Hi Adam, I know what you mean; the spreadsheet is more transparent. Once in a while, I use AI for backtesting.

Hi Steve, thanks for the 'welcome back'. I shall do my best to make a contribution to the board. Since your currency is USD, check out the recent spike in USD/CAD (see below). It might be an opportune time to look north to get more bang for your buck.

Yes Tom, I am still hailing from the Northern Great Lakes Region and one of the better investments I made last year was in a snowblower.

Hello Tom, it has been a while (more than 2 years) since I posted anything on the A.I.M. Users Bulletin Board. Recently had my alias changed from my real name 'Jack Jagernauth' to 'lifo', which reflects one aspect of A.I.M. and its variations.

Newport still works fine. AI 3.0 SP7 (Automatic Investor) is working too, however it seems to generate a few error messages; maybe there is a more recent Service Pack than SP7, but I didn't find one.

Hope all is well.

Best regards to you and all here,

Jack

Hello Conrad, you are sharp! You are probably the first person to notice the use of margin, which was done only for the purpose of backtesting.

Regards,
Jack

Hi Adam, thanks for the clarification. What you said makes sense.

Crunched some numbers and looked at historical prices. Using Suggested Action mentioned in your post, initial buy price in the ocroft Method was calculated as follows: Share Price = Portfolio Control / (0.9 x # of shares)

With the 2-year backtest that was done in AI, the AIM account started at $5.14 on Sep. 8, 2010 (Note: Looking at the chart below, most Aimers probably wouldn't have started an AIM account on Sep. 8, 2010 because the share price was above the 26-week MA).




The ocroft Method would have started at $2.70 during the week ending July 15, 2011.

It was an interesting exercise.

Thanks for your input.

Jack

Hi ocroft, your method seems interesting from the perspective of profiting from upcycles.

Below is the Buy / Sell advice from a backtest done a few minutes ago in AI (Automatic Investor), using GSC.TO (GSS on one of the US exchanges).

Standard A.I.M. parameters were used:
Buy Safe = 10
Sell Safe = 10
Minimum Trade = 5

You'll notice that there is a large number of consecutive Buys, and then finally there is a Sell on Sep. 5, 2012.

If I understand correctly, with your method, one would not have bought shares until a price is reached where Buy Advice = $0, i.e. Portfolio Control = Stock Value. Backtesting in AI doesn't show when that occurs. Are you using a spreadsheet with automatic data feed that shows when Buy Advice = $0?

Also, in the example below, between Sep. 8, 2010 and July 23, 2012, could there have been some false signals where Buy Advice = $0, indicating that it is time to buy, but then the downtrend continued?

