is retired now but still kicking like a horse!
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It Grabs you, does it not?
All this talk about tuning, optimization, etc. It's making my head spin!
Thats the spin of the Vortex!
Conrad
Karel, anybody: Results Vortex Back Testing
The following daily data has been downloaded form Internet from via an link provided by Karel. I believe it refers to SPY,
but the directly downloaded stock data does not specify which stock it is. I have taken a 4,5 year run from 2-01-19998 to 10-07-2002:
http://table.finance.yahoo.com/table.csv?a=1&b=1&c=1998&d=7&e=10&f=2002&s=sp....
The daily data is provided for 4,52 years and entered on an Vortex Excel spreadsheet.
The stock is almost like a flatliner and shows little volatility. This requires an aggressive approach. See the following:
Remarks for optimum parameters Start Capital =30 000
1 Buy & Hold Yield Loss! -0,85%
2 Number of Trades 12 137,5
3 Annual Yield 9,0%/yr
4 Direct Yield 41% total
5 End capital $42.236
6 Cash/Stock Ratio 0
7 Lowest cash 0
8 Highest cash 40207
9 End PF Value 42236
10 Highest PF Value 45585
11 Lowest PF Value 28386
12 Buy Aggression 0,94
13 Sell Aggression 0,8
14 Minimum Buy % SV 14
15 Minimum Sell % SV 70
Non Aggressive Vortex
Min Buy/Sell 10%
Suppressed Buys
Buy Aggression -1,1
Sell Aggression 0,61
Yield 5,33%/yr
24% total
Neutral Vortex
Buy Aggression 0
Sell Aggression 0
Yield 2,2%/yr
10% total
Vortex AIM Fokker Simulation 1995-1996
As promised I ran the stock prices of Fokker through the Vortex AIM to see what would happen, expecting the blood to run through the streets. The original non-optimised yield of –4,4% vs the Buy & Hold yield of –46%, was already a good showing. The actual buying and selling was done on a gut feeling level! I have always claimed if you know what you are doing then an AIM is not necessary, although it would not be easy to invest optimally.
In the simulation the trading cost and earned interest are taken to identical as the estimate for the actual investment. Fixed Fees are not used. Some interesting remarks are listed below the table for the run over 380 days:
Vortex AIM Fokker 4-01-95 till 19-01-1996
Minumum Buy/Sell is a % of Stock Value.
Optimised Parameters:
Cash/Stock
Ratio 83,18% Qty. of Trades 14
Capital 27345 Period(days) 380
Shares 4600 Ave. days/trade 22,7
End Capital 34008 Start price 11,5
Yield 23,4 % Highest price 13,2
B&H Yield -45,6 % Lowest Price 6,9
Reserve 22339 Bailout Price 6,1
Reserve High 33305 Minimum Buy 10%
Reserve Low 0 Minimum Sell 20%
Earned @ 4%/y 342,29 Buy Aggr BA 0,87
Fees @ 0,5%/Tr 509,28 Sell Aggr SA 0,76
____________________________________________________
____________________________________________________
Not Optimised Cases
Same Cash/Stock Ratio
BA 0,75 Moderately aggressive
SA 0,5 Moderately aggressive
Vortex Yield 9 % Same cost factors
At 50/50 Cash/Stock Ratio
Not optimised but adjusted to prevent negative cash.
BA 0,76 Moderately aggressive
SA 0,74 Moderately aggressive
Vortex Yield 15 % Same cost factors
Bernie. Thanks for the help on the sorting in Excel. I remember now that I used it before(Rusty!)
Conrad
Thanks, Karel for the SPY Info.
What did Bernie get out of SPY?
I will get the download.
If the data is reversed we can do two things:
1) Load it up reversed and get an interesting Inverted Yield!
2) I hope I can invert the data from the spread sheet. Is there an Excel function that can invert the data(Last=First)??
PS:
Uploading = Opladen in Dutch. Right? of Ophalen?
Downloading = Afladen ? Neerladen? Neerhalen! I like that one!
Conrad
NiteLord, Don Carlson, Anybody. Volatility with Vortex.
