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Hi Neko, What is the title of the book by Brian J. Millard? I try to read a broad range of stuff, not that I believe everything I read, that's for sure!
Best,
Allen
Hi Gang, You'll never believe this! I was rereading the AIM bible and realized I had never seen what Lichello wrote about Syncrovest. Well I went to my favorite used book source, Alibris.com, and found that the cheapest copy of "Superpower investing; the superpower way to bank and invest your money (featuring the revolutionary new investment discovery SYNCHROVEST)" listed at $54.50 and a "collector's copy" at $550.77.
Holy guacamole! AIM 4th edition book ranges from $1.25 to $91.96. What makes Super Power Investing worth so much more? Picture me scratching my head!
Best,
Allen
Hi Ken, Thanks a whole bunch for sharing your Pocket Change Profile info, especially the criteria and your sources.
Best,
Allen
Hi Neko, You say VWINX is getting 6%? I just looked at Yahoo and TDAmeritrade and they both say: "Distribution Yield (TTM) 3.04%"
How do you figure 6%?
Best,
Allen
Hi Toofuzzy, Yeah, I forget to use it. I'd rather have it in a spreadsheet so everything is in one place. I'm not sure how to implement it, though.
Interestingly enough when I went to the Quick AIM Calculator and put in a couple of samples to see what the result would be here is what I got for 5, 5, 10:
That's 17.7% for a sell and 13% for a buy. Personally I think that is a bit hesitant for a sell and too aggressive for a buy.@ Stock Value Above $11765
Min Sell Order Size $1177
Min Sell Price $11.77
Min # Shares Sell 100
@ Stock Value Below $8696
Min Buy Order Size $870
Max Buy Price $8.7
Min # Shares Buy 100
This would be a range of 30% total from low to high, from $8.50 to $11.50 starting with $10 as the buy in.@ Stock Value Above $11501
Min Sell Order Size $1150
Min Sell Price $11.5
Min # Shares Sell 100
@ Stock Value Below $8503
Min Buy Order Size $850
Max Buy Price $8.5
Min # Shares Buy 100
Hi Adam, Calculating on profit only is certainly one way of doing it, I just don't happen to think that way.
Best,
Allen
Hi Toofuzzy, Adam and the rest of the gang, While the buy/sell safe governs when the price of the position per share is high, the minimum $ trade governs when the price of the position per share is low.
I tend to use a $500 minimum trade size to keep the commission low. With TDAmeritrade that is $9.99 or a hair under two percent.
Using a minimum percentage trade size avoids this but seems to require a bigger price move when the price of the position per share is high. At $100/share and 10% of the shares as the minimum trade size, it looks like one would get a $1800 trade size with LD-Aim set 80% stock, 20% cash. This keeps the commission % low.
My spreadsheet is not set up to do a % minimum trade but rather a fixed number of shares and a fixed $ dollar amount so I'm not sure I'm correct about, I tested by fiddling with the fixed numbers.
I don't recall seeing a spreadsheet that uses the % minimum rather than a fixed number. Where is a spreadsheet set that way?
BTW, with PSEC it takes a bit over a 20% price to generate a sell and about 23% to generate a buy. This is using a buy/sell safe of 10%. 50 shares minimum trade and $500 minimum size. The share count has no effect in the price range of PSEC. If one sets the buy safe at 20% it actually takes about a 30% change to create a buy.
For the % shares to be the dominant factor the price per share has to be over $10.
It's clear to me that the exact point a buy or sell happens needs to be checked as the % of the buy and sell safe is not directly translatable into an actual buy or sell action.
It is amazing what one learns over time even when we think we know how something works. Also how small changes in the way the spreadsheet is constructed can have more effect than we might realize at first.
Best,
Allen
Hi Gang, In looking at low range positions last night It occurred to me rather than adjusting the buy/sell safe it might be easier to multiply the price movement by a calculated amount of the range.
I.e., if the range is 1/2 of the 2:1 then add a column that multiplies the current price move by 2 to enlarge the range and allow use of standard buy/sell safes. In a quick test it seems to work better than adjusting the buy/sell safe.
