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Synchrovest and AIM together!

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karw Member Profile
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karw   Friday, 02/22/02 06:35:31 AM
Re: None
Post # of 785 
Synchrovest and AIM together!

Assume an AIM machine with multiple securities.

Such a machine will have well defined AIM managed Buy and Sell events.

Mr Lichello says in his Q&A section(3rd edition, discussion on page 190)that you also can rotate as long as you keep Stock Value constant. So we have RotBuy(rotation Buy)and RotSell(rotation Sell) events.

These events are not well defined and Mr Lichello says on page 187 that:

"you simply reach into the CASH reserve, get the money, and give it to the most deserving security. And God will bless you for it, too"

However, we have Synchrovest technology available.
First of all we need to know for each security in the AIM machine the average Buy Price.

- Knowing the actual Price we can determine for each security if it has a Synchrovest Sell.

- The securities with a SynSell event are the candidates for a Sell or a RotSell.

- Knowing the actual Price we can determine for each security if there is a SynBuy event. (with one gear like Twinvest or two gears like Synchrovest).

- The securities with a SynBuy event are the candidates for a Buy or a RotBuy.

- To close the sum of all events you could:

A: Buy a new security for your portfolio.
B: Allocate a security that is positive or negative cash. This cash is on the STOCKVALUE side and not on the CASH side of the machine.
C: Use STOCKVALUE cash for Synchrovest driven buying.

One could elaborate a little bit more.

However in this way one could make trading in an AIM machine, with multiple securities, fully automatic. It will be based on average Buy prices using a Synchrovest style of thinking.

In my own BTB multiple security AIM machine I use this method with a 30% Synchrovest Sell threshold for RotSell events. This money can be put in the money capacitor on the STOCKVALUE side or immediately employed in a RotBuy event.
In my experience rotating otherwise is unsatisfactory and could well be emotional(buy high and sell low). One always regrets the transaction costs:)!
Buy and Sell events are well described at the top of page 190 in Mr Lichello's book.(3rd edition)

Regards, Karw
(I use karw, because there is another Karel active on the AIM boards)

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