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Hi Tom,
There are 4 average prices I use:
1 - Average cost price, which only changes with buys.
2 - Average cost price of the equities on the 'stack'.
3 - Average price as determined by AIM action only.
4 - Average price as determined by all action.
In the graph I displayed price 4. Price 1 would have been $79.14
Also the profit percentage is used. Whenever I think of a new statistic or I read about a new statistic, it is incorporated in my spreadsheet. Some things which have a lot of meaning at a certain point in time have less meaning now.
Tax considerations are not part of what I do, we should have a worldwide system which is the same for both sides of the atlantic!
Also, I noticed that most of my U.S. investments didn't drop below their 26 week eMA
Here 6 components dropped below their 6 months EA:
- VGK, VPL these only in possession for a short while, so maybe not representative.
- EFV, VWO, DGS, VNQI.
The Relative Strength graph during March showed weakness in emerging markets. VPL is weak currently. The US ETFs were strong throughout March.
At no time we were close to a BUY in any ETF.
Best regards,K
VSS
The VSS sell moved the Lichello Bands upwards.
The next sell is at approx. $114, while I have set the next buy at approx $81, just below the initial price. It is a bit lower than the LBD, because I always like a BUY below the avg price(AP) on the equity stack.
The purple line is the average price, included in the AP are also dividends and tax at Jan,1st.
The AP went from $80 to $71.
AP is calculated as Funds Allocated to this Machine minus Cash divided by Numer of shares.
The green line is PC per share.
Best regards,K
UBA XIRR
Calculated the XIRR for the UBA : 28.78%, from 2010, july 10.
Number is reasonably correct, added a few dollars when restructuring the UBA, but that was negligible.
The XIRR indicates that QE2 is the 8th world wonder.
For the US Permanent Portfolio, I measure a XIRR of 10.87% from September 2009.
Best Regards,K
1st Quarter review
The UBA share price is now $12.03. In early february there was a reshuffle. In the RS graph all current elements are shown. Note that the cost price is now constant because it is all dollar based.
There was a sell of VSS, I expect more sells to follow if the momentum continues.
Best regards,K
What a relief.
Endly today VSS had a sell. For weeks now, or was it months, VSS did not want to get to the sell price. So I don't have to watch VSS any longer. New GTC orders loaded for the next 6 months, we can go on holiday again.
But wait, VTV,VB and a few others are getting close as well. I like these upward price moves!
Best regards,K
Hi Tom,
Nice sell!
Nice that VNQ is down after your sell! You always feel smart then :)
My sell was a bit above 60, it didn't get there, maybe next week.
Best,K
Hi Clive,
Talking about SCV, which ETF should we use?
Yesterday VIOV was up $2.35 (3.82%)
VBR was up $0.27 (0.38%)
VTWV was up $0.38 (0.61%)
DES was up $0.25 (0.52%)
These funds have different coverage of Midcap, Smallcap and Microcap.
My feeling is that VIOV is maybe the most volatile.
Any thoughts?
Best Regards,K
Hi Clive,
When 5YrT yields are low, the spreadsheet would indicate less stock, more risk-free (cash/bonds)
Not sure about that, for example in 2009 the rates were low, and then the stock market exploded. After QE2 in September 2010 the same happened.
Best Regards,K
Hi Clive,
Like your conclusion on Value stocks!
Your study shows again that Right Tail selling is king.
The 'dynamic income' funds were FTM and RtW.
If for example the fund was S&P500, would your conclusion still be valid?
Best Regards,K
Hi Clive,
Sorry for the late answer, had a short holiday:)
PP and FTM are both nice ways to be cash instruments, so a combination of the two is probably best. Indeed I am running my portfolio like that currently. (Having much more in SHY than in the PP. Maybe IEI is better or BSV/BND to get the fourth and 5th Fama factor.)
SCV is in the equity part, in my case the UBH. And not in the FTM I use. There is an overlap here between the FTM and the UBH, because SCV is logically in both. Maybe no need to split it out in both the UBH and the FTM. (My UBH tries to cover the first 3 Fama factors).
