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Hi all,
UBA still in an uptrend. The gradient of the moving average is between 15% and 20% per year now. If this continues a bit longer, more sells will be executed. The last few sells were in international stock.(EU and INT-LV)
Also this week was the first week that the gain from the start had a 40% handle.
Best Regards,K
Congratulations Adam,
Nice selling!
My energy ETF is IXC, the iShares S&P Global Energy Sector(ETF) (NYSEARCA:IXC)
Best Regards,K
UBA sale today of EFV
Sold some IXG as well
Best Regards,K
Congrats Adam,
Nice to see all those sales:)
The US smallcap ETFs are nice for AIM.
Smallcap value is a favorite of many investors.
Lichello writes in his book about growth funds.
Whenever the market tanks a lot, I am thinking of adding a Small Cap Growth ETF(VBK).
Best Regards,K
UBA sale today of VGK
EFV is also close to a sell
Best Regards,K
UBA 3 years later,
We saw some buying activity in June, emerging markets and Reits.
In July some selling activity happened, Small Cap and Small Cap Value. More machines are close to a sell.
As always the graph is net, so all brokers costs and tax is already paid. The machine is up 36.8% since the start.
Now off to France for a holiday. Hope when I return, many machines will have Sells, all GTC orders are loaded.
Best Regards,K
Hi ls7550,
The negative is that, unlike constant value/weighted, you can exhaust cash reserves (but not stocks).
Using AIM we express quantities in dollars(or euros,pounds etc).
We can also express quantities in shares. Then the cash reserve expressed in shares will be the variable quantity and the equity expressed in shares will be the cash-like quantity.
Using standard AIM we can never sell all our equity but we can exhaust our cash. Using the inverted AIM we can never sell our cash but we can exhaust our equity.
I ran the Lichello test (10,8,5,4,5 etc.) with this idea.
After 10 years we got to the 1 Million, a bit later than in the book, but interest was not included in this example, while it was included in the book.
It would be nice if someone could check if the spreadsheet is correct, because it is not easy to think about cash as equity and equity as cash.
This could potentially solve the cash exhaustion problem.
Best Regards,K
Hi Adam,
For me there is no difference.
Each year i pay 1.2% tax on the total capital.
Tax deferred accounts i do not use, it is different from the US
(I am based in europe.)
Best Regards,K
Hi All,
Yesterday had a buy in MXI.
MXI,IXC,GNAT together is my Natural Resource/Anti-Inflation AIM-set. All NoDown AIM.
Could also buy GNAT again, but would violate the 1 month buy rule.
Best Regards,K
Hi Daisy,
No down AIM is with 100% virtual shares.
You start a machine for example $10000.
If each share is $10 you have 1000 virtual shares.
When you get an AIM Sell, you sell some virtual shares. When you get an AIM buy you can buy real shares, or virtual shares if that is what you want. Update your PC as well.
So you can slowly accumulate using AIM.
Hope this helps,
Kind Regards,K
Hi Tom,
DRW is an interesting ETF, very nice dividend.
Also bought some GNAT lately, outside the UBA.
GNAT could be part of an 'anti-inflation emphasis' strategy. Still thinking about it, started it as a No-Down AIM, and had 2 buys in it.
Best Regards,K
3 Buys today
DGS,VNQ and VNQI
Best Regards,K
Hi Tom,
Bought DEM as well today,
Best Regards,K
Thx Grabber,
Nice to see all these moves upwards!
Hope to see GIEW details!
Best Regards,K
Hi Tom,
Indeed it is nice to have all these sells. And Buffett is saying the market is not overvalued, so maybe we get a lot more sells!
Your portfolio is performing really nice, and we both got that funny uptick at the right side of the graph. I do not have gold in the UBA, so I got no buy there.
My cash level is now at 22% and a bit higher if today's sells were included in the cash level.
Best Regards,K
Hi all,
Today already 5 ETF sells!
- US: VSS,VPL,DBU
- EU: IDJV(large EU value), EXW1(eurostoxx 50)
Hope to get more sells soon!
Best Regards,K
Hi Grabber,
It is just the calculation of the hold zone as a percentage.