I think it will solve that problem. But is the performance on SYMC with 49% yield not enough to show that it can be done?
This same problem is solved with X_DEV, who got 51% on SYMC. I don't know if Don Carson made a run on SYMC but I think he will do just as good or better.
Give me any stock price list for any period. You or anyone may decide on the price behaviour, phone or real. I don't care what it is. It gives me an opportunity to test data other than what I pick.
Yesterday I made a run on Fokker(Dutch Aircraft Manufacturer) data 1995-1996 when Fokker was going belly up. The run was for 380 days. The stock was bought on 11.5 and sold on 6.1 on a Stop/Loss. The B&H was a loss of 45% annual base. The Vortex Yield was -4,4 %(annual) including the trading costs of 1%(in/out) already accounted for and interest on cash also. Without the trading cost in the calculation the yield was +8,5% !!!!!!
This Fokker thing was not an optimised run. It was a run on the actual investment I made. I will do this run again with the optimised Vortex AIM and let you know if I could have done any better.
Cio
Conrad
Nitelord. That's a good Point!. But the same can be said for X-DEVers and the others that score well. I made a lot of profit with AIming between 1994 and 1999
Just as is the case with this market, it just happens when I am out of money to invest now. The market is Optimum for buying we all know that, but some of us have no spare cash!
I have money but is is wrapped up in a lawsuit. If I win then I an fine again. If I lose then I vave to sell a lot of Vortex books and vortex programs!
Conrad
Hi NiteLord,
Glad to explain:
This was the case:
Aggression BA= 0,5
BF=1/(1-BA)
So, BA=0,5 then BF=2
Buy = (5000-3000)*BF=2000*2=4000
PC2=PC1 + 0,5(4000)=5000 + 2000 = 7000
New Stock Value =3000+4000=7000
The investment started out at 5000 and stock value dropped to 3000. So, when you buy the new stock @ 4000 + 3000= 7000. I think you get this part.
Remember that for the Vortex it stated out at PC1= 5000 and had to drop 2000 in value to get the Buy Order. The fact that the original Investment is then 9000 is not significant. This is only so if the 5000 was the first investment. The 5000 value could also have been due to profit from a previous rise from 2000 to 3000. This adding cash is the growth mode feature. It means that you might adding extra cash to the portfolio at low price, but it could also be re-investing the profits and taking a bit out of the reserve.
It is true that if you make the Sell Mode Aggression very high that you can sell off stock at a loss. This would be similar event as using a Stop/Loss. In the normal operational mode you need to have the right combination of buy/sell aggression factors.
Regards
Conrad
Nitelord, you wrote:
I like everyone else am attracted to etfs b/c they remove stock specific events, and almost by definition have fairly good fundamentals thru diversification...
You mentioned that this: etfs b/c might work for de alternative AIMs like vortex etc.
Could you explain what you meant here?
Curious Yellow,
Conrad
Bernie,
We have done just that! Optimizing such a simple stock behaviour is simple. X-DEV did it, Don Carlson did it, Vortex did it, and some others did it. But to call optimization greed is going too far. It makes no sense to make that allegation.
Conrad
A Bloody Marvelous Fuzzy Story.
It Sounds like an Annual Report to me!
I like the part of Martha Stewart. I have been told she can make something out of garbage, make it glitter like a diamond and sell it for twice its price. She ought to get the Nobel Price for Recycling.
Let's break her out of Jail!
Conrad
Karel,(& Tom) I respond to your message "as I read your message":
1 I think in pictures for the moment, and I visualise First In, Last Out=FILO. This reminds me of a warehouse with one door. How about the Veale Warehouse. How does that work, Tom
2) Ahh. This is of course the same as LIFO, as you surmised! Right, but this would normaly be via a price delay to sell high!
3) Your next point is less clear to me. I presumes for the moment the possibility that a package that is bought might be sold at a loss. Is that possible? Think, think, think: Yes! It is possible. It is also possible for me to jump from the DOM in Utrecht(No wire fences to keep me from doing it) but I am not planning it as it is not a profitable strategy. As you say, it might happen with bad parameter selection. Also, it is possible if the investor wants to do it, to cash out his portfolio.
