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OT/ Inverted Yield Curve
I started investing in January 1986. I can never remember a period when Money Market accounts paid higher yields than almost all short/medium/and long term bond funds,,, Ken
Hi Clive & Toofuzzy,
Thanks for your responses.
Hi Clive,,
I'm never really sure what anyone would consider a good return. In my example data,, a 7%(annual) return was achieved,, with an average of 52.5% exposure ,,,, having said that that an inverse type selection added to this could double the return in therory,,, but long extended bull runs would drive the inverse down to oblivion,, it would be tough to sink that kind of money in a fund which was betting short the market,,,,I couldn't help but notice those bond funds equal or beat the RYNVX example with never doing anything,, I suppose if one did you could double that 7%,, Aim needs that repetitive cyclical action to make money,, After 76 buys and 246 sells with a stock fund starting at $8.76 and ending at $31.35 after 12yrs and 4months should we consider 7% Aim by the book a good result? Ken
Back testing
I've been doing some back testing on RYNVX(Rydex SP500 150%),, good test range 12yrs,4 months,,,,Aim by book,,,50/50,,10% safes,, min trade $500,, 10,000 shares to start at $8.76,,current price $31.35,,,Aim runs out of cash briefly in 2003ish,which is good,,76 buys and 246 sells,, so not much room for tweaking,, turned a $175,200 investment into $413,971 in 12yrs 4 1/2 months,, 52.5% avg at risk,, that's about slightly north of 7% return for those 12+ years,,, which is equivalent to the average GNMA(Ginne Mae) Fund over the same period,, or less than some of the better High Yield funds over the same period,, comments please,,thanks, Firebird
Hi Mark,
Thanks for the free download trial offer,, sorry I did not have more time with the trial,, and time ran out on me,, would have liked to have tried more,, lots of ideas in my head yet to try,,thanks, Ken
Aptus,
AIM adds 50% of every purchase to Portfolio Control,, can that 50% be changed in your program? Say variable from 1 to 99%?
Hi Toofuzzy,
Thanks for your ETF suggestion. I'm still 100% cash, 5.09% money market, no bonds, no stocks, no RYTNX, no indexes, just cash. I've been looking at two plays, one is here local and very cyclical in the transportation industry, 50% off 52 week high and sinking,, and the other was a energy related play in the coal industry but has a very high pe ratio. It was not IYE,,,,, I saw Tom owns that ETF,, I've read Stephen Leeb's book " The Coming Economic Collapse How to Thrive when Oil Costs $200 a Barrel" and IYE would be one way to play oil. ETf's are not in general going to hit the moon,, but if oil does go to $200 or more then Tom's IYE is going to the moon! I like your ETF suggestion,, with a comprehensive list AIM could be rolling in and out as the sectors rotate. I started investing in January of 1987 and have never done well buying in August/ September time frame.
Looking to Aim up again,
Looks like I missed the interest rate call,, I guess that tells me the fed wants to error on the side of growth and less on checking up inflation,,At least I know I'm still 100% as I get it wrong just about every time,, I have two stocks that have caught my eye, one is cyclical and still heading south, and the other is a energy play and quite pricey at this point,,, still sitting at 100% cash,, I've never seemed to do well in the past 20 years buying just before September, so I'm a little gun shy,,, I do like Tom's sector rotation ideas,, my personal pick of that group is IYE, could be an event(hurricane, etc) or two from IYE hitting the moon even with its recent run up,, thanks Tom for doing your IW and newsletter I appreciate both,,, by the way is that pumpkin colored car of yours a little bit towards "McClaren Orange" ? You know, like Johnny Rutherfords "Hi-Gain" sponsered Indy McClaren from the early 70's,, best to all, Ken(firebird)
Hi Cody,,,,, I see your cash is nearly 80%,, we made a big move to cash back in March of this year,, since then we totally sold out and are currently 100% cash, riding a money market at 5.07%,,, I thought back in March fed funds were going at least to 5.25%,, and we are there,,,looking at the deficits and inflation I believe fed rates go even higher, so we are sitting it out for now,,,Aim knows what to do with dry powder when the time is right,, best to all on the board. Firebird
Hi Steve
Always a great feeling to sell,,, feel free to build a fire under me anytime we need a rally....... I am convinced i caused it,,,,, my wife is laughing so hard at me she's crying! Congrats on your sells, Ken
