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Hi Gang, Remember the 197 shares of DHT I bought at $5.02 by mistake in the wrong account? Well, after I talked with my accountant I had to treat it as a separate AIM program because of the tax complications. So I set up a LD-AIM program for it and at the same time I put in a GTC sell for enough above cost that it would cover the commissions and give me a tiny profit. Got that sale today at $5.20! Granted I only netted $15.53 after commissions, but given that it was only 48 days (including weekends) the rate of return is 1.55% or about 11.8% a year. Quite trivial but pleasing nonetheless.
I've been running some back tests of S&P 500 Sectors and getting ~100% or a bit less over 12 years or about 6.6%/year so this bit of stupidity on my part turns out to be sweet.
Best,
Allen
Hi Toofuzzy, Adam, TDAmeritrade suggests a 10 day EMA and a 30 day SMA crossover. Compare that to MCAD of 24,56,9 and you get a 7 day delayed buy by comparison. You get a bit more if you use a 45 day SMA as in the chart below.
So it seems that using something like that maybe be better for a delayed buy when the company is not likely to go out of business anytime soon.
Also note that I used a ZigZag of 10% Compared to 25% you get more action, but the position size has to be big enough that the dollar amount makes sense. If you look at the AAPL chart and bought at the first up after the crossover you would have gotten in at about $93.50 and out at about $97.50 if you used the SMA/EMA touch point or if you used the SMA/EMA crossover at about $95.50. However if you used the MCAD for exit advice you might also have gotten out at about $97.50.
However, Orcroft's buying on/after the second up day would also have worked, again at about $93.50.
I keep playing with various combos and and seeing what might work in current market positions given the generally lower volatility compared to the past. I think that if one has a big enough position it is okay to do as Ganadero is doing with a 0% SAFE or, as someone else said, a minimum stock sale of 1 and a minimum dollar amount sale such that the commission is small relative to the profit of the transaction.
Clearly all this shows that one needs large positions if one is not using LD-AIM, and even then larger positions are needed to make money on shorter spreads.
But, then there is the situation I'm in of selling below cost for tax harvesting. I think that by the end of the year that will almost be over. we'll see.
Best,
Allen
PS: Does anyone know how to link directly to a chart in Stockcharts.com and not have to copy then upload?
Hi Ken (and Pam), Congrats and best wishes for many more.
Gambling on love is the only kind of gambling that is worthwhile, for the payoff is beyond dreams of avarice.
Allen
Hi Toofuzzy, I agree, keep all your chambers on your six gun loaded because the odds are a downturn is in our relatively near term future. I've noticed that several of my trusts' positions are at or near 52 week highs, and bouncing around that point even though they are below what they were bought at and that seems to confirm the idea of a potential downturn, at least in my mind.
Best,
Allen
Hi Gang, Yeah, lots of crying wolf out there about a massive bear market coming but this article seems a bit more substantial than most.
http://thesovereigninvestor.com/exclusives/80-stock-market-crash-to-strike-in-2016/?z=511244
Worth reading, especially since we know that the market cycles, and, perhaps keeping our powder dry so we can fire when ready might turn out to be a good idea. Also note that the VWave for the week of August 5th for Individual stocks: 60.67 and Diversified mutual funds or portfolio: 40.45.
If I understand the oscillator correctly, the last three weeks have been ~2 or above, and this would tend to validate a potential correction. Additionally, looking at Plus the VWave has been ~60 or so for stocks and ~40 or so for portfolios.
Then looking at NBER's list of cycles, and using only the last three because there have been massive changes in our economy that seem to have extended the length of cycles, we are at month 87 and the average of the last three is 95 it seems fair to expect something soon.
Also looking at http://www.seasonalcharts.com/zyklen_wahl_dowjones_postelection.html and the other cycles, except one, have a low point in the February-April time frame with the DOW going back more than 100 years. The one that does not match up with the others is US Dollar-Index Post-Election Years.
All these seem to validate keeping your powder dry to be ready for buying relatively early next year to ride the next upswing.
But, then again, forecasters seem more often wrong than right so who the f#$% knows, right?
Best,
Allen
Hi Mvls, I'm in a similar boat on some positions in the trusts so what I do, for tax reasons in the US, sell the highest priced shares, that way my average price per share goes down after the sale and I get a tax loss against other income. It took me quite a bit to figure out this approach but it has helped keep the taxes the trusts pay to a minimum and last year got a small loss via K1s to the beneficiaries which helped their taxes as well.
