is retired now but still kicking like a horse!
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Thanks, Karw on the Lichello Series,
I have received a LC spread sheet from LC in the meantime, and I am trying to discover it's secrets. I am in contact with LC on this. It is indeed an Interesting AIM Variant...It may even outperform my Vortex AIM!
On Lichello's Millions, maybe something is wrong with the example.... Let's try to find someone that made a million with AIMing in 35 years. By betting $1 on the flip of a coin one can win $1. If one does this 100 times one can win 100 dollar. I bet it's never been done.
It's an interesting contradiction that Lichello's choice of title is no doubt responsible for the fact that AIMing has become well known. The book was not about making a million dollars but clearly about a simple low-tech method to make a decent profit at low risk....
I am now thinking of a new name for my book...With the The Vortex Method I raked in Fl. 539,45(If that) in 3 years. Maybe I will call it The Money GAIM
Conrad
Conrad
This FAIM LAIM GAIM is all the SAIM to me.
But one more thing:
One more thought. (S)he who hesitates is lost. I've still not forgiven myself for not taking AIM after I saw Lichello's original infomercial back in the 80's. What did the lack of action on my part in the 90's cost me? One will never know. That is why I've jumped into this with both feet
Who would want to know? I would rather forget that I lost the money, if I lost any, and forgive myself, even if I did lose a bundle.
Conrad
Conrad
Hi Everybody,
I have read many of the discussions on the Stop/Loss and the TA in general in combination with AIM. But I am a bit puzzled. It appears that the suggestion is made that AIM an TA are incompatible. Just like setting an AIM at a 10% Resistance or at 30% is not an incompatibility but a different tactic.
I do not pretend that I have the answer for any of you but it is clear that AIM + TA is not a matter of right or wrong buy a matter of choice. It is a matter of applying tools in a way that effectively works for you(me) reaching your(my) objectives:
1 Using a stop/loss on a stock that might experience a large dip makes sense! I would precisely want to generate cash to buy again when I am close to the bottom or after a significant drop. Either using AIM to buy before the bottom or using TA after the trend has reversed enough to believe the ride to the bottom is over. This gives me two compatible mechanisms....Buying close to the Bottom with TA magic is simply a severe form of Aiming...and a more effective one, or the other choice is to buy some stock on the way down when I judge it to be better doing it(not believing in TA so strongly as yet).
Now, on the up side I have the two options as well: I can AIM the profits into cash in small steps or larger ones. The other option is to stretch the AIMing to the limit and take profits later, but at least taking some profit if that makes me feel better. Then with the TA signal I can choose to dump the Residue and jump in again much later when that price is down. This would seem sensible to me. The Residue I have, if I let it ride, is only a “small” portion of the total, so the profit it can generate will have high percentage but will be a small portion of the Portfolio. If I let the whole portfolio ride under TA control the profits will be much larger. There is nothing incompatible between letting it all ride or letting a little bit ride. It is simply different.
I can play both techniques effectively as the result is not only a matter of % profit but a matter of using the available tools effectively to achieve my goal.
With the use of the Stop/Loss, and riding with a pocket full of cash to the bottom I can achieve exactly what I want, and if I think the stock has become too dicey I can pick a new stock.
I am convinced that as AIMers learn more and more about investing that they may well effectively leave AIMing behind them. AIMers should not try to convince anybody that other techniques are incompatible with AIM. They are not. Other techniques are complementary.
Having said this I will not get into a true/false discussion. As an Aimer I am not typically using stop/loss techniques structurally. I use them incidentally if I feel uneasy about a stock…buy I rather call it a Bail Out. But I will use a stop/loss if that appears to an advantage to me. If I make a less profitable decision, so be it.
AIMing is not a religion....to me.
Conrad
Conrad
Thank you WhiteLake!
I thought the numbers pertained to some parameters that I had not seen before...so many AIM variations in existence!
I read Lichello more that 10 years ago. I still have the book somewhere but I have no idea where I have it right now!
Conrad.
Conrad
Rico,
In answer to your question on a copy of the book:
Are you implying you only have the master copy of the 'old' book? That would not be a wise thing to sell probably. If you've got none left at the moment I'll have to wait. But I'm perfectly happy if you have an old dutch version left over and the new version is going to take a while before it returns from the presses. (Just don't charge me in dollars as on the website, if you please ) After I read the old one you can convince me to buy the update too.
If you send me you e-mail and/or address I can send you a copy of the book, or send to some free information on some of the topics in that book.
We can discus a price for the book that is reasonable for both of us.
Conrad
Conrad
Hoi Karw, On Synchrovest:
I did get the LC Spreadsheet(That is if LC is LostCowboy).
I am getting my wet.
Can you tell me what you exactly mean by Lichello Series(10,8,5,4,5,8,10.). There appears to be a standard sequence definition that I need to get.
Thanks,
Conrad
Conrad
No..some people just have a job on Monday!
To the loo,
Conrad
Karel, I think we are at an impasse, therefore we are: impasse ergo sum?
You are probably correct that the Kelly Equation has a low applicability to the typical investment decisions that we tend to make in AIMing....( what are p and E this proposition???)… The equation relates to coin flipping whereas most investment decisions(mine too!) for AIMing, and other techniques, are based on superficial risk analysis and a lot of subjective decision-making.
