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BTW, today is sort of proof of "Beyond the Random Walk" thesis of sell on Friday and buy on Monday.
Best,
Allen
There are plenty of references to using the ValueLine regular investment bulletin but I don't see any references to the Small-Mid Cap version. It's laid out differently and I'm not sure how to correlate the two. Are there any references that I might study to see how to apply them?
Thanks,
Allen
Beware the hungry bear...
More and more I'm seeing things that are anticipating a bear market or they are fear mongering in hopes of sucking you into their world so they can skin you alive. At http://investorplace.com/2014/09/sectors-to-sell-bear-market/view-all/ is the comment:
Hi JDerb,
Thanks for your efforts. May I make a minor suggestion? It would be nice if the prior week could be included in your posts and percentage above/below historical if this would not be too much of a burden on you.
Best,
Allen
RE: 100% Stock AIM (AIM beta)
Wow! Great idea to look into further with more examples.
This also fits with the traditional market cycle where there is a relatively longer up cycle and a shorter down cycle historically.
Good thinking Clive.
Best,
Allen
Found a good, and understandable, explanation of MACD at http://www.investopedia.com/terms/m/macd.asp
Best,
Allen
Thanks for the response orcroft. It is easy to make mistakes when writing up technical things so I understand quite well, having done it often enough enough myself.
MORE RE:
RE:
Hi orcroft. About your post 35655 I referred to earlier, for goofs and grins I decided to try to replicate it and failed to get the figures you said were the buys.
The problem was, as I understand it, AIM starts with a purchase and then, depending on price movement buys or sells. I could not figure out how you were able to get buy/sell signals without having an initial purchase. Second, the figures you give don't quite match the time frame you give. The $37.01 price doesn't occur until March 3rd, 2008. Next you seem to have skipped the August 1st, 2008 amount of $28.10.
The worst problem is that I can't seem to figure out how you got AIM to tell you to buy only $4,099 of stock at $25.50. The closest I could come is to have 79% cash and then it would buy $4182. Part of the problem is likely that I have everything set for whole stocks, no fractional stocks. Nonetheless, 79% cash is a whole lot different than 50%.
Next I could not get it to release $15,901, just $10,006 at 79% cash, or and a total of 654 stocks, including the original at $25.50. If I went 50% cash it wanted me to buy 2504 shares!
Also there is a math error. You say $15,901 at $10.11 buys 1671.71 shares. That should be 1572.799 shares. Probably just a typo of a 6 for a 5 and rounding errors.
All in all, I'm puzzled I can't make it work because the logic of buying near the bottom makes a whole lot of sense, especially waiting for a signal that the bottom is likely passed. Yeah, maybe a bit more dithering around but after a 77% loss for a company like GE that is not all that likely to go out of business as it produces real products for real markets, one can easily live with a few % more and not be hurt at all.
Thanks for revisiting this, orcroft.
Allen
The Chart of the Day was the Russell 2000 and it seemed that it has been going sideways for a couple of weeks and is headed back towards the support line that was shown after having been bouncing around near the resistance line.
Hi ocroft,
Thanks for the pointer to http://www.dofusdaddy.com/aim_internet.htm. I had seen it before but hadn't played with it. Today I did a bit and also used it to validate my own spreadsheet. I was perfect given that I have mine set to only buy whole shares, not fractional, so it is off after the decimal point but not all that much. I set mine to have a Starting Minimum Trade - Number of Shares at 5%, a 10% buy/sell safe and Starting Minimum Trade - Dollars at $0.00.
Very useful to confirm that I'm doing something right.
Thanks,
Allen
Thanks Is7550. Just what I was looking for. Now I'll put it together with the other sector tips I've gotten and will be in good shape to go foward.
BTW, are you being coy or what? You only mentioned the name of one of the usual suspects. Is one of the others you, by chance?
Best,
Allen
RE: Opportunistic Rebalancing...
Hi Toofuzzy. I came across the following article about this and it seems to explain it quite well.
http://www.tdainstitutional.com/pdf/Opportunistic_Rebalancing_JFP2007_Daryanani.pdf
Warmest Regards,
Allen
RE: If you are going to use market cycles to trade, you will not be Aiming!
