| From: OldAIMGuy | 6/3/2024 11:02:08 AM | | | | | | v-Wave Market Risk Indicator for AIM users, in Living Color!
It appears the markets are struggling to break out from current levels when faced with market risk headwinds. Of course, this assumes that stock market investors act logically. The major indexes do show three interpretations of investor sentiment. Recently the S&P 500 has been able to outshine the NASDAQ Composite and the Dow 30. Capitalization weighting in the indexes can cause this sort of differential. In this link, you can see the difference between the S&P 500 (traditional cap weighted) and the S&P 500 Equal Cap Weighted indexes. Once again we see that a few very large cap stocks outshine the broader markets. This equates to what we hear is 'poor market breadth.'
stockcharts.com
A change in Value Line's longer term (3-5 Year) Model took place this week.
At Value Line, they spilled their coffee and in a fit of tantrum, they dropped Starbux (SBUX) from their 3-5 Year Growth model portfolio. They first added SBUX back in 2015 at around $40/share, so they've done okay with the holding.
schrts.co
This 9 year histogram shows there were several thrilling moments along the way where Robert Lichello's AIM method of stock inventory management would have helped out. Selling into strength and buying into weakness would have built out a handsome portfolio over this time frame.
Value Line replaces Starbux with Euronet Worldwide (EEFT) as a new addition to the long term growth model.
schrts.co
A quick glance at its history shows even more opportunities for the practicing AIM user. Value Line feels its longer term outlook is worthy of consideration. It appears AIM might lend a helpful hand along the way.
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 6/4/2024 6:41:49 PM | | | | | | Guess what! Another month has passed and along with it the first half of 2024. Here's where my AIM portfolios stand:
My 9 "Style" International ETF Portfolio:
My U.S. Business Sector ETF Portfolio (mostly Equal Cap Weight Sectors)
My 10 Common Stock Portfolio
My Retirement Account (after required distributions)
May turned out to be a pretty good month overall. Cash is slowly rebuilding as stocks and ETFs rise.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 8/1/2024 9:50:40 AM | | | | | | July turned in a mixed bag of performances. There was really not much change at all from previous periods.
Tom's 10 Stock Composite Portfolio
(17% Cash)
Tom's 9 International "Style" ETF Portfolio
(20% Cash)
Tom's U.S. Business Sector ETF Portfolio
(16% Cash)
Tom's Converted IRA Portfolio (was Contributory until January 2024)
(25% Cash)
Mr. Lichello's AIM continues to be a reasonable cure for the Summertime Blues. AIM added to cash reserves in some of these while cash treaded water in others.
Best wishes,
OAG Tom
PS: my new office computer won't run my old picture editing software (company no longer exists) so I did these with "Paint." Resizing is something I'll have to learn!
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 8/5/2024 9:51:36 AM | | | | | | We can't say that the v-Wave didn't give us reasonable warning of the Storm the Financial District is experiencing this AM.
Both the v-Wave and the MRI were signaling a barometric pressure change well before this softening. While the MRI is my own home brew (going back to the Idiot Wave) and the v-Wave is built from Value Line's black box Appreciation Potential, they both have tracked quite well with each other.
There are more moving parts in the MRI so it can be a bit more responsive to sudden changes than the 3-5 year v-Wave but looking at the two standard deviation break points (Caution and Proactive) we see they are generally singing in harmony.
Thanks,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 8/8/2024 8:33:12 AM | | | | | | A member of the AIM group over on i-Hub posted this S&P History since 1871 for everyone's enjoyment. The S&P 500 equivalent was synthesized using inflation data to keep it honest as far as Inflation goes. It's a rather interesting bit of work.
-----------------------------------------------------------------------
AIM spreadsheet For S&P500 since 1871 data. AIM's the real (after inflation) S&P500 price
Doesn't display well within google-spreadsheet (online), but displays fine when downloaded as a Excel .xlsx and viewed locally (at least when using LibreOffice)
Includes data/results when you run that as a paper AIM and trade once/year to realign stock/cash (T-Bills) actual weightings to the AIM indicated prior year end AIM %CASH level. Which is like trading all of the years AIM trades, in a single combined trade. Which also means you can tie cash up for a year at a time (potentially better interest rates)
Click on the Spreadsheet to see the entire month by month history. Note there were far more months of no activity than there were months of trades. This means AIM takes considerable patience. His example shows $2000 growing to $64,000 over this time frame. Also note the fairly long times that AIM was out of cash and stalled on the Buy side. AIM can't run out of Shares, but AIM CAN run out of cash. This makes the Cash side more "precious" than the stock side since it can be depleted.
Starting with this page, there's deeper explanation of how Clive created this history.
investorshub.advfn.com
Best wishes,
OAG Tom |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 8/13/2024 8:27:54 AM | | | | | | More from AIM user Clive..............................