The average return on the positions in the trusts on original purchase price was ~9.8%, dividends and sale gains. Though a somewhat complex approach I have been able to dig my way out of the worst of the positions that my mother's broker put her into. His logic, it seems, was she needed income more than stock appreciation given her age. Not totally unreasonable but it left me with some halasish paper losses to contend with and yet significant taxes for the trusts and not a lot of spare cash to pay the taxes with. Doing the sale of the highest cost shares brought in the cash and losses to offset some of the taxes at the same time.
Plus, it made it possible to start AIMing positions such that more reasonable buy and sell prices were there. In once case I would have had to wait until the stock more than doubled to get a sale if I simply used original purchase price as the AIM starting point.
Best,
Allen
Hi Is7550, Quite interesting. I tried a different portfolio and got interesting results. I did 10% XIV, 45% SPY and 45% BRK.A. Fewer trades but better overall returns because of a bigger draw down and
Initial Balance Final Balance CAGR Std.Dev. Best Year Worst Year Max. Drawdown Sharpe Ratio Sortino Ratio US Mkt Correlation
1 $10,000 $21,932 14.87% 16.20% 39.98% -6.77% -22.41% 0.94 1.55 0.92
Hi Toofuzzy, I, too, use TDAmeritrade and was not aware of this "lending." Where is it found on the site and what is their name for it?
Thanks,
Allen
Hi Toofuzzy, In the online calculator there is the line "Minimum Purchase % Of Stock Shares". (I've always taken that to mean buy or sell.) Based on that it differs from the AimBareS.xls spreadsheet which says, "Starting Minimum Trade - Number of Shares". One then calculates whatever % you desire of your initial holdings as the fixed share number and enter it into cell B14. Of course one can change this by entering a different number at the appropriate line in column Q, "Minimum Trade Active ## Shares" but it is still a fixed number of shares, not a percentage of the shares held. Yes, one can calculate that percentage and enter it into the appropriate place in column Q. I'm just automating the process of converting that fixed number to a percentage of shares held.
Best,
Allen
Hi Is7550, OMG! Thanks, I think. What you describe is a whole level of complexity that I'm not ready to dive to deeply into. So you have any suggested readings/websites?
Best,
Allen
Hi Adam, given the short ranges that seem to be happening what I have been trying with one small position is selling more than AIM suggests and buying less, both roughly 10%. My logic is that I want out of this position long term but I want to make a buck or two along the way. I've only had one buy and one sell so it is hard to tell if it is working.
My thinking is that Lichello visualized relatively large swings (pages 64-71, 3rd ed.), $10 down to $4, a 60% loss and then from $4 to $10, a 250% gain. In the real market these days the only times swings like that happen is a major crash and then a long bull market, like 2007-8 at S&P 500 ~-52.5% from previous peak and the subsequent recovery until now of ~+295%. Given this and the tendency to either accumulate large amounts of stocks or large amounts of cash we might want to rethink some of the parameters we use.
One thing I've done is readjust the spreadsheet so that rather than a fixed percentage for buy and sell I'm making it a percentage of the stock on hand. This means changing B14 to a percentage figure and then changing Minimum Trade - Active ## Shares (Column Q) to multiply that percentage by the number of shares in column C in that line. I haven't quite figured out how to reliably integrate a change in the % into column P so that it changes the calculation in column Q so one can push the number up or down.
This change still leaves the minimum $ trade amount so you don't wind up with trivial buys/sales.
As a result of this change the figures are closer to the online calculator.
Best,
Allen
Hi Clive, I'm not sure I understand what you mean when you say long VIX and short VIX. Are these different symbols like VIXY or are you referring to holding options in VIX?
Thanks,
Allen
Hi Is7550, I've used Startpage since it began and before that, Ixquick.com, the only search engines with European Privacy Seals.
If you'd like some of the reasons go to http://dontbubble.us and http://donttrack.us. Cute and effective graphics.
Best,
Allen
Hi Is7550, Your link takes me to Startpage.com where it spells out "Tom Veale AIM Robert Lichello investing" and shows a bunch of pages but nothing specific. What should I be looking for?
Thanks,
Allen
Hi Tom, Toofuzzy, Are you suggesting that I amalgamate DHT into a single AIM account even though DHT is in two separate accounts, one a trust account?
