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Hi Allen.
I think what you're asking is how to convert an existing holding into AIM or LD-AIM.
If so, 'significantly down' from what?
The original cost basis?
Or your cost basis which I believe is set at the time you received/inherited the position.
Whatever that # is, the value at today's price is what is accesible.
So I would use Current total Value and Current Price/Share as the starting points in my worksheet.
Enter the total current value of your position in the Total $ Available cell, the current price/share in the Initial Purchase Price/Share cell and then whatever settings you want to assign.
The LD-AIM Outputs generated would provide 'guidance' as to redeployment of the asset.
For example, if you had a holding of 6,000 shares of ZYXW at a today's price of $5.00/share...
With standard AIM settings, you would keep about 2500 shares and sell off the rest.
Note that 'the rest', some 3500 shares, become Virtual.
The proceeds of selling the 3500 shares would fund your cash reserve for the program and still leave ~$3500 to redeploy as part of an overall diversification effort.
Of course you can run any number of scenarios given your settings options, but the key inputs are those first 2; $ Available and Price/Share.
Back in 2003 I needed to redeploy, raise some cash and reduce risk via diversification on all or most of my few Classic AIM programs.
I was in somewhat the same situation as you describe, except what I inherited and had to address were my own bad decisions during the dot-com heyday.
In effect I had to accept the fact that if I didn't change my direction I was going to end up where I was headed; and that was not looking to be a good place.
So I built the LD-AIM worksheet to assist in that effort.
I sold off some entirely and some as described above.
Virtually all of what I sold was at a loss but it wasn't going to get better unless I did something about it.
I've never looked back and have not second-guessed my decisions at the time.
Right. I was just making the connection between elections and bottoms (no pun intended).
Hi Allen:
With next year being a presidential election year, 'puffery and posturing' is going to happen regardless.
And if memory serves, the big drop doesn't tend to occur in those years. They wait until after the election.
The S&P bottomed in Sep, 2002 and Feb. 2009.
No problem Allen.
I consider it a compliment!
I don't judge my program's starting point basis any market sentiment, current position versus previous records, or other factors.
The prognosticatores would call that foolish but they are wrong more than right anyway.
Also, I don't tilt the #'s of Buys and Sells on a new LD-AIM program becasue of any of that. Besides, since I run a common cash reserve for all my prgrams it's a moot point anyway.
What I typically do when I start a new program is set about 5 Sells, 0 Safe and 9-10% minimum on the Sell side and 10-11% on the Buy side. This seems to work pretty well for me.
I have been playing my Silver ETF around 5-6% since it is substantially less volatile than a stock.
As for some type of variable PC adjustment rate, I've often pondered that, but have never taken the time to test any of those 'ponderings'.
I still work full time so don't have a lot of spare time to spend on such things (although I really want to someday!).
H j
I find that LD-AIM combined with higher yielding cash is superior to classic AIM on a risk-adjusted return basis.
Makes sense.
I think I have posted more than my fair share today. I hope I didn't bore the other members.
Don't worry about that.
I've always found that all of this discussion provides great perspective.
Stops me from 'wandering into the woods of confusion'.
Re: How is the above not LD-AIM?
Hi again j...
Well now that you've explained it I guess it is!
In fact it makes perfect sense given the tolerance levels you mention ($40 k in instead of $80k and $20k cash.
I just think those are arbitrary.
Besides, I've never agreed with Lichello's AIM-Hi, especially with resepct to individual equities. 20% is not a lot of insurance. And by saying that you don't want to buy in for more than $40k, you're also saying I want more than 20% cash reserve.
In your original post your use of the word 'leverage' was not what threw me off.
Rather, it was that you didn't mention virtual shares or that portfolio control included the intital value of them. I can see now that they did.
As for the cash portion of your explanation, LD-AIM has no 'rules' per se related to cash other than having enough at the beginning to cover your # Buys inputs. Any remaining can be redeployed.
And you only actually buy the # of shares to cover a reasonable # of consecutive sells out of the gate.
Bottom line is that I had always felt that there was no need to tie up $ just to set that initial PC. You're not likely to sell them anyway.
In my mind, those $ going to PC are 'excess', which aren't really invested with the expectation of an eventual gain anyway. At least within the context of Lichello's use of them.
BTW: Thanks for the Kudos on the spreadsheet.
When I built that, I didn't want to make arbitrary decisions on the Virtual/Actual portions. so I put in the # Sells & # of Buys logic to help out in that regard.
All very interactive IMHO!
This one below gets pretty close to your scenario supporting 10 Sells & Buys (not that either would ever actually happen consecutively).