You wrote:
The Kelly Equation and AIM are largely incompatible, I think. the reason I think so, is a standard piece of investment advice, that IMO also applies to AIM: cut your losses and let your winners run
The analogy that I made with (p,E)applies for cases(rare ones) in which the real applicable probability factors and applicable payouts(multiple events) can be determined. Then the Kelly Equation would still not apply, but there would be some sort of other relationship to determine the optimum investment. The actual relationship would be impossibly complex as a real venture has many events taking lace in its unfolding, all of which with their own probabilities that can be compared to coin flipping. It is even so that if you use a die instead of a coin in a simple die-game that the combinations of possibilities render the Kelly Equation invalid. The case of six payouts on six possible outcomes of the roll of a die are already too complex(it appears) to find a the exact optimum for the bet/cash ratio.
Because a pure probability approach for investing is impossible to execute we use in practice other superficial….incorrect… methods that are based on company profiles, while the real facts behind the curtains that determine what is actually going to happen, simply stay behind the curtains…We bet that things are not as bad as they might be.
This approach is normal, and we use it in engineering every day….not to talk about it’s use in economics! [b[We know that we do not know the facts...but use incorrect information that gets us close enough to our goal. Then, when in rare cases things go wrong, everybody is all of a sudden an expert on the subject and tells us why we screwed up and that we should have known better. We know that this will happen, still we keep using incorrect information because we either have neglected to find information that is already available in our branch of technology, or the correct information does not exist: we do the best we can but we always realise that we are ignorant of the facts no matter how deep we look into the matter before us beforehand...
All people in Manhattan that went to work in the WTC Towers on September 11th last year believed it was safe to do so, even though the events that would lead to their deaths were already unfolding...the facts behind the curtains were unknown to most people on earth, but these facts were facts just the same.
Cutting losses and letting the profits run is a sound investment method, I agree, considering that we normally do not see the facts behind the curtains, and that normally there is no ticking bomb hidden somewhere. Still, cutting the "losses" on a sound company that has a temporary setback is not sound, an letting the profits run may sometime end up in an financial disaster.
I believe that we have reached an impasse on the philosophy of investing and on how profits relate to real risk rather than perceived risks, and that we, I suspect deep down agree on the facts that most things that happen are caused by factors beyond our control, because of our ignorance of what really goes on, when anything goes on!
Conrad
Conrad
Karel, this idea of using a different row for the Excel iteration works fine if I use the PC in the row above the one in which the calculation is being made. However, if I use the PC in a row lower then chaotic results(profit rose to 2,3x10^14 !!!!) to develop again with a vengeance.
So, using a higher row works! The few times that the PC is updated to a higher or lower value could make a difference in the result but that is I think a minor problem.
Thanks!
Conrad
Conrad
To All,
I have summarised the results of the AIM Testing on an Excel spread sheet. I have included all the information I have received(I think).
For as far it was reasonably possible I have made some conclusions and listed these on the spread sheet.
The construction of the AIM as used by ICT gives the highest yield. Interestingly enough, ICT uses and AIM that is almost identical to the Standard Vortex AIM # 1 and #2 with PC=SV (SV=Stock Value) after a Buy or Sell(or at least that is how I understand it). Depending on how well optimization was achieved the Vortex AIm and the ICT AIM would appear to be similar, except that for the ICT AIM the Cash/Equity Ratio was close to 1 while for the Standard Vortex AIM the C/E Ratio is much greater than 1.
Another interesting result is that for the non-standard Vortex AIM #5 the use of a fraction of the PC-value gives a much better yield than using a fraction of the equity value. I presume this is also true for the Lichello AIM.
Any one that wants to get a copy of the AIM Test Results can request it by e-mail:
eng@vortex.demon.nl
If you have information on your Test Data dat is not included on the this listing you are welcome to enter this on the spread sheet, mark it clearly with colour or a border. I will compile the extra data and forward it to the people that have requested the Summary.
Discussions are welcome.
Conrad
Conrad
Karel, On the iteration suggestion, you were right. Thanks for reminding me. Some years ago I used that on a Mac Excel 4.0(still musing that on my Mac) but I did not think of trying it out.
The reason for this is that I was not intending to solve for the a common variable that was used. As it happens the iteration allows me to operate as intended, BUT....
For some very small parameter changes of about 0,01 on certain PC-values the calculation goes completely crazy...the cash value jumps from positive to 300 000 negative! In that way the iteration causes a huge problem.
What I need is a second column for the PC-value and then a decoupling of this column from the PC-value column.
If something like that exist I would like to know. In the Excel Function List I have not been able to find anything like that.
Thanks again,
Conrad
Conrad
Karel, I cannot relate a real investment to a simplistic relationship linking probability and payout to the optimum investment, as it appears possible with the Kelly Equation. I suppose that writing an equation for the optimum investment for a real business will be extremely difficult and anything that would come out of it would be very crude. But I would venture to say that the more you know about the intricate events that unfold in a company the more you will be able evaluate the probability of its success. This is also true in the flipping of a real coin!....You might have read about the fact that the Belgian 2-Euro Coin is not an honest coin,so even coin flipping is not actually a 50/50 chance event.