Alternately I finally got a figure for LD-AIM that would allow me to sell all of the shares and have ~$5.00 profit after commissions.
Which do you think would be best?
Thanks,
Allen
Hi Gang, A week or so ago I did a stupid and duplicated a buy of DHT in the wrong account so I wound up with 197 shares at $5.02, not at all what I intended. I've tried to figure out how to do a LD-AIM so it could be managed but have not managed to figure out how to do this going forward. Help, please.
Thanks,
Allen
Hi Gang, Back to back sales of VNR, Friday 15% for $0.04 over what AIM called for, an extra $26.00. Then over the weekend another 5% for $0.03 more than the close either day. Granted it was only $11.00 total on the 5% than AIM called for but I've been able to take advantage of each day's volatility to squeeze out a few cents cheaper on the buys and a few cents more on the sells.
$37 might buy a relatively cheap dinner in the SF Bay Area, but it's nothing to sneeze at.
Best,
Allen
Hi Steve, What I left out is a small gamble I take. I have noticed that very often the position takes a dip somewhere around 9:30-11 o'clock, so I play with the price a bit to see if I can buy lower or, perhaps, see if I if it might be better to delay a buy.
Best,
Allen
Thanks a whole lot Tom. It looks like DEM and DRW tend to be leading indicators. Had I seen that I would have been in a better position to select new positions with the money from the tax loss sales. I wonder if they were leading indicators in the past. I'll have to look into it.
Thanks also for the indirect pointer to the ROCAR calculation.
Thanks again,
Allen
Hi Toofuzzy, You are correct, up to a point. Each company that puts out ETFs does it slightly differently and that can, and does, make a difference in volatility. And, no, I am not interested in actively managed funds so I'm skipping those problems.
Then, why should I want to own any specific sector or position? That simply adds emotion to the equation, a big no no.
Okay, there are some that I might want, if they existed, but none, at this time, have sectors on global warming, discrimination, endangered species and similar issues so I just support them with my quite modest donations.
Best,
Allen
Hi Gang, I swear, at times I come across something that proves beyond all reasonable doubt that I am not the sharpest knife in the drawer. Sure, sometimes there are mitigating circumstances, but really almost 3 years missing the boat?
Okay, you are likely scratching your head abut what the h@#$ I'm talking about.
Here's the deal. When I took over the trust account there was a position, MORL that was seriously down so, since I really didn't know what the f$%^ I was doing I just sat on it. Then last December I did some tax loss harvesting but I was stupid. Yeah, stupid. I waited to the end of the year, almost the last day and as a result lost out on a dividend of ~$2150. You'd say, yeah, but....
Well it turns out it is a bit more complicated than I realized. MORL has a typical pattern in its monthly dividends of $0.03-5 for two months and then a bigger one of $0.55-71 per share, wash and repeat.
What I should have done is sell it all after the ex-dividend day of 11/9/2015, missing a $0.0476 dividend and buy it back in the middle of December, being sure to avoid the wash sale rule.
I would have made out like a bandit had I done this as I would have gotten double the tax loss and lowered my basis to the then current market, ~$13, from ~$19 and gotten the January dividend! Sweet. And then I could AIM it easily as a fresh position that has a healthy dividend.
Oh, well. If wishes were horses beggars would ride.
Best,
Allen
Hi Tom, Is there a spreadsheet modification to the basic AimBareS.xls that adds Vealies? Or do you do it by hand.
Speaking of doing things by hand I have found that I need to do the buys/sells by hand as the EOD/EOW/EOM prices rarely match the the AIM dictated buy/sell prices.
Another observation is that the buy/sell prices using the online calculator are different than the ones that one gets by entering a series from a base price - 5.02, 5.03, 5.04, 5.05, etc. or 5.02, 5.01, 5.00, 4.99. 4.98, etc. - and they do not match the results one gets using the Example sheet of the LD-AIM spreadsheet. Does anyone understand why this is so and which is the best one to use?
BTW, I love the Example approach on the Buy/Sell sides with the
Hi Tom, Did you include REITs or exclude them as Merriman does? What ETFs did you use for each of the sectors Merriman uses? Since there are a number of ETFs for each sector and they are different in composition it seems to me that even with ETFs selection is a critical step.
Best,
Allen
Hi Toofuzzy, Trust me, I wouldn't dream of it.
Allen
Papageno: "What should we say now?"
Pamina: "The truth, the truth, ...even if it is a crime."