In this last case all that is necessary is to have a very conservative buying and a very aggressive selling, in combination with a low Minimum Sell. In this case VORTEX can do it because it is designed to do it, but with such settings are not compatible with optimisation of the yield.
In case one needs to cash out the portfolio it would be advisable to use a yield optimisation strategy that maximizes the cash portion rather than simply sell of shares.
The beauty of having the flexibility is of course that it opens up the doors to various options(Maybe even Options as well!)
Conrad
Hi 2mc,
I appears we are on the same track for optimization plans.
Read my plans for this. Maybe we could brainstorm this further
http://www.investorshub.com/boards/read_msg.asp?message_id=416159
I am not so great in programming these ideas into concrete samples.
My plans are for the Vortex AIM but that is of no consequence as the optimisation routines should be standars, I think.
Conrad
Bernie, See Message #4113 for doing the Vortex Run.
As soon as I receive a Dataset I can do the run.
Automatic price importing I can not do. I simply need a date asn stock price list that I can copy onto the Excel sheet.
You guys that are interested in this also should secify the trading cost and interest rate for the cash earnings the way you would normally use it.
In a comparison with the B&H we have to include the entry and exit costs as wel, or do you want to do it without trading costs invoved? If vit is to be a comparison it might as wel be realistic(Tradin & Hoding fees, interest dividend, whatever).
Regards,
Conrad
Karel, SPY, DIA or whatever is fine with me.
Can you send me a Datsa Set that you would like to have tested? I am not very active on picking data from the net. If you suggest the Dats Set and mail it to me then I work on it.
You can even select daily, weekly or monthly prices.
Also you could give me the address of where I can find it. This you could send via this Board. Maybe others will not be able to resist the temptation to run a test as well!!!
Good idea.
Conrad
Karw, The better Investor?
You wrote:
The AIMer is also selling while the B&Her is not. So when doubling the stock price, the B&Her is ahead more than a factor 2. Up to this point the B&Her is the better investor.
The beautiful thing about this investing business is that we can interpret every hypothetical situation every which way we like to in order to illustrate a point(and use statistics to prove what we want!)
The AIMer in my example did not sell anything on the way up as the stock jumped to double the value(very quickly). The example showed the extreme case. You are right that if the AIMer sells off then his profit is less, but then also his net average investment is lower and the lower profit on a lower investment base increases the Yield. In this scenario one would have to take some sample runs to see how the exact AIM Yield compared to the BH Yield.
I suppose this is more or less what you refer to in the last part of you message.
In real life there are al sorts of options with which we need to consider. The B&H investment could be security for a mortgage. If so, he does not have the freedom to sell of a portion of the portfolio.
Thanks.
Conrad
Last Vortex posting this morning,
There has been quite a bit of Vortex AIM discussion in the latest round. I feel that the great flexibility that the Vortex AIM has, comparable to the Don Carson AIM, can beat the basic Lichello Aim any time on a given amount of cash(no borrowing).
Next to the basis operation using the buy/sell functions one can
introduce all kinds of extra deviation measures that are intended for preserve cash in case there is a dip or to sell of the cash faster or slower when prices have risen strongly. These measures can equally be added to the Vortex AIM for still better functioning in different types of markets. This is not a current feature.
For operational evaluation I define the Standard Vortex AIM as the Neutral Vortex AIM in which both aggression factors SA=BVA=0. The operation simply means that if stock is sold bought all the profit/deficit is traded via Sale=(PC-Y). Each trade will simply return the stock value to its original value.
This will also man that the PC does not changes in any trade. The Neutral Vortex AIM is very conservative but 100% symmetric with respect to selling and buying. The Neutral Mode is completely understandable as to what it does. From This one can begin to grasp what is happening if the parameters are changed and appreciate the meaning of the parameter values, and to understand how even this simple model shows a great growth potential in cycle trading.
Anyone interested to do some serious testing on the Vortex AIM with real American stocks. I would appreciate third party opinions on it. In Holland I am arranging a simulation/testing set-up as well.
