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Hi Clive, Yep, having the items you mentioned to protect yourself while on the net is quite good.
I have NoScript, Ublock Origin, Blur and Ghostery installed. I've always used about:config in Firefox to set the user agent but seeing your post I went looking and found "User-Agent Switcher" which makes it much easier, so thanks for suggesting that.
Blur - Abine - has an e-mail system I use that allows me to assign an e-mail address that is unique for each web site I need one on, that way I can tell when my address has been handed off/sold because two different sites use the same e-mail address. The one I use here, 60e20f21@opayq.com, hasn't been sold off. They also can create unique credit card numbers for one time use so your cards can't be hacked. It's a good system overall.
Ghostery is rather new but seems to work well. They also have a browser for use on Android phones.
The interesting thing about the 4 ones I use is that mostly they see the same intruders but on occasion one will find one the others don't see. Blur has blocked over 12,000 trackers since March of this year. Yikes!! The free version has access to masked e-mails as well as the password & account manager.
I've often thought of setting up a computer using one of the BSD versions but never got around to it because of my need to stay the same as the places I have worked at and being a bit lazy about overcoming the learning curve.
My computer is also quite old, I think 9 years, but it might be 10.
Hi Toofuzzy, I'm not sure how one would do that in this situation. If I bought a call near the bottom of the downturn and it goes back up I'd be out of the money, right? If so, how do I get the shares that I would then be able to sell at a higher price? Please explain.
My understanding is that while the profits from selling options tend to be smaller, they also tend to be more likely to succeed. Various figures I have seen say buying options fail over 80% of the time but selling, if you chose the right position, succeeds about 55-60% of the time.
Best,
Allen
Hi Gang, Taking advantage of personal knowledge can pay off! Since I have a background in information security when I saw Symantec took a 30% nosedive I too a quick look and felt sure that it would not stay down very long so I sold 6 PUT contracts at $19.50 for $1.05 for the May 25th expiration, then I put in a buy to close GTC order.
Today it closed and my net after commissions is $592.28. Not a whole lot but fun to get that much in 7 days. I tried to calculate the rate of return and came up with a ridiculous percentage over 3 million %/per year. Don't you wish one co actually do that without a big risk?
So pay attention to your expertise and those positions that are in that area and take advantage of others panic or over exuberance. You might well make enough to a really good dinner out.
Hi Ocroft, I was using the basic AIM spreadsheet as I've modified it - added commissions and dividends - and tested with various buy/sell %s, share buy/sell %s and % cash range from 5% to 25%. Nothing particular beyond the basics.
The basic idea I've been looking at is finding higher beta positions and testing them to see if they might fit into the AIM approach where Lichello went down and then back up in a 50% down/ 100% up range in 13 months to get his results. (Page 59, Revised edition 1980) I'd love to know how to calculate the beta for his chart.
The market as a whole doesn't fluctuate this much in this short a time frame, but some positions can approach this level of volatility if the beta is high enough. OLED is the highest beta I've found so far that wasn't just dying on the vine. Yahoo says its beta is 2.25, TDAmeritrade says 1.3. Not sure who to believe.
On the other hand, FTR, with a beta of 0.5 on TDAmeritrade and 0.32 on Yahoo, has gone up from a low of $8.13 to $11.48 in just 3 days! Up 41%. So it may be that the extremes in either direction is the way to go with AIM as the tool.
The quote you used, where is it from?
Hey Gang, In looking around for more volatility to make AIM work harder, I came across OLED so I did a weekly backtest for the last two years. Wow!
First of all I started with 20% cash, 10% buy safe, 0% sell safe and 10% shares buy/sell. A mere 30.585%/year gain. Quite good, excellent in fact, but, as I usually do, I played with cash %, as well as share buy/sell % and the buy/sell safe %s.
With only 5% cash to start with, 10% shares buy/sell, 5% buy safe, and 10% sell safe (!) the return bumps up to a mere 38.872%/year.
Now I know what one sees in the rear view mirror doesn't protect one from a potential crash going forward, what does everyone think of this possibility?
Hey Shifting Sands, Very interesting but not all that useful without a link to the article.
I'm not sure if this is what you are referring to or not but a quick read of Finra's Report seems to indicate they were manipulating the sale of OTC stuff for their own benefit.
