is retired now but still kicking like a horse!
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Hi SB Torres,
I suspected something like that of course, but the the drawing on
http://www.aim-users.com/aimbrief.htm
showed the SAFE as entered as a percentage in the equation:
(Pc+$s)/(N(1-S%))
and I followed the instruction as they are written. That's why I thought that maybe you intended it only as an algorithm for close to the 10% SAFE and with the use of GTC Orders only, but it still appeard wrong to me.
In your present answer you also use the S% in the equation while it in fact it should be a fraction!
Your:
S%==Safe in Percent where 10% = 0.10
is technically incorrect. I would restate it as
S%==Safe in Percent
and your equation becomes then:
(Pc+$s)/(N(1-S%/100))
Right?
I am just nit-picking, but a fraction-nit becomes 100x as large as a %-nit.
Conrad
New posting Vortex Demo Portfolio. ASML and QQQ 25/10/02:
http://www.investorshub.com/boards/read_msg.asp?message_id=555285
Conrad
New posting Vortex Demo Portfolio. ASML and QQQ 25/10/02:
http://www.investorshub.com/boards/read_msg.asp?message_id=555285
Conrad
New Results Posted for QQQ and ASML Vortex Demo Portfolio.
The ASML performance has been recorded with the initial aggression factors from the optimisation for a strongly declining market. The aggression factors appear to be set too high and cause a too rapid sell-off of shares. The aggression factors have been reduced to create a more appropriate Advise Level which is more in line with the available share capital and Reserve. Rebalancing to increase the current share capital appears necessary as it is not expected that large price drops will occur.
New BGIF=0,75
New SGIF=0,7
Previous actions have been fixed as executed in the Excel Program so that the change in parameter settings does not affect the performance to date. Share sales have been modified from the advice to prevent negative share capital. The spreadsheet is already modified to prevent negative cash.
The Vortex Result calculation with average capital at risk shows a significant improvement in yield to reflect the lower time averaged investment. Profit is of course still related to the original capital of $ 20 000.
Parameter Adjustment
Some of you may question as to why the parameter correction is required. You could argue that if need to do it then the system is not good enough for you. You judgement may be fair enough if you need a system that optimises automatically. Vortex is not yet automated automatically, so I present here the possibilities for adjusting the parameters on the basis of a practical approach. For the short period from 9/9 to 25/10 it is not possible to talk about optimisation yet. The period is far too short. The reason for the adjustment is that the high aggression settings that came out of the optimisation created sell advice and buy advice figures that exceeded the available share quantity, respectively the available reserve. The re-adjustment is therefore a purely practical affair so that the advice would be come executable. With a Standard AIM any AIMer would do something similar by executing only a portion of the AIM Advice to conserve cash, or by limiting the sell off by executing a PC-correction, which I believe is called a Vealie. In the Vortex this matching of the parameters to achieve practical trading actions, to maximise yield or to prevent negative $-values in the portfolio is no different. This is simply an action to remain in control of the system, using skill as wel as gut feeling.
For QQQ the time averaged investment also shows a significant advantage over the yield based on the $20 000 investment.
Per 25 October the Vortex yield shows lower due to the accumulated trade cost but on the basis of the time averaged investment the Vortex yield just outperforms the Buy and Hold, which is also calculated on the basis of effective trade costs.
The parameters settings appear to be OK for now. Rebalancing also appears to be useful at this stage.
Rebalancing
If the anticipated market recovery will be confirmed it will be important to convert the significant cash Reserve of ASML(CER is about 90/10) to shares. For QQQ this is also true(CER is about 50/50).
This approach is more or less in line with the TA method that if the bottom is identified then it is time to convert the cash into shares. In a way this is also similar to the Stop/Buy and Stop/Sell method by which the performance of Vortex can be enhanced significantly, similarly to the MACRO method developed by Don Carlson.
Conrad
The Husky Diver!
Congratulations!
You have grasped the Idea of the Alternative AIM very well: A logical adaptation of the basic AIM structure to maximise the effectiveness of the available resources. You can peel an apple or skin the cat in various ways. The trick is to find a way to use the skin as well as the innards that suits you the best. I believe that systematically stepping up the SAFE has merit, it achieves what other AIMers achieve by spending only 50% of the cash on each downward step and it has also some of the features of the Vortex Method that fundamentally relies on the correct setting of the Buy/Sell (Split)Resistances high enough so that cash is not depleted too soon.
The interesting thing about your Husky Method is a hidden optimum relationship between the price decline and the SAFE Increment. I would suggest to examine if there is a functional relationship to be discovered for an assumed price decline which is to be formulated in advance. I believe there is such a relationship but even then it will not be possible to catch all deep diving eventualities with a single method. We do not expect to charm all the women(or all the men) with the same bait, so we will not catch all stocks with the SAME AIM.
Try as you might, the deep diver will get you into a Depleted Cash if it dives deep enough. Solving this cash depletion problem of the Deep Diver is like solving the problem of salvaging a damaged ship: There are no scripts for this, simply because a damaged ship defies the rules of the sailing game. The big question here is:
Is the ship salvageable?
A standard seaworthiness test won't do. You have to get on board to find out if it is worth the trouble to even try to save the ship and if the salvager has the skill and guts to stop the bleeding and to re-start the heart of the patient then he will win the tough game he is in. The rules of this game are that there are no rules other than being able to determine if you should remain on board or bail out. All the experts on the shore with their little lists of 10 Best Things on Ship Salvaging only can tell you how they salvaged a ship or two and 9 of the 10 Best Things might well be the 9 Worst Things for your ship.
Here are My 10 Best Point for Deep Divers:
1 Get close enough to find out if the ship is still floating;
2 Have enough resources to stick with the ship long enough to find out that it may be unsinkable;
3 Be prepared to borrow for financing essential equipment;
4 Take the risk to let the ship go to the bottom and have enough money left to get home;
5 Look for another stricken ship;
6 GOTO 1 - 4 above.
It should be plain that # 1 and # 2 are prerequisites and that #3 and #4 are the calls of the Umpire: You are the Umpire! It's you game! If you call the shots right you win, and other Dives are there for you to take.
Making money on Deep Divers is like fighting for a woman, or for man, that says NO: Its almost impossible to succeed but the target should be worth having if you try.
There are no Rules.
Conrad
Hi sbtorres88,
I have looked at you diagram quite some time ago but now that it is discussed again I like to see if I am right in my interpretation(The detailed diagram gives me a headache, so I use the simple diagram):
___________________________________________________________
Selling
Val.=10000; Pc=10000
P1=100
N=100; Pc/N=100
SAFE=10%(1) and 40%(2) ; (These are alternatives)
P2=120; $s=2000 ; (I could select more or less than this)
P2=140: $s=4000 ; (Alternative price)
Sell(1)=12000/(100(1-10))=-13,33 ; Sell 13 units.
Sell(2)=14000/(100(1-40))=-3,59 ; Sell 4 units units.
Standard AIM Buy for this is: (2000-1200)/120= 7 units
Standard AIM Buy for this is: (4000-1400)/140= 19 units
____________________________________________________________
Buying; Start condition as before:
P2=80; $b=2000
P2=60; $b=4000
Buy(1)=8000/(100(1+10))= 7,27 Buy 7 units.
Buy(2)=6000/(100(1+40))= 7,27 Buy 1,5 units.
Standard AIM Buy for this is: (2000-1200)/80= 10 units
Standard AIM Buy for this is: (4000-1400)/60= 43 units
____________________________________________________________
It looks as if my interpretation of your method creates unreasonable results for large price differences.
A Torres-SAFE of 9% would give the Same Sell(15) at P2=120 as the AIM with a SAFE of 10%
On the Buy side a Torres SAFE of 7% gives the same Buy at P2=80 as the AIM with a SAFE of 10%
It would appear this AIM version can only be used with SAFES close to the 10% or lower,and then only with GTC Orders. As the SAFE Reduces to '0' the Buy/Sell reduces to:
Sell=$s/P2
Buy=$b/P2
After this the Pc deviates from the stock value, so this would change to:
Sell=(Pc+$s)/N
Buy=(Pc-$b)/N
What is wrong?
