIMers know THAT instinctively by now.
The important quality is that of having a relatively simple method that you have faith in so that you consistently trade (buy-low/sell-high) and capture the rebalance benefits over time. indeed. In this I think no system is simpler than Vortex AIM, which is a pure Ratio System:
Buy = aX
Sell = bX
No trades for X=0
If two investments each achieve the same longer term gain, but their relative difference zigzags over time, then reducing out of the leader and adding to the laggard will result in a higher overall gain than had no rebalancing been made.[i/]
Halleluja! Considering the features of AIM-like systems I could not have thought of saying this better myself.
Long Live the Skewed Share Acquisition Ratio.
Hi Jack. . .(Take me to Cuba)
I remember discussing with you years ago already your experiences with AIM and your modifications to it. It sort of mirrored my experiences. . not in detail but in spirit: to make changes that appear to have advantages.
Your Deep Diver experience certainly also mirror my experience with ASMI. .except that I bought in at $ 1,25 (1993)then bought extra parcels down to € 0,7 or so and wanted to buy more at € 0,60 but I had no money left and could not borrow any(About 1994 or so).
The stock recovered to over $ 6 when I sold the little I had left in 1996/7. The averaged annual profit over the 4 years was 137%. Then the stock kept rising and topped out at € 59. Goes to show like in your case that deep divers should not be dreaded all the time. . .research into the fundamentals is crucial in such cases and if one does not do that it is better to bail out early rather than late.
My point is, time and again, that the buy-sell algorithms of a system(any system) are rather less important than having a sound Overriding Management Technique that will allow one to ignore the signals of trading systems, that are purely Price difference driven, at will.
This is why in my own Vortex AIM-derivative I emphasize the the Trade Signals are only rough indicators for a general investment outline(conservative---> low risk or aggressive----> high risk) and that the Trade Signals might well be ignored if external information gives better information. I have feeling that you would agree with this all the way.
The end-effect of my investment philosophy is that an experienced investor that understands investing thoroughly has no use for AIM, VORTEX, or any other system that only looks at price differences.
The only criterion for not bailing out of an position, regardless of price level or or price trend, is
1) Is the stock worth owning ?
For buying more of it, it is
2) Do I have extra money or assets t pay for it?
All he rules of AIM and VORTEX are then no longer important.
In that sense I am a bit like a preacher: if the flock no longer commits any sins then the preacher losses his job.
This is part of the reason that makes marketing VORTEX so difficult for me: I really feel that it is a "nice gadget" on which I have spend, by the way, almost 30 years to develop it, but in the end it is not really effective for people that already know the simple important principles for effective investing. So, I am confronted with the fact that only if one does not want to spend much time on learning how to invest effectively that a system like VORTEX is of any use and that being so it is only a crutch for amateurs that do not really want to become effective investors.
I know it sounds stupid to anyone that does not understand me but the important thing is that I understand it. I am a duck in a strange pond!
It was good to read you input though!
Clive, I have quoted your explanation on AIM being a Constant Value system in
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=47111558
@ Anybody
I have tried to explain the fundamental difference between AIM and VORTEX.
In regards to AIM the fact that the PC is not updated after a Sell results that (after a buy) the value of the equity remains lower than the PC. If the price then rises there is a retardation effect r before one gets a positive price difference. I have expressed that as:
Sell(r) = a(X-r) - b
as opposed to a Sell after the price had recovered some more. Then the Sell = a(X)-b
For regular AIM one sets a=1. . .but I used the a to point to the proportionality feature of the trading signals.
If I have said something that needs correcting no doubt I will get en ear full for this!
The standard AIM and Vortex AIM have a common background. . .
1) A trade is in some way proportional to the price difference and originates from the principle to provide a steady base from which profit is "creamed".
That is if the price drops you want to buy some more equity to keep the "earning" power of the equity approximately constant. If the price of the equity rises you sell a portion of the equity to reap the profit.
This also safeguards your portfolio if after a rising trend the price suddenly drops: you will not lose the whole investment! s the equity ruses in value you convert a greater part in cash!
An interesting explanation on this from a smart guy (Clive) on mathematics analytical skills is:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46901787
2) Additional to having the fundamental idea of "Constant Value" of the equity one also wants to have constant growth.
This is achieved by the effect of The Skewed Function for buying shares on a price dip. . .at a lower price you get relativity more shares per invested Dollar than at high price.
This assures that for a cyclic price behavior at constant average share price the number of shares grow continually, and so continual equity growth is realized.
3 Additionally to these basics one can add specific features that cater to the temperament of the investor. . .are you aggressive or conservative?
Within the standard AIM system. . .more or less catering to one that is less aggressive this is achieved by an inherent offset system: for rising prices there is a less proportional advice to SELL than there is to BUY and there is a certain Sell Retardation effect. . . the price rise after a buy needs to be more that zero to get a sell signal. I ccan mathematically model that by the simple function
To Sell Y = a(X-r) -b . . . X = price difference. . . subject to limits such as Holding Zone % and Minimum Trade Size, and r is the Retardation Effect. Standard AIM has relatively few parameters to set the results of the Advice Generator as you want them. In this regards Standard AIM is asymmetrical for buying and selling.
To Buy Y = cX- d The values of a b,c,d are chosen by a parameter S so than one has little direct control over the specific relation between buying and selling.
Here normally c>a and b>d. This limits the flexibility of Standard AIM but it is quite easy to manage.
Vortex AIM is a Ratio System. . .in principle Vortex is symmetric but has independent parameters to make it function far more as the investor likes it. In essence Vortex can be set in such a way that any type of practical investment management is possible.
For Buying and selling this is how Vortex works
To Buy Y = aX . . . subject to limits such as Holding Zone % and Minimum Trade Size.
To Sell Y = bX. . .etc.
The possibilities now are greatly expanded as a and b are set separately! For example:
The value of a can be set small so that only small amounts of shares are bought as prices drop(conservative), OR a can be set large if you have dropping price and you have faith that the equity will survive(aggressive).
Also you can set a=0 ---------> never buy more after starting the Portfolio.
The value of b can equally be set as you like. . . . for a small b -------> Conservative Selling. . .for a large b------> Aggressive selling
Various combination for a and b gives these possibilities:
* Equity Growth Management. . . .buying more often than selling, cashing in on some future date with big profit;
* Pension Fund Management. . . .selling more often than buying to give a regular pension income;
* Buy & Hold Management.
Vortex AIM requires a bit more management activity than Regular AIM when it is in the Aggressive Mode, in regards to how to set the parameters to get the exact action you want in terms of general behavior in relation to how the equity prices are likely to swing + one needs to be more ready to stop the buying early and/or bail out.