There are two ways of doing it:
1 Excel Spread sheets
2 Windows 98+ Boiler Plate
Any suggestions getting involved in this?
I mean, in order to test the system some requirements may be suggested that I have not yet thought of and that we have to provide for first.
In case you prefer contacting me by e-mail feel free to do so. The e-mail address is listed on the Members Information Sheet. Ihub search for Conrad.
Regards,
What I look for now is that various third parties
Conrad
KarW,Anybody On B&H Performance
I have heard a lot of explaining that B % H beats AIM when stock goes straigt up. I think that claim should be tempered with some real measure as to what beating AIM actually means.
OK assume that a stock goes straight up(almost never happens).
Case 1:
B%H Invests 10000
Aim Invests 5000 + 5000 cash
Stock price dubbles(I am an Optimist in the worst of times)
B&H Gain= 100%. Investment worth=20000
AIM GAIN= 100%. Investment worth=10000 Cash = 5000
The fact is that the AIMer has just as good a performane on his investment. The fact that a rich man makes more profit in a rising market than a poor man does not make the rich man a better investor. That is what counts. The Aimer is a better investor! Period
The holding onto 50% does not mean that the AIMer has been beaten by the B & H investor.
Consider this: Case 2
AIM1 Invests 10000 + has 10000 in cash
AIM2 Invests 5000 + has 5000 in cash
Stock price dubbles(I am an Optimist in the best of times)
AIM1 Gain= 100%. Investment worth=20000 Cash = 10000
AIM2 GAIN= 100%. Investment worth=10000 Cash = 5000
Who has beat who here? Who is the better investor?
Look at is this way: Investors invest money in Black Boxes every which way they care or choose to do it, and in the end only the yield on invested capital counts for judging performance.
We can show beyond any doubt that the AIMer will Beat the B&H Investor all the time with yield on invested capital, except possibly if you look at trading costs if there is not one cyclus trade on the way up for the AImer(With lower trade sizes the % cost is a little higher). Now see this: the AIMer can also earn interest on his Reserve. That interest will result in a higher Yield and again the AIMer will beat the B&H on performance, if you do not consider the Reserve as invested capital.
If the stock cycles only a bit the AImer can at least make a few cycle trades and beat the B&H investor any time. It's a fact!
A B&H investor can, by accident, earn more money in a rising market but he is not a better investor and he almost never beats the AIM investor in een typical market condition.
It's just another way of looking at it!
Conrad
Hello Charlie. Risk never addressed?
I do not think that your assessement on this correct. It appears to me that risk minimization is an important feature on this Board. Maybe you are right that we do not dive into it in detail but this risk issue often addressed here.
The fact that we are AIMers is to a large extend due to the fact that you reduce risk substantialy by the AIM method, except if one keeps on buying on deep divers that dive because they are going down to zero.
If you consider that most stocks are not deep divers then with the AIM you can do very well, except the AIM BTB does less well than the fired-up AIMs.
As to the difficulty of looking forward, that's simply a problem we have not solved yet...we are waiting for the next Einstein te be born.
The way to tackle it is to be full in stocks when the market is low priced and to be in cash as the market is at a high. That is risk minimization. If one is greedy at the top and starts buying on the hope the rise will continue then he is betting on how the future will unfold in his favour while the AIMer is betting that the future will unfold against him!
Conrad
NiteLord, We should trade names!
It's 4 o'clock in the Sarurday morning here in Dutchland and I am burning the midnight oil, and a long list of messages to work through is in front of me.
I believe you have identified the severe limitations of the Lichello AIM. I think it is a beast that sits in a prisson. The Vortex AIM(and others like it) have let the beast out.
Give me a stock history that you think is a dud for AIMing and I show you what Vortex AIM can do....No flatliners of course!
OK OK OK I agree that optimization on historical stock gives unreal answers but I say that you can optimise on the run and do what AIM BTB can not do.
Conrad
Hi Tom,
I am already following the One Minute Rule.
I write an answer on the Vortex Cyclone every one minute.
