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Mark,
Does this new PI version imply that VSS will get the same new faster, more better, warp drive "engine" as well?
Thanks!
AIMster
Amongst all the investment spam that manages to clutter the inbox with tsunami-level volume, occasionally one or two do provide a glimmer of at least possibility. This particular spiel recommended Himax Technologies of Taipei, Taiwan (HIMX) Their products are used in LCD screens and with the transition to flatscreen TV's and computer monitors, pretty good demand. Not to mention a current 16.7% dividend yield!
Stockcharts renders a seemingly AIMiable view:
Not a recommendation, but something else to look at.
AIMster
I'm finding this to be a verrrry strange stock market.
Do the numbers on Newport and by the time I get on line to do the transactions, all the prices are changed enough to negate the Newport recommendations.
Hi, Al,
With the "window trade" system I don't always get the exact price that in my case, AI, rather than Newport recommends. Sometimes higher, sometimes lower. I place my trades the night before for the 11 AM window and figure that things will even out in the long run. Funds tend to move not so much as individual stocks will, so I've found not quibbiling over a few cents to take a bit of pressure off concern about whatever the market's doing. Just let it roll with the flow.
Best,
AIMster
Hi, Mark,
Is there perhaps a freeware report generator that we can use on the AI database to create individualized reports? I'd like one that would list the holdings and their tops and lows of their respective hold zones. That way I might be able to keep an intraday eye on if things are getting close to one end or the other. Rather than take more of your time, if there's such a program out there, we could write our own. Perhaps they could be exchanged between users much as you'd thought various AI configuration models would be.
Thanks,
AIMster
Scared :(
I started aiming this stock in May. Had a couple of sell signals around $30, started buying as it dropped. Haven't executed a buy since $19. My next buy will put me at 0% cash.
Not sure how this will play out with your holding but part of this outfit has been merged into something else!
See:
http://www.hbpfunds.com/
Best,
AIMster
Hi, Mark,
Thanks for the prompt reply. No performance issues and my file's not anywhere near being excessive. It was just more of a theoretical "gee, do we really need to keep ALL this stuff" type question. The database I manage at work which runs under uniVerse (a cousin of Pick) and it's is very good on accumulating data, getting rid of it, not so much. Still, that we can back up the whole thing on to just a little over 1 DVD [in ZIP archives] is a testament to the efficiency of the Pick structure. Basically it works like a spreadsheet, though one can have multiple values and even subvalues within a single "cell." Everything's variable-length data, so the data within each record will only use the space of the length of the data. This gets around the need for predefined field lengths. Anyway, before I go on and on...
Thanks,
AIMster
Hi, Mark,
Another suggestion for your Real Soon Now list. <grin> One thing with the AI database is that it keeps growing and growing and growing. Granted disk space is cheap enough these days, I recently got an external drive 500Gb for $80, but after a point, at what point would a person ever need to 'undo' to the first transaction? Or how many go back to see where things were a couple of years ago?
So, what might be worth adding at some point would be a purge function that would make the current line in the history as the starting line and add new history going forward from that point.
Such functionality would let users keep the history trimmed to whatever length is reasonable for them. Invoking a mandatory backup before the purge might protect people from an "oops" moment. Nothing to have to do right away, I don't think, but might be useful. Besides, does the Access "core" you're using have any performance issues as the number of transaction lines gets longer?
Thanks for your consideration.
Best,
AIMster
The context of my response to you was on how to deal with falling stocks. I 'keep on buying' using the 30 day rule and a minimum change in price (currently 15% from the last buy).
Hi, Steve,
FWIW, I, like Adam have mainly shifted to funds, CEF's, ETF's and so on. However, I've a small program running on a handful of mainly very low-priced issues. using "classic" AIM here, and a max investment of only about $2400 to start, more a "proof-of-concept" than a full-blown program, per se. As Jersey Al and I've mentioned, FOLIOfn lets you get away with these "micro" programs no problem and at zilch cost per trade. I figure the handful of individual stocks will kick the overall volatility up a notch, which may be more beneficial going forward.
Anyway, to your comment directly, the rule I've been using on the larger holdings has been to increase the buy SAFE 5% at each buy. I'd imagine that works similarly to your 15%. Slows down the cash burn rate to favor really new lows, as opposed to getting the "residual buys" which sometimes come very quickly.