On this board others have proposed that investing is a mixture of simple gambling and executing money and/or risk management.(I suppose this actually means application of investment theories as is found in books or is learned from experience.
A broad grey band between wild gambling and pure objective yield optimisation if you will, between investing and gambling at best only separates the relationships, or analogies. To a large extent is executing the advice of investment experts maybe the largest gambling component in any investment decision...such as acting on the belief that profits are simply the rewards of risk.
So, the application of the quantities p and E for a real company, to the extend these quantities can be determined accurately, would indeed be a good management tool...the big problem is that the optimum Investment Equation will not exist because the mechanics of the game are not known. The best I can do is make an subjective estimate and gamble that I am right, but even this gambling is based on logic and "Gut Feeling".
The very act of AIMing is such a process: With Stock prices being high in a Bull Market the p that a price decline will develop grows as the price continues to rise. At the same time the E for selling off the stock at a high price grows along with the rising price. For an AIMer the following interesting question arises:
How do p and E functionally relate to the Optimum Bailout Price or intermediate Sell Points?
Without pretending that such a relationship is easily found I dare to say that each investor makes up his own, subjectively.
I would argue as follows:
1) As p rises (1-p) drops(probability of a high E
2) As p rises then the Optimum Bailout Price(the end of the price rise) is unknown, except in so far the investor has information on this from the company itself.
3) If a realistic assessment of the Bailout price is possible, then it should be possible to make some prediction for Baling out at a certain price.
In practice we process this information subjectively and we bail out when we think it is the appropriate moment. This means that the function to find the optimum bailout price really exists and is a computational effect of the mind using ideas such as "The profit is high enough" or, "I will wait for the Big Kill".
I think, therefore I think I will Bail Out, therefore I Bail Out...as Extelecom would have said it.
In principle I believe, of course, that Risk-Reward Assessment is always being carried out...with computers or with the head. I conclude that investors that are the most successful are successful by virtue of combining effective risk avoidance and selecting high yield investments. Any other explanation doesn’t; fit the facts.
Fatal accidents on racetracks occur very seldom. The killing on public highways is due to risky behaviour. Race drivers survive by avoiding risk skilfully...
Conrad
Conrad
Karel,
I am by no means an expert on probability equations, and this formula, if it is correct, shows a very interesting aspect that a ~17% portion of the total investment is supposed to give the maximum yield...on the average. Aside from the interesting result of 17% it appeared to me that with the probability of winning/loosing(50%) on any one flip and the payout remaining fixed that the average maximum yield is dependent on how the bets are invested. This means that aside for the risk component there is an optimum strategy. This means to me that in addition to the probability of the events the chances for a net gain improve by virtue of risk avoidance. If the formula is correct then this simply demonstrates that fact.
Moreover, I believe the essence of the game is(as an analogy to investing) to demonstrate that the actual way of winning in this game was quite different than what most people would suspect...that is without using the 17% investment strategy the available cash would vanish rapidly because of a high risk strategy.
When I look at the formula p - (1-p)/E, and we take p to be .5 (coin flipping), there is indeed a chance to win in this game, because of the occurrence of E. I thought you meant coin flipping, a dollar for a dollar.
As I mentioned, this in a different game than the 50/50 game I alluded to before.
Of course you can win at that game! The surprising part is that this seems to appear to you as something surprising (or something that should surprise us...)
To you it may be obvious that you can win at this game but for many people it may not be. If one starts at betting 1000 the money would be lost right away, so the optimum strategy would not at all be obvious, and most people would think that winning
with a 2,5/Payout Ratio in a 50/50 probability game is going to be easy, especial if they have learned that profit is the reward of risk. The fact remains that by gambling wisely and using risk reduction/avoidance is the real source of the profit.
The analogy with investing is of course too simplistic. The biggest difficulty with business ventures is to determine the real probabilities of success. In my arguments I indeed implied that some ventures, by virtue their particular situation and good management are low risk ventures that can have high payouts.
The fact that low-risk high-yield ventures are difficult to identify is no secret. So, the real risk in investing is more related to the fact that high risk ventures are often chosen over the low risk ones.
Conrad
Conrad
Hello All, and Bruce 4444
Say, some time ago I mentioned, as an aftermatch on the many discussions on chances of winning or loosing and yield optimization that I know of a game with a 50/50 chance with which you can structurally win over time.
Today I got some interesting information on of a Dutch website about just this type of game, bit a different one. The proposition is that with coin flipping there is a fundamental high chance of winning with a 50/50 probability of winning....(Heads or Tails Betting).
The idea is that is you have a limited amount of cash to gamble then not betting assures no loss-no win. If you bet all the money right in one bet you are certain to loose in the long run.
There appears to be an optimum amount that one should bet on a probability game(investing).
For the Coin flipping the investment should be:
Investment ={p-(1-p)/E}
P= probability of Heads or Tails = 0,5
E= is the Gain if you win the toss
This means that for each Gain that one specifies there is a certain optimum investment defined. Furthermore it also demonstrates that for a given probability of winning the Winnings are dependent on the investment...and this is the essence of my previous argument that investment awards are not primarily a result of taking risk but primarily is determined by yield optimization and risk avoidance.