Conrad
Hi Jibes, b/s factor:
For a moment I thought you ment the Bull Shit Factor. But you are right. See Post # 4092. Other than that I have a very low bs factor, I like to think.
The cylone is still blowing on!
Conrad
Karel NiteLord Everybody
My Goodness. This Vortex is churning the air again!!!
Everybody is wrong in this FIFO vORTEX loss (Sounds like a dog's name!). If you use the right combination of parameters most of the stock stays in much longer than you imigine!
See Post # 4092
I have made arguments...shucks I forgot where that was.... that what Vortex Buys never gets sold at a loss....
The idea is that you have to pick the parameter combinations right! Optimization does the rest. Remember the 49% Vortex Gain on the AIM BTB 1,13 % Loss on the SYMC stock run....and the longer the cycling takes the more profit is made!
If I buy a package of stock the y=PC: NOTHING happens for selling untill unless the price rises, and by virtue of the assymetric buy/sell limits the delay for selling can be large. Thats why Vortex makes such big gains.
Maybe I will sell the book after all! What Happens is this
What goes in comes out bigger!
Conrad
Yep, Nitle Lord. The easy answer
See Post # 4092
I have a thick skin. I was lumberjack in the Canadian forrest, way North of Price George. After that I thought: "In a few years all the trees will be gone, so I beter learn a few things to earn a living with it"
I thought I had reduced my entire book to one simple page of bare bones.
The funny thing is, that the explanation Karel gave flies a bit past me, so Karel is the more intelligent one!
Now I have reduced my book to one page and I still do not make any mony with my wisdom! Hahahahah!
Conrad
Hi NiteLord, On Vortex.
I am running about 40 posts behind, so others may have responded to your qustion already. I take then as they come!
In the Vortex Y=PC after a trade always automatically by the linking of the Buy Factor and the Buy Agression:
BF=1/(1-BA)
So, if BA=0,5 the BF=2
Buy = (5000-3000)*BF=2000*2=4000
PC2=PC1 + 0,5(4000)=5000 + 2000 = 7000
New Stock Value =3000+4000=7000
Ergo
Conrad
Hi Karel, on the Vortex.
You understand the Vortex AIM probably better than anyone! I remember your discussion on a scalar vs a translation for the respective mathematical name-calling. If I read you right you see the differences probably in a deeper way than I could explain them right now. I appreciate that but the analogies such as memory, hurdles and turnstiles introduce dimensions that I can not place immediately in what happens in Vortex, but that OK.
I tend to think that the power of Vortex lies in the flexibility rather than in the fact that there is a little fundamental difference between the calculation of the Buy Order.
Also if I set the Sell Aggression Factor=0 the Vortex acts very similar to the Lichello AIM(No PC Update for Sells for one thing).
Now, the fact that for AIM BTB there remains the Residual Buy is an interesting difference which I interpret mostly as a necessity for a logical Buy/Sell System. Its operational effect is mathematically interesting but I have not fully been able to interpret its operational impact other than it causes a delay factor if the stock starts rising. Maybe you call it memory but that escapes me as yet. I achieve the necessary delay simply with an asymmetric Minimum Buy/Sell factor of an asymmetric split Resistances. In this way we achieve the same effect that a Stock Buy will be retained until it is profitable!
What is most important for me is that the performance of Vortex on the 6 month SYMC stock run for which the optimised AIM BTB achieves a 1,13% Loss while the optimised Vortex achieves 49% Gain. This Gain is due to the optimisation of only 4 parameters(since I did not use a SAFE), but only the minimum buy/sell(A limitation of the spread sheet!
The other point is that simply by choosing the parameters one can make the portfolio stock holding grow or shrink at will, while maximising the total value. I believe that this flexibility completely overshadows the small difference in calculation procedure of the Buy/Sell Orders.
In my book I address the option of decoupling the Buy Factor and the Aggression Factor so that the Vortex becomes even more flexible for automatic optimisation with at least 8 parameters. Such a system would be unmanageable to optimise manually, but also it would remove the requirement I have for PC=Y after every action. That would be OK. So, you see that I come around on that Residual Buy Issue: For the sake of a better optimisation result I would sacrifice the PC=Y demand, and certainly choosing a completely different Buy/Sell Function as I have now would then also be acceptable.