Best,
AIMster
I came back from the great North on the 14th of August. . .from there where the cold winds come from!
I actually did again go to watch the salmon race up the Bulkley River in Moricetown. . .wanted to buy dry smoked salmon(jerkey) but the local Indians were no longer selling to the public . . .I bought some in Vancouver on the Granville Island "Farmers Market". . . ridiculous high price. . . I am still trying to figure out how the heck a farmer grows a salmon!
Hi, Conrad,
Thanks for the follow-up. Glad you had what could generally be called a good trip. I've promised one of my cats that we'll share a bit of smoked lox salmon on OUR birthday next month. One of the few cats we've had where we know the actual birthday, and happens to coincide with mine! She'll be 13 and me well, yes, ahem...
Best,
AIMster
Hi, Tom,
Re: Retirement account rebalancing........
Good article there! Perhaps you should contact the author and suggest adding AIM as an overall management tool, rather than just the strictly buy-and-hold idea he's advocating. His point, "In order to understand the attractiveness of the Ultimate Buy-and-Hold Strategy, what you need to know is that a lower standard deviation is better, indicating a portfolio that is more predictable and less volatile." (emphasis added). Since AIM as a methodology uses volatility as the primary "engine" of activity, making something "less" volatile would seem, on the surface at least, to be counterintuitive. Of course this is just one aspect mentioned whilst dramatizing the benefits of diversification via asset class management, which is the primary thrust of the article. It would be interesting to see what fund(s) (or proxies) were used to obtain the results. It would be also of interest to backtest via AIM those same funds and see were B&H would out or under perform AIM.
BTW I love all of these "what-if" articles that start from an assumed base of $100,000 or so. For many people caught up in recession/forclosure and so on, keeping, let alone getting to that first $100K seems to be the biggest hurdle. Pocket change, right!
Best,
AIMster
IGT - Intl Game Tech
By way of AIMish follow-up:
http://www.forbes.com/free_forbes/2008/0901/114.html?partner=yahoomag
Best,
AIMster
Hi, Mark,
Trust all is well with you. The proverbial wheels in the head started turning so I thought I'd spell out the direction they're turning in and see if it makes any sense to you.
The Value Stock Selector does a reasonably fast job of getting data and processing it. AI does a good job also at looking at what would the results be if I AIMed a given security (or list).
What's missing? An automated ranking of the market like VSS only using the AI historical testing engine. In other words, feed it all the stocks/funds in the market, then run (for example) a 1-year test on each saving the results. Tests for this purpose might just offer canned results, say the default options from AI. I envision this as a jumping off point for finding candidates, rather than a final verdict of gospel truth.
After the scan's complete, sort the top 30 or so by descending annual return or ROCAR. This would give people a list of those stocks that have performed the best in the past year using whatever parameters the user's selected. The usual "past returns are not indicative of future returns" applies, of course, but I think it a way to efficiently find those stocks that might be the most promising.
Make sense?
Let me know what you think,
Best,
AIMster
. what do you think about using FF as a proxy for the banking / financial sector.
Might work - another one to look at might be BTO - trading at a deeper discount to the NAV than FF, less expense ratio, too, 1.36% vs 1.57% for BTO and FF respectively.
etfconnect page on BTO here:
http://www.etfconnect.com/select/fundpages/sectors.asp?MFID=11855
Best,
AIMster
Mebee I should take up bank robbery, whaddyathink?
Worked for Dillinger - when asked why he robbed banks his reply was simple, "that's where the money is."
Of course it didn't work out for Dillinger, but that's the high-risk of such an occupation! I'd stick with AIM!
As in Lichello's version, not showing a terrified teller the business end of a gun!
Best,
AIMster
Long term investors
using the ValuWave guide
see when best to buy.
Timing everything!
Or so many people say,
But if price too dear?
Yet another interesting tool...
I came across this one: http://www.stockfetcher.com/ and they offer a natural language query system to create stock selection filters. So much they'll give you for free, then memberships are fairly priced. They've also a .PDF manual you can look at for free (or download and save to your computer).
Using: crossover weekly MA(10) crosses above weekly EMA(150)
returned 39 matches. One of them returned was an ultra short for China's index! Perhaps not olympic returns, but looks like it could be a contenda for AIM:
Have fun!
AIMster
My current method is to spread the core buy into 2-3 separate purchases over a 2-4 week period.
