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Hi Tom, Bizarre, bizarre, When I first looked at your post I saw the zig-zag but when I just looked at it to print it out to study the zig-zag was gone! Could you repost it?
Thanks,
Allen
Hi Clive, (Orcroft as well), Sorry about the wrong attribution.
There is one problem with
Hi Gang, As I was creating the spreadsheet for Ford (F) a thought occurred. I've been using the last trading day of the last full week of the month, i.e. 5/27/2016, 6/24/2016, etc. Does that make sense instead of 6/3/2016, 7/1/2016 each of which have the actual last day of the month during the week?
Thanks,
Allen
Hi CanRay, Considering the market over the last year and that you are just learning AIM I'd say you had a good result. We all make mistakes as we are learning a new process.
One of the gentleman on the list, I believe it was Clive, told us how he starts a position. I'm sure he'll correct me is I misstate his approach.
As I recall it is to wait to the second up tick after a slide down. I don't recall if his monitoring of prices was weekly or monthly. I look at the price direction on a weekly basis because, to me, there is too much time between checks if it is done monthly.
Oddly, I put in a GTC+extended day order for Ford, (F) based on what I had seen a few weeks ago. I set the price $0.02 below the $13.07 that I had seen as the second up from the weekly bottom of $12.55, figuring things tend to bounce around near the bottom. One of the trust accounts got filled at that price but not the other, not sure I understand why. In any case I got filled at the $13.05 today and ended the day at $13.16 and after hours of $13.19!
Based on the $13.05 and the last 12 months of dividends of $0.85/share that's a 6.5% dividend.
I'd have done better if I had been following it from the first of the year as it hit $11.55 the week of February 1st and the price I could have gotten in at would have been around $12.10. Oh, well.
BTW, Ford has a beta of 1.4 and a Trailing P/E (ttm, intraday): 6.09, quite low compared to the market as a whole.
So, you are quite correct, waiting is a key part of investing.
Best,
Allen
Hi Gang, About 20 days ago I got a sell for about 13% of VNR for a small but nice bonus and then yesterday I got a buy for about 21% of what was left at $1.48, but my internet was down so I didn't see it until today after market. Then today it closed at $1.47. Wasn't quite sure what to do so I looked at the action today and the bid ask range. I set a price of $1.45 GTC+extended because I noticed that yesterday it dipped to $1.42 just after 10am and the bid ask was now 1.44 to 1.47. Well, I got the buy a bit ago and dropped my average price to $1.59 from $1.62.
Best,
Allen
Hi Is7550, I was playing with your first scenario and went to 27.5% stocks, 30% each long and short term Treasuries, and 12.5% Gold and got $90k more, a lower max loss and a better CAGR of 8.77%. Shows to go you if we had the smarts then we do now we'd be, well maybe not rich, but more comfortable.
Of course backtesting is not the same as real trades For example US Stocks seems to assume the whole market or some very large part of the market, however we only buy a portion of the market and we could be very wrong in our choices. Oh, well.
Best,
Allen
Hi Tom, Are talking modern commissions or those of 20-30 years ago? If relatively close - $10-$30- where do I send the check?
Best,
Allen
Hi Firebird400, Aren't you glad I told you about LEE? I did not hop on it when you did as I wanted to paper trade it for a bit but now that it is down cycling I'm going to give it a try.
I was able to free up some cash so do you have any suggestions for a Pocket Change Portfolio?
On a totally off topic thing, I was doing a malware scan with IObit and afterward I could no longer access finance.yahoo.com, at least I think that was the cause. Been trying to find a solution but nada so far. Anyone got a tip or a good place to search for a solution?
Best,
Allen
Hi Steve, The reason I am looking at this is trying to see if it is possible to create settings that work with shorter range positions. Many ETFs have a relatively narrow 52 week range so AIM, in its standard form, never gets a buy or sell in any reasonable time if you don't buy at the top or bottom of the 52 week cycle. Oh, well.
