CIO, SignalPoint Asset Management, 2008 to 2024, Retired
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Hi Will,
All will be clear when your Secret Decoder arrives!
Best wishes,
OAG Tom
To ALL who post here:
I come to i-Hub for information on various stocks.
I don't come here for your political views.
Keep those to yourself or take them to Zuckerberg Candyland or one of the other non-investment places.
Just assume nobody here gives a rat's butt about your political opinion and you'll be correct.
Now, back to the business at hand................
Best wishes,
OAG
Hi Will, Re: Range around target Cash Reserve...........................
Yes, you are correct in your example. For me, if I was going to see a 4% rise in the cash reserve with a Sale, I'd want to let the cash reserve level to drop to maybe 27% with a 30% target cash. Then, the sale would satisfy cash requirements without over-shooting the actual cash by too much. It would rise to around 31%. Then if the cash target remained steady (risk assessment) that would be followed by yet another vealie down the road if the value continued to rise (shares times price/share).
Actual Cash Reserve percentage, then, can "drift" + or - maybe 3% from the target cash level. Vealies happen if cash is close to, at or above the target level and sales happen if the cash is roughly 3 points below the target. Even if the price/share should double, then at the end you would still be roughly 30% of that ending AIM value. This assumes the target cash (and risk assessment) remain constant.
Best wishes,
OAG Tom
Hi Steve, Re: Questions...............
1) When a stock or fund is fully funded with cash reserve per my thinking, I don't hold any GTC Limit Sell orders open on it. I wait until the price/share hits my target (or better) and then execute the 'vealie' and update my watchlist target prices on the buy and sell sides.
2) I've been using i-Hub's "Monitor" menu item in a separate window. There I've added a "Memo" column and in there I put the next buy and sell target prices. That's my watchlist. It keeps me up-to-date at a quick glance. I've had other software in the past for such monitoring, but those have all gone "Bye Bye" now, so this is how I handle them today.
3) Yes, if I'm lucky enough to have the price/share race past my next Sell target while I'm napping ( 😎 ) I ask AIM how much the current price would want me to sell and then use that value divided by 2 to add to the Portf Control. Then all's well until the next price move or check-up.
Also, if market risk moves upward so that my current cash percentage isn't satisfactory, I'll execute a sale at the next target price to bring cash up toward the new market risk cash suggestion. Going the other way on risk, if risk drops and my cash looks too fat, I'll just have a chance to do more 'vealies' until either risk rises again, or cash gets diluted by stock position growth, or a buy cycle comes along and naturally lowers cash again.
I'll look through my Newport histories and see if I have a good 3 year period of trades and vealies as an example.
Best regards,
OAG Tom
Hi Adam, Re: Double Vealies..............
I've done that, too. And I've also done "Full vealies" or take the entire selling amount and adding it to PC. That usually scrubs out any residual sell suggestion.
OAG Tom
Hi Grabber, Re: Minimum Trade Amount (value)....................
Let's say I have my AIM engine set to sell $1000 as a minimum trade at the next target price. Overnight the stock price goes up beyond the target, AIM would say to sell $1200 instead of just $1000. I'd divide the $1200 by 2 and add 600 to Portfolio Control. (not 500, which would be 1/2 the minimum trade order amount)
Generally, a vealie will only raise the "next" buy and sell targets by about 2.5% to 5%, so it doesn't move the Lichello Hold Zone by very much. Over the years in bullish times I'll see the cash max out and then a series of vealies interspersed with some sales. This keeps the cash reserve percentage near what my target level is as the overall engine grows. (The target for common stocks is usually derived from the v-Wave or the SignalPoint Market Risk Indicator. Some income funds I use a fixed maximum cash level, such as 20% or 30%)
In general, vealies have done a nice job for me. Limiting cash buildup during long bullish periods has been productive. The sacrifice is not being as well protected if a Black Swan with diarrhea decides to fly overhead. I also, as part of this strategy, conserve cash on the downside with delayed sequential buying and such. Basically, if you're going to restrict build-up of cash, you also need to be more restrictive and structured in the use of cash in downturns.
Hope this helps,
OAG
Good morning Steve, Re:..............is the Sell Market Order / 2 PC adjustment driven by market price (Lichello Calc), or by your pre calc'd Next Sell order?
