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Hi Grabber,
When you start with Buys, you can also buy real and virtual shares. When you sell only real shares, it is another way to keep your cash, when the stock is going down.
The variations are endless...
Kind Regards,K
Hi Tom,
- high inflation
- high I wave
- top of first up wave after crash
- similar trend structure in 1930's
- high oil price
- similar trend structure as in 1970's?
- my own exuberancy
made me decide to sell (profitably) parts of several machines.
- it will increase my cash position.
- PC can be reset with PC/share=constant
- or the opportunity to NOT change PC and start some LD-AIM machines.
Kind Regards,K
Hi Grabber,
Thanks for this very fine calculation.
What Lichello did is very crude compared with what you did.
To include the AIM sell before adapting PC is very nice.
Keeping PC/share the same is very nice.
This technique i have immediately used on one of my machines which is now part of a basket. The PC which I still keep for each share seperately as well, I could update in this way and keep the machine healthy.
In the past i often used Lichello's advice, feeling slightly bad about it. This feels great.
Thanks,
Kind Regards,K
Hi Grabber,
My graph looks similar to yours. It shows how difficult it is to use AIM for your investments. It is interesting that you changed your approach at the 'bottom'. Diversification and LD-AIM. I also changed my approach at the bottom. I went back to AIM BtB.I made the mistake of trading too much. Only once a month now!
Also I am very willing to use LD-AIM. I see the value in bigger transactions. The thing that stopped me till now is precisely what you experienced in 2002. I am afraid that i would not have enough cash when the market is going down. You would be well diversified but cannot trade because there is no cash. With virtual cash it is even worse.
How do you approach this? What are your thougths about this issue? I haven't read anything yet to take away that concern.
Kind Regards,K
Hi Steve,
Percentage added to Portfolio from Oct05 to:
Sep05: 3.7%
YTD05: 19.3%
12mo.: 25.9%
Mar03: 138.3%
Stock Value: 79%
Cash: 21%
All machines are restructured to once a month baskets, AIM BtB, with safe 10% and minimum order 5%.
Some baskets have only one entity in them :)
The dutch market(index) is up less than 100% since Mar03, so i am happy beating that index. This was not by design, but by luck and by AIM.
Kind Regards,K
September check.
Two sell signals, when checking today.
One sell in my 'Europe' machine. This is a collection of funds and ETFs, where I sell the funds and buy the ETFs. Later on I plan on having different 'europe' ETFs like large, mid and small cap. Dependent on what ETFs there will be available at that point in time.
Another sell in my 'Financials' machine. I sell a sectorfund and build a basket of dividend paying bank and insurance shares.
The market moves nicely and it is interesting to see how the I-wave will do. Maybe with the 'new' inflation, the landscape is changed?
I let AIM decide what to do on a monthly basis. I really like that the best. Anytime i try to be smart, AIM is smarter.
Kind Regards,K
Hi Tom,
My sell was not based on a price rise in August, but was a sort of a MACRO type of sell. The sell signal was there for a long time already, but now I had the urge to execute.
Kind Regards,K
September check
I had a sell in my 'europe' machine. It is a mix of largecap, midcap and smallcap. I want to reorganize this machine and split it up into three parts(later).
Today i sold 'smallcap'. I know the i-wave is for america, but i guess both continents are 'in sync', so smallcap selling seemed 'logical'.
(OT)On the cooking front: I harvested the blackberries around the house and made 10+ bottles of jam. The strawberries are also still going strong.
Kind Regards,K
Core-Aiming,
Another possible use of the core: LD-AIM it.
In this way you get a LD-AIM machine within a LD-AIM machine like russian eggs.
In fact you get a series of machines inside each other.
Based on a core ratio of 1:2 you get for the inital parameters of such a machine:
Stock 33%
Cash 67%
Transaction size : 1.15 times the normal size.
Upgrade of PC on buying would use the normal PC based on 50% of the initial investment.
By using different core ratios, the initial investment and the relative transaction sizes will change.