Actually, I probably did not explain myself fully. My goal is to avoid buying into a sector at a high point or when it has just started down. If I did that I'd run out of cash quite soon and be stuck waiting for the next bull market in that sector to have any gain. Just like the MORL deal and ex-dividend date loss of ~8%, it makes sense to me to wait a bit and see where things are going before leaping. MORL is a very good performing REIT, on the whole this year, something like 24%, but taking an 8% dump in the first 10 days of owning it seems rather silly.
Best,
Allen
Hi Is7550,
If you need any data on that disk get an adapter from Apricorn - www.apricorn.com - very good people and when you have a problem they are very helpful on the phone. I have several of their adapters for use with my clients and their cloning software is just great.
BTW, who are those happy people in that photo?
Best,
Allen
Looking at the two charts they are almost identical. Amazing. Based on them you are obviously correct that they are slowing. BTW, what are the symbols for both of those?
You are absolutely right that only looking backward is guaranteed to lead you to a crash down the road. As Satchel Page was known for saying, "Don't look back, they might be gaining." But when the sun is in your eyes it makes some sense to see where you have been as seeing asphalt back there is a reasonable predictor that it is asphalt in front of you until at least the road bends and you hit either the center divider or the weeds at the edge of the road.
Hi Someone,
One of you commented, in a reply (which I can not find now) to a post of mine, that for backtesting with the AIM spreadsheet with Vealies that I should use "adjusted close" rather than "close" but I've run into one that seems quite screwy, SCIF.
It only started in 2010 at 18.97 close and 74.92 adjusted close. As of 9/2 (monthly) it is 48.86 for both. There was a 1:4 stock split in June of 2013.
The results of a back test for each version is quite different. For closing price with 50% cash, 20 shares minimum sale, $500 minimum amount, 10% sell safe, 25% buy safe (to avoid negative cash) there is a profit of 164% over the four years. But with adjusted closing price with 50% cash, 5 shares minimum sale, $1200 minimum amount, 10% sell safe, 35% buy safe (to avoid negative cash) there is a profit of 13.5% over the four years.
It seems to me that closing price is correct way do do AIM as we use it month to month but the profit shown is way too high, it seems to me, to be realistic.
So, which approach is best for selecting a position to buy into?
Thanks,
Allen
Hi Toofuzzy, This is the approach that I'm going to do; however, I don't have as much money as all that for the moment. What I contemplate is $40k with 75% in the funds and 25% in a common cash pool. This would spread the 75% across 5 funds that are currently still in an upswing according to the market I see and the overall market cycle.
I modified the original so that it is easier to see any point in the cycle. I also added lines to help visualize where in the cycle the various segments occur.
My guess is that we are between 35 and 45 on the scale. What do you think?
Warmest Regards,
Allen
RE:
Hi Toofuzzy,
I can't figure out when you got into FTEK and what parameters you are using for AIM to have a buy now. Please enlighten me.
Thanks,
Allen
You're welcome, Tom.
In the mail the day before was a short book, "Learn from the Generals of the Market," by Azeez Mustapha, ISBN-13: 978-1908756312 (ADVFM Books) 2014.
It is a brief look at a variety of people known for stock market innovations or attitudes. They include brief interviews or lessons that might be learned from them. Among the usual suspects are Charlie Munger, Warren Buffet's lesser know half, Julian Robertson, of hedge fund fame, Thomas Rowe Price, the "father" of growth investing and others such as Sam Sieden who has been known for flying in the face of conventional wisdom.
All are quick reads but to really understand the implications of the ideas one needs to go outside and gather more information. I've only dipped into the book a bit but it seems worthwhile to keep you awake and alert to what is the stock market past, and often a harbinger of the future, as some ideas keep getting recycled, going in and out of fashion much like the latest hauté couture, and often just as ugly.
ADVFN, the owner of Investors Hub, seems to be getting into publishing books on financial matters. One that I noticed, and am going to get, is "The Game In Wall Street" by Hoyle and Clem Chambers. It's about market manipulation and how the same ways it was done over a 100 years ago are still around.
Best,
Allen
RE:
Hi Gang...
I love to read and I will often get on a tear and read a bunch on one subject. Well, I've been doing finances lately and got a book because its title was intriguing, " Beyond the Random Walk - A Guide to Stock Market Anomalies and Low Risk Investing" by Vijay Singal, PhD, CFA. ISBN 0-19-515867-9, Oxford University Press, 2004.
