Investing strategy in "Invest My Way" by Alan Hull: Any experience?

[adisankhiyan]

Hi all,
I'm new to learning about stocks and investing. I started by reading a few books on investment strategies. This book and the information in it looks pretty good, I just wanted to know if anyone has used or is using the strategy described by him, and what is/was their experience??

Thanks

 

[Tightwad]

i read a book by him a couple of years ago, not sure if it's the same one. Was interesting enough but it may have required subscribing to his service so you get his number crunching, which i'd be wary of doing.

I think it was more a momentum trading thing which isn't really my style. I'd try and identify the strategy and then read up on it if you were interested.

 

[adisankhiyan]

i read a book by him a couple of years ago, not sure if it's the same one. Was interesting enough but it may have required subscribing to his service so you get his number crunching, which i'd be wary of doing.

I think it was more a momentum trading thing which isn't really my style. I'd try and identify the strategy and then read up on it if you were interested.

Yes, it is a momentum strategy and I liked the idea of it.
One doesn't have to subscribe to his newsletters and report though, as long you are ready to do all the calculations and a little bit of research by yourself at least once a month, which I can by the use of some dedication and a good charting tool(which I'm looking for at the moment). But because I'm new to this world of strategies, stocks and investments I want somebody experienced to tell me if this strategy is any good or not

 

[CanOz]

Yes, it is a momentum strategy and I liked the idea of it.
One doesn't have to subscribe to his newsletters and report though, as long you are ready to do all the calculations and a little bit of research by yourself at least once a month, which I can by the use of some dedication and a good charting tool(which I'm looking for at the moment). But because I'm new to this world of strategies, stocks and investments I want somebody experienced to tell me if this strategy is any good or not

Does the strategy have results based on historical data?

If you're looking for someone here to post a true record (the only way to verify for sure that a strat is any good) i wouldn't hold your breath....

When we make our decisions on whether or not to trade a strategy, we usually use a combination of historical data sets. Then, we can trade it on a paper account for a six months to a year and see if the performance is similar.

You need to be able to trade this through drawdowns, so i'd make sure YOU are confident trading it....

CanOz

 

[tinhat]

Does the strategy have results based on historical data?

If you're looking for someone here to post a true record (the only way to verify for sure that a strat is any good) i wouldn't hold your breath....

When we make our decisions on whether or not to trade a strategy, we usually use a combination of historical data sets. Then, we can trade it on a paper account for a six months to a year and see if the performance is similar.

You need to be able to trade this through drawdowns, so i'd make sure YOU are confident trading it....

CanOz

The last time i looked at Allan Hull's systems was the ActVest system about six or more years ago now. His book outlined the system in detail. I can't remember whether he back-tested it but, given that the system was completely transparent (white box) anyone could back test it. It was a fairly conservative active investing system focused on capital conservation and momentum - with filters for when and when not to be in the market (S&P500 and ASX200 momentum filters) with investments limited to a stock universe of perceived fundamentally sound companies. He has probably modified it since I last looked at it. Basically, as far as I recall it was a momentum based active investing strategy combined with a position sizing method and stop-loss method to conservatively manage capital drawdown. The fundamental analysis filter was your choice of either Lincoln Indicator's Stock Doctor (companies listed as strong or satisfactory under their FA analysis) or the Top 100 stocks of the ASX book (can't remember the author, don't know if it is still published).

 

[adisankhiyan]

Does the strategy have results based on historical data?

If you're looking for someone here to post a true record (the only way to verify for sure that a strat is any good) i wouldn't hold your breath....

When we make our decisions on whether or not to trade a strategy, we usually use a combination of historical data sets. Then, we can trade it on a paper account for a six months to a year and see if the performance is similar.

You need to be able to trade this through drawdowns, so i'd make sure YOU are confident trading it....

CanOz

The book does gives a stimulation at the end, where $100,000 invested in 2001 return $453,506 in 2011 with a return of -18.20% and -11.90% in years 2009 and 10 respectively. On average there were 9.7 trades per year and other costs like taxation, brokerage are excluded, dividends are also excluded. At the end of the stimulation there is kind of a disclaimer which says "This stimulation is a guide only and has not been independently audited" I don't know what "audited" means here.
Can that be seen as a result based on historical data ?

I'm going to start paper trading (which I also need to learn) using this strategy once I get hold of a charting tool to help me with it.