(did the calculations in my head and didnt want to write them down)
Kind Regards,K
<6(10[IBM(2:1)(60-120,5%]10)5>
that would be a variable core IBM machine with
6% buy min
10% buy safe
10% sell safe
5% sell min
2:1 virtual is 1 part of two
core range is 60 to 120
core steps are 5% of 120-60= $3
<6(10[IBM(2:1)]10)5>
that would be a LD IBM machine with
6% buy min
10% buy safe
10% sell safe
5% sell min
2:1 virtual is 1 part of two
<6(10[IBM]10)5>
that would be a classic IBM machine with
6% buy min
10% buy safe
10% sell safe
5% sell min
Having fun,K
Core,
In LDAIM your core holding is virtual.
In AIM classic the core holding is "Buy and Hold".
The core can also be made variable. At lower prices you have a big real core and at higher prices you have a big virtual core.
For example a stock moves between $10 and $20.
At $10 the core would be 100%.
At $11 the core would be 90%.
...
At $20 the core would be 0%.
By trading 10% of the core at these intermediate price levels, you generate extra 'dividend'.
Kind Regards,K
Hi Grabber,
Personally, I'm shooting for 30 LD-AIM programs, averaging $30,000 in actuial share value plus $100,000 in cash.
A starting LDAIM machine would have $1000 in shares and $3333 in cash? That is 2 sells of $500 and 6 buys of $555?
I am still looking at the initial cash position. Having virtual shares, do you also need virtual cash or is the virtual cash zero and is LDAIM-cash = AIM-cash?
Kind Regards,K
Grats Grabber,
3.5 times the low since july 2002.....
that is very very good!
Looked up my numbers and I have
2.3 times the low since march 2003
I have used aim-classic.
What are the most important factors to get your result?
Greetings,K
Hi Tom,
What was your motivation to stop using this basket approach?
Why did you not repeat this buying strategy?
Kind Regards,K
Hi all,
I like Lichello's idea: diversification on the way down and elimination on the way up. You want to diversify when the market is going down, reducing risk.
You can also say that a portfolio is not damping the volatility, but it enables you to tune the volatility. If you have a spring that moves periodically, you want it to move in an orderly way especially at the downside. Portfolio building is similar.
For what it is worth,
Kind regards,K
OIL
I was determined only to transact monthly and that would have meant next monday, but i could ship 11% of my royal dutch shares today, so i pulled the trigger and sold 11.26% of my shares for a profit of 40.5% (LIFO gains).
Immediately after the sell the price of Royal dutch went down 1%, increasing my satisfaction dramatically.
Only thing is: what would have happened if I waited till monday for the month to complete, I sold already after 3.5 weeks :)
Greetings,K
I know many of you have made AIM related purchases in recent weeks.
Indeed, i made buys in two machines during my May evaluation.
I wanted to invest in an ETF and I thought that the Euro was well priced vs the dollar.
So I bought the Ishares SP500 ETF for the two machines.
My broker (ING bank) is now charging Euro 11.95 for any transaction of any size.
I had one transaction for two machines, so nearly 6 Euro transaction costs per machine! I like this a lot!
The buys feel very good and look like excellent AIM buys at this moment.
Happily Aiming,K
Restructure
I hope I am clear in what I am writing, always remember I am not living in an english speaking population, so everything is not perfect.
I have done a bit of restructuring my portfolio lately. Up till now I had stocks and sectorfunds/etfs in their own machine. Now I made a few portfolios: amerika, europe, asia/pacific and emerging markets.
Those are four main streams, they are not fully populated yet, because emerging markets is too expensive to enter at the moment, I think. Also i want to use AIM to sell some stuff and to buy some.
On top of this picture 15 sectors are used for specialization. Some of the old machines are collapsed or distibuted over the sectors. These sectors will only contain stocks,etfs and sectorfunds belonging to that particular sector.
What is an sector? Roughly as defined by FT. Then whatever I think should belong to a sector.
Why this restructure?:
- did some research on monthly trading vs 'always' trading. I like the monthly scenario, similar results, less trading.
- get some distance from the market, spend time on other things
- when buying always buy 'new' stocks or etfs or sectorfunds
- use the 10,10,5,5 parameter set generally.
- avoid deep diving
This 'system' is now running for two months(jan/feb).
The most notable thing is the aspect of 'rest'.
Because I am fully recovered now from the 2000 crash, I am not in aggressive selling mode any longer to create a cash balance.
