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Author: AliciaThyme Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 252783  
Subject: Re: Does this stuff work ? Date: 2/25/2013 8:38 AM
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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 @ Held
AA 17.9% 15 Feb 2008 35.72 13 May 2008 42.12 89
CVX 8.6% 03 Mar 2008 87.2 29 Apr 2008 94.74 58
JPM 6.1% 01 Apr 2008 47 02 Oct 2008 49.85 185
BA -40.0% 29 Apr 2008 85.53 06 Oct 2008 51.29 161
DIS -41.3% 13 May 2008 34.33 12 Nov 2008 20.16 184
AA -42.0% 02 Oct 2008 19.38 10 Oct 2008 11.25 9
BA 25.4% 10 Oct 2008 41.8 31 Oct 2008 52.42 22
UNH 13.9% 31 Oct 2008 23.73 30 Dec 2008 27.04 61
CVX 7.6% 14 Nov 2008 72.68 15 Dec 2008 78.21 32
GM -46.6% 15 Dec 2008 4.08 17 Feb 2009 2.18 65
UNH 9.0% 30 Dec 2008 27.04 12 Feb 2009 29.48 45
JPM 34.6% 12 Feb 2009 26.19 09 Jun 2009 35.26 118
GM 81.0% 19 Feb 2009 2 27 Mar 2009 3.62 37
BAC 50.1% 27 Mar 2009 7.34 13 Apr 2009 11.02 18
AA 9.3% 13 Apr 2009 9.15 23 Jun 2009 10 72
MRK 10.9% 26 May 2009 26.56 22 Jul 2009 29.45 58
TEV 10.7% 09 Jun 2009 44.04 01 Oct 2009 48.77 115
AA 24.8% 23 Jun 2009 10 19 Aug 2009 12.48 58
DD 19.0% 22 Jul 2009 28.47 12 Nov 2009 33.87 114
CAT 22.7% 05 Aug 2009 46.64 29 Oct 2009 57.25 86
BAC -40.3% 19 Aug 2009 16.75 15 Jul 2011 10 696
GE 14.6% 01 Oct 2009 15.97 25 Mar 2010 18.3 176
XOM 15.5% 29 Oct 2009 73.96 22 Feb 2011 85.44 482
UNH 11.4% 12 Nov 2009 28.76 12 Jan 2010 32.05 62
BAC -40.6% 12 Jan 2010 16.36 18 Jul 2011 9.72 553
GE 9.5% 25 Mar 2010 18.3 24 Jan 2011 20.04 306
MRK 5.7% 21 Jun 2010 35.12 29 Sep 2010 37.12 101
AA 10.7% 29 Sep 2010 12.08 13 Oct 2010 13.37 15
BA 10.3% 13 Oct 2010 71.47 04 May 2011 78.84 204
UNH 13.3% 24 Jan 2011 39.81 05 Apr 2011 45.09 72
DD -12.5% 22 Feb 2011 54.38 Current 47.58 723
AA -44.0% 05 Apr 2011 18.05 22 Sep 2011 10.11 171
INTC 8.1% 04 May 2011 23.5 05 Jan 2012 25.4 247
CAT -11.9% 15 Jul 2011 109.36 Current 96.38 580
INTC 10.6% 26 Sep 2011 22.24 24 Oct 2011 24.59 29
CAT 15.1% 24 Oct 2011 91.77 20 Jan 2012 105.64 89
GE 8.5% 05 Jan 2012 18.55 27 Jun 2012 20.13 175
BAC 10.9% 20 Jan 2012 7.07 03 Feb 2012 7.84 15
AA -15.4% 03 Feb 2012 10.76 Current 9.1 377
JPM 12.0% 27 Jun 2012 36.78 05 Dec 2012 41.2 162
CSCO 6.0% 23 Aug 2012 19.13 19 Dec 2012 20.27 119
CSCO 10.0% 05 Dec 2012 19.21 Current 21.14 71
HPQ 12.5% 19 Dec 2012 14.38 04 Feb 2013 16.18 48
PG 1.7% 04 Feb 2013 75.25 Current 76.56 10



Monthly Results:

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

https://docs.google.com/file/d/0B6rBG1MNaUjJcTJGeEp5NTRDYmM/...

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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