To get the confidence I need to start trading using this strat is the reason I created this post. I don't know a way to know if this is a good strategy or not, other than asking at a forum like this. I am looking for someone to share there experience with this strategy.

 

[systematic]

tegy combined with a position sizing method and stop-loss method to conservatively manage capital drawdown. The fundamental analysis filter was your choice of either Lincoln Indicator's Stock Doctor (companies listed as strong or satisfactory under their FA analysis) or the Top 100 stocks of the ASX book (can't remember the author, don't know if it is still published).

Top Stocks, by Martin Roth. Still published annually.

 

[systematic]

To get the confidence I need to start trading using this strat is the reason I created this post. I don't know a way to know if this is a good strategy or not, other than asking at a forum like this. I am looking for someone to share there experience with this strategy.

...You highlight a point that is dear to my heart. You need a great amount...a very great amount...of confidence in a strategy in order to trade it. A lot of people, perhaps mostly newbies(?) underestimate that. That core need for confidence is one of the foundations of my own plan.

In my opinion, you don't sound ready to trade this system. At least not yet...not until you've built well-founded confidence in it.

Re: Alan Hull...all I know is, (a) his books disclose the methods of his newsletters very clearly, and (b) he is easily contactable. Personally, there are a couple of aspects of his systems (thinking back to Active Investing - I haven't read, "Invest My Way") that require a certain amount of discretion that I can't come at. But he is much more clear about his rules than so many authors.

It would not be difficult to either (a) code his stuff up yourself or (b) hire a system coder to test for you the quantitative aspects of Hull's systems(s) on whichever markets you choose. That's where I'd start, anyway. I can think of at least two "hire an Amibroker coder" services off top of my head; you'd just need to google it. A few hundred (no idea) dollars spent testing the system(s) on the markets / timeframes of choice would be a bargain. If they don't stand up to your requirements on a rules-based basis, then you wouldn't trade it (as you'd then be punting that you are awesome at the discretionary bits).

Regardless of that, your question is fine...hopefully someone here who has subscribed for a while will let you know of their experience. Hull has been around a good while now, so there must be some ASFers that have been members.

 

[CanOz]

I've got a couple good coders from upwork, let me know if you want thier names.

 

[adisankhiyan]

...You highlight a point that is dear to my heart. You need a great amount...a very great amount...of confidence in a strategy in order to trade it. A lot of people, perhaps mostly newbies(?) underestimate that. That core need for confidence is one of the foundations of my own plan.

In my opinion, you don't sound ready to trade this system. At least not yet...not until you've built well-founded confidence in it.

Re: Alan Hull...all I know is, (a) his books disclose the methods of his newsletters very clearly, and (b) he is easily contactable. Personally, there are a couple of aspects of his systems (thinking back to Active Investing - I haven't read, "Invest My Way") that require a certain amount of discretion that I can't come at. But he is much more clear about his rules than so many authors.

It would not be difficult to either (a) code his stuff up yourself or (b) hire a system coder to test for you the quantitative aspects of Hull's systems(s) on whichever markets you choose. That's where I'd start, anyway. I can think of at least two "hire an Amibroker coder" services off top of my head; you'd just need to google it. A few hundred (no idea) dollars spent testing the system(s) on the markets / timeframes of choice would be a bargain. If they don't stand up to your requirements on a rules-based basis, then you wouldn't trade it (as you'd then be punting that you are awesome at the discretionary bits).

Regardless of that, your question is fine...hopefully someone here who has subscribed for a while will let you know of their experience. Hull has been around a good while now, so there must be some ASFers that have been members.

Thanks for your reply, I have just installed a copy of Amibroker and I'm about to start learning to use it, I'll probably learn to code myself and then backtest the system.
You are right I'm not yet ready to start trading, I don't know a lot of things. It'll take me some time(or more than some time) to get a grasp of this world and use the tools at my diposal properly. I'll start investing once I get confidence in my knowledge.

 

[systematic]

You are right I'm not yet ready to start trading, I don't know a lot of things

...That alone puts you ahead of the game!

 

[adisankhiyan]

I've got a couple good coders from upwork, let me know if you want thier names.

Thanks CanOz, I'll let you know if I need help with that, I have a bit of basic coding background so I'll try to do it myself. I still can need your help.

 

[adisankhiyan]

...That alone puts you ahead of the game!

Thanks for that Systematic and for your replies. I look forward to ask for more help from you guys and this forum.