Qarel: Interesting Features!
You wrote:
I am a boring kind of guy...
So is Warren Buffet!
Your AIM BTB Result - I AM Rusty on AIM BTB so I work it out here as a refresher:
344*14,62=5029,28 = Y1 = PC1 (Trading cost from Cash Reserve)
344*50,24=17282,56=Y2
Advise=12253,28
Safe: 0,1 gives 1225,53
Sell Order=11027,75
Qty=11027,75/50,24=219,50: Gofor 220
Shares left+344-220=124
PV2= 124*50,24= 6229,76: No PC update on sells.
Advise=6229,76-5029,28=1200,48
Safe: 0,1 gives 120,05
Sell Order = 1080,43
Minimum Sell 5% of 6229,76 = 311,49
Sell Qty= 1080,43/50,24= 21,5 Gofor 22
Total Sell Conrad's AIM BTB= 242 (Total Sell Karel's AIM BTB =230)
Shares Remaining= 102
PV3=5124,48
Advise= 95,20
Safe: 0,1 gives 512,45
No Sell.
OK, Karel, Interesting fact you highlighted.
In the past I did not investigate the Residual Sell possibility. Technically it is a predictable(mathematical) result from the fact that PV is not equal to PC. On the residual Trade Effect is more severe because of the growing PC and the dropping PV.
If the AIM investor is on the ball he can ignore the Residual Buy, and in this sense the Residual Trade can be called a Feature. On the other hand, if a month later the stock has dropped only a little AIM triggers a Buy too soon, and this is the problem that is inherent in AIM for running out of cash. In this sense I would continue to call it a Flaw. On the Sell Side the Residual Sell is not a problem as most AIMers would not wait till the stock more than triples in value. In effect, the Typical AIMer would probably have sold much more stock than 242 shares at the price of 50,24. I have not calculated what an AIMer BTB would have done in this case: it would have been dependent on how frequently he updated his Portfolio.
Now the Vortex Response:
Sell Aggression Factor=0,5
Sell Factor=1/(1-0,5)=2
344*14,62=5029,28 = Y1 = PC1 (Trading cost from Cash Reserve)
344*50,24=17282,56=Y2
Advise=12253,28
Sell Order=24506.56
Sell =17282,56 !!!
Qty=344! Cashed out.
A Vortex Investor would typically look at the stock frequently and the above
Is not a realistic result. Probably he would have cashed out earlier, or he would have sold nothing if he believed the stock would triple.
The interesting point in this example is that it is a totally a-typical investment case for AIMers and this means that it does not provide any useful information for AIM or VORTEX investing. The example is more a Show Case for a Buy and Hold Investor that wants to demonstrate that Buy and Hold is a good strategy(Like the Coca-Cola Derivative).
The above example is an extreme case of what happens when we use singe case examples: we tend to extract the things we want to show and by doing so we neglect to mention that effective investing, with any method, is much more dependent on having the know-how to override the system calls: Bailing out(at any price) when the stock is not worth having and holding on when it is wise to do so. The system is only a device to make decisions when better information is not available.
I wish I had some money!
:-)
Regards,
Conrad
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