Conrad
I agree Karw,
The tangent-discussions takes altogether too much time anyway and without a good formal approach I just run into circles.
On the Vortex Random Price performance I conclude that Vortex does not care one way or the other as long as prices are volatile!
Also, it is clear to me now that we can create various types of random price structures and that Vortex responds with different optimum parameter settings that would give maximised performance on the average.
Regards,
Conrad
Hello Karw,
I am beginning to get your Message. It comes through loud and clear, like the Heralding of the Angels in Revelations!
You wrote:
1-Biggest C probably sends a spectrum of messages. From the lowest level of rationality to the highest levels of rationality. This to produce the highest ratings in terms of readership!
The Big C's are sending SPAM????
2-A hidden message is dependent on the receiver, not on the sender. The sender knows that He/She sent something. The receiver just receives the message or does not receive the message. The 'Hiding degree' of the message is dependent on the receiver.
This explains it! I must have a Firewall preventing anything from al the Big C's coming through
3-Algorithms don't have to be deterministic or classical. They can have 'quantum' nature or have 'classical chaos' nature. Having this nature one can build up a random number. Think about Schrodinger cat. When you open the box and the cat is alive you have a '0'. When the cat is dead you have a '1'. When you repeat this experiment you create a string of numbers. These numbers are random. Random irrational, i guess.
I am with you on the chaotic Random Event Generator. The civil Service and Government itself works like that too!
On the Cat Experiment I don't beg to differ. I insist on it. You have opened Pandorra's Box, and that has more things in it in it than a simple cat. The Analogy of the cat in the box is a completely inappropriate experiment that proves nothing and illustrates less(this is how you get negative numbers!). It's like equating the behaviour of a sub-atomic particle or a photon with the motion of a loaded super tanker, or that of the motion of the Moon. Stories like that simplify the issue at hand and make the analogy a ridiculous farce that lends itself perfectly for paperback publishing. Science fiction sells good too but most of the contents is fantasy.
If I put a cat in a box a million different things can happen to a cat: for one thing if the box is a microwave oven and I switch it on for 10 minutes the Cat will be dead about 99,9999939% of the time in the first 6 months of the microwave oven life. The most obvious statistical thing here is the quality of the oven. Some MACRO MICROWAVE Cat maymiraculously survive if on first try if the magnetron is defective at the start, or fails within a few seconds after switching on. The "3" in the percentage figure is a random event! The Lucky Cat will most likely be sterile though, or become blind a year later.
On the other hand if the box is a comfortable Cat House I could open en close the box a million times and the cat will most likely be alive each time. I would get tired of this silly cat experiment and would quit befr the cat could die. Schrodinger's Cat is a ridiculous experiment that is a futile attempt to make quantum mechanics and microscopic causality questions accessible to the Milk-Man and Joe Lunch Bucket. The essence of the background for that Cat Analogy is that for simple events between the 0-state and the 1-state, which are observable conditions, nothing can be said about the in-between state. Whether or not the end state is a "0" or a "1: or a 1 is irrelevant. For all that an observer knows about the "In-between" states they could have switched back an forth a million times in a myriad of fractional stateswhich are a function of the particle/box dynamic, and maybe as well a function of internal particle dynamics.
In the Cat Analogy no one ever came up with the idea to put a dead cat in the Box to see of it would be alive when the box is opened. The quality "dead" or "alive" does not translate from Cats and Cowboys to muons or to pi-mesons(Hah, here we have "pi" again! I suspect the ratio P/K for a pi-meson might be a new type of quantity that does not yet exist), and that various "states" that sub atomic particles can be found in are not transferable to a Cat.
I classify Schrodinger's Cat as a very irrational attempt to explain irrational events.
Cats are extremely predictable creatures!
The problem with popularisations of the mechanics of the observable universe is a dilemma: Simple people tell their children simple things such as that a cat in a box in neither alive nor dead and that one can only find out by opening the box. This simple view creates hordes of uninformed people that let these simplistic explanations grow on them, and so they develop a mystical interpretation of reality which totally escapes measurement.
When on a paranormal exhibition the Mystic fails to "read" my aluminium neck chain then he explains his failure that I am closing myself off from him while the whole purpose of my experiment with him is for him to circumvent my obvious attempt not to give him the answers that he wants to get. The sort of people that fall for the "trick" of the Mystic by answering all his probing questions and tangent remarks are always the simple people that have no idea that the Mystic is reading them because they themselves are flipping the pages of the open book they are.
Karw, the issues here are often quite overlapping and half covered under various cloaks that makes it difficult to separate reality from fiction. I was a pulp/paper mil engineer in Canada and one fellow came to me with great plan to conserve water. He proposed that we use the electricity from the hydro-turbogenerators that were idle to pump up the tail water from the other turbines back up to the lake. He said this would preserve the water.
On the one hand it is quite possible for a hydraulic turbine-generator to pump it's own tail water back up the lake. The problem with the man's proposal was that it would be much more effective to close off the penstock instead of pumping only about 40% of the water back up the lake using electric power. Many thought experiments that are set up for the public's entertainment of by virtue of ignorance are of this type(or simply to publisch a controversial book). Most of the talk about over-unity machines has this same type of ignorance hovering about it and a smal fraction of "weird idea's" are first of all less obiously impossible but require a Nasa Budget to study.
I think you are pulling my leg with the Cat In The Box Experiment.
Rational Regards,
Conrad
Hi Karw, An Irrational Random Number?
I had prepared a reply and saved it for later posting but I can't find it anymore. My computer files begin to look like a transcendental number. I can't find any order in the mess! Some messages must be there, I think, but Big C has no hand in it.
I think any message in a number should be rational. Sending an irrational message would be irrational, and that is not something one would expect from Big C. I say no message-digger is ever going to find a pre=loaded message in Pi or e. At most they will find Random strings of symbols that by virtue of Decoding Generation will produce a pseudo message.
Rational messages would be hidden in rational numbers. But I can't figure out why a message would be hidden. What's the point to hide it?
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++
The Karw Number=12,1122111222111122221111122222 etc.,
is non repetitive. This means that it is irrational by definition, as rational numbers are repetitive. The interesting thing here is that the digits are determined by an algorithm and therefore they are not random. By the same reason the digits of the known transcendental numbers are also produced by algorithms, and from that no transcendental number can be a random number. This I interpret that a random process can not produce all the predetermined transcendental digits of known transcendental numbers indefinitely. This raises an interesting possibility that a random process can create a unknown number that is irrational as well as transcendental. Right?
I believe that this is a contradiction: If a number that is produced by an algorithm is by definition not random then also the irrational numbers are not random. The nature of transcendental and irrational numbers is that they cannot be produced by an algorithm, and this should preclude them being random, but can this be proved?
It would appear that it might be possible that a random number may not have repeating digits, that it is not algebraic, and that it therefore must be classified as irrational and maybe transcendental.
Example: (--- is non repetitive continuation)
EXP(1)^(k=0,105360515657829---) =1,11111111111111 (repetitive). The exponent of 2,71828182849505--- is arbitrarily chosen to create a rational number 1/0,9 and the point here is that it therefore can be found via an algorithm:
So: k=Ln(1/0,9)
and for this an algorithm can be set-up, from which we know that k is irrational and possibly transcendental. If there is a Test that will be able to tell a irrational from an transcendental then I will find it, but the problem of the Random number remains:
If Rn is an random number, has no repetitive decimal digits, then it might be irrational as well as transcendental, and therefore it must be able to be produce it by using an algorithm, which makes it not-random. Can I conclude from this that Rn can not be irrational and can not be transcendental?
If so, true random numbers must be a class totally apart and no rule whatsoever apply to them.
This creates a new dilemma: Suppose a random process "accidentally" produces a transcendental number
Would it be am Irrational Random Number, or an Random Irrational Number?
Conrad
Hi AIM: Don't Bust: AIM High.