I moved one stock, GNL, into AIM wanting to reduce the size of the position and played with the buy safe because I did not want to get any more. I had to go to 200% to avoid buys after a sale of any size.
Best,
Allen
Hi Steve, I noticed that with the parameters you show a move from the $9.35 share price to the sell at $11.69, requires a 25% move and yet the safe and minimum shares are each 10%. The buy at $7.67 is only 18% down from the $9.35 price dividing 7.67/9.35, which is the way I was taught to figure what percentage a lower number is of a given one. It's a 21% move if you divide 9.35/7.67, which is to say how much the price would have to move up to get to the $9.35 price.
Do you know why the difference?
Also, I was playing with the sheet in my copy of LD-AIM and noticed that it is tough to set a very narrow range. It only allows ~ -4% on the buy side before it flips over to a sell price. Using the Bare-AIM spreadsheet I can use negative numbers smaller than -4% which lets me tighten the range for those positions with a narrow 52 week range.
Best,
Allen
Hi Firebird400, I'm curious, what did you pay for Lee?
Up 10% from yesterday's close. Sweet.
Allen
Hi Toofuzzy, All I got when I did the copy and paste into an e-mail was the HTML code for the layout. Is there a trick I'm missing?
Is what you posted for the AIM account HOLD ZONE Calculator or for the AIM MARKET ORDER CALCULATOR?
I wanted to get both as I explained to Ia7550 to included in the spreadsheet, apart from the basic recording of prices that the BareAIM.xls does.
Thanks,
Allen
Thanks Is7550, That works, but what I wanted to do is change the "Minimum Purchase % Of Stock Shares" to a percentage of portfolio control and compare with the original. Oh, well, back to grinding through Excel/OO and see what I can make that works to match the original and then do it again to try the %age of PC.
A while back I got close to getting a spreadsheet version working and life got in the way of completing it, as it has a way of doing.
What I want to do is take the original BareAIM.xls and add a bunch of stuff like dividend capture, CGR - Compund Growth Rate, commission costs and %age of stock price as opposed to portfolio %age change as well as the two ways of calculating buy/sell actions.
I've done the CGR and the %age of stock change, and thought I had done the commission but found an error so have to redo that but I think I know how to do it now.
Best,
Allen
Hi Toofuzzy, I've misplaced the post number where you explained how to capture the calculations behind the online calculator at http://web.archive.org/web/20120609073103id_/http://www.aim-users.com/calculator.htm
I tried to do what I had remembered and it did not work.
Thanks,
Allen
Hi Toofuzzy, Thanks for the explanation. It helps.
What about setting the buy safe to 50%? This would prevent buys and let one sell more in a shorter period of time. I would think that would be good to help sell off the unwanted share if the stock is not all that volatile.
Thanks,
Allen
Hi Gang, I came across LEE and it might be worth looking at for a Pocket Change position. I did a back test on it from the first of the year and it would have been about 21% gain to today. It is quite volatile with 11 transactions since the first of the year.
I used 50% cash 10% buy/sell safe and minimum transaction of $1000.
The analysts at one outfit are saying it is a strong buy.
Best,
Allen
Hi Toofuzzy, Sorry about not being clear enough. The problem is two fold, first is the exchange of current income for declining value of the position, the second that the amount in some of these positions is too big compared to the total value, both current value and purchase cost, of the trusts. This came about because partly because of needing to place largish chunks of money all at once. One example is a non-traded REIT that paid a bit over 8%, and then it became a traded stock and it almost immediately took about a 10% drop in price as well as some strange restatement of the basis from $10/"share" purchase price to about $9.85/share after being listed.
Given that the position was too big for the portfolio, the goal is to not loose a bundle that would take years to recover - my mother panicked during the 2008 downturn and sold a bond fund for about a 40% loss that is she had merely sat tight it would have fully recovered by the middle of 2009 and been up somewhere around 15% compared purchase. My goal is to avoid that problem.