It ends with initial Capital at Risk of only 40,130 (your goal) but a PC of 100,000 which would improve your return I think.
Then, 'Cash Reserve' plus 'Cash Saved' totals 59,870 (close to your $60k).
Hopefully you'll see what I mean.
In your scenario, Grabber introduced them to LD-AIM, where he convinced them to deploy only $40,000.
Grabber would have used the worksheet to rationalize the inputs to get to that output.
And Grabber would have generated an enhanced scenario whereby PC equalled 100,000, not 80,000. <Tongue firmly planted in cheek.>
Excel is very good at 'what-if' stuff.
Congrats j!
Nice to see when high dividend payors like UVV take advantage of the volatility leg of the AIM stool.
I've looked at tobacco stocks many times over the years but have never bought one for AIM.
I honestly didn't know Universal Corp even existed.
Missed that soemhow.
Very interesting business since they are suppliers to the manufacturers.
I would imagine that as a result, they tend to fly under the political radar for the most part versus the manufacturers.
Been around for almost 130 years!
Again, Congrats on the Sell.
Hi again Allen.
Glad to see I wasn't 'misremembering' what I learnt oh those many years ago.
jaiml's been around here long enough to know we're all on the same side. I'm sure he's OK with each of us 'calling him out' on his formula.
God knows I've been put in my place many, many times here over the many, many years here!
I take them as 'teaching moments' and I'm the student.
Hi Allen:
LD-AIM is actually easy to understand if you don't let yourself unecessarily complicate it.
See my previous post to jaiml.
Download the LD-AIM spreadsheet, provide your inputs and go from there.
No math needed on your part.
Simple is as simple does?
Hi again j.
OK. I trhink I understand now. But...
Hiya j.
Well it will be interesting to compare notes on CREE going forward.
There was a positive article this morning from Seeking Alpha that was touting how much growth potential their Power and RF business has given their recent results with the segments and the size of the markets they serve with them. That and the margins on these two segments are substantially higher than their LED segment.
But they only represetn 13% of the corp's total revenue.
I think the author was rationalizing CREE laying the groundwork for the spinoff IPO (which us holders of CREE would get some portion).
Regardless of all that, good luck with it (for both our sakes)!
BTW:
What is a '2X LD-AIM'?
And do the figures in your resulting chart and tables include the 'virtual' parts of LD-AIM? Or just the Actuals?
BTW 2: How is it that 0.6 = 0.4? Am I that old that the math and Order of Operations have changed?
1-0.8 = 0.2
0.2 * 2 = 0.4
Not following all of the 2X logic I guess.
RE: #3 on CREE
Hi j.
FWIW:
Looks like the bloom is off the rose for the time being.
If you're still interested in entry, CREE is trading around $30.10 this morning, just above last week's close.
Re #2 on CREE
Hi j.
CREE jumped up today about 5% on 2 bits of news:
- They have quietly filed to spinoff their power and RF (non-LED) business as an IPO whereby they would still own majority.
- Rumour that GE is sniffing around and may make a bid for CREE.
So your under $30 entry may not be availble for some time.
On the other hand, it might be worth it to take a position in anticipation of profiting on the rumour, then selling on the news.
Last price so ar today is 31.44 +5.7%
I cannot imagine that we'll see the price drop below $30 until this latest dust storm settles.
You're welcome J.
Hopefully the Past will be Prologue on CREE.
Hi j
RE: CREE - "A Great AIM Stock"
I've run a LD-AIM program on CREE since 2007.
Really active during the great 'downdraft of 08' with both Buys and Sells.
Then beginning in April, 2009, after 9 consecutive Sells over 11 months, I sold out of my Actual shares.
BTW: This doesnt happen very often in LD-AIM but it is possible.
Those Sells ranged in price from 24.75 on up to 69.75.
Nice run!
I kept the progam alive witrh the virtual shares and made the next Buy at 59.50 (15% discount from the last Sell), and began to replenish my Actual shares.
Since then, I've had 14 Buys and 9 Sells, the last transaction on 4/24, a Buy at 31.85.
CREE closed today at 30.03, 10% above their 52 week low of 27.25.
My next Buy would be at 27.00.
Now I think the question is whether CREE will continue to be a good AIM stock.
Hard to tell, but I do know this:
CREE pretty much leads the LED industry from a technological standpoint and has for quite some time. A nice plus.
But their roots are in the semicondictor industry. In my opinion, their marketing isn't on par with a cuonsumer packaged goods company. On the other hand, their exclusivity arrangement with Home Depot has been very successful. Another plus, but not sure if that will hold.