We could add SCV separately to the FTM, in that case probably it would not get AIMed, we could then rebalance this SCV at the right time, probably not when we are in the Right Tail when AIM is selling or in the Left Tail when AIM is buying.
I like the PP/FTM cash also to be the cash base for my third leg, low priced equity/dividend providers which could run as a CV vector. The PP/FTM must be dynamic and able to absorb cash and dispense cash when needed.
Best Regards,K
Hi Clive,
viewpoint/prediction
not enough stats for VOO and VNQI yet:
Emerging markets seem weak now. Strength especially in US ETFs.
TLT in buying zone now. Gold still going strongish although the DOW had a breakout upwards in the DOW/GOLD graph. All machines except TLT are moving to their next sell point, buy points are far down.
Best regards,K
Hi Larry,
A stop loss can also be constructed in a different way:
- determine the value of the stock. I like to do that using a free cash flow calculation.
- when the price of the stock is above the value, switch your AIM machine to virtual.
- when the price of the stock is below the value, execute AIM signals in real mode.
When AIMing a portfolio, make sure all stocks in the portfolio are below their value. Sometimes by rotating to other stocks or virtualizing the whole portfolio.
Best,K
Hi Adam,
My portfolio got restructured a bit more:
VXUS got changed into VGK/VPL. This results in lower expense ratios. VXUS also covers emerging markets, VGK/VPL does not, so the combination is more pure. Canada is not represented, maybe a small addition later can fix that.
IASP and IDVY got combined into EFV. That brings down the expense ratio a bit, and the diversification is better.
So after all this the cost per share and the value per share has not changed much. It was a lot of work to do all the calculations!
I learned a lot about portfolio administration and can see that there are endless possibilities to 'cheat' on the price of a fund.
Now I only want funds of the most reliable fund providers!
At this moment I do not know how to get the expense ratio lower and the diversification bigger. The next step could be further subdivision, for example VOO into sector funds. Also the connection to a 'cash enhancer' like PP is possible. A central cash system could be nice here. It is fun to play this game:)
Best regards,K
AIM sells yesterday: VOO and DLS
Hi Adam,
So I assume you have no tax free retirement accounts?
There are tax free accounts here, where you save and it gets taxed when you take it out at age 65 for example. It seems less flexible to me than paying regular tax. I have some money in a tax free account but also like liquidity of a taxed account.
Remember we are paying the 1.2% each year, not when we sell something. I thought in the US you only pay when you realize a profit.
This tax system is nice for the state, because the state has a guaranteed income, based on the capital of the citizens. The system is nice for the citizens when interest rates are high and not so nice when interest rates are low. Or nice when shares are doing well and not so nice when shares are stagnant.
Every system has it pluses and minuses, so make the best of whatever system umbrella you live under.
Best,K
Hi Adam,
Based in Holland(Europe), tax is only on capital(1.2% per year), not on transactions and dividends etc. Capital flows more freely in this way and seeks highest performance. My portfolio reporting is always corrected for tax, 1.2% of the value is deducted on 1st of January.
Or Native American? or the king himself?
No privileged position here.
Best, K
Hi Adam,
Is this in a tax sheltered account?
This concept does not apply to me, I can trade as much as I want, no taxation on trades.
what you mean by external cash
Having all cash balances set to zero. When the machine produces cash then remove the cash from the machine, reset Cash to zero. When a machine asks for cash, then add the cash, but just enough, keeping zero cash balances. In a way you milk all cash from your machines.
The cash could then be part of a PP for example and it makes bookkeeping simpler. I am still thinking about it, it is just an idea now.
Interesting info on what to choose for your portfolio and what's not worthwhile.
Keep us posted !