The reason for this is that the word Vortex has no significance in the Vortex AIM Structure. The fact that this AIM variant sucks up the dough lies at the root of choosing the name!
Now, money being the root of something is a different topic. Maybe that is your turf as well?
Conrad
I agree on that Bernie.
Your points are well taken and they are good points as well. In turn I like to point out to other people the good point some people make:
With some experience an AIMer will learn what is more or less right and what is not working. But this also means that with mutual funds for which the only trading cost is a 0,5% fee you can AIM with very low quantities. I have done this as well.
Of course, with a small portfolio you could ask if the time spend and the money earned is worth the trouble. In the same light(or darkness) you could ask if sailing is worth the trouble, or worth the money you have to spend on it.
Regards,
Conrad
The Vortex AIM is Caddilac instead of a Ford Pinto
Conrad
Reinventing the Wheel.
Irwin, I know that the you can find almost anything on the web, but it still makes sense asking first if the wheel is maybe already rolling in street next to me.
Conrad
Hi Bernie, On Minimum Trade Quantities.
(Hi Bernie sounds like an oil field in Canada)
When I was fooling around with my Models Spread Sheets I used in the first instance a Fixed Quantity for the Minimum Buy/Sell. This variable had nothing to do with the Vortex AIM functioning as the Holding Zone defined by the Trade Resistance would define the Lower Trade Limit for normal operation. The Minimum Trade Quantity defines the smallest trade one should execute from a practical point of view in order to prevent high trading cost per trade(for very small portfolios).
In the other spreadsheets I mentioned I played around with various other ways of defining parameters. The reason for this is also that in the spread sheets I had no provision for a Trade Resistance other than the Minimum Trade Quantity.
In the VORTEX Program I have simply defined a Trade Resistance and no Minimum Trade Quantity. I recommend a Minimum Stock Value of 10 000, so a 10% Holding Zone comes to a Minimum Trade of 1000. Even with a stock portfolio of 5000 this is 500. To start an AIM with less than that is useless anyway, unless you run it on a fund with trading costs of 0,5% per trade, and then you can trade down to 50 a shot!
Conrad
Hi Bernie, On Minimum Trade Quantity.
When I was fooling arrund with my Models Spread Sheets I used in the first instance a Fixed Quantity for the Minimum Buy. This variable had nothing to do with the Vortex AIM functioning as the Holding Zone defined by the Trade Resistance would define the Lower Trade Limit for normal operation. The Minimm Trade Quatity defines the smallest trade
Conrad
Cycles? You do not like the Tour de France????
Conrad
Irwin, AIM FanClub,
Impressive sites, of course, but on almost any topic there are zillion zites to find. I searched for simulation on these sites but this word was not found.
I was curious if any of the AIMers know of simulation software as I mentioned it. That way I might get some sleep...
Zzzzzz
I am affraid to look on Google as I will get zillion + 1 responses.
Conrad
This is not funny.
If you do it for two messages then OK, but this is BAD SPAM
Conrad
Hi Mechanical: AIM vs AIM, The Short Answer.
PS(Pre Scriptum): I intended to give a simple answer but found I had to dig deeper into the meaning of Standard AIM. This I have done right here and discovered a very interesting thing. Read on!
Glad you asked MM:
Regular AIM is what I would interpret the same as Lichello AIM]/b] or [B]AIM By The Book. Let's call it AIM BTB.
The important Features of AIM BTB are:
1) The fixed PC-Correction Factor: PCCF=0,5*Buy. This gives:PC2=PC1+0,5*Buy, and PC2=PC1 for Sells. Note also that the AIM BTB also creates a Residual Buy Advice for the same stock price as the Buy was executed at. I call this the Lichello Flaw. I hated it!
2) The SAFE=S(% Reduction Factor=PRF is also called the Buy/Sell Resistance. I have seen this interpreted in two different ways for braking the aggression of the buying and the selling on the Advice=(PC-V). V= Stock Value.
