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Hi Guys,

I am indebted to Zeelotes for providing GM data 2 Jan 2008 - 1 June 2009. Many thanks.

I have spent a couple of hours on the revised dataset. Running the previous strategy of simply subtracting the two trends now results in an overall loss, and shows the inadequacy of such a simple stock picking method which clearly needs to be more selective to detect potential growth stocks.
However, I have been trying to demonstrate the effectiveness of my STB method, and I am less concerned with stock picking methods (but I have implicitly assumed they whatever method used is designed to select stocks for capital growth).

So to demonstrate the process again, I have adjusted the trend formula to be more selective by find recovery from a dip.

This is achieved by subtracting the trends ONLY if:

A) the former trend is negative
B) the later trend is at least 0.5% positive

With a 20-day trend version having Yahoo price (+GM) data in column A,

B60=TREND(A20:A40,,{21})/TREND(A20:A40,,{20})-1
C60=TREND(A41:A60,,{21})/TREND(A41:A60,,{20})-1
D60=IF(AND(A60<0,B60>0.005),B60-A60,"")

I am not claiming that these formulae are infallible, simply that they give a decent set of target buys from which to draw comparisons. The results which follow are of course a single set over the latest 5-year period, and as many have suggested, to fully validate any strategy it should be run over a much larger dataset (as I have done with my UK FTSE100 data run as 5-year datasets at intervals over the last 10 years). So it may well be that the stock picking system I just invented for generating these target buys would need development to show consistent performance over the larger dataset - but that is outside my objectives here.

Now run these formulae across the dataset every 10 days and select the best result for the next target buy. There will be fewer target buys than previously because on some days no stock meets the selection criteria.

Without looking for any rebuys his provides a total of 59 target buys over the 5 year period which if you simply buy and hold will give you a profit of 14.9%. Obviously, at say \$1000 per lot, you would have to invest \$59,000. My STB system is designed for a single lump-sum investment, NOT for continuous investment.

So if you applied my STB rules you would find 75 target buys, the result is an overall profit of 68%, having bought and sold 39 of the targets for which the median profit is 10.7% (win ratio 82%), and ending with 5 current holdings. There are 7 stoploss sales and 3 rebuys (interestingly, the GM 19 Feb 2009 rebuy made 81% profit).

Perhaps now you can see the power of my system (68% with a modest lump sum investment vs 14.9% with a large continuous investment) which I have been trying to get you to use on your own portfolios.

If you want to validate my results, the listing are as follows:

