Replies to post #35606 on A.I.M. Users Bulletin Board (AIMUSERS)

[Conrad]

Hi Clive, between the Tennis Games of the First Set on Wimbledon I produced some Vortex Data Sets to have a closer look at:

For 50-50 initial stock/cash ($10,000 stock value, $10,000 cash), 10% SAFE, 10% min trade size and assuming a stock was 100 and declined 20% each week for four weeks down to 40.96, a weekly updated AIM would have exhausted all cash reserves ($10,578 of total buys). The same settings, but reviewed at the 40.96 price as the first update would indicate $5500 of additional stock be bought and still leave $4500 in cash reserves should the price continue further down. (There would be a residual buy of around $2200 sitting there waiting to be traded even if the price moved nowhere).

just to see how Vortex reacts to this. I have used for as far as possible the same although Vortex has no SAFE variable.
Start with 100 Shares @ 100 50/50 CER

I start with the Aggression Factors at 0, so the Buying good at

Buy= (PC-V)*1

****Murray has just this moment won Set 1****

In 4 consecutive Buys @ 20 drop in price I end up with this:

Value = 10000
Reserve= 2000 <-----Quite different from AIM zero Reserve
N=244.1406
PV= 12000
Price= 40,96
Profit= -8000


I know Vortex acts different right from the start. In order to compare it with Standard AIM I need to know the size of the first Buy in your 4-Buy example, which is, I think

Buy1 = (10000-8000) -800 = 1200 . . . .Correct

In my second comparison I will adjust the Vortex Buy Aggression to match the AIM Buy1 To the Vortex Buy1 and then we will see how it works out to the end for the 4 weeks.

First I wil report the VORTEX Single Buy Case at 40.96:

Value = 14096
Reserve= 0 <-----Quite different from AIM zero Reserve
The Buy Advice was > than Reserve so I had to temper the Buy to [prevent the Reserve going negative.
N=344.1406 <-----This is 100 Shares more than in the 4-Buy Case!
PV= 14096
Profit= -5904

Interesting Result to say the least but quite logical. Because of the 4-week wait the full Reserve value of $ 10000 could be spend at the low price of $ 40.96. . .This resulted in 1) 100 more shares and2) much $ 2096 less value loss.

These are the obvious and well known effects of delaying the buying to a lover price level. . This argument is the same for any investment scheme.

The interesting part here is that for a Vortex with zero Aggression, the results are 180 degrees reversed !!!. . . After 4 Buys I have $ 2000 left for in case the share price falls more. This means that the Standard AIM is a more aggressive buying machine than the Standard Vortex AIM with 0-agression ! This is something I had not discovered before.

Now it is time for more tennis. . .Federer is not at his best now but is holding off Murray in Set 2. . .Federed a bit ahead as yet!

I will adjust Vortex and do the run again later and then I will discuss more merits and pitfals in regards to my thinking on investing.

Regards,

****Ahaa. .Federer pulled out a bit of Magic to win a Set too!. . . . I opened a bottle of wine for that :-)****