Replies to post #41213 on A.I.M. Users Bulletin Board (AIMUSERS)

[OldAIMGuy]

Hi Allen, Re: Varying PC % additions...............

I believe Mark Hing's "Automatic Investor" may have a function to determine the "best" %age adder to PC for any individual investment. It, of course, is optimized based on History, not on prediction of the future.

Assuming a relatively mature equity, the historical value would be reasonably stable and effective. A young "growth stock" might not yield as valuable information for the future.

[AIM1979]

PC%
Something I've been pondering.

As a basis for PC%, ocroft has stated in several posts including 40389 that using MACD (24,52,9) as an entry point

when the stocks monthly Macd does a crossover, you can anticipate that the price will rise above its moving average. I use 20/40 EMA

leads me to believe this methodology may tell us more. If for example we trend the 2 MACD averages, we could look for a pattern, whether in the R-Squared value or by High/low points between crossover points to determine what PC% could be. I've also considered (very early in the process) Black-Litterman allocation prediction as a basis.

Still though, a lot of thinking and testing to do. As a caveat, the danger becomes too much tinkering or, as we used to say in the airplane world, chasing the needle can lead to undesirable effects.

RT