In doing the quick tests it does not seem to have the irregularities that adjusting the buy/sell safe does. I'm not sure why but I wouldn't advise adjusting buy/sell safe for low range positions now that I have tested them more as there seems to be quirks requiring lower than calculated buy/sell safe to actually get traction.
Best,
Allen
Hi K, The inverse AIM seems like a good idea, but I confess I have not spent much time on understanding how the spreadsheet is set up. Do you have a version of what you are using for this post that I could have?
My e-mail is 60e20f21@opayq.com
Thanks,
Allen
Hi Gang, "Brilliant" thought. I've played around with setting buy and sell safe percentages for positions that have a reduced range and had not found one that seemed to be right. Today I was creating a new AIM spreadsheet and it dawned on me that since a 2:1 range is needed with a 10% buy and sell safe to generate at least the minimum volatility and realized that there was an easy way to create approximately the same relative safe percentage for a reduced range.
Take GDXJ, 52 week low of $16.87 and high $27.29, a range of 1.617 to 1.
A 2:1 range would be $16.87 to $33.74 or a 16.87 range. GDXJ has a 52 week range of 10.42. Now divide 16.87 into 10.42 giving .618. Now multiply 10% by .618 and you get 6.18%
Of course one could use an 104 week range if you think that more accurately represents how the position actually moves. Personally I think that may include too much. What if the market correction makes the 104 week range greater than 2:1, will that range be likely going forward? This may argue for using only 26 weeks or perhaps 13 weeks as the baseline range to work with. Hard to tell.
It may be that you want to make the buy and sell different but the baseline needs to be 6.18% and not above that or you reduce volatility/range needed to get a buy or sell, and in fact you may never get a buy or sell if you go above the 6.18% safe zone. Lowering it speeds up the action but may not generate a large enough buy or sell to keep the trade cost percentage low enough. You'll have to play with that a bit and it depends on the price of each share and how many you bought.
The other adjustment you might want to make is to your standard range. Do you want 2:1 or perhaps a 2.5:1 range? I have not tested this yet.
I've run two samples and it seems to improve results. However, again, your mileage may vary.
Best,
Allen
Hi Gang, No snow here, in fact quite warm - 70s.
Back to the real (wealth) weather indicators. The overwhelming majority of positions I have looked at seem to have hit a recent low on February 11th and these are all up since then. I wonder if that is the bottom of the current "correction?"
This roughly fits past history for the DOW from 1900 to 2008. See: http://www.seasonalcharts.com/zyklen_wahl_dowjones_election.html
If this year fits the historical pattern then expect another downturn starting near the beginning of April. Then from roughly the end of May to the end of the year is a ramp up of about 8%.
Opinions?
Best,
Allen
Hi Steve, By Retail do you mean Consumer Discretionary sector or Consumer Staples sector or are you combining them for a generic view?
Consumer Discretionary has been quite volatile over the last couple of months while Consumer Staples considerably less so. Given this and AIM needing volatility to work best perhaps we should look for possible ways to harness the Consumer Discretionary volatility.
Best,
Allen
Hi Orcroft, Thanks for the clarification. Sometimes one goes off in the wrong direction when looking things.
Best,
Allen
Hi Gang, Very interesting article on how the big guys look at potential investments at (UDF in this instance):
http://finance.yahoo.com/news/lessons-learned-kyle-bass-shorting-164134371.html
We can't really do this sort of analysis because we don't have the resources but it is useful to understand it.
Best,
Allen
Hi Tom, Thanks for the info on the P/E + either CPI or the 13 week
Treasury notes.
Perhaps we could add this metric to the reports JD does on the board. It seems silly to have each of us do it individually. Shared info makes us all stronger, even if we don't use all the possible info.
Best,
Allen
Hi Orcroft, Aah, I see. A 20 year view would hide the shorter MCAD crossovers. In fact, with GDX, it is hard to see the current crossover on the Zacks chart. What do you use to see it clearer?