"The Magic Flute" Mozart with libretto by Schikaneder
Hi orcroft, When I looked at the chart it did not look like there was a buy signal until July or so. Is the difference because you used 24, 52, 9 and the chart uses 12, 26, 9?
Thanks,
Allen
Dear me, I see others had the idea of combining i-AIM and AIM had already been thought about. Hell of a note to read from oldest to newest.
Best,
Allen
Hi Is7550, Thanks for that view. Out of curiosity I had it do a run by comparing with a benchmark of S&P 500 Total Return. https://www.portfoliovisualizer.com/backtest-asset-class-allocation#analysisResults
It only goes back to 1987, however, not 1972. This shows that the suggested portfolio returns only 62.4% of the benchmark. It is worth looking at the other possible indexes. They all do better than the portfolio.
However, I'm not sure it really matters in the context of retirement income.
BTW, I noticed you used a 3% withdrawal rate rather than the 4% used by most. I agree with you that being more conservative as you can budget that amount and not worry, whereas with the 4% rate you might wind up eating dog food at the end of your life. It the dog is a Samoyed it might not be all that bad as they eat a lot of salmon.
Best,
Allen
Hi Is7550, Yep,
Hi karw, What is an "inverted AIM"?
Thanks,
Allen
Happy Birthday, Firebird400!
I'm curious how many shares you bought of TGD and what buy/sell & %shares did you use? Were you using standard AIM or LD-AIM?
Those sub $1 positions sure have a lot more volatility.
Best,
Allen
Hey Tom, I'd be damn proud if I were you. You beat the appropriate index on all of the portfolios, even the 10 Common Stocks portfolio. There, the comparison is not quite fair as the NASDAQ Composite Index has 3000 elements and you have only 10, nevertheless you beat it handsomely.
You can't compare the apples to apricots.
Congrats!
Allen
Hi Alton, Great idea! A sector ETF is dragged down by the low performers and, it seems to me, having so many stocks inside the ETF reduces volatility.
If I read you correctly you are selecting stocks within an ETF that are at the bottom of gain list expecting that they will go up rather than down, and you group them as they all have the same sector, or do they?
I don't have an example for the ETFs you mention but here is IYR top three and bottom three:
Sounds like a good guess. Thanks Jon.
Best,
Allen
Thanks Steve, When you say "no safe" I take this to mean neither buy or sell, correct? What percentage cash did you start with? Or are you using a common pool to handle the money for the buys? If so, how did you set up LD-AIM to start with?
BTW, what does GIEW stand for?
Thanks,
Allen
Hi Grabber, I'm using the basic AimBareS.xls spreadsheet with some addition but no changes to the core.
After playing with it a bit I wound up entering the buys in the "Action Taken - ## Shares" column at the price it executed at but leaving the figure for EOD as it appears on TD Ameritrade.
On that note, I had a buy of F(ord) today at $12.13 but what I did was enter it at the ask price of $12.12, a penny below because I've noticed that almost always there is a minor dip the next day around 10-10:30 that would catch the slightly lower price to execute.
Lo and behold, the execution was instantaneous and the price went up $0.02 right after. Maybe I should have gone for $12.11. Oh, well, it wouldn't have made much difference anyway - $0.70 - in the long run.
Best,
Allen
Hi Tom, Thanks for the suggested portfolio allotments, but please, no Crammer, excuse me, Cramer additions. See David O. England's site where he posts:
Hi Adam, Since it is an inherited IRA I had no say in the original formation of the portfolio, also the IRA was split in two, half for me and half for my brother which made it a little screwy as the number of stocks were simply divided in half, not consolidated so that the size of each stock position was too small to start AIMing and that there was no loose cash so some would have to be sold to meet the requirements of AIM.
As to a stock taking a dive, yeah if it is an Enron, a Washington Mutual Bank, or a Lehman Brothers, you would not get out of it with skin intact. However, this list: Merrill Lynch, AIG, Freddie Mac, Fannie Mae, and Royal Bank of Scotland, all were within a whisker of total failure but came back. So, like the economy as a whole, it is a craps shoot.
Best,
Allen
Hi Toofuzzy, Thanks for the message. I have read it.
On the issue of 100 versus 1000 shares I did not realize you were AIMing the same stock that you were doing option trades on. Given that you are quite correct that one would need 1000 shares so that you could limit your sells to ~10%.
Thanks,
Allen