Thanks,
Jack

08-Sep-10 START shares @ $5.1400 own 1,361 valued @ $6,995.54 Cash: $7,004.46 Portfolio Value: $14,000.00
18-Nov-10 BUY 93 shares @ $4.4000 own 1,454 valued @ $6,397.60 Cash: $6,585.27 Portfolio Value: $12,982.87
25-Nov-10 BUY 83 shares @ $4.2800 own 1,537 valued @ $6,578.36 Cash: $6,220.04 Portfolio Value: $12,798.40
11-Jan-11 BUY 79 shares @ $4.1700 own 1,616 valued @ $6,738.72 Cash: $5,880.62 Portfolio Value: $12,619.34
18-Jan-11 BUY 171 shares @ $3.8700 own 1,787 valued @ $6,915.69 Cash: $5,208.86 Portfolio Value: $12,124.55
25-Jan-11 BUY 234 shares @ $3.5800 own 2,021 valued @ $7,235.18 Cash: $4,361.15 Portfolio Value: $11,596.33
02-Mar-11 BUY 578 shares @ $2.9600 own 2,599 valued @ $7,693.04 Cash: $2,640.28 Portfolio Value: $10,333.32
09-Mar-11 BUY 328 shares @ $2.8700 own 2,927 valued @ $8,400.49 Cash: $1,688.93 Portfolio Value: $10,089.42
20-Apr-11 BUY 155 shares @ $2.8500 own 3,082 valued @ $8,783.70 Cash: $1,237.19 Portfolio Value: $10,020.89
05-May-11 BUY 254 shares @ $2.7000 own 3,336 valued @ $9,007.20 Cash: $541.40 Portfolio Value: $9,548.60
12-May-11 BUY 247 shares @ $2.6000 own 3,583 valued @ $9,315.80 Cash: -$110.79 Portfolio Value: $9,205.01
10-Jun-11 BUY 472 shares @ $2.3800 own 4,055 valued @ $9,650.90 Cash: -$1,244.14 Portfolio Value: $8,406.76
17-Jun-11 BUY 569 shares @ $2.2000 own 4,624 valued @ $10,172.80 Cash: -$2,505.93 Portfolio Value: $7,666.87
04-Jul-11 BUY 326 shares @ $2.1600 own 4,950 valued @ $10,692.00 Cash: -$3,220.08 Portfolio Value: $7,471.92
28-Sep-11 BUY 1,209 shares @ $1.8100 own 6,159 valued @ $11,147.79 Cash: -$5,418.36 Portfolio Value: $5,729.43
15-Dec-11 BUY 689 shares @ $1.7600 own 6,848 valued @ $12,052.48 Cash: -$6,640.99 Portfolio Value: $5,411.49
22-Dec-11 BUY 746 shares @ $1.6600 own 7,594 valued @ $12,606.04 Cash: -$7,889.34 Portfolio Value: $4,716.70
14-Mar-12 BUY 567 shares @ $1.6100 own 8,161 valued @ $13,139.21 Cash: -$8,812.20 Portfolio Value: $4,327.01
19-Apr-12 BUY 902 shares @ $1.5000 own 9,063 valued @ $13,594.50 Cash: -$10,175.19 Portfolio Value: $3,419.31
03-May-12 BUY 1,259 shares @ $1.3800 own 10,322 valued @ $14,244.36 Cash: -$11,922.60 Portfolio Value: $2,321.76
25-May-12 BUY 3,659 shares @ $1.0900 own 13,981 valued @ $15,239.29 Cash: -$15,920.90 Portfolio Value: -$681.61
15-Jun-12 BUY 1,310 shares @ $1.1000 own 15,291 valued @ $16,820.10 Cash: -$17,371.89 Portfolio Value: -$551.79
23-Jul-12 BUY 845 shares @ $1.0800 own 16,136 valued @ $17,426.88 Cash: -$18,294.48 Portfolio Value: -$867.60
05-Sep-12 SELL 1,412 shares @ $1.4900 own 14,724 valued @ $21,938.76 Cash: -$16,200.59 Portfolio Value: $5,738.17
06-Sep-12 LAST shares @ $1.4800 own 14,724 valued @ $21,791.52 Cash: -$16,200.59 Portfolio Value: $5,590.93

Hello Mark,

I am in the process of moving AI to a newer laptop computer and installed AI 3.0 SP7. After installation, it asked me to register the software, which I did. I then loaded one of my 'aidb' data files.

The program opens up, but it doesn't work, i.e. none of the accounts can be accessed. When I click on Portfolios, nothing happens.

Do you have any suggestions?

Thanks,
Jack

Hello karw, that's an interesting article. I had never heard of Mr. Psaras before. However, regarding "Operation Twist", i.e. "...nightmare that Bernanke surprised the market with selling short term and going long term", the surprise for me was that, within the past few weeks, Mr. Jim Rickards mentioned in an interview that that was most likely what Mr. Bernanke would do; and, that is what Mr. Bernanke did. Apparently, it's an approach that was tried before in the 1960's. What it tells me is that Mr. Rickards is sharp financial guy, worth listening to.

The comments in the article about cash reserve were interesting as well, i.e. for comparison with personal portfolios.

Thanks,
Jack

Hi Ken: good to see that you are making money from the volatility. It's about time we get some decent volatility.