Qarel and QP already advised you how to get you feet wet. Personally I would prefer about 25 % Cash right now. I have used 20% in the Demo Portfolio that I started on 9 September. Zie:
http://www.investorshub.com/boards/read_msg.asp?message_id=541739
and:
http://www.investorshub.com/boards/read_msg.asp?message_id=540570
The ASML Stock is quite volatile and could stand model for a typical AIM Stock.
QQQ is typically not very volatile and is typically not such a good AIM stock. With The Vortex Method it is possible to compensate for the low volatility, but also I prefer more volatile stocks.
If you are not willing to invest the cash right now I would advise to set up the AIM Portfolio or an alternative AIM Portfolio anyway, as if you were investing real money. "Invest" about 10K if you have it available for investing. Go through the motions as if you had to invest your own money and be serious about it. This Dry Swimming gives you some of the feelings of real investing and also experience of having to call the shots.
With a bit of experience I would advise you to start with Mutual Fund that charges only 0,5 % Trading Fees, but to find one with good volatility might be difficult. Reliability/Robustness + Volatility in one Fund are not easy to find bit that is what you should look for.
Getting you feet wet is the best method however.
Regards,
Conrad
Hi AIM: Don't Bust: AIM High.
Qarel and QP already advised you how to get you feet wet. Personally I would prefer about 25 % Cash right now. I have used 20% in the Demo Portfolio that I started on 9 September. Zie:
http://www.investorshub.com/boards/read_msg.asp?message_id=541739
and:
http://www.investorshub.com/boards/read_msg.asp?message_id=540570
The ASML Stock is quite volatile and could stand model for a typical AIM Stock.
QQQ is typically not very volatile and is typically not such a good AIM stock. With The Vortex Method it is possible to compensate for the low volatility, but also I prefer more volatile stocks.
If you are not willing to invest the cash right now I would advise to set up the AIM Portfolio or an alternative AIM Portfolio anyway, as if you were investing real money. "Invest" about 10K if you have it available for investing. Go through the motions as if you had to invest your own money and be serious about it. This Dry Swimming gives you some of the feelings of real investing and also experience of having to call the shots.
With a bit of experience I would advise you to start with Mutual Fund that charges only 0,5 % Trading Fees, but to find one with good volatility might be difficult. Reliability/Robustness + Volatility in one Fund are not easy to find bit that is what you should look for.
Getting you feet wet is the best method however.
Regards,
Conrad
Hi AIM: Don't Bust: AIM High.
Qarel and QP already advised you how to get you feet wet. Personally I would prefer about 25 % Cash right now. I have used 20% in the Demo Portfolio that I started on 9 September. Zie:
http://www.investorshub.com/boards/read_msg.asp?message_id=541739
and:
http://www.investorshub.com/boards/read_msg.asp?message_id=540570
The ASML Stock is quite volatile and could stand model for a typical AIM Stock.
QQQ is typically not very volatile and is typically not such a good AIM stock. With The Vortex Method it is possible to compensate for the low volatility, but also I prefer more volatile stocks.
If you are not willing to invest the cash right now I would advise to set up the AIM Portfolio or an alternative AIM Portfolio anyway, as if you were investing real money. "Invest" about 10K if you have it available for investing. Go through the motions as if you had to invest your own money and be serious about it. This Dry Swimming gives you some of the feelings of real investing and also experience of having to call the shots.
With a bit of experience I would advise you to start with Mutual Fund that charges only 0,5 % Trading Fees, but to find one with good volatility might be difficult. Reliability/Robustness + Volatility in one Fund are not easy to find bit that is what you should look for.
Getting you feet wet is the best method however.
Regards,
Conrad
Karw,
The information on the distribution in Pi led me to some arbitrary follow-up questions without trying to be exhaustive, and I thought that maybe some insight might be readily at hand.
I have read that the digits of Pi had been calculated to the order of 206 billion and that is an order of magnitude of 10^5 larger that a million. I would suspect that the deviation from equal frequency for all the digits will reduce to zero. If experience would show that convergence is not taking place then this would raise more questions: For example, would the preponderance of some digits be a transcendental number?
That I did not ask about the digit distribution irrationals but my curiosity would also apply to these numbers. Any reason why some Tr or Ir numbers would not have digits greater than 5?
Question 4 relates to the possibility if a whole number can be transcendental.
I am thinking of the definition that any Tr can not be a solution of a polynomial equation(with whole number coefficients). Nothing in the definition states that all Tr numbers must contain decimals. So this is my exploration:
Tr is:
1) A number with a large quantity of digits but it has no decimal parts;
2) Tr can not be expressed as a fraction of other hole numbers;
3) Tr is no solution of the mentioned polynomial.
Example: 7 is not irrational as 21/3=7, and 7 is not transcendental as it can be a solution to a polynomial with whole number coefficients.
A whole number can be a Prime Number, but can a whole number also be transcendental?
Conrad
Transcendental Numbers
I have discovered that Transcendental Numbers create more Traffic than a 56 % Yield with Vortex. OK, here is more on Tr Numbers:
In the first one million digits of pi there are:
99,959 zeros
99,758 ones
100,026 twos
100,229 threes
100,230 fours
100,359 fives
99,548 sixes
99,800 sevens
99,985 eights
100,106 nines
I just plucked this from Internet. There is more information on numbers than on solving crime. I wonder why this is is.
Anyway this raises interesting questions:
1) If we count the frequency of the digits to the "end" I would expect that
all the digits "are there" with the same frequency. Can anybody give a good reason why this would not be so?
2) Will give a digit count on "e" the same distribution?
3) Do all transcendental numbers we can make up have the same digit frequency?
4) Can we build a transcendental number that has no fractions?
I just wondered.
Conrad
Hi Karw, Message Reckoning.
This software you mentioned, is it standard in Bill Gates's software issues? If so, what messages does Bill send out?
I bet it will contain:
10.10101.1101.0.10.10101.1101.10.10101.1101.10.10101.1101...
Now, if you set your baby at your computer keyboard and let it type for an hour or so you will be amazed how intelligent a kid like that can be:
You might find this string of letters
!!!God Truly Lives!!!
What would you conclude from that?
You might think: "This kid of mine is really smart".
Wanting to know more, you read on, and on, and on, and then you read:
!!!!!Karw is Dead!!!!!
What would you conclude from that?
Big C
Karel, this is a terrible development!
We are coming to end up at a point at which we agree on everything!
What do we talk about next then? Oh well, we will just play the harp.
the reductio ad absurdum
It is one of my favourite tools in my toolbox.
About 45 years ago I was elected to lead a Christian Youth Group and on one fine day I announced:
God is not Almighty
This created a shockwave: Today some scientists can still measure the remnants of it, reverberating through the universe. They have no idea what it is, where it came from, and where it is going.
I controlled the panic by suggesting to play a game. Everybody was for it and it reduced the pandemonium a bit. They figured I had made a sick joke, and the game was going to make up for it.
Milk and cookies were brought in.
"Let's make a list of all the things people cannot do"
Many lists were made. That was fun.
I could not have imagined all the things people could not do! Kids are beautifully creative! Art Linkletter know this better than anyone. Some of the things had been done already more than once, ot twice, but that didn't spoil the fun! One kid triumphantly called out:
"People can't make babies!"
"Let's make List again" I said. "Hiep Hiep Hoera!" the kids screamed in unison.
So, I said: "It is almost time to go home, so this will be a Short List!
Each one of you writes down one or two things God cannot do."
The Short List is still growing. Even now I still get an e-mail now and then that says:
"I found another one".
It's amazing what people can think of!
Big C
The Magic Square!
Karw, you are right! First I thought it was due to a limitation of the Excel program but after you mentioned this I can see that
((K^n/A-X^n)/B) becomes zero for a certain value of n an then it becomes a complex solution if n gets bigger! I did not spot this from the figure.
See this for n=3, K=5, A=1=B
The stuff that you said next goes by me for the moment. For n=3 there are no square circles but the shape above in the graph. What shall we call it! A WW II helmet?
The interesting thing is that all sorts of interesting shapes develop when you start varying the parameters?? Hey, this parameter variation business sounds like VORTEX business
Aside from the geometric figures that can be generated the thing that I found interesting is that the Number set is not figure but simple a number set, and the Number Set
{2,K,x,y,Pi,Pi/4}
containing the transcendental number Pi, which is not related to a circle in his case, yet the numbers Pi and Pi/4 can be extracted from the number set (x,y) as an numerical integration process!