Makes sense - that lets you phase it in, rather than one "cannonball" plunge all at once!
Best,
AIMster
own EFT since a few weeks in the financials, homebuilders and BRIC. On my watch list is still a Tech EFT and an Energy EFT.
Welcome! And thanks for the question! That's the purpose of this board... so, with that in mind...
You've currently got three ETF's going, with two more under consideration, right? There are pros-and-cons to going the whole portfolio (the method preferred by Lichello) versus the individual holding route. Keep in mind that Lichello wrote his book and developed his AIM in the earliest dawn of the PC computer age so any calculations, any recordkeeping all had to be done manually, or with the help of a calculator, at best. So, he tends to write the system to favor the simplest, least time consuming method. With a computer to update prices instantly, software to handle the record keeping, it's a whole new ballgame. Of course, with the free calculator TooFuzzy supplied one can still do the work with the ol' #2 pencil - such exercise is helpful to get to see how AIM works. I'm speaking more to the state of technology at the time - you certainly don't need a computer to use AIM, but having one can make it easier.
Doing the whole portfolio route will generally mean fewer transactions, as a whole portfolio acts to a degree as a mini mutual fund, as some things go down, others will hopefully be going up, placing a damper on any trending motion either up or down,. The advantage of this route is that it still gives you control over how you wish to allocate the relationships of the holdings within the portfolio. For instance, if you don't want more than 10% of the portfolio value to be in the BRIC holding, when you get a "buy" order, you can choose to invest the money into some other component.
On the other hand, AIM works as a volatility capture system. The more volatile the holding with regular up-and-down movements in price, the faster AIM will increase the overall value. So, AIMing each holding (which of an ETF is already a mutual fund of sorts in the sense of being a basket of holdings) will give you better performance provided you're willing to accept that the returns will bias toward the most volatile of the holdings, to the relative stagnation of the others. Thus you might see your BRIC holdings quickly mushroom to 20% of the holdings, which may force you to do some asset re-allocation, independent of AIM, depending on how tightly you want to stick to particular percentage relationships.
Depending on your brokerage and costs of trading theoretically there aren't any minimums, per se. One could start for as low as $1000 invested, keeping the same in cash reserve if you want to use the "classic" 50/50 relationship. Obviously trades at such a level are going to cost more on a percentage basis than they would if you started with $10k or $100k. Jersey Al and I, maybe one or two others use FOLIOfn which offers a "membership" plan with no per-trade costs, subject to restrictions, of course. see http://www.foliofn.com for more info. With their system you can purchase a "folio" of stocks or funds already defined, or "roll your own" so to speak. Each of these can have up to 50 stocks or funds in them so there's a lot of latitude. You could buy $100 worth of Berkshire Hathaway, for instance and AIM it up to where Warren Buffet would start looking over his shoulder! Well, maybe not in the rest of his lifetime, but you can at least head in that direction!
Others will no doubt chime in with their perspectives too.
Keep the questions coming, we're glad to answer!
Best,
AIMster
I guess the relative dearth of posting on here lately must be due to the relative sideways movement of the market.
The DIAmonds DJIA proxy shows this:
We'll just have to stay tuned.
Best,
AIMster
If you were using real money I would take losses in less than a year so you have short term losses which are more valuable.
Good point, Toof!
I'll keep that one in mind for future reference!
Best,
AIMster
Hi, Al,
In another FOLIOfn experiment I've got running, I've taken Mark Hing's (of Automatic Investor fame) other program, Value Stock Selector and set the parameters to select stocks with a value weighting of at least 7, minimum price $3, max price $50, min avg share trade levels at least 100K and minimum return to be 100% or more.
Set up a watchlist (too chicken at this point to use real cash) and as of a couple of days ago it selected ALDN, NTRI, LCAV, TRID and BHE. TRID hit the biggest landmine and is off 30%+ on bad earnings. NTRI's up 7%+. If new stocks make the grade of these parameters I'll add them to the list for a full folio. Not too much point in using AIM as there's no money involved. I suppose I am interested in where these will go both in a few month and then say annual term. Hold it for a year + a day and sell no matter where it is? Perhaps. That at least would have only long term gains and losses.
More to follow!
