Replies to post #34 on Systematic Investing Group (SIG)

[lostcowboy]

Hi berry, Glad to have you over here, where we can pick your brain on the money spinner, I have read of it at your web site, but would like a detailed step by step walk through it. I have checked the web but your page is the only one on it.

About your questions!
(1) What is "Double Dollar Cost Averaging" ?
Mr Lichello talks of a system called this that he invented just before he invented Synchrovest. In his AIM book in chapter 5, he describes it.
About questions two and three, I can not help you. I checked over at Amazon and they do not have him/her listed there.

Like the Money Spinner, Lichello's system IMPLICITLY uses the dollar cost averaging and dollar value selling principles.
I think this is referring to Synchrovest. Could it be that Mr Chakrapani was reading Mr. Lichello's AIM book at the same time that he was writing his own book, both double dollar averaging and Synchrovest are talked about in Chapter five.

[karw]

Hello Barry,

I cannot give you an answer to question 2 and 3.

However I have some ideas about the evolution from dollar cost averaging to AIM. This based on playing with spreadsheets where you can see the logic of each new invention.

I think you have 2 evolution lines:

1 - Dollar Cost Averaging, Double DCA, Synchrovest. Here Synchrovest is the fittest survivor.

2 - Dollar Cost Averaging, Value Cost Averaging, AIM.
Here AIM is the fittest survivor.

Evolution Line 1 is well decribed by Lichello.

Evolution Line 2: Value Cost Averaging(see the gummy stuff website at www.home.golden.net/~pjponzo/gummy_stuff.htm for a good explanation of VCA and much more)introduces the concept of Portfolio Control, although it is not recognized as such. If you make a spreadsheet with the classical Lichello series 10-8-5-4-5-8-10 you can see that VCA does not perform well(you can vary the periodic VCA amount and for example set it to zero to get to AIM). Then introduce SAFE(10%). Then run the spreadsheet again. You will see the Lichello wonder. If you reread Lichello's book again, with the above evolution path in mind, it all makes sense.

Now you can also understand why Lichello keeps the once a month rhythm. It still is a trait from DCA and VCA. However in AIM it has no real function anymore and can be replaced by Price based action as in TMS. So you can see that I believe that TMS is a life-form from evolution branch 2!

In my next post I want to describe how Synchrovest and AIM can join again and make a new monster!

Greetings, Karw

[Conrad]

Barry and The Money Spinner,

Barry, it appears that you are one of the few people on these AIM Boards that actually have experience with The Money Spinner(TMS). I was curious were you hailed from...Sure enough you are from Canada were TMS was published. I ran into it in Vancouver about 1981 or so.

I agree with you that TMS is almost certainly a derivative of the Lichello AIM. Like you I started out on TMS. Although I liked the basic idea I disliked the fact that TMS was more complex than its introduction led me to believe. I particularly disliked the extra complexity of the Minimum Trade Interval(MTI) for low priced stocks, which Chakrapani claimed was a unique improvement. I never did understand why the MTI was an improvement. TMS also contained the Lichello Flaw(Residual Buy Advice) and that put me off even more. This is why I simplified the systems and created my own Vortex AIM.

I contacted Chakrapani a few months ago. He stated to me that he did not rework the Money Spinner after its first publication but that he was still developing investment systems(He did not specify any recent developments)

Its clear that recent efforts of various AIMers for more efficient cash disbursement schemes have outstripped the original systems.

Will it all end at THG?
(The Holy Grail)

Conrad

[infooverload]

Mystery solved. eric s. emory in when to sell stocks . Was a variant of constant dollar investing. Where profits were sold at a certain calendar date. When losses ocured all the cash reserve on the same calendar date the following year was reinvested. so on.

Stock market riches by praveen puri . I bought the book. It is constant dollar investing with additional contributions put into distinct shares and managed separately. so its suitable for ira's and fits into SIG realm of study.

All be well!

[infooverload]

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