In this sense the number Pi is still relevant but it is no longer special, as there are many numbers which are transcendental. I believe that many one of the square circles will have CN1 and CN2 being transcendental numbers different from Pi and P/4.
The next Trick of the Day will be the generation of a circle for which C=3*D and one for which A=4D^2
Keep
Conrad
I fully chuckle chuckle agree as wel!
Conrad
Quarel,
It would not serve any purpose to simply say NO to your question. You are either referring only to what other people see as messages or you are also expressing your own belief.
Either way, what you(or someone else) calls a message may be a simple fact that is not a message. On the other hand when I see something beautiful I can marvel at it without invoking it as message while the person next me may see it as a message.
I get the impression that you do not give people the credit of being creative, and that assumes that people can not do anything but read. I hope you are playing the Devil's Advocate.
I see a number as an abstraction and it can not be assigned any objective existence, unless it is a real number, of course
Let's face it: the names people give things tend to condemn them to a cubicle from which they may not escape. I am stuck with the fact that language is horribly ineffective to deal with the things I can think. I like to fly as Jonathan Livingston Seagull did, but I am not quite there yet.
To me it is clear that these digits 44244 are not message. They are not even numbers
???
Ha! That is what I call beautiful: Obviously they are even numbers, and after you see them as such, they are obviously even odd numbers.
As far as numbers go 44244 is an oddnumber indeed:
4*4*2*4*4=512 : Now multiply it with the central digit:
512*2 = 1024 OK, Now what? Simple! I do another trick:
Take the value of the sum of the 3 central digits:
8+2=10 and now raise the central digit to the power of 10:
2^10= 1024 Ok, fine, I am beginning to enjoy this There is more:
2^4=16 and this happens 4 times: 4* 16 = 64
4+4=8 8^2= 64 !!!
Anyway I still do not see any message. I just see the fun that I created with these numbers.
4+4+2=10
10^4=10000 : The remaining 4 give the quantity of zero's
10000 = 16 : In the binary system
4+4+4+4=16 and the remaining 2 is the 2 of the binary system.
I was a Big C for a while
Conrad
Hi Karw,
I have not forgotten you statement about transcendental numbers and messages that might be in them. In a way many numbers have interesting properties: Try out all the tricks one can do with the number 7!
Ok, I start off with the simple proposition that there are an infinite number ( I should rather say "quantity" here) of transcendental numbers. So, I suggest that any Creator (Big C) would have a Big Problem(Big P) with selecting the number in which he wants to put a message.
In my view Big C would even have a greater problem in finding reason for putting a message in a number, or two messages in two numbers, or two message in one number, or a million messages in one number. Any one irrational number or transcendental number is plenty big enough to contain everything the Big C would be able to tell us. But why would he?
I think Big C is no mathematician. One time when God(one of the Big C's)was asked by Adam to explain the Trinity he said: (Dat kan ik je zo 1,2,3 niet vertellen): "I can't tell you that in a 1,2,3 manner"
Let's make a long short story here:
I start with the equation
K^n=X^n + Y^n (ESP)
and I can find an infinite number of solutions to ESP ( I am tempted to call this Extra Sensory Perception). What it actually means is Equally Spaced Points. I assert that each point that satisfies the ESP Equation(and you need a bit of ESP to understand this)is as close to its neighbors as any other point is close to its neighbors. It does not have to be proved. It is an a priori fact.
Of course, you will recognize that Fermat already know that for n>2 and k, X and Y being whole numbers there are no solutions. So, there is a infinite set of numbers that do not satisfy the ESP Equation. We will not deal with them: it will take too long.
OK, lets use :
n=4
X=1
K=3 Find Y
No problem: Y=(81-1)^0,25= 2,99069756244244) which is at least irrational, and the serie 44244 is obviously a message: If you examine the digits then it will disclose the mass number of the the Oxygen Molecule, Water Molecule as well as the Nitrogen Molecule. I state that this message, which used to be a secret message, is the key to the all the mass numbers of the elements as well as a few Special Molecules that Big C has has given us to breathe and to drink. This was so ordained when Adam and Eve were created as the O2 + the N2 is the Breath of Big C and Adam and Eve are made for about 80% out of Hydrogen(2) and Oxygen(16). All the other elements in the human body can be found from 44244. Actually, you heard it from me first, this transcendental message from Big C is actually a blueprint for the human being. We can now make people in the lab. No more messing around with the lights out!
I promised to be short, so I will not explain how people are made.
Suppose now I do this trick again:
X=Pi
Y=e^2
K=Pie Find n
All of the input numbers are transcendental numbers. Also the exponent in the value of Y could have been e instead of 2. Before solving for the value of n I ask the question:
Is n a also transcendental number?
In any case n is between 1,58487734636197 and 1,58487734636195
And it might be tempting to say that if we make the last decimal=6 that the solution is then exact, but I do not believe it yet: I shall test it, just hold on a second:
Yep.
By making the last digit a 6 the solution appears to be exact, at least as far as my Excel spreadsheet is concerned and for the 14th decimal the difference between the calculations for Pie^n and the X^n and Y^n is exactly zero in Excel as both calculations end with the 6 as the 14th decimal.
I suspect however that this practical value n=1,584877346361960 is only an rough approximation and that n will be irrational as well as transcendental.
The reason for this belief is that the solutions of the ESP Equation contain between any two number pairs (x,y) we are able to fit in an unlimited quantity of other transcendental number pairs. It would seem therefore self-evident that in case one or all the input numbers (x,y) are transcendental that n should also be transcendental. But this is no proof as yet, but if any operation on a transcendental number is always a transcendental number then the conclusion should be that n is also transcendental:
K^n1= TR ------- (TR and K are any transcendental numbers)
Pi^n = e
n*Ln(Pi)=1
n =1/Ln(pi)= 0,8735685268302320
Which I believe is a transcendental number. This is yet to be proved or is already proved by others. It may be done by starting with the assumption that n=a/b with a and b being rational numbers, using the assumption that n^p is a rational number but as this is a short article, I leave this for others to prove.
Back to ESP: => K^n=X^n + Y^n
We generalize this to
K^n=a*X^n + b*Y^n
n=2 ; a=b=1
X=3
Y=4
K=5
Which is the familiar solution of the triangles with the 3,4,5 sides.
The first set of numbers we kan specify is: {2,Ki,Xi,Yi} of which {2,5,3,4} is an example. There should be an infinite number of these solutions, none of which are transcendental numbers. Also, ESP(a,b) and ESP(1,1) are respectively sets of Ordered Pairs such that
ES(1,1) is set of ordered pairs (x,y) from which a circle can be constructed;
ES(2,3) is a set of ordered pairs (x,y) from which an ellipse can be constructed;
ES(2,-3) is a set of ordered pairs (x,y) from which an hyperbola can be constructed;
Conclusion
The ESP Equation with exponent n is a generalized system from which we can generate an unlimited number of sets of Orderder Pairs in the form of
ESP{n,K,x,y}
and from these sets we can extract new sets in which the ordered pairs serves as input for new operations such that, for example, new Characteristic Numbers CN1,CN2,CN3 -----CNn are created and in which the value of CNi depends on the type of operation we select.
Example
CN1= Sum xi from i=0 to i=q
CN2= Sum yi from i=0 to i=q
The point being here is that the pool of x's and y's can generate various Offspring and depending on what type of operation we carry out the CN's will be generated as a specific construction process that we can select at will.
Example
ES(1){2,K,x,y,CN1,CN2,CN3,CN4}
From this set of numbers (x.y) we can construct a Euclidian Circle for which:
Diameter D=K
Perimeter P= Pi*K ; CN1= Pi
Surface Area A=Pi/4*K^2 ; CN2=Pi/4
Curvature of the Perimeter =1/(K/2) ; CN3=2/K
Curvature of the Surface =0
[ES(1)=>{2,K,x,y,Pi,Pi/4,2/K,0}
And this is the Set for all circles in a flat 2-D Space.