Best,
AIMster
As you know, a number 5 timeliness rank in Value Line means a stock is ranked to be in the bottom of their ranking system as far as its next 12 months go. This can mean 12 months of dead money possibly, but what I've found is that those 12 months become a good time to use AIM as these stocks bounce around near the bottom of their trade range. Then the long term growth that got them on the "highest growth stocks" list in the first place can carry them higher as they recover from whatever gave them a #5 Timeliness rank in the first place.
So, these would be quintessential "value" stocks then, eh? Basically sound companies beaten down more by the whim of the market, rather than anything fundamentally wrong with the company, per se?
Best,
AIMster
Of Paradoxical inter-relationships.
It's a bit long, but an interesting read that came across in my email inbox this morning:
I have often commented about the problem of personal savings. We worry about the lack of savings here in the US, but many do not understand that if everyone started to save 5% of there [sic] income immediately that it would seriously impact consumer spending, pushing the US into a recession. It is a paradox, as Paul McCulley points out, that what may be good for the individual may not be good for the collective country.
And in this week's Outside the Box, good friend and this week's Maine fishing buddy Paul McCulley writes about another paradox called the Paradox of Deleveraging. This Paradox is at the heart of the credit crisis. Many of you will not like his conclusions, as it calls for the government to step into the breach created by the problem he describes. But as I often point out, the purpose of Outside the Box is to make us think about ideas which may not be in our usual sources of information. Paul is the Managing Director at PIMCO, the world's largest bond manager. (http://www.pimco.com for more information.)
John Mauldin, Editor
Outside the Box
The Paradox of Deleveraging
By Paul McCulley
Back in college, most of us took microeconomics before we took macroeconomics. In fact, at Grinnell College where I went, microeconomics was a prerequisite for macroeconomics. The reason was simple: microeconomics begins with the concepts of supply and demand, an essential starting point for the study of macroeconomics. But you only know you've mastered both when you intuitively grasp that macroeconomics is not just the summation of microeconomic outcomes, but rather the interaction of microeconomic outcomes.
For me, a simple concept brought this realization: the paradox of thrift. For those of you who might not recall, the paradox of thrift posits that if we all individually cut our spending in an attempt to increase individual savings, then our collective savings will paradoxically fall because one person's spending is another's income - the fountain from which savings flow.
This principle is part of a whole range of macroeconomic concepts under the label of the paradox of aggregation: what holds for the individual doesn't necessarily hold for the community of individuals. Understanding this paradox is absolutely vital to understanding macroeconomics and even more so to understanding what is presently unfolding in global financial markets.
Double Bubbles Bust
Once the double bubbles in housing valuation and housing debt burst a little over a year ago, everybody, and in particular, every levered financial institution - banks and shadow banks alike - decided individually that it was time to delever their balance sheets. At the individual level, that made perfect sense.
At the collective level, however, it has given us the paradox of deleveraging: when we all try to do it at the same time, we actually do less of it, because we collectively create deflation in the assets from which leverage is being removed. Put differently, not all levered lenders can shed assets and the associated debt at the same time without driving down asset prices, which has the paradoxical impact of increasing leverage by driving down lenders' net worth.
This process is sometimes called, especially by Fed officials, a negative feedback loop. And it is, though I prefer calling it the paradox of deleveraging, because the very term cries out for both a monetary and fiscal policy response, not just a monetary one. Lower short-term interest rates via Fed easing are, to be sure, useful in mitigating deflating asset prices, particularly if they serve to pull down long-term rates, which are the discount rates for valuing assets with long-dated cash flows.
But monetary easing is of limited value in breaking the paradox of deleveraging if levered lenders are collectively destroying their collective net worth. What is needed instead is for somebody to lever up and take on the assets being shed by those deleveraging. It really is that simple.
Time to Lever Up Uncle Sam's Balance Sheet
As Keynes taught us long ago, that somebody is the same somebody that needs to step up spending to break the paradox of thrift: the federal government, which needs to lever up its balance sheet to absorb assets being shed through private sector delevering, so as to avoid pernicious asset deflation. That's a fiscal policy operation and, fortunately or unfortunately, fiscal policy is not made by a few learned technocrats above the political fray of the democratic process, but is squarely in the hands of the legislative branch, consisting of 535 politicians, with far more lawyers than economists among them.