Hi Adam, thanks for the info. quite useful, especially since I learned a bit about "...a good part of their distributions came from the fund’s value" when I was helping my mother. The broker sold her positions with high dividends that kept reducing the actual value of the position itself. Given she was in her late 80's and needed the money, it was not totally wrong from a likely short term point of view, after all if it reduced what my brother and I inherited it woldn't matter for her support.
Hi 3vis, Given your short supply of money to start with perhaps you should consider using Twinvest or Synchrovest to start with so you can build up your available funds.
Twinvest in in the AIM book and lostcowboy has a spreadsheet for Synchrovest and some info on how to use it. I don't have the link for his stuff handy, sorry, but I do have a copy of it if you'd like. Drop me a note at 60e20f21@opayq.com and I'll send it to you.
Hi Adam, Thanks for elements about RCS to look at before investing. Yeah, 1.5% expense and 26% premium over NAV makes it a very poor choice.
How does one find out where the distributions come from? I looked at PIMCO's site but didn't find an answer to that question.
Others have mentioned having CEFs, why don't you like them?
Thanks.
Hi Gang, Anyone looked at RCS as a possible place to hold one's cash?
Currently it priced about $9.27 and has, over its lifetime from 1994 to today, a maximum range of ~$6.81 to ~$13.26 and at today's price is paying about 9.3%. Narrow range and not very volatile.
Hi Toofuzzy, Can't agree with you more when you say:
Hi TF, You might also consider MLPQ. It is currently at $28.10 and has paid $5.788/share, 20.59%/year, in dividends over the last year.
Hi Toofuzzy,
So I did a back test on REM and got something interesting. At first I didn't put in dividends and got the best results at 0% buy safe and 0% sell safe, -4.58%, -1.168%/year, over 4 years. To keep me from going negative with cash, I had to have a reserve of 25%.
But when I entered the dividends I got +14.24%, 3.396%/year, also a reserve of 25% cash to avoid going negative.
Both had a minimum trade of ~10% shares, $500 minimum trade and a $5/trade commission.
BTW, I adjusted for the 1/4 stock split by multiplying the pre-split prices by 4 so that the whole period was in the ~$40-$50 range. This likely effected the results as the number of shares would be lower with the higher price per share so there would need to be an adjustment for that.
I'm glad I added both commission costs and dividends to the spreadsheet. It really helps understand things a bit closer to what you might likely get, long run.
Allen
Hi Gang, Obviously I need to stop and actually read what I write, especially the really simple ones.
Hi Jibes, I'm curious, do you have a copy of your AIM-ReBal spreadsheet I could take a peek at?
If so, please send it to me at: 60e20f21@opayq.com
Hope things are good,
Allen
Thanks Firebird for the working link; however when I tried to download it all I got was an empty spreadsheet.
I also tried to get it from Jibes AIM Rebal pages link - http://jibes0.tripod.com/trendseeker.html - and all I got was "404 Error - Page not found" on each of the links I tried.
Best,
Allen
Hi Gang, I'm curious, does anyone have a copy of Jibes' AIM-ReBal spreadsheet I could take a peek at?
If so, please send it to me at: 60e20f21@opayq.com
Thanks,
Allen
Thanks Adam. I'd had a hard time visualizing how to do this but now it is clearer.
Warmest regards,
Allen
Hi Gang, Well yesterday was the first time the portfolio as a whole moved outside the range of -0.05% to +0.05%. Been weird seeing the volatility and yet mine is moving so little. Even the single positions haven't moved enough to generate a buy or sell.
Best,
Allen
Hi Adam, I've been meaning to ask you how you are adding the % increase to PC. Do you do it by hand or or have you modified the spreadsheet to make automatic?
If you modified the spreadsheet, how did you do it?
Thanks,
Allen
Hi Tom, Sorry I wasn't clearer, yes I'm adding to the buy SAFE percentage to get the figures I stated.
Hi Gang, I think I might have a partial answer to the question I asked about reducing buy risk in case of a market downturn when one is adding a figure to the PC to account for inflation, etc.
I said:
Gang, See the documentary "The China Hustle" ASAP.
It is an excellent explanation of how fraud is being committed in the stock market with an old trick combined with two weak spots in the legal system of the US and China.
The first enables a company to get listed without having to go through the usual steps. The new, to us, Chinese company buys a morbid company that is already listed on a US exchange and just renames it. Bingo, they are in the market. American brokers, aand others involved in our stock market profit from this so they are all too happy to assist with the process
The next problem is that China has no legal apparatus for dealing with financial lies told outside China itself and the US has no way to enforce our laws about fraudulent statements when they originate in China.