Hi Tom,
AIM of S&P500 real price, Monthly reviews, 10% SAFE, no Minimum Trade Size, Buy even if cash moves negative (set cash to zero) (so starts selling again sooner after deep dives) i.e. a only on-paper-AIM that is used to identify a appropriate stock/cash weighting to rebalance to once/year, as of the end of July was indicating 58.6% cash, reducing down from former higher levels
That's still significantly higher that other markets i.e. Covid, wars etc. has seen a flight to US safety, and risks that when greed returns/fear subsides that capital may outflight the US for 'better value' elsewhere
Realigning once/calendar year the actual portfolio to the on-paper-AIM stock/cash weightings indicated values at that time ...
Achieved similar total returns whilst having averaged 40% to 50% cash. If/when cash earns > cash then any value added there obviously adds to total returns
AIM did a great job of scaling stock exposure down/up as stocks rose strongly (too fast)/declined
Clive
------------------------------------------------------------------------------------------------------------------------------------
...and my Reply:
Good day Clive, Re: AIM Performance against a broad index...................
AIM's performance compared to the S&P 500 (inflation adjusted?) and used as a cash cow is quite good. Consider that most professional money managers at mutual funds don't achieve equity with the index makes the AIM results all the more pronounced. Many investors talk of beating the "market" as a goal. Considering how hard it is to just match the market, they may be setting their goal too high. Matching the S&P Index with significantly less principle at risk seems to be a quite satisfactory achievement.
One of the reasons I came up with the R.O.C.A.R. idea (Return On average Capital at Risk) was to highlight AIM's risk adjusted return over time. In your example, to have achieved near parity with the S&P 500 Index over decades while having only around 60% of the average risk exposure seems a far better outcome than essentially all mutual funds. Fund managers might achieve better returns once in a while, but there aren't any that have been consistently that good. And, they've had to risk essentially all the capital to achieve their infrequent successful outcomes.
Thanks again for highlighting AIM's strengths over time.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 8/22/2024 8:58:21 AM | | | | | | Re: AIM and Gold.....................................
What's the appropriate level of Cash to hold in an AIM Engine designed around Gold?
Looking back at the last 25 years we see gold has had drawdowns of at least 20% six times. Some of those drawdowns were in the 30% to 50% range. Thinking of how the Buy side of AIM works, with relatively standard settings one would need a 30% to 50% cash reserve near peaks to be able to buy with AIM signals all the way down these slides.
I don't feel the v-Wave or the MRI relate to gold, so letting AIM seek its own level of cash might be best. But, if you still like the idea of capping max cash, you could use 'vealies' at some cash percentage. Maybe 30%, 40% or 50% would keep this engine in tune and offer some comfort.
schrts.co
Note the "Accumulation" pressure on IAU since around the start of 2020 (bottom of graph image). This might be symptomatic of the last 4 year's inflation. IAU shares rose roughly 50% over that time frame.
Holding 50% IAU (no yield) and 50% MMFs (5% yield) would render an approximate annual yield of 2.5% for the entire engine while idling. So, maybe a cap at 50% cash (then vealies) would make some sense.
Best wishes,
OAG
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 8/30/2024 12:27:27 PM | | | | | | Re: AIM Cash Reserve levels....................
My U.S. Sector ETF portfolio was started at the end of May in 2009. It started at 8% Cash Reserve. Here's the cash track record as of the 1st of the year each year since:
| Year Start | Start Cash Reserve | Previous Year Gain | | 2010 | 26% | +24.6% | | 2011 | 12% | +17.2% | | 2012 | 13% | - 0.7% | | 2013 | 21% | +13.2% | | 2014 | 30% | +24.6% | | 2015 | 27% | + 3.2% | | 2016 | 27% | - 5.2% | | 2017 | 17% | + 9.9% | | 2018 | 21% | +16.2% | | 2019 | 15% | - 5.9% | | 2020 | 14% | +25.2% | | 2021 | 21% | +13.6% | | 2022 | 18% | +15.4% | | 2023 | 10% | -11.6% | | 2024 | 12% | +16.2% | | To Date | 16% | +11.0% |
A surprise here is the low cash at the start of the Covid Year and yet there was a portfolio gain by the start of 2021 of 13.6%, even with all that thrashing. Cash was spent down to just 10% of that portfolio by April of that year but was back up to 21% by the end of 2000.
2022 was a sour year for performance, down nearly 12% at the end. Starting cash of 18% was drawn down to just 10% by year's end. The work of rebuilding the cash reserve levels continues with a sale this AM in the Healthcare Sector. Overall, my cash reserve levels have been lower than the v-Wave and the MRI suggested levels. Like Dire Straits said, "If you want to run Cool, you got to run on Heavy, Heavy Fuel."
youtube.com
I've not subjected this account to regular withdrawals for living expenses so far. I did take out 5.5% of value at the end of 2000, however.
Best wishes,
OAG Tom
Buy from the Scared; Sell to the Greedy..... |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| From: OldAIMGuy | 9/23/2024 10:28:45 AM | | | | | | v-Wave Market Risk indicator shows longer term diversified investments should be starting with around 34% cash held in reserve.
For comparison, here's my Market Risk Indicator (MRI) X-ray of market risk:
The MRI is showing 33% suggested cash - not much different from what the v-Wave is indicating for diversified investments. Neither is saying it's a bargain right now.
Best wishes,
OAG |
| | A.I.M Users Group Bulletin Board | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| |