It should be noted that a Circle is a 1-D structure in 2-D Space and that the Perimeter and the Surface of a circle are not a part of the Circle but are secondary defining quantities:
Perimeter is the length of the circular curve plotted or imagined in an xy-coordinate system;
Surface Area is the measure of the circular surface bounded by the circle.
The number CN2 is simply a Characteristic Number to calculate the magnitude of the surface defined by the circle.
Generalization
ES{2,K,x,y,pi,Pi/4,2/K,0}
is a set of Ordered Pairs (x.y) for which there are 4 Characteristic Numbers which are derived from the relationship between x and y as dictated by the ESP equation. Moreover, if we perform additional operations on the (x,y) pairs we can create more characteristic numbers. This generalization means
ES{2,K,x,y,CN1,CN2.CN3,CN4}}
is not a set of circles but a set of Numbers for which some Characteristic Numbers can be Transcendental as is the case of CN1=Pi and CN2=Pi/4 while CN3=2/K and CN4=0 are not transcendental numbers, and CN3 can be a rational or whole number. In this case the number Set is not necessarily related to a circle and the numbers K,2/K, Pi and Pi/4 are just numbers and the association or connection with circles is no longer present. In fact, this is an example, in which the Pi= 3,14159265358979 has meaning for its own sake in the same sense as the number 4 has, or the number 9, or the number EXP(1) = 2,718281828459050 or the complex number
Z(a,b)=(-1)^0,6 ={COS(0,471238898) + SIN(0,471238898)} = {0,891006524 + 0,453990500}
As the number Pi in ES{2,K,x,y,pi,Pi/4,2/K,0} is now a general feature of the Ordered Pairs and no longer related only to circles, the number Pi losses it special status as the Ratio C/D for a circle and it takes on a general meaning as just another transcendental number among the many, and Pi losses it status as something special, and it would be silly to expect a message in just a normal number.
Big C would have no reason to pick Pi for his message to mankind.
Complete Generalization of the ESP Equation
K^n = A*(X^n + B*Y^n) ESPG
Example
n=4
K=5
B=Pi
X=1
Y=2 Find the coefficient A
A=5^4/[1+Pi*16) = 625/51,2654824574 = 12,191438957371
Which means that A is a Transcendental Number, because if you carry out an operation on transcendental numbers they do not become rational numbers(I do not know how to prove this yet).
Anyway, the purpose of all this is to show the that specific number sets can contain numbers as derivations of the ordered pairs (x,y) according to ESPG with the various constants at particular values. In the same way that Pi shows up in many other occasions that have nothing to do with circles we can conclude that Pi is simply another transcendental number that also pops up as the Ratio C/D and 4A/D^2 for the circle. In other cases Pi shows up in vibration frequencies, but only if the frequencies are expressed as CPS(cycle/s) and this has also nothing to do with a circle but is simple a result of Unit Selection. We express Frequency in any unit we like and for each Unit there will be a Unique Number so that F(u)=Nu*w for which w is the vibration frequency which results form the solution of the differential equation of motion. For example, we cab use Naps as units: 1 Nap=e. And thus Nap Frequency = Radian Frequency/e.
With respect to the ESPG Equation it is possible to generate all sorts of Number Sets
ESPG{n,K,x,y,CN1,CN2,CN2}
Example for
n=4
K=5
B=Pi
A=5^4/[1+Pi*16) = 625/51,2654824574 = 12,191438957371
the Number Set (x,y) that is generated can be used to construct a Squared Ellipse and the numbers CN1, CN2 are to be calculated using analytical or numerical means, but it is almost certain that CN1 and CN2 for this shape are also transcendental numbers in the same sense that Pi is transcendental.
Now, it is interesting to note that as far as shape construction is concerned the numbers CN1 and CN2 reach a limit, as n becomes large, as follows:
CN1= 4
CN2 = 1
The Square Ellipse becomes a Square with P=4*K and Area=1*K^2
The same can be done when we start with the circle for which A=B=1:
n=2
K=5
B=1
A=1
This is a Circle with D=5. As n becomes very large such as n=300, the Circle transforms into a Square. The transformation for the numbers CN! And CN2 is
CN1: Pi changes to 4
Perimeter = 4*K=20
CN2: Pi/4 changes to 1
Surface Area= !*K^2= 25
See the Square Ellipse
and the Square Pie
These figures, for n=even, are smooth curves for which the perimeter length and the surface area are uniquely calculated as:
Perimeter = CN1*K
Surface Area = CN2*K^2
and depending on the choice of n these numbers may, or may not, be transcendental, and all such transcendental numbers CN1 and CN2 are equally important in the scheme of things.
The idea that in such numbers messages are embedded is not credible. Big C would not know how to decide as to why any of these transcendental numbers should be regarded as special.
Conrad
Karw, Vortex Watchers,
On Random numbers: I have found a Random number generator that gives an output as shown below:
0,71321284
0,57623562
0,19959292
0,43717070
0,56658437
0,05042683 etc., etc.
I have not actually seen the number 1,00000000 nor 0,00000000 so I can not be sure if these actually occur in that generation scheme.
The way I crate the Plus/Minus randomness is to use a second series and use the function (Nr2>0,5) Gives +1 and (Nr2<0,5) gives -1 and if (Nr2=0,5) it give "0" as output. I intended to ignore this zero as it would, in my view, create more than the random amount of zero's. But it would not matter, as the zero would simply keep the price unchanged.
This gives me a +/- Random Number and this is multiplied by the Factor=0,1 to produce the Random Error Factor(REF) and from this the Random Price Error(RPE) results:
RPE=REF*100 from which I get for Test 1:
Price 2= Price 1 + RPE; Start Price= 100
or
RPE=REF*Price 1 from which get I for Test 2:
Price 2=Price 1*(1+REF)
I am not sure about the meaning of your statements on random number generation as you are obviously more skilled on that front as I am. I do sense that what you say about procedure 3 and 4 that I have created something like that:
My Test 1 is not bounded by zero neither on the way up! It can go negative, and it did one or two times! For the cases I spotted I replaced the random number by another random number until the negative part disappeared. I do not believe that any negative prices did end up in the test, and is it did it would not have mattered either for at low prices and negative prices there would not have been any cash left for Vortex was limited to positive cash. On such very low prices.
In the price range just below zero an interesting Vortex Response would develop: The (PC-Y) would actually rise to a high value and this would indicate a large Sell:
F*(PC-Y)/(-Price)= Sell Quantity(negative quantity)
But the execution would result in a regular Profit as you would expect for a Sell:
Yield=(-quantity)*(-price)= Profit
While the number of shares becomes smaller as the Sell was normally executed, the PC goes negative! So while the price is still negative a profit is made and the cash is at a positive level.
At this point PC<0 and if the price starts rising Vortex will start buying shares at a negative price, creating more profits? My head is spinning like a vortex! I have to work this out as I cannot do this with mental calculations and see how this works out in the end, and what effect is will have after the price returns to positive territory. Food for thought!
For Test 2, using the percentage, the lower bound is zero and for this I did not need to check for negative prices.
These are a few remarks on these Tests for your reading fun.
The next topic will be my view on transcendental numbers:
There are no messages in them.
I have made up an appropriate name for the Product (Pi*e)=8,53973422:
Pie
Regards,
Conrad
@&%*#@%+?$#?^&!!:%+/-0,1)(&^%
To all VORTEX Watchers:
More results on Random Share Price Testing are presented:
http://www.investorshub.com/boards/read_msg.asp?message_id=546536
The Secret Decoder of the salutation costs TG 25.
Conrad
@&%*#@%+?$#^&!!+_)(&^%
To all VORTEX Watchers:
More results on Random Share Price Testing are presented:
http://www.investorshub.com/boards/read_msg.asp?message_id=546536
Conrad
VORTEX Test Results(2) for Random Stock Prices
Here are the second set of results of the Vortex testing with Random Share Prices. The Price in this case is generated from
Price 1= 100
Price 2=Price 1*(1 + dx);
dx= 0,1*[-1=<Nr=< 1]
Nr= Random Number
Typical Price Distribution. Price declines characteristically to well below 100 for 200 prices, even if the price initially starts rising as in the next Chart:
These price patterns can be regarded as Deep Divers with initially high volatility. As the price declines the volatility declines as well and the stock ends op at near zero price without volatility.