It is a very interesting game that is available on the Dutch Website:
http://tradesims.com/mmgame.php
The owner of this site also refers to an English/US?? website on which investing os treated in the same way as a dice game. The site BRAINS is:
http://keplerweb.oeh.uni-linz.ac.at/trading/
and appears most interesting. The proposition here is that the Initial Entry Point is of little consequence to the End Result.
One of these day I am going to read that site!
Conrad
PS:
I have reacted to the questions of Bruce4444. My response was too long for this Board. I explained that my way Turbo Investing a perfect mechanism is for AIM-investors without cash.
That write-up is available via e-mail eng@vortex.demon.nl for all to read it.
Regards,
Conrad
Conrad
TC-Circular Reference Excel
Thanks for the idea TC, but that is not the problem..I think, therefore I am...sure that the problem is fundamental and I need something to circumvent an unknown functional dependences. Lets see the problem in general
PC=F(y1,y2,y3...)
PR=F(x1, y2,z3...)---- PR=F(PC)
Both functions have the y2-dependency. The problem would be less problematic if were to solve for the value of y but that is not the case. I need to find PR. The part that I do not understand is that somehow in PC there is a dependence on PR and therefore I get the circular reference.
I think that it should be possible to eliminate the link and find PR once PC is calculated. For example, if I could introduce a delay-factor in the calculation then PC would be calculated first and then the PR would be calculated using the value of PC.
Is there such a delay-thing in Excel??---- PR=F(DL)F(PR)
Its just an idea.
The solution I use now is to make PR(Resistance) dependent on
the equity value instead of the Portfolio Control. I am curious to what extend this introduces a different end-capital.
Conrad
Conrad
Hi Lemon Head,
I get sucked in all these interesting puzzles. Anyhow, this is not a puzzle. There are several solutions. You are the Boss. A reasonable way I would use is to say that:
1) The fact that you sold 4 lots created a profit(assumption as you were not forced to sell any lots)
2)The 4 Homesteads increases the value of the properties
3) The lighting and security features(Dobermans?) benefit the future owner of lot # 5...so the value of the lot # 5 goes up regardless of how you charge the expenses to owners of the 4 lots.
4) The fair way is to interpret access them equally is to charge them 4/5ths of the total expenses. Legally you might be entitled to charging 5/5ths of the cost to 4 lots, depending on the intent on the agreement. Give the Homesteaders a break. No more than 80% I say!
If you were the Government the Homesteaders would no doubt pay for all of it.
Conrad
Conrad
Hello Tom, I will add it to the Matrix
This is interesting. It moves more into the ballpark with the other AIM Results.
I think with the SAFE at 10 % you still get a lot more Trades than would be "necessary" with this stock, but as this is more or less a Standard AIM BTB with the 10 % SAFE.
As I do not use the SAFE as you do but Only the Buy/Sell Resistance, so I have less of a "fee" for the mixed-up use of SAFE and Minimum Buy Amounts. To me a Minimum Trade is to prevent high trading costs on small orders. The Buy/Sell Resistance is the threshold to create the Hold Zone. In the actual testing I made the Buy Resistance large enough so that I needed no extra filter for minimum Trades.
Anyway this raises a question:
My Vortex Excel testing AIMs are a bit different from the Windows version.
In the Test AIms I used various options. I wanted to make the the minimum Trade amount a percentage of the Portfolio Value but the program refused that(circular Reference) so instead I used a percentage of the equity value. Do you have a "feel" for the difference between the two methods? Considering that
the PC-value sticks to the equity-value reasonably close I see no substantial difference, except the effect that if equity value falls the threshold value also drops, triggering earlier (relative to using the PC) for smaller buys, and triggering later for larger sells:
Rgards,
Conrad
Conrad
ET's DowLoad Hick-up,
You are welcome!
I send you another one. With a bit of luck this time you will get the missing Part!
Conrad
Conrad
Hi Bruce,
To AIM or Not to AIM. That is the Question! The answer is YES!
I have prepared a solution to your dilemma. I started out meaning to place it on this Board but it got too long. So, I can send it to you by e mail.
A few years ago I have developed an investment method that is a Natural Partner for AIMing and it will fit you like a latex glove!
I call it TurboVest...The idea for the name came lately to me when I was hearing the names TwinVest and Synchrovest repeatedly on this Board.The name is actually a little joke, but who knows, maybe it will catch on.
My e-mail address = eng@vortex.demon.nl
Anybody may ask for a copy of the write-up.
Regards,
Conrad
Conrad
Hi Ergo,
Good stuff for a discussion! I appreciate your point of view and I will discuss them. But let's call a spade a spade:
1) When posting the Test Results I said: Ergo Sum had the highest Result. I did not say you won. You just think you won!
2) The AIM Test was to find out what the different AIM Variants were capable of doing with a given boundary condition to work from.
3) I forgot what point 3 was...let me think….
4) As you did not use any AIM Structure your score does not count...Ahhhh...that was Point #3!
