A.I.M. Users Bulletin Board

[ls7550]

2) how many vealies were exercised during that long period?

Looks like 25 Vealies in total Tom. A few of the buys were reduced in size due to insufficient cash and a number of buys were also entirely missed due to absence of any AIM-cash, I can't really count those as they're sequential sets i.e. stuck down in zero cash territory. Primarily the concept is that a little cash induces relatively little drag, but is able to buy some shares after pullbacks and later replenish that cash when prices have rebounded. Whilst the >10% cash vealies ensures that it more closely aligns to being a 90/10 type portfolio asset allocation. I used 10% cash as a hard figure, if for instance 10.1% cash when AIM indicated sell then no action (pull a vealie), if 9.9% cash then the full sell order would be made, to the full amount indicated by AIM - which could lift the AIM account to be holding perhaps 20% cash following that sale.

Some of the buys were lower in $$$ amount due to insufficient cash, AIM with no dividends or cash interest included. Which might have been more partially or even fully filled if there was spare cash and/or interest/dividends available at the time.

Also note that that used a 10% of stock value minimum trade size, so larger bands than if using the more conventional 5% MTS (that tends to also generate a higher number of overall trades).

1) A quick look shows ROCAR to put the 90/10 portfolio in a favorable light compared to 100% invested.

AIM provided 6.51%, it was constant weighted 90/10 that had a 6.23% (6.92% ROCAR). AIM had 10.7% average cash (12.3% median cash) so on a average cash basis ROCAR = 6.51 / .893 = 7.29% (7.42% relative to median cash).

I quite likes ROMCAR, return on median cash at risk, as average cash can be distorted by extremes. The other way it might be measured is to add in the average dividends/cash. 6.86% annualised for 100% stock + 4% average dividends = 10.86% total. Versus 6.53% from AIM with median cash of 12.3% that earned a average 7.7% and 87.7% average stock x 4% average dividend yield = 6.53% AIM + 3.51% dividends + 0.95% cash interest = 10.99% total.

it appears to be a low effort management of risk and equity inventory.

Monthly reviews would be just as good I suspect, so could be even lower effort. Perhaps even quarterly reviews.

Basically a Buffett type concept of 90/10 stock/cash and deploy the cash at appropriate times, let cash accumulate up to limits during good times, and where AIM does all of the work, just leaves it to you to do the actual trades. With Toofuzzy's calculator you can even pre-determine AIM price levels and just await those being reached/breached before having to update records and perhaps make a actual trade.

Regards

Clive