The general result is similar to the result of Test 1 but due to the overall diving prices the yield is less than for Test 1, in which the prices remain averaged on 100.
The yield for the Unoptimised Runs at a CER of 50/50- these are the runs that start out with the parameters from the previously optimised run - are substantially lower than for Test 1, as was to be expected once the consistently declining price structure became evident.
Still, as was to be expected as well, the Vortex Yield was substantially better than the Buy & Hold case, which lost an average of 30% of the initial Investment while Vortex list only 4,2 % with the fact to be mentioned that Vortex used a Trade Cost of $10 + 0,5% for each Trade, and also counted a 4%/yr interest yield on cash.
The 200 price entries were assumed to be 200 trading days, so the investment period was 286 calendar days. The same is true for Test 1, although that was not mentioned.
For the optimised runs the same observation can be made that the optimum values for the parameters are relatively similar. This performance is nevertheless not as good as vor Test 1. This can be explained on the ground that all price patterens have more or less the same overall profile. In Test 1 the price remains averaged at about the 100 level while in Test 2 the price consistently declined.
The average optimised yield of $ 147 850 is, of course, a substantial gain on the Buy and Hold average yield of $ 70 000, which demonstrates one again that the Vortex Method, when globally optimum values for similar stock patterns are used for the parameters settings then it will strongly outperform Buy and Hold every time.
The average optimum yield with zero starting cash(CER=0)of about $ 173 000 for stocks that dropped 30% on the average is a beautiful demonstration of what Vortex is capable off. For typically declining stock prices it is not obvious that starting at zero cash is the optimum, but if the prices first rise to above zero then a good profit can be realised for share buying later on. I presume from this that for the stocks that optimised out at zero starting cash that significant profit-taking took place in the ups and downs of the price variations. Any other explanation I cannot think of. If you start a VORTEX with 100% cash, nothing will happen other than that 4% interest being earned for the period.
As an extra on this point, as was demonstrated in some Vortex testing recently carried out by Don Carlson, if widely varying stock patterns are used with the same parameter settings, Vortex tends to perform more or less as a Buy and Hold system. The profits form one trend are traded into a loss with the oposite trend, and on the average one could end up with only trading losses to show for.
Clearly, a use of Vortex requires a bit of learning and to find global parameter sets for certain stock types. This is a matter of learning how to interpret a stock pattern from historical prices and then match the appropriate global settings for such a stock.
In conclusion, the Vortex Testing for Random stock prices has demonstrated that Vortex responds to Random Prices as if they were real prices. This is, of course, in it self not surprising, as a trading System can not know the price history and responds only to price volatility, and as long as this volatility is present Vortex will extract money from the Market.
From Any Market!
Conrad
VORTEX Test Results with Random Share Prices
Testing with Random Share Prices is complete. Here is the result of Test 1:
This is a random example the 10 price profiles that were created. The 10 profiles all look real in the sense that one can not tell by looking at them that they are dummy prices.
Generally speaking my observation is that the VORTEX Parameter settings are surprisingly uniform for the 6 runs that were made with the 50/50 CER. This I had not expected. Possibly it indicated that the Random numbers generate more or less similar looking price patterns. From this it is clear that an Optimised VORTEX also performs well on the next Random series of stock prices although the Next Run is usually not fully optimum.
With optimised parameters from the Previous Run it is usually possible to tweak the system for the next run to a better result, but the new optimum settings are not substantially different. On the basis of this observation I have averaged the optimum settings for the 6 runs and arrived at a Optimum Parameter Set for achieving the best average expected results for future random prices. This use of the average setting is restricted to the type of price forming that I have used for the testing, but I would expect this also to be true for real prices that have the general pattern of the random price profiles. I note specifically here that the 6 runs did not contain deep divers or big winners.
For the 6 Runs the CER has been kept at 50/50. For other CER values the optimum CER lies between 70 and 80 and the yield for these runs was substantially better, indicating that the CER should be set ay about 75% cash in order to get the best results.
Mayor Conclusions:
1) It is possible to optimise the VORTEX system for future random prices in the form of:
Price 2=Price 1 + dx with 100*(-0,1=<dx=<0,1)
with the dx having a +/- random distribution as produced by a Random Number Generator;
2) The parameter settings for optimum yield for the 6 runs are surprisingly uniform although these settings are not fully optimum for the next run;
3) The yield is rather sensitive to parameters variations as can be seen from the substantial difference between the optimised yield of $ 197 000 and the non-optimised yield of $ 162 270;
4) Generally speaking it is an interesting but expected result that for the averaged optimised setting the average non-optimised yield is substantially higher than the Buy and Hold average performance for these runs, which is neither a loss nor a profit;
5) The most important result if this test is the fact that in spite of the fact that prices have a random distribution it is possible to optimise VORTEX for these prices. In case optimization for the future would not be possible for random prices then the yields would not have been consistently profitable. One would have expected some loss situations in that case.
Conrad
Tom, this Message Business in Pi or ExP(1)=e is getting out of hand. There are an infinite number of numbers to pick from. Any Creator would go mad trying to decide in which number to put a message. And then he would go mad the second time to figure out in which number he needs to put the Decoder.
Numbers do not contain messages. They just contain digits.
Ckeck out my next Message on Pi, e, etc.
Conrad
Tom,
I think Heinlein sold a lot more Glory Roads than I sold Vortex Books!
The Vortex Counter is stuck at 7 for the year 2002.
Now, the fact is that 7 is a Magic Number, so I expect all sorts of magical things to happen to me soon. Maybe I will be asked to become the next Prime Minister of Holland.
Conrad
Tom, I have heard many references about this Secret Decoder for about 6 or 7 months now.
If the SD is a Secret Decoder then after the secret is decoded it is no longer a secret, what do you do with the information that used to be a secret?
If the SD is a Secret Decoder then it is longer a secret as we al know about it already, and so its name should maybe changed to The Used-to-be Secret Decoder.
Conrad
Karw, thanks for the respond.
I need to digest this a bit more. I sense you are way ahead on me as far as formalism in this subject is concerned. In the next few day I will outline what I have done so far with two different options that can both be used as random simulations of stock prices.
Regards,
Conrad
Right On Tom,
Now that I have the program available for selling I have specifically installed a TurboVest Disable on the standard issue. This is to prevent inexperienced people from thinking that if Vortex goes negative that it is an "approval" to go on margin. To release the TurboVest Disable it has te be requested and this costs a little extra as the user will get a little Instruction Manual as well(not yet quite ready).
Regards,
Conrad
Hi Mark,
I think we have hit upon a subject on which we agree 100%, take a bit off with a random error on the downside(thinking for the moment that agreeing 101% will not be possible).
This discussion would(might)lead eventually to the question if causality on the smallest level(if such a level exists) remains. This is a subject of great interest to me, but also it is profoundly important with regards to the ultimate fabric of existence.
A friend of mine told me once that we are, maybe, simply nothing more than God's Nightmare, but this, apart from the humorous content, poses an even more profound dilemma: What horrible evil could cause God to be reduced to a pitiful trembling sweat-soaked creature?
A word on A.C. Clarke: One of his books I like the most is Rendezvous with Rama. It's awesome. It hits on subject above via a left hook which you didn't see coming.
It feels good read you words.
Regards,
Conrad
Karw, Re: Randomness.
Your point made and question asked is a good start for this discussion. Also, possible others have already done on which I am burning the midnight oil! The original discussion lead me into the forest in which there was no beaten path and I had to dive into this question on randomness: Interesting stuff.
I was given a series 10,11,10,11,.......for 200 data points. The series was given as a random set. I called it mathematical construction(Algorithm). Who is right?
The discussion is more or less like this: In a Casino the Roulette Wheel may produce a 10,11,10,.....etc. for an undetermined number of throws of the ball. On the Crap table the dies may be thrown (3,4), (4,3), (3,4),.....for an undetermined number of times. Ok, so far, so good.
