Mechanical investment strategies

[cubanpete_the_swiss]

@logitacher

If you are FIREd you also automatically break rule

Not exactly. I spend less than my taxable income from dividends and now AHV, so I adhere to that rule. I hope when I’m 100 and need the money for paying myself for caretaking they don’t define me as professional trader…

I probably would leave Switzerland in that case. I don’t spend too much time here anyhow. But then not having to adhere to the rules would make me take on more risk as I would change my strategies to only realize gains up to the same amount there are losses. The money I take out would be on credit, like all the rich do. I would probably pay even less taxes as I would not need to invest in dividend stocks any longer.

[ma0]

Soo.. I did an experiment with CHDVD and chatgpt and this is what I got:

Basically you can buy CHDVD. Not sure about Financials, since the NA is because ChatGpt says it doesn’t make sense to calculate on them.

They are in order of weight, maybe the only change is to weight them according to their dividend (not smart?).

[cubanpete_the_swiss]

Thanks, interesting. But AI???

Financials are more complicated, as their trading good is money. You have to remove or add some things. Shit, now I helped the AI to learn something. It is not that it doesn’t make sense to calculate them, it makes a lot of sense. It is just that the AI doesn’t know how to do it and the numbers may be difficult to come by if you don’t have a standardised data set like EDGAR.

No doubt there are good companies outside of U.S. But I would never touch Swiss companies because of the 35% dividend withholding tax, I think 15% in the U.S. is already way too much. Why do I have to give an interest free loan to the taxman?

There are more than enough companies for me in the biggest market in the world. The risk is not higher as most of those companies make their money around the world.

BTW: I would never trust an AI with financial research, NEVER! I may have them made me some love poem but any serious question (like: on festival X does El Drogas act on Friday or Saturday?) is just answered with bullshit. And if you ask twice you get two different bullshit answers. I suppose that is how AI works for now, we serve them as teacher, they tell us bullshit and learn from our reaction.

I cannot use a ETF directly because of several of my rules. The buy low sell high part with market dividends and adding to cheaper stocks only and the crash recovery part make a lot of the good performance, I don’t get that in an ETF.

Also seems CHDVD did not perform very well, even if you include the CHF/USD difference:

[JEPG]

@cubanpete_the_swiss

Also seems CHDVD did not perform very well, even if you include the CHF/USD difference

For some reasons Swiss investors LOVE these underperforming flat lines.

[cubanpete_the_swiss]

I am a Swiss investor. But as a contrarian I have a negative home bias.

[Mirager]

@cubanpete_the_swiss

But I would never touch Swiss companies because of the 35% dividend withholding tax

Ehm, you get it back as far as I understand? Goofy had FASTgraphed CHDVD, seems like the top 5 (out of 20) holdings looked good, which is a good thing given they cover about 70% of the ETF

[cubanpete_the_swiss]

@Mirager

Ehm, you get it back as far as I understand

Yes, usually in October, after 10-22 months. An interest free credit to the tax lady.

[xerox5003]

At least it’s performing better than a savings account

[roaster]

Can’t you just withhold a bit of your tax payment in anticipation?

[cubanpete_the_swiss]

They have the money already, it is deducted from the dividend.

The interest starts in October, after 10-22 months of them taking out the withholding tax. You don’t have to pay the rest of your tax until October, then the interest flows in both directions.

[ma0]

I used AI just to know how to calculate it. The rest is just python + yahoo finance. No way I’ll trust it to generate the table. I can post the code but last time I got 0 views so I just posted the results here.

What I find interesting is that I have a list of company that seems to follow your rules, but now I have no idea how you would theoretically buy them.
One missing rule is that you don’t pick too much companies from the same industry. Then?
You might go after the higher dividend? CLN vs HOLN , higher dividend vs lower debt?

[cubanpete_the_swiss]

I described the complete method including money and position management early in this thread.

It is 4% per position initial, no more than 20% of the same sector. I sort the candidates by dividend yield. As I am lazy I usually take the Dow Jones U.S. Dividend 100 Index as starting point.

BTW: I only use the numbers in EDGAR, yahoo finance has too many errors. Sometimes they mix up currencies in calculating their numbers, sometimes I have absolutely no idea how they get to their numbers.

[mabi]

@ma0

CLN vs HOLN

But then CLN has only a high dividend payout compared to HOLN because it’s share price has been decreasing quite a bit since 2-3 years. So there must be a filtering process before taking the dividend yield as comparison.

[rolandinho]

@ma0

CLN vs HOLN

Clearly CLN for your dividend strategy and HOLN for your momentum strategy.