As to your suggestion of how to handle this, I'm not sure I understand your way of doing this:
Hi Gang, Neat little calculator for S&P 500 all the way back to 1871 - not sure what they use prior to 1950 as the figures - but it looks rational,
http://www.moneychimp.com/features/market_cagr.htm
It even has inflation adjustment if you like and you can select the range of years you would like to analyze.
Have fun.
Allen
Hi Gang, As you may remember when I took over the trusts my mother had traded current income for decreasing position value. That's not quite accurate but it works for this discussion.
So, not wanting to lock in significant losses I've mostly been sitting on things waiting for a bit of a turn around, doing a bit of tax loss harvesting to reduce taxes and increase cash positions.
I've struggled to try to move things into AIM positions and I think I finally have found a way. For discussion purposes let us say that 8000 shares were bought at $10/share, but it is now trading in the $8.00-$8.50 range, i.e., 15-20% loss.
What I did was go to an arbitrary point in the past, 1/1/15, and took the price at that point, end of December 2014, as a starting point, let's say $8.15, and multiplied the 8000 shares by it to get $65,200 as stock value. Then I multiplied it by 1.25 to get $81,500. Subtract $65,200 from it to get $16,300. I ignored the actual cost per share.
Then I entered the $81,500 as the Initial Investment - Dollar$, with the Initial Investment - Percent Cash % as 20% or $16,300. I set buy and sell safe at 10% with the minimum $1500 transaction amount and a minimum share number of 150.
From there I poured the prices as recorded by Yahoo into the spread sheet and looked at the resultant trades. What I found is that almost all of the loss of ~$18,000 that had existed had been recouped just using the volatility of the market. Mind you this did not include transaction costs, about $750 and the taxes on the earnings. But the beauty of this is that almost no taxes would be owed as I used the "Highest Cost" for the sale price gain calculation. So if I sold at $8.00 I lost $2.00/share for tax purposes. When I bought it would be at a lower price but I held those in reserve. This way I managed to accumulate about $8000 in tax losses in addition to increasing my cash.
Of course this is just back testing, but I tried a couple of different positions and got similar results. Much much better than holding out for the market to recover.
We'll see how reality pans out.
Best,
Allen
Best
Hi Tom, In thinking about your post:
Hi OG, Thanks for the mention of Quandl, didn't know about that source of data. Also one can use Excel for some of the data. It'll take quite a bit of study to know that what one is doing is meaningful and useful for AIM. We ought to trade tips as we go so we can make faster progress.
It seems to me that three criteria that might prove useful for AIM are short term volatility to increase number of trades per year, price range sufficient to generate trades and sufficient trade volume so we don't stuck holding the bag. Might want to add whatever Firebird400 is using for selecting the Pocket Change Portfolio.
Can anyone suggest other criteria that could prove useful?
The other thing is that there are a number of free communities around Quandl that may well be worth looking at.
Best,
Allen
Hi Tom, I said:
Hi Tom, Yep, what you say makes a lot of sense, but one question, since you are buying a bigger lot compared to Lichello aren't you more likely to run out of cash in a long down like we have had over the last year or so?
Second, how do you implement this in the spreadsheet?
In my version I have in the first line of the Buy Safe =IF(A10<>"",A10,"") where A10 is the fixed %age value at the top of the sheet labeled Starting Buy Safe % . Would this then change to =IF A10<>"",(A10*I20),"") where I20 is the starting Portfolio Control and then progress down the sheet as Portfolio Control Changes?
It seems that the number being sold would also go up as Portfolio Control goes up because of the buys. Is this correct? If so it does not seem that the accumulation would grow all that much but over a number of cycles it would more or less balance out, correct?
Thanks,
Allen
Hi OldGrantonian, I stumbled across this today and thought you might be interested.
https://pythonprogramming.net/python-fundamental-investing/
If you are not familiar with Python he has an intro tutorial as well.
Also, if you give me your email address I'll send you my version (adapted from the BareAIM.xls) which has a few nice features such as calculation of return on daily/weekly/monthly basis, and if you like a variation that helps with backtesting and trying ideas like delayed buy/sells.