5) Most of us would be able to do something like you did. We could simply Sell all the stock at a share price of 134, then wait till the share price hit 70 and invest + 20000 and repeat that on the next peak and dip. The idea is that you use the AIM structure to squeeze the most profit out of a set of arbitrary data wit a set of parameters that would be valid for the 85 week run.
6) It is interesting that you suggest a test with the share price dropping first. It is clear that this would give a better result. In the testing I actually ran about 6 models, as luck would have it I accidentally used a share price pattern running from 100 to 40 and back to 150 etc. ending up at 100.
Without even trying hard to optimise I hit a profit of 36000...At first I did not realise I had used the wrong share data, so I thought my Vortex Model #5 was the goose that laid the golden egg. I thought "This will Blow everybody away" buy then I noticed that the wrong price data was used. When I get a little more time I will run the reverse price history.
7) Let me think...what was point 7?
Ah, yes: I think too, therefore I am!
Conrad
Cogito, Ergo Sum
PS:
Say Ergo, if you do not have a computer, I suppose you connect onto this site with pencil and paper? Anyway, you miss a lot of beautiful things. Borrow a computer one day and check out this neat website:
http://www.geocities.com/gedeonp/fractals/fractalgallery.html
It will blow you away!
The one I like the best is called Summer Solstice
There is also one called Coito Ergo Sum...One can do without and still be!
Some time ago I ran into some article on human behaviour and the link between the body and the soul. At first the preposition is that you are what you eat and how thinking affects the mind(now that’s what I call a viscious circle!!!). Anyway, the idea is for example that people who have evil thoughts become evil people….so, the message was that one should be mindful of one’s thoughts...
Cogito, ergo no sum
Rene Descartes walks into a bar, really thirsty and hankering for a cool beer. The bartender, seeing a person of such celebrated status walk in, thinks "I've got to set this guy up with something really nice!" So he says to Descartes, "Mr. Descartes, would you like a nice snifter of cognac or perhaps some whisky from Scotland? On the house?"
Descartes, have some intricate N-Space mathematical dilemma on his mind, replies, "Oh, I think not"...and promptly disappears!
http://www.netscrap.com/netscrap_detail.cfm?scrap_id=213
Conrad
Tom, on your Profile,
I get it!
Did you used a filter or a mask?
Conrad
Say, I just thought of a neat signature:
The Mask
AIM Testing Results
I have made a short list of the AIM Testing Results I have seen
so far. It is impossible to list all the data here...this list
below took me more than an hour to make it presentable.
I suggest that later on I send the Excel Matrix to you by e-mail
if you want to get it.
At this time the results of Egro Sum are the highest. For many
results a lot of data is not listed as I did not see it on the
Board as the data came in.
My personal preliminary conclusions are:
1) With the many variables its difficult to find the highest
peak in the multi-dimensional coordinate system(N-Space). There
are several peaks in such space and without going through all
the realistic settings one can not be sure the best combination
of parameter settings is achieved.
2) The Yield isvery, very sensitive to all parameter
settings. An infinitesimal change on for example Buy/Sell
Multiplier can make the Yield jump down (or up) very
drastically. This is caused by the fact that the Buy/Sell
Resistance(or SAFE) are not continuously variable, and as the
Buy Advice crosses the threshold-value it can throw the End
Result out of whack, if the other parameters are not optimum
for the new calculation results...It throws the end-result into
another place in the N-Space. This makes manual optimisation
very tedious.
3) Because of (3) it is not certain that the lower results are inferior to the higher results. One would need to test the full
range of parameter settings to find out any fundamental difference.
4) Very interesting is the fact that there are two extremes with
respect to cash-equity distribution. Some AIMs have
maximised the cash while others have maximised the equity!
This could be interesting information with respect to what the
investor wants to achieve: Equity Growth or Equity
Liquidation? In this Test I believe that the distribution
that we see is accidental, as none of us, I think set
out to maximize either the cash or the equity.
This cash/equity distribution is also important in relation to
how the share price is developing. If the stock price starts to
drop again after week 85 then a cash-risch AIM will be a good
thing for you….If you believe the stock is sound! If the price
starts rising again then you will be better off with an equity-
rich AIM. So, my conclusions is that with the stock price
running at an average even keel of 100 the best
cash/equity ratio to AIM for is the 50/50 that we started out
with. Being an idealist(on top of being a pragmatist) I would
also venture to say that if you can manage to control the cash/equity ratio to follow the Idiot Wave then you might
have the best parameters settings that you can hope for.
5) At this time I would conclude that aside from the fact that
for any price distribution we can find an optimum set of parameters, it is very difficult to find the best set parameters
for a particular stock pattern. This would make it even more
difficult to find a good set of parameters for a stock
with an unknown pattern and unknown volatility(as was more or
less already expected).
6) In order to obtain useful information from this testing the
data needs to be studied more carefully, taking into
consideration all the parameter settings. But then we would
need to optimise the testing so that we are sure that we have
the highest peak in the N-Space. Such information would
disclose specific difference between the AIM variants that are
presented in this test.