For the 10,11,10,....and the (3,4), (4,3), (3,4),.....A mathematician may argue that these series are not random, for the definition of a random number set is a sequence of non-repetitive numbers that satisfies no algorithm.
OK, now we have a dilemma: If the series above are produces in the Casino on the Roulette or on the Crap Table then they may qualify as random numbers. If on the other hand they are cranked out by an algorithm(machine) then they are called constructions.
Are Number Sets that can be produced by an algorithm then Random Number Sets because the same series may be produced randomly? Simply by inspecting the Set one can not determine how the numbers were produced. The question appears not to have a simple unqualified answer.
This leads to the question if numbers that are created by a Random Number Generator are random, for it is impossible afterwards to device a test to determine the process by which they are produced. A simple example: I give you the number 2 and ask you to think of an objective test to find out how I produced this number. Here are some possibilities:
2 Just popped up out of my head. It is random number;
2 =8/4 The 8 and the 4 are constructions. The 2 is a construction
2 =+(8/2)^0,5 No one knows how the 8 and the 2 were produced. It is undetermined
as to what type of number it is.
This leads me to think that the definition of randomness is ultimately a practical issue rather than a theoretical one. Any set of numbers that we produce are constructions, no matter how hard one tries to deny this. Numbers are abstractions and Number Sets do not appear magically out of nowhere. As long as we can not make any sense out a of set of numbers then we may call it random, even if there happens to be some structure found in it.
The digits of the transcendental number (pi) or (e) are said to be non-repetitive and if they are analysed they would appear, for al practical purposes, to be random numbers as there is no obvious structure to them. Are these digits random numbers in the order they appear in the Set?
For investment purposes it is agreed that stock prices are recognizable structures even though they appear random. We also know that stock prices quite often are strongly related to processes that makes the Market Place(Demand an Supply).
So, I can not honestly devise a definition for a random number other than to say that it is a number that is produced by a Random Number Generator, in the same way that a car is vehicle produced in a car factory, and a tomato is produced by a tomato plant.
I know, I know, we can think of all sorts objections: Is a pear that grows on an Apple Tree a pear or an apple? Is the intelligence from an intelligent dog different that the intelligence from a stupid human being? Is the intelligence of an intelligent machine not the same thing the intelligence of a animal or man? Obviously, female intelligence is something apart, we do not discuss that: it's pointless. You never win, no matter how intelligent you are.
Ok, a set of numbers that has been produced been produced by a process in which random numbers from a Random Number Generator are used to generate a different set of numbers that we use as a synthetic Share Price structure can be called a Random Share Price Set.
Example of this process:
Start Price of such a set is 100:
N1=100,00000000 This I have Randomly picked instead of 100,3456596723
Sequentially random numbers are created that are defined as difference increments dN to N1 so that:
N2=N1 + dN1; N3=N2 + dN2; N4=N3 + dN3, etc.
If the dN's are random numbers then the N2, N3, etc. are also random numbers, and the set of Random Numbers Ns={N1 to Nn} is used in an Investment System such as AIM BTB or VORTEX, or X_DEV, etc.
Testing
Serie Ns1 is being used to optimise the Investment System.
Serie Ns2 is being used to examine the performance of the optimised Investment System without changing any of the parameter settings.
The claim is:
The system can not be optimum for any Serie Ns2,Ns3, Ns4, ---à Nsn
The reason given is that truly Random Share prices do not exhibit any pattern so that the performance of the system for the Series Ns2 to Nsn can only be related to the specific Series and that the optimisation with Serie Ns1 will have no effect on the performance of the Serie Ns2, meaning to say that the performance for Serie Ns2 may be totally immune to the optimisation process with Ns1.
This is the question to be answered:
Can an Investment System be optimised for future share prices that satisfy the definition of Random Numbers as I have defined it?
In so far as real share prices are not random numbers in the sense of the above discussion testing with real share prices does not prove anything.
In the near future, at some random moment, I will present the Random Share Price Sets I have used to demonstrate how VORTEX responds in this situation.
Right now I like to hear some thoughts on this issue.
Regards,
Conrad
Hello Tom, on the leverage effect of borrowed money.
Your point is well made. The functionality of borrowing money and putting it good use is universally accepted: One can borrow foolishly or wisely!
On your statement that your account showed some Vortex-Activity, I like to set your straight, a bit, if you don't mind. I suspect you won't mind. How can anybody that loves cats, has a beard, and thinks like an engineer mind to be set straight?
Using margin or not is not actually a Vortex feature: Anyone can decide to use margin anytime for his investment, and he may do it wisely or foolishly. Using Margin is something that has worked very well for me and I therefore I tend to advice others to do it as well. This is sometimes put in the context of big Share Leasing schemes that have gone sour and I am taken to task that investing with borrowed money is dangerous. Driving to work is dangerous! Such share leasing failures had nothing to do with using borrowed money but with bad investment structures.
Prior to recent events I had trouble in programming a stop to going to negative cash on my Excel Vortex programs. I now have devised a statement that limits the buying to a percentage of the cash left if the cash gets low. This is very similar, by accident, to the concepts discussed on this Board for Deep Divers: Do not spend more than ½ the cash you have! Although I use it in a different way, I have a similar thing in mind: Do not buy any shares if you are broke.
I think the use of cash from other accounts is a good way of using cash effectively and is essentially no different than borrowing on your assets. The same goes for an investor that has started with $ 10000 equity and $ 10000 cash in his AIM and has a savings account for a rainy Day stuffed with $ 50000. He can borrow from that account just as he can borrow from a bank, or a rich Uncle (Sam).
Also, and I think that is no secret, it is effective to stash all the Reserves one has in easily liquidated investments, preferably investments with a negative correlation so that they liquidate themselves as the equity investment needs the money.
I am with you!
Regards,
Conrad
ASML(US$) Vortex Demo Update.
As per share price information for 16 October the ASML Demo
information is summarised below:
The information on the Buy and Hold Yield includes a adjustment for the B/H equity acquisition cost just like that is calculated for the Vortex method.
Additionally, a remark on the representation of the Vortex Yield based on IRR Method is useful as this percentage issue is, as I see it, not properly treated. I claim that the IRR-method is the only proper way to calculate annual yield for an investment, especially because the simple method using the original investment tends to misrepresent the actual yield on a Vortex Investment, or for any dynamic investment for that matter.
Considering the general case that a VORTEX Investment is intended to be a long term investment, and that it performs better than a Buy and Hold Investment, we should always use the time average for the investment yield calculation, or else the AIM Yield will be inflated and this presents a false picture.
Consider that in a 5 years investment an AIM Investment may have accumulated significant profits and that these profits are re-invested. The investment base(which generates the investment growth) may then be much larger than the original investment was, and by neglecting to mention this you would inflate the Yield Data and possibly mislead prospective AIMers with unrealistic information.
It is true that a percentage figure has multiple meanings, but that is just the problem if annual yield is quoted without presenting the basis for the calculation. Yield data is often misunderstood due to insufficient explanation.
I recommend that for any AIM Yield figure it is explicitly mentioned as to how it is calculated, and preferably both Yield figures should be mentioned.
For recently edited/publisched information on the VORTEX program see:
http://home.hccnet.nl/c.kruidenier/vortexus/vortex.html#Translation
Regards,
Conrad
System Optimisation for Random Share Prices.
Recently I was confronted with an assertion that if share price forming is truly caused by random events then it is not possible for any investment system to be optimised on the basis of price-history information.
This was obviously the wrong thing to say to an engineer: We can't fathom the notion that something is not possible:
Ask us if we can fly and we say: We can!
Ask us if we can make things disappear and we say: No problem, what do you want to get rid off? Your car, your wife, or what? After that your money will be gone too!
Ask us to jump and we ask: How high? 1 m or 20? Take your pick!
So, I said: No problem! VORTEX can be optimised on the basis of random prices to maximize the investment yield for future random share price behaviour.
I have, to my satisfaction, proved to myself that VORTEX can be so optimised. In fact, I have been surprised at the degree of consistency of the necessary parameter settings for the optimum performance for randomly generated share price structures.