Best,
Allen
Hi Firebird400, Obviously you are doing well with your Pocket Change Portfolio, what I want to know is how you are finding them, how large is each position, and how many, typically, do you have working at any one time?
Am I right that you monitor them daily for signals?
Thanks,
Allen
Hi Gang, Another one that hit recent bottom on February 11th - Eaton Vance Tax-Managed Global Diversified Equity Income Fund (EXG) Paying a bit over 11% and has been steady on dividends for the last couple of years.
Best,
Allen
Hi Toofuzzy, You said:
Hi Toofuzzy, You ask:
Hi Toofuzzy, Well, that may be your position but it was not Lichello's. On page 40 of the third edition, 1992, which, by the way, has few changes in the setup discussion from the second, (still can't put my fingers on the fourth) he talks of $10k, $5k stock and $5k cash. On page 88 he chart Rowe Price with a starting total of $10k. On pages 100, 108, and 146 it is the same $10k. On page 261 he talks about starting with $5,250. On page 263 he talks about a $3,000 and a $4,000 fund when he is comparing 50/50 split cash/shares versus 33/67 split cash/shares.
In addition he postulates that this will be spread over several stocks, not just one, see pages 203 and 204 for example.
Nowhere can I find any reference to selling a percentage of the shares, only dollars. On page 196 he says, "...I ignore buy-and-sell orders from AIM for less than $500." On page 265 he talks about setting the minimum buy/sell as 5% of stock value, not number of shares.
Best,
Allen
Hi Gang, Looks more and more like February around the 11th is the bottom for now. I was looking at JNK and it hit bottom on the 11th at $31.49 and is now at $34.13. It hit $41.75 in 2013 and has headed down since then. It pays about 6.5%, not great but not shabby either considering the banks.
I think once I understand TradeStation I may use that for my cash reserve given the low cost of trades. Does anyone have a better place to hold one's cash reserves?
Thanks,
Allen
Hi Toofuzzy & Adam,
TF, When you point to the site in the UK be sure to tell them to ignore the £ sign on the price per share if they are using dollars as the results are the same.
Adam, you are quite right that setting the % to 10% rather than 5% gets the same results as the spreadsheet, sort of. It is the same on the sell side but less than the dollar amount on the buy side. 10% stock is a sell at $1.41 - $423 - 300 shares with the online calculator versus $1.35 - $608 - 450 shares for the spreadsheet. This shows that the minimum $ transaction overrides the % of shares in spreadsheet.
Lichello says in the 1985 edition that one should ignore trades below about $100. I suspect that he did not change the dollar amount from the first edition in 1977. Inflation from 1977 to 2016 is about 400%, i.e., $100 then is about $400 now.
Haven't had time to do it by hand as I re-read Lichello's 2nd Edition, 1985 - couldn't locate my 2002 edition.
One thing that struck me as I was re-reading is that the best position to get for the best results for AIM is one that has rapid ups and downs over a big enough range to make the commission costs a low enough percentage, especially since many trades are only 100-200 shares for those of us with a limited available free money. This is where TradeStation shines, minimum trade cost $1.00 or $0.01 per share when over 100 shares in a trade.
Best,
Allen
Hi Gang, Take a peek at TROX, currently ~$6 with a history of steady dividends, currently ~16.5%, but is likely to be lowered to around 4%. Stock price seems to have hit bottom about the middle of January. Beta around 3.2 Makes titanium oxide and has raised the price $175/metric ton. I suspect it will hit a downward price bump when next dividend is posted around June.
Might be worth watching.
Bes,
Allen
Hi Gang, Odd difference between the online Quick AIM Calculator and doing the same with the spreadsheet.