I'm no great math wizard but I do love some of the oddities such as the drunkards walk and other "random" things.
The book is well written and fairly easy to follow. I doubt I would follow any of the suggestions but they are fun to know about.
The guy has a sense of humor that is easy to see. The dedication is: "This book is dedicated to my wife, Manisha, and my teenage sons, Ashish and Akshay, who, apparently believing that the book is perfect, refused to read beyond the title page."
In the preface he has a large heading, "Why Did I Write This Book?" and then has a quote, "If stock market experts were so expert, they would be buying stock, not selling advice." Norman R. Augustine
He then explains his thinking, which I won't quote, and it is quite reasonable.
It is well worth the read if only to better understand market inefficiencies.
Best,
Allen
Re: Ameritrade extended hours trading...............
Thanks guys. It's funny, when I started looking for a broker to use I looked at a lot of them and happened to settle on TDAmeritrade because they had actual offices, not really vital until there is a screw up. They don't happen often but my experience with being an information security consultant is that we do have a blue moon at least once a year.
However, they did not tell me about the extended hours! Shows to go ya that you really need the wisdom of crowds no matter how much digging you do on your own.
Warmest Regards,
Allen
RE:
Fun read from Investment U.
Many years ago I read a great book, "The Day They Shook The Money Tree," and learned a lot about early American industrialization and investment. Today there was an article about Hetty Green in Investment U's newsletter which is worth reading as some of the points are the same as Lichello's and the general AIM philosophy. Enjoy.
Hi karw, what metric are you using for value, the ValueLine book value per share?
Using ALK as an example with a book value of $17.30/share you would do what?
If the price of the stock is 0.4*17.3=6.92 then you would buy 0.1 of a slot - say you have 27 slots (9 sectors, 3 positions each) - for them if you wanted to add them to your portfolio. Given the price range for the last 52 weeks is 36.30 to 50.50 then you would never be able to buy ALK it would seem.
Clearly I don't understand how you are using Kelly's formulation. Would you please give an example all spelled out?
Thanks,
Allen
So, how does one implement a Kelly weighted portfolio?
I confess the math of the Wikipedia article is mostly beyond me as calculus was many years ago and I wasn't all that good at it then. Beyond calculus is totally terra incognito.
Best,
Allen
Hi OldAIMGuy,
Nope, no more private messages on Fridays so I have to use this, alas.
I would have replied to the Haiku but that is not allowed either.
The Grabber suggested I talk with you offline so I'll contact you at your business site if you don't mind. Alternatively you can use my masked e-mail which forwards to me: 60e20f21@opayq.com
Have a great weekend.
Allen
Superb analysis of the "slippage" that can easily be missed and yet counts for a lot in the long run. In 10 years this amounts to 8.29% or $8290 on $100,000 in the fund. Not huge, but not chump change. It would pay for a reasonable vacation from sweating over your investments Thanks Is7550.
Also thanks for the pointer on using Adblock. I didn't know about the scripting possibility. I was running Adblock Plus but was having problems with some sites that seemed to go away when I disabled it, but it may have been other causes so I'll try it with your script.
Hope your trip is going well.
Best,
Allen
BTW, nobody has commented about my question as to whether it is worth the money to be a paid subscriber to iHUB. $8.33/month seems steep for what it seems to get you but maybe I'm missing what the real value is.
Comments, please?
Thanks,
Allen
Toofuzzy and Five year Plans...
Well, the now ex-Soviet Union didn't do all that bad with them in some sectors but in others they sucked big time.
When you say:
Thanks Is7550. Very helpful to this newbie.
Well, wish me well, I'm going to take the plunge on my own next week and see how I do. As I get more experience I'll add other parts of my own funds and then the trust funds.
It has been a very educational experience being here the last 6+ weeks. Much, much better than the other "courses" I have paid for. They gave me a basic understanding but this forum has made the information a cohesive whole that can be acted on. I didn't feel up to acting on the other information, but then I tend to hesitate before putting my toe into the ocean because I am aware that there be sharks to devour me.
Warmest Regards,
Allen
Oh, Lord and Master Time who governs our every step, show us the path and grant us time for joy; joy sublime, joy without reason, joy that we share, joy without end....