Yes, I know that Congress passed a properly Keynesian stimulus package earlier this year, the benefit of which we are feeling now, sending over $100 billion in rebates to the citizenry, borrowing the money to do so and levering up the Treasury's balance sheet with debt in an equal amount. So, yes, I may be too harsh when I challenge the economic literacy of Congress: they do understand that Uncle Sam should borrow and spend, directly or indirectly through tax rebates to citizen spenders, to truncate the paradox of thrift (even if they don't know what that is).
But levering up Uncle Sam's balance sheet, to buy assets to break asset deflation resulting from the paradox of deleveraging still seems to be a foreign, if not a sinful proposition. This need not be, and should not be. Yet we hear endlessly that any levering up of Uncle Sam's balance sheet to buy assets must be done in a way that "protects tax payers." By definition, levering Uncle Sam's balance sheet to buy or guarantee assets to temper asset deflation will put the taxpayer at risk - but will do so for their own collective good!
This was defacto what the Federal Reserve did when it put up $29 billion on nonrecourse terms to buy assets so as to facilitate the merger of Bear Stearns into JPMorgan. As I said at the time, and wrote about two months ago, this was a fiscal policy operation, conducted by the Fed. Logically, it should have been conducted by the Treasury using appropriated spending power from Congress. But alas, that "right" solution was not legally available to the Treasury, whereas the Fed did have the power to act: Section 13(3) of the Federal Reserve Act of 1932 gave the Fed the power to lend to essentially anybody against any collateral, so long as it declares it is necessary to do so because of "unusual and exigent circumstances."
But make no mistake, it was a fiscal policy action demonstrated by (1) the fact that the Fed sold a similar amount of Treasuries from its portfolio, increasing the supply of Treasuries in the market by the same amount, and (2) the fact that any losses the Fed experiences on that $29 billion will reduce dollar-for-dollar the amount of seigniorage profits that the Fed remits to the Treasury. At the end of the day, there are $29 billion more Treasuries on the open market than otherwise would be the case, and the Treasury is, one small step removed, on the hook for any losses the Fed experiences on the $29 billion of non-Treasury assets it now de facto owns.
Yes, that $29 billion is actually a loan to a Limited Liability Corporation (LLC) set up to hold the Bear assets, with JP Morgan providing a $1 billion subordinated loan (sometimes called the "first loss" tranche) to the LLC. But that is merely a technical detail - the bottom line is that we the taxpayers bought $29 billion of Bear's assets.
To their credit, legislators did figure that out - albeit after the fact. And they were none too happy about it, despite accepting the Fed's and Treasury's logic that it simply had to be done, for the greater good of the citizenry. Legislators rationally guard their constitutional powers over the federal purse.
And Now to Freddie and Fannie
Which brings us to Mr. Paulson's request to Congress to give him - and his successor - the power to spend unlimited amounts of taxpayers' funds to buy the debt or equity of Fannie Mae and Freddie Mac. I confidently predict that he's not going to get unlimited authority; it will most likely be checked by counting any such deficit-financed injections into Fannie and Freddie against the Treasury's statutory borrowing limit, which can be lifted only by Congress. But Mr. Paulson is going to get most of what he wants, if only because legislators are too fearful of the consequences if they stiff arm him.
Between now and then, the Federal Reserve stands ready to lend to Fannie and Freddie, again using Section 13(3) as its enabling authority. But unlike the case with the $29 billion spent for Bear's assets, any Fed lending to Fannie and Freddie is explicitly being billed as a "bridge" to Treasury lending or investing in the agencies. This is the way it should be: bailouts and backstops with taxpayer funds should be legislated by Congress and placed on the Treasury's, not the Fed's, balance sheet.
In fact, I envision that legislation will explicitly direct the Treasury to "buy out" any lending that the Fed does to Fannie and Freddie. Indeed, in what might be a bit of wishful thinking, I believe it would be highly appropriate for Congress to authorize the Treasury to buy out the Fed's $29 billion loan to the LLC holding Bear's assets, putting it on the Treasury's balance sheet, where it belongs.
Section 13(3) should be used only when it is absolutely necessary to avoid systemic financial turmoil. That's not to say that the Fed shouldn't be cooperative in any necessary bailouts or backstops. The fact of the matter is that the Fed is the only entity in Washington able to spend money without prior Congressional approval. Thus, when the stuff is truly hitting the systemic oscillator, the Fed has to unplug it.