The other question, GDX does not have quite 10 years of history but close enough for government work, as they say. Does this mean that you don't even look at those, like many ETFs, that have only 5 years or so?
Best,
Allen
Hi Orcroft, When I click on your link there are no parameters listed so I added both of yours and made the time frame 6 months then had it redraw. See the image below.
Where the arrows are is what I am talking about. The MCAD is not as clear as the EMA. On the point you were talking about the MCAD crosses over before the EMA just as it does for the one I'm talking about.
Sorry about the image being a bit on the small side. If you enlarge the image after selecting it with <ctrl> + (that is hold down the control key and hit the plus sign) you can make out the parameters I used.
Best,
Allen
Hi Gang, Have you bought your lotto ticket for the week? Maybe you'd rather do a craps shoot? UDF just got raided by the FBI. Not totally clear why but it might be that there is some saying one thing and doing another with their investments.
http://ih.advfn.com/p.php?pid=nmona&article=70453282
It opened today at $7.40 and when news got out near the end of the day it dropped to $3.20. It went from ~22.7% dividend to ~51.4%. Volume is quite low at about 14,000 shares a day.
Best,
Allen
Hi Orcroft, I noticed that back at the beginning of October 2015 there was a crossover but it crossed back in what looks like the first week of December. What did you think of it at the time?
Thanks,
Allen
Hi Gang, Finally got a buy to start AIM for PSEC at $6.59. It currently is paying ~15%. Because I did not sleep properly the last few days I missed getting it when I should of, about $0.35 lower.
It currently is paying ~15% dividend with ex date of the 25th and has a beta of .4 according to Yahoo but .7 according to TDAmeritrade. Google says .75 so I guess .7-.75 is more correct. It is currently ~26% above the 52 week low. That low was February 9th at $5.21 and it hasn't been that low in about 5 years.
I'm not sure if I should leave GTCs sitting on these sort of things because a number of people say that if you do it is easier to see what the market as a whole is doing and making it easier to manipulate. What does everyone think about this?
Best,
Allen
Hi Gang, There is an interesting read that dings ETFs, like SPY, as being "black boxes" at:
http://globalslant.com/2015/12/hedge-funds-courageous-performance-fee-structures-rule-risk-less-management-fees-flounder-2/
There is a lot of other stuff in the article so you might want to skim until you see the ETF stuff.
I'll have to think about a bit more to figure out what final conclusions I come to. Always worth reading this sort of stuff, even if one winds up not agreeing with it as it stimulates one's thinking and exposes one to other viewpoints.
Best,
Allen
Hi Toofuzzy, You may well be right about 400 years ago, but think of 1900 compared to today.
Given that I could only find two in a casual search I should hope that they are profitable.
Why wait until you need an oil lamp? Mine, extra wicks, matches, and lamp oil are on a cabinet next to the front door, honest. Would you like a photo?
Best,
Allen
Hi Is7550, Your PS is most interesting strategy. It certainly makes sense to not have non-earning cash sitting around. The only real question is being sure you use your cash for something that is likely headed up in any given market cycle. Overall gold has lost money over much of the last several years (-4.3% real returns over the last 5 years according to https://www.bullionvault.com/guide/gold/Annual-asset-performance-comparison) so one has be careful.
However, a longer look at performance may actually be the wrong one because, as the brokers say, past performance is no guarantee of future performance. Truly a roll of the dice craps shoot that one hopes to load the dice with a bit of research and seeing how others are behaving.
Best,
Allen
Hi Tom, Adam, Yes, both of your comments are accurate. I am not suggesting that more than a portion of a portfolio be in individual positions, just a way to boost overall return a bit.
Say you have a position in a sector and you also have a 10-20% position in one of the elements of the sector. You'd need to look at both the sector and the company's history, prospects, (Obviously one would not invest in buggy whip manufacturers.) as well the position of the economy relative to what is happening in the world as well as the business cycle. This will not guarantee success. Even Warren Buffet is wrong at times.