Don Carlson
Thanks for the private email but I'm a cheapo freebie on this board and the service will not let me respond,, lots of sales to all this week, Ken
Hi Tom,,, i too have felt the ceiling,,, we thought it good to move when we did,,,, its that econ in me that said move now so we did last week,,,did you see yesterday's report on trade deficit? up over 20% in one quarter? yet , they were saying fed about to stop tightening,,,,, I guess i believe the debts,,, not that tightening is going to stop,, i thinkm fed funds to 5.25% or higher but that's my take on it,,, I will re-adjust when the fed announces tightening is over for awhile,, i think their hand will be forced to go higher,, so mucho chips off the table for me,, even a few more today, Ken
Hi Tom,, I'd like to take credit for this recent jump in stock prices,, we made a major move to the conservative side last thursday,, so prices could only go higher,, my apologies for holding the market back for 4 years ,,, sell on RYTNX today,, much smaller of course but that's ok,,,, hope everyone on the board gets lots of sells coming their way this week,, best to all, Ken
Hi Tom,
After much consideration and discussion(with wife of course)last Wed night,, we decided to take a very conservative and defensive position,, so Thursday we switched lots of money around,,, Why?,, I guess the most nagging thing here is the interst rates,, everyone can be their own economist,, but my crystal ball says Fed Funds rate will climb to 5.25% unabated and probably higher,, so that alone tells me to move but the biggest intangible in play is IRAN,, they have stated $100 a barrel oil if punished,,,, and with Venezuela and Libya backing their statements about supporting IRAN and $100 oil,, that's just not a damper on the market but a total flame out! Just my thoughts from all that econ I learned in college, Ken
Hi Aim hier,,,,,,,,,,,,,,Lots of irons in the fire right now, but I'll get to it, maybe this weekend, Ken
Where's Jibes? N/T
Darvas
I read that book,,,, never took the bait,,, I'll just keep with my own system,, maybe I'll write my book,,, for now my favorite books are still " The Money Spinner" ,, " Super Power Investing"(synchrovest) and "How to make a $1,000,000 automatically." Ken
Sidelines cash
I for one am happy about interest rates rising. Its about time our sidelines cash started adding a little to the bottom line too. Saw an old friend I haven't seen in at least a year last week,,, he brought up the old days when the Worldwide Money Market fund had a 7 day yield of 8.75%,,,, AHHHHHHHHHHHHHHHH the good old days of the mid 1980's! Ken
Congrats Sam4AIM on your sells this year to date,,,, looks like when they rang the bell and opened the gates this year your horse took off running! Nice profit in such a short time, Ken
Jibes,,,,,,,,, what ever happened to Jibes?
Hello Tom and AIM board,,,,,,, thanks for the Rydex reply,,,,lots of great folks and ideas on this board,, I trade using my own system which spins off cash,,, cause in the end its the cash we need when its time to live in this world,,, your ideas and twists on AIM sure help us all think a little deeper about what we are doing,, I've thought about writing my own little book on cash spinning,,, maybe,,, wish I could have met Mr. Lichello and shared some thoughts with him,, best to all, Ken
Using the Rydex Funds,,,,,,,,,,,,RYTNX(SP500x2) for me,,,, do your back testing,, 6/16/2000 was start of this fund,,, achilies with AIM is running out of cash as you all know, Since these are 2x the market dynamic funds lots of cash is warranted to start with,,, even 80% cash 20% stock runs cash dry back tested to 6/16/2000,,, 84% cash runs a impressive 32% gain on a stock almost down 50% since inception,, Aim on! Ken
Well done Cody and congrats on hitting a homerun with NTES, Firebird
Hi Tom and board,,,,,,,,,,,,,,Just a few notes and thoughts on the public debt in the USA,,,, 70% of Americans live paycheck to paycheck,,, same 70% can't scrape up $1000 cash without help,, 401k's average just over $40,000 hardly enough for anyone to retire,, I believe interest rates are going higher, much higher over the next 12 to 24 months,, because of the trade deficit, national debt,, etc we must attract offshore money at record levels,, I actually want rates to go up,, money markets around 7% to 8% would be nice,, I know so many people upside down in car loans,, wait until the housing bubble bursts and 0% down 30yr loan people are upside down in house loans,, already bankruptcy city here in Indiana where I live,, our cars and houses aren't worth near what we think,,,big contrast from say Florida where real estate is booming,, as for the market "Don't fight the fed",, if rates keep climbing I think Dow 8000 has a better chance than Dow 15,000, One final thing, How stupid are we with this kind of debt? China uses the interest from our debt it holds to do what? Buy oil! They use our own borrowed money against us! Firebird