In this once a month system you can think of trading twice a month for example. Lichello changed the check to two weeks to accomplish this objective. He changed the frequency of AIM. You can also divide your portfolio in two parts and run them independently. In this way you still have montly trading, but you have two portfolios with the same frequency but they are out of phase. In stead of two portfolios you could have 4 portfolios out of phase for weekly trading or 23 portfolios out of phase by one day for daily trading.
In this way you could also mix different frequencies and phases, for example a frequency of two months and 8 portfolios for weekly trading.
These are just thoughts, nothing else, I have not implemented anything.
At the moment i am happy with above. Hope it will hold.
Kind regards,K
Once a month
If you want to AIM monthly, you can still trade on a weekly basis and AIM an intra month high in the share price: divide the portfolio in 4 parts and AIM every 7.5 days. So you have the monthly evaluation for each part while trading weekly, every week another part of the portfolio.
At the other side of one month you have two months and three months. Should you now increase the portfolio by 2 or 3? Should you use LD-AIM in that case? The trades increase because you trade less often?
Kind Regards,K
Hi Aimhier,
Finding funds that track international stock and bond investments along with the currency fluctuations unhedged, might be a great way to add good returning assets not highly correlated with domestic stock markets.
In fact I am using sector funds with currency fluctuations unhedged. The currency effect sometimes causes a Buy or a Sell.
Also country funds(China for example) and worldwide funds are part of my machines. Stocks tend to be dutch based, although I have a Nasdaq 'deep diver' with good prospects :)
Kind Regards,K
Hi Aimhier,
Yes, i can buy stocks on american exchanges in dollars and also on exhanges in other countries. Transaction costs would be a little bit higher. For some stocks I need to change to another broker. It would be some hassle to make a change.
You could also use an internet broker. The broker could be from any country.
Also american stocks are available on the amsterdam bourse, the same as ADRs in the US.
The volatility could be greater.
Why am i not doing this? Dont know, maybe too lazy.
Kind Regards,K
Trend break,
Ir is funny to read these postings. I also have the feeling there is a trend break happening. Last night I could not sleep until I wrote on a piece of paper to liquidate my Corus machine. Today I saw the piece of paper, but did not react. Then I noticed I had two AIM directed sells today. At that moment I implemented the Corus sell. It was just a feeling and I think the feeling was triggered by two events:
1- China for the first time is selling steel to the USA.
2- UBS gave a warning for steel producers.
There was also the longer running wish to liquidate stocks and move into ETFs. The problem in Holland is that number of ETFs on the market is rather small. So this program is executed in slow motion.
Also the energy sector fund I used is going down lately. Not at the right level for a buy yet.
On CNBC this morning I saw a guy who said there will be no inflation but deflation.
Anyway, I am not in steel anymore.
Regards,K
One more
1% Telecom services sector fund, LIFO 23.7%
Parameters 10,0,6,1
Seems that the (small) food sector and Telecom is popular.
Kind Regards,K
Sell
5% Sell on CSM(amsterdam market), LIFO 33.6%
Parameters:10,10,6,5
Kind Regards,K
Inventory reduction,
Yesterday and today I had three 1% sells in my Telephone Services sectorfund. The Lifo gains were 24%, 23%,22%. Parameter settings are 10,0,6,1.
I have loaded 3 more 1% sell orders.
It is amazing that these sells happen, while the euro is up. Must be vodaphone in the fund?
Kind Regards,K
ishares - IBXLQ
website for more info:
www.euronext.com
label: trading, then click trackers
then click full list
and search for IBOX liquid corp.
click on IBOXX for more info
I dont know if this is the time to buy euro's. The euro went from $0.80 to $1.30. I don't know about the upside. I think in the past the DM went to an equivalent of $1.60
There seems to be some panic about the dollar, and we have seen many US mega investors telling us on euro TV that they have moved their assets from the US to other countries. They all 'fear' something like Buffett with his derivatives weapons of mass destruction. They say the situation is bad in the US, but who knows really?
I AIM euro shares, worldwide sectors, china, region funds and am exposed to all currencies. The currencies add volatility
and sometimes the movements are purely connected to the currencies.