Regards,
Jack

Hi Ken, Re. Newport, etc.

Earlier this year, I booted up an older computer running Windows 98; I was surprised at how well it worked. I am glad to hear that your Newport Program is up and running.

It looks like the S&P 500 reached another 52-week high today. I guess that QE2 and a promise of more to come, if necessary, are helping the markets to move up. It's a little bit scary that money printing, and a few words spoken, can help boost stock prices.

Happy Holidays!

Jack

Hi Steve and Ken, I sent the files. There are at least a couple of different ways to install the program and they are mentioned in the one-page Word Document that I sent, 'How to Install Newport'.

Best regards,

Jack

Hi Ken, ...Re. Newport

I could probably do a little better for you. I recently installed Newport on a laptop and prepared a folder titled, Installing Newport, which includes the following:

New winport.exe
Original Newport Program Files
Word file: How to Install Newport
(One page of reference notes I prepared to help save time with installation).

I don't have your email address; please send me a message at the following link:
http://jagernauth.com/index.php?option=com_contact&view=contact&id=1&Itemid=65

I assume that, since you are a licensed user of Newport, it's okay for me to send you the above. Unless we hear something to the contrary from Tom or Bob Norman, I'll send them.

Best regards,

Jack

Hello AIMster, Re. AI and W7

Here is some info about W7 that I found at Wikipedia:

Windows 7 is available in six different editions, but only Home Premium, Professional and Ultimate are widely available at retail...
All editions support the 32-bit (IA-32) processor architecture and all editions except Starter support the 64-bit (x86-64) processor architecture (64-bit installation media is not included in Home Basic edition, but can be obtained from Microsoft).

It seems that it might be possible to run AI directly on W7.

Separately, here is a Chart from AI; I haven't seen one posted lately. I lightened up a little more on GSC.TO. The chart shows that the current price is below the initial buy price in 2004. The account is profitable.



Best Regards,

Jack

Hi Ken, re. XP, Newport

I noticed that Windows 7 Pro includes downgrade rights to XP. Someone at Staples Business Depot mentioned to me that one could get Windows 7 Pro and run older programs in "XP mode". I am not sure how that works, whether one has to make a choice between running XP or 7 (either / or), or one is able to run both XP and 7, depending on the program.

I am running XP and, today, I finally backed up the original Newport Program that I bought in 1998, from 3.5" floppy to CD. I even added the 'new' winport.exe file to the same CD so that the program could be installed correctly from the CD, if one recalls what needs to be done after the initial installation.

Best Regards,

Jack

That's right, Tom, it did feel like "Death Valley" at the bottom.

It bottomed at 50 cents, which was 91% below my initial buy price. And, when it bottomed in the Fall of 2008, everything else in my portfolios looked ugly as well.

As a heads up, for those who work with individual stocks, it's probably worth a look next time it takes a dive. The symbol in the US is GSS. It's a gold producer, and the company is profitable now.

Best regards,

Jack

Hi Tom, ...Uploading Images

Just to try out the image upload instructions that Clive posted, here is my first attempt at uploading an image from Newport.

It has been a slow year, but I did have a sell in Golden Star Resources today.





The share price is currently below my intial buy price (back in 2004), but the account is profitable (up about 100%).

Thanks,

Jack

Hi Conrad, ...OT Dutch, World Cup, etc.

The study of history is very interesting. From what I have learned so far, it seems that wars tend to be profitable for some special interest groups (such as bankers that fund both sides). On-going, never-ending wars are perpetually profitable (for some). It's a racket.

On a happier note, I have been following World Cup Soccer, and I am looking forward to the Final on Sunday. Good luck to the Dutch.

Jack

Hi Steve...OT World Cup

Spain won. I was surprised by how well they played against Germany. The Final on Sunday will be Spain vs. Netherlands. It should be fun to watch.

Jack

Hi Ken, ...Re. Cash Reserve

At this time, my cash reserve is the highest it has ever been.