Short List AIM Test Results
Data Cash 50/50
Capital 20.000
Interest on cash 0,05 Compounded Weekly
Trading Cost
Fixed Fee 20
Commission 0,006
Interest on cash 0,050
Initial Trade Cost 80
Equity to start 10.000
Netto Cash to start 9.920
Name Value PC(W=85) ROI Equity Cash Trade Interest
Cost
AIM Guy 22951 9,03 8151 22951
Vortex 1 28040 8392 24,59 20743 7297 802 961
Vortex 2 28696 10988 26,60 18615 10081 567 831
Vortex 6 25350 17278 16,37 3712 21638 346 346
Lost Cowboy 30143 31,03 Synchrovest Experiment
AXP 1 24847 14,83 At 30% Cash
AXP 2 At 50% cash?
Pragmatico 25835 17,85 5154 20681
ICT 32232 37,42 17456 14776
Ergo Sum 32610 50,68 32170 4400
Labestul SA 24309 15793 13,18 9309 15000
Labestul TA 24367 17136 13,36 7767 16600
Labestul HY 24150 15907 12,69 9150 15000
DonC1 25464 16,71 7406 18058
DonC2 24964 15,18 6519 18445
DonC3 30836 33,15 Synchrovest Experiment
Hi Cowboy,
Yes, it would be useful to see a Synchrovest spreadsheet to try it out, but I am actually looking for a qualitative description as to the fundamental difference. I believe Qarel got me on the right track in his Post # 1721.
After we get through a discussion on the AIM Test I will loo into it.
In the meantime you can mail the spreadsheet to me at eng@vortex.demon.nl
Thanks,
Conrad
Conrad
Hi Lemon Head,
Glad to hear my profile looks good!...
I can make it look any which way you like it even better!
(Joke)
Conrad
Hello Cowboy,
I do not have paid any attention to the mechanics of Synchrovest, so your many numbers go by me. What I want to remark is that if you have any type of weekly installment plan then a cost loading of 20 + 0,6% would be very unreasonable.
In the AIM we run into 10 to 15 transactions in 85 weeks and the total transaction cost is 400 @ 600. So, if you are buying every week then you should look at only the 0,6 % commission in order to get reasonable cost for the period.
Now something else. Without so many numbers, how can you get a high yield of over 30000 when you start only with 16000 total and invest every week? What happens in Synchrovest to get that kind of Return on 16000?? I have a feeling that something is wrong. IF Synchrovest works that well then all of us should be discussing variations on Synchrovest...shouldn't we?
Curious Conrad
Conrad
OOPS Initial CASH= 9920 !!! Not 9200 !!!
In the editing mode I entered the wrong Initial Cash Position.
I noticed that if you use the Editing Function(15 minutes) then all the corrections that are made are undone.
I hope this is clear. In my Test Spreadsheet I had originally forgotten the Upfront Cost of buying the first 100 shares!
Also, some of you have listed the Terminal PC-Value. This is interesting to compare.
Next, some of you also listed the total Trade Cost separately. I had not intended to go into that much detail buy if you all think that it is good to list then I will enter that in the Results Matrix.
Now, if we are going that far it might be useful to list the interest earned on the cash.
From all this we can can discuss the results from the inside out and make some more judgements than on Yield only.
Conrad
Conrad
AIM Test-Data Results Recording
I have made up a Matrix with results but a lot of information is still missing. The following List of symbols is used to compile the parameters. As various labels are used I like to get everybody on one line:
Definitions of Parameters
ROI Return on Investment(Weekly compounded)
Start Stock = 10000
Start Cash = 9200 (As the initial Trade costs are 80)
PC Portfolio Control
SV Stock Value
BS Buy Safe
SS Sell Safe
BR Buy Resistance
SR Sell Resistance
MB Minimum Buy
MS Minimum Sell
0,5 PC Update Lichello PC2=PC1+0,5*Buy
0,0 PC Update Lichello PC2=PC1+0,0*Buy
Buy(Lichello) ?? PC-SV*BS
Sell(Lichello) ?? PC-SV*SS
F1 PC-Factor Buy:PC2=PC1+F1*(PC1-SV)
F2 PC-Factor Sell: PC2=PC1+F2*(PC1-SV)
FB PC-Factor(Vortex) Buy:PC2=PC1+FB*BM*PC1-SV)
FS PC-Factor(Vortex) Sell: PC2=PC1+FS*SM*(PC1-SV)
BM Buy Multiplier(Vortex) 1/(1-FB)
SM Sell Multiplier(Vortex) 1/(1-FS)
BB Buy Beta BB*(PC-SV)
SB Sell Beta BS*(PC-SV)
AIM Test-Data Results Recording
I have made up a Matrix with resutls but a lot of information is missing. The following List of symbols is used to compile the parameters. As various labels are used I like to get everybody on one line:
Definitions of Parameters
BS Buy Safe(Lichello)
SS Sell Safe
BR Buy Resistance
SR Sell Resistance
MB Minimum Buy
MS Minimum Sell
0,5 PC Update Lichello PC2=PC1+0,5*Buy
0 PC Update Lichello PC2=PC1+0,0*Buy
F1 PC-Factor Buy:PC2=PC1+F1*(PC1-SV)
F2 PC-Factor Sell: PC2=PC1+F2*(PC1-SV)
FB PC-Factor(Vortex) Buy:PC2=PC1+FB*BM*PC1-SV)
FS PC-Factor(Vortex Sell: PC2=PC1+FS*SM*(PC1-SV)
BM Buy Multiplier(Vortex) 1/(1-FB)
SM Sell Multiplier(Vortex) 1/(1-FS)
BB Buy Beta BB*(PC-SV)
SB Sell Beta BS*(PC-SV)
AIM Test - Preliminary Observation
First of all, thanks all your people from Mars, for your efforts on this Testing.It has produced some interesting results. I am compiling the information so later we can dig into it deeper.
