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Developed an AB code which also "fairs in" the maximum distance
outliers stock values. Problem is that for some stocks - like most
tech stocks - extending the values beyond the max distance point
results in huge values. (Imagine what the Nasdaq would be at today if
it had kept rising like it did prior to March of 2000.) So I'm
considering another approach using the standard least squares
quadratic curve fit. I'm sure this won't work too well for a lot of
stock also. But it's worth a try.
a
--- In amibroker@xxxxxxxxxxxxxxx, "Steve Almond" <steve2@xxxx> wrote:
> Here it is:
>
>
>
> Steve
>
> ----- Original Message -----
> From: "nickt75" <nvt1@xxxx>
> To: <amibroker@xxxxxxxxxxxxxxx>
> Sent: Wednesday, May 19, 2004 8:51 PM
> Subject: [amibroker] Re: Something New?
>
>
> > Steve,
> >
> > I would like to see the original chart. Here is my email
address:
> > nvt1@xxxx
> >
> > Nick
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Steve Almond" <steve2@xxxx>
wrote:
> > > Can I send the original chart direct to you? (and if so, how?)
> > > All should be clear(er) about the method, then.
> > >
> > > Steve
> > > ----- Original Message -----
> > > From: "aequalsz" <aequalsz@xxxx>
> > > To: <amibroker@xxxxxxxxxxxxxxx>
> > > Sent: Wednesday, May 19, 2004 8:17 PM
> > > Subject: [amibroker] Re: Something New?
> > >
> > >
> > > > Sorry, don't know. I couldn't view the attachment and I
don't get
> > > > email from the group so wasn't able to view the original
graph
> > showing
> > > > the method.
> > > > Reformulated the problem st it did pass through the beginning
and
> > end
> > > > points and found the max "outliers" and passed curves though
those
> > > > also. Problem is, if the CAGR curve always ends at the end
> > point, how
> > > > do you ever get a buy signal? As you can see I'm quite as
> > mystified
> > > > as you are. Maybe more.
> > > >
> > > > Not sure why the original method didn't pass through the end
> > points.
> > > > I just backsolved the compound interest formula, ie,
> > > >
> > > > (Close_initial)*(1+i)^n = Close_final
> > > >
> > > > for the required interest, i using daily data.
> > > >
> > > > a
> > > >
> > > >
> > > >
> > > > --- In amibroker@xxxxxxxxxxxxxxx, "Steve Almond"
<steve2@xxxx>
> > wrote:
> > > > > It would seem that the CAGR curve should pass through the
> > latest closing
> > > > > price. Is the difference due to rounding of the CAGR figure?
> > > > >
> > > > > Steve
> > > > >
> > > > >
> > > > > ----- Original Message -----
> > > > > From: "aequalsz" <aequalsz@xxxx>
> > > > > To: <amibroker@xxxxxxxxxxxxxxx>
> > > > > Sent: Wednesday, May 19, 2004 6:55 PM
> > > > > Subject: [amibroker] Re: Something New?
> > > > >
> > > > >
> > > > > > OK. I went back to the original method. Works a little
> > better.
> > > > > >
> > > > > > a
> > > > > >
> > > > > >
> > > > > >
> > > > > > --- In amibroker@xxxxxxxxxxxxxxx, "aequalsz"
<aequalsz@xxxx>
> > wrote:
> > > > > > > It looks like some of the tech stocks will have to go
into
> > negative
> > > > > > > numbers to be buy candidates. Do you use extreme high
and
> > low
> > > > points
> > > > > > > relative to the CAGR curve for the series of curves or
> > other more
> > > > > > > intermediate points?
> > > > > > >
> > > > > > > a
> > > > > > >
> > > > > > >
> > > > > > >
> > > > > > > --- In amibroker@xxxxxxxxxxxxxxx, "Steve Almond"
> > <steve2@xxxx>
> > > > wrote:
> > > > > > > > I came across a 'new' method of investing whilst
perusing
> > the
> > > > Motley
> > > > > > > Fool boards (I think a subscription is required -
sorry).
> > It's
> > > > called
> > > > > > > the BMW system after the inventor's name BuildMWell.
> > > > > > > > http://boards.fool.com/Message.asp?mid=20414790
> > > > > > > >
> > > > > > > > Basically, he takes a long price history (typically
30
> > years of
> > > > > > > monthly data) and constructs a series of % CAGR
(compound
> > annual
> > > > > > > growth rate) curves which encompass the data.
> > > > > > > >
> > > > > > > > Here is an example (PEP) from, I believe, Excel:
> > > > > > > >
> > > > > > > >
> > > > > > > > The first curve uses today's price and the price 30
years
> > ago to
> > > > > > > calculate the current CAGR (say 11.3%) which he then
draws
> > > > (manually)
> > > > > > > on a chart printout.
> > > > > > > > He simply calculates the price every 5 years assuming
an
> > annual
> > > > > > > 11.3% increase and connects the dots with a French
curve!
> > > > > > > > Similar curves are then drawn to hit the obvious
high
> > and low
> > > > points.
> > > > > > > >
> > > > > > > > In this way he invests when the stock is
> > historically 'low'. For
> > > > > > > example see the above chart about mid 2002.
> > > > > > > > As you will appreciate, this is not a short term
system,
> > but BMW
> > > > > > > claims not to have had ANY losers since starting in
1999!
> > > > > > > > The question, of course, is can we draw these curves
in
> > AB?
> > > > > > > >
> > > > > > > > Thanks,
> > > > > > > >
> > > > > > > > Steve
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > > Send BUG REPORTS to bugs@xxxx
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> > > > > >
> > > > > >
> > > > > >
> > > >
> > > >
> > > >
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> >
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