In my case, it's the Sell Market Order's value, not the minimum trade amount. Half of the suggested Sell order is what I add to Portfolio Control. If that won't erase the urge to sell completely, then I'll do another 'vealie' and that will usually eliminate the sell suggestion.
Hope this helps,
OAG Tom
That photo was taken on a state highway in Tennessee. Some other very cool cars were right behind me. There were about 3000 cars moving from city to city for the 5 day journey. Very cool. This year's HRPT is in Tennessee, Kentucky, Ohio and Indiana. I'm thinking of doing the Ohio and Indiana days - maybe take my 13 year old grandson with me.
OAG
Well, they're never completely "finished"........................
However, it took several months of small things and most of a summer to get the body work done and ready for paint. It was around the beginning of October, 2009 when I took it to the DMV for inspection and getting the operating title, registration and plates. So, somewhere around 6 months. The guy who started the project found they'd changed the laws on "home built" cars in his state and he couldn't register it there. So, I bought it unfinished from him, but a lot of work was already done and quite satisfactorily.
Choosing paint scheme and colors wasted a lot of time!!
2008 Jaguar Chili Red Mica with 2008 GM Panel Truck Tan.......
Of course I had to two tone the wheels, too..... and then add white walls!
Motor Trend Magazine featured my car in their cover art for the 2023 Hot Rod Power Tour. I was in the 2022 HRPT - 2600 miles round trip from Wisconsin to Tennessee, Alabama, Florida and Georgia. It was yet another Bucket List item. Here's the image they used:
OAG
A company in Massachusetts, Factory Five, built the kit. It was #007 and the first one sold to the public. It was partially assembled when I bought it. I finished it.
https://www.factoryfive.com/33-hot-rod/
There are now about 1000 of the kits that have been sold. The first 6 were either mules or SEMA show cars. Mine was one of the first to be licensed for the street. That was in 2009.
The rest is FAST History!!
OAG
I fancied myself a road racer from 1988 thru 2007. I drove a variety of '50s British sports cars in what's called "vintage racing."
When I gave up my competition license I decided to build a "street rod" - something I'd wanted to do since I worked at a Sunoco station back in high school.
I finished the car in 2009 and since have put ~15,000 to 20,000 miles on it. (some of those miles were on track days at the local race course nearby)
It's fun and noisy and just what an old guy like me needs to keep my heart beating!
Best wishes,
OAG
It would probably be 1000Lbs lighter if it were fueled directly from gasoline. Steep driveways in Snow Country can be challenging for heavy vehicles.
All that said, the Teslas were kicking serious butt last summer at the drag strip. All wheel drive and instant torque can make up for a lot!
I found out 13 year old tires don't get much traction!!
Thanks Tom and Welcome,
I watched it on YouTube a couple of years ago but haven't looked for it in a while. I'm sorry to see it 'disappear' from our collective history.
Thanks for the notification,
OAG Tom
Thanks Pedro, Re: Money Spinner...........................
It's been a while since the Money Spinner has been discussed here on the Board. There was quite a bit of discussion years ago. It's quite similar to AIM but I don't recall the differences.
Best wishes and Welcome,
OAG Tom
IRBT was the "worst" on Value Line's list! Down 64% in just 13 weeks!
OAG Tom
HI EU,
Re: Trip................
Yes it was a great vacation and one much needed. While our winter here in WI has been mild, it's still nice to go someplace where water isn't frozen!
We usually attempt a week or so in a salty, sunny, sandy and warm place each year. Turks is one of our favorites, even if it's getting a bit "popular" these days. Somebody said God only made so much shoreline!
Best wishes,
OAG
Hi EU, Re: Beaten Down Stocks.................
I will use Value Line's "Best and Worst Performing Stocks - Latest 13 Weeks" for some ideas once in a while. One thing I look for is how many companies from the same industry sector are on the "Worst" list. Some times there are as many as 20% of the 41 stocks listed that are from one industry. A definite "Oversold" signal for that sector. That's not the case this week, however.
Other things I watch for on this list are stocks that move from the "Worst" to the "Best" list (and visa versa). If I see a sector that is oversold, I'll then go to that sector in Value Line and look at all the companies there. Many times I'll find a stock that's not on the Worst list that's beaten down with the sector but is fundamentally very strong. Consider such stocks the best of the worst!