Best, K
Hey Adam,
This month my lazy portfolio (UBA) was restructured a bit:
VV --------> VOO
VEU--------> VXUS
IASP&IPRP--> VNQI
So the UBA structure now:
All changes improved the expense ratio and diversification coverage for each slot.(VOO has a lower ER than VV, 0.06% expense ratio versus 0.12%))domestic international emerging REIT
VOO VXUS VWO VNQ
VTV IAPD/IDVY DEM VNQI
VB VSS VSS
VBR DLS DGS
Hi Tom,
Looking at the graph, it seems that FVL was following the MidCap Value index and during the last few months was in sync with the MidCap and SmallCap growth indexes.
So it changes its character during the ride.
Looking at these graphs I suddenly remembered that Lichello said that we should use aggressive growth funds.
Best Regards,K
Hi Adam, Tom
The Value Line page shows the performance of the 5 groups. The obvious conclusion is that investing in group 1 is best, with a 13.7% yearly return.
Now Adam shows that an index fund is performing better.
This seems impossible. However maybe the interplay between the different groups produces this result(correlation etc.)
Is now the conclusion that VO(or a growth/value subindex) or IVOO is better than FVL? Also FVL cost 0.7% and VO 0.14%, which is an index approach advantage.
All this superior stockpicking does not produce value at the end of the day? And if we stockpick we should look at portfolio effects? And how could we do that practically?
A lot of questions.
Best Regards,K
Hi Larry,
Had a closer look at PCL and RYN.
PCL is way too expensive, so that one is discarded.
RYN is fully priced at 2009 numbers. However the numbers for 2010 for 3 quarters are good. Using these numbers RYN could be attractive. RYN had a nice run this year and the numbers are for a good buy, but not a screaming buy yet.
So when RYN tanks, it could be an interesting holding. I put it on my watchlist.
Best Regards,K
Hi Tom,
Thanks for the suggestion. I would expect the paper version of Value Line very hard to get over here. Nevertheless you never know and I will look for it.
A subscription is indeed a bit over the top for me, at least we have access to the Dow 30 stocks!
Best Regards,K
Thanks Grabber,
Your approach makes a lot of sense, especially I like the start with the sectors and find stocks best positioned for recovery.
Agree with you not paying for stock selection info.
These days I like the Finviz screener a lot:
http://www.finviz.com/
Thanks again for your reply.
Best Regards, K
Hi Tom,
Just noted that yesterday my VBR machine was selling. Waited a long time for that one.
Now back to the spreadsheet for a new calculation and then an update of the broker trade screen, so much work :)
Best Regards,K
Hi Grabber,
"Now is the time to look for top-choice stocks trading at hamburger valuations."
Having looked at Free cash flow/Owner Earnings as a valuation criterium to find contrarian/low valued stocks, also looked at Aptus ValueSelector criteria, Toms timeliness, and a few others, the question pops up: what selection criteria do you use to select your stocks?
Best regards,K
Perfect week
Share price of my UBHA went from 11.69 to 11.96, nearly 3 percent.
No sells this week, but hopefully a first sell of the year on monday.
Best,K
Hi Larry,
The percentage is understood to be variable and dependent on the portfolio.
Now I have to determine my weighting of Timber!
Best,K
Hi Toofuzzy,
You say: Reits mean income. The income is assured because of the natural growth of the trees. (they could even sell carbon-dioxide rights)
The question then is: do you need it in your portfolio. The retired investor site says yes, the correlation rato is below 0.65, it is a distinct asset class. Or do we say, these wood-companies are already in our ETFs, and we do not need to emphasize wood.
And if we say yes, what to buy? PCL and RYN or WOOD. I always considered the nonstandard Ishares global sector funds(SP1200), ICLN NUCL IGF WOOD, as a bit of a hype.
It is interesting that the retired investor would put 10% in this sector.
It could be a possibility for a place in a Current Value Machine. I am thinking of a CV machine with ETFs and WOOD could just be part of it.
Best,K
Thanks Clive, these commodities are complicated
Thanks Larry
Hi Adam,
Couldn't agree more!