The third problem is that it is profitable for American companies like Price Waterhouse Cooper (PWC), KPMG, legal firms, and others who are supposed to audit and/or verify statements to do no real digging into the claims of a company. The result is claims about value and profitability are "verified" by big names.
An example that will help you understand this is when a Chinese company says they've been audited by PWC, technically it is true but they leave out one part, that it is a mostly independent branch of PWC in China which has the name but is almost totally uncontrolled by American PWC and can't be challenged by the SEC or other US regulatory agencies because they are not based here.
It's all a bit complicated and hard to explain in a short post because the film is quite dense and moves along through the many twists and turns of the market process. However, the claims of the people in the film are backed up with good, visual evidence that is quite stunning.
The four key people in the film have different motivations but have one thing in common, they are short sellers making money by exposing the frauds.
Another element, though not the core of the film, is that there is approximately $1,300,000,000 bucks currently involved in these companies on the American stock exchanges and, given that they may well crash big time, there might be a big risk of their demise triggering an even bigger downturn.
"The China Hustle" is worth seeing, even if you don't have any money in any of the positions, because it exposes the lack of reasonable regulation and validation of statements made by CEOs, brokers and others involved, for these companies, in the US stock market.
Hi TSNH, This approach is similar to Jason Kelly's "3% Signal" in which he looked at the long term gain of the market and factored it into his buy/sell algorithm and it certainly makes sense.
If I read you correctly this reduces sales because of the move up of Portfolio Control (PC), right?
But I'm not clear about it reducing down market risk as you say in your last paragraph:
Hi Adam, What percentage are you using to increase PC/year, approximately inflation, 2.7% or so?
Thanks,
Allen
Hi galtinvestor, thanks for the comprehensive reply. I agree with you that one needs to create one's own parameters, but it is more than useful to see what others are doing even if what they're doing doesn't fit your own thinking.
It's much like have multiple people read what one writes, it's amazing what other perspectives help one clarify one's own thinking.
I confess, I'm a bit jealous that you managed to latch on Lichello so long ago and I was cautioned away from being involved in market stuff from one minor loss of just over $200 as I figured I didn't understand enough to separate the pump and dump types from worthwhile approaches and had no friends to ask at the time.
Best,
Allen
Hi Galtinvestor, Part of the problem is that there is not all that much dialog about specific positions or what metrics that might be considered to chose them.
As to your comment about SOXL, I just tested an AIM 5 year with $20,000 with 20% cash, 10% minimum share sale, 10% buy and sell safe and I didn't come up with the same result you did. Including dividends I got $102,983 total, quite good, but $27,017 less that you go.
So I went back and created a new spreadsheet that put $1,000 in every quarter over the same five year like you suggested. I started 4/1/2013, a $1000 for shares at $10.13/share. I rounded to whole shares, 99 shares for the first purchase.
So I'm not sure how you got the figure of $140,000.Date Current Bought Total
Price Shares Shares
4/1/2013 $10.13 99 99
7/1/2013 $12.41 81 180
10/1/2013 $14.63 68 248
1/1/2014 $16.51 61 309
4/1/2014 $20.95 48 357
7/1/2014 $24.40 41 398
10/1/2014 $27.63 36 434
1/1/2015 $28.70 35 469
4/1/2015 $32.61 31 500
7/1/2015 $26.61 38 538
10/1/2015 $26.95 37 575
1/1/2016 $20.51 49 624
4/1/2016 $23.20 43 667
7/1/2016 $37.55 27 694
10/1/2016 $45.77 22 716
1/1/2017 $64.11 16 732
4/1/2017 $76.44 13 745
7/1/2017 $93.17 11 756
10/1/2017 $147.96 7 763
1/1/2018 $173.91 6 769
3/1/2018 $201.28 5 774
Total $155,790.72
Hi Toofuzzy, I understand what you are saying; however, one does not want to get into a position that is at risk of disappearing for any reason so looking at the parameters, even if you like the position, is key to long term success.
I didn't look in enough detail to realize that XIV could be closed so I lost a bit over $150, not a biggie, but that is an amount for an EXCELLENT dinner out with my partner, so, while it is not even 0.005% of my positions total, it still is missed.
But I did learn from this to better investigate potential positions to place my ~60% cash reserves when it seems appropriate so I won't run out of cash should the market be bitten by a Grizzly Bear.