Dealing Schedule:
`EPIC	Return	  Bought	 @	   Sold  	  @	HeldAA  	17.9%	15 Feb 2008	35.72	13 May 2008	42.12	89CVX 	 8.6%	03 Mar 2008	87.2	29 Apr 2008	94.74	58JPM 	 6.1%	01 Apr 2008	47	02 Oct 2008	49.85	185BA     -40.0%	29 Apr 2008	85.53	06 Oct 2008	51.29	161DIS    -41.3%	13 May 2008	34.33	12 Nov 2008	20.16	184AA     -42.0%	02 Oct 2008	19.38	10 Oct 2008	11.25	9BA  	25.4%	10 Oct 2008	41.8	31 Oct 2008	52.42	22UNH 	13.9%	31 Oct 2008	23.73	30 Dec 2008	27.04	61CVX 	 7.6%	14 Nov 2008	72.68	15 Dec 2008	78.21	32GM     -46.6%	15 Dec 2008	 4.08	17 Feb 2009	 2.18	65UNH 	 9.0%	30 Dec 2008	27.04	12 Feb 2009	29.48	45JPM 	34.6%	12 Feb 2009	26.19	09 Jun 2009	35.26	118GM  	81.0%	19 Feb 2009	 2	27 Mar 2009	 3.62	37BAC 	50.1%	27 Mar 2009	7.34	13 Apr 2009	11.02	18AA  	 9.3%	13 Apr 2009	9.15	23 Jun 2009	10	72MRK 	10.9%	26 May 2009	26.56	22 Jul 2009	29.45	58TEV 	10.7%	09 Jun 2009	44.04	01 Oct 2009	48.77	115AA  	24.8%	23 Jun 2009	10	19 Aug 2009	12.48	58DD  	19.0%	22 Jul 2009	28.47	12 Nov 2009	33.87	114CAT 	22.7%	05 Aug 2009	46.64	29 Oct 2009	57.25	86BAC    -40.3%	19 Aug 2009	16.75	15 Jul 2011	10	696GE  	14.6%	01 Oct 2009	15.97	25 Mar 2010	18.3	176XOM 	15.5%	29 Oct 2009	73.96	22 Feb 2011	85.44	482UNH 	11.4%	12 Nov 2009	28.76	12 Jan 2010	32.05	62BAC    -40.6%	12 Jan 2010	16.36	18 Jul 2011	 9.72	553GE  	 9.5%	25 Mar 2010	18.3	24 Jan 2011	20.04	306MRK 	 5.7%	21 Jun 2010	35.12	29 Sep 2010	37.12	101AA  	10.7%	29 Sep 2010	12.08	13 Oct 2010	13.37	15BA  	10.3%	13 Oct 2010	71.47	04 May 2011	78.84	204UNH 	13.3%	24 Jan 2011	39.81	05 Apr 2011	45.09	72DD     -12.5%	22 Feb 2011	54.38	 Current	47.58	723AA     -44.0%	05 Apr 2011	18.05	22 Sep 2011	10.11	171INTC	 8.1%	04 May 2011	23.5	05 Jan 2012	25.4	247CAT    -11.9%	15 Jul 2011    109.36	 Current	96.38	580INTC	10.6%	26 Sep 2011	22.24	24 Oct 2011	24.59	29CAT 	15.1%	24 Oct 2011	91.77	20 Jan 2012	105.64	89GE  	 8.5%	05 Jan 2012	18.55	27 Jun 2012	20.13	175BAC 	10.9%	20 Jan 2012	 7.07	03 Feb 2012	 7.84	15AA     -15.4%	03 Feb 2012	10.76	 Current	 9.1	377JPM 	12.0%	27 Jun 2012	36.78	05 Dec 2012	41.2	162CSCO	 6.0%	23 Aug 2012	19.13	19 Dec 2012	20.27	119CSCO	10.0%	05 Dec 2012	19.21	 Current	21.14	71HPQ 	12.5%	19 Dec 2012	14.38	04 Feb 2013	16.18	48PG  	 1.7%	04 Feb 2013	75.25	 Current	76.56	10`