The thing I want to mention here is an observation that I had not expected:
Some AIM versions tend to accumulate cash
Some AIM versions tend to accumulate equity
This unexpected result is quite strongly noticeable, en apart from the variations in Yield itself it means something important:
1) With a concentration on stock you will benefit if the next move is a Upcycle;
2) With a concentration of cash you will benefit if the next move is a Downcycle.
Interesting!
Conrad
Conrad
Hi Lemon Head,
Your question has been hanging on my mind for several hours and slowly the fog began to lift...maybe you meant my profile that would be attached to the IHUB Sign-On!
So, I looked for it and after a while I found it and filled in some information. I will edit it later.
I had completely forgotten that sign-on ad I never questioned who all those peole were that I was talking with. The only person I know a bit is Rien and Tom Veale.
Regards,
Conrad
Conrad
Hi AXP,
Interesting to note that you get to a value of $ 24847 with 30 % cash! Can you do some runs with 50% cash and tweek to see what you can get?
The comparing will be done at 50 cash to keep the boundary conditions the same.
Regards,
Conrad.
Thanks TC,
Yes, that explains it! I read over it in your earlier message.
That makes it very interesting. This method is then identical to my method in which I set PC=Y after the recommended buy or sell....Y being the new equity value.
This way you circumvent effectively the Lichello feature of the Residual Buy Advise after a buy!
Good work!
Conrad
Hi Lemon Head,
That profiling I happen to address in my post # 1677.
In providing some insight as to how I picked stocks I present a bit of history as well. It explains a bit how I tick.
As to putting my profile in the Board, I have no objection to that, but I think sometimes it good not to know...knowing certain things about people sometimes forces a discussion into a direction that is not conductive to good conversation.
Although it is not relevant to this board I mention something I learned about meeting people as I found it quite inspiring: Before that it was my habit to start out a conversation by asking: "What do you do for a living?" It was pointed out to me that this knowhow is...unconsciously...used to peg the person and to use this information to lead the discussion to the persons occupation...due to a lack of anything else to talk about.
I learned that "making contact" with an interesting topic will focus the discussion on that topic and in due course the discussion partner will disclose, without any reservation, how the topic relates to his or her job and this way the topic will automatically be addressed from two different perspectives, adding extra depth to it... I found that a most interesting experience. Since then I almost never needed to ask what people did or what they had studied. It simply comes out!
Say, do you know why a golf ball curves upwards against the force of gravity when you hit it in a certain way? It was on a day when I had nothing drink when I saw it happen. The ball first moved more or less in s straight line and then it started to rise...curving up instead of falling down. Quite impressive to see. It was no illusion.
I though, you being a golfer, may have noticed this interesting behaviour.
Regards
Conrad
Hello TC,
This is very interesting. You are using multiplication factors for the buy and sells almost in the same way as I do, except that you set them directly and I set them via the Aggression factors.
I suppose you also tweek the PC update factor by using other values than 0,5 of the buy?
Suppose you do that apart from the multiplication factors, that would create two new parameters for your aim(5,20,3,a,2,b)
and the factors "a" and "b" would indicate a pc-update factors for the buy mode and the sell mode
I have been toying with decoupling the pc-update factor from the buy multiplication factors...food for thought.
I like your approach of course because it looks like the Vortex AIM a lot.
Conrad
Hello Barry--Test Results.
Very interesting Results. I have mist most of the night already and need to address this later today...its almost 6 AM here and I need a few hours sleep!
Regards,
Conrad
Barry, You ask some darn good questions…
1) Trading cost is correct....As you put it I have to check my calculations...I may have neglected to include the cost of the first acquisition of the 10 000! Everybody take note of this!!!
2) In reality this is YES for Funds on participation basis. NO for stock as you round off the share purchase for whole quantities. I would, in reality, use 500 shares is the calculation suggests 498. In the calculations for the test you could round off the buys and sells as you want. Is up to you. In my Excel Test program the actual number of shares traded would have as many decimals as the Excel normally retains.
3) With a particular setting of a Resistance(or SAVE) I noticed that a small deviation of any parameter can just make the difference between Ordering A Buy/Sell or not, and this can have an effect on the outcome. I thought that some people might use say 49% if this happens to give a positive effect to the yield.
4) You raise a good point but it is not practically important. This is My Way: You start out with 10000 cash to buy stock and pay for the trading cost out of the remaining cash. This would satisfy the condition that your initial split is 50/50
5) My God, in the past someone called me a mathematician. Now we have you! Good Point though, but not serious if you truncate or not. I simply carry fractions(behind the curtain) as far as Excel does it and do not truncate. I simply show integer values.
The test is an Order of Magnitude Test. I would consider, taking into account all sorts of practical factors, that a result of 25000 Yield means almost the same as result of 26000 Yield, and only a result of 30000 would be a significant difference. Then you can look at why this difference occurs.