Best,
Allen
Hi Firebird, Thanks for that info.
What parameters do you suggest? This is the area which I find most difficult to figure out and where I seem to make the most mistakes. Fortunately most of the time it is just for paper trading to see what happens. But, a couple that might have been good choices I sat on too long because I didn't have the right criteria to use and so didn't get into them. A couple of times I got into positions and they turned bad but with the tipsy market was able to get out with a minimal loss.
Thanks,
Allen
Hi Gang, The key difference between Kelly's 3/6/9% signal trading approach and AIM is that Kelly uses an assumption based on a long term look at the market that the average base of the market as a whole goes up 3%/year. He then adjusts the figures for buys and sells for the 6 and 9% signal, because they are 2x and 3x ETFs, to account for that volatility.
I have a spreadsheet that can handle it if anyone would like to play with it. Drop me a note at 60e20f21@opayq.com and I'll send you a copy.
Best,
Allen
Hi Firebird, You are obviously doing great so how about sharing how you find the type of positions that do so well.
Thanks,
Allen
Hi Gang, So I went to NBER (National Bureau of Economic Research and got the data for the length of the bull and bear markets from 1945-2009 (11 cycles) with the bear being an average of 11.1 months and the bull being 58.4 months. Using this I created a AIM spreadsheet that runs 91 months, the same length as Lichello's table on pages 64-71 in the fourth edition.
I started with $10,000, $10/share, 50% cash, 10% buy, sell and minimum trade size and a roughly 3%/year market increase. It was hard getting this exact so the figures I got are not perfect.
During the two bear markets I would have run out of cash on the way down so I stopped buying when very close to zero cash left and wound up with total portfolio of $12,983 versus B&H end at $9,056, AIM doing $2,983 over the time frame and $3,927 better than B&H, but only 3.5%/year, not great.
In looking at the reason I ran out of cash it was clear that I was buying before the market hit bottom. So I played around a bit with the % buy safe and came up with a 23% buy safe, a portfolio value of $15,591, 6.031%/year return. The first buy was at the $4.00 bottom.
But the key to consider is that the market doesn't fall 60% so a lower buy safe % would be better most of the time. I'm not sure how to do it but what would make the most sense would be a delayed buy like Orcroft suggests.
Playing with the sell safe, going to 0% requires increasing the buy safe to 28% to keep from running out of cash. This combo reduces the result to $14,787, 5.293%/year still better than stopping buys altogether.
None of the other approaches I tried did any better.
One of the other keys is in position choice as demonstrated on pages 88-96 in the fourth edition. Most years AIM loses to B&H but in the final three years of of the chart gets about $5,000 ahead of B&H, not all that much given the time frame.
Then the chart on pages 100-1 shows that the general market doesn't do all that well with AIM either, 3.445%/year.
At: https://www.thesimpledollar.com/where-does-7-come-from-when-it-comes-to-long-term-stock-returns/
Hi Gang, Yipee!! Although I could have done better had I calculated a better exit point and placed it as a GTC and actually followed through with the two AIM directed trades, I still did quite well with IJR using the selling a PUT plus buying some extra. I almost didn't buy enough extra but I came up with one extra share.
I put the trade into an AIM spreadsheet like I talked about before. I used weekly data for the calcs.
My total investment was $23,630 and I had 350 shares, total as of 8/28/2017, 179 days ago. I sold them all today for a total of 27,119.37, including commission for a net total of $3,489.37, 32.45%/year.
Had I followed through, and hadn't been overly cautious, I would have made about $500-600 more.
To do the same with AIM alone I would have had to spend ~$30,500. The very best I could do playing with the buy/sell/minimum trade size was -5% buy, 10% sell, and 4.28% minimum trade size for a return of 21.15%/year for a net income of $3,021. Using the standard 10/10/10 I got 19.7%, and the same result using 10/0/10.
$478.37 ain't a ton of money, but it is nothing to sneeze at either.
So the basic idea of selling a PUT plus buying extra shares, I'm guessing ~25% more is the right range, seems to work. Now to find the next trial position. I might look at 2x ETFs and see what I can do.
Have a good weekend, everyone.
Hi Gang, at the http://jfholdings.hol.es/jfholdings/ Examples page are two long term charts comparing AIM and B&H.