This market scares me. There are too many flim-flam financial games going on. It seems that, over the past 15 months, stimulus money kept the markets afloat. But, the stimulus is running out.

I could be wrong, but my sense is that markets will likely be much lower by the end of this year. So, for me, now is a good time for preservation of capital.

Best regards,

Jack

Hello Chris, ...interested to know how AIM has performed

I am very pleased with the performance, considering that screw-ups were made along the way.

It's like anything else in life; the more we learn and apply ourselves, the better we get, in terms of knowing what works and what doesn't work for us as individual AIMers.

AIM requires volatility in order for it to work, and one needs to have the discipline to buy (quality) when prices are relatively low.

Tom's "Equity Warehouse Business" is a very good way to look at it. Not all of the inventory in the equity warehouse will likely generate outstanding profits. Some might even be losers. However, overall, the business is profitable.

To my mind, the S&P 500 seems to be rolling over. So, personally, I wouldn't buy a core position to start an AIM program in the S&P 500 right now. The risk seems too high.

Best regards,

Jack

Nice picture, Tom!

My AIM 2000 shirt doesn't look half as good as yours.

Come to think of it, now might be a good time to look back and see how much money the AIM strategy and its variations have helped me make over the past 10 years.

Best regards,

Jack

Hello Ray, ...Re. S&P 500 2x Bear

My 3rd experience with Horizons Beta Pro S&P 500 Bear Plus ETF turned out okay. In the recent drop, the 2x Bear ETF spiked. My GTC sell order was triggered and I was sold out.

It's the longest I have held this ETF...about 7 weeks. So far, I am batting 3 for 3 with the 2x Bear. It's most likely just luck. The problem I still have with the 2x Bear ETF is that it's not really a tangible investment.

Nowadays, there is so much quality information available on the Internet that it's not too difficult to connect the dots. It seems that there is a currency crisis coming.

OT: How is the knee coming along?

Best regards,

Jack

Hi karw, ... Not sure why you would say that Gold is cheap?

I am sorry, that chart didn't post the way it looked in the preview. With Zig-Zag shown, the relative value of gold to oil would have been more compelling.

The first drop is the oil spike, was that GS or Lehman pushing that oil price so high?

That's an interesting thought. Of course, there is no market manipulation :)

I don't own oil or energy right now; however, I do own a couple of gold stocks.

Best regards,

Jack

Hello karw, ...Re. GLD

As I begin to understand more about how unreal fiat currency can be, I am putting more faith in tangibles such as gold, oil, etc. Yesterday, I was looking at the Gold to Oil Ratio.

Compared to Oil, Gold is relatively cheap. Have a look at the following chart:

http://stockcharts.com/c-sc/sc?s=$GOLD:$WTIC&p=W&yr=3&mn=0&dy=0&i=t19434570703&r=9114

Best regards,

Jack

Hello karw, Re. P/E10 Ratio

Excerpt:
So what is the P/E10 ratio now saying about the market? In short, the market is expensive. The ratio has entered the most expensive quintile, which means it is more expensive than it has been 80% of the time.

That's an interesting perspective on things.

I could feel in my gut that the risk is high. As best I can, I have been building cash reserve over the past several months.

It seems strange, Governments that are heavily in debt themselves have supposedly 'bailed out' bankers, etc.

Greece has now been offered more debt, in order to help them avoid defaulting on their debt? This might be an example of a country deferring its debt problem by taking on more debt. I gather that a lot of debt in the world might never be repaid.

Regards,

Jack

Hi Ken, ...OT: global warming, etc.

It's good to see you around here.

For me, one of the greatest things ever invented is YouTube. Of course, one needs to be very selective there. From some of the clips I have been watching, I am inclined to go along with the idea that the reason generally given for global warming is a bit of a farce. It's probably just an excuse to collect carbon tax the world over.

Separately, the S&P500 keeps going up and up. It seems somewhat scary.

Best regards,

Jack

Hello Ocroft, Re. PC tracking

That's an interesting idea related to PC tracking as an indication of when to begin buying, and how much to buy.