You can calculate it using different prices, for example the buy price or the sell price or the PC-price, but you get a small difference in the value. That is all, it is not important stuff or so:)
Best Regards,K
Hi Grabber,
Nice table!
You calculated the price move(Hold zone percentage) versus the PC-price. You can also calculate the price move versus the Buy price or the Sell price.
For parameter settings (10,0,6,5):
Price Base Price Move%
PC-price 19
Buy-price 22
Sell-price 18
Hi Tom,
Those settings have worked pretty well for me, too. Buying 6% of shares instead of 5% as a minimum puts the buy/sell dollar values very close to being equal.
Yes, the buy/sell distance is 10+6+5 = 20% (approx.)
And 6/5 = 1.2 = +20%
Perfect fit :)
Best Regards,K
UBA December 2012
Nice rally, hope it continues. Europe/Pacific and emerging are strong at this moment, which is captured by the UBA.
sells : -
buys : -
Cash% : 14.5%
The small dip at the right end side in january 2013 is the tax paid for 2012
(minus dividend tax already paid and interest on cash.
For the interest percentage on cash 0.3% is used, which is roughly the current SHY rate)
Kind Regards,K
Hi Tom,
Re: CHY
Thanks for the pointers. I sold CHY now. Thinking about a substitution,
Regards,K
Thanks Tom,
Don was a great contributor to this board and he was also a nice person. We lost a great AIMer. It feels like a loss.
Regards,K
Hi 1step,
What do you think of chy or erh
Lately the difference between CHI and CHY became clear to me: CHI has the higher dividend and CHY is the higher grower of the two. So CHY would give you a bit more AIM activity than CHI. All from Morningstar. I own some CHY.
No opinion on ERH. I have DBU(int. utilities wisdomtree). I sold my IGD and put some in JXI(global utilities ishares) and bought some IBM for my share portfolio. IBM having a nice cashflow and great return on investment(CROIC). Buffett is a big buyer these days of IBM. Ironically I sold IBM at a bit lower price a while ago.
I have no real opinion on Pimco, only that they have some high income funds. I have the feeling that I want to sell all dividend-specific funds and switch to value. Also add money to diversify into new stock areas further avoiding bonds. And adding high cashflow high growth stocks (P/FCF).
Kind Regards,K
Hi 1step,
I think they raised the dividend recently, and the stock price increased last week.
The negative operating cash flow would still be a problem for me. I would switch to something that has a positive operating cash flow.
Did you have a look at the Pimco dividend funds?
Kind Regards,K
Hi Tom,
It is always good to check facts!
didn't have to suffer a slow and painful decline with lots of false rallies along the way!
This describes the price performance of IGD very well.
I had a look in Morningstar at the Growth of 10,000 for IGD:
http://performance.morningstar.com/funds/cef/total-returns.action?t=IGD®ion=USA&culture=en-us
It is basically flat from 2005 to 2012. So despite the nice dividend you get 7 years of zero growth and the stock does not seem very AIMable.
Thinking about this, I think I will sell IGD, still having a profit thanks to AIM.
Kind Regards,K
Hi 1step,
Just looking in Morningstar at PSEC, I see that the operating cash flow is negative and getting more negative each year.
http://financials.morningstar.com/ratios/r.html?t=PSEC®ion=USA&culture=en-us
that would be a red flag for me, despite the nice dividend and the nice pop today.
this does not look like a buffett enterprise.
Kind regards,K
Hi 1step,
Thanks for mentioning PSEC!
Without looking at any filings, just google finance and the prospect capital website:
yield: 11.8% - good
monthly div - good
payout ratio: 72.40% - good
volume:2M-4M - good
2009 price 6,58 is 40% down - could AIM that
Praveen technique - risk limited to slot size - good
portfolio has a lot of secured debt - good
could be used as dividend carry diversification strategy
I think the overall package doesn't look too bad and could easily fit into a Praveen high dividend vector. I don't like to fully AIM these products, only as NoDown or Constant value and the strategy target is dividend capture with occasional volatility capture.
If(when?) we get a new wave of hedge fund selling these high dividend yielders could produce attractive buying opportunities.
Hope the cliff will be meaningful.
Kind Regards,K
Hi All,
This summer I read Expected Returns from Antti Ilmanen.