Why? Becasue now that there is an established market for LEDs in the home, the big guns are coming up on CREE's flanks.
Those being Philips and GE.
Those 2 will not hesitate to flood the market with cheap imports and try to cut CREE off at the ankles. And they have the $$$ to do it.
CREE has already persuaded the Government to investigate Feit in an unfair business practice complaint.
CREE's financials are hard to judge because they are compared to other semi-conductor companies. LEDs are semi-condictors I guess.
The Street likes their financials, but for the most part, current recommendations are to Hold or Reduce.
Their earnings were down in the latest quarter due to higher costs.
I see this as tempting to us contrarians!
Your call of course, but I'm stll in to CREE.
As for Solar, I've not looked at it seriously since all that government $$ went to waste at Solyndra and I'm sure other places.
I've also read that the Chinese are dumping cheap solar cells on the US, so maybe invest in them?
Just not informed enough on the industry I guess.
That's great Tom!
Andy's hanging in there pretty well for someone who is almost 89 years old, but his eyesight isn't too good anymore so I can see how he might have made the mistake.
He has not been AIM-ing for a number of years but always asks me if I am.
Most recently he has been helped by one of his grandsons who worked for and trained at R.W. Baird.
RE: Ray's 'AIMdoctrination'...
Good link to share Tom!
What with everything you and 'et' posted to kick off the Q&A thread, and the excellent discussions after, Ray ought to find most everything he needs there to get started. There's only 310 posts out there. Easy read!
If you recall, I had to read over 5,000 posts, over on the SI board before I introduced myself to you and this crazy group.
It was well worth it though as I have a thick head.
Actually Bernie's last post here was in June, 2003
Not sure what happened.
Anyone from back then know?
RE: Strewie
I gave it to you and you forwarded on to Bernie.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=363264
The subsequent posts brought back a lot of memories.
Including the lapel pin which I do have in the same box I store my cufflinks and other foppish accoutrements.
Right Tom.
It may have gone to Bernie after me.
Coincidentally, didn't he kind of drop out of the group not too long after?
...you would not only be smart, but handsome also.
Not sure how much money it would take to make me 'handsome'
My Latin teacher was blind and as a young lad my attention was low during his class (and most others come to that). I used to sit at the back of the class more often with other things on my mind. He however had a highly accurate shot with the blackboard wiper that regularly refocussed mine and many other classmates attention. Really really stung when you got unexpectedly hit by that block of wood. Headmaster used a cane, deputy head a chair leg, maths teacher used books, physical education guys kicked and punched. Back in the days when respect was commanded rather than earned.
More like fear than respect.
The School Sisters of Notre Dame must have learned their corporal punishment techniuqes from those UK Headmasters, et al.
I attended a Catholic Parochial Elementary school from 1st through 8th grade.
I've personally been on the receivinng end of:
- Nun's knuckles ground into my spine from behind. Always a surprise and quite painful.
- Rulers across my knuckles. The kind that had that thin metal strip embedded along the edge. "Put your hands down flat on your desk!" (Oh lord, here it comes!)
- Thrown Chalkboard Erasors, although they did not have wooden spines like yours. Not particularly painful but would be quite an embarrasing surprise as they were normally thrown while you were asleep at your desk.
- Dustbrooms across my backside, and sometimes the small of my back that did have thick wooden handles and spines. It's a wonder I'm not a parapalegic as a result.
- Wide Leather Belt 'borrowed' by Sister Mary Cyprian from (the hated) Tom Hryzina; the first guy in our 7th grade class that went 'Mod' and wore that kind of belt. He got his comeuppence after school and was told afterwards to never wear it again.
- And maybe the worst torture of all was being made to kneel, upright on a marble floor for 30 minutes.
At the 2000 and 2001 AIM Users Meetings we handed out an award for doing the most accurate job of shooting oneself in the foot!
Hi Tom.
Where's the pic of that plaque?
'Gold' plated Sperry Deck Shoe with a bullet hole.
Do I still have that laying around somewhere since I was the 2001 recipient (for reasons forgotten)?
Or did I give it back to you somewhere along the line?
HI Alton.
RE: SO; Southern Company
Very interesting pick.
A 'utility' that is primarily into electric generation using most methods of doing so from Nuclear to Biomass.
Along with a side business in telecomunications infrastucture and services.
Not very volatile for AIM but that fat, growing divided should overcome the trading frequency deficit.
If purchased as a long term holding, I wonder if they have a DRIP program? Could be good for a childs college saving plan.