But Section 13(3) should be considered sacred, used only in extremis, so as to ensure the Fed's operational monetary policy independence in the pursuit of sturdy growth and low inflation. It's never been a good idea to have the monetary authority and the fiscal authority housed under the same decision-making roof.
That's not to suggest that there is no room for coordination between the monetary and fiscal authorities. This is particularly the case when the economy is experiencing asset deflation, begetting debt deflation and deleveraging. Indeed, none other than Chairman Bernanke made this case when he was Governor, first in November 2002 in his famous speech titled "Deflation: Making Sure 'It' Doesn't Happen Here", and then in May 2003, in a speech titled "Some Thoughts on Monetary Policy in Japan".
In the first speech, the economic menace at hand was the risk of goods and services price deflation in the United States; in the second speech, the menace was the reality of goods and services price deflation in Japan. Currently, in the United States, asset price deflation is the menace at hand, not goods and services price deflation.
But make no mistake, asset price deflation can be every bit as nefarious as goods and services deflation. Indeed, asset price deflation in the context of deleveraging is, in my view, much more nefarious than modest goods and services price deflation, since asset price deflation undermines the capital base of levered financial intermediaries, begetting yet more deleveraging and further asset price deflation.
Harkening back to those two speeches from Mr. Bernanke, it is very clear that he sees the role of the central bank as different in deflationary times than inflationary times. Specifically, in the speech on Japan, he said (my emphasis):
The Bank of Japan became fully independent only in 1998, and it has guarded its independence carefully, as is appropriate. Economically, however, it is important to recognize that the role of an independent central bank is different in inflationary and deflationary environments. In the face of inflation, which is often associated with excessive monetization of government debt, the virtue of an independent central bank is its ability to say "no" to the government. With protracted deflation, however, excessive money creation is unlikely to be the problem, and a more cooperative stance on the part of the central bank may be called for. Under the current circumstances, greater cooperation for a time between the Bank of Japan and the fiscal authorities is in no way inconsistent with the independence of the central bank, any more than cooperation between two independent nations in pursuit of a common objective is inconsistent with the principle of national sovereignty.
Again, I'm aware that he was speaking in the context of both goods and services price deflation and asset price deflation in Japan, not just asset price deflation. So the parallel is not complete with current circumstances in America, which involves elevated goods and services inflation in the context of asset price deflation.
In fact, I believe the Fed faces a more daunting challenge now than the Bank of Japan did back then, in that the Fed has to balance the risks of both goods and services inflation and asset price deflation, whereas the Bank of Japan did not have to do so. Put differently, Japan faced both the paradox of thrift and the paradox of deleveraging, screaming for the Bank of Japan to subordinate itself for some time to the fiscal authority. This is not the case now in the United States, which is experiencing only the paradox of deleveraging, not the paradox of thrift, though the latter malady is certainly a fat tail risk if the former malady is not ameliorated, notably in house prices.
Bottom Line
Conventional wisdom holds that when an economy faces a paradox of private thrift, it is appropriate for the sovereign to go the other way, borrowing money to spend directly or to cut taxes, taking up the aggregate demand slack. Indeed, that is precisely what Congress did earlier this year, sending out $100+ billion of rebate checks, funded with increased issuance of Treasury debt. Good ole fashioned Keynesian stuff!
Concurrently, conventional wisdom is struggling mightily with the notion that when the financial system is suffering from a paradox of deleveraging, the sovereign should lever up to buy or backstop deflating assets. But analytically, there is no difference: both the paradox of thrift and the paradox of deleveraging can be broken only by the sovereign going the other way.
Fortunately, Congress is finally grappling with this reality, as it moves towards passage of Mr. Paulson's plan for backstopping Fannie and Freddie with taxpayer funds. It's not a fun thing to do, particularly following the use of $29 billion of taxpayer funds to facilitate the merger of Bear Stearns into JPMorgan. But it is the right thing to do. And it is further the right thing that Congress is doing it, not the Fed under Section 13(3), except as a possible bridge to Treasury authority.
Best,
AIMster
Found a website giving the full info on the previously mentioned "mother of all systems:"
This article is in issue 119 - this site seems to have a lot of potentially interesting (if dated) articles.
http://www.webtrading.com/backish.htm
The Mother of All Systems - By Robert Alberto
(submitted by Alfred Wong)
This stock trading system needs two sources of info and has four trading rules. You need Investor's Business Daily and Standard & Poor's Stock Guide. Although the newspaper prints daily, looking at it weekly is fine. Standard & Poor's has yearly books. You need to took at a monthly guide. Investor's Business Daily is at most libraries. Standard & Poor's Stock Guide is not. But you can get a trial subscription.