Hello Board,,, I'm still around but I haven't posted in a few years,, don't know why cause I read Tom's board and comments all the time,,, best to all Firebird
Hi Aim Hier,,,
I see the market did bounce back a bit,,that was healthy and refreshing,,, the best thing about Aim is having people screaming at me at work as to what to do next,,and what am I doing now? I usually say its up to my computer program(AIM) which is why I'm not screaming and you are,, makes them madder yet,,, So many I know have just quit,,and hate the 1% thery're getting in money market,, LOL Firebird
Hu Aim Hier,,,
I see the market did bounce back a bit,,that was healthy and refreshing,,, the best thing about Aim is having people screaming at me at work as to what do,,and what am I doing now? I usually say its up to my computer program(AIM) which is why I'm not screaming and you are,, makes them madder yet,,, Firebird
Myst,,
I believe I'm getting the 3.5.8 update,,,and that's why its not running,,, what I need is the 3.5 Demo,,Firebird
Deepster,nocona
JMHO,, as an Aimer,,,, that almost everyone has run out of cash,, especially in the last few years,, not even 50/50 AIM had enough cash for Naz100 losing 80% of its value,,5400 down to 1600,,,if your in this long haul an adjustment as you mentioned is not a bad idea,, at least it will give you some dry powder for more dips,,, with a oil refinery fire in Northern Indiana,, Iraq's oil pipeline blown up yesterday,, and gasoline jumping 21 cents per gallon here,, I don't look for this to be a great week in the market,, JMHO, Firebird,,, Also, Myst,, I downloaded your free trial an cannot get it to work,,,????????????,, Firebird
Just noticing a few things,,
Let's see there's a oil refinery fire in Northern Indiana,,, Iraq's oil pipeline blew up again yesterday,, gasoline prices jumped here 21 cents per gallon,, enough personal bankruptcies in our local paper to last thru 2 trips to the crapper,,, marriage dissoulutions too,,, my best guess is most peoples free cash will be delivered to the pump this week,, and not to the stock market,,,, JMHO,,Firebird
Tom
thanks for the reply,,, the people around me are telling me we are going down by their actions,,but my experience tells me its time for a nice bounce with all the negatives I keep hearing,,, the big question are the nay sayers actually right this time? At least we know with AIM we are doing the opposite of the crowd,,, buying low/ selling on run-ups,, my concern is for very long term as in Grabbers post b4,,, when do we do enough damage as to ruin this market for nearly a generation? 4 years has past since our highs,, 16 more to go in a 20 year bear if that be the case,,, 1 in 10 is still 1 in 10 though,,, have a good weekend too,, Firebird
Heat Stroke!
That baby needs a bathtub of ice,,and fast! Firebird
Grabber/Post #13525
Steve,, I re-read that post,,,, I just wanted to say a few things again,,, it was in reply to my "where are we going?" post,,,, It's just been my gut since this crash,, but we've been over 10,000 Dow for awhile,,, when and are we going to make a run at 11,000 or 12,000 or higher in this bush- league booming economy? It's just my humble opinion but I see a test of the 7800 to 8000 range coming first,,, higher gas or terrorist and I believe we can take out Dow 7200,,,, I work around 30 white collar college educated people daily,, average age 53 or so,,,,virtually none of them is still in the market or investing in stocks anymore,, they have either stopped the money flow altogether or stopped the flow and pulled the money out,,the latter is far more the case,, I've seen 3 cancellations of retirement because of the market,, just my small world but that's what I'm hearing and seeing,,, remeber as the market falls every 1%,,, buy and holders need a 1.1% increase to get back to even,,,,,lots more fingers on the panic button this time I'm affraid,,,,, sure there's a boatload of cash on the side lines,, and those boomers aren't putting it in either,, the bear is winning steve, JMHO, Firebird
DonCarlson
Thanks for your reply in the mail. Sledding on these boards is not always easy. Firebird
Sell out of what long term position?