I note that Forward Air shows up on your list and also on Value Line's "Worst" list for the latest 13 weeks.
Best wishes,
OAG
Re: Steve's referenced AIM material from the old aim-users.com web site:
https://web.archive.org/web/20120118093621id_/http://www.aim-users.com/aimchng.htm
Thanks Steve for bringing this up. I'd almost forgotten I'd done this way back then. It would appear I did the various VTSS simulations up to around 2001. I don't remember when VTSS was bought out, but it either merged or was acquired by another semi company. That was the end of that particular "Love Story" with this stock. I note that Mr. Buynhold did quite well, beating the AIM examples. However, he also consumed 342 gallons of MAALOX along the way!
Best wishes,
OAG
Boy, Steve. That's jumping into the Wayback Machine!
My best guess is total return was the end value of the stock+cash divided by the starting stock+cash.
For the average amount at risk, I would average each period's invested percentage over the test. In this case it appears it was 56% invested on average.
(Sum of each period's invested percentage divided by the total number of periods)
Then, Return On (average) Capital At Risk (ROCAR) is simply total return percentage divided by the decimal of average invested. In this case, it's 0.56. Then, 2146% / 0.56 = 3832% ROCAR.
ROCAR gives us a feel of how hard AIM has worked to achieve its results. You can't take ROCAR to the bank but you can use it to compare AIM's result to Mr. Buynhold. Mr. Buynhold's total return and ROCAR are the same since he's 100% invested and at risk (divisor = 1.000).
That's about the best I can do after about 20+ years!
Thanks for asking. A CPA friend of mine reviewed the concept at the time said it was valid for risk comparison.
Best regards,
OAG Tom
Hi Pete, Re: EPD Price and Upgrade.......................
Those are just above my next targeted harvest price. I'll take some $$ off the table at $30.77 for future rainy day purchases.
I now have about 16% more shares in EPD than when I started and slightly more cash held in reserve as well. Without dividends, the holding is up 19%. I've had 5 Buys and 4 Sells of incremental amounts over the holding period. The best accumulation price was $13.48 while the best distribution price was $29.38 so far.
Through those small, opportunistic trades, I've been able to take a stock that's only gone up 3.8% and managed to increase the return to 19%. Collecting EPD's generous distributions has also helped in the total return.
Best wishes,
OAG Tom
Q) Hi Tom!
Happy President's Day. :)
I've been backtesting AIM and learning a lot.
1) question for you:
During a severe bear market (2008 scenarios), what do you do when you're running out of cash to buy?
Do you get more cash from other accounts?
Or let it weather the storm and wait for months until it sells and generates cash again?
For example, if I run GOOGL from Nov 2007 to Jan 2010:
The cash portion gets drained quickly and is cash-negative for about 7-13 months.
(Depending on initial cash position of 30% to 50%)
What do you do in the months where AIM wants you to buy, but is out of Cash portion?
2) Also, related to my previous question about running out of cash during bear markets:
You wrote : "I now have a habit of adding 5% to the Buy SAFE each time I buy. That helps to slow the cash burn rate a bit. Then, when selling starts to occur, I reduce the SAFE back to 10% from wherever it was after the buy cycle."
Do you have a cap for Buy Safe %?
And how many sells does it take before you reduce Buy Safe back to 10%?
Thanks!
A:
Hi CCL,
1) Good question! It's painful to run out of cash for AIM users, but far less so than for Mr. Buynhold. Those less than enjoyable times can be improved slightly with a technique I've been able to use a couple of times. I call it the "Black Swan Method."
With the Black Swan method I take the last buy price and divide it by 0.80. That becomes my "next Sell price" for a minimum size trade. This can be quite a bit lower than what AIM would be suggesting as a Sell target price. Should the price rise to this new, lower target I'll sell the minimum shares designated by the percentage of Portfolio Control I've been using. This is even though the price/share is lower than AIM suggests. Once that sale has been made, I then won't sell again until AIM comes back into selling range. If the price/share continues to rise, eventually AIM will sell and start to accumulate cash again.