I think it might be worthwhile to paper trade a structure like this and see the results
As an aside, I noticed the other day that he is credited with saying:
Hi Gang, Someone was talking about investing in style ETF/ETNs. I stumbled on this: http://www.wwfn.com/crashupdate.html
But what I was really going to chat about is another approach that I have seen that might give more volatility than straight ETF/ETNs.
As I understand it the idea is that the top 2 or 3 inside an index/ETF/ETN will out perform the index/ETF/ETN itself.
Take a peek at http://www.investshare.com/services/etfbully/diacomps.htm as one example.
The DIA index has has gained 2.9% but VZ has a gain of 14.2%, WMT 9% and MCD 8.2%. (The period start date is not clear but the end date is in the upper right corner.)
But what may be of more interest for AIMing is the worst performing stocks in the index. For the Diamonds that is BAC at -3.5%, IBM at -4% and AXP at -13.1%.
Here are the links for the index/ETF/ETNs that I have found.
http://www.investshare.com/services/etfbully/diacomps.htm
http://www.investshare.com/services/etfbully/spycomps.htm
http://www.investshare.com/services/etfbully/qqqqcomps.htm (4 q's is correct to get to the right place.)
http://www.investshare.com/services/etfbully/kbecomps.htm
http://www.investshare.com/services/etfbully/xoicomps.htm
http://www.investshare.com/services/etfbully/huicomps.htm
http://www.investshare.com/services/etfbully/smhcomps.htm
http://www.investshare.com/services/etfbully/iyrcomps.htm
These appear to be the only ones dissected at that site. There may be others at other sites, but I have not found them.
Best,
Allen
Hi Gang, This list is from David England's Cramer Challenge and is some of the worst losers from Jim Cramer’s Buy Right Now List-Restaurants and Retail, which may mean that they may rocket back at some point. Who knows, I sure don't.
http://davidoengland.com/wp-content/uploads/2016/02/Cramer-Challenge-Returns-2-8-16-FINAL-A.pdf
JACK Jack in the Box Inc. -22.30%
HBI Hanesbrands Inc. -29.51%
AN AutoNation, Inc. -29.81%
DKS Dick's Sporting Goods Inc. -35.16%
M Macy's, Inc. -41.65%
KMX CarMax Inc. -41.99%
URBN Urban Outfitters Inc. -45.47%
KSS Kohl's Corp. -45.62%
DDS Dillard's Inc. -50.35%
There are a few more but they are mostly Tech sector which is even more volatile.
Best,
Allen
Hi Gang, I was betting oil related would go down more. The market is so crazy it is hard to tell what's next.
I was looking at the NBER business cycle stuff at http://www.nber.org/cycles.html and also SPY (As a proxy for the S&P 500.). One might get somewhat different results, depending on what you are using for metrics. In looking at the last several down trends they vary from 18 months down to 8 months. Looking at NBER's 2007-9 which they say was 18 months, the SPY peak to trough is only 14 months.
In looking at SPY the current market seems to have peaked around November 3rd, 2015 and has, for the most part, been falling since then.
Digging a bit further into the NBER data for the last few cycles, the last two troughs ended a from 8 to 12 months after the Presidential election. The previous two ended from 12 to 26 months before the election.
Prior those 4, there does not seem to be all that much correlation to the Presidential election cycle.
What to make of this? It seems to me that there are actions taken by the politicians - which is not clear - to ensure that the worst happens after or well before the election.
Applying this to the current situation it "might be" that we can see the market continue to be volatile and overall headed down until sometime next year so it might be wise to keep your powder dry and sit on your hands for a while more.
Of course there are some situations, like Firebird400 has found, where you can still make money in a stumbling market.
JAWAG - Just a wild ass guess.