Taking and extra 10% on the sell side and lowering PC by that amount would sell who out of what? Adding that same extra 10% money back in on the next buy anyway is what I meant to help kill that math quirk. Let's see,,, if I had a 5% sell then I'd add another 10% to that sell which would be another 1/2% of PC,,, 1/2 of 1 percent in a 5% sell,, or 1% of PC extra in a 10% sell,,,, might take a few life times to run the position dry,,, especially when you are replacing that same money and adding back to PC with every buy,,,, Selling out of long term position? Could be done with maybe 40,,50,,60 sells in a row with no purchase signals,,,, I saw the newest Aim book in a large bookstore while on vacation,,, let's see 80/20 split was mentioned,,, how rediculous is 20% cash as a starter? That's bad,,, REAL BAD ADVISE!!,,, as a long term investor I think 20% cash as a starting point is ridiculous,, let's see I started investing in January 1987,,,, How many times would a 80/20 split ran way short of cash? Not short,, WAY SHORT!! 1987,,yep,,88,,yep,,89,,yep,, 91,, yep,,92,,yep,,94,,yep,, 00,01,02, yep, yep and yep! JMHO, Firebird
OT: Racing
That's right,, off to MIS to see the Indy cars of the IRL. I wouldn't go to a NAP-CAR race if you paid me,, and yes I love F1 racing too,, forget Schuuuumy at the front,, lots of great racing going on behind him,, and Montoya is the next king of F1,, Firebird
The Mathematical Problem with Aim
I just wanted to leave this thought before I left for vacation. You brought up vealies,, here's my take on trading stocks,, you know the math in a trading range,,, take $100 lose 10% you got $90,, gain 10% back you only have $99,,,, reverse it,, take $100,, gain 10% you have $110,, then lose 10% and you have $99,,, not to mention commisions,, its that little quirk of math that just always kills ya and its always there. What's wrong with AIM? To really turbo-charge a AIM traded entity the PC needs to be reduced also on every sell to remove the above mentioned math anomaly. How much? What amount? It's actually 10% of your sell amount,, in the example if you would have sold $10 at $110,, sell $11, and lower PC to $99,, doing this alone adds a nice turbo charging to AIM and gets rid of the math quirk against you,,, Is this math quirk real? Oh, ya,, even those who AIM never had enough cash for the NAZ100 to drop from 5400 to 1600, peoples basis are so low now,, many need Naz and Dow to more than triple or at least double to get back in the game where they were 4 yrs ago,, I say keep the cash,, let the cash grow,, AIM in its original form burns cash,, I think so cause my Janus, PBHG, and American Century stock funds(9 of them) lost between 70% to 80% of there value,,, thank god for our large cash and bond positions,, are total hit was close to 40%,, but I have many friends my age and older in serious fiancial trouble,, they were 100% invested the whole time,, ouch! Best to all! Off to Michigan to play golf and watch the Indy cars next Sunday at Michigan International Speedway,, JMHO, Firebird
Hi Aim Hier,, OT:College costs,
My son enters college in 1 month. How can I compare? Easily,,,,, very easily,,,,,,,, he has exactly the same part-time job with the same employer I did when I went to college,, how does it compare now??????????,,, well I lived at home, drove on to campus(Purdue, West Lafayette) paid for my own books and tuition,,, I used about 30% of my spendable take home income,,, What about now,, he has the same job I did so long ago,, it would take about 90% of his take home annually to cover his tuition and books by himself,, so the real costs seem to have tripled using this measure,, which I believe to quite acurate,, We travel the state for tournaments,, I cannot tell you how many people have asked me if I knew how lucky we were to live here,, and save all that money,, in the past 5 yrs especially,,, I guess "the sun shines on the ugliest dog's a$$ every now and then" so I consider myself lucky,, when he was in jr high,, we thought $12,000 to $15,000 for 4 or 5 yrs,, we are now looking at $35,000 to $42,000 for the same,,, pay as you go here,, no financial aid for this local, financial aid= loans,, no thanks,, can't tell you how many I know hocking there house for $20,000 per year to get kids thru,,,and they are in they're 50's!!!!! No guarantee of employment or graduation,,, you talk about risk,,, He really wanted to go to Bowling Green State University,,, out of state tuition we were looking at about$130,000 when you include gas, pizza, movies, etc on top of tuition and board,, same degree he can get here, cheaper too,, not to mention his loss of income from losing his job if he moved there,, keep AIMing, Firebird
Hi Grabber,
Thanks for the reply. Inflation in my life is way higher than the 2% the gov't says it has been. I believe the Fed is way behind the curve. Firebird
OT: Where's the market going?
Let me sum up my own situation,,, Auto insurance went up 12% in March,,,, electric bill went up 8% June 1st,,, on top of a 8% hike last June 1st,, Health care went up 15% las Oct and not sure yet this year,, gas for our 4 autos and groceries taking an extra $250 to $300 per month,,, I have a 2% pay increase coming in Sept,,, oh I must not forget junior starts college here in next month and the tution bill was 9.42 times higher than when I went there,, so if I'm typical of boomers out there,, then where is the "extra" free cash to come from to spur this market out of this trading range? I don't see it happening any time soon,, I consider being in the trading range a blessing right now,,, "not much Aiming in ranges" how's that for a quote!! ready and waiting when something happens, Firebird