The difference between the two is interesting. Over 13 years from market top in 1999, and including the two bear markets of 2000-2, and 2008-9, AIM does 4.84%/year while B&H was 3.45%, significant as an an account of $100,000 with AIM would get a total of $184,863.50 while B&H would get $155,416.25, a difference of $29,447.24, not chump change.
However, the 10 year period starting at the bottom in 2003, and including the 2008-9 bear market, AIM would get $248,729.54 versus $247,144.63 for B&H, a difference of only $1,584.91, quite small.
What this shows that timing is a critical element no matter which approach one takes. Combining market volatility and AIM clearly is important no matter when you enter the market. It also explains why Lichello's AIM results on page 64-71 (4th edition) is so successful. With the almost twice a year from market top to market bottom and back again, AIM captures the volatility, but, since he does not include the typical long term inflation of the market of almost 3%/year, he makes B&H come out worse than the reality would be as shown by JF Holdings examples.
It also explains why various people here have reported the backtesting SPY comes out with trivial differences over the last 5 or so years, with sometimes B&H coming out ahead.
So, going forward, we need to figure out the best combination of actions for all of us, especially people like me who've only been at it for less than 5 years.
Best,
Allen
Hi Gang, Well, I finally got an answer to the problems with the TDAmeritrade web page display of prices. The error on some positions was up to 37%!!!! Anyway what they finally said was:
Hi lostcowboy, Actually that is why it was a question, not a suggestion. I could not make "negative portfolio percentage increase (actually a decrease)" work in any way other than a blind guess.
As to your other points, I'm doing reasonably well with AIM though I'm not getting a lot of trades, but that's okay, but it is why I'm playing around with a bunch of ideas, not all viable, to see if there is any way to improve volatility capture.
Thanks for the suggested readings, but your link for the CASH BURN RATE for AIM table doesn't work. I get:
Hi AIMExperimentor, drop me an e-mail at 60e20f21@opayq.com and I'll send you the latest version I have, AIMWorking_v6.xlsx. There are a few by the book examples, a couple of different ways of calculating buy/sell prices and two different Compound Annual Growth Rate (Annualized Return) calculators, one of which is tied to a backtest tab.
What I suggest is that you make a copy and use the copy to play with so, in case a problem happens, you'll have a master to work with.
I also have a copies of Syncrovest and Twinvest which I got from Lostcowboy's site. You can find them at:
http://web.archive.org/web/20091027001231/http://geocities.com/lostcowboy5/Spreadsheets/
Hi Gang, What a crazy week it was last week, lots of things happening at the credit union that I have to tend to as well as a f#$%up on my part trying to install new receipt printer and the documentation had a typo in it, saying use version 4.5.7 but the only ones I could find at Epson's web site were 4.5.6 and 4.5.9 so I went with the 4.5.9. Wrong, wrong, WRONG! turns out that it was not for the TM U220B, but the, I think, the TM U220D and we got the B as it has an Ethernet connection. Even Epson's help desk could not help me fix it.
And then I discovered that TD Ameritrade's Positions web page had the wrong prices for the original and subsequent purchases/sales. Out of 9 positions in the trust 7 of them were wrong compared to Gainskeeper, which is the "Master" price that everything is figured against. Calling them about the errors, some of them as much as $4/share, was a total mess. Ugh. And one that talked with said that another help person had sent an e-mail to the ones who were responsible but never got it fixed. Double Ugh! We'll see what happens in a few days. If they don't fix it I might move to
But the good news was that income, dividends and mo9ney earned in trades but not position value, was just over 11% for the year and would have been just under 13% had not one of the positions that was inherited from my mother went bankrupt. Not a huge loss but not trivial either. I had held onto it rather than selling it for a 50+% loss, figuring it was a bull market, don't be impatient. Oh, well.
Hi Tom and Adam, Using a percentage increase during a bull market makes so much sense so that during "corrections" we might get some buys to help offset the cash accumulation.
Given this, might it not make sense to use a negative portfolio percentage increase (actually a decrease) during longer term or deeper down markets?
I can readily see how to do the plus side in the spreadsheet but I'm not sure how to do the change over when a down market of more than 10% occurs.
One possibility would be to run a second item in parallel to the primary one, i.e., run SPY or an index like ^GSPC (Yahoo's S&P 500) and enter data at the same time we update the primary position. The problem with this is that we'd have to update more frequently which is what AIM does not want you to do.
Any better ideas?
Best,
Allen