Rules one, two, and four involve looking at Investor's Business Daily. Buy stocks that pass rules one, two and three. Sell stocks that pass rule four.
Trading Rule #1 - Buy stocks that have doubled their 52-week low. Scan the paper for "N H." This means new 52-week high. Then compare the close to the high.
Trading Rule #2 - Buy stocks that have an earnings per share (EPS) and a relative strength (RS) of 80 or better. Investor's Business Daily alone prints relative EPS.
Trading Rule #3 - Buy stocks that are making all-time highs. This means for the life of the stock. If Standard & Poor's does not cover the stock you'll have to call the company or a knowledgeable broker.
Trading Rule #4 - Sell stocks immediately whose relative strengths (RS) drop below 75. Of course you can sell earlier if you have a good profit.
Some Fine Points - Don't buy stocks that have risen more than 10% past where they've doubled. Only buy stocks selling for $2 dollars or more. Use a discount broker.
I haven't been able to test this system. Clearly it is a relative strength momentum system. It definitely selects few stocks now. A quick glance didn't reveal any recent buys. Maybe there are plenty at market bottoms.
I wonder about past stock price history. Do the two sources adjust for stock splits? I seem to recall some inconsistencies between the closing price and past price ranges. Trading rules one and three depend on accurate prices.
CAN-SLIM
Hi again, Al!
Nice report on the seminar. I suppose it represents one paradigm of "working" the stock market - as a trader, rather than an investor. Granted a 12-18 month timeframe is somewhat long term, especially compared to a "day" or weekly swing trader.
I remain dubious of any system or method that requires one to have a subscription - one should be able to glean whatever one needs to, given all the free sources on the 'Net, and go without a perpetual hand in one's wallet constantly in extraction mode!
Basically, it's chart reading. Identify a winner, find a buy point, jump in, identify a sell point, jump out. Get in ... get out Basically, in for 12 -18 months or less.
If it were only so simple, everybody would be doing it! Some fellow years ago devised what he called "the mother of all systems," basically a momentum tracking system using IBD data. Strongest relative strength, making new 52 week high at least double the previous 52 week low, highest price it's ever been, and a couple of other factors. The idea being that the momentum will keep going, as will your increasing profits! Um. Not totally, especially in a volatile market. Small detail there.
Thanks again - and I think you're wise to save the additional $$$ they'd charge you for learning the "inner secrets." Woo Wooo!
Best,
AIMster
How new is your computer?
I'm using an old iMac. With fiber optic.
I got it used from ubid.com in '03 (I think). It's an IBM NetVista (one of the last of the true IBM's before they sold the whole PC business to Lenovo). I bumped it up to 1.2 Gb RAM from the original 256Mb, it has a single Pentium 4 processor @2.4Ghz. Windows XP professional. 80Gb hard disk, though I'm about to add 2 500Gb USB externals. Buy.com has them on sale for $80 each. Two of them is about 1/3 cheaper than the 1TB version!
See: http://www.buy.com/prod/verbatim-500gb-usb-2-0-7200rpm-external-hard-drive/q/loc/101/206808436.html
This "new" machine, whilst somewhat dated now is still a nice upgrade from the 400MHz IBM workstation class machine I've had. The earlier machine's built like a sherman tank, though the newer one has a lot more plastic in it. I'm waiting for fiber optic to come up here. Real Soon Now, I'm sure.
Anyway, I'm thinking that the speed is partly a factor of the service (dial up, vs DSL vs cable vs fiberoptic) and partly a factor of the chip(s) in the machine. And partly a factor of what kind of "stuff" is clogging the machine.
Exactly. Taken together, it's a "whole," with "bottlenecks" forming in various places depending on the things you mention, as well as operating system, whether it's a standalone system or on a LAN, and so on. Also practices like keeping temp files at bay, regular disk defragmentation and so on all play a part.
