Summarized results of Vortex comparison with Standard AIM Example provided by Is7550 in Post # 35606
C= 20000 : CER= 50/50 : SAFE = 0,1 : Min Trade = 10% : Price drop = 20%.Week : N=100
End of Run Results from the previous Post # 35615
4-Buy Run. One buy per week, starting at week 2 at P= $ 80. . .Buy Aggression = -0,66667
V= 7164
R= 5746
PV= 12910
Profit= -7090
N= 175
Single Buy @ Price = 40.96 at the start of week 5. . . Buy Aggression = -0,66667
V= 7638 ------- +
R= 6458
PV= 14096
Profit= -5904
N= 186
Considering that the Vortex buying aggression has been tempered to give an identical 1st Buy as AIMST at price of $ 80 it tempting to conclude that, because both machines get out of the starting blocks at the same speed, that they are more or less equivalent "runners" in a race. This clearly shows that this is not the case. The Standard AIM(AIMST) 4-Buy variant had spend the $1000 Reserve after 4 weeks, whereas the Vortex 4-Buy tempered version at identical Start Block Speed as AIMST had at the first 20% price drop, is easy to see that AIMST becomes more aggressive as the price drops towards a high Cash Burn Rate and has emptied the Reserve, and it had more shares invested at $ 40.96 than Vortex did.
Vortex instead retained a Reserve of $ 5746 for significant buying power if the price drops lower. If however the price would return after having dipped at $ 40.96 it is obvious that AIMST would have been a better machine at the applicable parameter settings.
So far this means, from the point if view of increasing the buy amount as the price drops that AIMST does this better that Vortex. . . This in reference to earlier very interesting discussions on a Progressive Buy Function for dropping prices towards a midpoint price for a trading Rang.
On the other hand, the notorious Cash Burn Rate of AIMST. . .often this has been a bone of contention in regards to AIMST functioning. . . has been demonstrated here again. For Vortex this clearly is not a problem when low aggression factors are used. . .clearly the buying is less progressive that AIMST for the 20%/week price drops.
But what is the real value of the information here?
First of all, maybe there is no lesson to be learned for reasonably experienced AIMers. . .they know what to do in response to price behaviour of a fund. It is already well known that deep divers can be a blessing as well as a curse. . it all depends what an investor does when the prices have dropped by 60% . . .if he has not bailed out already! The value of a Delay Filter in such cases such as the MACRO and others they need not be mentioned again. . . each AIM investor will. . .in time. . .learn to deal with his AIM Machine and make the operational adjustments as he considerers appropriate. I might add here that a fund that starts out at a price of $ 100 and drops 20% in a week will make many investors uneasy, and even some AIMers may bail out if the drop reaches 30% or less. Then it can happen that the price starts to cycle between a weekly +/- 30% horizontal trading range about a mid-price of say $90. Any AIMer that is only reviewing per 4 weeks will have missed the Silver Fleet. A keen AIMer that looks at the market every day would see that behaviour, and can adjust the operational parameters of his machine. . that’s WHY there are Dials on any Machine for Turning them. . .to the correct new postion!
If AIM Machines are to be compared one need to process a fairly representative range of arbitrary equities, run them trough different machines for a reasonable period of time without intermediate adjustments of the chosen parameters. Then use different parameters that are also reasonable starting parameters, and do the testing all over again for the same period.
Only then can one get a clue about the merits and pitfalls that may be discovered for the different machines. . .but the pitfall of that testing method itself is that Investors will generally do NOT invest like that. The Aim Forum and other investment forums are the very proof of that. . .People are forever suggesting schemes to make AIM better and to do this or do that in response to the market in general and stock prices in particular. . and of course, that is just perfect in my opinion. . .I applaud it!
I recommend that investment skills ought to be used to change The Dials on the Investment Machine that one uses. . not emotion but rational judgement should trigger the necessary parameter changes and even to buy or not to buy at a particular moment. . .Each Machine requires its own Operator to make it run optimally.
In regards to the 1-Buy Case at a price of 40,96 Vortex did perform predictably better relative to the 4-Buy Case, because of the known continued price drop that applied, and the buying at low prices that would occur. In reality that does rarely happen at a 60% price drop and if it did people would be caught with the pants down. . especially if they do not watch the stock process for a month. . .this would make them unprepared to intervene properly with the running of their Investment Machine.
Keep an eye on the market every day!