Best,
Allen
Hi Gang, Holy Moly, have you looked at DWTI? It is an inverse 3x crude oil ETN by VelocityShares. You want daily volatility? Take a peek at this since the first of the year:
Date Close Diff to prior day
1/4/2016 177.60
1/5/2016 207.48 16.82%
1/6/2016 230.72 11.20%
1/7/2016 246.02 6.63%
1/8/2016 256.40 4.22%
1/11/2016 279.24 8.91%
1/12/2016 300.10 7.47%
1/13/2016 303.25 1.05%
1/14/2016 307.00 1.24%
1/15/2016 356.10 15.99%
1/19/2016 367.55 3.22%
1/20/2016 415.33 13.00%
1/21/2016 362.20 -12.79%
1/22/2016 282.34 -22.05%
1/25/2016 302.12 7.01%
1/26/2016 270.00 -10.63%
1/27/2016 262.00 -2.96%
1/28/2016 225.00 -14.12%
1/29/2016 226.60 0.71%
2/1/2016 266.26 17.50%
2/2/2016 313.00 17.55%
2/3/2016 248.03 -20.76%
Hi Gang, You might want to take a look at AEUA. It is a unit trust and is paying ~14% and has a dividend date of 2/19/2016 in the amount of $0.9375/share. This might be a good oil stock to have going forward. Then there is VNR which is paying ~17%. It pays monthly.
In looking at oil to AIM I figure that oil can't go down all that more before pumping stops thereby creating shortage which would drive prices up. The really nice thing is that it takes time to get the shut down wells back online, keeping the price of oil up for a while. Anyway, almost all I have looked at had a current bottom on 1/20/2016, plus or minus a day, and are went up from that low of almost ~10% and are headed down now. This includes the ETF/ETNs OIL, USO, and UWTI. I have not checked all the ETF/ETNs.
Best,
Allen
Hi Gang, I suspect that Chevron, CVX, is worth looking at. It was reported they lost ~$850 million last quarter.
This is the first quarterly loss since 2002. "Chevron's full-year 2015 profit of $4.6 billion is the lowest annual total in 13 years." (Dow Jones)
The stock is quite volatile as it was at ~$75 less than ten days ago and closed at ~$86 today, before they revealed last quarter's results.
I'm going to put it on a watch list as it looks like their credit rating, currently AAA, will be downgraded so might fall down to to the 52 week low making it a good candidate for going up over the next couple of years. If oil continues down, combined with a credit rating downgrade, Chevron might drop below the 52 week low. Also the dividend is $1.07 quarterly, ~5%/year. If they cut the dividend it is likely to put more pressure on the stock price.
Who knows when, but it is likely that oil will rebound down the road somewhere.
Best,
Allen
Hi Firebird400, So what are the elements of the "The Pocket Change Portfolio?"
Best,
Allen
Hi Tom, Yeah, little things do slip by us and language is quite slippery!
I was in a hardware store with a friend and we got into it about a way to fix something. Just as the store manager came to see what was the matter we both realized that we were wanting to do things the same way but describing it differently. My friend answered the manager's question by saying, "No problem, we were just agreeing loudly." I always thought that was a great response.
Best,
Allen
Hey Tom, My memory of math is certainly not perfect but I was taught that subtracting a negative number was actually adding a positive number, so why does subtracting a negative oscillator from the VWave make the VWave smaller?
Thanks,
Allen
Hi Toofuzzy, Nah, too honest for my own good. Well, not strictly accurate as I recall using some cash to go out to lunch a few times. Don't recall if I knocked down the money received to account for this, I suspect not as I would have to created a new invoice and that would have been a pain as they were numbered via the letterpress. Running off a single copy would take too long.
Best,
Allen
Hi Toofuzzy, God, I wish I knew about having 3 sets of books back when I had a print shop. I only used one.
Best,
Allen
Hi Alton, You know I'm glad you refer to Mr. Market as I would not like to blame women for the craziness we are seeing. :)
Best,
Allen
Hi Gang, Amusing item in a promotional e-mail from David O. England.
Hi Alton, When you say:
Hi Gang, I stumbled on a web site with a lookup for symbols and a bunch of data for the possible position.
http://www.dividendinvestor.com/
And they have a dividend reinvestment calculator.
http://www.dividendinvestor.com/dividendreinvest.php
There are a bunch of other things on the site that might be useful.
Best,
Allen