However, it's possible that the bottoming process of the market will bounce a few times. I use the last Buy Price that drained the cash to zero again as my buy target. If the price drops to that previous price, I'll buy the minimum amount once again. Once more I'll set that same non-AIM target in place for selling a minimum amount of shares. This way, if the bearish period before recovery continues for a long time, at least I'll be able to clip some coupons profitably while low on cash and awaiting the Market Pendulum to swing back toward its mean.
I've not had a lot of these black swan events occur, but this method has worked well when it has occurred.
There is another possibility that I've never used. It's the use of Margin Buying. While I've studied it I've never used it. Most investors are 100% invested at market tops where AIM users are not. Some are using Margin buying even near market tops and are 150% invested (100% stock + another 50% borrowed)! We AIM users buy into the market weakness until our cash is exhausted. By coincidence, many times that will be around the market bottom. If we were to continue buying by borrowing on margin but using AIM as our guide, it looks potentially successful as a way to continue buying. If the market is truly bottoming, then we won't have margin exposure for very long. AIM will get back to selling and back-fill the margin position and then continue selling and rebuilding our cash reserve. Like I said, I've never done this in all the years I've been using AIM even though theoretically it looks like a good plan. Most investors use Margin at the wrong time - near market tops. This theory says AIM's far smarter and would only consider using Margin at or near market bottoms.
You can back test this idea by letting your spreadsheet go to negative cash reserves as AIM continues to buy on Margin. It should shorten the overall recovery time. Proceed with CAUTION!!!
2) As soon as AIM reverts to selling, I reduce the Buy SAFE back to its standard 10% level. I've had a couple of individual stocks take the Buy SAFE as high as 40% with many sequential buys. At each level, I buy only the minimum amount at the suggested price indicated with the higher Buy SAFE.
AIM can and does run out of cash periodically. CASH is the Precious component and lubricant for the AIM engine. AIM CANNOT run out of shares, however. Since we're selling only a portion of the remaining shares, the shares are inexhaustible.
Best wishes,
OAG Tom
Hi Will,
I use PC percentage on both the buy and sell side as the minimum order Value. As mentioned, the share count buying will be larger than the share count selling at that minimum.
OAG
Hi Will, Re: Min Order Value as a percentage of Portfolio Control..................
It's worked for me over a long period of time.
As a side consequence, both the buy and sell side orders are the same dollar value, but not the same share count. If you usually sell 5% min of shares, you'll buy about 6% more shares at the target price with this method.
Have a great weekend,
OAG Tom
Thanks Steve,
Re: Conserving Cash with Consecutive buys.........................
I let my minimum order size be a percentage of Portfolio Control, so each buy increases the size of the minimum order. That makes AIM look for a slightly lower price for the "next buy."
I also still am pretty solid on the 30 day delay between sequential buys. That helps when there's a long term bearish period.
For some years now I've also been adding 5% to the Buy Resistance (SAFE) with each sequential buy. That also forces AIM to look for a deeper discount between buys. (Then when directions change and I get my first AIM directed Sale, I revert the SAFE back to 10%)
Maybe Will can use some of these ideas as well.
Thanks again for the link,
OAG Tom
Thanks Steve,
Where did you come across Mr Hicks and his AIM interest?
OAG Tom
Ford may dump "Self-Parking" function from their fleet.
As far as I'm concerned, it's 9 years too late. I have it on my 2015 Flex and have never used it other than when the salesman demonstrated it long ago.
https://www.msn.com/en-us/money/companies/ford-considers-axing-car-feature-that-could-save-company-millions-per-year/ar-BB1hWnqP
OAG
Thanks!
OAG
DING DING DING DING DING!!!!!!
......and we have a new WINNER!!!!!
Grace Bay Beach, Provodenciales, Turks & Caicos!!!
One of the world's most beautiful natural wonders.
The Elves ha e fired the forge furnace to strike a new
SECRET DECODER
fore you!
Best wishes,
Tomaso Vitello
Think of the Beach Boys song, "Kokomo" and all the places mentioned. I'm one place they skipped!!!!
OAG Tomaso
Just a little north of East take plenty of provisions as it's a long sail to see the canaries on those Islands.....
OAG Tomaso
CLUE.....
A short swim south would take you to the second oldest republic in the western hemisphere. It was home to the Baby Doc at one time.
OAG Traveling Tom