I have a couple of questions:
- How do you track PC? Do you look at numbers on a spreadsheet?
- How is this approach working for you in terms of results?

Thanks,

Jack

Hello Conrad, yes, of course, I do recall our discussions from many years ago. You are one of those brilliant people who could figure out a mathematical equation for just about any concept. It was taxing on my brain and I am not sure I understood it all, but I did understand the general concepts you expressed.

To my mind, AIM and AIM-like methods, such as Vortex, are very beneficial. They instill discipline...buying and selling without much emotion involved. I know of people who sold out when the markets crashed in 2008; it was the worst time to sell. Someone using AIM, Vortex, etc. would more likely have been buying at that time.

For me, it's great to have a system, and to think as well.

Regards,

Jack

Hi Adam, someone looking at what I am doing might correctly state that it is not AIM, on account that I am not using the AIM algorithm to generate Buy / Sell advice.

About 6 years ago, I began developing a methodology. It's working well and it might have commercial prospects; so, I haven't made it public. It's AIM-like from the point of view that it still involves disciplined buying, selling and LIFO profit. It evolved from experiences I had along the way with AIM.

My very first deep diver experience occurred soon after the inaugural AIM Convention in Las Vegas in 2000. I was using standard AIM.

June 19, 2000 - Bought shares of a software company, Geac Computer, at $14.75. By May of 2001, the stock had dropped to a low of $1.55 (-89.4%).

I had already depleted my cash reserve in Oct. 2000, with the last purchase of shares at $5.15. So, it was not a pretty picture.

As ugly as it was, it did have a happy ending, not because of standard AIM, but because I took a chance and made one big buy at $1.65 with additional cash.

I sold shares along the way and, when I finally exited in March 2006, at $12.85 (the company was taken private below my initial purchase price), the simple return was 432.4%.

As weird as it might seem, that experience taught me that deep divers can be profitable. Of course, the stock could have gone to zero as well.

While I am not using the AIM algorithm to generate Buy / Sell advice, I still manage to keep live accounts in Newport and AI, because I like the charts in Newport and the Internet price updates in AI.

Regards,

Jack

Hello Adam, ...Re. Deep Diver AIMing

In my mind the biggest problem with AIM is the unfortunate AIMing of a deep diver. The premise in AIM is that the stock more or less recovers, if it doesn't, AIM is in deep trouble, because it can funnel a large amount of cash into a sinking stock. This is the achilles heel of AIM, and focusing on an aesthetic feature does not deal with this big problem. One has to be extremely careful when choosing a stock/fund to AIM.

What you expressed has been my experience as well. The way I see it, if the core shares (50% with standard AIM) go under water, then life can get a bit difficult. That is one of the reasons why I changed my "AIMing" to suit myself, i.e., my own proprietary methodology. Thankfully, so far, it's working well.

Here is an example with GSC.TO (GSS on the AMEX) in my retirement portfolio:

July 22, 2004 - Initial shares were purchased at $5.61

In the 2008 meltdown, the stock bottomed at $0.50 (a drop of 91% from the initial purchase price)

Feb. 23, 2010 - GSC.TO closed at $3.04

This is a gold mining stock and the company pays no dividends.

Here are the results, at the close today (2/23/10):

Buy & Hold: -45.81 %
Standard AIM: -20 %
Actual Result: +29.06

Anyway, to my mind, all of these methodologies require the use of judgment, which is intangible.

Regards,

Jack

Hello karw, ...Re. Bright spot is Japan

For the most part, Japan has been one huge downdraft for the past 20 years, or so. And now, Toyota, with their humongous recall related to faulty accelerators, isn't helping. Anyway, it would be a refreshing change if Japan finally turns around.

The flight of Euro into the USD seems a bit bizarre, considering that the fundamentals supporting the USD aren't much better than those supporting the so-called "PIIGS" (Portugal, Italy...Greece, etc.).

This is probably the weirdest market I have witnessed so far.

Best regards,

Jack

Hello Ray, thanks for the suggestions. I'll have a look.