For what it is worth,K
Hi,
There is an euro-bond ETF on euronext Amsterdam.
IBOXX Euro liquid corporates.(IBXLQ from ishares)
Regards,K
Re: Gauging Initial Cash Reserves.....
AIM classic 50/50
AIM 66/33
AIM HI 80/20
AIM LO 20/80 (could use some LDAIM at the start, which could be discarded later)
Kind Regards,K
Macro AIM
I see a MACRO Buy in my IT fund and also in Philips Electronics.
Could be the start of a tech rally.
Kind Regards,K
Hi Aimhier,
This was an AIM directed sell:
parameters 10,10,6,5
sell safe 10%
buy safe 10%
buy min percentage 6%
sell min percenatge 5%
On the sell side I tend to execute the AIM advice. Especially when a stock moves up very fast. When the news in the press is a price increase of 50%, I think it's time to sell. Whenever I feel irrational exuberance, I know it is selling time.
With AIM when you are selling you are also holding.
The proceeds go into CASH and earn 3.1% in Euros on the internet money market here.(ING) I am not worried about using the cash for new buys.
What I am thinking about is restructuring the machines. Maybe combining some stocks and sectors. The thinking is continuing but I did not receive any 'AHA Erlebnis' yet. I wait until I get a good idea before making any changes.
When a machine is very profitable and the size is too big, maybe it is a good time to make PC smaller and get a free machine.
At the buy side of things I am more conservative. I don't automatically buy normally. Did that in the past and had to use margin. That situation is corrected during last one and a half year. Now my cash position is approximately 20%.
I had some success with postponing an AIM buy until we get a crossing of the 200MA. MACRO-AIM. That was especially nice at the end of the great 2000 bear for some stocks.
I got some new insights in LDAIM lately, when I saw that you can have 3 sells, but 10 buys. I always thought that LDAIM was played with 3 or 4 buys and sells. I am thinking about this but not doing anything yet.
At least I feel 'safe' now with my cash position and will use it very conservatively.
Have to go to bed now, K
Hello All,
With the acceleration of the share price of CSM(Amsterdam stock market) I got my first sale after a long time in this stock.
The sale was partly stock dividend so my LIfo gain is very high. Without the dividend 28%, with the stock dividend 346%.
The stock is undervalued and quite possibly could go 50% higher
Cheers,K
Hi Steve,
I am 100% sure I sent you the spreadsheet with automatic LIFO calculations. I also remember I had to resend it because your email-address said that there was virusprotection or something like it.
Here is a copy of the email I sent you:
===========================================================
Hi Steve,
Here is an example of how i use it in my spreadsheets.
Regards,Karel
Attachments:
C:\Documents and Settings\Willem\My Documents\Spreadsheets\LIFO.xls
============================================================
Kind Regards,K
Hello Keith,
Maybe it is a good idea to listen to our fathers carefully.
They only want the best for us. Always listen to their message.
I cannot talk to my dad anymore because he is gone.
Talk to him when you still can.
Kind Regards,K
LDAIM
The down side is the potential to run out of shares in a bull market environment. In recent history this hasn't been too much of a problem!
What about the potential to run out of money in a bear market environment?
Kind Regards,K
Hi Tom, that rebalancing of the tech sector is interesting. It happened in AIM buy mode. It suggests that the AIM methology could be enriched with a rebalance plug-in, when AIM is in deep buy mode or high sell mode.
Kind Regards,K
Rebalance
I rebalanced my Corus machine today to its initial size. It became a bit too big.
It is now a free machine following Jibes concept of free shares. The rest of the profits go into the general cash reserve.
I am happy I did it. The new machine is started with parameters (10,10,10,5), half HI.
Kind regards,K
Hi Tom,
That's what I am doing as well. Machines that are too big will get a rebalancement. Also my Corus machine will get a smaller Portfolio Control at an unspecified moment on the medium time scale. This is also inline with the free shares concept from Jibes.
Kind Regards,K
Hi Tom,
Just liquidated my energy sectorfund, I am not happy with it. Profit 20%.
Kept my Royal dutch/Shell shares, so still in the energy sector.
Royal dutch/Shell could be a candidate for LD-AIM. Have to think about that one.
Kind Regards,K