It is a Lazy AIM style. After you enter the GTC orders you can relax. When an order gets executed you enter a new pair and that's all. It cannot get any easier :)
The nice thing is that in 2010 such Lazy portfolios did very well as Larry S. shows in his article.
Best,K
Hi Larry,
I have difficulty finding out what LSC, PCL and RYN are.
PCL - Plum Creek Timber Company, Inc. ?
RYN - Rayonier Inc. REIT Common Stock ?
LSC - ELEMENTS S&P Commodity Trends Indicator ?
Why not WOOD, the S&P Global Timber & Forestry Index Fund ?
I would love to hear why they think Timber is a good commodity portion.
In the 'Four Pillars of Investing' William Bernstein only thinks Reits and Precious Metals Stocks are appropriate to add as sectors.
Best, K
Hi Larry,
Had a look at the retired investor website, but you have to sign up to see more.
So nice to see their portfolio structure, bonds, reits, commodities and equity. Domestic and International.
In my UBA there are no bonds, only SHY, used as AIM cash.
For the Commodities allocation in my portfolio there is IAU (as part of the permanent portfolio). I find it difficult to find a good fund in this area, was thinking about VDE and VAW or equivalent.
My UBA started equal weighted (roughly), will not be rebalanced at certain dates or certain deviations of a set percentage. Have to decide what to do about weightings later on.
Best, K
Hi Grabber,
Larry thinks along the same lines as I did for my UBA!
Here is a link to a nice overview of returns for 2010, for an equivalent portfolio as my UBA, although Larry does not use Emerging Markets Small Cap Value, for which I use DGS:
http://moneywatch.bnet.com/investing/blog/wise-investing/lessons-from-2010-diversification-matters-and-forecasters-dont/1934/
The funds used are DFA funds, which you can only access via advisors. Having no access to DFA, I try to use Vanguard because of the lower fees and indices which cover the market really well.
Best Regards,K
Hi Grabber,
Yes 6 months, from July 10 till Jan 08 equals 6 months. July 10 is my first data-point.
I guess this is in line with the market, especially the small-caps did do well. It is an ETF portfolio.
The growth could also be a bit higher than expected for an AIM portfolio, because the cash inside the UBA is 20% at the moment. When the UBA tanks, then if that 20% is not enough I will buy more shares. That 20% is also not evenly distributed over the ETFs inside.
The cash has grown a bit over the last 6 months through AIM sells.
Best,K
Hi Grabber,
The # of shares is constant from July, 10 when the UBA was started.
No shares bought or sold. I hope to buy shares when the UBA tanks:)
The Avg Cost/share and the Value per share are both calculated for one share. The Avg Cost/ Share is a bit fuzzy, because the UBA also contains older components for which I used the older cost price, so the Value per Share is on July,10 a bit higher than the Avg Cost/Share.
Best Regards,K
Hi All,
No trades in the UBA lately!
Here is my UBA with the latest updates of this week. The dip at Jan, 01 was 1.2% of total value and is the tax that was paid to our good government. So this graph shows the net value development of the UBA. I now see that the avg cost per share and the value per share are the other way around, will change it next time:)
On the Relative Strength front, VGK is now also under 1.00, this is because of the weakness of the euro. VGK corrected for the dollar/euro ratio is doing well for me. TLT is still weak, but stabilizing a bit. SHY is now reverting back to the MA crossover, when it hits the MA a change into SHV could be worthwhile.
I am thinking of adding EFV and VNQI to the mix. Have not made a decision yet, will do when I see a clear path to implementation that makes sense to me.
I hope we all have a Super-Aim year!
Best Regards,K
Hi Adam,
The book was posted here because it was a freebie and it had 500+ pages. Good value! :)
The conclusions were browsed in a fast way, to see if there was relevance for me. Only take out 2% from your portfolio yearly and you are safe, was the message I took out.
So its contents could be OK or not OK. :)
Another nice website (just information sharing):
http://www.ndir.com/SI/index.html
I like to look at the screens, to see if they are the same as mine. :)
Best Regards,K