[anon17469660]

Neither CLN nor HOLN have EDGAR data afaik, but there’s always FASTgraphs …

• CLN
  Historical earnings graph with dividend payout ratio:
  
  
  
  Since the 2020 dividend distorts the graph (high dividend due the split), here’s the same graph without the dividend payout ratio:
  
  
  
  Their earnings growth has been flat over the past 20 years. I personally would pass despite the luring high divided. YMMV, of course.
• HOLN
  Historical earnings graph with dividend payout ratio:
  
  
  
  I like this earnings graph much better (at least looking back the past 10 years or so), alas, I don’t like its price.

[cubanpete_the_swiss]

OK, the stock market January is history. What a month!

First my momentum strategy, I think most Dollars ever in a single month.

Margin multiplier: 132.87%.

Performance YTD: 13.28%, XIRR since 2020: 28.64% (yippie, again over 28%!)

Table:

Positions:

Again did Tutor Perini grow a lot. I would really really like to sell a bit to reduce my risk. But the capt’n says no, it is still on buy, the only thing I would be allowed to do would be to buy more. There go my 2 Ferraris… but OK, if something feels so bad it brings usually a ton of money.

The last 6 buys were oil and gas, all are double digits in the green. Nice.

Now for the divi strategy:

Portfolio: Finviz.

Dividends: KMB,MRK,MO,HST,ONL,O,CSCO

Bought additional GIS

Margin multiplier 100.32%

Carry premium: 2.86% (still no market dividend, a bit low…). That is withholding tax and debt interest already deducted of course.

Performance: YTD: 6.81%, XIRR since 2014: 11.45%, since 2020 14.64%

Wheels of fortune (positions, dividends and sectors):

[cubanpete_the_swiss]

Today it seems Supermicro starts the second round. I did cash out already a lot of gains, much more than I did invest, in the last round where it made me more than 2000%! But I still hold a nice position. Fundamentally it is almost as cheap now as when I did buy the first time. And today probably momentum builds up again…pre market almost 12% in the green.

Super Micro Computer Inc (SMCI) Q2 2026 Earnings Call Highlights: Record...

The negative cash flow and lower margins hurt a bit, but that is normal for a growth company. The main concern is the same as with some AI companies: they place orders on credit at each other. SMCI has a bad reputation for such bookkeeping tricks.

[cubanpete_the_swiss]

Today IBEX from my momentum strategy published numbers:

IBEX Ltd (NASDAQ:IBEX) reported a 17% increase in headline revenue and a 46% growth in adjusted EPS for Q2 2026

Nice, 11% pre-market. Seems after all there are some companies that profit from AI. The IBEX AI phone bots…

[cubanpete_the_swiss]

I was not sure if I should post this. Because a few years ago I would have read such a thing and think to my self “what an asshole, that is completely impossible!”.

But it is not.

Friday I not only had a new all-time high in all currencies but had a new record in one-day performance. The momentum strategy did rise 6.03% and the dividend strategy 2.33% (which was less than the Dow that made 2.47%). That made me a total of 3.95% in a single day. Or more or less almost what I made in a year in my last job…

I had losses that big during COVID, but then got it all back the same year. But I never have seen the stock market rise that way as it does right now. Maybe all is over soon? I don’t know but lucky for me I don’t need to know.

4 of my stocks in the divi portfolio are on sell for overvaluation. But they are still in the better half of momentum and therefor aren’t sold yet. They use to produce nice market dividends, but sooner or later they will get back to earth. The stocks are Broadcom, Emerson Electric, Cummins and Caterpillar. All companies that are with me a decade or longer. Of course, the best scenario would be higher cash flow, but in this case the stock price rises probably even more, the overvaluation continues.

In the momentum strategy oil was a very good choice of my captain. I bought this sector, especially the “shovel sellers”, since October. But then stocks from other sectors did perform very nice too: Tutor Perini, a double position, is over 550% in the green and keeps rising.

I don’t think the markets can rise for much longer. Without my mechanical strategies I would sell, sell, sell. But then probably I would have sold long ago and would have missed all that windfall profits.

One could say “nothing is rising, it is just money losing value”. I always see money as a position. And money is a very bad position, with a state guarantee to lose value. So, I will keep to be invested in stocks (and some privately used real estate) and will never or seldom have a positive balance for cash, cash is trash.

An extended bear market could lead to a positive cash balance, because I don’t buy but still sell. But then I will buy on credit a lot when my captain tells me the bear market is about to be over. I described the details of such scenarios in my crash recovery system (part of the divi strategy), all the rules are included earlier in this thread.

[cubanpete_the_swiss]

And finally a bit action in the dividend strategy:

After a bit more than a decade I had to sell Kimberly Clark. Too bad, but better safe than sorry. The FCF does not cover even the dividend. And all that just to diworsify, why not stick to paper?

The position did not grow in all this time, so it was not too big. I could distribute the money among my other holdings. Did buy APAM, CNA, DD, F, GIS, IBM and T.

Goodbyie Kimberly…