6) ROCAR??? I must confess I do not know what it is. I think that at this level your suggestion goes beyond the initial purpose of the tests. In order to do what you do suggest the test have to be set up far more professionally and that was not intended...we are looking at some results without digging too deep into all sorts of qualifications that you mention. We do in effect something as if we are testing Apples and Oranges to see which one tastes better. Later on we can compare on a deeper level. As I see it we are not even intending to make anybody switch from an apple to an orange. I just want to raise awareness that an orange may taste good if till now you only have tried apples. In practice people will use vastly different reasons for operating their aim quite differently from the next person.
Let's keep it simple for now.
Conrad
Hello Ergo SUM,
Hey, let's get together and not play golf.
When I use to work with Sandwell in Vancouver(Canada) I played golf at the Annual get-together. I and my friends got a little too heavy into drinking before we got to the # 1 Hole. We drove an electric cart to get from hole to hole: From # 1 we ended up on # 8 and via # 13 we found # 2 hole. We tipped the cart a few times, ripped open some greens, drove into the bunker and ended up one time in the pond...it was only 6 ft deep.
My golf score was 157 and I won a bottle of booze, there was applause just before everything went black...I thought that they closed the curtains for a movie.....what away to find out the next dat you are supposed to get the lowest score to really win the game!
What? Do we have a Soccer Team?
How come I don't know about this?
I have to do some FA on that!
Conrad
My God, This AIM-Board fills with the speed of light!
I took off some time tonight and I see 30 new messages to read!
Some time ago ET asked me about my ideas on stock picking, or maybe it was VT, PX, IC or GI Joe, I don't remember.
Anyway, I started out intending to write up a few pearls of wisdom for this board on how I pick stocks. I soon discovered that I could not simply list how I do it. I call it Common Sense, but it's damn difficult to explain it, as I have no standardized way to do the picking.
My explanation is wrapped up in the way I started with investing the AIMWay...I also tried AMWAY but never made any money with it...I had to use up the stuff I bought as I could not sell any of it!!!
As the few items I intended to share with you have grown into several pages I dare not put them on this Board. If you want to know my way of stock picking then I will send it to you if you give me your e-mail address.
Please contact me for receiving I've Done It My Way by e-mail.
My e-mail address is: eng@vortex.demon.nl
Regards\Conrad
The Cost of Trading.
For the Test I used 0,6 % indeed plus 20 units per trade.
If stock on a Foreign Exchange is bought then the Up-front Fee is quite large. I thought 20 units would be a happy average.
Conrad
OK, Ergo Sum,
Your method may qualify as an AIM technique if you structuralize it...15% Action Limits are fine. The buys and sell have to be calculated by an algorithm. Essentially I used your method “off the top of my head” for many years and did well. The idea of the AIM is that the system does the work and you go away to play golf...
What I am wondering right now is
1. What if the stock just kept going down? Seems like AIM would keep telling me to buy, not good.
2. What if the stock just kept going up? How would AIM convince me to buy?
These questions have nothing to do with AIM, although Aim has an answer for them.
Stock going down
That’s Good! The price is now Low!
It depends on the fundamentals and the general market condition as to what is best to do. AIM is a method to buy low, not a method for finding out how long to wait.
If the stock is sound and the market is collapsing like it did after 11 September 2001, then you could bail out with the intention to jump back in near the bottom. Common sense. If the stock is solid, goes down in a cyclical manner, and the market is not in a panic, you AIM all the way down, making a profit as you go! A bit of Fundamental Analysis will help you on picking such stocks. Now, if you are in a stock that you know nothing about and it keeps going down, then you have two options: 1) Keep your fingers crossed and stay in, shift in the Gambling Mode, hoping that the little ball will settle on your number, or 2) bail out and see what happens and take your chances again if the stock survives the dive.
Stock going up
1)Let the profit ride and take regular profits as you go(AIMing). At the top you will be cash-rich and the few high priced shares you have kept have no potential for depleting your profits it the share price drops. That’s the essence of AIMing.
If you know the stock will keep going up then: hock your house, jewels and wife, buy a lot of stock, zero cash reserve and bail out just when you know the top is reached. Maybe you can buy your wife back with all that money and take her sailing in your new boat.
2)Let the profit ride and bail out when you are satisfied;
3)If the stock cycles upwards, go to (1)…AIMing);
4)If you are greedy then go to (2) and do not bail out but wait till the top is reached. It's your problem then to figure out when this happens. With a Little Bit of Luck....Why does this sound so familiar?...anyway, with luck you can sell close to the top. Often on such occasions of a dumping market your Sell Order needs to be an unlimited Sell, as the market will be full of Buy Orders at a very low Limit(Bargain Hunters like AImers). With limiter orders the price you ask may not be met, and then you fish behind the net all the time. So, the sensible thing to do is not be greedy and sell when you are satisfied with the profits you have made.
Outside the limited, well defined Price Driven Buy Sell Orders an AIM does nothing to tell you anything about an unknown future. The certainty of the market place is that it cycles. That cycling is what AIM capitalizes on. Nothing else!
Conrad