I wish to open a discussion on this topic so that with various expert opinions I can formulate a final conclusion that has sufficiently been scrutinized so I can make sure that my conclusions
are not a result of a self-fulfilling prophecy.
The initial question I pose here is:
Is it possible to optimise an investment system so that for future random share price structures the system performs close to the maximum yield?
My answer is YES, although I mean by Maximum Performance not optimised performance. It is a known fact that if share prices exhibit a different behaviour than for the optimisation procedure then the performance will not, generally be optimum.
The floor is open for suggestions on answering this exiting question.
Please let's keep it simple at the start so that we are not going to wallow in reams of statistical equations and lemmas.
I prefer rather the discussion to focus on the practical method by which results can be achieved and how it can be decided by what method the results are to me judged.
Remember, according to the experts, bees and humming birds can't fly... or where it horses?
I have already have a set of Data that I will formulate in a simple presentation soon.
Regards,
Conrad
Vortex QQQ Demo Update.
Hello all of you!
Just a message to tempt you write something the Vortex Board. It would not look good If I am the only one that is filling the space there:
http://www.investorshub.com/boards/read_msg.asp?message_id=540570
Recently some Vortex test have been done on the SPY stock which shows that the Vortex Performance, one again, has liked the heels of X_DEV runner and of some others in the race to squeeze out every last drop of profits from the stock market.
The specific tests showed that for the Buy & Hold method, over a four-year period, from a $ 30,000 Investment only just over $ 25000 was left. The Vortex Method yielded $ 37.166 instead, without borrowing 1 penny, and again with an effective average investment that was substantially lower than that for the Buy and Hold investment.
Details
QQQ Closing Prices, Daily from 2.02.98 - 7.10.02
Period: 4,68 year
Investment: $30.000
CER: $ 10 Cash: $ 29990 Equity
Trade Cost: $ 10 per trade
Interest on Reserve: 0%
Buy and Hold Loss: 3,4%
Total Vortex Trading Cost: $ 80
Number of Trades: 7 (No exit trade considered)
End PV-Value: $ 37.166
Cash: $ 18.879
Equity: $ 18.288
Average Vortex Investment: $ 11.051 (arithmetic average)
Vortex Annual Yield: 13,9% on average capital at risk.
Vortex Simple Yield: 5,11 % on Initial Investment
Remarks
1) The parameter settings for the full period were kept fixed, and no intermediate rebalancing of the CER was done. In practice one can re-optimise the system every year or every 6 months. This would considerably improve the yield.
2) The optimum settings are never ideal for the future stock prices, so the yield would be likely be lower if no rebalancing or re-optimising is done, but with the proper attention to investment management, reading the market and overriding Vortex when that is a good thing to do, I estimate that the yield would have been about the same, or even more.
Regards,
Conrad
Vortex Demo QQQ: 16 October 2002 Report.
Here is a short update on the QQQ Demo per share price of 14 October 2002:
I will also provide the Vortex ASML(US $) Demo.
The column "Vortex Realistic" presents the realistic yield for QQQ based on the average capital at risk. In this the capital has been averaged arithmetically instead of by the IRR formula as the time-base is very short and only a minor buy/sell adjustment was made.
With the initial investment at $ 16.000 the buy/sell action has reduced the invested capital to below the $16.000 level. The Reserve fetches a nominal interest rate of 4% compounded at the rate of price entries.
For questions on the VORTEX program you can contact me at
http://www.vortexcw.nl
or for Vortex-Demo Program downloading information at:
http://home.hccnet.nl/c.kruidenier/vortexus/vortex.html#Translation
Regards,
Conrad
LemonHead,
Why is there a survey to remove Matt? Matt Who? Matt 2MC?
Why is there a survey to remove Bob? Bob who?
Why?
What have these angels done?
Curious!
Conrad
The information on my previous post # 5366 was not complete. I should have mentioned that the $1000 that was invested on a share price of 90 was a accumulated net profit from previous operating cycles.
This alters the conclusion in that for each share price cycle:
100 to 110 to 100 to 90 and back to 100
there is a net gain of about 2,02% even if you cancel out any profits from a share price increase or skewed buying and selling in an AIM system.
I shall revise the incorrect presentation to make it more clear as to what was supposed to be demonstrated.
Regards,
Conrad
Qarel, or Any AIMer,
I am not sure I understand why you need to do this in 139 steps. You can show it in 4 steps:
1)100 *0,8= 80
2)80*0,8=64
etc.
3)64*1,2=76,80
4)76,80*1,2=92,6
If you do this in the extreme and drop 100 %:
100(1-1)=0
0* 1,0=0
Not surprisingly here, of course, is that is you drop with less than 100 % you never get to zero! This encouraging News: The market will never drop to zero!
It is clear that from a Buy and Hold perspective the market must recover more in percentage points than it previously dropped(as you also showed). In absolute recovery it of course has to recover exactly as much as it previously lost.
In this light I like to present a simple chart that illustrates very strongly the source of the profits in dynamic trading when profits on the high side pay for the share purchases on the low side. Most technical AIMers already know this, of course, but usually people want to explain things with words, and that is seldom powerful enough to drive a point home. I refer the principle of the Skewed Share Acquisition Ratio:
In relation to the VORTEX Method this explains why it is still possible to realize a Gain in the Neutral Mode for which the aggression factors are set to zero and the Resistances are set equal. In the Neutral Mode VORTEX would, for example, buy at 100 and then buy at 90 again with a 10% Resistance. As the price rises to 99 VORTEX in the Neutral Mode would sell at 99. This appears to be a loss invoking setup with Buy High-Sell Low.
But is it?
Are things always as they appear to be?
Consider that $ 100 is invested at 100:
Buy 1 for 100
Y= 100
N=1
Price drops to 90: Buy for 10 @ 90
Y=90+10=100
Quantity=10/90=0,1111
N=1,1111 : Using 4 decimals
Price rises 10% to 99
Value = 1,1111*99=110
Profit P=10
Selling : Y-rw= 110-100 = 10 : This is 100 % profit taking
Quantity sold = 10/99=0,1010
Cycle Price Loss= 1% !!!!
Share price = 99
Value Y=100 equity + 10 cash = 110 Portfolio value
Quantity N= 1,010 !!!
Capital Gain----- =10 --------100% on differential investment of 10
Share Gain------ =0,01 ------9% on differential share acquisition of 0,1111
The most interesting thing is the Capital Gain as well as the Share Quantity Gain is positive on a share price loss of 1 %.
This is a powerful illustration of the fundamental reason of why VORTEX Investing is so effective and of course, AIM Investing in general as well: VORTEX creates profit on a dropping share price cycle in its basis Neutral Mode in which actually a Buy High-Sell Low methodology is used. That is the secret that in superficial observations(by outsiders) is rarely discovered. Possibly even some experienced AIMers do not recognize this fundamental powerful capital growth feature in AIMing. Many investors probably stop at thinking that the Buy Low-Sell High is the only thing that is at work.
Remark:
With the Standard AIM, using the SAFE this effect would possible not be present until the Portfolio size is large enough. Also, obviously, this effect would be completely masked by the effect of trading costs. Here it is demonstrated to bring the powerful compounding principle of dynamic trading to the surface.
Obviously, the parameters setting in the VORTEX Neutral Mode is not at all suitable for an Operational Mode as the differential gain calculated here is solely an effect of the Skewed Share Acquisition Ratio and not of the gain of selling at a higher share price. For the Operation Mode the VORTEX parameters are set such that the Buy Low-Sell High feature is accentuated strongly. An example of a mildly aggressive operational mode is:
Buy Resistance 10% : Buy Aggression 0,5 : increases buying on down side;
Sell Resistance 20% : Sell Aggression 0,4 : increases selling on the up side.
These setting might globally represent a VORTEX Default Mode for inexperienced investors.
In closing this illustration demonstrates strongly that the market does not need to recover to previous levels after a drop: To make money with AIMing the market may even stay down and we still can make a profit in every cycle, and as long as the market cycles AIMers keep laughing, or they should be!
Conrad