Best,
AIMster
The DSL part of the service was $20/month when it first started some 4 1/2 years ago, but is now $35. That seems high, but with fiber to the house it is speedy! I just checked on PCPitStop.com and we're getting actual rates of 2570kbps Download and 2605kbps Upload. I really like that Upload rate since it allows me to grab for the grubs when I do decide to play. Plus when the college age youngun and 4 of his friends all log on for their overnight WOW marathons, they appreciate the big pipe. HMMM...Maybe that's why they're always over here.
Internet speed - too much is not enough! <grin>. I'm on Time Warner cable for the internet and have been using Vonage since Dec '04. Got rid of the land line a long time ago!
What's interesting in your setup is the relative parity between the upload/download sides - with the cable it's very biased toward download. I went to the site you mentioned so we'd be comparing apples-to-apples and using the domestic server to DC gave me a download speed of 9384kb but an upload speed of 943kb! Obviously they expect more downloading going on.
Best,
AIMster
Tom,
let us know your experience going forward - started looking up reviews at it seems as many people love the thing as hate it. One site got inspired from the frustration:
http://www.dontgetjacked.com/
Good luck!
AIMster
Hindenburg Omen -
The High/Low Logic refined.
Can this really work?
People see patterns,
to make sense of the random,
whether true or not!
Congrats AIMster.
Thanks! Beats the usual 10 9 8... version. Soap opera style, you want to read what's next! <grin>
I was going to play as well, but was lured outside by my better half for a swim, glass of port and a cigar. Couldn't pass that up.
Gee, I didna know you were married to The Godmother!
But she obviously made you an offer you couldn't refuse! And you didn't!! So I begrubbingly thank you and her! <grin>
Best,
AIMster
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
She looked up at me and gave a very soft "meow" in reply! That's the kind of thing that really makes one...
attached to one's pet. She'll be 13 and I, egad, will reach the half-century mark!
My late grandfather, had he lived so long, though, admittedly reaching 96 did make him the longest-lived of any in my family,
Would have been 100 for 3 days prior to my ascension to the 50 mark!
I've inherited a bit of his ideas, values and humor.
Such that giving a narrative bit whilst going for the
GRUB
is something he'd approve of!!!
Thanks for your indulgence
Best,
AIMster
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
She looked up at me and gave a very soft "meow" in reply! That's the kind of thing that really makes one...
attached to one's pet. She'll be 13 and I, egad, will reach the half-century mark!
My late grandfather, had he lived so long, though, admittedly reaching 96 did make him the longest-lived of any in my family,
Would have been 100 for 3 days prior to my ascension to the 50 mark!
I've inherited a bit of his ideas, values and humor.
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
She looked up at me and gave a very soft "meow" in reply! That's the kind of thing that really makes one...
attached to one's pet. She'll be 13 and I, egad, will reach the half-century mark!
My late grandfather, had he lived so long, though, admittedly reaching 96 did make him the longest-lived of any in my family,
Would have been 100 for 3 days prior to my ascension to the 50 mark!
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
She looked up at me and gave a very soft "meow" in reply! That's the kind of thing that really makes one...
attached to one's pet. She'll be 13 and I, egad, will reach the half-century mark!
My late grandfather, had he lived so long, though, admittedly reaching 96 did make him the longest-lived of any in my family,
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
She looked up at me and gave a very soft "meow" in reply! That's the kind of thing that really makes one...
attached to one's pet. She'll be 13 and I, egad, will reach the half-century mark!
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
She looked up at me and gave a very soft "meow" in reply! That's the kind of thing that really makes one...
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
That we will simply have to share together some salmon or tuna on OUR birthday!
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Anyway, she was kinda sleepy in her cat bed. I went over to say goodbye to her before leaving for work. I told her, in a soft voice...
salmon race upstream on the waterfalls. . . the ones that are not caught.
but for those that are - funniest thing with me and one of our cats the other morning... we both happen to share the same birthday!
Tanks Tom, maybe kayak races on the rivers there
One race will be traveling from Vancouver to a tiny village called Telkwa on Highway 16. . . some people there call it a town. Close to there in Morrice Town one can see the salmon race upstream on the waterfalls. . . the ones that are not caught.
Sounds interesting, if somewhat fishy! <grin> Does it mainly draw Canadian competitors or like the more northern Alaskan dog race, the iditarod, a more international mix of participants? Obviously has enough of a draw to bring you halfway around the world! Have a great time and if you do meet up with Mark, give him regards from all of us here!
Best,
AIMster