2.1) Buy(& Sell)=(PC-V)*(1-S). With S being the SAFE fraction to create a lower Buy/Sell Order, typically S=0,1 for the 10% SAFE.
2.2) Buy=(PC-s*Y) with s=(1+S) for a Buy and s=(1-S) for a Sell.
These two methods are more or less the same generally as they both result in a Buy/Sell Ratio 1 for say the same S=0,1 but method 2.2 creates a more aggressive buying and a less aggressive selling for the same S as method 2.1 does. It is a very interesting difference to me: method 2.1 buys more aggressively than method 2.2 but also sells more aggressively than method 2.2.
This means, if I can keep al this in the correct perspective, that, for say a given S=0,1 for both cases:
Method 2.1 sells off the stock at a relatively high rate on the rise but buys it back at a relatively slow rate on the next dip.
Method 2.2 sells off the stock at a relatively low rate on the rise on the rise but buys it back at a relatively high rate on the next dip.
It appears uncertain, without running a test on the two methods, parallel to each other, which method will perform better in term of total yield. If I must make a stab at it right now I would predict that Method 2.1 is a cash accumulator and Method 2.2 is a stock accumulator.
Maybe some of you will run a test on this?
I had to think on my feet here on these interpretations, as you as you asked me for the difference between Regular AIM and Vortex AIM, I had to understand these differences first. This result proved that there are two Regular AIMs already! If my memory serves me well, Method 2.1 was the original Lichello AIM. Method 2.2 was. I believe, this difference was pointed out to be by Qarel, in a technical sense, about 4 months ago, although I did not know the different performance features between them. I am a slow learner, but I dig deep!
This is very significant as any Regular AIMer has two Regular AIMs to choose from, depending on what he wants to achieve next to simply portfolio growth. He can select to let his cash grow faster than the stock(Cash Engine Mode= RSP for old people over 60) or he can select to let the stock grow faster for increasing the portfolio growth potential(Stock Engine Mode for young people like all of us under 60).
The Vortex AIM was created to remove all the things I did not like about the Lichello investment method I liked very much! basically. So, I went to work on the fundamentals. The Lichello AIM was far too ridged for me, for one thing, and I hated The Flaw. I reasoned that, if I go through all the trouble of designing an Advice Generator, the least the damn thing should do it to give a Zero Advice if I just bought a bunch of shares! Also I wanted flexibility for the PC-Correction for I did not believe for a second that this Lichello Factor=0,5 was the best choice. Lichello never justified the choice other than it being a Golden Mean of some sort that he found via an old car licence plate with the number 2 on it!!!! So, I knew that 0,5 was not chosen by any synthesis process: If you pick something on a hunch there will most likely be a better method.
I did as follows and chose Variable Constants to create the Vortex Mehod:
1 Eliminated the SAFE and introduced only the Minimum Buy/Sell(MB & MS);
2 Introduced a Buy and Sell Resistance for the Holding Zone(RB & RS); Please note that the Resistance is not used in the calculation for the buying and the selling but can be used for calculating the next Buy or Sell on the Holding Zone Boundary if required. Simply a nice feature!
3 Introduced a Buy and Sell Factor(FB & FS):
Buy=BF*(PC-V) and Sell=FS*(PC-V). I call (PC-Y) the Index, or Advice if you will.
4 Introduced a Buy and Sell Aggression Factor(AB & AS) used them as follows:
PC2=PC1 + AB*Buy=PC1 + AB*FB*Index for updating after buying,
PC2=PC1 + AS*Sell=PC1 + AS*FS*Index for updating after selling.
5 Introduced the requirement that after a Buy there was no Residual Advice. This meant that Index= 0 after any Buy and after any Sell must be true, and this meant that PC=Y after any Buy/Sell. This requirement resulted , via a mathematical synthesis process the following:
5.1 That FB =1/(1-AB). and by general demonstration this relation is proven to be correct to get PC=V and Advice =0 after any Buy that is calculated in via these algorithms.