It seems that the easy money was made in 2009.

Regards,
Jack

Hello Aimster, Re. 2x, 3x Bear

I took small positions as well. I only did it twice when I felt that the probability was very good of making a few dollars, and both were profitable trades.

It seems to me that, going forward, there is a good chance of making money on the down cycle. I wish that there were some lower-risk, longer term vehicles for working the down cycle.

Best regards,

Jack

Hello Ray, Re....S&P 500 2x Bear ETF

Recently, I couldn't find any stocks worth buying; so, I bought a little bit of S&P 500 2x Bear ETF (HSD.TO).

It seems that, with governments pulling back on stimulus funds, and recent uncertainty regarding banking regulations, etc., the markets are jittery. Anyway, I sold my shares of HSD.TO on Friday. I made a few dollars, even though I might have sold too soon.

I am not really comfortable with 2x Bear ETFs, on account of the day to day nature of these funds. 2x Bear ETF is not an investment vehicle that one could use to set up an AIM-like account and forget about it for a while. It requires very careful attention.

Are you holding any Bear ETFs right now?

As an aside, it seems that the writing on the wall suggests that now is a good time to preserve capital, i.e., the markets are likely to take a dive in 2010.

OT: How is your knee recovering?

Best regards,

Jack

Hi Steve, ...Re. Final 2009 Results

Congratulations on achieving such a fantastic return in 2009. Considering that you outperformed the indexes with lower risk than B & H, it is quite a remarkable accomplishment.

I am pleased that my portfolios generated decent returns in 2009, and thankful as well, considering the tsunami of 2008.

I have been paying attention to what a couple of reputable trends forecasters have been saying regarding 2010. It should be interesting.

Happy New Year to you, and all the AIMers here.

Best Regards,

Jack

Hi Ken, regarding transfer of funds, I recently applied for electronic transfer capability with Scotia iTrade (formerly E*Trade Canada). While I haven't used it as yet, it does seem like a convenient way to transfer funds.

Separately, regarding the level of cash reserve indicated by the vWave, etc., my understanding is that it suggests the % cash reserve for starting a new AIM account. 2008 was a shocker that taught me some lessons; so, I have been building cash reserve while stock prices have been going up. At this time, my overall cash reserve is higher than that indicated by the vWave.

Best regards,

Jack

Hi Ken, ...New Wall Street Tax?

The headline of this article caught my attention:
http://thehill.com/homenews/house/56789-afl-cio-dems-push-new-wall-street-tax

Here is a brief excerpt:
The AFL-CIO, one of the Democratic Party’s most powerful allies, would like to assess a small tax — about a tenth of a percent — on every stock transaction.


It doesn't seem like a great idea to have to pay tax every time one buys or sells stocks. Also, those taxes usually start off small, but the percentages tend to get bigger over time.

How are things with you; are you making money?

Best regards,

Jack

Hello Ray, ...2x Bear ETF, P&F Charts, etc.

It must be quite an experience indeed, getting a total knee replacement. Hope your recovery goes very well.

In the past, I only looked briefly at P&F Charts; so, I don't have enough background to use them profitably at this time.

My recent experience with the 2x Bear ETF was instructive. Psychologically, it seemed a bit contradictory from the perspective that, in order to make a dollar with the 2x Bear ETF, my existing long positions had to experience a downdraft, in the short term anyway.

I'll see how it goes from here. For me, short-term trading is a harder way to make money than the AIM-like method that I use with stocks. However, when there doesn't seem to be very good buys in stocks, then the 2x bear ETF looks appealing to me.

Best regards,

Jack

Hello Ray, ...2x Bear S&P 500 ETF

For the purpose of learning about things, I bought some HSD.TO last Friday. I thought the risk was low enough at that time. I sold all today for a gain of 6.6%. I didn't put much money into it; so, it's only a small gain.

Anyway, it was an interesting exercise. I usually work with stocks. That was the first ETF I ever bought.

Best regards,

Jack