Replies to post #38863 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

BTW, you used the Orcroft Method on both the buy and sell side in the spreadsheets you posted, right?

Correct. I tried a couple of different variations of applying ocroft and applied to both sequential buys and sequential sells.

Finding the right food for AIM is the trick to overall performance (or not). Many find it difficult to even match a index through selectivity so its a tough call. Part of the problems are costs and taxes and part is down to survivorship.

Take the "Dow" for instance. That started life as a Dow "Industrial" Average and there were also Dow Utility and Dow Transport average indexes as well. Of those three the Transport and Utility indexes lagged and over time the Industrial was expanded into being a more general index. A reasonable investment choice might have been to hold all three in equal measure, not realising the 20th century would have been kind to industrial expansion and as such the collective average of the three would have lagged the Dow Industrial average alone.

Much of investing is risk management - avoiding being too heavily concentrated into a single stock/sector that performs poorly. AIM will do the best it can with whatever you feed it and it has cash exhaustion measures to help avoid injecting too much into a single holding/AIM before calling it a day with that stock/sector. Its a good business manager but it can only manage what its given.

[AIM1979]

All the discussion we've had about the Orcroft Method, Vealies and other variations on a theme are wonderful. Now we need a good discussion on the right metrics for the current market. Things change over time and we see this in other stock market algorithms and fund managers when they do great for a while and then fall on their face. In fact I once read somewhere that a hot fund manager that is at the top of his game and is hired away by another fund almost never does as well again.

Hi Allen,

In a post previous to this, one you mentioned why back test. Your comment above is exactly the reason to back test; Orcroft's method bears (no pun intended) this out. When I back test, I analyze technical indicators at the time of buys and sells. It lets me refine them and choose ones that provide me the best predictive result as to when to buy into a stock or ETF. In my testing, I look at stocks/ETFs that might be interesting to me. I AIM them all virtually as if I were back testing. I then enter the market with a real AIM program when the indicators I follow, line up with the virtual program signals.

It also allows me to watch the performance of the asset. As stocks often trade in a range, you can get a feel for when things are going awry as well.

BTW, I enjoy reading your posts. Oh, since you always have interesting links, here is one for you. https://www.robinhood.com/. It is an app/brokerage that is just getting off the ground that has $0.00 commissions and no minimum deposit.

Merry Christmas to All

Art

[Toofuzzy]

Hi SF

You may think you need to change your investing methods to keep up with the times but that is the biggest mistake you can make.

I was talking to an older friend years ago when I just started Aiming about how momentum investing is so opposite AIMing. His statement to me is that both methods can work but you can NOT switch from one method to another.

Most people use Aim to avoid emotional decisions, if you change any of the parameters AFTER you start an Aim program you are making an emotional decision and risk data mining for something that only worked in the past.

If you try to maximize your returns, you also risk maximizing your losses.

Have you even started Aiming yet, or are you still looking for the holy grail?

Aim has me buy on the way down and sell on the way up. It works good enough.

It is safer with funds than with individual stocks.

Some diversification of sectors or industries is good.

Keep it simple

Simple is good.

Not always
Toofuzzy