5.2 By analogy the result for the buying was assumed to be also valid for the selling. By demonstration this assumption proves to be correct.
Now, after you have read al this there is no longer any need to read my book, so, I hope you will not understand any of this and order the book soon(sorry only in Dutch for now). It goes to show that the essence of the Vortex Method, as well as the Lichello Method, can be shown on one page. But only fools will pay $ 10 for one page, so Lichello filled his book with non essentials. My book costs Euro 17 and has less volume by at least 2/3rd of the Lichello Book.
I might add as an explanation that the guts of the Vortex Method lies in the coupling of the FB to the AB and the FS to the AS. This gives two Aggression Factors that define the full range of Operating Modes between aggressive stock accumulation and aggressive cash accumulation. Additionally there is also a setting for aggressive selling while only buying a little on the Dips. This is the Portfolio Liquidation Mode. This means that you take our the cash as you need it, as in de case of needing an income. The Vortex Investor is the King in his Vortex Domain.
Yield optimisation can be achieved as you define the optimisation goals. That is up to the investor. When one is used to the impact of changing the parameters one can set the parameters for cash accumulation or stock accumulation.
The utility of the Vortex AIM is that all this is achieved with only two Aggression Factors, rather than creating various models for different purposes.
In addition to these fundamentals the program VORTEX contains various aspects that supersede the basic requirements as outlined here. However these are niceties and make it easy invest from a practical perspective(Portfolio Management & Administration) as an investor typically wants it. The program is mostly debugged now but has a Dutch Users Guide and User Interface. The Guide is not yet comprehensive enough to show all the features. At this time I have no extra subroutines for the optimisation of the Buys and the sells based on stock pattern analysis. This of course could drive the Vortex AIM buys and sells to the extreme limits of the pattern in the same fashion as Don Carlson and Myst are doing for investing the cash or selling the stock efficiently. The ultimate goal in this optimisation is that Vortex AIM will buy sell 100 % of the stock and buy with 100% of the cash on each top and each valley respectively, outside the Holding Zone. Zzzzzz(this means I am dreaming!).
Any Questions?
Please note that I would like to prevent clogging up this board with non-essential features of the Vortex Program. I like to restrict the discussions here on the features and the meaning of the construction. Some aspects of the optimisation belong on the Aptus iHub Board for Advanced AIM stuff. I do have various Excel spread sheets that were originally set up for me by Don Carlson. These models investigate things such as making the Minimum Buy dependent on the stock value rather than on a fixed quantity. Also I investigated making a floating PC but I do not remember what it was floating on, or if it sank of if floated into the sky.
Anyone looking for other information can contact me at vortexaim@vortex.demon.nl or look on:
http://www.vortexcw.nl ------Link: Vortex Methode: Page: Book.
Zzzzzzz
Conrad
Karw, Karel, Dutchmen?
The Dutch Link to the Vortex AIM discussion effort is:
http://marksmeets.nl/index.php3?section_id=5
Mark runs a website on various investment systems.
The plan is to build a TradeSim model for one version of Vortex AIM so that it is immediately clear via a simmulation what the Vortex AIM can do with stocks on the AEX etc. When this is ready we can show How Vortex compares with the other methods.
The Sims system works like this:
1 you select a stock from an Exchange;
2 You pick a simulation system---- of course Vortex later on!;
3 You select the agressivity and simulation period;
4 You whatch the Yield on a grapg and compare it with the Buy & Hold Method.
You can see the system work on the link EasySims.
Are there any services like this in the USA? I bet there are!
Conrad
Pragmatico,
Yes, you can read up on Vortex AIM on either one or the other websites:
http://www.vortexcw.nl
---->Link: Vortex Method---->Contents----->Book: The Vortex Method.
http://home.wanadoo.nl/christiaan.kruidenier/vortex/index.html
----->Contents------>Book: The Vortex Method.
Happy reading!
Conrad
Hiram Walker.......
Some people get all the breaks!
Conrad
Karel,
Maybe something to do with language?
Conrad
TOM,
Johnny Walker was there too!
I bet!
Conrad