I think you confused AXAS for SNDK
Right you are!
I haven't had the time to look at either's history anyway, so no problem.
I'll focus on AXAS, but like SNDK, I know it went very low and I bought a bunch when it did.
Hey J.
Congrats on your sells.
I am curious about the 10-yr performance of your AXAS AIM program and how you managed to stick around all this time. My back testing shows that an LD-AIM program, 2X leverage, with 63% cash reserves (played with the settings to end up with 10X-11X fold number of shares) would've had a CAGR is ~5.75% assuming VFISX cash. That would have been a very tough hold for me.
I'll have to go back through the records to assess where I am at after all these years with SNDK.
But 2 facts could help explain the differential you note.
1. Between Oct, 2007 and March, 2009 I had 11 consecutive Buys starting at $49 / share and ending at less that $10. So I guess I did hang tough through the great recession.
2. I run a common cash reserve and it was very low during most of that time. But I do recall allocating much of it to SNDK as it seemed to be a no brainer as far a long term outlook.
I'll take a look at the whole life of the program when I get a chance since the info is spread around a bit since I changed the way I track all of my activity a few times over the 12 years since I began LD-AIM.
Thanks Alton and fingers crossed on your 'pending' sells.
Well it took another day but...
After my energy stock (AXAS) came to within 1 cent of my Sell GTC yesterday, it finally tripped early this afternoon.
So that 30% LIFO gain gets recorded.
Also, in today's premarket, I had a Sell on BX for a 34% LIFO gain.
Only 1 Sell left on this one unless an intervening Buy happens.
Has been a program for almost 8 years.
So far have had 15 Buys and 20 Sells. 4 per year, sometimes 5. Pretty typical.
This one has paid a nice dividend as well.
Unfortunately, my largest holding (SNDK) took a -5% header, closing near $68 after earnings came out.
Of course AIM had me buy a bunch at $65 almost amonth ago, and it had since clawed its way back to $71.
Now I gotta wait a little longer to take some $ off the table.
My next buy would be at $55, so it doesn't look like it will go that low either. So the waiting continues....zzzz
Ahh. You need a primer on Android.
Your device (phone or tablet) has to be running the Android operating system.
So there is no APP compatibility with Windows.
Conrad
You must be an "Android Virgin"
All of the million or so apps out there only show screen shot examples.
None are interactive.
It only takes a few seconds to download and try it out.
If you don't like it, uninstall.
That's even quicker!
No Problem Conrad.
This is the Android App currently available for free at Google Play...
Their Description:
This app is based on the best selling book by Robert Lichello, wherein he describes his mathematical formula for managing stock portfolios. His Automatic Investment Management system (AIM) has been used the world over, and is now alive in Android app form!
In addition to computing and storing your trades, this app also connects you with a touch of a button to stock quote information. Plus, every last Friday of the month you will receive a notification in your status bar to remind you to check your stocks. Enjoy!
They've updated it since I originally installed and apparently you can do backtests now.
But it looks like you really don't have any controls to fiddle with settings or trade more often than monthly.
So if one is looking for AIM By the Book, this might work well.
You can go directly to the app page here:
https://play.google.com/store/apps/details?id=com.javamatt.aim
Congrats Toof!
Glad to see the energy sector is coming back.
We got some pretty good deals over the last 8 or 9 months and it's time to start harvesting I think.
Today, my energy stock came to within 1 cent of my Sell GTC.
Hopefully it will trip after hours.
If and when it does, we'll harvest a 30% LIFO gain on shares purchased in January, December and November.
Abraxas is currently my second largest holding and has been part of my LD-AIM portfolio for 9.5 years. So far I've had 88 transactions and my current Actual # shares is 11X my original Actual purchase when I started the program in October, 2005.
Even though this is an LD-AIM program, I've never come close to selling out.
Slow and steady wins the race?
Conrad.
Answered on my first response below.
Hi Conrad and welcome back.
I tried the Android AIM app a few years ago.
Kind of 'Klunky' so I uninstalled.
It was pretty basic. No Bells & Whistles as I recall.
Thaks Jon.
Geez! Getting a little lonely out here!
There's more than one way to describe the "back door"
Hi Allen. This isn't exactly what I said yesterday that got wiped out, but...
"We don't Speak of Wednesday."
Hi gang.
I couldn't figure out why my excellent reply to Alan about the Orcroft approach and LD-AIM just disappeared!
Look up above:
"We don't Speak of Wednesday."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=110956296
I'm not sure I can repeat the stream of consciousness I used for that.
Just wanted to let y'all know if you hadn't.