Monthly Results:
`	         Bank	Holdings  Overall	Profit	#Held31-Jan-08	10,500	     0	  10,500         0%	029-Feb-08	7,000	 3,639	  10,639         1%	131-Mar-08	3,500	 6,959	  10,459         0%	230-Apr-08	  303	10,429	  10,732         2%	330-May-08	  930	10,015	  10,944         4%	330-Jun-08	  930	 8,425	   9,355       -11%	331-Jul-08	  930	 8,621	   9,550	-9%	329-Aug-08	  930	 8,847	   9,777        -7%	330-Sep-08	  930	 8,953	   9,883        -6%	331-Oct-08	2,662	 6,142	   8,803       -16%	228-Nov-08	1,217	 6,904	   8,121       -23%	231-Dec-08	1,972	 6,188	   8,160       -22%	230-Jan-09	1,972	 6,249	   8,221       -22%	227-Feb-09	  658	 6,991	   7,649       -27%	231-Mar-09	3,493	 6,804	  10,297	-2%	230-Apr-09	5,247	 7,879	  13,127	25%	229-May-09	1,747	12,092	  13,840	32%	330-Jun-09	3,285	10,562	  13,846	32%	331-Jul-09	3,665	11,341	  15,007	43%	331-Aug-09	1,033	15,008	  16,042	53%	430-Sep-09	1,033	15,251	  16,285	55%	430-Oct-09	2,206	13,475	  15,681	49%	430-Nov-09	2,869	13,864	  16,734	59%	431-Dec-09	2,869	13,399	  16,268	55%	429-Jan-10	3,270	12,993	  16,262	55%	426-Feb-10	3,270	13,641	  16,911	61%	431-Mar-10	3,780	14,199	  17,980	71%	430-Apr-10	3,780	14,354	  18,135	73%	428-May-10	3,780	12,645	  16,425	56%	430-Jun-10	  280	15,021	  15,301	46%	530-Jul-10	  280	15,279	  15,559	48%	531-Aug-10	  280	14,340	  14,620	39%	530-Sep-10	  480	15,081	  15,560	48%	529-Oct-10	  853	14,512	  15,365	46%	530-Nov-10	  853	14,073	  14,926	42%	531-Dec-10	  853	15,796	  16,649	59%	531-Jan-11	1,186	16,636	  17,822	70%	528-Feb-11	1,730	16,845	  18,574	77%	531-Mar-11	1,730	16,769	  18,499	76%	529-Apr-11	2,194	16,052	  18,245	74%	531-May-11	2,555	15,012	  17,566	67%	530-Jun-11	2,555	14,489	  17,044	62%	529-Jul-11	3,224	12,653	  15,877	51%	431-Aug-11	3,224	11,499	  14,723	40%	430-Sep-11	1,684	11,472	  13,156	25%	431-Oct-11	2,054	13,374	  15,428	47%	430-Nov-11	2,054	13,647	  15,701	50%	430-Dec-11	2,054	12,913	  14,967	43%	431-Jan-12	2,866	13,828	  16,693	59%	429-Feb-12	3,247	13,830	  17,077	63%	430-Mar-12	3,247	13,860	  17,107	63%	430-Apr-12	3,247	13,589	  16,836	60%	431-May-12	3,247	12,293	  15,540	48%	429-Jun-12	3,545	12,219	  15,764	50%	431-Jul-12	3,545	12,075	  15,620	49%	431-Aug-12	   45	15,742	  15,788	50%	528-Sep-12	   45	16,218	  16,263	55%	531-Oct-12	   45	15,471	  15,517	48%	530-Nov-12	   45	15,609	  15,654	49%	531-Dec-12	  674	15,635	  16,309	55%	531-Jan-13	  674	16,845	  17,519	67%	513-Feb-13	1,112	16,520	  17,632	68%	5`

From previous experience I have no doubt that there will be much criticism of this post and very little support.

In business I have always found that my staff thrive not on aggressive criticism but on patient encouragement, and as a team only then do we keep an open mind and achieve our best. I have also found that women do this much better than men, who seem to need to be much more arrogant and dismissive of challenges which may dent their ego.

When I was young I was advised that to succeed in a man's world I should consider Rudyard Kipling's short poem "If" - it has served me well. http://www.kipling.org.uk/poems_if.htm

I have offered my Sell-to-Buy solution to the dilemma of when best to sell a holding as my response to dividends20 original post 241336 only to be met with much derision (which I have either ignored or patiently responded to with good grace). To paraphrase the Good Book, there is a season for all things, and I feel the season for this post is now over.

Please feel free to use STB as you wish, but remember that no-one can guarantee future performance of any investment, so do not invest what you can't afford to lose.

All I would ask in return is that you donate a good proportion of your profits to a charity of your choice.

Finally, you might be interested to consider the results from my system modelled on the UK FTSE 100 constituents dataset over the 10 years to date. It uses two independent functions for detecting target buys and applies the STB process I have been describing. It starts with £10,500 and ends with £163,253 net profit having bought 206 target buys along the way to conclude holding 40 currently (there were 25 rebuys) That's a net profit of 1,550% or 32.4% GAGR (Note that in UK, Net means gross less charges of broker fees + 0.5% tax for each purchase lot):

Currently I have 4 investments running and the results for those are:
"5-yr plan" started Nov 2007 now 413% net profit
April 2010 plan now 146% net profit
April 2011 plan now 7.3% net loss
April 2012 plan now 12.1% net profit

Good luck, God bless and Goodbye

Alicia Thyme

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