Subject: Re: A mechanical strategy
Doesn't work. Either of them. For the S&P500 (SPY) starting Jan 1950.

I downloaded that spreadsheet and extended it and plugged in the SPY values from Jan'1950 to June'2017. I normalized the "stock price" for a starting value of 10 (SPY was 17.05).

Mark's definition is "Portfolio control = last month's PC + 50% of prev mo trade amount"
so PC will go up when you buy and down when you sell.

That spreadsheet, PC only goes up. PC does not change on a sell.

On the face of it, it seems like Mark's way is more logical. The Control varies up and down as stock is bought or sold.

Mark's way, you never have a buy signal.
SELL 20
BUY 0
Hold 789

6/1/2017 values
Stock: $0
Cash: $3,149


Spreadsheet way is more active.
SELL 64
BUY 5
Hold 740

6/1/2017 values
Stock: $2,843
Cash: $7,237


B&H for initial $2000 of SPY: $284,271
Bigtime fail!!!!!

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"Buy/sell advise = last months portfolio control - this month stock value
Market order = buy sell advise - safe value"
This cannot be right.
If the advise is 0, then the order will be to sell $(safe value) amount.

"Is there a place where I can upload a spreadsheet."
Upload to dropbox. Or upload to a google sheets.
Either way, share the link.


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Critique:
What he calls "SAFE" is what I'd call "threshold to take action" or "guiderail". It is a percentage of the current STOCK value. He uses 10%. That seems to be a very large percentage.
Then it computes the excess (above that threshold) and calls for a buy/sell of the amount of excess but ONLY if the order is for more than 5% of the current cash. That seems...odd. It works to moderate the change of cash.

All in all, it seems to me like he started with some particular stock and adjusted the threshold values until it gave him a result that he liked. As we used to say, Torture the numbers until they confess.