His message is to look at "return sources. Returns can be viewed from many angles—which asset classes earn them, what active strategy types deliver them, what fundamental factors explain them."
Assets
8. Equity risk premium
9. Bond risk premium
10. Credit risk premium
11. Alternative asset premia
Dynamic strategy styles
12. Value-oriented equity selection
13. Currency carry
14. Commodity momentum and trend following
15. Volatility selling (on equity indices)
Underlying risk factors
16. Growth factor and growth premium
17. Inflation factor and inflation premium
18. Liquidity factor and illiquidity premium
19. Tail risks (volatility, correlation, skewness)
Currently I am looking at how I can use these concepts to AIM a set of ETFs and cover the universe. For example IGD would be a Carry and Volatility selling style, with AIM as manager. CHY would go for the Credit risk premium. The UBA will go for the Equity risk premium, Value oriented equity selection and growth factor.
Kind Regards,K
Hi 1step,
IGD is a high dividend fund, around 12% now. They try to capture volatility with options.
I am aiming IGD, but started it as a NoDown Aim. So I use a virtual history.
Up till now I had 2 buys, the last one in November when the high dividend funds crashed.
The erosion of IGD value is scary, since mid-2009. The value erosion is compensated by the high dividend, and I found that by Aiming it , it is still managable. The Buy Safe is increased with 5% at each buy and is currently 50%.
Kind Regards,K
AIM buy in IGD.
The yield is around 12% now.
There were more high dividend payers going down the cliff.
Also CHY is weakish. My buy price for CHY is a bit lower than what we saw yesterday. Was also thinking, should we swap CHY for CHI?(CHI's yield is a bit higher)
Kind Regards,K
Hi Conrad,
As you start buying and selling with the future prices then the SP changes, depending on which day you start your AIM.
For a volatile stock you might get different Hold Zone values if you would start an AIM at different days after the Historical Data Set.
You need enough data to get a stable sigma, preferably data over all economic 'climates'.
The SP in Lichello AIM is the Portfolio control divided by the numer of shares and is stable until a buy or sell.
After the buy/sell the PC per share follows the price curve, and is stable again.
I dont see how the different days would impact this? In Vortex you could start with the average price as SP,
so you are then date independent.
What is the basis for using sigma? Why not any of the other statistical functions?
My idea was to make a buy or sell when 1 standard deviation price change has occurred.
2 standard deviations is too much, but 1.1 times the standard deviation could be better.
I do not know what is the best value at this moment, but 1 SD is a good starting point.
Hope I answered your questions.
Kind Regards,K
Hi Conrad,
On your data series from 1-8-2011 to 31-08-2012 I get a standard deviation of 8.626136 and a Sell % of 7.6% and a Buy % of 6.6%.
So your total hold zone based on this data is 14%.
Which seems a bit low, but then again the volatility is low now.
A better determination would be to inlcude 2008/2009 in your data, that will increase the standard deviation.
I am still looking at how to determine the sigma, and you want to include all economic climates in its calculation, I guess.
When you calculate your second run you get a hold zone of 7.7%, again based on not enough data points.
In that case I would use minimum settings. At this moment I use minimum settings of 20% for the Hold zone:
Strategy Hold Parameter
Type Zone Settings
AIM LO 20% 5,5,5,5
AIM LM 25% 6.25,6.25,6.25,6.25
AIM MI 30% 7.5,7.5,7.5,7.5
AIM MH 35% 8.75,8.75,8.75,8.75
AIM HI 40% 10,10,10,10
Re advanced automatic investor board
Mark posted a nice article on opportunistic rebalancing.
The article conclusion is that the best rebalancing band is 20% of the portfolio benchmark.
Kind of similar to AIM high.
However a portfolio benchmark is a moving value while in AIM our PC per share is fixed
and we measure against this fixed value.
Not sure how this impacts the size of the optimum rebalance band.
Also thinking about calculating the total hold zone and dividing that zone
between the Min Amount% and Safe%, so they are always equal.
Then putting the max value at AIM high(10,10,10,10), so each band is 20%.
Now I have the minimum value at 5,5,5,5 so a 10% band.
Not sure if that minimum is high enough !?
Kind Regards,K
Hi Mark,
Thx for the article on opportunistic rebalancing!
Kind Regards,K