VNR
$5,717.65 Initial Investment - Dollar$
$1.62 Initial Stock Price - $$/Sh
15 Initial Investment - Percent Cash %
150 Starting Minimum Trade - Number of Shares
600 Starting Minimum Trade - Dollar$
5% Starting Buy Safe %
8.50% Starting Sell Safe %
Portfolio Control $4860
# of Shares 3000
@ Stock Value Above $5618
Min Sell Order Size $281
Min Sell Price $1.87
Min # Shares Sell 150
@ Stock Value Below $4418
Min Buy Order Size $221
Max Buy Price $1.47
Min # Shares Buy 150
Hi OldGrantonian,
You can get a copy of the original book and further editions for less money than Amazon at Alibris.com
4th Edition http://www.alibris.com/How-to-Make-1-000-000-Dollars-in-the-Stock-Market-Automatically-Robert-Lichello/book/28671960?matches=15 = prices run from $5.00 up to ridicules.
3rd Edition runs $0.99 up to ridicules.
I have copies of all 4 editions and if I recall correctly they cost about $25 including shipping.
Myself, I prefer paper when studying something. I find Kindle, etc hard on the eyes for more than light reading.
There is also an interesting chart on AIM at:
http://unrulydog.com/WordPress/scans-portfolios/warning-htmlspecialchars-charset-utf-10-not-supported-assuming-utf-8-in-homeunrulydopublic_htmlwordpresswp-includesformatting-php-on-line-2747warning-htmlspecialchars-charset-utf-10-not-2
Best,
Allen
Hi Gang, Since I didn't hear from anybody hear about my question as to the best way to sell my 93 shares of PSEC in the three accounts (the actual EOD was $7.27) what I decided was to set a limit sell at a penny higher than the $7.27 AIM called for. Got a sale in all three accounts I manage at 12:04+/- a few seconds (EDT) at the limit price.
When you look at the chart for the day, it did, indeed, start the day lower ans slumped still lower then picked up in the early afternoon and got as high as $7.295 at one point then dropped back to $7.27 at the close.
My logic was that if the day started higher than the limit no problem and it hit the limit later in the day it would be most likely be after the common morning slump and that is what happened.
Best,
Allen
BTW, what does everyone think of TradeStation? They have a lower commission and can, in fact, pay a penny a share which for AIM type sales and buys on the first 500 shares and 0.006 above that. There is a minimum cost of $1.00/trade. It also seems well suited to AIM for scaling in or out of a position is a max of $5.00 for 500 shares. This sounds great for the Pocket Change Portfolio.
Hi Gang,
Due to illness I missed a sell in PSEC earlier in the month on the daily chart. Didn't worry all that much as I was using the daily to look at volatility and see what effect it had compared to weekly and monthly. Well, I was busy near the end of the market today and when I entered the closing price, $7.26, I got both a sell in the daily and the monthly, this being the last day of the month. Then I went and looked at the chart and noticed that in post market it had dropped to $7.22. At $7.26 the call is to sell 92 shares, at $7.22 the call is to sell 87 shares. Obviously it is not all that big a deal, only about $35 but what I'm looking to do is add a rule to my rule book.
My question is, should I pay attention to post market action or not?
The next question is I've noticed that in almost all positions I have looked at there tends to be a low point somewhere between 10 and 12:30 PDT and, for the most part, ends the day higher. If I can not monitor the price action in real time - I'm busy with other things for example - any clues as to how to avoid the low points in selling? Should I use a limit order, EOD order, or just accept whatever happens?
BTW, an observation over about 50 possible positions shows that the low point in recent prices was about February 10-13th. Rocky after that but still above the low point. Does this match what you've seen?
Thanks,
Allen
Hi Ray,
Thanks for the info. My e-mail is 60e20f21@opayq.com
Best,
Allen
Hi Grabber, Why do you use LIFO? It would seem to me that highest cost would be the best method because, A) If you are selling at a price lower than purchase you gain a tax loss offsetting other gains, and B) if you are selling at a price higher than purchase you minimize gain and therefore taxes owed.
True, if you eventually sell out completely you will owe the taxes on the total gain. However, it seems to me that one wants to be in a position for a long time, perhaps even having it inherited by our kids, therefore the basis will become the price at the time of inheritance therefore saving a bundle on taxes.
Thanks,
Allen
Hi Adam, Do you have a pointer to how the Don Carlson ladder method works? In a quick search I could not find anything.
Thanks,
Allen